By Avia Collinder
Cathy Lyn, a past president of the Caribbean Actuarial Associa-tion, is suggesting that pension funds should be given the same priority as other investor groups for which restrictions on foreign-exchange investments are soon to be lifted by the Bank of Jamaica (BOJ).
The central bank will be lifting the cap from its current five per cent in phases, starting later this year, and will eventually eliminate the restrictions.
The central bank will first lift the cap to 7.5 per cent at mid-year, then 10 per cent and up to 25 per cent by yearend 2015. The restriction is expected to be eliminated by the end of 2016.
Lyn says pension funds should immediately be allowed to have up to 20 per cent of their investments in foreign exchange.
However, the Financial Services Commission (FSC) has said that pensions funds will not benefit from the lifting of the cap immediately. FSC regulates pension funds, insurance com-panies and securities dealers. It oversees 803 pension plans with assets totalling $303 billion.
Senior deputy governor of the BOJ, John Robinson, said the central bank will first address firms heavily invested in repos and deal with pension funds later.
"The lifting of the ceiling on investments in foreign-currency assets, which was announced at the end of December 2013, was aimed primarily at facilitating the transition of investments that are now funded by repos into collective investment schemes," said Robinson.
"Revised limits for pension funds and insurance companies will follow after discussions with those firms and their regulator, the Financial Services Commission, to determine an appropriate timetable for such adjustments," he said.
Lyn says pension funds should be allowed a 20 per cent limit rather than five per cent, saying it could boost returns and enrich pension payments.
"Poor pensions being paid today result from savings that are too low; but then, what is the incentive to save if the real returns on domestic instruments is poor after expenses are deducted?" she said.
"If BOJ is worried that large sums will migrate overseas, then the amounts being saved now are just a fraction of the population's needs for retirement, so perhaps the actuaries could do some pro-jections to estimate the figures to support the present population when they grow old. Also, BOJ could bear in mind that people who live and work here are likely to stay here in retirement, so the money would come back to pay pensions," the actuary said.
From 1960 until 2012, Jamaica GDP averaged US$5.2 billion, or 0.02 per cent of the world economy.
According to FSC data, less than nine per cent of working Jamaicans in the private sector have formal pension savings.
Those numbers, according to Lyn, are indicative of the need to entice more retirement savings.
"The percentage of people getting pensions from the formal arrangements is another powerful point to lobby for higher overseas limits to prove the need for more saving within the formal arrangements," she said.
avia.collinder@gleanerjm.com
Source Gleaner
Saturday, 1 February 2014
State Street fined £23m for “can of worms”
By Nick Goodway
The UK arm of US financial services giant State Street has been fined £22.8m by the City regulator for overcharging institutional investors in a shocking case in which bankers were caught emailing each other incriminating messages like "this can of worms stays closed" when deciding not to notify their legal department.
The Financial Conduct Authority said State Street staff simply made up extra charges, which they felt that clients would accept, during 2010 and 2011.
On one occason, a banker who had clinched such a deal rejoiced with the message "back up the truck", presumably meaning "fill it up with cash."
The investigation lays bare the cynicism and greed of the bankers involved. The FCA found that State Street deliberately overcharged six institutional investors a total of $20.2m (£12.2m) over and above fees and commissions that had been agreed. The fine is the eighth-largest imposed by the regulator.
The FCA’s chief enforcer, Tracey McDermott, said State Street’s conduct had "fallen far short of our expectations".
The offences took place in the transition management division, which carries out complex structural changes to portfolios on a client’s behalf, such as switching out of shares into bonds for a pension fund.
After the financial crisis in 2008, State Street enjoyed a booming business in transition management because many of its competitors pulled out of the market. But by 2010 the market had become far more competitive and managers made it clear they wanted not only to win more business but also to make it more profitable. They did that by levying hidden extra charges.
In one case a client wanted changes made to a €4.7bn (£3.9bn) portfolio. A series of emails between senior managers began: "Gotta win this one! Any ideas how to get more revenue would be appreciated."
The reply said: "How about a 1bp [basis point] management fee or something... We need to charge fee then otherwise they get suspicious." The response was: "Just to clarify – 1.25bp is the management fee. The extra quarter point makes it look like we actually thought about it and did the calculations."
In another exchange, the executives discussed their own legal department.
"Did they [legal] look at the original agreement?" asks one.
