"Keeping Watch Over China's Business Risk and Insurance"
Vol. 2 , No. 4 - October 17, 2001
TOPICS THIS ISSUE:
CHINESE NEWS
- World's Planes Possibly Grounded
- Airlines To Charge Extra Aviation Insurance Fees
INTERNATIONAL NEWS
- White House expected to unveil safety net for insurers
- Aon Expands To Underwrite Direct Property, Casualty
IT'S YOUR HEALTH
- For additional Overseas Protection¡¡TravMed
FINANCE AND INVESTMENT
- Financial Troubles
- Telemarketing Scams in Asia
EyeWatchina is intended to be used for news purposes only. It should not be taken as comprehensive advice, and its producers will not be held responsible for any such reliance on its contents. EyeWatchina, Copyright 2001 WaterStreet Asia in cooperation with Lehman, Lee & Xu, All Rights Reserved.
CHINESE NEWS
World's Planes Possibly Grounded
Shanghai - Airplanes might stay on the ground worldwide from now on, given that international insurance companies will withdraw the usual cover for war liabilities in the wake of recent attacks in the United States. It is still unclear how this might affect international air traffic from and to China. Domestic flights are most likely not affected.
Insurers are afraid to follow in the footsteps of Lloyd's and Zurich Insurance Company, two of the world's best known insurance companies, which were hit hard by the financial fall-out of recent attacks. Both companies' financial ratings were cut by risk assessment company Standard & Poor. Each dropped one full grade, Reuters reports.
Unless airlines and insurance companies find a solution in ongoing negotiations, the risk of taking off will be too high. The insurance companies won't be able to cover for any damages and/or injuries to third parties, as recent attacks on the US, when airplanes devastated the World Trade Center and the Pentagon. The insurance firms expect they have to cover US$ 6 billion to the victims of the disaster only, several European media report.
Some Asian airlines announced they will introduce surcharges of US$ 1.25 per passenger to cover for the short fall in third-party insurance, FT writes. Chinese airlines will raise the cost for international flights by $2.50/ticket.
A worldwide disruption of flight services will have major economic consequences worldwide, with billions of passengers stranded and enormous chaos looming.
Source: ChinaBiz 21/09/2001
Airlines To Charge Extra Aviation Insurance Fees
Oct. 5, the General Administration of Civil Aviation of China (CAAC) announces its consent to allow airlines to charge for extra aviation insurance fees. Starting Oct. 15, 2001, domestic airlines' international air routes which take off in China and fly to foreign countries, Hong Kong and Macau, may charge no more than $2.5 in extra aviation insurance fees, while extra fees cannot be charged for domestic air routes. The Chinese government will provide one month of extra aviation war-coverage insurance to ensure Chinese airlines continue operating their international air routes. International insurance companies have cut the maximum for war-coverage insurance to $50m after the Sept. 11 terrorist attacks on the US.
Source: China Market Economic News , 10/08/2001
INTERNATIONAL NEWS
White House expected to unveil safety net for insurers
The Bush administration is expected to unveil soon its own plan to provide a partial government-funded safety net to the insurance industry against costs associated with future terrorist attacks.
Under the plan and others under consideration, US taxpayers would foot much of the bill for future terrorism insurance claims.
The proposal is being developed as US insurance companies threaten to end terrorism coverage for fear of massive liabilities. They claim the cost of the September 11 attacks alone could cost the industry as much as $40bn, and they want government help in dealing with future attacks.
Reinsurance companies, firms which insure insurers, will not renew terrorism coverage after December 31. Insurance companies have threatened to do the same unless they get adequate government support.
At the very least, terrorism coverage could become prohibitively expensive, threatening basic functioning of the US economy. Proof of such insurance is required for many basic transactions - including real-estate purchases, development projects and bank loans. Under the Administration proposal, taxpayers pay 80 per cent of future terrorism-related insurance claims with the rest left to insurers and government's liability restricted to three years.
An administration official said the Bush plan would be guided by specific principles: "avoid disruptions in insurance and real estate markets, prevent high rates for terrorism insurance, protect industry against catastrophic losses and limit the government's role".
Its proposal could compete with one developed by some congressional lawmakers to create a new government-backed insurance company to manage an industry-wide pool of premiums and payouts for terrorism-related insurance. If payouts exceeded money in the pool, the government would cover the difference.
Source: Financial Times, 14/10/2001
Aon Expands To Underwrite Direct Property, Casualty
Aon Corp , the world's No. 2 insurance broker and medium-sized insurance underwriter, said on Friday it plans to expand its underwriting to direct property and casualty policies and reinsurance policies, after last month's attacks created demand for such policies.
