What’s new: In brief (September 12, 2004)

Fitch Ratings says even with the back-to-back landfall of hurricanes Charley and Frances, most insurers will be protected because of their spread of risk geographically and by line of business, as well as the presence of public-sponsored entities which will bear a good portion of the loss. However, insurers concentrated in Florida will feel the pinch, and all policyholders will ultimately have to pay some portion to support the public-sponsored entities if insurers are required to subsidize these entities following the storms.

The Canadian Broker Network has welcomed Smith Petrie Carr & Scott Insurance Brokers Ltd. of Ottawa and Moore-McLean Corporate Insurance Ltd. of Toronto. The network was formed in 2002 to act as a networking body for commercial lines brokers. Thus far, nine brokerages are part of the network, including brokers from Ontario, Manitoba and Alberta.

U.S. insurers are concerned by a recent Utah Supreme Court judgement on punitive damages in State Farm v. Campbell. While the Utah court had originally awarded compensatory damages of just US$1 million and a whopping US$145 million in punitive damages, the U.S. Supreme Court ruled this amount was out of line. The punitive damages have now been reduced to US$9 million by the Utah court, but insurers say this still flies in the face of the Supreme Court’s desire to keep punitive damages more in line with compensatory damages.