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Sofia Ashmore

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    British Prime Minister David Cameron on  Wednesday warned that overhauling the state-funded National Health Service  (NHS) was “essential” as he launched a fightback against criticism of the  plans.

    Launching a “listening exercise” in response to anger from unions and  patient groups over the radical plans, Cameron said he was willing to make  changes but added wholesale reform was the only way forward.

    “The status quo is not an option,” he told NHS workers in Frimley,  southeast England, during a launch event with Deputy Prime Minister Nick Clegg  and Health Minister Andrew Lansley.

    “Modernisation is not just a good idea to save money and build a better  health service. It is in my view essential for a better NHS for our future,”  Cameron added.

    But he also reassured the health workers: “We will listen and we will make  any necessary changes.”

    Major changes proposed by the Conservative-Liberal Democrat coalition  include taking away control for managing budgets from local boards and handing  it to family doctors.

    The reforms would also see the private sector have a greater role in  running health services.

    But opposition is growing amid fears more competition will lead to the  closure of some NHS units and over the speed at which the government wants to  push the plans through.

    Successive British governments have struggled against fierce opposition to  major reforms of the NHS despite frequent criticism over poor performance.    The NHS, which was launched in 1948 and has grown to become the world’s  largest publicly funded health service, is committed to providing treatment  free at the point of use to anyone resident in Britain.

    London, April 6, 2011 (AFP)

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    A new resource for Citizenship and PSHE teachers, that aims to improve the health and well- being of young people has been launched by Legal & General and MEND.

    Your Life, Your Choice is an educational teaching resource for 11-14 year olds that aims to encourage young people to evaluate information on healthy lifestyles, make informed judgments and reflect on the consequences of their actions now as well as in the future. The resource is designed to support elements of the Citizenship and PSHE Curricula for Key Stage 3 students.

    One hundred copies of Your Life, Your Choice will be made available free of charge to Citizenship and PSHE teachers on a first-come-first-served basis.

    Harry MacMillan, Chief Executive of MEND, said: “Giving young people the information they need to live healthy lives and take responsibility for their own wellbeing is vital if we are to achieve a healthier nation. We hope the resource will inspire young people to be healthier and become active citizens by promoting healthy lifestyles to their peers.”

    Graham Precey, Legal & General’s Head of Corporate Social Responsibility said: “With one in three school children overweight or obese, it’s important to educate our young people about healthy lifestyles. We’re delighted to partner with MEND, the experts in child health, to offer this exciting resource free of charge to teachers. If we act now we can improve the future health of our nation’s children.”

    The resource forms part of Legal & General’s corporate responsibility strategy to help understand trends in health and the impact of ill health on policy holders. With the UK population living longer this has a huge impact on the economy and the demand for health care. Understanding health issues is key to increasing the affordability and accessibility of products designed to mitigate health risks for consumers. Legal & General work with a number of partners in the third sector such as MEND to help us gain knowledge and understanding that helps to inform its business.

    Your Life, Your Choice contains lesson plans, teacher resources and student worksheets, plus DVD clips to complement each session and help engage students.

    The resource supports the Healthy Schools Standards and the relevant National Curriculum requirements for Key Stage 3. The resource helps to achieve SEAL learning objectives and areas of the PLTS framework.

    Source : Legal and General Press Release

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    The ABI has today announced that the long-standing Concordat and Moratorium on Genetics, agreed with the Department of Health has been extended to 2017.

    Nick Starling, the ABI’s Director of General Insurance and Health, said:

    “The Concordat and Moratorium on the use of predictive genetic test results works well for consumers. It means people can insure themselves and their families, even if they have had an adverse result from a predictive genetic test. The moratorium has proved effective since its introduction in 2001 and has now been extended to 2017.”

    The moratorium means the results of a predictive genetic test will not affect a consumer’s ability to take out any type of insurance other than life insurance over £500,000.  Above this amount, insurers will not use adverse predictive genetic test results unless the test has been specifically approved by the Government. Only around 3% of all policies sold are above these limits. The only test that is approved is for Huntington’s Disease.

    Health Minister Anne Milton said:

    “This is an excellent agreement that has benefitted both patients and consumers. The extension of the moratorium will ensure that the public continue to have confidence in using predictive genetic tests and being insured.”

