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The cost of car insurance soared by 14% during the second quarter as insurers raised their prices in a bid to return to profit, research has indicated.

The average cost of a comprehensive motor policy rose by 14.2% during the three months to the end of June to £599 – a £74 increase, according to price comparison website Confused.com.

The latest rise leaves a comprehensive policy costing 31%, or £142, more than it did in July 2009. The group said insurers were imposing double digit price hikes in a bid to get back into profit, following increased claims costs, including higher personal injury payouts, and rising fraud.

Business consultants EMB, which produces the index with Confused.com, said figures from the Financial Services Authority showed the average car insurer incurred costs of £122 for every £100 of premiums they received in 2009.

The industry also had to pay out £400 million to the Motor Insurance Bureau last year to cover the cost of accidents involving uninsured drivers, adding an average of £30 to the price of policies for other motorists.

Simon Lamble, product director at Confused.com, said: “This is a massive blow for motorists who have already suffered at the hands of petrol price hikes and insurance premium tax increases, and unfortunately we do not think we’ve seen the worst of it.

“In the last two years visibility of the market through price comparison sites has kept prices down and driven up competition. In order to secure customers, insurers have been forced to repeatedly slash their margins, but inevitably this could not continue.”

Drivers aged between 41 and 55 saw the biggest price hikes as they paid to have their children added to their policies, with women in this age group seeing a 14% jump in the cost of their cover if they added a driver who was not their husband to their policy, on top of the 14.2% rise seen across the board.

On a regional basis, drivers in Manchester and Merseyside saw the largest quarterly increase of 18.2%, following one of the lowest rises in the first quarter, while, on a postcode level, drivers in Bradford, East London and Ilford faced the biggest price hikes of 20%.

July 12, 2010 (Press Association)

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The insurance company of pop-singer Lady Gaga will not cover 30 million dollars lawsuit from her ex-boyfriend and producer Rob Fusari.

The insurance company Navigators Speciality Insurance doesn’t want to cover Lady Gaga after a claim by her ex-boyfriend and producer about breach of contracts (co-writing songs, stage name…). The company refused to defend Lady Gaga because the policy doesn’t protect this kind of claim. So Gaga will go to court without her insurance company aid.

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The Met Office has issued a weather warning for East of England, in Norfolk and Suffolk. Heavy rain is expected today until 4 pm.

“Heavy and possibly thundery rain will spread northwards across parts of East Anglia during this afternoon, giving rainfall totals of 15mm in 3 hours, and locally up to 20mm”, Met Office announced.

“The public are advised to take extra care and refer to the Highways Agency for further advice on traffic disruption on motorways and trunk roads.”

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Insurance companies can use a person’s credit report to determine rates, the Michigan Supreme Court said Thursday in declaring that state regulators exceeded their authority when they banned the practice as discriminatory.

The decision ends a legal battle between insurance companies and Gov. Jennifer Granholm’s administration that has reached three courts since 2005. The industry says people with strong credit reports make fewer claims and deserve lower rates than people with weak credit reports. The Supreme Court, in a 4-3 ruling, said Michigan law allows companies to offer people with good credit lower rates.

“It is difficult to see how offering discounts to some insureds on the basis of good insurance scores is inconsistent with the (law’s) general purpose of availability and affordability of insurance for all consumers,” Justice Maura Corrigan wrote in the majority opinion. Corrigan and fellow conservatives Stephen Markman and Robert Young Jr. were joined by Justice Elizabeth Weaver. Insurance companies have been allowed to use credit reports for home and car rates while the dispute was tied up in the courts.

“This decision is a win for Michigan policy holders,” said Peter Kuhnmuench, director of the Insurance Institute of Michigan, which represents 39 companies. “Insurance carriers will continue to be able to offer discounts to policy holders who are less likely to have a claim.” Democratic Party Chairman Mark Brewer signaled he would make the case a campaign issue for Young, a Republican who is seeking re-election. He didn’t, however, criticize Weaver by name. She has run as a Republican in the past but is seeking another term as an independent.

