Daily Headlines: Wednesday, August 31, 2011

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August 31, 2011 News By Region  National  International  East  Midwest  Southeast  South Central  West Video Today's Headlines National Insurer Ratings Unaffected, Stocks Rally As Losses from Irene Look Manageable Loss estimates from Hurricane Irene continued to fall and ratings agencies said insurers would have no problem with claims, helping boost ... Can Federal Flood Insurance Handle Irene Losses? The only thing worse than getting flooded out of your home once is getting flooded out of it twice. Or, for that matter, over and over ... Irene’s Impact on Private Insurance Markets The $7 billion in estimated losses from Hurricane Irene compound the vast damage caused by weather in the United States this year. Yet ... Irene’s Impact on Fragile U.S. Economy The struggling U.S. economy should escape largely unscathed from Hurricane Irene and may even get a boost from reconstruction. Irene, which ... AIG Suit Against Bank of America Raises Disclosure Issues Top Bank of America Corp. lawyers knew as early as January that American International Group Inc. was prepared to sue the bank for more ... Judge Blocks Punitive Damages in Fossamax Claim Against Merck A federal judge on Tuesday threw out part of a bellwether lawsuit against Merck & Co. over claims that its osteoporosis drug Fosamax ... Best Affirms Ameriprise Financial and Subs Ratings A.M. Best Co. has affirmed the financial strength rating (FSR) of 'A+' (Superior) and issuer credit ratings (ICR) of "aa-" of ... General Star Launches Nutraceutical Binding Authority Program General Star has launched a delegated authority platform to distribute its NutraAdvantageproduct nationwide. Wholesale broker Worldwide ... NAS Enhances Tenant Discrimination Insurance NAS Insurance Services' tenant discrimination insurance no longer includes co-insurance.  NAS' tenant discrimination insurance also ... LexArchaeology Provides Construction Owners Peace of Mind in Troubling Times Even though the rate of new construction projects has dipped significantly since 2008, those that are funded, especially large commercial... More National News Webinar: Beyond Basic Training Information Session (join us free) New from Insurance Journal's Academy of Insurance Understand Why Insurance is Not Risk Management. Instructed by Chris Boggs, author of "Insurance is Not Risk Management: The Insurance Professional's Guide to Risk Management and Insurance". Because this is a free class - seating is limited to the first 250 people. Next week: Click Here to Register East Forecast: Few Insured for Irene’s Losses in Connecticut Only about 30 percent of property losses inflicted by Tropical Storm Irene in Connecticut will be covered by insurance, according to an ... Jury Finds Naval Officer Guilty of Defrauding 9/11 Victims’ Fund A retired naval officer honored for his valor during the Sept. 11 attack on the Pentagon has been found guilty of defrauding the victims' ... Maine's Northeast Bancorp Sells Its Insurance Group to 2 Local Agencies Lewiston, Maine-based Northeast Bank Insurance Group has been acquired by local agencies in two separate transactions effective Sept. 1. ... More East News Midwest Former Nebraska Insurance Claims Examiner Pleads Guilty to Mail Fraud An Omaha man has pleaded guilty to mail fraud while he was working as a claims examiner for an insurance company. The U.S. attorney's ... New Illinois Law Meant to Help Smokers Kick Habit A new Illinois law requires insurance companies to offer coverage for services meant to get smokers to kick the habit. The American Lung ... More Midwest News Southeast Home Insurers in Georgia Seek Rate Hikes A year after most Georgia insurers increased homeowners premiums by 9 to 23 percent, a new wave of increase requests is pending. State ... More Southeast News South Central Man Sentenced to Life in Louisiana for Death of Insurance Agent Calling the crime a "despicable act," a Louisiana judge has sentenced a 22-year-old man to life in prison in the killing of a Georgia ... Louisiana Worker Insurance Program Valued at Up to $217M The market value of a state worker health insurance program that Gov. Bobby Jindal is considering privatizing has been pegged between $133 ... TDECU Insurance Agency Welcomes New President TDECU Insurance Agency LLC in Lake Jackson, Texas, has added Wesley "Wes" Wolff as president. He brings more than 30 years of insurance ... More South Central News West Judge Limits ‘Housewives’ TV Star’s Damages