Congressional Committee Requests: the job performance evaluation and bonus criteria for claims processors and customer service representatives.
July 20, 2007
Jay Fishman, the chief executive of Travelers, which is one of the biggest commercial insurers in the United States, got a $6.5 million bonus last year. In 2005, he got $3.75 million from an executive bonus pool that would have been smaller if the board’s compensation committee had counted “certain 2005 natural disasters,” according to its proxy. Hurricanes Katrina, Rita and Wilma contributed to $2.19 billion in catastrophe claims that year.
Travelers insurance Chairman and Chief Executive Jay S. Fishman received total compensation valued at $15.7 million last year, a period when calm weather fueled big profits for one of the nation’s largest commercial insurers, the company said in an Securties and Exchange Commission filing Friday.
Fishman’s pay included a $1 million base salary and $6.5 million in non-equity incentive plan compensation. The Travelers Cos. Inc. also granted him restricted shares and options with an estimated value of $7.7 million, according to the company’s proxy filed on Friday.
In awarding executive bonuses, the Travelers compensation committee decided that he and other executives had “substantial success” in meeting the company’s goals for the year.
The Associated Press calculates total compensation including salary, bonus, incentives, perks, and the estimated value of stock options and awards granted during the year. It also includes above-market returns on deferred compensation, although Travelers said Fishman received no such compensation.
Fishman’s pay included $267,639 for personal use of the company plane, which Travelers said it requires for security reasons. The company said that beginning this year Fishman, at his request, has begun reimbursing the company for personal travel on the company plane.
St. Paul-based Travelers also paid $164,055 for use of a company car and driver for Fishman.
The proxy also disclosed that Fishman owns or has the right to buy about 3 million shares of the company’s stock. Those would be worth $155.9 million based on Friday’s closing price of $51.68.
Link Here Committee Letter - Succinct Discovery Requests Here
UPDATE 2-US panel probes Conseco, Penn long-term care policies
24 May 2007 Reuters News
WASHINGTON (Reuters) – A congressional committee Thursday launched an investigation into allegations of deceptive business practices by Conseco Inc. and Penn Treaty American Corp., two major providers of long-term care insurance.
The U.S. House of Representatives Energy and Commerce Committee said data from state insurance regulators indicate an “unusually high” number of policyholders have complained of improper denials of valid claims.
The panel asked both companies to turn over documents about state administrative proceedings and court lawsuits about denial of claims for payment for long-term care services.
The committee also asked Conseco and Penn Treaty to submit the job performance evaluation and bonus criteria for claims processors and customer service representatives. All information is due in three weeks.
Penn Treaty said it would cooperate with the inquiry, and noted that it approved more than 95 percent of new claims submissions during the past three years. “The company has built its reputation as an industry leader with policyholders and agents due to its strong record of approving and paying claims expediently and fairly,” it said in a statement.
Conseco said it would respond promptly to the committee’s request. “We agree that every long-term care policyholder deserves assurance that their claim will be handled timely and in accordance with the terms of their contract,” a Conseco spokesman said.
“People who invest in long-term care policies and pay their premiums faithfully should be able to rely on those policies when the need arises,” Rep. John Dingell, a Michigan Democrat who heads the panel, said in a statement.
“As Congress considers ways to preserve the solvency of the Medicare Trust Fund and the long-term viability of the Medicaid program, we must ensure that people get what they pay for when they purchase long-term care coverage and are not forced to use publicly-financed programs,” he added.
Elderly Americans whose claims for long-term care are denied by their insurance carriers must exhaust their assets to pay for nursing home care until they are eligible for the U.S. government’s Medicaid coverage.
Conseco collected more than $4.2 billion in 2006 premiums and about one-fourth of that was for long-term care policies, the committee said. Penn Treaty collected more than $300 million in annual long-term care insurance premium revenues, it said.
INSURANCE-CONGRESS/ (UPDATE 2)|LANGEN|RNA|FUN
Document LBA0000020070524e35o001r6
Travelers Triples Profits
Property and casualty companies, a group that includes State Farm, Chubb, and Travelers, tripled their profits to $65 billion in the past six years. The comeback started after 2001, when claims for asbestos and medical malpractice rocked the big players, and 9/11 raised fears of more terrorist attacks. The insurers responded by raising their rates even as claims began to drop, thanks to tort reform in a number of states. So the insurers prospered despite the damage wrought by Katrina and other hurricanes in 2005 In 2006 the skies turned clear: The insurers boosted their rates as much as 100% for catastrophe insurance on the coasts yet experienced few damaging storms.
