Sunday, 31 August 2014

3 ways insurers discourage sick from enrolling

Insurers can no longer reject customers with expensive medical conditions thanks to the health care overhaul. But consumer advocates warn that companies are still using wiggle room to discourage the sickest — and costliest — patients from enrolling.

Some insurers are excluding well-known cancer centers from the list of providers they cover under a plan; requiring patients to make large, initial payments for HIV medications; or delaying participation in public insurance exchanges created by the overhaul.

Advocates and industry insiders say these practices may dissuade the neediest from signing up and make it likelier that the customers these insurers do serve will be healthier -- and less expensive.

"It's the same insurance companies that are up to the same strategies: Take in as much premium as possible and pay out as little as possible," said Jerry Flanagan, an attorney with the advocacy group Consumer Watchdog.

Insurers acknowledge that people may see changes in coverage, driven in part by how the overhaul affects insurance. But they say prudent business practices, not discrimination against the sick, are key factors behind some of the trends that have raised concerns.

They point out that if customers find a plan they don't like, they generally have plenty of additional options to choose from both on and off the exchanges.

They also note that the overhaul takes several steps to discourage them from avoiding costly patients. It prevents insurers from marketing or designing a plan that would discourage someone from applying based on their health.

It also calls for insurers to chip into a pool that compensates competitors who wind up with a more expensive patient population. That lowers their incentive for discouraging the sick from enrolling.

"Health plans now guarantee coverage for individuals and families regardless of health status," said Clare Krusing, a spokeswoman for the trade association America's Health Insurance Plans, or AHIP.

There are three major ways insurers still might steer sick or expensive patients away from their coverage:

Form narrow networks

Insurers can lower their chances for covering patients with expensive medical conditions like cancer and autism simply by limiting the number of doctors and hospitals in a coverage network. That would send those patients searching for coverage elsewhere because they don't want to pay expensive, out-of-network rates.

Narrow insurer networks might include only 30% or less of a market's hospitals, as opposed to 70% or more for a broader network, according to the consulting firm McKinsey & Co.

These narrow networks have grown more common in recent years, especially in coverage sold on new public health insurance exchanges created by the overhaul.

An Associated Press survey of the nation's top cancer centers this spring found that patients covered under the health care law could encounter barriers to access in many cases. For instance, MD Anderson Cancer Center said it is included in the networks of less than half of the plans sold on the Houston area's public insurance exchange.

Aside from excluding patients, narrow networks also can help insurers form a healthy customer base by lowering the cost of coverage. A narrow provider network gives insurers leverage to squeeze better rates out of doctors who want to be included in that network in order to get the insurer's business.

Better rates lead to lower premiums, and young and healthy people generally shop for insurance based on price.

"They're the ones that don't check the provider directory," said Bob Laszewski, a former insurance executive turned industry consultant.

Insurers say plans with narrow networks are among many coverage choices consumers can make when they shop for insurance, and they are not an attempt to dodge the sick.

Narrow provider networks help maximize value by grouping providers "who have a track record of delivering high-quality, cost-effective care," said Krusing, the AHIP spokeswoman.

She added that insurers who sell coverage on the overhaul's public insurance exchanges have to offer more than one plan. It would make little sense for them to steer patients away from one plan when that person could just choose another option from the same insurer with broader benefits.

The overhaul sets some standards for provider networks, and a Centers for Medicare and Medicaid Services spokesman said regulators plan to increase their review of these networks for 2015 to figure out whether they need to strengthen requirements.

Cause prescription sticker shock

Some plans are requiring patients to initially pay 30% or more of the bill for drugs that can cost several thousand dollars a month. HIV drugs and multiple sclerosis medications are among them.

The overhaul caps the annual amounts patients are required to pay for these so-called out-of-pocket expenses. Still, some say the higher cost-sharing requirements can steer patients that need these medications away from enrolling.

"It's another way to send a message to sicker patients that says, 'If you're taking these medications, we'd rather not sell insurance to you," Flanagan said.

The AIDS Institute filed a complaint with U.S. Health and Human Services department earlier this summer against four Florida insurance companies over the issue.

Insurers say their plans follow HHS guidelines and cover all medically necessary HIV drugs. They also note that the price patients pay reflects, to some degree, what drugmakers charge for their medications.

Insurers also say customers have options if they find a prescription plan they dislike. In some markets, a customer may have more than a dozen choices, some of which might offer better coverage or a lower-cost alternative for their prescriptions.

