QBE Acquires U.S. Crop Insurer For $565M

QBE Insurance Group has agreed to acquire NAU Country Insurance, a provider of crop insurance in the U.S., NAU Country Insurance reports. The $565 million deal is expected to close in July 2010. QEB is buying the specialist business to further enhance its product diversification and distribution.

The deal would add 3-4% to QBE’s earnings per share in the first year. The company is planning to fund the acquisition through cash and short-term borrowings. QEB, which made 75 acquisitions in 47 countries in the past 10 years, is in talks for takeovers in Europe, the US, Latin America and Australia, adds Reuters.

Insurance penetration low in Pakistan

KARACHI: The insurance penetration in Pakistan is miserably low, the Executive Director Insurance of the Securities and Exchange Commission of Pakistan (SECP) Nasreen Rashid said on Thursday.

Nasreen Rashid said the need of the hour is to increase the insurance penetration in Pakistan. “Now our focus is the microinsurance for the people from lower income groups”, she remarked. She said steps would be taken for the promotion of the microinsurance in the country.

This, she pointed out, would be all-inclusive product would cover everything relevant, adding efforts would be made for the creation of enabling environment for the promotion of insurance in the country.

She also highlighted the significance of the insurance but regretted that awareness in this connection is quite low in this very respect.

Whereas, Tariq Hussain and Farazuddin Amjad- both from the SECP Insurance Division, highlighted the vision which is aimed at promoting orderly development of a financially strong and transparent insurance, thereby increasing the insurance penetration in Pakistan. Arguably, in Pakistan, the insurance penetration is mere 0.7 percent of the GDP, which is believed to be the lowest in the region as well as in the world. The insurance industry remained ignored in the country for decades.

Volcanic ash 'highlights need for travel insurance'

Holidaymakers have been reminded of the need to buy travel insurance the moment they book a flight or vacation.
The Icelandic volcanic ash eruption should serve as a reminder to Britons for the need to have travel insurance.

With the incident causing flights across the country to be grounded, Direct Line notes that affected travellers who opted to purchase cover ahead of their journey could find they are able to make claim as a result of a missed departure or travel delays.

As a result, those with either single trip travel cover or annual insurance may be able to get their money back or make new travel arrangements at no additional cost

However, Direct Line spokesperson Jennifer Thomas claims those wishing to purchase single trip insurance now will be unable to make a claim in the event of any disruption caused by the ash "as they are buying cover in the knowledge that there is a problem".

"This highlights the importance of buying travel insurance as soon as you book your holiday or flight," she states.

The advice comes as Esure urged those wishing to indulge in adventurous sports and activities while on holiday to first check the terms of their insurance policy, as some 13 per cent of travellers have suffered an injury while taking part in such pursuits.

All insurers barred from issuing new ULIPs

New DelhiL: Union Finance Ministry has stepped in the war between Securities and Exchange Board of India (SEBI) and Insurance Regulatory Development Authority (IRDA) over new unit linked insurance plans.

Insurance companies cannot issue any fresh ULIP products until a court decision. The restriction is also applicable on the Life Corporation of India (LIC) and eight others companies which were not named in the earlier SEBI order that barred 14 insurers from issuing any new ULIP.

But all ULIPs issued before April 9 will continue. The Finance Minister had already asked the insurance and market regulators to maintain status quo on the SEBI order banning new unit linked schemes or products by insurance companies.

The market regulator had on April 12 lifted its ban order imposed on April 10 on selling of ULIPs by the 14 insurance companies after a meeting with IRDA and Finance Ministry officials in New Delhi.

The IRDA had rejected SEBI's decision and asked the insurance companies to carry on with business as usual. The insurance regulator had invoked its powers under Section 34 (1) of the Insurance Act to take on SEBI.

SEBI wants all financial products to move to no entry load. ULIPs currently charge entry load.

The insurance companies against whom SEBI passed an order were SBI Life, ICICI Prudential, Tata AIG, Aegon Religare Life, Aviva Life, Bajaj Allianz, Bharti AXA, Birla Sunlife, HDFC Standard Life, ING Vysya Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India and Reliance Life

Administrators not in a hurry to sell off Quinn Insurance

Grant Thornton, the official administrators of the Quinn Insurance empire, has today confirmed that while interest has been shown in the operations there have been no discussions with potential buyers of the business. The Quinn Insurance saga appears to be getting more complicated by the day with court action, comments from the administrators and comments from the regulators appearing to cast different light upon the direction the story will take.

It is believed, unofficially, that around 30 expressions of interest have been shown in the underlying Quinn Insurance business, for what is the second largest insurance company in Ireland and a major player in the UK market. This interest in the operation will not be to the liking of founder Sean Quinn who is attempting to reopen his UK branch for new business. A decision from the regulator is likely to come sooner rather than later with regards to the UK operation in order that doubts are lifted as soon as possible.