"We had been preparing for a turn in the insurance cycle through our spin-off plans announced in April of this year," said Aon Chief Executive Patrick Ryan. "The events of September 11 have emphasized the need for enhanced property and casualty capacity."
Hijacked planes slammed into and destroyed the World Trade Center and part of the Pentagon on Sept. 11, killing thousands of people and fueling demand for insurance policies.
The Chicago-based insurer already provides warranty, specialty property and casualty lines, accident, health and life insurance at operations to be spun-off as Combined Specialty Corp.
Aon also said Kenneth LeStrange, now head of Aon's retail brokerage operations for the Americas, will become chairman and chief executive of its Combined Specialty Corp. spin-off, effective immediately.
Copyright ?2001 Reuters Limited. All rights reserved. Republication or redistribution of Reuters Limited content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters Limited. Reuters Limited shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
Source: Reuters 12/10/2001
IT'S YOUR HEALTH
For additional Overseas Protection--TravMed
Business related travel is taking your employees and consultants to more diverse travel destinations than ever before. However, your protection plans may not always travel with them, leaving your employees or your company vulnerable to substantial our-of-pocket expenses. And because 40% of all travelers are affected by travel-related health problems (HR World Winter, 1998), it's important to make checking your health protection policy a vital part of your travel preparations. WATERSTREET GROUP, INC, a sister company of WaterStreet Asia, offers a program called TravMed to fill the gaps in your primary health plan. Even if your plan covers overseas medical expenses, it may not pay directly to foreign hospitals, which can result in delayed medical treatment and large out-of-pocket expenses, or the limits may be substantially reduced when employees are outside of the country.
For over 15 years, TravMed has been protecting individuals with travel health protection. The TravMed program offers $100,000 of coverage for sickness of accidents. This includes:
- Physician's fees and hospital expenses
- Emergency dental expenses (limited to $200)
- Emergency medical evacuation
- Repatriation of remains expenses
- Transportation expenses for accompanying travelers, 18 years of age or under, to home residence
- Transportation expenses for bringing a family member to your side
Frequently Asked Questions
Do You Need the Protection Provided by Travel Insurance ?
Yes. Your medical insurance provider may not cover you outside the United States. Even if your plan does provide coverage, many plans and HMOs have high deductibles or co-payments if you receive treatment out side their immediate coverage area. In addition, most do not provide payment directly to foreign hospitals nor will they cover the cost of emergency medical evacuations and/or repatriations.
Do I Have to Buy TravMed at Any Specific Time?
You may enroll anytime prior to leaving on your trip, however, we advise you to purchase it at least 10 days prior to your departure date.
Are There Events or Medical Conditions that Are Not Covered?
Every insurance plan contains restrictions and limitations. For full details, please call us at WaterStreet_asia@yahoo.com.
How Does TravMed Compare in Price to Other Travel Health Protection Plans Available?
TravMed is the best value on the market. No other comparable policies currently provide the dollar for dollar value in terms of daily rate and terms of coverage. Additionally, with TravMed, you get all the benefits of medical assistance services, including 24-hour, multilingual assistance, worldwide medical and dental referrals, coordination of the replacement of prescription medications, coordination of emergency evacuations and repatriation, emergency travel arrangements, etc.
Who Provides the Insurance?
TravMed is underwritten by Virginia Surety, Inc. Virginia Surety has an A+ Insurance rating as listed by AM Best.
How Much Does It Cost?
TravMed costs only $4.00 per day (through age 70) or $5.75 a day (age 71-80)and the deductible is only $25.00 per accident or sickness. TravMed takes the Medical Access and Plus programs one step further and may be the solution to a health protection plan that stays home while your employees travel.
Finance and Investment
Financial Troubles
Expatriates in China have been targets over the last few months from overseas companies proposing to offer inside information on NASDAQ or US listed companies who's share prices has fallen dramatically, but has now started to climb. Big gains and profits are offered in the hard hitting sales calls.
The old adage of "Never getting something for nothing" certainly applies to these offers.
These companies buy up a listed companies stock when they are low. This duly increases the price of the shares in the markets through increased demand, not from any internal or external events of the companies. The shares are then promoted to the unwary investor, who looks at the price on any of the numerous websites showing listed companies only to see that in the last 2 weeks the price has doubled from US$2.00 per share to US$4.00 per share. Pressure is on to buy in NOW... while the price is still low as the expectation is of a share price around US$8.00 or US$10.00 a share.
Easy way to make a money.................... or so you thought.
