Banner Graphic, Volume 18, Number 167, Greencastle, Putnam County, 23 March 1988 — Page 3

States allege insurance companies created liability crisis for their profit

. SAN FRANCISCO (AP) The nation’s largest insurers conspired to fabricate a liability crisis, which crippled businesses and forced nationwide cutbacks in police, child care and other services, according to suits by seven states. The lawsuits, filed Tuesday in U.S. District Court here, accuse dozens of insurance companies of collaborating in a global boycott of certain types of general liability insurance through secret agreements and internal pressure. < THE SUITS, filed by California, New York, West Virginia, Wisconsin, Minnesota, Massachusetts and Alabama, named 32 insurance companies, underwriters and associations, including Lloyd’s of London. Arizona planned to sue in the same court today, and Texas filed a separate suit in its state court because the state “has one of the toughest, best antitrust laws in the nation,” said Texas Attorney General Jim Mattox. “These defendants have sucked the blood of our nation’s economic wse4l-being,” Mattox said at a news conference in Austin. ’.’New York State Attorney

Postal rates go up; stamp to cost 25 cents

.Washington (ap) The postal rate increase that will push the cost of mailing a first-class letter to 25 cents next month is likely to affect consumers in a host of other areas as well, as businesses pass along their own higher costs. . While first-class rates will be most readily noticed, the charges to businesses for mailing bills and advertising and sending books and magazines to American homes also effect individuals. Prices and subscription rates may well increase, with the postage costs being cited as a factor. ; THE NEW RATES, for example, would add about $1.15 to the annual cost of mailing a weekly newsmagazine to one home. Utilities, credit card companies and department stores will have to Spend about 36 cents more, annually, to bill one customer. The CoSt of an average book club mailing will rise by about 50 cents.

Kite takes girl flying

MOUNTAIN VIEW, Calif. (AP) —7 Eight-year-old DeAndra Anrig says she felt like Winnie the Pooh when an airplane snagged her kite line and lofted her on a 100-foot ride. - “I read about how Winnie the Ppoh flies in the air on kites, but I never wanted to try it,” said DeAndra, who let go just as the kite carried her toward a tree. “I wasn’t thinking anything but how scared I was.” “She said it was just a big jerk that lifted her (10 feet) into the air,” said DeAndra’s mother, Debby. “It carried her right over my husband’s head. All he saw was a shadow going over his head. I’m just thankful she let go.” DeAndra escaped from her ride with bruises. Sympathetic neighbors delivered cupcakes Tuesday to her home in Dublin, 30

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General Robert Abrams said the case was one of the largest ever tackled by a group of states in a federal court, adding that the states had to take action because the federal government did nothing. ONE OF THE companies, Aetna Life and Casualty Co., condemned the suit as “another political move by political officeholders who have consistently opposed any and all efforts to address the real problems of the nation’s liability system.” A spokesman for the Insurance Services Office, a 1,400-member industry trade group also named in the suit, called the allegations unfounded. The lawsuits claim the companies targeted for elimination coverage for pollution accidents and general liability for damage discovered after the life of a policy, known as “occurrence” coverage. The companies instead favored more limited policies, covering only losses that were suffered and claimed within the policy term, excluding damage that was discovered later, the suits said. THE LAWSUITS said four major insurance companies

The increases are needed to avoid deficits for the agency that could reach $5 billion in 1989, postal officials said Tuesday in announcing the April 3 rate hike. The last rate increase was in February 1985, and the Postal Service lost more than $220 million last year. The new 25-cent letter rate is part of a broad series of rate changes affecting all types of mail. “THESE ARE THE first adjustments in general postage rates in more than three years. They reflect the higher costs the Postal Service is experiencing,” said John N. Griesemer, chairman of the agency’s board of governors. The Postal Service is required to break even over time by the 1970 law that made it an independent federal agency and ended the taxpayer subsidy for the mail. Postmaster General Anthony Frank said post offices across the country will expand window ser-

miles southeast of San Francisco, where she rested on an air mattress surrounded by ice packs and two of her stuffed animals. DeAndra and her parents were picnicking Sunday with friends at a park 2 miles from the Palo Alto airport when the accident occurred. DeAndra was taking her turn flying the 12-foot, glider-type kite when a twin-engine plane descending toward the airport caught the kite’s 200-pound nylon test line. Mountain View fire marshal Frank Moe said the 70-pound child was carried about 100 feet before letting go.