    To provide ongoing certainty for consumers, the ABI and the Department of Health undertake planned reviews three years before the end of each extension. This announcement follows the 2011 review; the next review will take place in 2014.

    Source : ABI Press Release

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    Specialist international insurer, Amlin, made initial estimates of the impact of the 2011 New Zealand earthquake, the Japanese earthquake which occurred on 11 March and the 2011 Queensland floods.

    The 2011 New Zealand earthquake was a major catastrophe with market loss estimates of up to US$12 billion.  As previously reported Amlin’s most significant reinsurance exposures are to residential properties.  Little detailed information is available to date to allow a full analysis of reserve estimates to be made, particularly with respect to overlapping damage from the previous Christchurch earthquake.  However, Amlin currently estimates net claims of around £110 million from the second earthquake.

    Inevitably, so soon after the devastating earthquake and tsunami in Japan, any assessment of potential losses is subject to considerable uncertainty.  However, based on a review of catastrophe reinsurance exposures and known exposures for property/marine insurance accounts, Amlin estimates that its net claims are likely to be between £80 million and £150 million based on insured market losses of between US$12 billion and US$25 billion respectively.

    The scale of the losses means that any deterioration of these New Zealand and Japanese reinsurance loss estimates will be partly recoverable from our reinsurance.  The structures of the reinsurance programmes for London and Bermuda also mean that increased reinsurance protection will be available for future events in 2011.

    Net claims from the 2011 Queensland floods, which affected Brisbane and surrounding territories, are estimated at £15 million.

    Charles Philipps, Chief Executive, commented: “We are working closely with brokers to provide Amlin clients with all possible support following the tragic loss of life and property as a result of these events. Our ability to respond quickly and proactively to claims from catastrophe events is a key aspect of our service to clients.”

    Simon Beale, Underwriting Director, Amlin London, commented: “Amlin will continue to benefit from the diversity of its account in 2011.  Early market signs suggest that previously reported softening in certain areas will be arrested and loss affected areas will see strong rate increases.  As previously disclosed, Amlin’s reinsurance programmes provide increased levels of reinsurance protection for any further catastrophe events during 2011.”

    Source : Amlin Press Release

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    Following the announcement of the company’s major push into commercial lines mid-markets,  Liberty Mutual Insurance Europe (LMIE), a member of Liberty Mutual Group, has confirmed more details of its expanded regional office network and management team.

    Supporting the commercial lines business, new operations in Birmingham and London are opening to complement existing locations in Bristol, Cheltenham and Manchester.

    The new Birmingham office opened 4 April and will service the Midlands region.  A dedicated commercial branch will open in London later this month focusing on the South East and London.

    The existing Manchester office is managed by Daniel Fielding, Regional Manager; Bristol by Jonathan Powell, Regional Manager; and Cheltenham by Chris Bilas, Managing Director of LMIE subsidiary Liberty Vision.

    Commenting on the expanded office network, LMIE CEO Sean Rocks said: “This expansion allows us to increase our presence in the commercial lines arena amongst mid-market and larger SME companies. We are confident that the new locations in Birmingham and London, together with our existing branch network will support the distribution of our products and position LMIE as a ‘go to‘ market for brokers placing mid-sized commercial risks.”

    Source : Liberty Mutual Insurance Press Release

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    The airline industry has started to recover since the darkest days of the financial crisis, with rising passenger numbers and fleet investments resulting in insurance premium rising by four percent on average during 2010, according to Aon Risk Solutions. The findings are detailed in Aon’s annual report the airline industry, the Aon Airline Insurance Market Outlook, 2011.

    One of the key factors, other than the values of aircraft fleet, in determining the cost of an airline’s insurance premium is the number of passengers they expect to carry. After an overall decline in passenger numbers forecast for 2009/10 renewals, 2010/11 placements showed a recovery in every region of the world, with airlines in Asia Pacific predicting the largest increase, 12%.

    Passenger number forecasts, year on year comparison (% change)
    2006/07 2007/08 2008/09 2009/10 2010/11
    Africa +10 +13 +9 +7 +3
    Asia Pacific +7 +11 +7 -1 +12
    Europe +12 +12 +7 -1 +11
    Latin America +32 +7 -1 +8 +11
    Middle East +11 +10 +12 +12 +4
    North America +4 +4 -5 -6 +7
    Global +9 +8 +3 -2 +10

     

     

    During their insurance renewals, regional airlines predicted the largest increase in passenger numbers, 28%, followed by international airlines (14%), low-cost (10%), flag (7%) and charter (7%).