“Voters are tired of being put on the back burner so insurance companies can make a heftier profit,” Brewer said. Chief Justice Marilyn Kelly and justices Diane Hathaway and Michael Cavanagh said they would have upheld the actions of Michigan insurance regulators. “I would … hold that the uncertainty surrounding the accuracy of credit reports is evidence per se that a classification system based on those reports is unreasonable,” Kelly wrote.

Detroit, July 8, 2010 (Associated Press)

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If you’re driving a rental car this summer, watch out: you might not have the insurance coverage you think you do.

While most states require drivers to carry minimum coverage on their own cars, no such requirement exists for rental vehicles. Rental agencies typically offer optional coverage for an additional fee, but your existing auto policy often extends coverage to include rentals.

Such was my assumption when, on a recent family vacation to Spain, we declined the optional insurance.

But driving on the unfamiliar, twisting and narrow streets of Europe is a very different challenge, carrying a higher level of risk than a leisurely jaunt to the Hamptons.

On the first full day of our trip, my meticulous husband dented the side of the new Renault while trying to maneuver out of a ridiculously tight parking garage space. I said, “Well, thank goodness we’ve got insurance.”

But something told me to double check. So I called our car insurance company and, sure enough, our existing policy covered domestic travel (including Mexico and Canada), but not international.

As I hung on the phone considering my options, the insurance representative noticed we also had a MasterCard with them. After some quick research, he found to our immense relief that our credit card indeed would cover damage to the rental car, though not any injuries or damage to other property.

Armed with that backstop, 10 days later we turned in the Renault and braced ourselves for an interminable wait and the inevitable repair estimate sticker shock.

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A new venture is being launched to compete for acquiring retail banking assets bought by the British government at the height of the financial crisis, the Financial Times reported on Friday.

The venture, expected to soon start trading on the stock market as a cash shell, will be chaired by Peter Levene, who is due to step down as chairman of the Lloyd’s of London insurance market next year, the paper said.

It added that while the venture had identified a number of small banks for purchase, it ultimately hopes for a larger acquisition such as nationalised bank Northern Rock or 600 branches to be sold by the lender Lloyds.

“There is room for a trusted retail bank,” the FT quoted one investor in the new venture as saying. “The long-term returns from the sector have been excellent. The big high street names will have to divest assets and the business model should be simple enough.”

London, July 9, 2010 (AFP)

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Aegon Ireland has launched six new protected funds aimed at advisers who have clients interested in some form of equity exposure while maintaining a degree of capital protection.

The new protected fund range covers different equity markets including North America, Europe, Japan, Asia, the UK and global emerging markets.

David Aaron, Marketing Communications Manager for Investment Products at Aegon said: “Signs of improvements in stock markets are continuing, however many people who are nearing or already in retirement remain nervous about investing large proportions of their money into equities. These funds may be suited to advisers who have clients looking for a degree of certainty with their investments”.

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The specialist of credit insurance Euler Hermes announced on Tuesday a new service through a new department dedicated exclusively to major exporters.

With a view to providing major export companies with all the solutions they need to secure their trade, Euler Hermes is setting up a Transactional Cover unit dedicated to tailored credit insurance solutions for major exporters and bank trade related financing as from October 1, 2010.

The new department will form part of Euler Hermes World Agency, a division dedicated to large multinational corporations. Euler Hermes Transactional Cover will offer a full range of cover against interruption of trade, debtor insolvency and abusive exercise of bonds, as well as confiscation, expropriation and nationalisation. It will complement the offer already existing in Germany.

The insurance offer will be particularly flexible so as to adapt to clients’ needs and business trends, with a cover duration of up to seven years. Isabelle Girardet will head the Transactional Cover department with Pierre Lamourelle as Deputy Head. The Transactional Cover team will be based initially in Paris and gradually extended to other financial centres, and will roll out their offer worldwide through Euler Hermes’ international network.

Isabelle Girardet brings experience in political and trade risk insurance acquired during 15 years with Reliance Insurance in the United States and in the United Kingdom, and in France with Atradius, which she joined in 2003 as head of the Global department for France. In 2005, she set up the credit and political risk division for France and then moved on to head the Southern European region in 2006.

