Although word from the Greenwich Prime Meridian insists that it’s required to hang around a a little longer via a “leap second” (http://www.chicagotribune.com/business/sns-ap-eu-britain-time-to-change,0,6973696.story), 2008 is almost gone.

And good riddance. Although there’s been no lack of stuff to write about this year, from Eliot Spitzer to AIG, 2008 for the most part has been the kind of year most of us would like to forget.

And early signals seem to indicate that 2009 could be shaping up to be just as “interesting,” in the Chinese curse sense. Last week while decompressing with my kids in San Antonio, I sneaked a peek at the Crackberry to learn that the FTC was sniffing around nine insurers about their use of credit-based insurance scores for home insurance, citing concern about bias against minorities.

In the January issue of AA&B, NAMIC’s Paul Tetrault presciently discusses just that subject, and the need to educate legislators on the beneficial side of credit scoring. I’ve written about credit scoring on this blog site, and personally have mixed feelings about its use.

But whether or not you’re a fan of credit scoring, the FTC’s action seems to suggest a taste of things to come in 2009. In the wake of the economic meltdown, all regulatory eyes are on the financial services sector, and plenty of that limelight will be spilling on insurance.

Part of that focus is likely to come in an increase in M&A activity — something that’s already well under way, with Munich Re snapping up Hartford Steam Boiler from AIG and Zurich publicly announcing its intention to increase its acquisitions in 2009. No surprise, then, that Watson Wyatt just announced that it expects the insurance industry to see more M&A activity in 2009 (http://www.watsonwyatt.com/news/press.asp?ID=20287).  And although I predicted earlier this year that more foreign investors would be looking to buy U.S.-based insurance entities, the current global recession may make that impending fire sale a little less intense.

So what’s in store for 2009? I’ll leave the predictions to the wiser heads in the industry, but I do have a wish list:

1.  Stock market stability. Come on, guys, put on your big boy panties and start doing some business, along with all those bailed-out banks that aren’t makeing any loans. A little of the uncertainty has eased due to the financial sector rescue and Big 3 auto handouts, so let’s all stop standing on chairs and screaming at imaginary mice.

2. Bailout accountability. When you or I get a personal or business loan from a bank, they give us something called a “payment schedule” to ultimately get their investment back. But when the Treasury throws billions at banks in a bailout, the money seems to disappear into a black hole. Check out this interesting site to try and follow the money: http://www.propublica.org/feature/bailout-bucks-to-banks-1028. Meanwhile, we should be holding each TARP recipient’s feet to the fire for accountability. And the banks getting this bailout gravy should be doing what banks do — you know, lending money to creditworthy citizens.

3. Peace on earth, good will toward all. Corny, yeah, but we need nothing less to get through what 2009 and beyond will have to offer. That means Dems working with Repubs, conservatives with liberals, federal regulation supporters with state regulation supporters (gasp!).

Oh, and be nice to your friendly neighborhood editor, too — 2008 wasn’t really nice to the publishing industry, either!

I don’t know about you, but when I see the word “outrage” used in a headline in an insurance publication, I tend to sit up and take notice.

That’s exactly what happened last month, when I saw the headline in our sister publication National Underwriter about the reaction of some trade groups to Florida Commissioner Kevin McCarty’s support of legislation that would ban credit scoring.

So far the bills haven’t gone anywhere, but their very existence testifies to the ongoing rancor surrounding this touchy issue. Supporters like NAMIC and PCI point to the proven correlation between financial irresponsibility and the likelihood of filing an insurance claim and laud the method for its reliance on personal responsibility rather than income, sex, race or place of residence. Critics claim credit scoring is a “proxy for race,” and its use unfairly targets minorities and the poor.

My own not-so-empirical studies — e.g., conversations with agents — indicate something else. From what I’ve heard, producers aren’t that wild about credit scoring themselves, primarily because it presents another hurdle to clear before they can place coverage for a customer.

It’s also interesting to speculate on what impact, if any, our floundering economy will have on the credit score controversy. As unemployment and inflation keep creeping up and Americans dig themselves deeper into debt just to buy groceries and fill their gas tanks, will “bad” credit scores become an epidemic?

 
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