What’s New: In Brief (November 05, 2007)

Just one month after the Ontario government introduced a tough new, anti-street-racing law, more than 1,000 motorists have been charged under the act, the Metro newspaper in Toronto has reported.The new law introduces harsh penalties such as license suspension or the potential impoundment of a vehicle for a week if motorists are caught traveling more than 50 km-h over posted speed limits.The Metro paraphrased the provinces police commissioner, Julian Fantino, as saying he was shocked 1,057 drivers had been charged under the new law after only a month.

Guy Carpenter & Company, Marsh & McLennans global risk and reinsurance unit, is developing a hedge index to pave the way for a transparent means of protecting against unpredictable adverse loss reserve development.Guy Carpenter says the index is a result of identifying a need for a new class of products that would allow its clients to hedge the systemic risk associated with long-tail lines.Michelle Harnick, managing director at Guy Carpenter, describes under-reserving as often resulting from what is broadly referred to as systemic risks. Harnick said these include new areas of toxic torts as well as unforeseeable events, legislative and regulatory changes, aggregation risk, changes in the macroeconomic environment and adverse decisions on insurance.Designed to require little underwriting, Guy Carpenters hedge index would help insurers reserve for these systemic risks, including aid in selecting attachment points and determining the amount of coverage for each accident year. The hedge index is based on industry loss development indices.The index is currently being tested in private passenger auto liability, commercial auto liability, workers compensation, commercial multi-peril, medical malpractice and other liability lines.