Massive Insurer AIG to Benefit From Yet another Major Government Giveaway

The United States government has agreed to commit an additional 30 billion dollars to aid the once largest insurer, AIG, American International Group Inc. The $700 billion Troubled Asset Relief Program will serve as the source of financing for the additional equity commitment which gives AIG the opportunity to issue preferred stock to the government.

In addition to this, AIG is granting the Federal Reserve a preferred-stock interest in its American Life Insurance Co. (Alico) in return for reducing its debt. Alico is the source of more than half of its revenue from Japan, along with its Hong Kong-based life insurance group American International Assurance Co. (AIA).

According to one of two sources, the plan being presented allows AIG to still own the common equity, while the two businesses will be transferred into separate trusts. A source with direct knowledge of this matter reports that it is suspected that the government probably will receive a 5 percent cumulative dividend on its preferred-share stake in these trusts.

Alico and part of AIA have been up for sale by AIG and it is still possible that they will find a buyer. Some bids have already been received, according to the source.

There is another option being considered and that is to take these units public when markets improve, according to the source.

Some U.S. life insurance policies may also be securitized by AIG which would also securitize and give them to the government to further reduce its debt, the sources add.

According to this scenario, the company would securitize as much as $10 billion under that plan, according to one of the sources.

Such a debt-to-equity swap combined with the securitizations would help AIG to repay much of the approximately $38 billion it has already received from its government credit line, that sources say.

PROPERTY-CASUALTY SPINOFF
In order to pay back the government, AIG announced last year that it plans to sell all of its assets with the exception being its U.S. property and casualty business, foreign general insurance and the company's ownership interest in some foreign life operations.

Because of the present financial turmoil, although the company has succeeded at making some sales, it has had difficulty finding buyers and receiving an acceptable price for its assets.

In light of this, AIG is now planning to sell off as much as 20 percent of its property-casualty business in an initial public offering. This could eventually lead to a complete spin off the business, one source said.
So as to differentiate it from AIG, the business would be renamed and have its own management and board of directors.

One of the major potential buyers may receive aid from the government to effect a purchase and that is International Lease Finance Corp., sources said.

One of the sources said that ILFC has some debt that comes due in 2009 which if needed, could be used by AIG in its new equity commitment to help potential buyers.

When asked to comment on this, an AIG spokeswoman refused comment.

New Website Offers Innovative Agents The Tools To Attract New Clients

Brentwood, Tenn., Feb. 13
While some may even say that it is because of the present difficult economic conditions that are being generally experienced while others in spite of the increasingly severe economic conditions, a new web-based service is being implemented by insurance brokers and insurance agents, in addition to other professionals, that is designed to function to assist in bringing about workers compensation education along with marketing.

Some insurance agents it would seem are apparently bracing themselves in order to effectively deal with this new economic crisis, with the hope of getting through it, while there are yet others who are beginning to realize that the existing conditions may indeed represent an important period for making efforts in order to achieve new additional sales and to take advantage of new and creative service opportunities.

WorkCompEdge.com is an example of one of the web sites that is making available to insurance agencies and their associates a fresh and unique way to center attention on and to attract new prospects. It is also offering information for improving the delivery of workers comp education and for offering cost-saving strategies to employers. Included among the original Member Agencies of this website is a hospital association in addition to some of the leading agencies across thirteen states at both the local, regional and super-regional levels.

Tim Coomer, who is the CEO of Specific Software Solutions, speaks about the introduction of this new site that occurred only weeks before the economic drop of last fall, by saying that initially it looked like that they had introduced WorkCompEdge at a very appropriate time. He also says that the website has successfully persisted with the message that WorkCompEdge is a provider of marketing tools that enables an insurance agency to be a focus for and hold on to clients and not through providing only well known and proven implementation strategies but also new and innovative ones. He adds that those involved in the website are supporters of those forward-thinking agencies that are currently seeking out new clients, and at the same time enthusiastically are promoting their success through their use of the site.

Presently the sum of those agencies that are listed as being a part of and represented by the WorkCompEdge AgentFinder, are bringing the use of WorkCompEdge strategies into their sales and service processes as well as the website's well-tested and reliable promotional materials, and at the same time are authorized to make available to their clients direct access to WorkCompEdge educational modules, videos, analytical tools, among other things.

The company's ModMaster software is also being made available to all of the website's founding members, to compute and also to analyze the workers compensation mod factor. CEO Coomer adds that he sees the WorkCompEdge website and its tools as being a natural extension of ModMaster, being based on the knowledge the company has built up during the past twenty years.

