What’s New: In brief (October 12, 2005)

AIG Excess Casualty(R), a division of American Home Assurance Company, a member company of American International Group, Inc. (AIG), has introduced a new product that provides excess liability coverage for risks previously covered by an insurance carrier that is now insolvent. Available as an endorsement to AIG Excess Casualty’s Commercial Umbrella Liability policy, Umbrella Prime(R), xsInResponse allows policyholders to reduce insolvency-related vulnerabilities in excess liability insurance programs dating back up to 15 years. “Over 200 insurers and reinsurers have become insolvent in the past decade, leaving many companies unable to collect on large liability claims,” Chris Maleno, president of AIG Excess Casualty, says and further explains that xsInResponse allows risk managers to secure stable capacity and strategically address coverage holes left by insolvencies. This, he says, will provide further assurance to stakeholders, board members and others regarding the ability to access excess liability coverage when required.

London’s Market Reform Group recently sent out a code of practice and a checklist that is meant to aid insurers and brokers realize the January 1, 2007 deadline to achieve contract certainty for insurance buyers at policy inception. Nick Prettejohn, chief executive of Lloyd’s of London and chairman of the Market Reform Group, urges all London insurance market companies to “communicate the definition and principles of contract certainty to the board of your company and obtain its commitment to them.” The Market Reform Group’s program office is initiating this support in order to assure the Financial Services Authority that the insurance market is committed to achieving the contract certainty target. Prettejohn says the FSA will formally review insurers progress at the end of 2005 to determine whether the market is on track to achieve satisfactory performance by the end of 2006.

Lloyd’s recently signed a licensing agreement to use EQECAT Inc.’s catastrophe management software, WORLDCATenterprise to enhance assessment of catastrophe risks to the Lloyd’s market.