Pierre Lamourelle began his career as an underwriter with Coface before moving to Unistrat as Underwriting Manager for Northern, Central and Eastern Europe. In 2006, he became head of the French underwriting team at Atradius’ credit and political risk division.

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Pension deficits have ballooned to the £100 billion landmark but the knock-on effects of the austerity measures announced in the Budget are likely to add to the woes of companies sponsoring final salary schemes over the next few years.

However, in the long-term those measures will eventually start to erode the final salary debts of companies if the economy improves, according to Aon Consulting, the leading employee benefits and risk management firm. The aggregate pension fund deficit shown in company accounts for the 200 largest UK privately sponsored pension schemes increased from £88 billion in May to £100 billion at the end of June.

In the short term, the fiscal measures introduced in the Emergency Budget are likely to increase final salary pension scheme deficits. The reduced issuance of government securities (gilts) relative to previous expectations, combined with slower economic growth, are both likely to reduce the yields available on gilts and so increase the value placed on final salary scheme liabilities. A 0.5% fall in gilt yields would increase the value of the Aon200 final salary scheme liabilities by circa £43bn to £143bn.

Over the longer term, however, as the tough economic measures take effect, financial conditions will change and those changes are likely to be more favourable to final salary deficit. It is likely that the strengthening of the economy will lead to increased yields available on gilts and, thus, a reduction in the value placed on final salary liabilities. An increase in gilt yields to 1.0% above current levels would reduce the Aon200 deficit to a mere £25bn from its current level of £100bn.

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Troubled Hollywood starlet Lindsay Lohan sobbed and pleaded in court but a judge still slapped her with 90 days in jail for violating probation in two 2007 drunken driving cases.

Lohan was ordered not to drink alcohol, drive a vehicle with any drugs or alcohol in her system, drive without a valid driver’s license and insurance, or deny any field sobriety tests.

The actress, 24, also was ordered Tuesday to participate in a 90-day in-patient substance abuse program. “I’m not taking this as a joke and this is my life. This is my career and everything I’ve worked for for my whole life,” Lohan pleaded with Beverly Hills Superior Court Judge Marsha Revel.

Revel likened Lohan to “someone who cheats and only thinks it’s cheating if she gets caught.” Revel announced: “the court doesn’t buy that this time.” Once a promising young A-list actress whose career since has spun off course, Lohan has been known to audiences for years.

After Revel sentenced Lohan, the actress, sometime singer and fashion muse burst into tears, plunging her face into her hands or sobbing on her lawyer’s shoulder. The judge ordered Lohan to begin serving her jail term July 20.

Los Angeles, July 7, 2010 (AFP)

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Around 32,000 lives could be saved each year if people over 50 got regular colorectal cancer screening as recommended, the US Centers for Disease Control said Tuesday.

The disease is the second leading cause of deaths in the United States after lung cancer, but millions of people “still have not had recommended screening,” according to the new CDC report. “Tragically, one in three people who should be screened for colorectal cancer have not yet done so; and rates are even lower among Hispanics and blacks,” said CDC director Thomas Frieden in a statement.

“Each year about 12,000 lives are saved as a result of mammography, and an additional 32,000 lives could be saved if every adult aged 50 years or older got tested regularly for colorectal cancer,” he said.

Comparing the rates to screening for breast cancer — the second leading cause of cancer deaths among US women, but also the most commonly found — the CDC noted that “more than 22 million men and women have not had a potentially life-saving screening test for colorectal cancer.”

In 2008, adult Americans who have health insurance had the highest rate of people receiving a colonoscopy, at 66 percent, compared to just 36 percent for those without insurance.

While the signs are encouraging, that more adults are undergoing their recommended screenings, Frieden insisted: “We have more to do, especially when it comes to getting more people screened for colorectal cancer, which kills more American non-smokers than any other cancer.”

