September

Highlights of his presentation:

• Agency carriers are born from a need to provide a viable market or special program for agencies and they succeed because of the local knowledge of the customer and area.
• The premise from which Summit is based is to keep the underwriting and marketing of the independent agent, but adapt the lower expenses of the direct writers to generate better loss ratios and returns for the agency owners.
• The focus of the company is on taking back some of the large market share from the direct writers in Rhode Island.
• The incentive for agents to sign on as owners an agency-owned insurer is to be the best of the independent agents. Although the agents may do more administrative work, they are also financially rewarded accordingly.
• Although the commission rates are competitive with other insurers, it was felt that the added administrative tasks and responsibility was not extra work but reflected more ownership and control of the business.
• The long-term vision of the company is to expand in other states depending on the regulatory environment. However, there is still plenty of room to grow in Rhode Island.
• View the entire text of Mr. Pereira's comments

Highlights of her Presentation-

• Ms. Bowler gave her background experience in the department and her approach to regulation, the main focus being corporate governance and issues as a result of the hard market.
• There are three goals of Insurance Regulation: assuring consumers that their investment is protected, that insurance products are sold at a fair price, and that those who sell insurance are knowledgeable and trustworthy.
• Corporate governance is changing rapidly due to more insurance products on the market and the globalization of companies
• Comments on the hard market: mid-year and third quarter results of carriers still look negative with high combined ratio for both reinsurance and primary carriers. She indicated that regulating in a hard market was difficult as it was a delicate balance between maintaining insurance company solvency with pricing fairness.
• Questions from the floor were her comments on the issue of coverage for mold and terrorism. Her approach to any type of exclusion is a buy-back option or mandatory offer. With regard to terrorism, the industry needs predictability and a safety net and is hoping for the creation of a catastrophe pool.
• Comments on other questions of Credit Scoring and Mass. Auto. Julianne said the issue has not been explained very well to the public in Massachusetts. The focus should be on proper discloser to the customer and at the same time, taking the agent’s out of having to explain scoring and its use in insurance. Her view was that tiering based on score was acceptable. However, using bankruptcies due to medical catastrophes would not be tolerated. On Mass. Auto, Julianne stated she could not publicly comment on the Attorney General’s rate finding. She was open to some limited open competition with a flex band, and a revision of the residual market.

Highlights of Mr. Gray's Presentation

• John discussed the state of the reinsurance market today, noting that there was still very little optimism that many reinsurers would survive the current economic turmoil.
• Most of the major reinsurance companies have been downgraded by the various rating companies due to adverse experience primarily in the casualty lines of business.
• As a result of the current market conditions, John noted that there would most likely be a smaller number of reinsurance companies, but that those that survive would come out much stronger.
• John noted that the terrorism bill that is likely to become law soon is necessary, as the industry cannot afford another 9/11 catastrophe.