A congressional panel will examine whether an optional federal charter for insurance companies is needed, the chairman of the U.S. House Financial Services Committee said Tuesday.

The committee's panel on insurance and capital markets is launching a series of hearings on an optional federal charter, Democratic Representative Barney Frank told the Reuters Global Financial Regulation Summit in Washington.

Frank, who plans to introduce a broad bill to reform U.S. financial regulation, said "there may well be an insurance component" to it.

U.S. insurance companies are now largely policed by the states and some lawmakers support legislation to create a federal regulator that could smooth the patchwork of regulation.

Similar attempts have failed to pass Congress in the past, partly due to opposition from states and consumer groups who say it would lead to higher insurance rates and weaken consumer protection.

But now that the federal government has spent billions of dollars in taxpayer funds to prop up big insurer American International Group, calls for a federal regulator have intensified.

Frank said that whether or not insurance oversight is federalized, his proposal to create a "systemic risk regulator" -- which would monitor all risk in the U.S. financial system -- would have a mandate that would cover large insurance companies.

Insurers can expect an impact from the hailstorm of rules and lawsuits related to changes in climate that have come on the scene, a legal expert advised during a Web conference.

“The legal and regulatory storm regarding climate change has arrived,” said Richard Faulk, partner and climate change practice leader at Gardere Wynne Sewell in Houston, according to a report of his remarks by the Property Casualty Insurers Association of America (PCI) in Des Plaines, Ill.

His comments came at a PCI webinar, where participants were informed about legislation pending in Congress and briefed on the liability consequences of climate change regulation, litigation risks insurers face from their insureds’ and their own activities, and advised of concepts for minimizing those risks.

Mr. Faulk told the participants, “Within the last month alone, three significant events occurred. First, the Environmental Protection agency issued a critical finding that ‘greenhouse gases’ posed a threat to ‘health and welfare’ and commenced the process toward wholesale regulation of the U.S. economy.

“Congress proposed comprehensive climate change legislation that includes provisions authorizing litigation against the government and private industry by all those who ‘suffer’ from climate change. And, the NAIC voted to require insurers to submit annual ‘climate risk’ reports regarding their own operations and, derivatively, the operations of their insureds,” he related.

Mr. Faulk warned that as a result of these events and many others that preceded them, it is “essential for insurers to understand the legal and regulatory issues that are present now, as well as the risks that lie ahead.”

Read this full story here on the National Underwriter website.

A record number of women filed pregnancy discrimination complaints in the past decade, signaling more women demanding equal treatment in the workplace.

The number of pregnancy discrimination complaints filed with the Equal Employment Opportunity Commission soared to 6,285 in 2008, up 12 percent from the previous year and 50 percent in the past decade.

During that same period, the number of complaints in Ohio increased to 230, up from 205, with four discrimination filings in Butler County and 21 in Warren County.

“People are becoming more aware of the issue and more aware that there is something that they can do,” said Equal Employment Opportunity Commission Assistant Legal Counsel Dianna Johnston.

Read the full story here on the Middletown Journal website.

In looking at medical professional liability financial results, some people might say that pigs are indeed airborne.

Many industry observers expect overall 2008 property-casualty underwriting and investment performance to reflect significantly deteriorating results— separately and combined. In fact, insurance analysts at A.M. Best expect something approaching a 10 percent decline in surplus.

For its part, the medical professional liability line should be expected to share in some aspects of the deteriorating investment results, but early signals are that expectations for deteriorating underwriting results may not be realized.

It may seem odd to discuss medical professional liability as though it could have its own underwriting and investment results but, in substantial measure, it can. Because so much of the coverage is provided by companies that specialize in the business or by captives and self-insured programs, we can review both of these drivers of financial outcomes—something that can’t be done easily for most other lines of business.

Read this full article here on the National Underwriter website.

Compared with life insurers and many other financial-services companies, shares of insurance firms that cover property damage and legal liability, known as property/casualty companies, have weathered the market downturn well.

But the industry's profit fell 96% last year, and it would have lost money overall if insurers hadn't released billions of dollars from reserves. Reserve releases, common in the industry, reflect an insurer's judgment that it had set aside more to pay claims than it now expects to need.