for Wrongful Firing A judge urged attorneys to try to settle Nicollette Sheridan's wrongful termination lawsuit over her ouster from "Desperate Housewives"  ... Driving Deaths Continue to Decline in Arizona Arizona's transportation department says that driving-related deaths continued to decline last year. The Department of Transportation's ... More West News International Irene Losses Won’t Trigger Policy Payouts – CCRIF The Caribbean Catastrophe Risk Insurance Facility (CCRIF) announced that, "while Hurricane Irene resulted in registered losses in six of ... Swiss Re Sigma Study Examines Government/Private Sector Coverage Swiss Re's latest sigma study  - "State involvement in private insurance" - examines the increasing symbiosis between governments and the ... Report Says Asia to Add 1.66 Million Millionaires by 2015 Asia will add 1.66 million dollar-millionaires by 2015, taking the total number of wealthy to 2.82 million as the world's fastest-growing ... Marsh Acquires African Insurance Business of Alexander Forbes Global insurance broker Marsh said it will acquire the brokerage business of Alexander Forbes. This business comprises Alexander Forbes ... More International News Webinar: Top 7 CGL Coverage Questions New from Insurance Journal's Academy of Insurance Help get a better understanding of the underwriting thought process. Next week: Click Here to Register Join the Insurance Journal Network Insurance Journal TV What's in a Name? Unitrin CEO Southwell Says A Lot A legendary insurance company name is back in the headlines. Unitrin Inc. has taken the Kemper... Watch Now Brokering the Hot Cyber Liability Market With data breaches in the news, cyber liability insurance is gaining recognition. The market... Watch Now Watch more videos at InsuranceJournal.tv New Discussions in the Forums CPCU classes vs. CLU classes Posted: Wed Aug 31 -- Anyone have any info on future CLU conferment ceremony locations?? PatsFan2001 Lifted trucks - who insures them? Above 6'' Posted: Tue Aug 30 -- I have customers with greater than 6 inch lifts.. who insures this? Many companies accept small lifts, but nothing beyond 6 Thanks Uni meytai Why Would an Agency Retain Trust Account Service? Posted: Tue Aug 30 -- My agency maintains separate fiduciary accounts for each carrier (9) we have 'sweeps' for. This way one carrier cannot 'accidentally'... darnovak Book recommendation for starting an agency? Posted: Tue Aug 30 -- In addition to reaching out to different agency owners for advice/counsel/mentoring, etc., you may wish to look at the publications offered... Rainmaker Preparing for the New York State brokers' license exam Posted: Mon Aug 29 -- Can anyone please recommend study material to use in preparing for the second exam for the NY State licensing requirement for insurance... John J90 CIBA Insurance purchasing group...Help Posted: Sat Aug 27 -- While I am hoping Hurricane Irene doesn't cause significant damage to the east coast, I am curious to see what will happen if some of these... HOA Expert GMAC AUTO IN CA Posted: Sat Aug 27 -- Had them for 2 years before I switched to GEICO. Very good customer service and very easy for claims. Thing is their prices are jacked up. I... London946 Go to Forums Reader Comments California Surfboard Maker Faces Product Liability Claim Posted: Mon Aug 29 -- Anyone in action sports will be injured at one time or another. It's part of the game. What surfer hasn't been cut by his fin or hit in the... OC agent With FEMA Running Low on Funds, Irene Revives Budget Battle Posted: Tue Aug 30 -- Not to worry. Geightner and Bernanke will just crank out the money for FEMA. God forbid if a few of the several hundred other Federal... Longtime Agent Allstate Files $5 Million Insurance Fraud Case in New York Posted: Wed Aug 24 -- "Black and white proof"? Sorry Eddie K. sounds like you just have a bone to pick about a claim that wasn't resolved to your satisfaction. If... Don't buy it Texas Supreme Court: Bad Faith Claim Inconsistent with Worker's Comp Posted: Tue Aug 30 -- It is well known that Texas Mutual does not like to be ripped off on fraudulent claims. I have to believe they investigated this incident... Longtime Agent Go to Popular Comments Subscriber Tools Send this to a friend Subscribe Unsubscribe Submit News Contact Us Current Issue The Insurance Journal Satire Issue! News that never happened. Features you won't forget. Plus reader submissions, fake statistics, made-up mergers and lots more. 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Prajna Capital

