Fall Season Reminder: Heating Causes 14% of Home Fires

Heating is the second leading cause and accounts for 14 percent of all residential building fires responded to by fire departments across the nation.

From 2008 to 2010, an estimated average of 50,100 heating fires in residential buildings occurred in the United States each year and resulted in an annual average of approximately 150 deaths, 575 injuries, and $326 million in property loss, according to government figures.

Fall begins this Saturday, and with it comes cooler temperatures and the resulting seasonal increase in the number of home heating fires. The term "heating fires" applies to those fires that are caused by central heating units, fixed or portable local heating units, fireplaces, heating stoves, chimneys, and water heaters.

Previously, especially during the late 1970s and early 1980s, heating was, by far, the leading cause of residential building fires. Stimulated, in part, by an energy shortage, this surge in heating fires was the result of the sudden increased use of alternative heating, particularly wood heating stoves and space heaters.

Since then, the overall numbers of heating fires have substantially decreased. In 1983, there were 200,000 heating fires, but by 2010, that number had fallen to an estimated 46,800.

Cooking is the leading cause of residential fires.

A new report from the U.S. Fire Administration (USFA), "Heating Fires in Residential Buildings (2008-2010)" is based on data from the National Fire Incident Reporting System (NFIRS) and provides more detail on the different types of heating fires and when they are most likely to occur. According to the USFA report:

• Residential building heating fires peak in the early evening hours between 5 and 9 p.m. with the highest peak between 6 and 8 p.m. This four-hour period accounts for 30 percent of all residential building heating fires.

• Residential building heating fires peaked in January (21 percent) and declined to the lowest point during the summer months from June to August.

• Confined fires, those fires confined to chimneys, flues, or fuel burners, accounted for 87 percent of residential building heating fires.

• Thirty percent of the non-confined residential building heating fires occurred because the heat source was too close to combustibles.

As heating season gets underway in many parts of the country, the USFA offers the following safety tips:

• Maintain heating equipment and chimneys by having them cleaned and inspected annually by a qualified professional.

• Use heating equipment that has the label of a recognized testing laboratory.

• All heaters need space. Keep anything that can burn at least three feet away from heating equipment.

• Plug space heaters directly into outlets and never into an extension cord or power strip.

• Install and maintain carbon monoxide (CO) alarms inside a home to provide early warning of CO.

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Mississippi Court Hears Challenge to Death Certificate As Evidence in Accident

Prosecutors have asked the Mississippi Supreme Court to reinstate the conviction of Jeffrey Dale Beecham, who won a new trial because the state failed to offer testimony to authenticate a death certificate in a fatal DUI case.

Special Assistant Attorney General Billy Gore told the court that a death certificate was used at Beecham's trial to provide the cause of death and other facts and did not require testimony from an expert to validate.

The state Court of Appeals last year ordered a new trial for Beecham on grounds that his attorney was not allowed to question the doctor who prepared Freda Lovelace's death certificate. Beecham claimed — and the Appeals Court agreed — that it was a violation of his Sixth Amendment right to confront his accusers.

Beecham was convicted in 2008 in DeSoto County of being intoxicated when he was involved in a fatal wreck. Prosecutors said Beecham's blood-alcohol content was more than three times the legal limit of 0.08 percent.

Beecham was sentenced to 25 years. Beecham died in 2011 while in prison.

At trial, Circuit Judge Robert Chamberlin had allowed a certified copy of Lovelace's death certificate to be introduced by prosecutors without a sponsoring witness.

The Court of Appeals ruled the death certificate was tantamount to testimony in that it offered a conclusion that Lovelace died from "complications of blunt-force injuries to head and chest sustained in an automobile accident."

The Appeals Court said the only information that Lovelace died in 2007 as a result of the automobile accident was the death certificate.

"Death certificates are different from laboratory or ballistic reports. If you can't trust a death certificate, what can you trust? It is a record of vital statistics. It is self-authenticating," Gore said.

John Watson, a Southaven attorney representing Beecham, said the death certificate noted that she had been involved in a traffic accident.

"The death certificate was the only thing put in by the prosecution as to the cause of death. The confrontation clause says that we've a right to cross-examine. There are many, many trials that result from traffic accidents. There are circumstances where information in a death certificate is testimonial and in this case it is," Watson said.