But AIDS Institute Deputy Executive Director Carl Schmid said he worries that patient choices will dissolve over time if the high prescription payments spread to other insurers in a market, and "the good plans will become the bad plans."

Enters market cautiously

Another way insurers might land a healthier population is by playing the waiting game.

The nation's largest health insurer, UnitedHealth Group, will dive into the overhaul's public insurance exchanges with plans to sell 2015 individual coverage in 24 exchanges. That's up from only four in 2014.

These exchanges debuted last fall and offer shoppers a chance to compare and buy policies, often with help from an income-based tax credit.

UnitedHealth's delayed growth could be a savvy way to avoid some of the sickest patients who likely rushed to sign up for insurance in the initial year of the exchanges, said Laszewski, the industry consultant.

That could free UnitedHealth to enter markets and sign up healthier patients after other insurers, most likely nonprofits with deep community roots, have "taken the bullet" the first year, he said.

Health insurers are still figuring out plan options for 2015, so there are no signs yet that other insurers are following UnitedHealth's example.

UnitedHealth said it had always planned a measured approach. It needed a year to set up provider networks and see how the exchanges worked in their debut before deciding whether to plunge in deeper. Spokesman Tyler Mason said the insurer wasn't waiting for those competitors to sign up all the sick patients first.

"Philosophically, we've always said the marketplaces would evolve over time and that they would be good markets and that reform is needed," he said.

Associated Press writer Ricardo Alonso-Zaldivar contributed to this report from Washington, D.C.

Source: Associated Press

Saturday, 30 August 2014

Former executive of Mutual Benefits Corp. gets lengthy prison sentence for insurance fraud

By Brian Bandell

Joel Steinger, the former top executive of Mutual Benefits Corp., was sentenced to 20 years in prison for running a $1.25 billion insurance fraud scheme.

He previously pleaded guilty to conspiracy to commit mail and wire fraud for deceiving about 30,000 investors. He is the last of 13 people charged in the scheme.
U.S. District Judge Robert Scola sentenced the 64-year-old Steinger to 20 years in prison, out of a maximum 50-year sentence. He reportedly showed up in court in a wheelchair with an oxygen tank.

His Fort Lauderdale-based company purchased life insurance policies from elderly people and people battling AIDS. With the policies, MBC sold shares of the policy death benefits, promising a fixed rate of return with low risk. New investor money was used to pay premiums on life insurance policies purchased by earlier investors and to pay investors who requested their money back.
MBC opened in 1997. Its scheme started to unravel in 2003 when the Florida Office of Insurance Regulation conducted a surprise inspection of its headquarters in response to numerous investor complaints. The investors complained that the beneficiaries were outliving their life expectancy so their investments were not paying out. Many of these customers were lured by advertisements promising a 42 percent return in 36 months.

MBC’s license was suspended the following year. The OIC said that by taking action when it did it preserved nearly $600 million to return to investors.
Source: South Florida Business Journal

Man imprisoned for killing son over insurance now charged with murdering wife for same reason

WATERLOO, N.Y. – A man imprisoned in New York for killing his son to collect on his life insurance is now charged with murdering his first wife in 1991 for the same reason.

The Post-Standard of Syracuse ( reports that Karl Karlsen was charged in Calaveras County, California, Friday with first-degree murder in the death of Christina Karlsen.

Karl Karlsen pleaded guilty in Seneca County in November to a charge of second-degree murder. He admits he allowed a truck to fall off a jack and onto his 23-year-old son, Levi, who was working underneath it in the town of Romulus in 2008.

Karlsen collected $700,000 in insurance after his son's death. He'd received $200,000 after the 1991 fire that killed Christina Karlsen, Levi's mother.

His attorney wasn't available to comment.

Source: Associated Press

Reduced political risk spurs growth and boosts insurance

Reduced political risks following a peaceful election and transition in Kenya is expected to spur growth of insurance industry in the country, according to an advisory body.
The Kenya Association of Insurers (AKI) said late Thursday that plans to launch East African Community (EAC)’s Common Market, which point to a solid economic future for the region in the medium to long term will also augur well for the industry.
"The sector will also be tapping into opportunities provided by recent discoveries of oil and gas across the East African region to widen their market share and increase profitability," AKI chairman Justus Mutiga said during the launch of the report for 2013 in Nairobi.