    Insurers paid out more in claims in 2010 than they took in premiums, although the high level of airline insurance market capacity meant that there was enough competition to suppress their premium income aspirations to only 4% where premium was rising at least 20% in 2009. 

    Losses in 2010 were very high, with insurers seeing approximately US$2.1 billion of claims, compared to an average of US$1.5 billion between 1998 and 2009, but down on the US$2.3 billion of claims in 2009. It appears as though the loss profile of the industry is evolving, given that the last two years have seen a very high level of claims, but the actual number of incidents well below the long term average. There were 601 fatalities in 2010 compared to a long term average of 621.

    Simon Knechtli, Aon’s head of aviation in the UK commented: “The bottom line is that the only reason for the small rise in market premium is the airline industry’s rebounding risk exposures, including fleet value and developing number of passengers. As risk exposures have risen by more than overall premium this evidences that the underlying cost of insurance continues to fall. That said, it is very difficult to sum up the position of the airline insurance market in a simple statement because the conditions are exceptionally complicated with market players deploying a variety of tactics to try to achieve their desired portfolio performance.”

    Source : Aon Press Release

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    XL Insurance announces the appointment of Kadidja Sinz as Country Manager for France.

    She succeeds Guy Lallour who is retiring in May.  Ms. Sinz has more than 25 years of experience in the European and French insurance markets. She joins XL Insurance from Ace Europe where she most recently held the position of Distribution and Customer Relationship Manager for Europe. Previously she held various management roles at AIG Europe in Paris and Chubb France.

    Gernot Klantschnig, Regional Operating Officer Continental Europe, Asia and Latin America for XL Insurance, commented: “Kadidja has extensive experience in developing and implementing insurance solutions for major and middle market firms in France. She is well placed to build on our momentum in the market and further grow our French business through offering a product mix that responds to market needs.

    “France is an important market to us and home to many international companies which rely on XL Insurance to provide local and global insurance coverage.”

    Ms. Sinz added: “XL Insurance has a reputation for technical insight and providing an efficient service. I am extremely pleased to join such a successful team and look forward to working in partnership with clients and brokers devising appropriate risk transfer solutions for them.”

    Ms. Sinz holds a TRIUM Global Executive MBA jointly issued by the NYU Stern, London School of Economics and HEC Paris universities.

    Source : XL Insurance Press Release

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    AXIS Global Accident & Health, a division of AXIS Capital Holdings Limited announced two senior additions to its International operation, based in London.

    Rob Smart has been named Senior Vice President and International Reinsurance Manager, responsible for building the division’s reinsurance portfolio outside the US and Canada.  In this new position, Rob will report to International Chief Executive Officer, Paul Chapman, and will spearhead the expansion of the International Accident & Health reinsurance offering into new markets and distribution channels.  Rob brings almost 20 years of insurance industry experience to the position, most recently serving at Catlin Underwriting Agencies where he was Deputy Head of the Specialty Business Group, which included Accident & Health.

    The division has also bolstered its International Insurance team with the appointment of Giles Berkshire as an Assistant Vice President and Underwriter.  Giles will assist in the development of Personal Accident and Business Travel insurance products and the management of certain MGU relationships.  Giles joins the Company from ACE European Group where he was a Senior Accident & Health Underwriter.  He will report to International Insurance Manager, Giles Allen.

    Commenting on the new appointments, Paul Chapman said, “I am delighted to welcome Rob and Giles to the International Accident & Health team, and know that we will significantly benefit from the breadth of their collective underwriting experience.  Their appointments underline the commitment AXIS Capital has made to the establishment of a truly global accident and health business, and we view them as key to the growth of the International operation.  In the short time since we started writing reinsurance in April 2010, we now have the capability to offer our brokers and customers a full range of accident and health reinsurance and insurance services in Europe and beyond. With a now stronger team of industry experts, we expect to further capitalize on these capabilities.”

    Source : Axis Global Accident and Health Press Release

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    Indonesia wants the private sector to build more hospitals and reserve a quarter of the available beds for the poor, as it increases spending on free healthcare to tackle a rise in diseases from strokes to AIDS, the health minister said.