In the event of a major catastrophe -- a Katrina-size hurricane, for instance -- some insurers could need to raise capital amid difficult market conditions, though Robert Hartwig, the head of the Insurance Information Institute, a trade group, notes that property/casualty insurers were able to raise $11 billion in 2008.

You can read the full story here on the Wall Street Journal website.  Robert Hartwig, quoted in this article, will be speaking at the PLUS International Conference taking place November 11-13, 2009 in Chicago, IL.

An annual survey of risk managers has found a gap between senior management and risk managers over what they perceive as the major perils a company should focus on.  

The preliminary report of the survey released here yesterday “Excellence in Risk Management VI, Putting Risk Management Into Practice,” also found that most companies are not cutting back their spending on risk management.

Brian C. Elowe, managing director with Marsh in Boston said the survey involved more than 450 organizations and 65 percent of those polled were risk managers, 15 percent were from the chief executive suite and 20 percent were from other categories.

Of the risk management approaches, 17 percent of firms said they were strategic, 44 percent were progressive and 39 percent were traditional, with most companies falling between $1 billion and $4 billion in revenue.

Pamela G. Rogers, senior vice president with Marsh USA in Minneapolis said the survey pointed out differences between executives and risk managers over what they see as their company’s top risk exposures.

Executives are most focused on business continuity and crisis management risks, while risk managers are more concerned about brand and reputation risk, she said.

Read the full story here on the National Underwriter website.

Mark your calendar and make plans to attend the 2009 PLUS International Conference taking place November 11-13, 2009 in Chicago.  You won't want to miss it!

2009 PLUS Conference Teaser from Scott Billey on Vimeo.

 The Rise and Fall of Bill Lerach, a documentary created for the 2008 PLUS International Conference and then again played at the 2009 PLUS D&O Symposium, has been posted online for viewing by PLUS Members.

Please click here to access the web page where it is being hosted.  You will need your PLUS username and password in order to access the video.

If you have trouble with the link above, please post the following address in your web browser:

https://plusweb.org/index.cfm/p/Media.Video

MFS founder Michael King and the auditors to his failed financial services empire are at the centre of a $1 billion lawsuit launched by disgruntled investors.

The legal action, filed with the Federal Court last Friday, is seeking damages on behalf of eight investors in the frozen Premium Income Fund (PIF), which is now under the control of Jenny Hutson's Wellington Capital.

The respondents were all board members of MFS Investment Management, the responsible entity of PIF until Wellington Capital's takeover in October last year.

Read the full story here on the GoldCoast.Com website.

Like Starbucks, medical spas have become ubiquitous throughout California and the U.S. Also called “Medi-Spas,” they combine traditional spa treatments with medical procedures such as Botox and laser hair and tattoo removal. They should not be confused with day spas, which only offer facials, massages and body wraps.

Hundreds of thousands of women are the primary patrons of “Medi-Spas” and they could be at risk. Although a number of Medi-Spas are regulated by state legislation that requires on-site physician supervision, that is not the case in California, according to attorney Stephanie Berman Schneider, a partner with Berman, Berman & Berman, LLP who specializes in representing medical spas and medical professionals.

In California in 2006, a laser bill which would have required on-site physician supervision while lasers were being used or the ability for the physician to arrive on the premises within one (1) hour if needed was amended and became a “study” bill. It never went anywhere.

In 2008, California re-introduced legislation (Assembly Bill 2398) which would have required physicians to be on-site, provide direct supervision of delegated procedures and good faith exams on all patients prior to delegation. The legislation also would have prohibited the corporate ownership of medical spas and established extreme penalties for non-physician corporate owned entities or management companies.

Read the full story here on the Advisen website.

2009 PLUS Medical PL Symposium Industry Overview from Scott Billey on Vimeo.

As many as 100,000 patients of Peninsula Orthopaedic Associates are being warned to protect themselves against identity theft after tapes containing patient information were stolen.

In a letter mailed this week, Chief Executive Officer Brian K. Mathias told patients they should place 90-day fraud alerts on their accounts at the three major credit bureaus.

Patients also were advised to keep an eye on benefits statements from their health insurance companies since they may also be at risk for medical identity theft.

"What a mess," said Ann Suthkowski of Salisbury, who was treated at Peninsula Orthopaedic more than two years ago for bone fractures.

