What’s new: In brief (October 26, 2004)

The Property-Casualty Insurers Association of America (PCI), says the issue of broker commissions has become confused the long-standing practice of contingent commissions is being lumped in with alleged acts of wrongdoing which are not accepted by the industry. “While those guilty of any illegal business practices should be punished, it is unfair to paint the entire industry with the same brush that is being applied to the individuals and corporations named in the Spitzer complaint,” says PCI president Ernie Csiszar, a former insurance regulator. “It is important to keep in mind that the businesses affected by these transactions are sophisticated corporate insurance buyers, many of whom consult with or retain risk managers to assist them in the purchasing process.”

Transatlantic Reinsurance Co. and its subsidiaries have had their “AA” rating affirmed with a stable outlook from Standard & Poor’s. The rating reflects a “strong business franchise, strong underwriting culture, strong operating performance, conservative investment strategy, excellent financial flexibility, and strong capital adequacy”, says S&P analyst Laline Carvalho.

AIG says it will seek “prompt resolution” of issues with the U.S. Securities Exchange Commission and Department of Justice by pursuing a settlement with the government and regulators. The issues relate to an investigation of transactions between an AIG Financial Products subsidiary and PNC Financial Services Group between June, 2001 and November, 2001 for which SEC and Justice Dept. staff recommend charges be filed.