Vested Interest - News and Notes - June 2002 Issue

Property/Casualty insurers incur losses of $7.9 billion in 2001

Property/casualty insurers reported losses of $7.9 billion in 2001, the first time they have ever reported a calendar-year loss. They reported profits of $20.6 billion in 2000. Their losses from the Sept. 11 terrorist attacks totaled $10 billion, but they are expected to post additional losses from those attacks in 2002. Other reasons for the drop were the economic downturn, underpricing, catastrophic losses, medical cost inflation, Enron and legal costs. (Liability & Insurance Week – April 22, 2002)

Philip Morris changes name

Philip Morris shareholders voted overwhelmingly to change the company’s name to Altria Group, part of an effort by the nation’s largest cigarette maker to reflect that it is not just a tobacco company. The Philip Morris name will survive only on its tobacco operating divisions and in the MO stock symbol. The change was approved by 95 percent of eligible shareholders after nearly an hour of sometimes harsh criticism of the company’s tobacco products and marketing policies from dissident shareholders. (The State Journal-Register – April 26, 2002)

Chief justice halts jury trials

Alabama Chief Justice Roy Moore has ordered an end to jury trials in civil court until October 1 and restricted criminal jury trials to two weeks after the Legislature adjourned without appropriating more money for the state’s court system. Although appropriations for Alabama’s trial courts have risen 31 percent since 1998, the courts are caught in a fiscal crisis that is only going to get worse after October 1, when the state’s judges are scheduled to receive a pay raise. (Liability & Insurance Week – May 6, 2002)

Auto insurance rates rise by 8 percent

Auto insurance rates already have gone up 8 percent in the past year and are continuing to go up across the nation. State Farm Mutual Automobile Insurance, the nation’s largest auto insurer, already has raised rates by 7 percent in California, 9 percent in Texas, and 10 percent in Florida. Allstate, the second largest auto insurer, has raised premiums in New York by 10.5 percent and in Texas by 7.5 percent. (Liability & Insurance Week – April 29, 2002)

Medical error bill gets final approval in Connecticut

Hospitals and outpatient surgical centers in Connecticut will have 24 hours to report accidents that kill, seriously injure, or endanger patients under a bill that got final approval in the legislature. Connecticut will join sixteen other states requiring hospitals to report potential medical errors. In addition to the error-reporting system, the new law also requires health care providers to report cases of suspected physical or sexual abuse of patients. (The Hartford Courant – May 9, 2002)