GMAC Commercial Mortgage Corp. has agreed to release about $20 million in business interruption insurance proceeds to World Trade Center leaseholder Silverstein Properties Inc. as the parties seek agreement on a redevelopment plan for the WTC site. After consulting with the judge hearing the dispute over the redevelopment, the parties agreed that GMAC, which administers the mortgage on the property, would continue the business interruption payments and pay October rent. The agreement gives the parties until Oct. 22 to work out a redevelopment agreement. Meanwhile, one day after that agreement with GMAC, Silverstein encountered a setback in its insurance coverage litigation when the 2nd U.S. Circuit Court of Appeals affirmed a lower court ruling that a jury should decide whether the WTC attack was one occurrence or two.
More states consider Canadian drug programs
In what appears to be a growing trend, two state governors last week separately announced plans to study the possibility of importing drugs from Canada for their state workers and retirees. Gov. Tom Vilsack of Iowa and Gov. Tim Pawlenty of Minnesota both instructed their state officials to investigate the financial and legal implications of a drug importation program. The announcements are similar to an announcement made earlier this month by Gov. Rod Blagojevich of Illinois.
Farmers to quit medical malpractice coverage
Farmers Insurance Group, the country's fifth-largest medical malpractice underwriter, is exiting the market. The insurer said that in an effort to focus on its core business lines it will no longer write new medical malpractice coverage and will begin the process of nonrenewing existing business beginning Jan. 1, 2004. According to A.M. Best Co., Farmers represented 4.7% of the total U.S. medical liability market in 2002.
Travelers to buy rights to marine lines
Travelers Property Casualty Corp. is acquiring renewal rights to most of Atlantic Mutual Cos.' commercial lines inland marine and ocean cargo business. The deal gives Travelers the opportunity to acquire business worth up to $110 million in net written premiums and the related unearned premium reserve on Atlantic Mutual's balance sheet. Terms of the deal were not released.
Coverage for satellite loss led by Munich Re
Munich Reinsurance Co. is the lead underwriter for the $141 million communications space satellite that owner Loral Space & Communications Ltd. has declared a total loss, sources say. Marsh Inc. placed the risk, but Loral switched to Willis Group Holdings Ltd. before the loss and has asked Willis to handle the claim, according to sources. The primary power plant for the Telstar 4 satellite, manufactured by Lockheed Martin Corp., short-circuited Sept. 19, and Lockheed and Loral were unable to correct the problem.
Claims commission sued by Holocaust survivors
Two Holocaust survivors are suing the international commission established to handle Nazi-era insurance claims, alleging that the entity's efforts to resolve those claims violates California's unfair trade practices law. The plaintiffs allege that the International Commission on Holocaust Era Insurance Claims helped Assicurazioni Generali S.p.A. reduce its exposure to claims from over $1 billion to only $100 million and that it has failed to publish on Web sites the names of all policyholders during that era, among other things. Generali dismissed the allegations as 'baseless.''
RICO suit against health plans to proceed
A suit filed under the Racketeer Influenced and Corrupt Organizations Act against Capital Blue Cross and its health maintenance organization, Keystone Health Plan Central, can go forward as a result of a ruling by a federal court judge in Pennsylvania. The judge ruled that a RICO claim by doctors against an HMO is not barred by either the McCarran-Ferguson Act or the U.S. Supreme Court's 2000 decision in Pegram vs. Herdrich. The suit, filed Oct. 5, 2001, alleges, among other things, that the managed care provider 'shaves'' capitation payments by purposefully underreporting the number of patients enrolled in physicians' practice groups.
New Jersey orders cleanup of 18 watershed sites
As part of a large-scale effort to collect damages for the loss of use of polluted natural resources, New Jersey environmental regulators have identified and directed dozens of potentially responsible parties to begin assessing and restoring 18 contaminated sites within the Passaic River watershed. The river watershed recovery effort by the Department of Environmental Protection is part of the state's broader effort to pursue recoveries for more than 4,000 polluted natural resource sites statewide.
Court orders Honeywell to pay retiree benefits
A federal court has ordered Honeywell International Inc. to reinstate full health insurance benefits for 800 retirees that worked at an automotive parts manufacturer it formerly owned by Oct. 1, 2003. Bendix Corp., a brake manufacturer, was acquired in 1983 by Allied-Signal Inc., which later merged with Honeywell. The litigation against Honeywell began in August 2002, after Motor Components L.L.C., the current owner of the auto parts plant formerly owned by Bendix, cut retirees' health and life insurance coverage. The court said that Honeywell had to reinstate the benefits under an agreement between Bendix and Allied Signal at the time of the Bendix acquisition. The retirees were represented by the United Auto Workers union.
Employers get time to adopt COBRA rules
Employers will have six months to comply with the Department of Labor's proposed federal COBRA notification rules once they become final some time early next year, the department's Employee Benefits Security Administration said. The notification requirements, which were proposed in May, would, among other things, set minimum standards for the timing and content of the notices required under health care continuation provisions of the Consolidated Omnibus Budget Reconciliation Act.
Dallas-based Summit Global Partners Inc., the 26th largest broker of U.S. business, has named Joseph R. Wiedemann as chairman. Mr. Wiedemann, a longtime insurance executive who retired from American International Group Inc. in 1996, replaces Gary R. Griffith. Mr. Griffith resigned as SGP's chairman and chief executive officer but will remain a director. Management of the brokerage will be led by a new office of the president, headed by Jeff Pan, who has been an executive at SPG since 1997....A.M. Best Co. downgraded its financial strength ratings of the Royal & SunAlliance USA Insurance Pool and the Royal Surplus Lines Insurance Co. to B+ from A-....John T. Sinnott, the former chairman and chief executive officer of Marsh Inc., has been named the 2003 Insurance Leader of the Year by the School of Risk Management, Insurance and Actuarial Science at St. John's University. Mr. Sinnott will be given the award at a Jan. 22, 2004, dinner in New York.