Mutiga said the overall insurance penetration is still low, although it increased to 3.44 percent in 2013 compared to 3.16 percent in 2012.
"The low penetration highlights the significant opportunities that exist in the Kenyan insurance market especially in commercial lines such as oil, real estate and infrastructure," he told journalists.
He said the industry is reaching out to low income earners through micro-insurance products and diversifying distribution methods to further increase the penetration and grow gross written premiums.
"Micro insurance and bancassurance are still in the early stage of development and they will be key drivers of both premium growth and penetration," he said.
Mutiga said the National Social Security Fund (NSSF) Act 2013, which allows employees to opt out of NSSF scheme means that pension business will grow and the insurance industry could be a beneficiary.
The insurance industry currently comprises 48 insurance companies, 187 licensed insurance brokers, 29 medical insurance providers (MIPs) and 4,628 insurance agents.
Other licensed players include 134 investigators, 105 motor assessors, 22 loss adjusters and 27 insurance surveyors.
According to the report, motor insurance accounted for 39 percent of total gross premiums or 387 million U.S. dollars, including commercial and private, while medical class recorded a 24 percent or 236 million dollars of the total premiums.

It showed the industry incurred net claims totaling about 720 million dollars in 2013 compared to 636 million dollars in 2012, representing an increase of 13.1 percent.

"This increase (in net claims) is a clear manifestation of the commitment of the industry towards restoring the economic status of clients in the event of loss as a result of insured risks," said Mutiga.

The industry made a pre-tax profit of 205 million dollars in 2013 up from 170 million dollars in 2012 as insurers stepped up efforts to increase penetration of their products and services among Kenyans.

Source: Xinhua

Airtel Insurance records 130,000 customers in two weeks

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By Nkechi Naeche

Airtel Nigeria, says over 130,000 Nigerians have subscribed to its groundbreaking Insurance offer, Airtel Insurance, two weeks after launch.

The mobile insurance product offers Nigerians life and hospitalisation cover with many benefits based on monthly airtime recharge.

The new value offering, which has revolutionized the telecommunications and insurance sectors, is set to hit the 200, 000 customer milestone, barely three weeks after launch.

Airtel Insurance is a tripartite collaboration involving Airtel and two prominent insurance providers, MicroEnsure and Cornerstone Insurance plc. The product delivers affordable insurance services while encouraging insurance culture among Nigerians.

It is first of its kind in Nigeria and has been endorsed by the National Insurance Commission (NAICOM). It is open to all Nigerian residents between the ages of 18 and 65 years. To access the service, customers simply dial *259# from an Airtel mobile number.

Airtel Insurance rewards loyal Airtel customers with a free renewable monthly life and hospitalisation cover based on the amount of monthly airtime recharged. All hospitalisation cases are covered, be it from natural or accidental causes, and can be accessed in over 5000 hospitals in the NHIS database, making it the most widely accessible and free insurance cover in the country.

Customers qualify for these benefits by recharging their Airtel lines with N1, 000 or more monthly. The higher the value of recharge, the more insurance cover they enjoy – with up to N500,000 and N50,000 of life insurance and hospitalisation cover per month.

Chief Commercial Officer, Airtel Nigeria, Maurice Newa, emphasized that the Airtel Insurance plan was designed to make affordable insurance available to everyone in a simple and convenient manner.

According to him, "The Airtel Insurance package is consistent with our commitment towards creating meaningful platforms that enrich the lives of Nigerians. It is in line with our brand promise of becoming the most loved brand in the daily lives of Nigerians."

Source: Businesstoday

Friday, 29 August 2014

CIIN holds 2014 insurance professionals’ forum

·         Focuses on new trends and strategies for industry  

Chuks Udo Okonta

The Chartered Insurance Institute of Nigeria (CIIN) has announced plans to hold its 2014 annual professionals’ forum, billed for Wednesday September 10 to Saturday September 13 at Green Legacy Resort, Abeokuta, Ogun State.

A statement by the institute’s Head of Corporate Communications, Joseph Obah, said the event has remained the single most crucial gathering of professionally qualified insurance practitioners in Nigeria, adding that since 1991 when the forum became a reality, it has offered immense opportunities for robust deliberations on issues pertinent to the growth and development of the insurance industry, the profession and practice.  

He said the 2014 edition of the forum, will be anchored on a well-conceived theme; “The Insurance Industry: New Trends, New Strategies”, stressing that the forum theme aptly captures the post economy rebasing mood in the insurance business environment in Nigeria in terms of new product trends and strategies of harnessing the perceived opportunities.  