    The plan to cover basic hospital medical services nationwide, to ensure Indonesians who live in poverty get free hospital treatment, will cost 10 trillion rupiah ($1.15 billion), Endang Sedyaningsih said in an interview on Tuesday.

    The extra spending comes as much of Asia seeks to improve healthcare facilities to prepare for an increase in chronic long-term illnesses as populations age, though many developing nations such as Indonesia are starting from scratch.

    “We are aiming that everybody doesn’t have to pay when they are hospitalized in class-3 hospital beds,” Sedyaningsih said, referring to the basic level of service. “They will be covered by either the central government or the provincial government.”

    But she acknowledged that there were budget constraints and the plan will be implemented in stages.

    In 2009, 76.4 million Indonesians who were considered to be poor received free medical services in class-3 hospital beds, up from 36.4 million people in 2005. Currently, 56 percent of Indonesia’s 238 million population have some form of health insurance.

    Under Indonesia’s 2011 budget, the Health Ministry has been allocated 26.2 trillion rupiah, an increase of 10 percent – but this is still just 2.3 percent of gross domestic product, versus 3.7 percent in Thailand and 15.7 percent in the United States. The government last year opened up its healthcare sector to foreign investment and is encouraging private hospital builders to reserve space for its free health program.

    “I invite the private sector to build hospitals and to have at least 25 percent of class-3 beds,” Sedyaningsih said. “If they can have 50 percent of the rooms in their hospitals for class-3 beds, it would be great.”

    Indonesian property firm Lippo Karawaci and the Mayapada Group are both building hospitals in Indonesia, but regional firms such as Singapore’s Raffles Medical or India’s Fortis Healthcare have yet to show interest.

    Aids fear grows

    President Susilo Bambang Yudhoyono has pledged to reduce the poverty level to around 8-10 percent, from above 30 percent now, though critics say strong economic growth has not benefited the poor. And, as incomes for a growing middle class rise, there is an increase in “lifestyle” diseases.

    Indonesia now needs to tackle a rise in chronic, non-communicable diseases such as stroke, heart disease and cancer, even though infectious illnesses like tuberculosis, malaria, childhood diarrhea and dengue remain huge problems, said Sedyaningsih, who is currently battling lung cancer herself.

    The ministry is trying to extend health services and treat adults with hypertension, diabetes and high cholesterol. It is also studying the possibility of reducing the salt content in fast food, and looking to improve health for children under five in a nation with a relatively high mortality rate.

    Sedyaningsih, who was a scientist before becoming minister in October 2009, said HIV/AIDS was a growing concern even though its prevalence across the world’s fourth-most populous country is relatively low at 0.5 percent, versus 18 percent in South Africa.

    “We have certain provinces that are facing AIDS very seriously, like Jakarta, Bali … Papua province,” she said.

    ndonesia had 4,158 newly confirmed HIV infections in 2010, up from 3,863 in 2009. It had a cumulative 24,131 HIV/AIDS cases by end-2010.

    Sedyaningsih noted that controlling the spread of HIV was difficult because the use of condoms cannot be promoted due to religious sensitivities in the world’s most populous Muslim country. The ministry is asking NGOs and religious communities to be more active in promoting safe sex.

    “We cannot put ads for condoms openly on TV. They are available, but we cannot promote their use or people will say the health ministry promotes promiscuity,” she said.

    Source : Reuters

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    Over half of Britain’s charities believe that the nation’s banks and financial traders are morally obliged to increase their support for charities following their role in sparking the economic recession.

    According to a newly published study conducted on behalf of specialist charity insurer Ecclesiastical, 53% of charities said that they felt financial services organisations had a moral duty to offer more donations and support as the charity sector’s finances are squeezed by the aftermath of the credit crunch.

    The study also found that post-recession, large numbers of British charities are considering merging or reducing the scale of their operations.  Almost a quarter of charities interviewed (23%) said they were considering a merger or consolidating with another charity, while 14% said they were either downsizing or closing. A further 15% were reviewing the potential to set up a social enterprise.

    Asked how they felt their finances would perform in 2011, over half (54%) predicted that business for their organisation would remain at a similar level to 2010. The remainder were fairly evenly split between improving and worsening scenarios.