He said the death certificate allowed the prosecution to admit facts of the case into evidence without testimony to support it.

Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Willis Opens New Office in Malta

Willis Group Holdings plc has opened a new office on the island of Malta, which it said is "to serve its growing captive and commercial insurance clients in the region," an area that "has experienced substantial growth in the past year. The office is located at Development House on St. Anne Street in Floriana, just outside the Maltese capital of Valletta.

Willis' Malta operation now has seven full time Willis associates based in Floriana, who will bring the services of the wider Group to bear on a growing portfolio of local clients. The official office opening took place on September 19th and the Chairman of the Malta Financial Services Authority, Professor Joe Bannister, attended as a guest speaker.

"The presence of a global insurance broker such as Willis is proof that Malta is a jurisdiction of repute with solid regulation," Bannister stated. "The presence of Willis assumes great importance because it shows that Malta—now a Member State of the EU—is able to attract large multinationals to the island. The indications are that we are going to continue achieving this despite the economic and financial turbulence."

Nigel Goodlad, Managing Director of Willis Management (Malta) Limited, commented: "We are now even better positioned to take our insurance company management business forward in an attractive EU location and modern office environment. Malta has a number of unique characteristics that make it an interesting location for our clients. The combination of the ability to write risk across the European Economic Area (EEA), an accessible regulator and a pleasant place to do business makes for an attractive business proposition."

Malcolm Cutts Watson, Chairman of the Willis Global Practice – International, added: "Malta is an expanding financial services centre with close links to many European financial hubs enabling European organizations to easily set up their captives here. They are impressed by the business centric experience provided by Malta. This applies not only to captives but also third party underwriters writing commercial books of risk."

Source: Willis Group Holdings

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Gunshot Claim Not Barred by Workers' Comp Settlement: Georgia Supreme Court

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Gunshot Claim Not Barred by Workers’ Comp Settlement: Georgia Supreme Court

A worker who unintentionally shot a co-worker can be sued in civil court since his actions were outside the scope of his normal duties and despite the fact the employer treated the shooting like a workers' compensation claim, the Georgia Supreme Court recently ruled.

At issue before the high court was the application of a landmark workers' compensation case [Ridley v. Monroe, 256 Ga. App 686 (2002)] that found if a worker receives benefits for an on-the-job injury the worker cannot then sue a fellow co-worker even if the worker was responsible for the accident and acting outside his or her normal duties.

The state's high court upheld the Ridley principle but carved an exception due to the particular facts of the Smith case that it said allow a civil suit.

The case that rose to the Supreme Court [Smith et.al v. Ellis, S12A1174] had its genesis in a Georgia District Court of Appeals case where the judges split 6-6 on the issue of whether Ridley should be upheld. The matter then went before the state's high court.

At stake are the circumstances in which an injured worker can sue a co-employee responsible for his injury in civil court.

The Smith case started due to a February 2009 incident between Joseph Smith and John Ellis, both of whom were employed by Georgia housing construction firm, The Knight Group.

The two men worked at different housing subdivisions. Ellis asked Smith if he could meet him at Smith's job site so he could borrow a tool and test fire an AR-15 rifle he had just recently bought.

Ellis began firing his new rifle at a nearby undeveloped lot while Smith worked near his truck. The rifle jammed three times. Ellis unjammed the rifle twice, but the third time he accidentally shot Smith with the bullet, penetrating his right leg into his left leg leaving him seriously wounded.

The Knight Group subsequently fired both men. But when Smith filed a workers' compensation claim saying the incident happened on the job, the company agreed to pay him $6,000 with the stipulation that it was not a compensable claim.

Under Georgia state law, employers and injured workers can agree to a "no liability" settlements, whereby an injured worker can receive a lump-sum payment while holding the employer harmless for any future legal action requesting medical or wage-loss benefits.

The settlement triggers the "exclusive remedy" portion of the workers' compensation law and blocks the injured worker from seeking further action against a co-worker or employer.

But Smith later sued Ellis for negligence and Smith's wife sued for loss of consortium based on the argument that Ellis was not acting in the capacity of "employee of the same employer" and therefore could be sued.