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• Mutual Fund Review: HSBC MIP Savings Plan
• Stock Review: LG Balakrishnan
• HDFC Cash Management Fund - Call Plan
• Stock Review: Thermax
• Tata Equity Opportunities Fund
• Mutual Fund Review: DSPBR Balanced

Mutual Fund Review: HSBC MIP Savings Plan Posted: 31 Aug 2011 07:13 AM PDT Name: HSBC MIP Savings Plan-Growth Type: Open-Ended Debt-MIP Fund Manager: Mr. Shailendra Jhingan, Mr. Jitendra Sriram & Mr. Viresh Mehta Inception Date: February 13, 2004 Monthly Income Plan (MIP) are the marginal equity funds that provides a conservative investors the stability of debt and growth potential of equities. In MIPs, typically a large portion (75-100%) of the fund is invested in debt and money market instruments and the rest in equity. MIPs are typically suitable for investors who want to largely play it safe, but don't mind taking a little risk in order to increase the potential returns than pure income/debt funds would provide. HSBC MIP is an open-ended income scheme with the primary objective to seek generation of reasonable income through investments in debt and money market instruments. The secondary objective of the scheme is to invest in equity and equity related instruments to seek capital appreciation. The scheme's savings plan is aggressive in its equity allocation and could invest up to 25% in equities and equity related instruments and up to 100% in debt and money market instruments (including cash and money at call).   The scheme has grown at a CAGR of 9.25% since its inception in February 2004 and has comfortably outpaced its benchmark and peers during the selected time frame. Higher equity allocation and vibrant equity markets along with the judicious asset allocation in debt & money market instruments has enhanced the returns of the scheme. Its one year and two year returns at 9.91% and 10.68% are superior to the returns posted by peers and benchmark for the same period As on August 2006 the scheme has an asset base of Rs 80.36 crore and has declined by Rs 21 crore compared to the pervious year same period.   Although the scheme could invest upto 25% of its assets in equities but the scheme have restricted its average equity allocation to 20.4% in last one year. As on August 2006 it has apportioned 48.34% of its assets in debt, 20.48% in equities and rest in cash & equivalent. Its debt component has been fluctuating in the range of 39% to 61% over last one year with average allocation at 48.3%.       The scheme has allocated 24.8% of its debt portfolio in securitised debt securities and 13.7% in commercial bond. It has invested 16% of its assets in AAA rated papers, 8.6% in AAA (SO) rated and 9.95% in AA+ (SO) rated paper. As on August 2006 it had an average maturity of 555 days and is higher than the category average. On the equity side its portfolio is spread across 16 stocks which seem to be large for fund with an asset base of Rs 80 crore and equity allocation at 20%. Top five holdings account for less than half of its equity portfolio with Reliance in top place. The scheme has large cap oriented portfolio and IT sector has received highest exposure at 24% followed by Diversified and Oil & Gas sector at 17% and 9% respectively.   Minimum investment required to enter the scheme is Rs 5000 in growth option and Rs 25000 in monthly dividend option and Rs 10000 in quarterly dividend option. It charges an Exit load of 0.5% for investments less than Rs 10 lakh and if redeemed within 6 months and nil for investment amount greater than Rs 10 lakh. While no entry load is charged for the scheme. It is benchmarked against Crisil MIP Blended Index. Expense Ratio of the scheme as on July 31, 2006 is 1.95% and is in line with the category average of 1.95%. MIP schemes have been doing well from quite some time thanks to the soaring equity markets. HSBC MIP Savings Plan is an aggressively managed MIP scheme as it could invest upto 25% of its assets in equities and is thus suitable for the investors having risk appetite for the same.   -----------------------------------------------------------------   Also, know how to buy mutual funds online:   Invest in DSP BlackRock Mutual Funds Online   Invest in Reliance Mutual Funds Online   Invest in HDFC Mutual Funds Online   Invest in Sundaram Mutual Funds Online   Invest in Birla Sunlife Mutual Funds Online   Invest in UTI Mutual Funds Online    Invest in SBI Mutual Funds Online   Invest in Edelweiss Mutual Funds Online   Invest in IDFC Mutual Funds Online