    With money harder to come by, over half of charities (53%) said they felt under pressure to create and manage fundraising activities that differentiated them from other charitable organisations with 26% actively considering so-called extreme fundraising . 45% were concerned about the risks they faced by using volunteers in fundraising and 37% were taking action to reduce this level of risk.

    Commenting on the study’s findings, Ecclesiastical’s director of underwriting Paul Bloxham said:

    “What we’re seeing here is a snapshot of the charitable sector caught squarely between a rock and a hard place.

    “There’s a very strong belief among senior charity managers that, having been a key factor in triggering the recession, Britain’s banks and financial organisations need to reach deeper into their pockets to support the charities that are having to cope with the recession’s social aftermath. With debt and social problems increasing, charities are in greater demand but are less able to supply the services due to cutbacks. The feeling seems to be that the financial services sector has an obligation to bridge that gap with increased donations.

    “It’s also very interesting to see the mounting pressure on charities to resort to extreme fundraising activities such as abseiling or adventure treks and races.  These can be effective fundraising tools, but they expose charity staff and volunteers to an increased level of risk that needs to be managed. Insurance is one way, but only in conjunction with effective risk management. 37% of charities say they are now interested in receiving this kind of advice.”

    The survey of 190 UK charities was conducted from Ecclesiastical by telephone during October-November 2010 by independent research company FWD.

    Source : Ecclesiastical Press Release

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    Brit Insurance announces the expansion of its Bristol Team with the appointment of Robin Martin as Branch Property & Liability Underwriter. He takes up his new position immediately.

    Robin has over 30 years of underwriting experience in the UK property and casualty market. He joins Brit Insurance from Travelers Insurance Company Ltd., where he was more recently Regional Development Manager for the South West. Prior to this, Robin has held various senior underwriting roles with other commercial insurers with broker relationships throughout the region.

    Reporting to Peter Grocock, Head of Brit Insurance’s Bristol operations, Robin will be responsible for managing the existing property and liability account and developing new business in line with the Group’s underwriting philosophy.

    Peter Grocock, Head of Office, Bristol commented:

    “I am delighted to welcome Robin to the team in Bristol. He has a strong track record and is a well known and respected underwriter in the local insurance market. In particular, he will bring a wealth of underwriting experience to our growing branch, together with some strong personal relationships established with brokers over many years. I am confident he will make an important contribution to our long term development plans”.

    Source : Brit Insurance Press Release

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    Fitch Ratings has assigned Munich Re’s (‘AA-‘ /Stable) expected issue of hybrid securities in benchmark size an expected ‘A(exp)’ rating. The final rating is contingent on the receipt of final documents conforming to information already received.

    The issue is part of Munich Re’s active capital management and takes into account the refinancing of the company’s current outstanding bonds. The transaction involved the partial buyback of Munich Re’s outstanding EUR2.9bn hybrid bond at 6.750% coupon, callable 21 June 2013 with a maturity date of 21 June 2023. Due to the simultaneous buy-back of outstanding subordinated debt the issue is expected to either not affect or only slightly increase Munich Re’s financial debt. In any case, Munich Re’s leverage ratios remain well within the range of the group’s rating level.

    The new issue will first be callable in June 2021 with a final maturity date in 2041. The notes are subordinated to senior creditors. The securities pay a fixed annual coupon for 10 years, at which time there is a step-up of 100bps and the coupon pays on a floating-rate quarterly basis. The hybrid has been prepared for Tier 2 own funds eligibility according to the latest guidance from the QIS-5 Technical Specifications under the Solvency II regime.

    Source : Fitch Ratings Press release

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    US insurance giant MetLife will sell its  Taiwan unit to local financial conglomerate Chinatrust for $180 million, the  companies said.

    The deal, pending the approval of Taiwan’s industry regulator Financial  Supervisory Commission, will allow Chinatrust to buy all of MetLife Taiwan,  according to statements released late Monday.

    MetLife last year struck an agreement with the Taipei-based Waterland  Financial Holding for the sale of its Taiwan unit for $112.5 million, but it  failed to obtain the Commission’s approval.

    Chinatrust, which has assets of Tw$1.8 trillion ($61 billion), has  guaranteed that the interests of MetLife Taiwan’s more than 307,000  policyholders are safe, and that its 600 employees will be kept.