At the trial court level, the court found for Ellis based on the Ridley case, maintaining that since Ellis received a workers' compensation settlement he had no standing to sue Smith.

Upon appeal, however, the Georgia District Court of Appeals split 6-6 on the issue of whether Ridley should be overturned given the facts of the case.

District appeals court Judge Anne Barnes, writing for in favor of overturning Ridley, said that Smith's injury did not constitute a compensable act because "no rational mind can see a causal connection in this case between the conditions of Smith's employment and his injury."

As a result, Barnes said that by blocking Smith's right to sue, Ridley was "illogical" and should be overturned.

Writing in favor of Ridley, appeals court Judge Gary Andrews said that since Smith accepted the workers' compensation settlement he essentially agreed with the state law barring any further action. Andrews wrote that overturning Ridley would gut the exclusive remedy provision of the workers' compensation law and would "flout the [law's] command that it be interpreted liberally to bring both employers and employees within its scope."

In its decision on the Smith case, the state Supreme Court upheld Ripley, stating the case correctly interpreted the intent of the state's workers' compensation law. However it also opened the door to further suits in the Smith case.

Supreme Court Judge David Nahmias said Ridley rightly prevented injured workers from reaching a workers' compensation settlement with an employer only to "turn around and sue the employer now alleging that the injury was not compensable, hoping that the court will disregard the prior resolution of the case."

However, the high court did not stop there and outlined a possible exception to the Ridley ruling.

Nahmias noted that a substantial argument could be made that at the time of the shooting Ellis was not acting as an "employee of the same employer." Among other things, he noted Ellis was not at his job site, was not engaged in his normal work duties, and was acting in a manner that his "employer did not condone, much less direct."

Nahmias said such an exception should be possible because if Ridley prevented an injured worker from suing a co-employer or employer as was the case in the Ellis case, it could open the door to other workers' compensation claims the law never anticipated.

"As long as the plaintiff happened to be employed by the same employer and working at the time of the injury, it would make no difference whether the co-employee defendant was at work, off-duty, or even on vacation when the injury occurred," wrote Nahmias.

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Marsh Names Cameron, Ott in West

Marsh named Alice Cameron as west zone leader of Marsh Private Client Services and Susan Ott as San Francisco PCS office leader.

Cameron is responsible for overseeing all aspects of Marsh PCS operations in its Los Angeles, San Francisco, and Seattle offices.

Ott, who is responsible for the San Francisco PCS office, reports to Cameron.

Mash PCS clients include many members of the Forbes 400 list of the wealthiest Americans.

Cameron has 22 years of insurance industry experience as a broker, high net worth client advisor, and underwriter. She rejoins Marsh PCS from Fireman's Fund Insurance, where she was a vice president responsible for marketing and corporate communications. She began her career at Safeco Insurance in 1990 as an personal lines underwriter.

Ott has 25 years of experience as an insurance broker and high-net worth client advisor. Before rejoining Marsh in 2011, she led the personal insurance divisions dedicated to affluent individuals and family offices at both MacCorkle Insurance and Frank Crystal & Company. She previously managed the West Coast offices for PLI. She began her career in 1987 as a client advisor in Marsh's San Francisco office.

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Pawlenty to Head Financial Services Roundtable

Former Republican presidential hopeful Tim Pawlenty will become the head of the Financial Services Roundtable, a U.S. financial services lobbying group that represents JP Morgan Chase & Co. and Wells Fargo & Co., among other financial companies, the group said on Thursday.

Pawlenty, who dropped out of the White House race early and quickly backed Mitt Romney for the nomination, takes over as president and chief executive office of the industry group on Nov. 1, it said in a statement.

As the industry's top lobbyist, he will play a major role in the industry's efforts to make new Dodd-Frank rules, which Congress passed in 2010 in response to the 2007-2009 financial crisis, more favorable for Wall Street as regulators implement the law.

The measure – a response to the crisis fueled by risky financial swaps trading at some firms that required multibillion-dollar tax payer bailouts – has yet to be fully enacted.

"Few industries have more impact on the entire economy – and on the lives of average Americans – than financial services. I realize there is still work to be done to continue to earn customers' confidence," Pawlenty said in the statement.

