INSURANCE BRIEFS

INSURANCE BRIEFS

DC TO INVESTIGATE

GEICO HIRING AND SALES

WASHINGTON - The District of Columbia's insurance commissioner said last week he would investigate charges of racial bias in insurer Geico Corp.'s hiring and insurance sales practices.

The National Association for the Advancement of Colored People alleges Geico allowed "blatant racism" in the workplace and violated federal insurance laws by "redlining" or excluding certain areas from coverage, in this case areas that are populated largely by blacks.

''We categorically deny and resent what we consider to be incredibly irresponsible charges that were made here today," said August Alegi, group vice president at Geico.

Commissioner Robert Willis said that if redlining was found, Geico's license to do business in the District of Columbia could be revoked. "But I frankly feel we wouldn't get to that point. I think what we need to do is get more evidence to find out the company's side of what we've heard," he said.

NEW JERSEY APPEALS

MUTUAL BENEFIT PLAN

NEWARK, N.J. - The New Jersey Insurance Department is appealing a court- ordered rehabilitation plan for Mutual Benefit Life Insurance Co., claiming that creditors will be paid ahead of annuity and policyholders.

Insurance Commissioner Samuel Fortunato had wanted to give policyholders 80 percent of the rehabilitated company's stock. The plan, approved by the court in August, calls for the insurer's creditors to receive 80 percent of the stock.

The department will also appeal provisions of the plan that will allow excess capital held at the end of the seven-year rehabilitation period to be distributed to creditors, require majority creditor approval for the sale of the company and award top priority to some administrative claims.

MOODY'S AFFIRMS

TRANSAMERICA RATINGS

NEW YORK - Moody's Investors Service confirmed the various ratings of the commercial paper issued by Transamerica Corp. and Transamerica Finance Corp. following an announcement that Transamerica plans to buy the assets of the container division of the London-based Tiphook PLC.

The proposed transaction, which is expected to cost $1.2 billion, will double the size of Transamerica's leasing corporation and will boost the company's market share in container leasing, Moody's officials said. Transamerica will contribute the Tiphook assets to its Transamerica Finance Corp.

Affirmed ratings for Transamerica Corp. are as follows: senior debt at ''A2," senior shelf registration at (P) "A2," subordinated debt at ''A3," preferred stock at "A2" and commercial paper at "Prime-1." Affirmed ratings for Transamerica Finance are as follows: senior debt at ''A2," senior shelf registration at (P) "A2," subordinated debt at ''A3" and commercial paper at "Prime-1."

MO. REGULATORS WANT

FIRMS' COVERAGE CRITERIA

JEFFERSON CITY, Mo. - The Missouri Department of Insurance has issued rules requiring residential and auto insurance companies to disclose the criteria they use to deny, cancel or limit coverage and set rates.

The new regulations are aimed at detecting unfair underwriting practices, according to the department. The rules would require insurers to identify any written standards used to determine whether to accept an applicant and how much to charge for coverage.

Insurers also would be required to disclose any questions they ask on the applications to determine race, color, age or other characteristics that could be used to discriminate against applicants.

The proposal will be presented to the Joint Legislative Committee on Administrative Rules. If no objections are registered, the department plans to adopt the final rule on Dec. 16.

INSURER SAYS CHURCHES

MUST ADDRESS ABUSE

FORT WAYNE, Ind. - Churches are vulnerable targets for lawsuits based on claims of sexual abuse and aren't acting quickly enough to address the problem, an insurance executive says.

Such suits typically allege negligent hiring, supervision or retention of a person accused of child molestation, said Al Davidson, vice president of claims for Brotherhood Mutual Insurance Co.

Mr. Davidson said his Fort Wayne company, which insures 21,000 churches in 21 states, currently has 50 claims pending concerning sexually deviant behavior. Ten years ago, he said, the company had no claims in dispute.