Reality is you are buying the shares via a private placement direct from the very company who are selling them to you. May not be in their name, but ultimately owned by the very same people. In other words, large profit for them, losses for the client. The scenario usually follows that no sooner do they take in the money, than they let the shares run normally as before. Price plummets creates a loss for the investor. Value now less than 50% or in most cases almost zero.
Apologies from the salesman that sold and recommended the shares are forthcoming..... bad luck, but he'll have another one that's a sure thing! Here we go again.
Be aware of these calls. A recent article in the "Financial Times" stated that 10 foreign individuals where arrested in the Philippines for conducting similar schemes.
By Robert Formon, Formon & Associates
Telemarketing Scams in Asia
Telemarketing scams offering doubtful share or currency investments had dramatically increased their activities in Australia, the corporate watchdog warned.
Seven Australians were arrested recently when Thai authorities raided offices of finance and security companies as part of a crackdown on telemarketing scams.
The raids netted more than 70 foreigners as well as Thai support staff, as part of coordinated efforts between Thailand, Australia and the United States against the scams.
Millions of dollars have been taken from Australian and New Zealand investors through the scams.
The Australian Securities and Investments Commission (ASIC) said it had been working with Thai authorities for some time to crack the operations.
ASIC's executive director of consumer protection, Peter Kell, said it was likely there were Australians behind the schemes.
"Our experience has been with a few of these cold calling firms, there have been allegations of Australians involved, British people, Irish people so yes, it is a possibility there are Australians involved," Mr Kell told ABC radio.
"We've had a lot of Australian people lose money as a result of these activities.
"We've had people losing hundreds of thousands of dollars to these sorts of outfits and it seems more recently that their activity in Australia, calling into Australia, has rather dramatically increased."
Mr Kell said ASIC was pleased with the arrests and had worked hard with Thai counterparts.
"We have been talking to our Asian counterparts for some time but while some of these cold calling operations were previously based in America and Europe, they've moved a bit more recently into the Asian region but the level of complaints have increased rather dramatically," he said.
The raids targeted the Brinton Group and the Benson Dupont Capital Management companies, both operating without licences.
The Australians and other foreigners detained are being held at the economic crime suppression division headquarters, and are likely to be charged over immigration and visa irregularities.
From ninemsn Friday 27th July, 2001.
Sponsors And Contributors:
Lehman Lee & Xu
China Lawyers, Notaries, Patent, Copyright and Trademark Agents
Suite
188, Beijing International Club
21 Jianguomenwai Dajie, Beijing 100020 China
Tel.: (86)(10) 8532-1919
Fax: (86)(10) 8532-1999
Lehman, Lee & Xu, China Lawyers, Consultants, Patent, Copyright & Trademark Agents is China's largest, full-service private law firm with offices throughout the country. The firm, in cooperation with WaterStreet Asia, provides unparalleled insurance, China foreign investment, pharmaceutical and intellectual property legal services and advice.
WaterSteet Asia
Healthcare, Safety and Risk Consultants
WaterStreet Asia Consultants specialize in providing risk management, employee benefit solutions and administrative services to employers and individuals alike. Our exclusive focus is to solve the diverse problems of expatriate business owners, "half or local expatriates" and third country nationals living and working in Asia.
10-1-8
P.O. Box 199
Beijing 100036
Tel: (010)81714076
Fax: (010)81714078
E-mail: waterstreet_asia@yahoo.com
Formon & Associates
Private Banking and Trust Services
In response to a perceived need for quality advice on financial matters and other issues relevant to the expatriate community in Shanghai, Formon & Associates proposes to host several special interest seminars and round-table discussions.
For more information please contact either Robert Formon or Brad Tyson at Formon & Associates
21/F, HSBC Tower
101 Yin Cheng Road (E), Pudong District,
Shanghai 200120 P.R.China
Tel: 8621 2890 3118
Fax : 3303 0596
E-mail: info@formonassociates.com
Destination Travel Agency
Full Service Travel Consultants
Focusing on a high level of service in English or Chinese, Destination provides travel options for individuals, companies and other organizations. We handle international corporate travel accounts as well as group tours throughout China.
Tel.: 86 - 21 - 6314 5505
Fax: 5359 0632
Email: irs@uninet.com.cn
Add.: 34, Dong Jia Du Road, Huang Pu Dist.,
(Corner of Zhong Shan Rd. South)
Shanghai 200011, China
To unsubscribe from this newsletter send an email to unsubscribe_insurance@chinalaw.cc Please include the email address to which the newsletter is being sent (not a forwarded address) in the body of the email.
The EyeWatchina Newsletter is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu and Waterstreet will not be held responsible for any such reliance on its contents.