"Absolutely not..." came the reply, "This can of worms stays closed! Btw – there is no way we can disclose our spread."
State Street said: "In 2011, we dismissed individuals … involved in the overcharging. Their behaviour was unacceptable and a significant departure from the high standards of conduct and transparency that we expect."
Source The Independent
The UK arm of US financial services giant State Street has been fined £22.8m by the City regulator for overcharging institutional investors in a shocking case in which bankers were caught emailing each other incriminating messages like "this can of worms stays closed" when deciding not to notify their legal department.
The Financial Conduct Authority said State Street staff simply made up extra charges, which they felt that clients would accept, during 2010 and 2011.
On one occason, a banker who had clinched such a deal rejoiced with the message "back up the truck", presumably meaning "fill it up with cash."
The investigation lays bare the cynicism and greed of the bankers involved. The FCA found that State Street deliberately overcharged six institutional investors a total of $20.2m (£12.2m) over and above fees and commissions that had been agreed. The fine is the eighth-largest imposed by the regulator.
The FCA’s chief enforcer, Tracey McDermott, said State Street’s conduct had "fallen far short of our expectations".
The offences took place in the transition management division, which carries out complex structural changes to portfolios on a client’s behalf, such as switching out of shares into bonds for a pension fund.
After the financial crisis in 2008, State Street enjoyed a booming business in transition management because many of its competitors pulled out of the market. But by 2010 the market had become far more competitive and managers made it clear they wanted not only to win more business but also to make it more profitable. They did that by levying hidden extra charges.
In one case a client wanted changes made to a €4.7bn (£3.9bn) portfolio. A series of emails between senior managers began: "Gotta win this one! Any ideas how to get more revenue would be appreciated."
The reply said: "How about a 1bp [basis point] management fee or something... We need to charge fee then otherwise they get suspicious." The response was: "Just to clarify – 1.25bp is the management fee. The extra quarter point makes it look like we actually thought about it and did the calculations."
In another exchange, the executives discussed their own legal department.
"Did they [legal] look at the original agreement?" asks one.
"Absolutely not..." came the reply, "This can of worms stays closed! Btw – there is no way we can disclose our spread."
State Street said: "In 2011, we dismissed individuals … involved in the overcharging. Their behaviour was unacceptable and a significant departure from the high standards of conduct and transparency that we expect."
Source The Independent
CHP officer, wife accused of workers’ comp insurance fraud
By Cathy Locke
A veteran California Highway Patrol officer and his wife, a CHP dispatcher, were arrested today, accused of workers’ compensation insurance fraud.
The Sacramento County District Attorney’s Office announced that Officer Daniel Cory Clapp, stationed in Lassen County, and his wife, Jolea Marie Clapp, face five felony counts.
Daniel Clapp, a CHP officer for 11 years, filed his worker’s compensation claim based on injuries he allegedly sustained during a scuffle while making an arrest on Dec. 27, 2011. He and his wife told the workers’ compensation doctor that Daniel Clapp was unable to drive or lift heavy items, and that pain prevented him from performing his duties as a CHP officer, according to a District Attorney’s Office news release.
The CHP’s Internal Affairs Section, Workers’ Compensation Fraud Investigation Unit, conducted surveillance on numerous occasions and observed Daniel Clapp camping, boating, swimming and diving, officials said. He also was reportedly observed driving for long periods of time, and cutting and carrying firewood rounds 18 inches thick and 24 inches in diameter.
Jolea Clapp often accompanied her husband on these outings, driving for him when in the local CHP jurisdiction, then turning the driving over to him outside the jurisdiction, officials said.
During medical visits in which Daniel Clapp complained of pain, Jolea Clapp allegedly corroborated her husband’s accounts of disabling pain and his inability to perform physical activities that she had seen him perform.
Both defendants are accused of conspiracy to make false statements in support of a workers’ compensation claim and making false statements about the extent of Daniel Clapp’s physical activities and abilities in order to obtain benefits. Daniel Clapp also is accused of perjury for false statements in a deposition.
Authorities said the amount of the alleged fraud exceeds $50,000, and the charges carry a potential state prison sentence of up to five years and a $150,000 if convicted. The Clapps are to appear in Sacramento Superior Court in early February.
The case is being prosecuted by the District Attorney’s Insurance Fraud Unit.
SSource Sacbee
A veteran California Highway Patrol officer and his wife, a CHP dispatcher, were arrested today, accused of workers’ compensation insurance fraud.
