In Houston on Tuesday 26th January, U.S. District Judge David Hittner ruled against Lloyd’s underwriters and in favor of R. Allen Stanford. This means that Mr. Stanford can now use the Lloyd’s of London insurance policies covering his companies’ directors and officers to pay lawyers to defend him against upcoming criminal charges. Stanford is currently being held without bail, a trial has been scheduled for January 2011. He’s charged with defrauding investors in a $7 billion Ponzi scheme involving certificates of deposit and could be imprisoned for decades.
Lloyd’s underwriters had denied coverage in November, saying the policy was voided by the August guilty plea of James M. Davis, who had been chief financial officer for Stanford Financial.
Stanford had sued to force Lloyd’s to pay his defense costs. Joining Stanford in the insurance suit were three criminal case co-defendants including former Stanford Financial Group Co. investment chief Laura Pendergest-Holt, and former accounting executives Gilbert Lopez and Mark Kuhrt.
The position taken by Lloyd’s “is absurd because these circumstances are precisely why corporations procure D&O insurance on behalf of their directors and officers,” Hittner wrote in his 42-page opinion. “Indeed, it would contravene the very purpose of the policies — as well as the policy language itself — to require (the accused) to prove their innocence before being entitled to funds for their defense.”
Stanford’s attorneys said the position taken by Lloyd’s effectively required him and his co-defendants to prove their innocence to the underwriters prior to receiving indemnity against legal fees.
Dan Cogdell, an attorney for Pendergest-Holt, said in an e-mail that he and his client were “relieved” by the decision. “The judge’s order now allows us to properly defend our clients without fear of going into bankruptcy,” Cogdell said.
Insurance Products Mentioned:
D&O insurance – Directors and Officers liability Insurance
Liability insurance payable to the directors and officers of a company, or to the organization(s) itself, to cover damages or defense costs in the event they suffer such losses as a result of a lawsuit for alleged wrongful acts while acting in their capacity as directors and officers for the organization. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously.
Insurance companies mentioned:
Lloyd’s is the world’s leading specialist insurance market and occupies fifth place in terms of global reinsurance premium income, and is the second largest surplus lines insurer in the US. In 2009, 74 syndicates are underwriting insurance at Lloyd’s, covering all classes of business from more than 200 countries and territories worldwide. Lloyd’s is regulated by the Financial Service Authority.
The International Association of Insurance Supervisors (IAIS) has given the go-ahead for the creation of a Common Framework for the Supervision of Internationally Active Insurance Groups.
A task force led by Monica Mächler of the Swiss Financial Market Supervisory Authority (FINMA) drew up the recommendations in order to develop better supervision of internationally active insurers’ group structure, business mix and intra-group transactions. The purpose of the increased monitoring of international insurance groups’ business operations is to help identify risks and establish protective measures as needed.
A wide-ranging concept paper on the framework is set to be ready in the first half of 2011 with the framework to be completed by 2013. It will set out both quantitative and qualitative requirements for the insurance supervisors from the 140 countries participating in the IAIS smoothing the way for wide-spread implementation as well as cooperation and interaction between supervising entities.
International Association of Insurance Supervisors (IAIS) – The IAIS was established in 1994 and represents insurance supervisors and regulators from 190 jurisdictions in 140 countries. It works to promote financial stability by issuing worldwide insurance standards, principles and guidance papers as well as offering training on issues pertaining to insurance supervision.
Swiss Financial Market Supervisory Authority FINMA – FINMA is the independent Swiss authority supervising insurance companies, banks, stock exchanges, securities dealers and other financial intermediaries. Created by the FINMASA Act which was approved by parliament in 22 June 2007 which into full force on 1 January 2009; it combined the Federal Office of Private Insurance (FOPI), Swiss Federal Banking Commission (SFBC) and the Anti-Money Laundering Control Authority.
According to a recently released Gallup survey, which has taken three years to complete, 16% of all adults in over 130 countries globally – equivalent to over 700 million people – would relish the prospect of starting a new life in a different country. Unsurprisingly, the most popular migration destinations include relatively wealthy Western countries, with Saudi Arabia and the United Arab Emirates also being seen as attractive places to live.
If all adults seeking relocation achieved their desires the population of the USA would increase by 165 million people, while France, Britain and Canada would each receive 45 million new migrants. According to the survey, African adults were the keenest to leave their home countries, while Asian respondents were the happiest to stay where they are.
There are a number of factors at work in the desire of individuals to relocate to another country. For many expatriates the primary consideration when deciding to stay in their country of residence, or relocate somewhere else is with regards to job opportunities. This is not surprising in an era of increased globalization in the workplace. For many expatriates, the biggest advantage to taking an employment position away from their home country is with regards to their employment contract or career prospects. According to a report released by HSBC, 51% of expats will stay in their country of residence because of a superior employment contract, while 44% would remain to improve their career prospects.
HSBC found that expatriates enjoy a superior quality of life when they move abroad, with Canada achieving top position for the world’s largest expatriate lifestyle survey; Australia and Thailand placed second and third respectively. The United Kingdom, while being a desirable destination for millions of people around the globe, placed last in terms of quality of life; this may be in part due to the limited access to healthcare and social services enjoyed by non-nationals, and the competitiveness of the job market.
Increasingly, expatriates around the world are spending more time away from their home nations, and this trend is increasing. More than half the respondents questioned by HSBC had lived outside of their home nations for more than 5 years. The countries where expatriates tended to reside the longest before returning to their home countries included South Africa, Thailand, and Canada. Expatriates originating from Thailand, Bahrain, South Africa, Russia and the USA had a higher tendency to permanently relocate away from their home nations and spend the remainder of their life overseas. The average time for most expatriates to live outside of their home nation is between 7 – 48 months.
