2011-08-05
The Economical Mutual Insurance Company has proposed to the federal government that Canadian property and casualty insurers should follow essentially the same demutualization process as reflected in the rules for life insurance mutuals.
However, in a submission to the federal government, the company also outlines areas in which the federal governments current rules allowing life insurer demutualizations may not be suitable for Pamp;C insurers. These include restrictions on ownership by companies, holding companies and foreign ownership.
The Economicals board recommended last year that the company demutualize. As of yet, however, the federal government does not have any regulations in place governing the demutualization of a federally licensed property and casualty insurer.
The department of finance launched a one-month-long consultation process in late June, calling for submissions from the public and the insurance industry regarding what such regulations might look like. The Economicals full, 43-page submission can be read at:
http://www.economicalinsurance.com/en/resourcesGeneral/TEIGResponsetoConsultationPaper.pdf
In a summary statement to the federal government, The Economical makes the following points:
bull; Mutual policyholders of federal Pamp;C mutuals enjoy at least as strong ownership rights as participating policyholders of federal life mutuals and accordingly have exclusive rights to demutualization benefits, as did the participating policyholders of the demutualized federal life mutuals.
bull; Holders of mutual (ie voting) policies are the only policyholders of a federal Pamp;C mutual who should be entitled to vote on a demutualization and to receive demutualization benefits.
bull; Permitting federal Pamp;C mutuals to demutualize would affect so few companies and such a small percentage of the overall Canadian Pamp;C industry that we do not believe there would be any material adverse impacts.
bull; The Economical needs to demutualize in order to compete more effectively over the long term with the large stock Pamp;C companies that operate in Canada.
The Economicals full submission delves into some of the possible factors in calculating the actual value of the demutualized Pamp;C policies. It also recommends, to maintain the financial stability of a company during a demutualization, that none of the surplus of a demutualizing Pamp;C mutual be distributed to its policyholders, as is reflected in the life insurance regulations.
The Economical also recommends amending some rules guiding life insurance demutulizations to better reflect the Pamp;C context. For example:
bull; Except in the case of an approved sponsored demutualization, or the acquisition of a significant interest as part of an approved IPO structure, the two-year restriction on any person having a significant interest in a demutualized property and casualty insurer should commence on the date such insurer demutualizes.
bull; Except in the case of a sponsored demutualization, or the acquisition of a significant interest as part of an approved IPO structure, the two-year restriction on any person having a significant interest in a demutualized property and casualty insurer should apply to all demutualizing insurers, not just those with between $1 billion and $5 billion in surplus.
bull; The restrictions on a sponsor being a lsquo;company or a lsquo;holding company, or an entity controlled by a lsquo;company or a lsquo;holding company, and having no significant shareholder should be eliminated.
bull; Entities incorporated or controlled outside Canada should be permitted to be sponsors.
By Michael Crittenden
Business economists are split on whether more austerity or more stimulus is the best path forward for US fiscal policy, according to a new survey, highlighting the dilemma facing policy makers eager to shore up the nations economy and long-term fiscal position.
The National Association for Business Economics said roughly 49% of the economists surveyed in late July and early August favor a more restrictive fiscal path forward over the next two years, while 37% chose the other direction, supporting more efforts to stimulate the economy through fiscal measures. More than seven in 10 economists who took part in the survey said they expect fiscal policy will be tightened regardless of whether that is the best approach.
The split 51% of those surveyed would prefer the status quo or more stimulus underscores the challenge facing the White House and Congress as they gear up for another bruising round of legislative fights over the future size and scope of the US government. Lawmakers on both sides of the aisle have said reducing the nations deficit is a key priority, though the faltering economic recovery has become a growing concern as policy makers consider how to balance short and long-term economic needs.
The association said in its report that the support by a fair share of those surveyed for more stimulus measures was notable, perhaps reflecting concern about weaknesses in the overall economic environment.
Republicans and Democrats have battled over how best to rein in spending, whether it be through sharp, immediate cuts to federal spending, changes to the tax system or other approaches. The survey found that most business economists favor a package of spending cuts and tax increases to begin reducing deficits over time, though the exact composition of such a package was the source of divided opinions.
More than four in 10 economists said spending cuts should make up a larger portion of any deficit reduction package, while more than a third of respondents said an equal mix of tax increases and spending cuts would be the best approach.
The economists surveyed generally favored reducing health-care costs in the federal Medicare and Medicaid programs, as well as an overhaul of the tax code. Only 15% of those surveyed said caps on government spending or cuts to discretionary spending would be the most helpful in reducing the deficit.