It is still unclear why Quinn Insurance has attracted the wrath of the regulator and indeed why the business, or at least the Irish operation, has been placed into administration.

Sean Quinn attempts to rescue his insurance empire

Sean Quinn, the founder of Quinn Insurance, yesterday served various papers on the Irish financial regulator which have resulted in a week-long reprieve before the company is possibly placed into permanent administration. As we covered in one of our earlier articles, the Irish regulator stepped in to effectively try and close down Quinn Insurance last week citing various regulatory problems and concerns.

However, the company has been fighting a battle over the last week claiming that issues raised by the regulator have been addressed and the company is still profitable and able to trade. A High Court hearing yesterday was suspended after papers were served to the regulator and the judge awarded a one-week reprieve giving Sean Quinn seven days to try and save his insurance empire.

At this stage it is unclear exactly what the regulator was and is concerned about because very little has been placed into the public domain as yet. However, it is likely that, assuming the issue goes to court, we will hear further details which should cast more light on this rather mysterious saga.

Quinn Insurance is just one of many companies which have felt the wrath of the financial regulator over the last two years. An increase in fines, court cases and in some cases suspensions and administration has certainly been the name of the day from regulators in the UK and in Ireland.

Georgia Insurance Commissioner Balks at Request on New Health Law

ATLANTA — The insurance commissioner of Georgia has chosen not to comply with a federal request to create a state pool for high-risk insurance plans, opening a new front in the resistance by state Republican officials to the new federal health care law.

The commissioner, John W. Oxendine, who is a Republican candidate for governor, appears to be one of the first politicians in the country to take that stance. His decision will not affect the cost of insurance for any patients, but it means that the federal government, not the state, will oversee the distribution of certain federal health care funds in Georgia.

Nineteen state attorneys general — nearly all Republicans — are filing lawsuits challenging the constitutionality of the health care law. The issue has been especially contentious in Georgia. After the state attorney general, a Democrat, called the lawsuits a waste of taxpayer money, Republican lawmakers here drafted a petition calling for his impeachment, and the Republican governor appointed a “special attorney general,” a private lawyer, specifically to file a lawsuit on the state’s behalf.

Mr. Oxendine, in a letter Monday to Kathleen Sebelius, the secretary of health and human services, said he could not allow Georgia to join “a scheme which I believe the Supreme Court will hold to be unconstitutional, leads to the further expansion of the federal government, undermines the financial security of our nation, and potentially commits the State of Georgia to future financial obligations.”

In an interview, Mr. Oxendine said he had spoken to at least two governors and one insurance commissioner from other states who were considering taking the same stance, although he would not say which states.

This month, Ms. Sebelius had asked the governors and elected insurance commissioners of every state to decide by April 30 whether, and how, to create the insurance pools. Under the health care law, a total of $5 billion in federal money will be allocated to reduce the costs of insurance premiums for high-risk patients by the end of 2013.

A spokesman for Ms. Sebelius, Nicholas Papas, said the decision by Mr. Oxendine would not affect the premiums that any Georgians pay.

“For too long, Georgians with pre-existing conditions have been locked out of the insurance market,” Mr. Papas said in a statement. “If state officials in Georgia elect not to participate in the high-risk pool program, our department will work to ensure Georgians with pre-existing conditions have access to affordable insurance through the federal high-risk pool program that we will establish this year.”

Mr. Oxendine said his opposition to the pool program was legal and financial, not politically motivated. But some political experts noted that any stance against the federal health care law could help him in the crowded Republican primary race for governor in July.

“I suspect the decision was heavily influenced by politics,” said Charles Bullock, a professor of political science at the University of Georgia. “The electorate here is hostile to Barack Obama and health care reform.”

Mr. Oxendine’s decision is not necessarily the final word on whether Georgia will create the insurance pool. Bert Brantley, a spokesman for Gov. Sonny Perdue, said the governor’s office would also issue a response to Ms. Sebelius, but agreed with Mr. Oxendine’s arguments against the pool.

SEBI bars launch of new ULIP’s

Market regulator Securities and Exchange Board of India (SEBI) barred the launch of new unit-linked insurance plans (ULIPs) by 14 life Insurance companies until they seek permission from the Insurance Regulatory and development authority (IRDA).



However, the order will not apply to existing ULIPs, SEBI said.

On April 10, SEBI had banned the 14 insurance companies from selling their Unit-linked Insurance products as these were in the nature of mutual funds and not insurance.

SEBI and IRDA agreed to maintain the current status of ULIPs after the intervention of the finance ministry.

Both the regulators have agreed to jointly seek a legal binding mandate from an appropriate court.

Earlier, the IRDA rejected SEBI’s decision and asked the companies to carry on with business as usual.