One of the biggest challenges to the expatriate lifestyle is with regards to healthcare access. For many expatriates not covered by a national health insurance scheme, accessing the health care services they require can be difficult. As a consequence of this, there is a growing need for expatriates to purchase some form of international health insurance. Additionally, the expatriate focused services sector has seen explosive growth over the last year as companies realize the need for services and products specifically targeted towards these consumers. Dow Jones, Labour International, Conservatives Abroad, and Marks and Spencer are all organizations which have made the move to provide tailored services and options to expats around the world.
Prudential plc has announced a partnership with United Overseas Bank (UOB) in Singapore to distribute Prudential’s insurance products through United Overseas Bank’s retail network. The deal entails that in addition to the partnership, Prudential will also buy UOB Life Assurance in Singapore for S$428 million .
The bancassurance partnership which will last for 12 years, means that Prudential will be able to market and sell their protection, savings and investment insurance products through UOB’s 414 bank branches throughout Singapore, Thailand and Indonesia.
Prudential already has 400,000 agents across 13 markets in Asia, including: China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. The pending deal would help solidify Prudential’s standing in the region and give it further opportunity for growth given UOB’s strong distribution network.
Prudential plc – Prudential has been in the insurance and financial services business since 1848. Today they operate throughout the UK, US and Asia offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.
United Overseas Bank – United Overseas Bank has been operating in Singapore since 1935. For the last 75 years they have been growing their operations based on high quality products and customer service and now the UOB Group runs 500 offices in 18 countries in Asia, North America and Western Europe.
CIGNA International has announced that it will be expanding its core US business with an aim to offer comprehensive private medical coverage to clients around the world. CIGNA’s spokesperson revealed that the company will launch their services for customers in Spain by the end of the first quarter 2010.
The company has said that it aims to target expatriates and high net-worth individuals throughout Spain with their expansion, and that CIGNA International is in a unique position to provide dedicated services due to its already existing, extensive network of over 600,000 partner hospitals, healthcare facilities, and doctors.
The deployment of CIGNA’s Spanish operation now means that the company has a presence in over 27 countries and jurisdictions worldwide. With a historical international focus on providing American expatriates and employees with health insurance, CIGNA is now moving to expand its presence and offer services to expatriates of allnationalities.
Keith Biddlestone, with 25 years experience in the healthcare and insurance industry across Asia, Europe and the Middle East will be leading the venture, having joined CIGNA from BUPA International. CIGNA International President William L. Atwell has said he is “very pleased” at the appointment.
Insurance Companies Mentioned:
With a corporate history dating to 1792, CIGNA is one of the oldest insurance companies in the world. CIGNA is a major international health insurance provider, priding itself on good communication and customer dedication.
Established in 1947, the British United Provident Association is committed to ensuring that patients have the option of where and when they receive treatment. A leader in the expatriate medical insurance market, BUPA has almost 7 million policyholders worldwide.
On Tuesday January 12 2010, the Island nation of Haiti suffered a major disaster in the form of an earthquake measuring 7.0 on the Richter scale. Although there is no threat of a Tsunami, the country has continued to be ravaged by aftershocks after the primary incident, some of which have measured as high as 6.0 on the Richter scale. Red Cross estimates indicate that as many as 3 million people have been affected while the cost of the damage caused by the quake could exceed billions of dollars. The quake was the worst natural disaster to strike Haiti in 200 years.
Earthquakes, one of the most damaging natural disasters which a nation can face, are caused by the movement of the Earth’s crust in the form of tectonic plates. These plates will often rub and grind against each other (which is how mountain chains such as the Rockies formed) often resulting in tremors or vibrations. These vibrations are what are colloquially referred to as Earthquakes.
Depending on the severity of the quake in question, and the standard of construction in the country where the quake occurs, the most common type of damage associated with this type of disaster is property damage and loss; which can consequently result in the loss of human life. Common human injuries associated with Earthquakes often include cuts, broken bones, crush injuries, and dehydration from being trapped in rubble. However, it is important to note that with every natural disaster the scope of injuries, and the impact on a populace, will be largely dependent on the time of the incident, population density, and the quality of construction/housing in the area in question.
On the 17th of January 1994 the Northridge Earthquake, measuring 6.9 on the Richter Scale, struck Los Angeles. As a result of the quake roadways, utilities, and private property throughout the greater L.A. area were severely damaged and a total of 171 people sought treatment at L.A. hospitals for earthquake related injuries.
The injuries experienced by the L.A. population during the 1994 earthquake were wide and varied. Of the 171 people injured, 33 were fatalities while 138 required hospital admission. There were no statistical differences between the injuries received by men and women, although the prevalence for an individual suffering an injury during the quake was shown to increase with age. Most of the fatalities of the Northridge Earthquake were due to the collapse of buildings on people, which resulted in head or chest injuries, and consequently death. The majority of non-fatal hospital admissions were due to an individual falling, or being hit on the head by falling objects. Motor vehicle injuries, including burns, were also common among those survivors admitted to hospital – this was in part due to the extensive damage suffered by the city’s road network.
At the time of writing, details on the Haiti Earthquake are still coming in. Haitian government officials estimate that the final death toll may exceed 100,000 people while hospitals in the country are struggling to cope with the deluge of patients waiting to receive treatment. Considering that the standard of construction in Haiti is significantly lower than the standards in the USA, and that the Haitian quake was 0.1 times stronger than the Northridge incident, it can be expected that the damage will be wider and worse in Haiti.