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Weekly news through Aug. 11

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Weekly news through Aug. 11

Risk & regulation

The California Department of Insurance will investigate claims that Wells Fargo & Co. and National General Insurance improperly charged customers for auto insurance. Federal Reserve Bank of San Francisco officials are already investigating Wells Fargo, The New York Times reported. Meanwhile, a group of U.S. senators have written to Wells Fargo CEO Timothy Sloan and National General Holdings Corp. CEO Barry Karfunkel over the matter.

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MBIA Inc. unit National Public Finance Guarantee Corp. and Assured Guaranty Ltd. units Assured Guaranty Municipal Corp. and Assured Guaranty Corp. have filed adversary complaints against the Puerto Rico Electric Power Authority for failing to remit pledged special revenues to the bond trustee for the timely payment of debt service on their bonds.

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Maine Community Health Options appealed a federal court decision denying funds the company argues the federal government from the Affordable Care Act, or ACA's risk corridor program, Maine Public reported. The company said it is owed $23 million in back payments.

A federal judge ruled that Molina Healthcare Inc. units are owed about $52.4 million in risk corridor payments under the ACA the government refused to fully pay.

The U.S. Department of Labor is looking to delay the full rollout of its Conflict of Interest Rule to July 1, 2019, from Jan. 1, 2018, according to a brief as part of a lawsuit in the U.S. District Court for the District of Minnesota.

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Several lawsuits against OneBeacon Insurance Group Ltd. related to its pending acquisition by Intact Financial Corp. have been dismissed, according to court filings.

The U.S. District Court for the Eastern District of Pennsylvania denied Radian Guaranty Inc.'s motion to enjoin Ocwen Loan Servicing LLC's parallel arbitration against it, according to a quarterly regulatory filing.

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Thirty-three attorneys general have reached a $5.5 million settlement with Nationwide Mutual Insurance Co. and its subsidiary Allied Property & Casualty Insurance Co. in connection with the company's October 2012 data breach.

Property and Casualty

Atlantic Equities analysts John Heagerty and Nadja Heini have downgraded American International Group Inc. to "neutral," noting that the insurer's reserving issues have persisted and saying that resuming a strategy of growth could be expensive.

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The pending acquisition of NBIC Holdings Inc. is "strategically important" for Heritage Insurance Holdings Inc. and allowing its purchase by one of Heritage's peers would have put the company at "a significant disadvantage," Heritage Chairman and CEO Bruce Lucas said. Heritage Insurance Holdings has agreed to acquire the parent of Narragansett Bay Insurance Co. for $250 million. It also agreed to a $12.5 million cash termination fee if the deal with NBIC Holdings falls through under certain circumstances.

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Fairfax Financial Holdings Ltd. is expected to take a 20% stake in Irish insurer FBD Holdings Plc, The Irish Times reported, citing FBD CEO Fiona Muldoon.

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Hedge fund reinsurers have generated better investment returns than traditional reinsurers over the past few years, but underwriting losses have prevented the group from outperforming the traditional Bermuda reinsurers, according to new research from S&P Global Ratings.

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CNA Financial Corp. priced $500 million aggregate principal amount of 3.450% senior notes due Aug. 15, 2027, in a public offering.

Conference call roundup

Maiden Holdings Ltd. reviewed the reinsurance accounts that helped drive $56 million in unanticipated expenses and costs and canceled the account of one client in response, President and CEO Arturo Raschbaum said.

A two-notch downgrade by S&P Global Ratings on MBIA Inc.'s bond insurance unit's rating does not jeopardize the future of the company, according to CEO Joseph Brown Jr., and there is no need to take any "drastic actions." However, Brown declined to respond to a question on an earnings call as to whether a formal process is underway to pursue a sale.

Athene Holding Ltd. President William Wheeler welcomes a potential delay of the Department of Labor's fiduciary rule, saying the original regulation had "serious problems."

Primerica Inc. CFO Alison Rand brushed off concerns over higher mortality and lower-than-expected term life persistency on a call to discuss second-quarter earnings.

Life and health

Green Mountain Care Board approved a 9.2% rate increase for Blue Cross Blue Shield of Vermont health plans sold through the state's online benefit exchange, Vermont Health Connect.

Federated Insurance will stop offering group health insurance beginning in 2018, because of ACA uncertainties, the (Minnesota) Star Tribune reported. Moreover, Anthem Inc. is withdrawing from most of Nevada's and Georgia's ACA's state exchanges for 2018.

President Donald Trump stepped up his criticism of Senate Majority Leader Mitch McConnell, R-Ky., blaming him for the chamber's failure to pass legislation to repeal and replace the ACA. On the other hand, the uncertainty surrounding the Trump administration's oversight of the ACA is expected to drive healthcare insurance premiums up significantly for many Americans, according to a new analysis. Meanwhile, a bipartisan group of health policy experts released a proposal to stabilize the ACA insurance markets, according to The Wall Street Journal.

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Aetna Inc. completed its offering of $1.0 billion aggregate principal amount of senior notes.

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Continuing the trend of increased frequency in recent years, insured losses in the U.S. in the first half rose about 10% compared to the first half of 2016 and exceeded $15 billion, according to a report from Verisk Analytics' Property Claim Services.

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CF Corp. shareholders approved the company's pending acquisition of Fidelity & Guaranty Life for about $1.84 billion.

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Brighthouse Financial Inc completed its spinoff from MetLife Inc.

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