"Our members will best accomplish that goal by responsibly investing every day in our communities and job creators," he added.

A former Minnesota governor, Pawlenty was considered a possible vice presidential pick for Romney, but U.S. Representative Paul Ryan of Wisconsin eventually was chosen.

The Financial Services Roundtable represents 100 integrated financial services companies and accounts for $92.7 trillion in managed assets, $1.2 trillion in revenue, and 2.3 million jobs, according to the group.

[Insurance industry members include Allstate, Brown & Brown Insurance, Chubb, Hanover Insurance, The Hartford, Liberty Mutual, Nationwide, State Farm and Swiss Re America.]

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Ratings Recap: Emirates, Sorford, BF&M, Unity Re

A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of 'A-' (Excellent) and issuer credit rating of "a-" of Emirates Insurance Company P.S.C. (EIC), which is based in the United Arab Emirates. The outlook for both ratings is stable. The ratings of EIC reflect its "strong level of risk-adjusted capitalization, very good track record of technical profitability and established position in the United Arab Emirates market," Best explained. As an offsetting factor Best cited the company's" weak investment strategy, with a significant concentration in equities." Best added that in its opinion, "EIC's risk-adjusted capitalization is strong, benefitting from capital and surplus of AED 784 million ($214 million) in 2011, relative to a low level of underwriting risks. Additionally, EIC's capital position is supported by sound reinsurance protection. However, capital requirements are largely driven by EIC's investment activities, with a high concentration in equities, which is a concern." Concerning the equity investment concerns, Best said it "believes that while EIC's level of risk-adjusted capitalization is sufficiently strong to absorb the concentration and fluctuation in its investment activity, it will give rise to volatility in its capital position and earnings and thereby require prudent capital management." Best also acknowledged "the efforts made by the company in recent years to de-risk its investment portfolio, although exposure to equities and private investment funds remain high, above 60 percent of invested assets. Prospective levels of risk-adjusted capitalization are likely to be driven by improvements in its investment profile and dividend policy. EIC has demonstrated a very good track record of technical profitability in recent years, with technical profits rising to AED 56 million ($15 million) in 2011 from AED 54 million ($15 million) in 2010. This has been achieved through strict underwriting practices and careful selection to attract quality business in a competitive market environment. EIC produced a loss ratio below 60 percent in 2011, with a robust performance across most business segments. A very good combined ratio of approximately 77 percent has been maintained, with profits benefitting from significant inward reinsurance commissions." In Best's opinion, "EIC has become a prominent player in the United Arab Emirates' general insurance market with written premiums of approximately AED 643 million ($175 million) in 2011, establishing itself as the fourth-largest insurer by total revenue. However, there is some pressure on EIC's market position from increased competition and pressure on pricing. As such, EIC is expected to concentrate on underwriting profitability over premium volume. EIC has a diversified portfolio in line with local market characteristics, with a low retention level of 36 percent weighted towards motor." Best also indicated that it "views EIC's risk management framework as moderate, with good controls in place, particularly for underwriting and operational risks. However, there are concerns regarding EIC's deficiencies in its investment risk management, which it is aiming to address over the next three years. There is no prospect of upward movement on EIC's ratings in the short term. Downward pressure might arise if the company's capital adequacy is materially impacted by investment losses or aggressive dividend policy."

