Many Insurers would receive lower Y2K grades if held to standard for banks
In a new survey of Year 2000 preparedness, 138 of 1,069 insurance companies and HMOs, or 13%, have made inadequate progress, according to results released by Weiss Ratings, Inc., a provider of Y2K ratings on financial institutions.
Of those, 91, or 9%, were assigned a Y2K grade of "Below Average," while 47, or 4%, were rated "Low." On the other end of the spectrum, 213 companies, or 20%, reported data that Weiss interpreted as an indication of "High" progress in their Y2K preparations. The remaining 718, representing 67% of respondents, indicated a level of progress that Weiss deemed "Average" based on guidelines set by the National Association of Insurance Commissioners (NAIC).
"If we assume that the 1,069 responding insurers are representative of the overall industry, we'd have to conclude that approximately 730 insurers are behind schedule. But, given the natural tendency of lagging institutions to be less willing to respond to our Y2K surveys, I estimate that the actual number of insurers behind schedule could be well over a thousand," Martin Weiss, chairman of Weiss Ratings said in a press release. "Given that the NAIC's standards are looser than those being applied to the banking industry, it's worrisome to see this many insurers still behind schedule."
The Weiss Y2K survey, mailed on June 30, 1999 to 5,654 insurance companies and HMOs, asked 14 questions about each company's timeline for completing various milestones in the computer Y2K remediation and testing process. Weiss then evaluated the actual or expected completion dates for critical tasks, using, as a reference point, standards established in September 1998 by the NAIC.
Companies receiving a "Low" Y2K progress rating include:
-- Provident Mutual Life Insurance Company (Penn.)
-- American Family Mutual Insurance Company (Wisc.)
-- Anthem Insurance Companies (Ind.)
Companies receiving a "High" Y2K grade include:
-- Nationwide Life Insurance Company (Ohio)
-- Massachusetts Mutual Life Insurance Company (Mass.)
-- Pacific Life Insurance Company (Cal.)
Weiss publishes financial safety and Y2K readiness ratings on insurers, HMOs, banks, and S&Ls. The accuracy of its ratings has been favorably reviewed by the U.S. General Accounting Office (GAO) as well as national consumer organizations. According to its press release, it is the only major rating agency that receives no compensation from the companies it rates.
Source: Weiss Ratings Press Release
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