Founding agency partner Neace Lukens representative Maureen Gallagher, says that WorkCompEdge possesses a wealth of useful, and practical, user-friendly information. She says that she has spent many hours navigating the site, and is now thoroughly impressed, so impressed, in fact, that the recognized commercial insurance broker and consultant now contributes on a regular basis to the WorkCompEdge blog.

Sacramento, Norfolk Offices to be closed by USAA

February 16th, 2009
The diversified financial services company USAA, has made it known recently that it will be shutting down its operations and office in Sacramento, California along with other operations that it maintains in Norfolk, Va., (at least in part) and that it is intending to consolidate its operations by combining them with its other United States locations. Those employees who are in good standing and who will be affected by the consolidation are to be offered the opportunity to relocate within another USAA office. The other offices that are available for relocation are situated in Colorado Springs, Colo., San Antonio, Texas, Phoenix, and Tampa, Fla.

Joe Robles, who is the CEO and president of USAA, says that this present consolidation of facilities is because of the affect of real estate capacity and expenses. He also notes that there are currently more than 5,000 vacant seats not required by the company. He points out that USAA places a high value on their employees as well as to very special service that these employees provide to the company’s members. Robles says that his company is in the position to provide a job for every eligible employee that is in good standing with the company. He says that they have already set up a special, relocation program that he describes as being attractive, designed to help retain as many employees as they can.

The date set for completing this project of consolidation as well as the relocation of the company’s employees that are to be affected by the relocation move, is the end of September of this year by which time relocation efforts are expected to be completed. Robles stresses that this move will in no way impact member customer service. At the present time the number of employees in the Sacramento office stands at 625 positions, while there are another 475 positions that are slated to be affected directly by the company’s consolidation within the Norfolk office. For those employees that are not in a position to relocate, generous severance packages are being offered.

The Norfolk claims staff and legal staff of USAA will remain intact. They will be used to support strategic business needs. However, the company will be leasing space for them in the Norfolk area in a yet to be determined location. Field claims personnel living in the Sacramento of Norfolk areas will not be affected by the consolidation. These personnel will continue as they are now, working remotely.

At the same time, the USAA offices in San Antonio, Phoenix, Colorado Springs and Tampa will continue operating as usual, as they integrate their new colleagues from Sacramento and Norfolk. It is expected that between 250 and 1,000 customer service and claims positions will be added at these locations. These positions will be filled mostly by those employees that are being relocated in addition to hiring efforts within the existing local communities. The staff represented in the Sacramento and Norfolk offices are drawn primarily from the company's auto and property insurance operations. Both of these facilities will be sold according to USAA.

Is Life Insurance A Good Investment?

Your insurance agent will tell you that a whole life insurance investment is the best way to go. It's good for the rest of your life so you will never be without coverage. It’s also good for the agent’s commission.

Your life insurance policy builds cash value and can be used as an investment vehicle. If you ever need money you can take out a loan against your life insurance policy. These all sound like good reasons to make a whole life insurance investment and for many people it is but for some it may be better to go with a term life insurance policy.

Life insurance itself is a very smart move to protect your family but you may want to think twice about a whole life insurance investment. For some people, whole life insurance is a great option but it's not the best for everyone and may not suit every situation. Sometimes term life insurance is the better choice.

You should consult with a financial planner before making your decision but you may be well served by a term life insurance policy and putting the substantial savings off of your premium payments into other investments.

Things Are Tough – Don’t Cancel Your Life Insurance

The current economic mess is forcing many of us to rethink our budgets and make some drastic changes. Cutting back on various items seems the best way to make ends meet. But cancelling important life insurance policies to save money could prove a very costly mistake for you and your family.

If you cancel your life insurance policy that puts an instant stop on the cover it provided. For example, the payout from your policy might be earmarked for providing care for your children if you're no longer around. Unless your circumstances have changed, that need for protection is still there. So ask yourself how your family would cope if the worst were to happen to you, but they received no financial help?

When your financial situation improves, you may have to pay more for the same level of life insurance cover. That's because you'll be a little older. And the older you get, the greater the risk you pose to an insurance company, which means the premiums for your life insurance policy will be more expensive.

You could end up chasing after life insurance you can afford your whole life.

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Dealing With At-Fault Accidents

I can be a very nerve wracking experience to be in an auto accident, even when no one is injured. If you are in an auto accident and it is you who are at fault then it can be even more nerve wracking. In this case not only are you responsible for the damage to someone else's car along with your own but you probably are worrying how the accident will affect your auto insurance premiums.

Changes in the Pattern of Rate Hikes

For some time now, auto insurers have been using the excuse of accidents as a means for raising their clients’ auto rates. Occasionally the company would even raise rates when their client was not at-fault, even in this case where they didn’t have to pay out any money for a claim. But in many states the public outcry along with changing laws has changed this. There are however, still many responsible drivers who may yet be in for a rate increase.