    Taipei, March 29, 2011 (AFP)

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    Latest figures from the Association of Investment Companies (AIC) suggest that consistent, reliable dividends continue to be a relevant strategy for a significant proportion of the investment company sector.  Some 16 investment companies have been consistently raising their dividends each year for over 20 years – and a number of these have even broken the 40 year mark.  These are City of London Investment Trust (44 years), Alliance Trust (43 years), Bankers Investment Trust (43 years), Caledonia Investments (43 years), Albany Investment Trust (41 years), F&C Global Smaller Companies (40 years) and Foreign & Colonial Investment Trust (40 years).

    An impressive 28% of the UK Growth & Income sector have raised their dividends each year for over 20 years, and a staggering 67% have achieved this in each of the last 10 years.  A further 26% of the Global Growth sector have raised their dividends each year for over 20 years, and 29% have achieved this for each of the last 10 years.  In the UK Growth sector, 20% of companies have raised dividends for each of the last 10 years.  To view investment companies which have raised their dividends for each of the last 10 years, please see notes to editors.

    Annabel Brodie-Smith, Communications Director, Association of Investment Companies (AIC) said: “Dividends have always been an important component of equity investing, and are likely to become increasingly so in the current inflationary environment.  The investment company sector has an unrivalled track record when it comes to raising, or maintaining dividends.  This is because they can retain up to 15% of the income they receive each year and transfer this to their reserves.  This allows investment companies to build up their revenue reserves during the good years which allows them to pay dividends in difficult years.  Known as ‘smoothing’ dividends, this is one of the defining characteristics of the sector.”

    Source : Association of Consulting Actuaries Press Release

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    Fitch Ratings-London/Milan-28 March 2011: Fitch Ratings has revised the rating outlook for the Italian non-life insurance market to stable from negative, on the grounds of improving profitability driven by premium rises and better risk selection.

    Fitch says in a newly-published report that trading conditions in the Italian non-life insurance market are improving, after two years of weak operating performance.

    “There is a stronger degree of consensus among market participants regarding the need to raise tariffs to restore profitability, as well as more evidence that the operating environment, and regulatory aspects in particular, could support the non-life industry in its recovery,” says Federico Faccio, Senior Director in Fitch’s Insurance team. “However, the speed at which non-life insurers have responded to the sharp deterioration of the underwriting conditions in 2009 and 2010 has varied between market participants, with higher rated companies having been quicker to respond.”

    In the life sector, higher interest rates should compensate for the lower fee-based income from declining sales, resulting in resilient operating profitability for the sector as a whole.

    Fitch will hold a teleconference to discuss the main findings described in the report. Details of the call will be announced shortly.

    The report entitled ” Non-Life: Recovery Underway; Life: Sales Fading, But Profitability Holding Up”, is available on www.fitchratings.com.

    Source : Fitch Ratings Press Release

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    George Osborne’s plan to merge income tax and national insurance threatens to delay the Scotland Bill which hands more powers to the Scottish Parliament, politicians and economists warned yesterday.

    Historic legislation to hand more income tax powers to Holyrood may now have to be revisited as it was based on an assumption that Westminster should keep control over national insurance. One of the architects of the enhanced Holyrood powers yesterday called for a “rethink” of the Scottish tax plans. And the SNP said a “coach and horses” would be driven through the Scotland Bill with the amalgamation of the two taxes, one of the key proposals of the Chancellor’s 2011 Budget.

    Yesterday, the SNP finance secretary John Swinney said: “The Chancellor’s decision to progress the merger of the tax and national insurance systems is a good thing, but it drives a coach and horses through the Scotland Bill’s financial proposals – and there has been no explanation from UK Ministers about its implications. This new factor creates uncertainty over the time scale for the tax powers, which could well be delayed.”

    The Scotland Bill proposes cutting the block grant from Westminster and cutting income tax for Scots by 10p in the pound. However, more powers to raise or lower Scottish income tax to above or below the 10p level would be handed to MSPs. The Scotland Bill is based on the work of the Calman Commission, the body set up by the pro-Union parties of Labour, the Conservatives and the Lib Dems to examine the constitutional question.

    The Calman Commission report concluded that the link between national insurance and the benefits system meant that the levy was an “explicit expression” of the Union between England and Scotland and ought to remain reserved to Westminster. Yesterday, Iain McMillan, a member of the Calman Commission and the director of CBI Scotland, said: “If there is a change to the structure of personal taxation – income tax in particular – then the Chancellor and the UK Government would need to rethink how Scottish devolved income tax would interact with the revised organisations within the UK.”

