INSURANCE BRIEFS

INSURANCE BRIEFS

PAN AM SETTLES SUIT

OF LOCKERBIE FAMILIESThe families of ground victims of the terrorist bombing of Pan Am's Flight 103 over Lockerbie, Scotland, have reached a settlement with the airline, an attorney for the victims said Thursday.

All 259 passengers and crew aboard the plane were killed when the jet plowed into the quiet Scottish town Dec. 21, 1988. Eleven people on the ground were killed, a dozen others were injured and many homes were damaged or destroyed.

About 250 Lockerbie families filed claims in Dade Circuit Court because two Pan Am subsidiaries have headquarters here, said Miami attorney Aaron Podhurst.

The agreement doesn't affect lawsuits filed by the families of those aboard the plane, Mr. Podhurst said.

PRIMERICA PLANS TO BUY

ALL OF AMERICAN CAPITAL

NEW YORK - Primerica Corp. said Wednesday it plans to acquire the remaining stake in American Capital Management and Research Inc. for about $38 million.

Under the terms of Primerica's proposal, American Capital shareholders ''would receive 0.30 shares of Primerica common stock for each of their American Capital shares in what is expected to be a taxable exchange," Primerica said.

Primerica already owns 82.6 percent of Houston-based American Capital, which has about 24.4 million shares outstanding. If approved by the American Capital board, Primerica will issue about 1.27 million new shares to be exchanged for American Capital shares.

Based on Tuesday's closing price of 29 5/8 for Primerica common stock, the transaction is valued at about 38 million.

American Capital provides investment advisory services to 36 mutual funds and closed-end investment companies, and had about $12.8 billion in assets under management as of March 31.

CONSUMER GROUPS ISSUE

PRODUCT SAFETY STUDY

WASHINGTON - A government stamp of approval is no guarantee a product is safe, so manufacturers should not be exempt from punishment when an approved product causes death or injury, consumer advocates said Thursday.

Four national consumer groups reported that more than 1,300 deaths and thousands of serious injuries in the last 10 years resulted from the use of drugs and medical devices approved by the Food and Drug Administration.

The report was issued as the Senate Commerce consumer subcommittee held its third hearing on federal product liability legislation backed by the Bush administration.

The legislation includes a provision to exempt from punitive damages in product liability cases those manufacturers whose products received premarket approval from the FDA or the Federal Aviation Administration.

The study was issued jointly by Consumers Union, Public Citizen, U.S. Public Interest Research Group and the Consumer Federation of America.

NY COURT UPHOLDS

FINE OF $3.2 MILLION

NEW YORK - A regulatory decision ordering DEF Brokerage Facility Inc., Great Neck, N.Y., and two of its brokers, to pay $3.2 million in restitution to contractors who had obtained surety bonds through them, has been upheld, the New York State Insurance Department said Tuesday.

The New York State Supreme Court Appellate Division upheld a May 1989 decision by the department against DEF Brokerage and brokers Davis Flatow and Phillip Montuori.

The superintendent determined that these parties violated the state's insurance law by collecting service fees from contractors without written agreements specifying the amount of the fees.

An investigation found 759 violations involving $3.2 million in services collected between 1982 and 1985. "In fact, the brokers collected more in service fees than in total premiums from the contractors during this period," according to the department.

DEF Brokerage, Mr. Flatow and Mr. Montuori face having their licenses revoked if they fail to make restitution to their clients. In addition, each must pay a civil penalty of $2,500.