A.M. Best Co. has assigned a financial strength rating of 'B' (Fair) and issuer credit rating of "bb+" to Bermuda-based Sorford Surety Insurance Company, Ltd and has assigned the rating s a stable outlook. The company is a wholly owned subsidiary of the Miami-based IBT Group, LLC, which is a subsidiary of Spain's Eurofinsa S.A. They are both members of a multinational group of companies that specialize in the development, design, construction, equipment and finance of public infrastructure projects around the world. Best said the ratings "reflect Sorford's sound business plan, supportive risk-based capitalization and the explicit financial guarantee from IBT. Also inuring to the ratings is incorporation of a favorable business plan, upon which the profitability and liquidity metrics of the ratings are based, as well as the benefits from the management and underwriting expertise provided by Willis Management (Bermuda), Ltd. As partial offsetting factors Best cited the "start-up nature of Sorford, its limited market scope/business profile, product mix and dependence on third parties for processing, servicing and administration. Furthermore, the company's relatively large (gross) underwriting exposures, as it offers high gross insurance limits and execution risk associated with the implementation of Sorford's business plan. Additional rating factors taken into consideration are Sorford's fundamental business strategies of providing stable risk products including bid, performance and down payment surety bonds to be key lines of business, coupled with quality service for IBT. While the business that will be written has a history of strong underwriting results, to protect the company from undue risk exposure and underwriting volatility in its startup phase, Sorford will place various excess-of-loss with external reinsurers." Best said it believes that Sorford's capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), is supportive of its premium growth and overall risk profile over the next five years." However Best also indicate that is concerned "with Sorford meeting the assumptions included in its business plan, economic volatility as well as the possibility that Sorford could be exposed to a confluence of events that will test its capital strength." Best added that it would "closely monitor the quarterly performance of Sorford against its stated operating plan. Any material adverse deviations with regard to management, earnings, capitalization or risk profile could potentially undermine the stability of the assigned ratings. Conversely, key rating triggers that could result in positive rating actions would be Sorford generating consistent net income, limiting its losses and meeting and/or exceeding its business plan and credit metrics that improve steadily supporting the ratings over the long term.

A.M. Best Co. has affirmed the financial strength ratings of 'A' (Excellent) and issuer credit ratings (ICR) of "a" of BF&M Life Insurance Company Limited and BF&M General Insurance Company Limited. Best also affirmed the ICR of "bbb" of BF&M Limited. The outlook for all ratings is stable. All companies are domiciled in Hamilton, Bermuda. The ratings of BF&M Life reflect its "consistent favorable operating results, premium growth and strong level of capital. Operating income for 2011 was the highest reported in the last five years, aided in part by a one-time credit for an adjustment to the retiree benefits liability. The positive net income has contributed to the company's strong capital level through retained earnings while still maintaining a dividend to its parent company, BF&M." As offsetting rating factors Best noted "margin pressure due to competition and economic conditions, the effect of the low interest rate environment on BF&M Life's pension business and investment income and income statement volatility due to asset valuation. BF&M Life operates mainly in the local Bermuda market, which concentrates its business geographically and limits domestic growth opportunities." Best said its "ratings for BF&M General reflect its consistent overall profitability, excellent capitalization and top line premium growth. In addition, BF&M General continues to maintain a leading market position in the domestic Bermuda market. As partial offsetting factors, Best cited the "geographic concentration of BF&M General's business in Bermuda, the level of intra-group receivables, and like its domestic peers, reliance on reinsurance to protect its earnings and capitalization. BF&M Life and BF&M General are well positioned for their current ratings. Negative rating actions could occur if  BF&M Life or BF&M General experience a significant deterioration of operating trends, there is a drastic decrease in either company's level of capital or if the consistent low interest rate environment has a material adverse effect on operating results."

A.M. Best Europe – Rating Services Limited has revised the outlook to positive from stable and affirmed the financial strength rating of 'B+' (Good) and issuer credit rating of "bbb-" of Russia's Unity Reinsurance Company, Ltd. Best explained that the positive outlook "reflects Unity Re's ability to maintain a strong technical performance and a strong level of risk-adjusted capitalization while growing its business in Russia and outside its domestic market. The positive outlook also reflects the recent de-risking and de-leveraging of Unity Re's balance sheet, driven by the significant reduction in its use of repurchase agreements to date. The ratings also incorporate Best's view of Unity Re's exposure to country risk through its operations in Russia. Best described Unity Re's risk-adjusted capitalization as "strong and supportive of its ratings. A major banking institution is expected to take a 20 percent stake in Unity Re in September 2012, which will include an injection of new capital into the company. Additional capital needs generated by Unity Re's ambitious growth plans will be largely met by this capital injection and will be further supported by internal capital generation. Unity Re has been actively involved in repurchase transactions since 2010, which have been used to invest in fixed-income instruments rated within the vulnerable category. However, this trend has reversed since the beginning of 2012 and at half year 2012, Unity Re had significantly reduced its use of repurchase agreements, improving the risk profile of the company." Best also indicated that the reinsurer "continues to produce strong underwriting results, despite its rapid expansion in recent years. Technical profitability has remained at a strong level with a combined ratio of 76 percent in 2011 (2010: 75 percent). Although prospective operating results are expected to remain strong," Best said it "remains cautious about the potential impact of the company's planned growth on underwriting profit margins going forward. Nevertheless, Unity Re has demonstrated a consistent quality in its underwriting in recent years with a five-year average combined ratio of 79.1 percent. Unity Re is a leading reinsurer operating in Russia and the Commonwealth of Independent States. Despite Unity Re's relatively small size by international standards, gross written premiums grew by 25 percent in 2011 to RUB 1.275 billion [$40.45 million], estimated to represent around 6 percent of the local reinsurance market (2010: 5 percent). Unity Re's portfolio of cedants includes most of the largest local insurance companies, and unlike most competitors, its portfolio of risks excludes captive business and financial schemes. Positive rating actions could occur if Unity Re continues to profitably grow its business whilst maintaining risk-adjusted capitalization at a sufficient level to support its ratings, and maintains a prudent investment strategy. Negative rating actions could occur if there is an increase in the use of repurchase agreements to levels similar as at year-end 2011, or risk-adjusted capitalization falls below a level considered supportive of the current ratings. Additionally, a deterioration in operating performance or country risk factors could negatively affect Unity Re's ratings.