Washington, July 6, 2010 (AFP)

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Maiden Holdings, Ltd today announced that it has entered into a definitive agreement to acquire the majority of the reinsurance-related infrastructure, assets and liabilities of U.K.-based GMAC International Insurance Services, Ltd., including renewal rights on nearly $100 million of predominantly personal auto quota share reinsurance as well as the supporting business development subsidiaries in Europe.

The transaction includes the assumption of more than $100 million of loss reserves and net unearned premiums which will be funded by a transfer of cash and investments. GMAC International Insurance Services, Ltd., primarily focuses on providing branded auto and auto-related insurance products through its insurer partners to retail customers in the European Union and other global markets.

“This transaction provides a significant step forward as Maiden continues to strengthen and enhance its international platform and capabilities while further diversifying its underwriting portfolio,” said Art Raschbaum, President and CEO of Maiden Holdings, Ltd. “We are very familiar with this unique low volatility, international reinsurance business. Not only are we gaining a highly-regarded team of professionals with a strong track record and a proven, successful and profitable business development platform, but the acquired business also includes unique, auto-related distribution networks. Beyond the profitable underwriting portfolio, these networks will provide a source of future fee income opportunities.”

Raschbaum continued, “This opportunity is consistent with our disciplined, low volatility model and will allow us to further leverage our Bermuda underwriting platform. Once integrated, we expect the renewal portfolio to generate operating performance consistent with Maiden’s overall objectives. We are confident that our relationship-oriented, value-added focus will enable us to further expand this strong platform and continue to make progress toward delivering on our stated profitability and return goals in 2011 and beyond.”

Maiden plans to fund the proposed transaction through its existing capital base which, subject to customary regulatory approval, is expected to close by the end of the third quarter. The company expects the transaction to be accretive to 2011 earnings, and to generally perform within its overall stated targets of a 96% combined ratio and medium-term ROE target of 15%.

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Aon/Albert G. Ruben, the world’s leading insurance broker for the entertainment industry, today celebrates its 50th anniversary. A half-century ago, Albert G. Ruben had a bold vision to create a new format of entertainment insurance. From this humble beginning, today’s retail entertainment division of Aon Corporation (NYSE: AON) – four times the size of any other provider or broker of insurance in the world of entertainment – was born.

“For 50 years, Aon/Albert G. Ruben has broken new ground in the entertainment industry, and we continue to serve as the global architect and originator of innovative risk solutions to help our clients succeed,” said Douglas Turk, executive vice president of Aon/Albert G. Ruben. “Our clients benefit from our consistent ability to manage their risk without sacrificing their creative vision.”

In support of both domestic and foreign film production, Aon/Albert G. Ruben has crafted an exclusive solution to facilitate film financing by providing production incentive indemnity, insuring against causes of loss ranging from bankruptcy or insolvency to the destruction of sets.
Since the inception of reality TV, Aon/Albert G. Ruben has served as the genre’s dominant risk control and solutions provider, insuring risks on programs such as “Fear Factor,” where a contestant jumped from one speed boat to another as the boats cut through the water side-by-side at 45 miles per hour, and “The Rebel Billionaire: Branson’s Quest for the Best,” where two contestants sipped tea with Richard Branson on top of a hot air balloon at an altitude of 20,000 feet.

The entertainment business has felt the impact of the depressed global economy with the dramatic decline in the number of firms looking to underwrite films. Aon/Albert G. Ruben has taken a creative approach to this challenge by helping its clients leverage their accounts receivable assets to improve their financing and operational activities.

With offices in global entertainment hubs such as Hollywood, New York, Chicago, Toronto, London and Beijing, Aon/Albert G. Ruben is a crucial behind-the-scenes partner to the key players in entertainment and communication, providing risk management services and insurance coverage to organizations in the business of motion pictures, television, radio, theater and sports.

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    BP’s costs over the Gulf of Mexico oil spill soared Monday above three billion dollars, while a giant Taiwanese ship provided hope of revolutionizing on-sea skimming operations.

    “The cost of the response to date amounts to approximately 3.12 billion dollars, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs,” BP said. The latest estimate is far higher than the 2.65 billion dollars given by the energy firm one week ago.