Suthkowski said she planned to give copies of the letter to her attorney and her health insurer as a precaution.

Read the full story here on the Delmarva Media Group website.

Self-proclaimed victims of global warming or those who "expect to suffer" from it - from beachfront property owners to asthmatics - for the first time would be able to sue the federal government or private businesses over greenhouse gas emissions under a little-noticed provision slipped into the House climate bill.

Environmentalists say the measure was narrowly crafted to give citizens the unusual standing to sue the U.S. government as a way to force action on curbing emissions. But the U.S. Chamber of Commerce sees a new cottage industry for lawyers.

"You could be spawning lawsuits at almost any place [climate-change modeling] computers place at harm's risk," said Bill Kovacs, energy lobbyist for the U.S. Chamber of Commerce.

The bill was written by House Energy and Commerce Committee Chairman Henry A. Waxman, California Democrat, and Rep. Edward J. Markey, Massachusetts Democrat. Both lawmakers declined repeated requests for comment.

Read the full story here on the Washington Times website.

A former Miss West Virginia has won a US$7.2 million verdict against nine Internet companies and individuals who tried to sell pornographic videos they falsely claimed featured her.

A jury in U.S. District Court in Clarksburg on Wednesday ordered each defendant to pay Allison Williams $800,000 for damaging the 2003 beauty queen's reputation and invading her privacy.

"This had been a very long fight for her so this was a great victory for her," her lawyer, Parween Mascari, said Thursday.

The videos, which surfaced in the fall of 2004, show a woman the Internet porn producers falsely claimed to be Williams engaged in sex in the back of a television news truck.

Williams, now 27, discovered the defamatory videos during her first semester of law school at West Virginia University, while searching the Internet for a favourable newspaper article about herself to save for her scrapbook, Mascari said.

Williams has since graduated from law school and now works for a shipping company in Vienna, Va., while she prepares to pass the bar, Mascari said.

Read the full story here on the Hamilton Spectator website.

A federal judge in Pennsylvania dismissed a shareholder lawsuit against Radian Group Inc. (RDN) on Thursday, saying the plaintiffs failed to prove "conscious misbehavior or recklessness" by the defendants, lawyers for Radian said Friday.

The suit accused the mortgage insurer, along with several officers, of making false and misleading statements regarding its investment in Credit-Based Asset Servicing & Securitization LLC, or C-Bass, which bought and repackaged subprime mortgages and was owned in part by units of Radian and fellow mortgage insurer MGIC Investment Corp. (MTG).

The plaintiffs said Radian's statements about C-Bass' profitability and liquidity inflated Radian's share price, which led to shareholder losses when Radian announced on July 30, 2007, an impairment of its investment in C-Bass because of the faltering subprime market.

This is a video clip from the 2009 PLUS D&O Symposium session titled "A View from the Top".  The discussion centers around what buyers syhould be analyzing when it comes to credit quality of carriers.

In a recent decision granting summary judgment (Index No. 601904/06, Motion Sequence No. 8), Justice Charles E. Ramos of the Supreme Court of New York, Commercial Division, held that a notice of circumstances (the "Notice") that plaintiff JPMorgan Chase & Co. ("JPMC") had submitted to defendant Twin City Fire Insurance Company ("Twin City") under its earlier insurance program did not contain any misrepresentations entitling Twin City to rescind its insurance policy for the subsequent renewal program. Proskauer Rose LLP represented JPMC.

Read this full article, written by the Proskauer Rose LLP's Insurance Coverage Practices Group, here on the Proskauer Rose LLP website.

On April 1, 2009, a divided U.S. Supreme Court upheld the ability of an employer and a labor organization, as the employees' exclusive representative for purposes of collective bargaining, to agree that employees can be required to arbitrate their statutory employment discrimination or retaliation claims in accordance with an express requirement to do so under the terms of a bargained-for collective agreement.

Justice Thomas, writing for the majority, held that where the union and the employer have clearly and unmistakably agreed that statutory employment discrimination claims must be processed through the grievance and arbitration procedure in the parties' collective bargaining agreement, an employee will be required to file a grievance and ultimately submit the claim to a private arbitrator. Further, that employee will in most instances be barred from filing the same claims as a lawsuit in federal or state court.