He noted that an array of respected speakers has been invited to address the forum topics. These according to him include: Commissioner for Insurance Fola Daniel, who will give a keynote address; Managing Director Niger Insurance Plc Kola Adedeji, will speak on Investment and Investors’ Interest; Deputy Commissioner for Insurance National Insurance Commission (NAICOM) George Onakhena, Financial Reporting; Group Managing Director Mutual Benefits Assurance Plc Dr Akin Ogunbiyi, Product Development, Market Expansion and Penetration;  Managing Director Financial Institute Training Centre Dr. Lucy Newman, Nigerian Financial Inclusion Strategy, the Insurance Industry and Human Capital Alignment and Managing Director Consolidated Hallmark Insurance Plc  Eddie Efekoha,  Client Services.

CIIN President, Bola Temowo said that the Nation’s Financial Inclusion Strategy may top the agenda in view of the Human Capital realignment imperatives for driving the financial inclusion products such as Micro Insurance and Takaful.

Temowo stated that the products remain relatively unknown to the critical mass in the grassroots, despite being the targets of the products. He argued that a whole lot must be done in order to bring these products in the front burners of our operations in order to deepen insurance penetration in the country.  

He said the prevailing trends and strategies provide food for thought and a reason for serious deliberations by the managers of the nation’s insurance sector, adding that highlights of the forum also include:   Fitness & Aerobic Sessions, Health Talk to focus on Healthy Eating Medical Check-up Family Session & Socials.  

Temowo called on Insurance professionals to see the forum as a unique opportunity for continuous professional education and their personal growth and development for career progression.

He said attendance at the forum should be instinctive for all well-meaning professionals rather than compulsive, adding that the forum ought to have grown to the 1,000 delegate mark after more than 22 years of coming into existence.  

Director-General of the CIIN, Kola Ahmed, expressed optimism that the forum would record an all-time record attendance.      

Green Legacy Resort, Abeokuta, venue of the Professionals Forum, is fast becoming one of the most patronised hospitality destinations in South-West Nigeria. With a mixed grill of hill-top ambience, artificial lake and a bamboo grove amongst other attractions, the resort has all it takes to host the convocation of Insurance Professionals. As at the last count, over 300 participants had been registered.

Microsoft, Mansard Insurance partner to unveil Lumia 930 in Nigeria

Mansard Insurance Logo

Press Release

Microsoft has announced that its latest addition to the Lumia range of smartphones, the Lumia 930, running Windows Phone 8.1 is now available in Nigeria.

The Lumia 930 smartphone comes with the best of Microsoft built in work and play features such as Microsoft Excel, Microsoft Word, Microsoft PowerPoint, XBOX, Skype and One Note to ensure customers are able to work hard and play hard whenever and wherever, whilst keeping content like photos, videos and documents in sync across their Windows Phone, Personal Computers, tablets and XBox devices.

With the use of OneDrive and its 15GB of free storage in the cloud, customers can access their documents, files and even games anywhere and anytime. The device features one of the brightest screens seen on a smartphone with a 5 inch Full HD 1080p screen with sunlight readability and curved Gorilla Glass 3.0 for better viewing angles and an outdoor reading experience unmatched in the industry.

The Lumia 930 comes with 2.2GHz Quadcore Qualcomm Snapdragon 800 processor as well as the Lumia Cyan update of Windows Phone 8.1 to give customers the most out of the latest Windows Phone 8.1, whilst enjoying a superfast experience. The Lumia 930 also comes with in-built Wireless charging as well as a 20 mega pixel PureView ZEISS camera with Optical Image Stabilization and 4 ultra high performance digital microphones that record Dolby Digital for an unparalleled imaging and rich recording and audio capture experience.

Managing Director, Microsoft Mobile Devices and Services, West and Central Africa, Nick Imudia, said, "The Lumia 930 is beautifully designed and a testament to our design heritage. Its Premium metal edges are sand blasted and precision machined to finely crafted details; to produce a strong, slim and striking smartphone that’s just simply beautiful to look at, with the best of Microsoft built in."

"Another first coming with Lumia 930 is the insurance cover that customers get with the phone as soon as they purchase it. The insurance which is underwritten by Mansard Insurance Plc covers accidental damage to the screen and accidental liquid damage to the phone. This unique benefit commences immediately at the point of purchase and runs with the warranty on every Lumia 930 bought from authorized Nokia Retail partners. This makes it a wonderful device coming with awesome package" Imudia added.

The Lumia 930 continues Microsoft’s color story with the Lumia 930 with its smooth, gently pillowed rear that echoes it’s beautifully curved glass and brings a splash of Bright Green, Bright Orange, Black or White to the Lumia 930.

