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From the AASCIF President

 

Russ Oliver - AASCIF President

In the last newsletter I mentioned our efforts to help deal with the after-effects of Hurricane Katrina and to help convince Congress to extend TRIA. I want to update you on those efforts as well as other AASCIF activities over the last few months.

We have all seen the news reports about the continuing struggles of the victims of Hurricanes Katrina and Rita and the dedicated efforts of various government and private organizations to help them recover. As a result of the research and deliberations I mentioned in my last letter, the AASCIF Executive Committee authorized our friends at LWCC to donate, in AASCIF’s name, the net proceeds from our 2005 Annual Conference to the LSU Charity Hospitals Relief Fund Foundation. We hope that this donation will help thousands of health care givers in Louisiana recover their lives and thus be able to assist many other affected Louisiana residents to do the same.

On the TRIA extension front, our ad hoc coalition of members worked hard from September through November to carry our message to Congress. Many of you made calls and sent letters to your state’s U.S. Senators and members of Congress, and we appreciate your efforts. Telling your unique story to your Congressional representatives is critical to their understanding of the impacts on your state and your company of a catastrophic terrorist attack and the need for TRIA extension. Special thanks to those who traveled to Washington as part of the coalition’s efforts: Pat Johnson from Minnesota, Steve Cavanaugh from Louisiana, Joe Solomon from Rhode Island, Dennis Smith from Missouri, Dennis Lloyd from Utah, Dennis Carroll from Maryland, and Terry Frakes from Texas. I saw these folks in action, and they were very effective in telling the “state fund” story to members and staffers in the House and Senate. We talked to many people in Washington who learned why workers’ compensation is different from other lines of insurance and why state fund companies are different from other workers’ compensation insurers.

Unfortunately, there was substantial opposition, particularly in the Senate, to TRIA extension. The combined efforts of a number of industries, including ours, have succeeded in convincing those opposed to a straight extension of TRIA to at least allow a limited extension of TRIA, with changes.

Just before this letter reached you, Congress passed a two-year extension bill, and President Bush signed it in late December. The bill raises the “trigger” – the amount of insured loss from a terrorist attack needed to cause federal government involvement – substantially. The bill also raises the current individual insurer retention level from 15% of the previous year's earned premium in 2005 to 17.5% in 2006, increasing again in 2007. The bill also eliminates some lines of insurance from TRIA’s coverage, but still includes workers’ compensation. Thus, the TRIA coverage in 2006 and 2007 will be different from current TRIA provisions and will require more financial payout by individual insurers if a major terrorist attack occurs.

The legislation includes a study this year on terrorism insurance issues. The study will be conducted by the President’s working group on Financial Markets as opposed to an appointed commission. We are hopeful that the work we have done this year in educating people in Washington about our issues will help further understanding of those issues and perspectives when the study occurs.

We had a successful AASCIF CEO meeting in early November. Bruce Hockman from Towers Perrin did his usual fine job of presenting data about workers’ compensation insurance industry trends and results that prompted active discussions about the roles we play in our markets and what we may expect from other insurers in those markets. Thanks to Bruce for his great contributions, and thanks to the CEOs who attended the meeting.

We announced the AASCIF committee appointments for 2006 in mid November. Thanks to all of you who have volunteered for service. We look forward to seeing you at the All Committees Meeting on January 12 in Las Vegas, when we begin our planning for the year’s activities. The 2005 committees performed some great work that you can build on.

Finally, a special thanks to the AASCIF Executive Committee. This has been a particularly busy and demanding year for your association’s officers, with more work and more meetings than any year I can recall over the past six. Thanks to the Executive Committee’s work, we adopted revised and improved Articles of Association, changed the Association’s fiscal year, and adopted responsible budgets. We also helped our LWCC friends provide thoughtful and much needed hurricane relief, thanks to the request of the LWCC folks. It has been a challenging and successful year, and I want to thank Past President Pat Johnson, First Vice President Ken Ross, Vice Presidents Dennis Smith, Don Smith, Joe Solomon, Nancy MacReady-Williams, and Past Vice President Doug Sexsmith for their hard work and contributions.

I hope all of you had a safe and joyful holiday season. I look forward to working with you to make 2006 another year of AASCIF success and accomplishment.

Russell R. Oliver
AASCIF President
2005 - 2006

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