Notably, while those surveyed doubted that Congress will be able to pass a comprehensive tax overhaul over the next year, 75% of the business economists said any changes should seek to increase the revenues the government collects in taxes. That approach would be in line with demands from the White House that any deficit reduction package should include some steps to raise the revenues the government receives from taxpayers and businesses.
The economists also weighed in on a number of other topics, including inflation expectations, monetary policy and whether the US government is overregulating businesses. On the latter issue, which has become a touchstone for many Republican lawmakers, 80% of the economists surveyed said the current regulatory environment was good for US businesses and the broader economy.
Regarding monetary policy, more than 50% of those surveyed suggested the Feds current easy-money stance was about right, though roughly a third said the Feds efforts to keep rates low was too stimulative. Looking forward, the economists were evenly split on whether they expect the Fed will maintain rates at the current levelwhich the Fed subsequently said it would door begin to tighten monetary policy. Only 15% of those surveyed said they expected the central bank to take steps to further stimulate the economy.
Additionally, nearly 36% of the economists surveyed said they do not see a risk from either inflation or deflation, though 31% said they still see some risk from rising prices.
Most people understand the origins and rationale of ordinary industrial patents. They give, say, a pharmaceutical company which has spent a fortune developing a new drug a window to profit from its investment before the rest of the world can make cheaper versions. But software patents, though legally similar, are very different in practice. Googles $12.5bn purchase of Motorolas mobile phone activities last week caused a stir in the business and technology worlds alike, because the reason for it was not to acquire Motorolas phones but its portfolio of up to 17,000 software patents, which have become the gold dust of the digital age.
Patents are now a multibillion-dollar industry in which companies find it more attractive to make money suing each other for infringement than actually making things. Until the mid-1990s the computer industry – including Microsoft – was opposed to such licensing. This was mainly because the industry was so innovative without the protection of patents, which in any case involved often quite trivial advances in technology that were regarded as a standard part of an engineers work.
Then temptation reared its head. Corporate lawyers realised that they could sue others for infringing patents often purchased as a job lot. They were joined by troll companies formed just to buy up patents and sue companies and developers, knowing that most would settle rather than face the huge cost of hiring defence lawyers. Today the corporations that formerly opposed patents are in an arms race to acquire them. Microsoft has amassed a vast patent arsenal and can charge a manufacturer like HTC a reported $5 for every phone it sells – even though the Android system (developed by Google) used in HTC phones is open source and supposedly available to everyone. With hundreds, if not thousands, of patents now inside a mobile phone it is almost impossible not to infringe some patent in some way. Meanwhile Google, faced with its rivals vacuuming up all the patents in sight, has been forced to buy its own portfolio in self-defence.
Patents were supposed to protect innovation. Now they risk throttling it. Such acquisitions may drag technology companies ever further from their original core competences. Academic research by the Berkman Center for Internet and Society has found that software patents have provided no net benefit to the software industry, let alone to society as a whole. Tragically, because so many corporations which formerly opposed software patents have now joined the system, an effective solution will be harder to find. Once again consumers are pitted against the corporations. Where are the regulators when they are needed?
Internet security company McAfee released a report on a massive global cyber espionage activity that hit more than 72 private as well as public organizations in 14 nations as a result of a five-year targeted operation called Operation ShadyRAT or remote access tool.
Now businesses can monitor their social activities for as low as $10 a month, a services by Zero360Marketing. The social media reporting reports all positive and negative comments, sensitivity, channels where people are discussing about the brand and many more analytic to reflect the brand, companies can also view how their competitors are promoting their brands in social arena.
MIST Suzuki Racing team manager Mike Edwards has more than a few ideas on how to make Superbike racing more economical and competitive.
Internet security company McAfee released a report on a massive global cyber espionage activity that hit more than 72 private as well as public organizations in 14 nations as a result of a five-year targeted operation called Operation ShadyRAT or remote access tool.
MIST Suzuki Racing team manager Mike Edwards has more than a few ideas on how to make Superbike racing more economical and competitive.
This post comes from Len Penzo at partner blog Len Penzo dot Com.
#160;
Its hard to believe, but August is finally upon us. Of course, for most folks that means its time to celebrate National Goat Cheese Month. That is, unless youre one of the millions of kids who would rather lament the fact that the first day of the new school year is right around the corner.
#160;
Of course, the start of the#160;school year means financially savvy parents will be making sandwiches for the kids brown-bag lunches. And why not? In most cases, those homemade sandwiches are more economical than buying lunch at the school cafeteria.
#160;
That being said, some sandwiches are more economical than others, as the results of my third annual brown-bag sandwich price survey clearly shows.