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Hartford Fire Insurance Co., Allstate Insurance Co., Cigna Corp, and Aetna started a campaign in 1984 to curtail coverage that was generally available in the industry. According to the suits, the companies got major U.S. and British reinsurers, including underwriters at Lloyd’s of London, to threaten a boycott of any U.S. insurance company that provided the broader coverage. At the same time, the suits said, major insurers and reinsurers pressured the Insurance Services Office to stop distributing standard forms, so that it would be impractical for individual companies to continue offering that coverage. AS A RESULT, the suits said, property damage insurance for local governments, nonprofit agencies such as child care centers, and various businesses suddenly became unavailable or prohibitively expensive. “This illegal boycott was a major contributor to the insurance crisis that forced so many cities and businesses up against the wall,” California Attorney General John Van de Kamp said.

vice during the next two weeks to help customers cope with the changes. But while service is being expanded temporarily to help during the changeover, recently imposed reductions in post office hours and services are not related to the rate increases and are likely to remain in effect Those cutbacks result from congressional action in December, while these rate hikes have been in the works for nearly a year. FACING THE BIGGEST increase will be the so-called “junk” mail, third-class advertising material that the independent Postal Rate Commission concluded wasn’t paying its fair share. Advertising mail prices will increase 24.9 percent, compared to hikes of 18.1 percent for newspapers and magazines and 14.7 percent for items sent by individuals.

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Van de Kamp said the attorneys general decided to file together here because he has taken the lead on the issue and California law is favorable to the case and might be cited by the federal court. Among other things, the plaintiffs seek to restructure the Insurance Services Office by giving non-insurers a majority on its board and making public its data on insurance coverage losses. DAVE OSTWALD, the spokesman for the Insurance Services Office in New York City, said rates increased mainly because of “a demonstrable increase in claims losses and a drop in interest rates, slowing down (insurers’) investment income.” He said pollution coverage was changed in response to expansive court decisions. Pollution insurance and “occurrence” coverage remained available, with some restrictions, he added. The Hartford Insurance Group called the lawsuit “totally without substance” and said it is confident that all charges eventually will be dismissed.

The new 25-cent first class price means that sending a one-ounce letter will take about the same bite from the average budget as in 1932. Adjusted for inflation, the 3-cent postage rate introduced in 1932 would amount to 25.5 cents today. The price for each additional ounce of mail will rise from 17 cents to 20 cents. The cost to mail a post card will increase from 14 cents to 15 cents. FOR MAIL GOING outside the country the rate will be 45 cents per half-ounce to most areas. The agency did cut, from 7 cents to 5 cents, the minimum charge for a business using pre-paid envelopes that allow consumers to reply without a stamp. The minimum rate for third class mail will jump from 12.5 cents to 16.7 cents and the per pound rate will rise from 38 cents to 48 cents.

world

9,000 murders reported in Russia last year: Kremlin

MOSCOW (AP) More than 9,000 murders were committed in the Soviet Union last year, but some types of major crimes declined due to the Kremlin’s campaign against drinking and drugs, Radio Moscow reported. The state-run radio’s report, in news bulletins on its international English-language service, was believed to be the first time the Soviets have made public a comprehensive annual statistic for murders nationwide. FOR YEARS, the Soviets used to contend that their society had less crime than Western countries, but issued sparse statistics. Monday’s Radio Moscow report was clearly linked to Soviet leader Mikhail S. Gorbachev’s campaign for “glasnost,” or more openness on some issues, that has brought franker reporting on the country’s social problems. “Last year, slightly over 9,000 murders were registered in the U.S.S.R., which is one third less than in the United States,” Radio Moscow said, citing preliminary statistics.

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It did not say where the figures for U.S. homicides were obtained. Official statistics for last year have not yet been issued. In 1986, according to the FBI, there were 20,613 murders in the United States, up 8.6 percent from 18,976 in 1985. RADIO MOSCOW said there was a drop last year in the incidence of some types of major crime in the Soviet Union, but gave no details. It quoted a Soviet legal expert, Dr. Igor Karpets, as crediting the “positive role of the anti-drinking and anti-drug drive” launched under Gorbachev for the decline in some crimes. However, there was no decrease last year in crimes against property, such as burglaries, Radio Moscow said, without providing data. This year, police in Moscow have begun issuing weekly reports through the official Tass news agency on the number of murders, rapes and other crimes committed in the capital. Soviet officials are also working on a revision of criminal code.

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