Read this full story, written by Gavin Appleby, Hans Tor Christensen and Jennifer Mora, here on the Littler website.

New York's attorney general filed civil fraud charges Monday against a hedge fund manager who funneled $2.4 billion to Wall Street swindler Bernard Madoff without telling clients where their money was going.

The complaint accuses J. Ezra Merkin, the former chairman of GMAC Financial Services, of telling a "panoply of lies" to give the impression that he had a sophisticated investment strategy, when in fact he was simply a middleman who handed most of his cash to Madoff.

A majority of investors had no idea where their money really went until after Madoff's arrest in December, when Merkin sent a brief note informing them that their money was probably gone forever, the suit said.

"Merkin duped individual investors, non-profits, and charities into believing he was responsibly managing their investments, when in actuality he was dumping them into history's largest Ponzi scheme," Attorney General Andrew Cuomo said in a statement.

The suit said Merkin, the son of a respected New York philanthropist, charged his clients $470 million in management fees but did little actual work other than "routine bookkeeping."

Read the full story here on the CLTV website.

Technology-company shareholders have reached a $586 million settlement with dozens of leading Wall Street firms in a long-running class-action lawsuit alleging that the banks manipulated the market for initial public offerings of stock during the late 1990s and 2000.

The settlement, reached April 1 and still subject to court approval, is due to be paid by dozens of banks and brokerage firms, including Credit Suisse Group's Credit Suisse Securities (USA) LLC, Deutsche Bank AG's Deutsche Bank Securities Inc., Goldman Sachs Group Inc. and Morgan Stanley.  Insurers for tech companies that issued stock during the relevant period also will contribute to the settlement. Court filings didn't disclose how much will be paid by each defendant.

Read the full story here on the Wall Street Journal website.

Denise Amantea speaks with the Insurance Journal.

The UK Financial Services Authority announced today that a tribunal has upheld its decision prohibiting the former chief executive at a General Reinsurance Group unit from working in financial services.

Banned from the industry for his involvement in sham reinsurance deals that helped shaky insurance companies bolster their results was Milan Vukelic, former CEO of Alternative Solutions.

The FSA’s decision was upheld by the Financial Services and Markets Tribunal in London, which found that Mr. Vukelic’s actions as CEO of AltSol lacked integrity, said FSA.

General Reinsurance Corporation, a subsidiary of Warren Buffett’s Berkshire Hathaway Inc., established Alt Sol to develop and market financial reinsurance products outside the United States, according to the Tribunal.

Alt Sol’s former chief underwriter John Houldsworth, a former chief executive of Gen Re’s Dublin unit Cologne Re, pleaded guilty to U.S. securities fraud conspiracy and testified last year against five executives who were convicted of a scheme between Gen Re and AIG to inflate AIG’s earnings with two sham finite reinsurance transactions.

The Tribunal in its decision noted that “large and damaging transactions could not have gone ahead without Mr. Vukelic’s want of integrity.”

Mr. Vukelic was CEO from August 1997 until October 2002. During that time Mr. Vukelic was responsible for overseeing and structuring three different transactions that were designed to allow the client insurance companies to hide very significant losses in their accounts, the FSA said.

Former AIG CEO Maurice “Hank” Greenberg says the bailout has "failed" and he's proposing a 10-point alternative focused on saving, not breaking apart, the mega-insurer.

Greenberg will reveal his plan during a hearing before the House Oversight and Government Reform Committee today, slated to start at 10 a.m.

His proposal includes pressuring the counterparties at the other end of AIG’s toxic financial transactions to reinvest in AIG some of the $100 billion in taxpayer money they received as part of the firm’s bailout, according to a copy of Greenberg’s prepared testimony obtained by POLITICO.

Critics have blasted the feds for not forcing AIG counterparties to take a loss on the complex financial contracts, but rather allowed them to be paid off in full. Particularly galling for some is the fact AIG paid out billions of U.S. taxpayer money to Europe’s largest banks.

“The plan has also been highly controversial and in some respects downright puzzling,” Greenberg says of the counterparty payments.

A story of two PLUS members and their work to help the families of soldiers who have died in Iraq and Afghanistan.  This is from NBC Nightly News with Brian Williams.