BestWeek: Increased Liabilities Arise From College Campus Drinking

Rider University recently reached a confidential court settlement to resolve claims brought against the school by a family of a student who died in 2007 after consuming a large amount of alcohol during a fraternity ritual, according to BestWeek U.S./Canada.

The case is just one of many related to college drinking that have garnered headlines. Schools face growing claims activity for negligence, misconduct and wrongful death, says Constance Neary, vice president of risk management for United Educators, a reciprocal risk retention group that insures more than 1,200 colleges, universities and schools.

"There is an expectation that colleges and universities are monitoring and enforcing policies. If there is a perception of a lapse in that promise, a claim could arise," said Neary.

In BestWeek Europe, Lloyd's has emerged as a center of the special purpose underwriting activity that has developed on a piecemeal basis since the aftermath of the great hurricanes of 2005. Such high-profile Lloyd's insurers as Beazley Group plc and Amlin plc recently have been linked to interest in the special purpose vehicles sector within Lloyd's.

In BestWeek U.S./Canada, like presidential contenders to Iowa, or cicadas to suburbs, the issue of credit-based insurance scoring is one that periodically returns to the insurance industry. And, like those examples, it is not entirely welcome.

Two NAIC bodies -- the Property and Casualty Insurance Committee and the Market Regulation and Consumer Affairs Committee -- have spent much of 2009 taking a detailed look at the use of credit information in insurance scoring. One marathon April hearing went on so long, participants seemed to start it in one age demographic and end it in another.

To personal-lines insurers, the focus on credit scoring is frustrating. They cite study after study -- 18, by one count -- that show a net benefit to most policyholders. In state capitals, before Congressional hearings and at NAIC meetings, they argue that use of credit data is a strong indicator of insurance risk.

BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, visit www.ambest.com/sales/BestWeek.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

SOURCE: A.M. Best Co.