    John Aldridge, a former Scottish Executive finance director who advised Calman, said: “My main criticism is that the (UK] Government is not being joined up at all – in that you have a Chancellor who is coming up with the idea of merging income tax and National Insurance at the same time as putting a Bill through parliament in which National Insurance is symbolic of the Union and income tax is less so.”

    A UK Treasury spokesman said: “The income tax/national insurance proposal is going out to consultation and this is exactly the kind of thing that will come up in the consultation.”
    A Scotland Office spokesman said: “We are confident in the Scotland Bill and believe it would be possible to accommodate any such changes over time.”

    Source : Scotsman.com

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    US First Lady Michelle Obama’s campaign  against childhood obesity took a personal turn when she said she is paying  more attention to a key body fat measurement for her own daughters.

    Obama said she was surprised to learn that her daughters’ body mass index,  or BMI, numbers were “creeping upwards,” she wrote on yahoo.com’s website.    “I didn’t really know what BMI was,” she said.

    “I certainly didn’t know that even a small increase in BMI can have serious  consequences for a child’s health,” she added, recommending that all parents  inform themselves about the vital weight statistic. President Barack Obama and the first lady are the parents of two girls,  Malia, 12, and Sasha, 9.

    The BMI takes height and weight into consideration when calculating body  fat, and is considered by doctors and fitness experts to be a more reliable  indicator of obesity than weight alone.

    Michelle Obama has targeted childhood obesity as her signature cause, at a  time when one in three American children is obese or overweight due to a lack  of exercise and a diet loaded with fat and sugar.

    Overweight children are believed to be more likely than their normal-weight  peers to grow up to be obese adults at greater risk of high blood pressure,  high cholesterol and type 2 diabetes.

    Washington, March 24, 2011 (AFP)

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    Tax experts warn on government plans to merge national insurance and income tax in this week’s budget could be “politically explosive” and create a new system of winners and losers.

    The chancellor, George Osborne, will signal his intention to reform the two taxes as part of a drive to simplify taxation for business by reducing bureaucracy and cutting costs when he unveils his budget for growth on Wednesday.

    Reform will be trumpeted by Osborne as a way for people to see more clearly how much they are being taxed.

    Mike Warburton, tax director at Grant Thornton, the accountancy firm, said: “The plan is a good one in principle as it can’t be right that people’s earnings are subjected to two different taxes. But the issue is politically charged because an amalgamation of the two taxes would mean basic rate taxpayers would see their income tax jump from the current rate of 20% to 32%, to take account of the 12% NI rate that comes into force on 5 April. Psychologically, that could be difficult to swallow, so changes would have to be very carefully explained.”

    Higher rate taxpayers would see their rate jump from 40% to 52%. Over the years, Conservative and Labour governments have increased national insurance to avoid being accused of raising personal taxes.

    Warburton said the reality was “there is no separate national insurance pot that goes towards paying unemployment benefits or the state pension; NI is all part of general taxation”.

    He said that merging income tax and NI could create winners, such as stay-at-home mothers, whose state pension would no longer be linked to how much NI they pay. But losers could be pensioners or individuals who do not work, whose savings would be taxed at a new, higher rate of income tax. It could also hit people who pay the full amount into their pension over their working lives, as they would no longer qualify for an “enhanced’ state pension.

    Trade unions have warned that tax shakeups for workers must be carefully scrutinised as reform could be used as a way to increase tax receipts.

    Chris Sanger, head of tax policy at Ernst & Young, said reforming the system could be “politically sensitive” as employee taxation would be more visible and people would have a clearer idea of their tax bill.

    But he supported the idea as it would cut costs and paperwork for businesses. “It is pointless to have two separate employee taxes with two different sets of rules and regulations. Many millions of pounds could be saved and the government are absolutely right to look into it.”

    Sanger said employer NI contributions could be scrapped and replaced by an additional payroll tax. Experts point out there is no way that employer NI could be scaled down as the ration of pensioners to people of working age is forecast to jump from 25% to 43% over the next three decades.

    In a report on small business tax commissioned by the chancellor last July, the Office of Tax Simplification called for an end to the parallel systems of NI and income tax.