    BP’s share price has collapsed more than 50 percent since the Deepwater Horizon oil rig it leased sank on April 22, two days after a blast that killed 11 workers. After intense pressure from President Barack Obama over the worst ever US environmental disaster, BP agreed last month to suspend its shareholder dividend and create a 20-billion-dollar fund for costs arising from the spill.

    BP is also selling non-core assets to raise 10 billion dollars, while international ratings agencies have downgraded the company’s credit worthiness. But Monday, spokesman Robert Wine discredited a Sunday Times report that the company was turning to rival oil groups and sovereign wealth funds from Asia and the oil-rich Middle East to fend off a possible hostile takeover bid.

    “We have no current plans to issue new equity,” he told AFP. Nearly a week after Hurricane Alex swept through the region, bad weather continued to hamper the clean-up, keeping smaller skimming vessels tied up in harbors in the affected Gulf states of Mississippi, Alabama and Florida. Skimming and other operations have resumed in calmer seas off the coast of Louisiana, however.

    Although there was no direct hit from Alex, this year’s first major Atlantic storm provided a reminder of the urgent need to clean up a disaster surpassed only by Iraqi troops’ deliberate release of crude in Kuwait during the 1991 Gulf War. A major boon to the clean-up effort could come in the form of “A Whale,” a giant ship converted by its Taiwanese owners into what they call the world’s largest oil skimming vessel.

    Owners TMT Shipping Offshore say the ship can suck up to 500,000 barrels (21 million gallons) of oily water a day through its “jaws,” a series of vents on the side of the ship. By comparison, more than 500 smaller vessels in 10 weeks have only managed to collect some 671,428 barrels (28.2 million gallons) of oil-water mix between them.

    Tests on the “A Whale,” which traveled more than half-way around the world from Taiwan to the Gulf, were ongoing and approval for it to start skimming operations could come as early as Tuesday. The US Navy’s MZ-3A Airship was expected to reach the Gulf Coast Tuesday to help detect oil, direct skimming vessels and search for wildlife threatened by the thick brown-orange mess.

    And officials said disposal units known as Heavy Oil Recovery Devices (HORDs) are “greatly improving” clean-up operations. Up to 1,000 units were expected to be up and running in the coming weeks, with a focus on sucking up thick-heavy oil that has thwarted traditional skimming methods.

    The fractured pipe that connected the BP-leased platform to the well a mile (1,600 meters) down on the seafloor has now spewed somewhere between two and four million barrels of oil into the Gulf. The firm’s current containment systems can only capture or flare some 25,000 barrels of oil a day, a number set to double when a third vessel is expected to be in place on Thursday. It will likely be mid-August at the earliest before the ruptured well is permanently capped by injecting mud and cement with the aid of relief wells.

    New Orleans, Louisiana, July 6, 2010 (AFP)

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      The recent invoices received by members from the FSA for the 2010-11 fees and levies have highlighted the inequality of the current funding of the FSCS.

      Eric Galbraith, BIBA Chief Executive, said “BIBA has been inundated with calls from members who are incensed and ready for a fight. The increase in the FSCS levy on intermediaries is totally unjustified. It is not the failure of insurance brokers that is causing this massive increase in the cost of regulation”

      Galbraith continues “The fault actually lies with the failure of firms who’s core business is not insurance intermediation and with the FSA who have consistently failed to adequately police the sale of this product. The cost of the mis-selling of PPI is that Insurance Brokers are facing 48 fold increases in there FSCS fees from 2 years ago, this proves the structure of the compensation scheme is totally flawed”.

      “It gets worse”, stated Galbraith. “Just wait until the banking failures have been assessed because the current compensation fund has a cross-subsidy with banks. Unless we can change the structure of the FSCS many brokers will struggle to survive!”

      BIBA can advise members on how best to minimise the levy applying to brokers and has published a new helpful regulatory briefing for members containing this advice which is attached. “We are part of the FSA group reviewing the FSCS and will lobby strongly for this inequality to end”, stated Steve White.