The Lumia 930 comes with some amazing social Apps like Vine and Instagram, apps from GTBank, Arik Air,, Channels TV as well as the BlackBerry Messenger (BBM) from Blackberry.

Football fans will also have the opportunity to watch matches from their device with the SuperSport App which allows them stream LIVE events and matches from the BPL, La Liga, the ATP, the PGA and other sporting events.

Speaking on its partnership with Microsoft on the insurance coverage for the Lumia 930, Mansard Insurance’s Chief Client Officer, Mr. Tosin Runsewe disclosed that Mansard shared Microsoft’s vision of delivering unrivalled experience to its customers even as they enjoy their Lumia 930, knowing that it has an insurance cover they can depend on should the unexpected happen

Source: Worldstage


LASACO partners L.E.A.R.N on summer school

Chuks Udo Okonta

LASACO Assurance Plc in line with its Corporate Social Responsibility (CSR) initiative, has made financial donation to Lagos  Empowerment and Resource Network (LEARN) to enable it organise and facilitate summer school programme for this year’s long vacation as a means of keep students off the street during the period.

Beyond students taking tutorials in their regular academic subjects, the summer school programme is designed to empower student with practical skills that would make them self reliance and inculcate entrepreneurial skill in different areas of endeavours. Practical skill areas include shoe making, bead making, event decoration, barbing, catering, soap making, photography among others.

The firm’s General Manager, Biodun Dosunmu, who stood in for the Group Managing Director, LASACO Assurance Plc, Olusola Ladipo-Ajayi, explained that LASACO believes tomorrow is certain when future leaders are properly groomed and nurtured through investment in their education and empowerment with practical skills that would make them self- reliance.

“Our support for LEARN has been on in the last 3 to 4 years due to LASACO’s believe in being a socially responsible corporate organization as well as sustaining the legacy of its former chairman, late Chief Akin Leigh, who initiated the collaboration with LEARN.

“This great initiative aligns with one of LASACO’s strategic business principle of striving to better the society, particularly using corporate social responsibility platform and therefore deserves sustenance.

“LASACO cannot but give support to Lagos State Government’s drive to lay a solid foundation for the future leaders. Lagos State government has also been very supportive of LASACO as a corporate entity”, he added.

Dosunmu, who led a team of LASACO management staff to visit one of the summer school centres at Oke Ira Junior Grammar School, oke Ira, Lagos, expressed gratitude to the LEARN for taking the initiative to get the students engaged during the holiday rather than roaming the street, stating that the society would be better for it.

The Coordinator of Oke Ira Centre, Mrs. Olufunmilayo Soneye disclosed that the centre has about 600 students drawn from various schools in the area. According to her, many parents have testified to the effectiveness of the programme as they have noticed remarkable positive changes in the live of their children. In their appreciation during the visit, the representatives of the students at Oke Ira Junior Grammar School centre,  Miss Okega Tinuola and Master Salim Mohammed, commended LASACO for supporting the vision Lagos Empowerment and Resource Network (LEARN) in not only impacting knowledge but also preparing them to be self reliance through the skill acquisition component of the programme.

Apart from Oke Ira Junior Grammar School centre, LEARN has two other centres for this year’s summer school. They are located at Iponri Estate Junior School, Iponri Surulere and Awori Ajeromi Junior Grammar School Agboju. Lagos Empowerment & Resource Network (LEARN) was established in 2007 with special focus on youth development.

The vision is to ignite a passion for learning in the youths through education, vocational skills and recreation. Other programmes of LEARN are:   Summer & after school lessons; career enlightenment program;  a time out with the youths;  skill acquisition program;  open day for parents & excursion; what next;  excursion and volunteer induction.

LEARN is an initiative of Lagos State first lady and wife of the Governor, Dame Abimbola Fashola.  

