In harm's way
Article Abstract:
Due to an increase in civil suits, outsider-initiated costly product reforms, and market instability (coupled with increased competition), property-casualty insurers have sought relief through innovative market strategies and policy revisions to reduce risk exposure. State Farm and Allstate serve as examples of the trend toward mass marketing, including personal policies as well as those that fall under the heading of employee benefits. A review of industry threats in the areas of product liability and pollution focuses on the new commercial general liability policy, with three areas of modifications designed to better control risk exposure. The National Council on Compensation Insurance has introduced broader policy coverage for employers faced with the threat of the "doctrine of dual capacity." Insurers must continue to change products to adapt to an evolving environment.
Publication Name: Management Focus
Subject: Business, general
ISSN: 0076-3624
Year: 1985
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Profit and laws
Article Abstract:
Upcoming Congressional legislative activity will affect banking and insurance industry marketing strategies because of lingering arguments over market domain, despite Title VI of the 1982 Garn-St Germain Depository Institutions Act restricting the financial arenas, while allowing the "South Dakota loophole." A discussion of the 1983 South Dakota legislation (and arguments against it) that opened up insurance opportunities for banks indicates the weaknesses of the Garn Act. The concept of non-bank banks is also discussed, relative to the enforcement provisions of the Garn Act. The Donald T. Regan legislative campaign to broaden banking powers is reviewed, and the insurance company non-bank strategy is examined. The bargaining of the 98th Congress and political prognostications are presented. It is not likely that these issues will be resolved soon.
Publication Name: Management Focus
Subject: Business, general
ISSN: 0076-3624
Year: 1985
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Double exposure
Article Abstract:
By ceding a portion of its underwriting risk to an assuming reinsurer, an insurer can cover larger risks because of reduced exposure, but the ceding and assuming insurers must assess each other's financial stability to avoid the huge losses of the late 1970s that continue to affect the industry in the 1980s. A hypothetical example is used to demonstrate precautionary measures related to reinsurance agreements, such as the submission of quarterly financial reports for monitoring by both parties to the reinsurance agreement.
Publication Name: Management Focus
Subject: Business, general
ISSN: 0076-3624
Year: 1985
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