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      Belgian bank KBC has sold bond and derivatives trading businesses to Japanese firm Daiwa Capital Markets for one billion dollars (800 million euros), the companies said on Friday.

      KBC also announced that it was selling its reinsurance unit Secura NV to Australian insurance company QBE for 267 million euros as the Belgian group focuses on its core banking business.

      KBC, also a major insurance business, is being forced to divest assets under the oversight of the European Commission after the bank had to be bailed out by the Belgian government during the global financial crisis.

      The transaction with Daiwa involved KBC’s global convertible bond and Asian equity derivatives businesses. The sale consists of 800 million dollars for the trading position and 200 million dollars for staff, IT infrastructure and other assets. The businesses employ around 150 people in London, New York and Hong Kong.

      The deal is expected to be closed in the fourth quarter following regulatory approval. “The acquisition cements and accelerates our plans to become a major player in the Asian equity derivatives and global convertible bonds space,” Toshinao Matsushima, global head of markets at Daiwa, said in a statement.

      Separately, KBC and QBE announced the sale of Secura which is expected to close in the third quarter. Located in Brussels, Secura NV is a specialised European non-life and life reinsurer with a diversified and Europe-focused customer portfolio. It employs 86 people.

      Brussels, July 5, 2010 (AFP)

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      Google on Thursday improved health and family leave benefits for its US employees with same-sex domestic partners.

      The Internet titan began adjusting the pay of workers in such relationships to offset income tax paid on health insurance benefits extended to partners, according to Cynthia Yeung of the firm’s strategic development team.

      The California company also put same-sex couples on par with traditional man-woman spouses when it comes to how much time they are allowed to take off from work for family or medical reasons, Yeung said in a blog post.

      Google has also worked with its health insurance carriers to define “infertility” as an inability to conceive a child for one year with no stipulations on trying.

      Nearly 300 “Googlers’ with colorful balloons marched in San Francisco’s 40th annual Pride parade on Sunday. “We braved the rain in Boston, enjoyed the sun in New York, rode a trolley in Chicago and marched with the Israel Gay Youth Organization in Tel Aviv and Haifa,” Yeung said of Google workers taking part in such celebrations.

      “Googlers will be participating in EuroPride, held in Poland this year, as well as many other parades, including Tokyo for the first time. And we’ll be celebrating Pride season in Singapore too.”

      Google openly supports equality for lesbian, gay, bi-sexual and transgender workers. The company opposed a successful California initiative to legally define “marriage” as exclusively a union between a man and a woman.

      “While we respect the strongly-held beliefs that people have on both sides of this argument, we see this fundamentally as an issue of equality,” Google co-founder Sergey Brin said when the company came out in 2008 against the initiative that was passed later that year by voters in the state. “We should not eliminate anyone’s fundamental rights, whatever their sexuality, to marry the person they love.”

      San Francisco, USA, July 1, 2010 (AFP)

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      XL Group plc (‘XL’ or ‘the Company’) announced today that it has completed its previously announced redomestication to change the parent holding company’s place of incorporation to Ireland from the Cayman Islands.

      In addition, as previously announced, the name of the holding company is ‘XL Group plc’ as of July 1. XL will continue to be registered with the U.S. Securities and Exchange Commission (“SEC”) and will be subject to SEC reporting requirements. Shares of XL will trade on the New York Stock Exchange under the ticker symbol “XL”, the same symbol under which the shares of XL Capital Ltd, the prior parent company of the XL group, previously traded.

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        New claims for US unemployment benefits jumped more than expected last week, official data showed Thursday on the eve of the key June jobs report.

        Initial claims for jobless benefits rose to a seasonally adjusted 472,000 in the week ending June 26, an increase of 13,000 from the previous week’s upwardly revised level of 459,000, the Labor Department said. The leap was sharply higher than the consensus analyst forecast of 458,000 claims. The four-week moving average, which helps smooth out weekly volatility, rose 0.7 percent to 466,500.

        “The trend has generally been moving higher in recent weeks, suggesting that the labor market is perhaps starting to weaken,” said Andrew Gledhill at Moody’s Economy.com.