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Bank Group Warns of Heightened Risk of Cyber Attacks

A financial services industry group warned U.S. banks, brokerages and insurers on Wednesday to be on heightened alert for cyber attacks after Bank of America and JPMorgan Chase experienced unexplained outages on their public websites.

The Financial Services Information Sharing and Analysis Center, which is widely known as FS-ISAC, raised the cyber threat level to "high" from "elevated" in an advisory to members, citing "recent credible intelligence regarding the potential" for cyber attacks as its reason for the move.

The problems with the websites at the two banks came after an unidentified person posted a statement on the Internet threatening to attack Bank of America and the New York Stock Exchange as a "first step" in a campaign against U.S. companies. The posting said the attacks would continue until the film that had stirred up anti-U.S. protests across the Middle East was "erased" from the Internet.

It was not possible to identify the person who posted the statement. Nor was it clear if the threat had anything to do with the issues at either of the two banks.

Dan Holden, director of security research at Arbor Networks, said that several U.S. banks were under assault by a distributed denial of service (DDoS) campaign. He declined to identify them by name.

An outside security contractor who was familiar with the attacks said that they were "massive" in scope.

Denial-of-service attacks seek to disrupt websites and other computer systems at the targeted organization by overwhelming their networks with computer traffic.

FRAUD ALERT
The move by FS-ISAC came just two days the FBI published a "fraud alert" advising financial services firms that cyber criminals may be disrupting service to their websites in a bid to keep banks from noticing a recent surge in fraudulent large-sized wire transfers.

"Often these DDoS attacks are part of a more sophisticated blended threat – One that utilizes DDoS as a diversion for more complex, difficult to detect, techniques with the intention to extract customer data or financial information," said Holden of Arbor Networks.

An FBI spokeswoman declined to say if the tactics cited in the fraud alert were related to the problems experienced by the two banks.

On Wednesday the consumer banking website of JPMorgan Chase & Co was intermittently unavailable to some customers. The problems followed issues with the website of Bank of America Corp on Tuesday amid threats on the Internet that a group was planning to launch cyber attacks on a U.S. bank.

JPMorgan Chase spokesman Patrick Linehan said: "We're experiencing intermittent issues with Chase.com. We apologize for any inconvenience and are working to restore full connectivity."

A Bank of America spokesman reported no continuing problems on Wednesday. "Our online banking services have been, and are, up and running," Mark Pipitone said. "The vast majority of our customers have not experienced any issues."

'ENSURE CONSTANT DILIGENCE'
The short advisory from the industry group urged banks and other industry members to "ensure constant diligence in monitoring and quick response to any malicious events."

The Reston, Virginia-based group is owned by dozens of firms, including the two banks, as well as Citigroup Inc, Goldman Sachs Group Inc and Morgan Stanley. Insurers including American International Group, Allstate Corp and State Farm Insurance also belong to the group, as do credit card companies MasterCard Inc and Visa Inc.