    “The overwhelming conclusion is that genuine and long-lasting simplification can only be brought about through structural change to the entire UK tax system,” the report said.

    Source : The Guardian

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    Insurer AIG said Friday that Japan’s  massive earthquake and tsunami disaster would cost its Chartis subsidiary $700  million in the first quarter of 2011.

    AIG said the property casualty insurance unit would be hit with another  $200 million in pre-tax insurance losses from other disasters, including the  January New Zealand earthquake, and huge floods in Australia and Brazil.

    The preliminary Chartis loss estimates from the Japan disaster excluded  AIG’s general insurance operations in Japan, it said.

    It said the maximum loss it could incur from those operations would be $575  million, mainly from its participation in the Japanese government’s earthquake  insurance pool for private homes, which holds about $500 million in AIG  reserves.

    On home losses, it said, “the industry loss remains unquantified at this  time.”

    “The catastrophe in Japan has affected people, their homes, infrastructure,  and businesses both in and outside of Japan, and our industry is working hard  to quantify the complex impact of the devastation, a process that will take  some time,” said AIG chief executive Robert H. Benmosche in a statement.

    “As a result, our preliminary loss estimate will change as the industry  losses from (the government insurance pool) for earthquake damage to personal  dwellings become known and other information becomes available as the  situation in the quarter evolves.”

    Washington, March 18, 2011 (AFP)

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    South Korean pharmacists issued an appeal  Thursday cautioning against panic over Japan’s crisis-hit nuclear plants, as  callers flooded drug stores with requests for iodide pills.

    Fears over possible radiation has spread across the Internet, prompting  Seoul, the closest foreign capital from the stricken nuclear reactors in  Fukushima, to launch a crackdown on scaremongering.

    Officials on Thursday took pains to stress that westerly winds will blow  radiation from Fukushima, some 1,200 kilometres (750 miles) east of Seoul, out  into the Pacific.

    “Anxiety over radiation exposure is growing in this country following the  explosion at Japan’s nuclear power plants,” the Korea Pharmaceutical  Association said in a statement.

    “Drug stores are being flooded with calls from people seeking to purchase  iodine,” it said.

    The association said iodide tablets could reduce the risk of thyroid cancer  from radiation exposure but could also put users at risk of allergic reactions  and problems with thyroid glands.

    “As there is little possibility of radioactive dust reaching the country,  heavy doses of iodide needed to fend off radiation impact would only bring  about health hazards,” it added.

    Amid deepening fears over radiation, crews on Thursday boycotted ships  bound for Japan, Yonhap news agency said, as Seoul started screening  travellers from Japan and Japanese food for radiation.

    A EU-registered container carrier diverted from its original destination,  Yokohama, and returned to South Korea’s southern port of Busan, incurring a  substantial costs, according to Yonhap.

    A luxurious cruiser from Shanghai, the Legend of the Sea, also skipped   Fukuoka before making a port call at Busan as passengers were concerned about  radiation, the agency said.

    President Lee Myung-Bak on Thurday called for a halt to spreading rumours  over radiation exposure as police launched a crackdown on text messages and  social networking sites.

    The Financial Supervisory Service watchdog is investigating the source of a  rumour doing the rounds in the markets which exacerbated a stock market plunge  on Tuesday.

    In South Korea, those who cause confusion by spreading false rumours can be  jailed for up to a year.    Aviation companies said Thursday that flights from Tokyo were fully booked  as growing numbers of South Koreans joined the exodus from quake-hit Japan.

    South Korea’s largest airline, Korean Air, said it had “drastically”  increased flights linking Tokyo’s Narita airport and Seoul’s Incheon airport.

    It plans to add three to five flights to its normal four flights per day,  to carry an additional 5,000 passengers between Wednesday and Sunday, a Korean  Air spokesman said.    Asiana Airlines, the second largest South Korean airline, said it had added  one flight a day to its regular four from Narita to Incheon.

    It cancelled all flights to and from Fukushima for fears over radiation  fallout after it closed the routes to the tsunami-hit Sendai City and Ibaraki  Prefecture.

    The Korea Football Association said Thursday that Montenegro had called off  a football friendly with South Korea scheduled for next week because of  concerns over feared radiation fallout.

    “Players, their relatives and clubs opposed the visit to Seoul because of  the quake and radiation leaks,” it said in a statement.

    Seoul, March 17, 2011 (AFP)