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Oregon health insurance co-op folds; Aetna, DOJ officials talk Humana deal


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Oregon health insurance co-op folds; Aetna, DOJ officials talk Humana deal

Inthe news

Oregon will take over its troubled state healthinsurance co-op to wind downits business after the sudden collapse of the organization's finances.

The Division of Financial Regulation of the Oregon Departmentof Consumer and Business Services will file a petition to place inreceivership to liquidate its assets and help connect policyholders to newplans.

AetnaInc. metwith U.S. Department of Justice antitrust officials in a bid to convince themto approve its pending acquisitionof Humana Inc., Reutersreported.

Reuters reported separately that Aetna's plan includesselling its MedicareAdvantage portfolio, which could be valued at about $1 billion. andCentene Corp. areamong bidders for the portfolio.

In other deal-related news, the board'sspecial committee is reviewingthe newest takeover offer from AmericanFinancial Group Inc. subsidiary Great American Insurance Co.

AssuredPartnersInc. acquiredRichardson, Texas-based LegacyTexas Insurance Services, the general insuranceblock of business of LegacyTexasBank.

If the Federal Reserve waits longer to raise interestrates, U.S. P&C and life insurers will continue to a tough road in terms of investing,given their heavy exposure to fixed-income securities. Bonds made up roughly68.1% of the P&C industry's investments at the end of 2015, and the lifeindustry's ratio was 76.1%, based on unaffiliated investments reported in thebalance sheet section of statutory statements.

Underwriting results of the U.S. P&C industry declinedin the first quarter from the year-ago quarter as catastrophe losses hit thehighest level since 2011, according to A.M. Best. Net investment income andrealized gains also dropped due to increased market volatility and pressure onyields as rates on reinvestment remain low.

The U.S. Department of Labor has clarifiedan exemption under the Conflict of Interest Final Rule, commonly known as thefiduciary rule, Business Insurance reported.One of the 13 technical corrections that the department made to the ruleclarified that insurance companies can use the so-called best-interest contractexemption regardless of whether they use independent actuaries for their annualaudit of reserves or not, according to the report.

New issuance of nonlife insurance-linked securitiestotaled $1.0 billion in the second quarter, down from $2.7 billion in theyear-ago period, according to Willis Capital Markets & Advisory's latestILS report.

Artemis reported that sponsoredBlue Halo Re Ltd. series 2016-2, a catastrophe bond that has a preliminary sizeof $100 million.

In executive moves, Donna Kinnaird, senior executivevice president and COO of ReinsuranceGroup of America Inc., intendsto retire in 2017.

AllstateCorp. CEO Tom Wilson wants someone who is knowledgeable about dealsand macro- and micro-investing to replaceformer Chief Investment Officer Judy Greffin, Bloomberg News reported.

Financialnews in other parts of the world

Asia-Pacific: CathayGeneral to acquire Bank SinoPac's US biz; Japan's Abe wins upper house poll

Middle East & Africa:

Europe: €150BEU bank rescue program proposed; BoE rate cut likely; Deutsche Börse, LSE movefor merger

Theday ahead

Early morning futures indicators pointed to a higheropening for the U.S. market.

In Asia, the Hang Seng rose 1.54% to 20,880.50, whilethe Nikkei 225 increased 3.98% to 15,708.82. In Europe, around midday, the FTSE100 was up 0.73% to 6,638.48 and the Euronext 100 0.68% to 844.46.

Onthe macro front

The Labor Market Conditions index is due out today.