INSURANCE BRIEFS

INSURANCE BRIEFS

HARLEYSVILLE DENIED

RATE INCREASE IN PA.HARLEYSVILLE, Pa. - The Harleysville Insurance Cos. said it was denied its request for "extraordinary circumstances" relief from the rate rollbacks mandated by Pennsylvania's new auto insurance law.

"The Pennsylvania Department of Insurance did not grant our request for a 14.2 percent personal auto insurance rate increase," Randy Buckwalter, public relations coordinator for Harleysville, said.

Harleysville will appeal the department's decision with the insurance commissioner, Mr. Buckwalter said. "Meanwhile we will be renewing our personal auto insurance business in Pennsylvania, but not accepting any new business."

HEDSTROM CORP. AGREES

TO $165,000 SETTLEMENT

WASHINGTON - The U.S. Consumer Product Safety Commission accepted a $165,000 settlement agreement from Hedstrom Corp. following allegations that the playground gym set maker failed to report product defects on a timely basis.

According to the commission, the gym sets included a so-called "glide ride" feature, or bracket, that presented a dangerous pinching or crunching point. The design resulted in injuries to 10 children, who suffered pinched, lacerated or partially amputated fingers.

The injuries occured as early as 1985 and to date the commission is aware of a total of 31 incidents.

Hedstrom reported the problem in April 1988 and in November of that year announced plans to repair the 370,000 gym sets.

"We believe it is an adequate amount of money to deter firms from violating reporting requirements in the consumer product safety act," said Alan Schoem, director of the commission's division of administrative litigation.

ST. PAUL AUTHORIZES

REPURCHASE OF STOCK

ST. PAUL, Minn. - The St. Paul Cos.' board of directors authorized the

purchase of Alleghany Corp.'s 9 percent ownership interest in its outstanding common stock, worth an estimated $260.7 million.

The purchase was based on a $59.25 a share price at the close of the market on May 23. The stock will be retired.

St. Paul will reimburse Alleghany for up to $5 million for certified out- of-pocket legal expenses in its attempt to gain approval from various state regulators for purchase of over 10 percent of St. Paul stock. Both companies have agreed to end legal proceedings against the other.

"We are pleased that after two-and-one-half years of regulatory process and litigation, this issue has been brought to a close," said Douglas W. Leatherdale, St. Paul's chairman and chief executive officer.

TEXAS REGULATORS WIN

CASE AGAINST INSURER

AUSTIN, Texas - Texas insurance regulators last week won a $3.8 million court judgment against a California firm that fraudulently sold health insurance to more than 60 Texas companies.

The firm, Rubell Helm Insurance Services Inc. of Irvine, Calif., failed to pay claims on the coverage it sold, instead using premium payments for expensive cars, jewelry and clothes, the Texas State Board of Insurance charged. Company executives were paid $40,000 a month and also used policyholder premiums to pay their personal credit bills.