The Sacramento County District Attorney’s Office announced that Officer Daniel Cory Clapp, stationed in Lassen County, and his wife, Jolea Marie Clapp, face five felony counts.
Daniel Clapp, a CHP officer for 11 years, filed his worker’s compensation claim based on injuries he allegedly sustained during a scuffle while making an arrest on Dec. 27, 2011. He and his wife told the workers’ compensation doctor that Daniel Clapp was unable to drive or lift heavy items, and that pain prevented him from performing his duties as a CHP officer, according to a District Attorney’s Office news release.
The CHP’s Internal Affairs Section, Workers’ Compensation Fraud Investigation Unit, conducted surveillance on numerous occasions and observed Daniel Clapp camping, boating, swimming and diving, officials said. He also was reportedly observed driving for long periods of time, and cutting and carrying firewood rounds 18 inches thick and 24 inches in diameter.
Jolea Clapp often accompanied her husband on these outings, driving for him when in the local CHP jurisdiction, then turning the driving over to him outside the jurisdiction, officials said.
During medical visits in which Daniel Clapp complained of pain, Jolea Clapp allegedly corroborated her husband’s accounts of disabling pain and his inability to perform physical activities that she had seen him perform.
Both defendants are accused of conspiracy to make false statements in support of a workers’ compensation claim and making false statements about the extent of Daniel Clapp’s physical activities and abilities in order to obtain benefits. Daniel Clapp also is accused of perjury for false statements in a deposition.
Authorities said the amount of the alleged fraud exceeds $50,000, and the charges carry a potential state prison sentence of up to five years and a $150,000 if convicted. The Clapps are to appear in Sacramento Superior Court in early February.
The case is being prosecuted by the District Attorney’s Insurance Fraud Unit.
SSource Sacbee
Vienna Insurance buys Moldovan insurer
Vienna Insurance Group has agreed to buy a 94 percent stake in Moldovan insurer Donaris Group SA, it said on Friday, without giving financial details of the deal.
"By entering the Moldovan market, we have expanded the Vienna Insurance Group's network to 25 countries and gained access to one of the last blank areas on our map of Central and Eastern Europe," Chief Executive Peter Hagen said.
Non-life insurer Donaris, founded in 1998, booked premiums of 2.8 million euros ($3.8 million) in the first half of 2013, an increase of around 9 percent year on year. Around 80 percent of the premiums are for motor insurance, Vienna said.
Donaris's market share of 8.4 percent makes it the fourth largest non-life insurer in Moldova.
($1 = 0.7373 euros) (Reporting by Michael Shields. Editing by Jane Merriman)
Source Reuters
"By entering the Moldovan market, we have expanded the Vienna Insurance Group's network to 25 countries and gained access to one of the last blank areas on our map of Central and Eastern Europe," Chief Executive Peter Hagen said.
Non-life insurer Donaris, founded in 1998, booked premiums of 2.8 million euros ($3.8 million) in the first half of 2013, an increase of around 9 percent year on year. Around 80 percent of the premiums are for motor insurance, Vienna said.
Donaris's market share of 8.4 percent makes it the fourth largest non-life insurer in Moldova.
($1 = 0.7373 euros) (Reporting by Michael Shields. Editing by Jane Merriman)
Source Reuters
Two Obamacare exchanges see more health insurer competition
 |
| Obama |
At least two U.S. states running their own Obamacare health insurance exchanges expect new insurers to enter their marketplaces and bolster competition in 2015, officials said on Friday.
Kynect, which is Kentucky's marketplace, and the Rhode Island Health Benefits Exchange have had separate talks about 2015 with health insurers that could opt to join the online marketplaces set up under President Barack Obama's healthcare reform law. Kentucky also expects an expansion of physician networks available within current plans.
Increased competition would increase consumer choices and tend to put downward pressure on health insurance cost trends. It could also help ensure the future of Obama's Affordable Care Act, which depends on the success of new online marketplaces.
Kentucky and Rhode Island are among states with the most successful Obamacare launches. Obama himself highlighted Kentucky's performance in his State of the Union address on Tuesday.
Each state also has only a small number of insurers. Kynect currently has three insurers and has enrolled more than 44,000 people in private plans since its October 1 launch. The Rhode Island exchange, with two insurers for individual consumers, has enrolled about 12,000 people.
It was not clear whether more competition would be in the offing for other states with their own exchanges or the federal government, which runs a marketplace for 36 states that have chosen not to operate their own.