Group life, annuities drive 35% growth in life insurance business

The effective compliance by the Federal Government and medium sized oil firms with the provisions of the amended Pension Reform Act of 2014 have boosted the nation’s life insurance market with 35 percent annual growth in the last three years, BusinessDay investigations have shown.
 Also, renewed interest in annuity, which guarantees lifetime payment, as against programmed withdrawal with specific period of payment by retirees, has been identified as a contributory factor to the growth of the life business, projected at about N105 billion at end of 2013, from N78 billion in 2012.
 The implication is that group life insurance is set to boost the revenue of the industry, as more organisations embrace the scheme, which seems to enhance the welfare of workers.
In the last three years, annual group life insurance of public sector workers from the office of the head of service of the federation annually has been in the neighbourhood of N6 billion and N7 billion, constituting a significant contribution of the life business to total industry premium figure.
Annuity on the other hand, has moved from less than five percent of retirees retirement benefit in 2007, to about 20 percent, while programmed withdrawal, managed by Pension Fund Administrators (PFAs) currently stands at 70 percent of total retirement benefits.
Teju Ogunjimi, managing director, ARM Life, said the commitment of the federal government to the provision of group life insurance cover for its workers has added increased value to life business, and would become more significant when most of the states comply.
“Medium-sized oil firms are compulsorily providing group life for their workers, as a precondition to bidding for contracts from major oil companies and the Nigerian National Petroleum Corporation (NNPC) and I think this is increasing the demand for life business in that sector”, Ogunjimi said.
“Though we cannot quantify in real terms what the contribution of life business is to total premium figure for 2013 yet, because only just about 20 percent of the companies have gotten approval of their annual accounts, but by the end of September, more than half  would have gotten approval and we can be specific on what the actual contribution is”, Ogunjimi said.
Chike Mokwunye, group managing director, Royal Exchange plc, said insurance industry growth in Nigeria and across Africa is largely driven by life, credit insurance and health products, as against what comes from general business.
Mokwunye  observed that the drive was coming as a result of regulatory enforcement, which has made certain life covers, such as group life insurance and health insurance compulsory for employers, as part of the welfare package for their employees.
“For us at Royal Exchange, our life business is growing at about 115 percent annually, while general business is growing at between 11-15 percent, and is cuts across the market. We see more growth coming in these areas in the near future, as players engage in more research for innovative products that meet consumers needs and are made easily accessible”.
Section 9 (3) of the Pension Reform Act stipulates that every employer to which the Act applies must maintain Life Insurance Policies in favour of  employees, for a minimum of three times the annual total emolument of the employee. Under the policy, total annual emolument is defined as the basic salary, transport and housing allowances and shall not include bonuses, overtime, directors’ fees or other fluctuating emoluments.
According to the guidelines for life insurance policies for employees, jointly issued by the National Insurance Commission (NAICOM) and the National Pension Commission (PenCom), the employer is required to fully bear all costs in relation to procurement of this policy, and this shall be in addition to the contributions to be made by the employer, to each employee’s Retirement Savings Account.
The policy provides cover to the insured against death, and the insurance cover is mandatory for all employees, as long as they are in employment. This means that the policy provides for the payment of the sum assured, in the event of the death of a member of the scheme from any cause, natural or accidental.
Annuity on the other hand is a series of fixed payments made at regular intervals over the specified period of the annuity purchased by a retiree from his pension emoluments. As provided in the Pension Reform Act 2004, a retirement Savings Account (RSA) holder may upon retirement or attaining the age of 50 years (whichever is later), purchase an annuity from a life insurance company licensed by NAICOM with monthly or quarterly payments.
Modestus Anaesoronye

UK: Aviva insures £300m of liabilities for the Interserve Pension Scheme

Aviva has secured a buy-in arrangement with the Interserve Pension Scheme covering £300 million of pensioner liabilities, following a competitive tender process.
The Trustee of the Interserve Pension Scheme was advised by LCP as lead adviser, with Sacker & Partners providing the legal advice.
The buy-in will help Interserve, the UK-based international support services and construction group, reduce its pension scheme risk by protecting around 35 per cent of the Scheme's liabilities from fluctuating interest rates, inflation and mortality risk. The size of this buy-in puts it in the top 20 of publically announced transactions completed over the last five years.
Aviva worked closely with the Trustee and its advisers to agree a flexible and practical solution in just four months, highlighting how efficient transactions such as this can be when all parties commit to pre-determined timescales.
David Trapnell, Chairman of the Trustee Board, said: "This transaction represents a significant risk reduction step for the Interserve Pension Scheme, reducing funding volatility and providing additional protection for all our members' benefits."
Nick Johnson, Aviva's Director of Bulk Purchase Annuities, said:
"Aviva has worked particularly closely with the Trustee and its advisers, focusing as a team on an efficient way to complete the transaction and providing Interserve with an effective way of managing its pension scheme risk. We are increasingly seeing mid-size BPA transactions being dealt with in a streamlined way, similar to smaller deals, and this calls on Aviva's specific expertise in the market."
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Lehman Brothers Pension Scheme – funding agreement announced

