Kovacs named new PACICC chief

For Insurance Bureau of Canada (IBC) chief economist Paul Kovacs has been named president and CEO of the industry’s guaranty fund. The Property and Casualty Insurance Compensation Corp. (PACICC) says Kovacs will take over immediately, with current CEO Alex Kennedy set to retire at the end of the year. Kennedy has held the post for five years.Kovacs was with the IBC, most recently as senior vice president of policy development, as well as chief economist, since 1992.He has also been executive director of the Institute for Catastrophic Loss Reduction (ICLR) since 1997, and it is expected he will remain in this position. Prior to joining IBC, Kovacs served with the Ministry of Finance and Ministry of Community and Social Services of the Ontario Government, as well as working with economic research firm Burns Fry (now BMO Nesbitt Burns).”We are pleased that Paul Kovacs will continue the succession of strong leadership that we have had at PACICC and guide the organization in this crucial time for our industry,” says PACICC chair Alain Thibeault. Paul brings a keen understanding of the issues related to the financial stability of the industry that will serve insurers and consumers very well. He is highly regarded in the industry and has had experience in dealing with PACICC’s various stakeholders, including the Office of the Superintendent of Financial Institutions (OSFI) and the provincial regulators.”Kovacs notes that the industry faces important challenges in the current market. “As insurers emerge from the most difficult market in Canadian history, consumers will want to be assured that the industry remains solvent. While return on equity appears to be recovering, capacity problems in the industry as a result of declining capital will continue to be a concern.”PACICC is dealing with several challenges, including the insolvency last year of Markham General, as well as the Newfoundland government’s proposal to require insurers to belong to a compensation mechanism that pays back 100% of unearned premiums to policyholders in the case of an insolvency.