"We expect our number of carriers to certainly grow and our networks to become more robust," said Audrey Haynes, a one-time aide to former President Bill Clinton who is now secretary of the Kentucky Cabinet for Health and Family Services.
Christine Ferguson, director of the Rhode Island exchange, predicted an expansion would result from insurer interest in individuals and small-business employees. "We are definitely in conversations with other carriers to come in. And I think we'll be successful with that," she said.
Both women were speaking to reporters at an event hosted by the nonprofit Robert Wood Johnson Foundation, which tracks healthcare trends.
Healthcare marketplaces, which began operating in all 50 states and the District of Columbia on January 1, allow consumers who lack coverage to purchase private health insurance, often at federally subsidized rates.
But a botched autumn launch of the federal marketplace and lagging enrollment among younger adults have raised concerns about the success of the marketplaces, with critics predicting big increases in costs down the road.
Haynes said officials in Kentucky had spoken to managed care plans owned by larger national insurance companies. "We've heard that they want to come into the market," she said.
California, which operates the nation's largest state-run healthcare exchange, has 13 insurers and has enrolled more than 625,000 people through private plans since October 1.
The state has barred new insurers from entering its marketplace in 2015, but officials say they are confident about the current roster of insurers.
"All of the plans with Covered California are really recognizing that this is a long-term play and are looking at things like benefit design, how do we improve the benefits," Peter Lee, executive director of the California exchange, told the same forum.
(Reporting by David Morgan; Editing by Tom Brown)
Source Reuters
Pay Rs 7,000 for rejecting claim, consumer court tells insurance firm
A Central Mumbai consumer disputes redressal forum on Friday directed New India Assurance Company Ltd to pay Rs 7,000 as compensation for mental agony to a medical policy holder, Bugwadia Phiroj.
Phiroj, a senior citizen, was admitted to a hospital in 2012 for a urinary tract infection. After discharge, he sent the bills for claim but despite follow-ups, the authorized TPA, Vipul Medcorp, and K U Sampath, the development officer at New India Assurance, did not revert till January 2013. Phiroj was told the file had been dumped in the godown without processing and a discharge voucher for Rs 41,000 was sent by courier.
Bugwadia said there were deductions in the money and demanded Rs 63,000. The forum found that despite having paid his premiums in time and filing a proper claim with verified bills, his claim was wrongly denied causing him "mental agony" for which he must be compensated.
The forum ordered New India Assurance and TPA to pay Rs 63,000 with interest of 9% per annum from September 2013 and Rs 5,000 as costs in a month.
The Times of India
Phiroj, a senior citizen, was admitted to a hospital in 2012 for a urinary tract infection. After discharge, he sent the bills for claim but despite follow-ups, the authorized TPA, Vipul Medcorp, and K U Sampath, the development officer at New India Assurance, did not revert till January 2013. Phiroj was told the file had been dumped in the godown without processing and a discharge voucher for Rs 41,000 was sent by courier.
Bugwadia said there were deductions in the money and demanded Rs 63,000. The forum found that despite having paid his premiums in time and filing a proper claim with verified bills, his claim was wrongly denied causing him "mental agony" for which he must be compensated.
The forum ordered New India Assurance and TPA to pay Rs 63,000 with interest of 9% per annum from September 2013 and Rs 5,000 as costs in a month.
The Times of India
IRDA releases new draft micro-insurance norms
The Insurance Regulatory and Development Authority (IRDA) has mooted that all micro-variable products should have a lock-in period of five years from the date of inception of the policy.
In the new draft norms on micro-insurance, the regulator said surrenders would not be allowed, but partial withdrawals may be permitted in some cases.
For the distribution of micro-insurance products, regional rural banks, micro-finance institutions, district cooperative banks, non-governmental organisations, self-help groups, urban cooperative banks, banking correspondents, among others, could be allowed.
It said that all the stakeholders should submit their feedback to IRDA before February.
Source Business Line
In the new draft norms on micro-insurance, the regulator said surrenders would not be allowed, but partial withdrawals may be permitted in some cases.
For the distribution of micro-insurance products, regional rural banks, micro-finance institutions, district cooperative banks, non-governmental organisations, self-help groups, urban cooperative banks, banking correspondents, among others, could be allowed.
It said that all the stakeholders should submit their feedback to IRDA before February.
Source Business Line
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