The Joint Administrators of Lehman Brothers International (Europe) ("LBIE") and the Trustees of the Lehman Brothers Pension Scheme (the "Scheme") are pleased to announce that they have reached an agreement on the funding of the Scheme deficit. 
The agreement provides for LBIE to fund the defined benefit pensions promised under the Scheme.   In due course it is expected that the benefits will be secured under a bulk annuity policy with an insurance company.  It is also expected that members will receive their pension benefits in full. 
Whilst the funding to the Scheme is provided by LBIE, as part of the settlement agreement significant financial contributions have also been made by certain other companies in the Lehman group.  The details of the agreement remain confidential.
This agreement brings to an end litigation and negotiation which has taken place between the parties since the Pensions Regulator started action in 2010 seeking a Financial Support Direction (FSD) against LBIE and other Lehman companies. 
Tony Lomas, joint administrator of LBIE and PwC partner, said:
"The conclusion of this significant pension scheme deficit issue is another milestone on the path to resolving the administration of LBIE.  The agreement benefits LBIE's creditors by securing significant contributions to the cost of the settlement from other Lehman group companies, and alleviates concerns for pension scheme members about the provision of their pension benefits." 
Peter Gamester, Chairman of Trustees of the Lehman Brothers Pension Scheme, added:
"This negotiated outcome is a good result for defined benefit members of the Lehman Brothers Pension Scheme. It has been made possible by the underlying financial strength of Lehman Brothers in the UK , and the successful administration of LBIE and other UK companies.  The Trustees would like to thank members for their patience during the difficult period following the collapse of Lehman Brothers in September 2008; but at least this patience has been rewarded by the commitment to provide funding to secure pension entitlements in full. We will be contacting members shortly to explain in detail the next steps."
For more information, contact
David Jetuah
PwC | Media Relations, Assurance and Business Recovery Services
Notes to editors
  1. AV Lomas, SA Pearson, PD Copley, R Downs and JG Parr were appointed as Joint Administrators of Lehman Brothers International (Europe) to manage its affairs, business and property as agents without personal liability. AV Lomas, SA Pearson, PD Copley, R Downs and JG Parr are licensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales.
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Australia to Sell Largest Health Insurer Medibank in 2014 IPO

By Brett Foley
Australia plans to sell shares in Medibank Private Ltd. before the end of the year, adding to the highest level of initial public offerings in the nation since 2005.
An offer prospectus for the country’s largest health insurer will be sent to the Australian Securities and Investments Commissionin October, Finance Minister Mathias Cormann said today in e-mailed statement. Pre-registration for the prospectus opens late next month and the company may list on the Australian stock exchange in December.
Australia’s Coalition government, led by Prime Minister Tony Abbott, is cutting spending and selling assets as it seeks to rein in a budget deficit estimated to have swollen to A$49.9 billion ($46.7 billion) in the year ended June 30. Nomura Holdings Inc.’s Sydney-based analyst Toby Langley in March valued the insurer at about A$4 billion based on peer-group analysis.
The Medibank IPO will come after share sales by Australian companies this year reached about A$9.7 billion, the highest since 2005, according to data compiled by Bloomberg. Offerings this year included hospital operator Healthscope Ltd. and catering and services company Spotless Group Holdings Ltd.
Australia in April hired Macquarie Group Ltd., Deutsche Bank AG (DBK) and Goldman Sachs Group Inc. to manage the Medibank IPO. It has appointed other advisers to prepare scoping studies on the sale of other assets including Defence Housing Australia, the Royal Australian Mint and the registry business of corporate regulator ASIC.
Australia provides its citizens with free or subsidized health care at clinics and hospitals through Medicare. It also encourages people through tax benefits to take out private health insurance. About 47 percent of Australians are covered by private insurers for hospital treatment while 55 percent are covered for other services such as dental and optical, according to a statement in June from the government’s Private Health Insurance Administration Council.
To contact the reporter on this story: Brett Foley in Melbourne
To contact the editors responsible for this story: Philip Lagerkranser at Edward Johnson

