TEXAS LAWYERS' INSURANCE EXCHANGE
For the fifth year in a row, TLIE's Board of Directors has approved a distribution to insureds. This year the distribution represents $1.5 million. As an insurance exchange owned by its members, TLIE makes such distributions when operating results permit after an examination of the financial impact on TLIE. In the past five years, TLIE has now returned a total of $12.5 million in distributions to our insureds.
The World Trade Center tragedy of September 11, 2001 has had an impact to some degree on virtually every line of insurance including professional liability. Although TLIE was not directly affected by these events, the magnitude of the forecasted losses will affect a number of domestic and international reinsurers adversely, including those who reinsure TLIE. Some reinsurers will not be able to service the severity of these losses and their demise will ripple throughout the entire insurance industry. We continuously monitor the financial health of all present and past reinsurers who participate on our program, and when necessary, have taken the appropriate steps to lessen the financial impact of these potential problems.
In our last newsletter, which was written prior to September 11, we noted that a number of sources were forecasting significant rate increases in reinsurance for professional liability insurers. Such increases now seem to be even more likely. Eventually, such increases would have to be passed along in the form of higher rates. Further developments of material significance along these lines will continue to be reported to you in this newsletter.
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