In the news
The New Jersey Department of Banking and Insurance and the California Department of Insurance are investigating Prudential Financial Inc. following claims that Wells Fargo & Co.'s fraudulent sales practices with credit card accounts also involved sales of Prudential life insurance policies. Former Prudential Financial employees alleged that Wells Fargo employees signed up consumers for Prudential Financial insurance without securing authorization. Prudential Financial sells some products through Wells Fargo, and an internal review allegedly revealed that certain clients were signed up for policies through the bank's fake-account creation practice.
New York Life Insurance Co. is looking for a buyer for Mexican unit Seguros Monterrey, The Insurance Insider reported. The company has received bids for the insurer, but they have not come in the $1.2 billion to $1.5 billion range that New York Life wants for the property, the news outlet reported.
A U.S. Supreme Court ruling cleared the way for a lawsuit to proceed against M.R. "Hank" Greenberg originating from his final years as CEO of American International Group Inc., Reuters reported. The New York Attorney General's office accused Greenberg of fraudulent reinsurance transactions that inflated AIG's reserves and running deals to conceal underwriting losses in the company's auto-warranty insurance business. A decision by the New York Court of Appeals in June said the state could ban Greenberg and former AIG executive Howard Smith from the securities industry and from leadership positions at publicly traded companies.
Repealing the Affordable Care Act will be an early priority for the U.S. Senate, but the timeline on the Republican's replacement program is still unclear, Reuters reported. U.S. Senate Majority Leader Mitch McConnell said the Senate would vote on the healthcare law's repeal after Jan. 1, 2017, and will create "a better program" than the current one. However, he declined to provide details on the schedule of the Republican's planned replacement.
The plan to repeal and replace the ACA would render at least 52 million nonelderly adult Americans uninsurable, according to Kaiser Family Foundation estimates. Most people with pre-existing conditions have employer or public coverage, but those who are between jobs, retired or self-employed usually tap into the individual market for coverage. Those people are at risk of losing their coverage and finding it more difficult to secure health insurance if the ACA is removed since the current healthcare law ensures that people with pre-existing conditions are covered, according to the nonprofit organization.
A.M. Best maintained its negative outlook for the global reinsurance sector as continued market challenges could limit the potential for positive rating actions and could lead to negative rating pressures. The rating agency said the reinsurance market is starting to hit a floor in pricing, but lower risk adjusted returns show that market conditions strain reinsurers' profitability.
In executive moves, Ambac Financial Group Inc. appointed Claude LeBlanc president and CEO.
Stewart Information Services Corp. named Timothy Okrie COO.
A former American Family Insurance employee who sued a company sales manager for alleged retaliation, age and sex discrimination won $20 million in punitive damages and $450,000 in actual damages, The Kansas City Star reported. Deborah Miller lost her manager position in a corporate restructuring and stayed on as a company agent. Her attorneys claim that the restructuring was a scheme to replace older workers with younger ones. Ken Muth, media relations director at American Family Insurance, said the insurer is considering filing an appeal.
Aspen Reinsurance's Aspen Capital Markets division renewed Bermuda-domiciled special purpose insurer Silverton Re Ltd. for 2017. Silverton Re was established in 2013 to provide additional collateralized capacity to support Aspen Re's global reinsurance business.
Court rejects attempt to block Bayer/Monsanto deal; Sanofi faces epilepsy suit: A U.S. court dropped a Monsanto shareholders' lawsuit to block the acquisition by Bayer; and Sanofi could face a French class action suit over its epilepsy drug Depakine.
Financial news in other parts of the world
Asia-Pacific: Indonesia, Japan extend currency swap; Philippines-EU free trade talks delayed
Middle East & Africa: Zimbabwe cuts withdrawal charges; Japanese bank to open Saudi branch
Europe: UniCredit maps out capital-raising plan; UK further cuts Lloyds stake
Latin America: Brazil plans new economic stimulus; Seguros Monterrey for sale
The day ahead
Early morning futures indicators pointed to a higher opening for the U.S. market.
In Asia, the Hang Seng rose 0.06% to 22,446.70, while the Nikkei 225 lifted 0.50% to 19,250.52.
In Europe, around midday, the FTSE 100 climbed 0.35% to 6,914.51, and the Euronext 100 was up 0.75% to 920.13.
On the macro front
The NFIB small business optimism index, the import and export prices report and the Redbook are due out today.