Issue | 

June 10, 2005

SEC Investigation into "Non-Traditional Products"

As you may have read in the press, the Securities and Exchange Commission (SEC) is investigating “non-traditional products.” We wish to inform you that AEGIS has received a subpoena from the SEC seeking information regarding certain "non-traditional products" and Inter-Ocean Holdings Ltd. (Inter-Ocean), a specialty firm devoted to non-traditional insurance techniques. AEGIS has had a small investment in Inter-Ocean since its inception in 1990. AEGIS understands that it is one of a number of insurance companies that has been issued subpoenas in these and related matters. AEGIS will, of course, fully cooperate with this and any future inquiries.

New AEGIS D&O Policy

In consultation with the RMAC, we have developed a new basic D&O policy form. For some time, we have recognized improvements in the risk profiles of some members and the changing conditions in the D&O market by endorsing the old form. The new form will provide the desired coverage without the need for so many endorsements. The RMAC has enthusiastically supported this approach and the new form.

A working draft of the policy is posted in the Underwriting Products & Services section on the password-protected section of our website. This draft has benefited from the extensive comments of the RMAC, all of our major brokers, and legal specialists from Bailey Cavalieri and LeBoeuf, Lamb, Greene & MacRae. We believe this current version is close to what the final form will be, nevertheless, we want to make sure that every member has the opportunity to offer comments and suggestions before the policy form is finalized. We will leave the discussion open until July 1 and invite you to submit comments to Gil Gould. It would help us organize and process your ideas if you could submit your comments in writing.

After reviewing your comments, we plan to present the final form at the Wednesday morning general session of the Policyholders’ Conference in Vancouver. We will also hold two afternoon breakout sessions where you will be able to discuss the details of the final form with our D&O underwriters. The new form will be incorporated in renewals occurring on or after September 1, 2005.

Even with this broader basic form, some modification by endorsement may be required to make an individual member’s actual coverage narrower or even broader to accommodate specific situations. But we believe the new form will match up better with the risks presented by the majority of our members. We look forward to hearing from you.

 

Side A Only and Independent Directors Liability Insurance

Our interactions with AEGIS members and others suggest a growing interest in new D&O products that supplement traditional coverage. After discussing these issues with the RMAC, and other members and brokers at large, we have decided to (1) improve our Side A only coverage and (2) offer a new Independent Directors Liability product (IDL).

Although the final forms are still in development, we intend to offer these coverages in a way that is superior to or at least competitive with the best products currently in the market place. If you already purchase our basic D&O coverage, using AEGIS to provide the supplementary coverages will provide superior coordination in the event of an actual claim. These new forms will be presented at the policyholders’ conference where they will be discussed and they will be posted on our website at that time.

 

Register now for the 2005 Policyholders' Conference

The 2005 AEGIS Policyholders’ Conference will be held Monday, July 25, through Thursday, July 28, at the Westin Bayshore Resort and Marina in Vancouver, British Columbia, Canada. Eligible attendees can register for the conference and reserve hotel rooms now online.

The deadline for registration, activities, and hotel rooms is Wednesday, June 29.

AEGIS staff will be available to meet with members on both Monday, July 25 and Tuesday, July 26. The additional time for meetings on Monday was popular at last year’s conference and we’re pleased to offer it again. To schedule a meeting, please contact your AEGIS underwriter, loss control representative or claims representative.

We encourage you to lock-in lower cost airfares now especially if you’re traveling from the East Coast. Depending on your originating city, you may also want to consider a connecting flight through nearby Seattle, WA. Also, please take a few moments now to become familiar with the travel documents you will need to enter Canada.

Conference registration is complimentary and attendees are invited to bring guests.

AEGIS will reimburse one representative from each member company with a current AEGIS policy written through Jersey City for the cost of three nights lodging at the Westin Bayshore. If you have any questions about your eligibility for reimbursement, please contact Gil Gould at 201.521.4824. Brokers must be connected with a current AEGIS member policy written through Jersey City in order to attend.

If you have any questions about the conference, please contact Carrie White by e-mail or by phone at 201.521.4524. We look forward to seeing you in Vancouver!

 

Save the date - AEGIS Loss Control Seminar

Please mark your calendars and join us for the AEGIS Loss Control Seminar, “System Disasters - Planning, Mobilization and Recovery,” on November 1 to November 3, 2005 at La Mansion del Rio Hotel in San Antonio, TX.

During the summer and fall of 2004, the southeastern United States weathered three major hurricanes that inflicted extensive damage. This seminar will focus on the experiences of electric and gas utilities that were affected by these and other major storms, with an emphasis on storm preparation, response and restoration, as well as "lessons learned" for the future. In addition, the seminar will also examine loss control issues surrounding the threat of terrorism.

Additional information and registration materials will be distributed later this summer. For more information, please contact Tony Calega, Vice President-Loss Control, at 201.521.4553.

Conference registration is complimentary and attendees are invited to bring guests.