The advisory also cited a warning from Microsoft Corp that hackers have attacked some of its customers by means of a security bug in its widely used Internet Explorer browser.

Microsoft has yet to release software to fix that security flaw. The German government advised the public to stop using Internet Explorer until an update is released. The U.S. Department of Homeland Security has advised users to follow steps recommended by Microsoft to reduce the risk of attacks but noted that those measures may not fully secure the browser.

POLICY DEBATE
The warning from FS-ISAC comes as the Obama Administration is considering issuing an executive order that could instruct government agencies to take action to help better protect the nation's critical infrastructure from cyber attacks.

Legislation that would strengthen the government's ability to help secure private networks has so far been stalled in Congress by groups concerned about privacy issues as well as business groups that oppose increased regulation of their activities.

Senator Jay Rockefeller, who heads the Senate Commerce Committee, on Wednesday sent letters to the 500 biggest U.S. companies, challenging them to improve their computer security. He blamed the defeat of the legislation on concerns raised by "a handful of business lobbying groups and trade associations."

He asked the companies to identify their own best practices and to spell out their concerns about government-conducted risk assessments that were part of the cyber security bill. He warned that the companies could face "reactive and overly prescriptive legislation" if nothing were done until some cyber disaster.

During a speech to the annual Air Force Association conference, Deputy Defense Secretary Ashton Carter complained that businesses are not doing enough to protect their own networks, saying he was disappointed that the legislation has not passed Congress.

Officials with FS-ISAC could not be reached to comment on the decision to raise its cyber threat level. A spokesman for the Department of Homeland Security declined to comment on the advisory from the industry group.

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Gates, Buffett Still Top of Forbes List of Richest Americans

The net worth of the richest Americans grew by 13 percent in the past year to $1.7 trillion, Forbes magazine said on Wednesday, and a familiar cast populated the top of the annual list, including Bill Gates, Warren Buffett, Larry Ellison and the Koch brothers.

The average net worth of the 400 wealthiest Americans rose to a record $4.2 billion, up more than 10 percent from a year ago, while the lowest net worth came in at $1.1 billion versus $1.05 billion last year, the magazine said. Seven in ten of the list's members made their fortunes from scratch.

It was a bad year, however, for social media moguls, whose net worth fell by a combined $11 billion. On the heels of Facebook Inc.'s rocky IPO in May, the No. 1 social network's chief executive, Mark Zuckerberg, was the year's biggest dollar loser: his net worth fell by nearly half to $9.4 billion from $17.5 billion. He also slid to the No. 36 slot from No. 14 a year ago, Forbes said.

Facebook shares have fallen 40 percent from their IPO price of $38 a share in May.

Dismal performances by other social media stocks dropped some executives from the list altogether, including Groupon Inc. Chairman Eric Lefkofsky, No. 293 on last year's list, and Zynga Inc. Chairman and CEO Mark Pincus, No. 212 on the 2011 list.

"The gap between the very rich and merely rich increased and helped drive up the average net worth of The Forbes 400 members to an all-time record $4.2 billion," said Forbes Senior Wealth Editor Luisa Kroll.

Collectively, this group's net worth is the equivalent of one-eighth of the entire U.S. economy, which stood at $13.56 trillion in real terms according to the latest government data. But the 13 percent growth in the wealth of the richest Americans far outpaced that of the economy overall, helping widen the chasm between rich and poor.

Forbes attributed the growth in net worth in part to the performance of the stock market and a recovering real estate market.

But while their wealth grew faster than the economy as a whole, which expanded at an anemic 1.7 percent annual rate in the second quarter of 2012, the super rich generally failed to keep pace with the stock market. The benchmark Standard & Poor's 500 index rose nearly 20 percent over the 12 months ended Aug. 24, the last date of market performance measured for this year's list.

FAMILIAR NAMES AT THE TOP

Gates, the chairman of Microsoft Corp., topped the list for the 19th year in a row, with $66 billion, up $7 billion from a year earlier.

Buffett, chairman and chief executive of insurance conglomerate Berkshire Hathaway Inc, stood second with $46 billion, followed by Ellison, head of software maker Oracle Corp., with $41 billion. Brothers Charles and David Koch, who run the energy and chemicals conglomerate Koch Industries Inc and who are active in conservative politics, were tied for fourth with $31 billion, Forbes said.