Stock Review: LG Balakrishnan Posted: 31 Aug 2011 05:01 AM PDT The company makes metal forming and transmission parts for the auto sector. They have 17 plants. In Q1, they have posted topline of Rs 215 crore and EPS of close to about Rs 16. If one extrapolates the same, they have posted an EPS Rs 64-65 for FY12 that translates into a PE multiple of 4.2-4.3. The price to book is less than 1. The total enterprise value of the company is about Rs 310-315 crore. This is because they have very low debt of just Rs 80-90 crore. The market cap of the company is close to about Rs 210. Talking all this into consideration, it is a very consistent performer. The respectable holding of the promoters stands at 47-48% and 7% is held by the IFC Washington. The share just corrected by 8-10% and one can expect a price of Rs 400 in next 10-12 months.

HDFC Cash Management Fund - Call Plan Posted: 31 Aug 2011 04:56 AM PDT Objective To generate optimal returns while maintaining safety and high liquidity. Option/Plan Dividend Plan, Growth Plan. The Dividend Plan offers Daily Dividend option (reinvestment facility only); Weekly and Monthly Dividend option (with payout and Reinvestment facility). Minimum Application Amount For new/ existing investors :Rs.100000 and any amount thereafter (Under each Option).   -----------------------------------------------------------------   Also, know how to buy mutual funds online:   Invest in DSP BlackRock Mutual Funds Online   Invest in Reliance Mutual Funds Online   Invest in HDFC Mutual Funds Online   Invest in Sundaram Mutual Funds Online   Invest in Birla Sunlife Mutual Funds Online   Invest in UTI Mutual Funds Online    Invest in SBI Mutual Funds Online   Invest in Edelweiss Mutual Funds Online   Invest in IDFC Mutual Funds Online

Stock Review: Thermax Posted: 31 Aug 2011 04:13 AM PDT The kind of performance we have seen from ABB , Crompton Greaves nobody is happy to touch the capital goods and Thermax also falls in this category. But, I have different view for this stock. The company is an engineering solution provider for heat recovery, waste recovery, water treatment, etc. It caters to the core sector industries like cement, steel, fertilizer, dairy. The company has been a consistent performer. There have been no slippages on quarter on quarter basis except for last year or a year back. One of their overseas subsidiary did not perform well and they had to take an exceptional hit. In FY11, its turnover went up close to one billion dollar. They posted an EPS of close to Rs 30 plus. Going by their Q1 performance, they have been able to maintain the topline of Rs 1,000 crore. The profitability is always back ended, it comes in the second half of the year. The promoters hold 62% stake and 28-29% is held by institutional investors. It is debt free company and has a very low float. On can can lap these stocks in a market correction like this one. The stock moved to about Rs 700 couple of month back. At that time people come out with buying ideas on the stock. But whenever there is a correction of this kind people first try to jump out of these stocks. This is the time where one should really accumulate the stock. A positive view on this stock, largely on account of consistency in performance going ahead. They have an order pipeline of 18 months close to about Rs 7,000 crore order. Taking all this account and the reduction expected in commodity prices will be quite well for the stock. This stock can touch Rs 600 price in the next four-six months time.