Insurance Firms Stop Online Sales, as Regulator Takes Long Look

(Beijing) – Three insurance companies have been told to temporarily halt sales of policies on a popular e-shopping website, as sources say the insurance regulator has started examining products that function as investment tools.
The stores of Guohua Life, Zhujiang Life and Hongkang Life all contained a message on August 28 saying that they were updating their systems and services, and users will not be able to buy insurance products on the website during the maintenance. None said when sales would restart.
The suspension was required by the China Insurance Regulatory Commission (CIRC) because they violated regulations when selling the products, a source close to the regulator said. "The CIRC required these companies to halt online sales because it found during earlier inspections that they were misleading investors."
Problems include too much emphasis on expected yields and not enough disclosure of information and risk, he said.
Most of the insurance products on Tmall had two purposes. They provide coverage against illness and accidents just like regular policies, but also allow buyers to make money the way they would with a wealth management product.
The policies often had a maturity of one year or less and offer an annualized yield between 5 and 7 percent, higher than bank rates for term deposits and even for many wealth management tools of the same maturities.
Investors like the short-term, high-payoff products. Guohua's single-day sales on, the business-to-consumer website of Alibaba Group Holding Ltd., surpassed 500 million yuan on November 11, a major e-shopping day in China. Its best-selling product that day offered an expected yield of 7 percent.
Critics have argued that insurers were racing to win customers, but that the risks are high. CIRC has been concerned, but current regulations apparently do not address the problems that emerged when insurance products meet the Internet.
Requiring the three insurers to shutter their e-stores marked the beginning of a new round of perhaps tighter efforts to put the market in order, another source close to CIRC said.
The regulator held a meeting with insurance companies, including Guohua and Hongkang, as early as October, he said, warning them not to engage in vicious online competition. In November, it barred Guohua from opening any new branches over liquidity concerns. The ban was lifted when the insurer's shareholders increased their stakes.
The regulator also recently established a task force led by Chen Wenhui, a deputy chairman, to design regulations for selling insurance online, a source with knowledge of the matter said.
Guohua may have crossed CIRC again this year with Yu Le Bao, an investment-type insurance policy it developed with Alibaba, a source close to the situation said. Alibaba rolled out Yu Le Bao in March. It allows people to buy insurance from Guohua for as little as 50 yuan per person and invest the money in a trust product that finances filmmaking. In return, investors can expect an annual return of up to 7 percent, with perks such as a chance to meet movie stars.
Critics say that Yu Le Bao is crowd funding by another name. Packed as an insurance product, it can sidestep restrictions on similar products that pool small sums of money. One such restriction is on the number of investors.
Crowd funding has become popular in countries around the world a way to collect small sums of money from Net users for a given project. Different versions of the practice see investors receive a reward or a stake in the new company.
The controversy over Yu Le Bao was the main reason CIRC told the three insurance companies to stop their sales online, the source close to the regulator said.
(Rewritten by Wang Yuqian)

German Insurers Weigh Funding to Plug Merkel Infrastructure Gap

By Brian Parkin
Germany’s insurers said they may back a government call to invest in infrastructure to help cover an annual 7 billion-euro ($9 billion) taxpayer shortfall to repair roads and bridges.
The GDV, the Berlin-based group that represents insurers includingAllianz SE (ALV)said today it’s ready to steer long-term capital to infrastructure provided Chancellor Angela Merkel’s coalition provides adequate legal safeguards for investments. The response follows a call to industry in July by Economy Minister Sigmar Gabriel to help kick-start projects.
A dearth of government cash and low returns on insurers’ investments may lead to a marriage of convenience to refurbish German infrastructure. Low interest rates are impinging on the profits of insurers. Bonds make up about 80 percent of the combined 1.4 trillion euros they hold in investments, according to the GDV.
The insurance industry is keen to help with “big engagements” in infrastructure, the GDV said in a 19-page position paper. “More planning security would make it easier for insurers to finance” projects amid examples in Europe of partnerships that have soured, as when the Spanish government in 2012 cut solar power subsidies, it said.
In a coalition contract forged last year, Merkel agreed to boost federal infrastructure spending by 5 billion euros before the next election in 2017. The BDI industry group puts the annual funding gap at about 7 billion euros.
The GDV said it seeks talks with Merkel’s ministers on models that may be adopted to secure long-term returns on investments. Plans by former Chancellor Gerhard Schroeder to finance infrastructure projects by so-called public-private partnerships fizzled over the issue of legal liability.
The group said it also wants Merkel to champion a change to Solvency II capital-adequacy rules for insurers that will come into effect in 2015. Infrastructure investments should be reclassified as low-risk compared with other assets in the new rule book, reducing capital needed to back the investments, said the GDV.
To contact the reporter on this story: Brian Parkin in Berlin
To contact the editors responsible for this story: Alan Crawford Zoe Schneeweiss, Tony Czuczka