The ranks of the top five were unchanged from a year earlier.

Two notable names dropped from the top 10, however. Casino magnate Sheldon Adelson, also active in conservative political causes, fell to the 12 spot from No. 8 last year, and financier and liberal philanthropist George Soros dropped five spots to No. 12.

Michael Bloomberg, the billionaire founder of Bloomberg LP who is now in his third term as New York City mayor, rose to the No. 10 slot.

Newcomers to the elite club of 400 include Laurene Powell Jobs, the widow of Apple Inc. co-founder Steve Jobs who is now the wealthiest woman in Silicon Valley, and Jack Dorsey, the co-founder of Twitter.

Just 45 women made the cut, up from 42 last year, Forbes said.

California has the largest share of Forbes 400 members, with 87, followed by New York, Texas, Florida and Illinois. Among cities, New York City topped the list, with 53. San Francisco, Dallas, Los Angeles and Houston rounded out the top-five cities.

One quarter of the Forbes 400 come from the finance and investment sector while another quarter come from either the technology, media or energy industries.

The complete list can be found at: www.forbes.com/forbes400.

admin 20 Sep, 2012

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Source: http://www.insurancejournal.com/news/national/2012/09/20/263751.htm
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John Hancock, Law Firm Face Tax Shelter Racketeering Lawsuit

John Hancock Life Insurance Co. and its law firm, Edwards Wildman Palmer, must face a class action accusing them of violating racketeering laws by marketing a tax shelter, a federal appeals court ruled on Wednesday.

The 6th U.S. Circuit Court of Appeals in Cincinnati in reversing a lower court's ruling, found that the insurer's customers had sufficient grounds to pursue a claim under the Racketeer Influenced and Corrupt Organization Act (RICO).

Federal prosecutors first used RICO to go after mobsters and organized crime, but later used its powers to pursue white collar crime on Wall Street. Victims of an alleged fraud can use RICO to file civil suits and recover triple the amount of damages they suffered.

Judge Jane Stranch, writing for a three-judge panel, said the appellate court recognized that John Hancock, Edwards Wildman and various individuals named as defendants may ultimately be found to have not participated in a RICO enterprise.

"But that is a matter to be fleshed out in discovery and to be resolved through motion practice or by the jury," she wrote

Ralph Canada, a lawyer for the plaintiffs, welcomed the decision.

"We're obviously delighted to go back to do discovery and go forward with our case," he said.

Representatives for John Hancock, the U.S. unit of Canada's Manulife Financial Corp., did not respond to requests for comment.

John Tuerck, a spokesman for Edwards Wildman, said the law firm looks "forward to the opportunity to show…that there is no basis for the plaintiffs' claims against the firm."

The lawsuit, filed in 2009 in the U.S. District Court in Grand Rapids, Mich., stemmed from a purported tax-deductible welfare benefit plan called Benistar 419 Plan.

The plaintiffs, family owners of Newaygo County, Mich.-based Stoney Creek Fisheries and Equipment Inc., alleged that starting in 2001, agents with John Hancock approached them about buying financial products, including the Benistar plan, which was intended to provide death benefits funded by life insurance policies.

Stoney Creek's owners signed up for Benistar in 2001 following meetings with John Hancock, which also furnished a letter from the law firm Edwards Angell Palmer & Dodge attesting to the plan's legality. The law firm is now called Edwards Wildman following a merger last year.

When Stoney Creek's owners chose to end their participation in the Benistar plans in 2006, John Hancock allegedly told them there would not be any tax consequence, the complaint said.

But in 2008, the Internal Revenue Service declared the Benistar plan an "abusive tax shelter" and assessed back taxes and penalties on the plaintiffs, the complaint said.

The lawsuit seeks an unknown amount of compensatory and punitive damages. The 6th Circuit's ruling sends the case back to U.S. District Judge Janet Neff, who had dismissed the lawsuit in October 2010.

The case is Ouwinga, et al., v. Benistar 419 Plan Services, Inc., 6th U.S. Circuit Court of Appeals, 10-2531.

admin 20 Sep, 2012

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Source: http://www.insurancejournal.com/news/national/2012/09/20/263756.htm
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