Normal Procedures for Dealing with At-Fault Claims

The state laws determining why and when an auto insurance company can increase its rates based on an at-fault accident may vary from state to state. Here is how insurance companies handle at-fault claims along with a few tips.

• In the event that there is a police report and the presiding officer has designated one of the parties in the accident to be “at-fault,” insurance companies do not need to take the officer’s word for it. In most cases, the insurance company itself will hold its own investigation into the accident to determine who they decide was at-fault for the accident. In many states there are laws determining how the investigation should be conducted.

• When deciding if to raise rates, companies may take the severity of the accident into consideration when. So if it is a small or minor fender bender your rates may not be affected, but if you are in an accident in which major auto repairs are needed or medical bills need to be paid, your rates will probably go up.

• There are insurance companies today that are offering what is called “Accident Forgiveness.” When the driver has a good driving record according to their insurer’s standards, for his first at-fault accident the company may not raise the driver’s rates.

• When it comes to the second at-fault accident however, most people can expect a significant rate increase. This is experience true when it follows closely behind their first one.

Making an Auto Insurance Claim

Insurance is not like any other product you may be purchasing in life. For example, if you were to buy a car, you would be allowed to drive it home. If you were to buy a house, you would be able to live in it. But this is different when you buy insurance. In this case you only get a piece of paper that represents a promise that if you are to make a claim it will be paid. But, is there a way to make sure you get paid? Here are some tips to follow.

1. Always keep a record of your claim number. Make sure that it is written down and available to you. If you do this, the claims adjuster will be able to handle your claim faster. It is a general rule that the quicker the adjuster is able to handle your claim, the easier he or she is to work with.

2. Do not try to get every dime out of the adjuster. If the offer that you have been given is close to the amount of loss, and seems reasonable, do not keep pushing for that last $5. You will never get what you want from them and in the end you may cause negotiations to be harder on other aspects of your claim.

3. Do not threaten the adjuster by telling him or her that you are planning to hire an attorney. They hear this all of the time and it doesn’t scare them. The usual reaction is that they get more difficult to work with. Unless you have actually hired an attorney, don’t mention it.

4. Treat the adjuster like a regular person. Adjusters are also human. When you treat an adjuster with respect you can expect to be treated the same way. This will make the claim process much easier.

5. Make sure that you have available all of the required documentation. For example, if you say that you had a special seat in your car that cost $500, then the adjuster is going to want to see some kind of proof. While you may not have the original receipt, you may have to provide some documentation that the car seat costs what you say it did.

6. Do be disappointed if the adjuster does not treat you as his friend. The adjuster has a job to do and can't spend time developing relations. His job is to pay your claim and then move on to the next claim. If they are able to save the insurance company some money, then from their perspective, that is all the better. So don't expect them to give you advice, explain things to you, or offer you exactly what your case is worth!

Individual Health Insurance

According to the U.S. Census Bureau about 60 percent of people get health insurance through their employer under group health insurance programs. Another 27 percent of the population is covered by government sponsored health care.

The remainder is the self-employed or those working for very small companies which do not provide health insurance benefits. If that describes you, you must directly purchase coverage directly through private health insurance companies. If you and your family have always been healthy, you will be able to choose from a variety of plans available in your state. However, if you've already had any medical conditions, or other high-risk factors, you may be unable to find a health insurance company that will insure you at any price.

All health insurance companies are in business to make money. They don't want to sell insurance to people who are most likely to utilize it. At the end of the day, what determines their profitability is that they need to take in more dollars in premiums than they pay out in benefits and administration costs. When a health insurance company sells a policy to a business it gets all that businesses' employees, healthy and sick.

Keep an eye on the numbers when you are buying health insurance

The most bewildering and difficult to understand aspect of individual health insurance policies is probably the pricing, so it's well worth your while to shop around. For instance, the premiums for similar products from different insurers can vary by as much as 50 percent for the same person. What's more, the rules and regulations about individual health insurance vary from state to state, making comparison shopping a must for the uncertain consumer.

If you're faced with finding individual health insurance, don't let the confusion tempt you to go without. Even if you're healthy, you could fall off a ladder or have a serious car accident and be financially ruined. Plus, you'll lose your pre-existing-conditions coverage in most states if you go without health insurance for more than 63 days.

Finding the right balance of coverage and cost of health insurance can be challenging, but it's a necessity. So take your time and do your search one step at a time. The first step is to evaluate your health insurance needs and understand your health insurance options. For some, that may mean buying COBRA coverage from their former employer.

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