#160;
How the survey was conducted
Thats right. For the third year in row, I actually walked down to my local grocery store and#160;recorded the per-serving costs of various ingredients for#160;10 of the most common brown-bag sandwiches: peanut butter#160;and jelly; bologna; tuna; ham#160;and Swiss; roast beef#160;and cheddar; egg salad; salami; American cheese; turkey; and bacon, lettuce#160;and tomato. (Yes, folks, I realize I need to get a life.)
#160;
This year, a nosy shopper in the condiment aisle noticed me taking price and serving size information off the applicable product labels and price tags. Are you one of those secret shoppers? she asked.
#160;
No, Im doing a price survey for a personal-finance blog, I said.
#160;
Oh! You mean like The Simple Dollar?
#160;
Yes, except mine is called Len Penzo dot Com.
#160;
Lead pencil dot com? Ill be sure to check it out.
#160;
Hey, that would be great! Thank you!
#160;
Come on, folks. Can you really blame me for just letting it go? But I digress.
#160;
Anyway, as in my past sandwich surveys, for consistency in determining prices of the individual sandwich ingredients, I only selected items with the cheapest per-unit costs, regardless of brand. To keep it simple, I also assumed all sandwiches would be made with wheat bread.
#160;
Survey results
Here are the results of my price survey, conducted July 30. The first graphic shows the sandwich serving sizes and per-serving costs for each ingredient. It also includes the percentage increase or decrease in the per-serving price of each item from last years survey:
#160;
With that data in hand, and using my handy spreadsheet, it was no effort at all to determine the most economical sandwiches.
#160;
Here are the official Len Penzo dot Com rankings of the#160;10 most economical brown-bag sandwiches in 2011. Ranking are based upon total ingredient unit costs, from least to most expensive:
#160;
Now, I realize that some people dont use any spreads at all. I also understand that some folks enjoy two or three slices of bologna. And I know lettuce and tomato can be placed on sandwiches other than a BLT. If you make your sandwiches differently, you can simply look at my shopping survey numbers in the top#160;graphic and adjust the sandwich costs in the bottom chart accordingly.
#160;
Observations and tips
This post comes from Len Penzo at partner blog Len Penzo dot Com.
#160;
Its hard to believe, but August is finally upon us. Of course, for most folks that means its time to celebrate National Goat Cheese Month. That is, unless youre one of the millions of kids who would rather lament the fact that the first day of the new school year is right around the corner.
#160;
Of course, the start of the#160;school year means financially savvy parents will be making sandwiches for the kids brown-bag lunches. And why not? In most cases, those homemade sandwiches are more economical than buying lunch at the school cafeteria.
#160;
That being said, some sandwiches are more economical than others, as the results of my third annual brown-bag sandwich price survey clearly shows.
#160;
How the survey was conducted
Thats right. For the third year in row, I actually walked down to my local grocery store and#160;recorded the per-serving costs of various ingredients for#160;10 of the most common brown-bag sandwiches: peanut butter#160;and jelly; bologna; tuna; ham#160;and Swiss; roast beef#160;and cheddar; egg salad; salami; American cheese; turkey; and bacon, lettuce#160;and tomato. (Yes, folks, I realize I need to get a life.)
#160;
This year, a nosy shopper in the condiment aisle noticed me taking price and serving size information off the applicable product labels and price tags. Are you one of those secret shoppers? she asked.
#160;
No, Im doing a price survey for a personal-finance blog, I said.
#160;
Oh! You mean like The Simple Dollar?
#160;
Yes, except mine is called Len Penzo dot Com.
#160;
Lead pencil dot com? Ill be sure to check it out.
#160;
Hey, that would be great! Thank you!
#160;
Come on, folks. Can you really blame me for just letting it go? But I digress.
#160;
Anyway, as in my past sandwich surveys, for consistency in determining prices of the individual sandwich ingredients, I only selected items with the cheapest per-unit costs, regardless of brand. To keep it simple, I also assumed all sandwiches would be made with wheat bread.
#160;
Survey results
Here are the results of my price survey, conducted July 30. The first graphic shows the sandwich serving sizes and per-serving costs for each ingredient. It also includes the percentage increase or decrease in the per-serving price of each item from last years survey:
#160;
With that data in hand, and using my handy spreadsheet, it was no effort at all to determine the most economical sandwiches.
#160;
Here are the official Len Penzo dot Com rankings of the#160;10 most economical brown-bag sandwiches in 2011. Ranking are based upon total ingredient unit costs, from least to most expensive:
#160;
Now, I realize that some people dont use any spreads at all. I also understand that some folks enjoy two or three slices of bologna. And I know lettuce and tomato can be placed on sandwiches other than a BLT. If you make your sandwiches differently, you can simply look at my shopping survey numbers in the top#160;graphic and adjust the sandwich costs in the bottom chart accordingly.
#160;
Observations and tips