- State Farm profits fell $1B last year, while the mutual’s p/c companies basically broke even. Underwriting losses were $4.5B – $1.3B worse than 2010, thanks to five of the 25 worst cats in the mutual’s history.
- Two undercover NY cops posed as accident victims to bust up a massive ($275M) medical fraud mill. The coppers got kickbacks to show up at clinics and attest they received treatments they didn’t receive for injuries they did not have. The NY Daily News trots out the Untouchables glossary – doctors got fat fees to be in cahoots with ringleaders – to write the story.
- The U.S. Supreme Court limited the ability of asbestos victims to sue in state courts. This is generally a good thing for the insurance industry, which prefers federal venues.
- Chartis, AIG’s p/c vehicle, is exiting the excess workers comp business. It had been a leader in the specialized coverage, but the line had stuck it with significant reserve increases in recent years.
- Last week, I’d noted that AIG’s Q4 earnings were puffed up by reinstatement of an $18.7B tax-loss carryforward. This week, the New York Times got upset – the tax deal was in essence a private ruling by the Treasury Department that: a) helps senior execs hit bonus targets; and b) helps the feds say they “turned a profit” on the AIG bailout – if you don’t count forgoing $18.7B in taxes.