Tata Equity Opportunities Fund Posted: 31 Aug 2011 04:10 AM PDT Objective To provide medium to long term capital gains and/or income distribution along with capital gains tax relief to its unitholders, while at all times emphasising the importance of capital appreciation. Option Available Growth & Dividend Entry Load For Each Investment amount < Rs. 2 Crores - 2.25%. For Each Investment amount >= Rs. 2 crore - Nil. Exit Load For investments greater than or equal to Rs.2 crore: Nil. For investments less than Rs.2 crore: 1%, if redeemed with in 6 months from the date of allotment. No exit load will be charged on investment made by the fund of fund scheme. Minimum Application Amount Rs.5,000/- and in multiples of Re.1/- thereafter.   -----------------------------------------------------------------   Also, know how to buy mutual funds online:   Invest in DSP BlackRock Mutual Funds Online   Invest in Reliance Mutual Funds Online   Invest in HDFC Mutual Funds Online   Invest in Sundaram Mutual Funds Online   Invest in Birla Sunlife Mutual Funds Online   Invest in UTI Mutual Funds Online    Invest in SBI Mutual Funds Online   Invest in Edelweiss Mutual Funds Online   Invest in IDFC Mutual Funds Online

Mutual Fund Review: DSPBR Balanced Posted: 31 Aug 2011 03:52 AM PDT   While DSPBR Balanced might not seem exciting, it will show its mettle in long-term performances… Though not the most exciting offering around, it won't disappoint over the long run. Its 10-year annualized return of around 21 per cent (as on May 31, 2011), ahead of 80 per cent of its peers, bears testimony to that. However, investors would not be over the moon with last year's below-average returns. "This is a more defensive fund," says Shah, with reference to other offerings in the category. "In 2010, mid caps out performed large caps significantly and this fund has only 50 per cent portfolio in mid caps." Hence the underperformance with regards to its peers which had a greater tilt towards mid caps. What hit the fund in 2010, helped it in 2011. As on April 29, 2011, the fund lost 2.87 per cent (category average: -3.29%). A similar trait was noticed in 2008 when the fund's fall was curtailed to 5 per cent less than the category average. At that time, a reduced exposure to equity came to its aid. Though equity allocation has touched a low of 57 per cent (November 2008), it largely remains within a range of 65 to 75 per cent and has averaged around 69 per cent since 2006. Despite more than half of its equity portfolio in large caps, this fund follows more of a multi-cap strategy. Once Shah took over mid 2006, the fund moved from a large cap portfolio to make way for mid caps. The equity portfolio of this fund is basically just a replica of the DSPBR Equity which in turn is a blend of the DSPBR Top 100 and DSPBR Small & Mid Cap funds. If Shah brought in the mid-cap blend, he simultaneously increased the number of stocks too, currently at 74. This has resulted in a low concentration with a long tail of stocks (51) that have an allocation of less than 1 per cent. Currently, no stock has an allocation of over 4 per cent. Neither will you find aggressive sector bets here. Though stocks like Reliance Industries, ITC and Glaxosmithkline Pharmaceutical etc that have been held for a long period of time, the portfolio is churned quite frequently. Its turnover ratio of 2.32x over the past one year signifies that. But Shah views it differently, "It is an active portfolio and this has always been the investment style where the large cap stocks are rotated regularly to benefit from market volatility in fairly valued stocks. The mid cap portfolio is more structural". As far as debt is concerned the fund invests in a variety of papers. Currently majority is into debentures with small amounts in Certificate of Deposits (CDs) and preference shares. The average maturity of the portfolio has come down from 1.31 years in November 2010 to 0.23 years at present.   -----------------------------------------------------------------   Also, know how to buy mutual funds online:   Invest in DSP BlackRock Mutual Funds Online   Invest in Reliance Mutual Funds Online   Invest in HDFC Mutual Funds Online   Invest in Sundaram Mutual Funds Online   Invest in Birla Sunlife Mutual Funds Online   Invest in UTI Mutual Funds Online    Invest in SBI Mutual Funds Online   Invest in Edelweiss Mutual Funds Online   Invest in IDFC Mutual Funds Online

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