        In the previous week ending June 19, the insured unemployment rate was 3.6 percent, unchanged from the prior week’s revised rate, the department said. The number of people collecting unemployment insurance benefits in the week to June 19 rose by 43,000 to 4,616,000, while the four-week moving average slipped 0.5 percent to 4,567,500.

        Gledhill called recent moves in claims “troubling.” “In typical job market recoveries, claims would be much lower — below 400,000 — but in the current situation they have remained stubbornly elevated. Part of the explanation is that hiring is very low, potentially prompting a greater share of unemployed than is typical to file for benefits coming out of a recession.”

        The weekly jobless claims data came on the eve of the department’s key June jobs report, widely expected to show worsening conditions. Most analysts expect the data Friday will show the unemployment rate rose to 9.8 percent from 9.7 percent in June, and the economy shed 100,000 nonfarm jobs after adding 431,000 in the prior month, mainly temporary government jobs for the 2010 census.

        Washington, July 1, 2010 (AFP)

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        Hurricane Alex picked up strength in the western Gulf of Mexico on Wednesday, heading towards northeastern Mexico and Texas and disrupting oil cleanup operations off the coast of Louisiana.

        Alex, which became the first hurricane of the 2010 Atlantic season late Tuesday, was packing winds of 80 miles (130 kilometers) per hour, the Miami-based National Hurricane Center said. US President Barack Obama declared a state of emergency in Texas late Tuesday and ordered federal aid to bolster the local response efforts. Mexican authorities took similar measures and reported one storm-related death.

        At 0600 GMT the center of Alex was located 195 miles (315 kilometers) east-southeast of the Mexican coastal town of La Pesca and 255 miles (415 kilometers) southeast of Brownsville, Texas, at the point the US-Mexico border reaches the ocean, the NHC said. The Category One hurricane was tracking “erratically” in a general westward direction at five miles (eight kilometers) per hour and not forecast to turn towards the massive BP oil spill along the US Gulf Coast.

        But severe winds from Alex churned up waves that halted clean up operations and threatened to push more of the huge slick onto the coastline. On the forecast track Alex is expected to make landfall late Wednesday or early Thursday in Mexico south of the US-Mexico border, separating Texas and Tamaulipas states, the NHC said.

        “Additional strengthening is forecast prior to landfall,” the statement said, but after reaching land it is expected to lose power. Mexico ordered authorities on emergency alert in Tamaulipas state after one woman died when a wall of her home collapsed in the southern state of Oaxaca during driving rain caused by the storm system, officials said.

        Obama’s move late Tuesday was a green light for the Federal Emergency Management Agency (FEMA) to coordinate all disaster relief efforts, a White House statement said. Texas Governor Rick Perry issued his own state disaster proclamation for 19 counties, allowing Texas to launch preparations such as pre-deploying resources to ensure local communities are ready to respond to the hurricane.

        Tornadoes were possible over southern Texas on Wednesday, the NHC statement warned. It said the storm could cause dangerous floods and was set to drench parts of Mexico and Texas with 6-12 inches (15-30 centimeters) of rain, with isolated maximum amounts of 20 inches (51 centimeters). “These rains could cause life-threatening flash floods and mud slides,” the NHC warned.

        Alex was well southwest of the area worst hit by the massive BP oil spill — the coasts of Louisiana, Mississippi, Alabama and Florida — though its strong winds were causing problems for the cleanup effort. The storm forced suspension of oil skimming operations as visiting Vice President Joe Biden heard complaints about the pace of cleanup efforts in the disaster zone. Alex was also the first Atlantic hurricane to form in June since 1995, according to the NHC.

        FEMA, an agency of the US Department of Homeland Security, urged Americans to closely monitor the storm and be as prepared as possible. “The most important thing for people living in the area to do right now is to ensure their family is prepared and to follow the instructions of state and local officials,” said FEMA chief Craig Fugate. Alex killed at least 10 people when its rainwater unleashed landslides and floods in Nicaragua, Guatemala and El Salvador over the weekend.

        Miami, June 30, 2010 (AFP)

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