WASHINGTON – The Insured Retirement Institute (IRI) at this time declared 1st quarter outcomes for the United States annuity business. Annuity revenue for the 1st quarter put up a robust boost over gross sales from the similar interval in the previous year.

Sector wide revenue ended up being $58.1 billion dollars, upwards 17% out of $49.7 billion dollars inside the 1st quarter of 2010. Initial quarter results likewise received quarter-to-quarter increase, growing at a pace of 5% more than $55.2 billion through the 4th quarter of 2010.

Of special note, variable annuity financial assets achieved $1.6 trillion, a very high amount ever documented by Morningstar.

Together with the 1st influx of the 79 million Seniors turning 65 this year, assured retirement plan income strategies evidently will be counted on in increasing amounts. Current IRI studies show that 92% of Baby Boomers who actually possess annuities have a greater self-assurance in the monetary security of their old age unlike people who do not. The 1st quarter information displays that the reassurance that only annuities brings into a healthy investment portfolio is now being significantly recognized by people most needing assured pensionable income, a pattern that people expect to carry on all year round.

Preset annuity revenue for the 1st quarter had been $18.9 billion dollars, upward from $17.6 billion dollars in the earlier quarter, symbolizing a 7% improvement. Year-to-year quarterly revenue of fixed annuities had been up 6%, growing from $17.9 billion within the first quarter of 2010.

The quarter to quarter decrease in revenue annuities was primarily seasonal. Listed annuities could have dropped revenue to variable annuities, due to the fact that variable annuities convey more benefit potential within a soaring stock market. We believe 2nd quarter results might be powerful as well. Nonetheless plummeting prices may reduce revenue to come.

Variable annuity revenue for the 1st quarter had been $39.2 billion, up 4% from $37.6 billion in the earlier quarter. Year-to-year quarterly revenue of variable annuities had been up considerably, publishing a 23% rise from 1st quarter 2010 income of $31.8 billion. 1st quarter 2010 net income were $5.8 billion. There are $26.2 billion in eligible revenue and $13 billion in non-qualified in the 1st quarter.

The rise both in income and net earnings imply developing impetus in variable annuity utilization as Consultants carry on and become a little more informed concerning the special advantages of variable annuities and grow progressively secure with them as an essential portion of a lasting cash flow generating portfolio.

The Allsup Disability Study: Income at Risk shows that for the first quarter of 2010, people with disabilities experienced an unemployment rate nearly 40 percent higher than people with no disabilities. Specifically, the unemployment rate for the first quarter averaged 14.3 percent for people with disabilities, compared to 10.3 percent for people with no disabilities, according to non-seasonally adjusted data from the U.S. Bureau of Labor Statistics (BLS).

Since the BLS began reporting unemployment rates for people with disabilities 18 months ago, the lowest unemployment rate reported for people with disabilities was 11.1 percent, recorded in November 2008. In comparison, the highest unemployment rate for people with no disabilities remained below 11 percent—topping out at 10.4 percent in January 2010.

“It’s clear that people with disabilities face a significantly greater challenge in the current economy,” said Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center. “They consistently face higher unemployment rates and many, ultimately, are unable to return to the work force.”

The Bureau of Labor Statistics also reported that in March about 44 percent of those unemployed had been jobless for 27 weeks or more.

“The financial situation has become dire for many people with disabilities, and those who are not able to return to work face prolonged waits for Social Security disability benefits,” Gada said. “They may have limited economic resources, putting them at a significant financial risk while they wait for their claim to make its way through the SSDI process.”

Increase in SSDI Claims, Long Waits Add to Financial Strains

The Allsup Disability Study: Income at Risk also shows that during the first quarter of 2010, the number of people with disabilities unable to work and applying for Social Security Disability Insurance climbed to 712,755, an increase of 5.2 percent compared with the first quarter 2009. More than 1.7 million SSDI claims are pending with an average cumulative wait time of more than 850 days, based on Allsup’s analysis of the Social Security disability backlog.

“These extended delays in processing claims create extremely difficult financial situations for hundreds of thousands of people,” said Gada. “They’re struggling with disabling conditions, and each day they are forced to make tough decisions about living expenses and how to secure the money needed to pay their mortgage, pay other bills, seek medical treatment for their condition or pay for their prescription medicines.”

Deciding to Apply for SSDI Benefits

Gada cautioned that those considering applying for SSDI need to understand eligibility requirements. “People with disabilities should apply as soon as possible so that they can minimize their wait for benefits,” said Gada. “At the same time, those who are not eligible should not apply, and those who are uncertain should seek assistance to determine if they may qualify.”

Generally, applicants are considered disabled by the Social Security Administration if:

• They cannot do the work they did previously;
• They cannot do other work because of their disability; and
• Their disability has lasted or is expected to last at least one year, or result in death.

To qualify for SSDI, a person also must have worked and paid into the program (via FICA payroll taxes) for five of the last 10 years and be under retirement age.

Gada noted that applying for SSDI benefits requires an extensive amount of paperwork. This includes completing an initial Social Security disability application and, in most instances, a detailed activities of daily living questionnaire. Information is needed on the person’s work history and the impact of the disability on his or her day-to-day activities. A doctor must verify information and additional medical exams may be required if there is not enough information to make a decision.

Only 35 percent of initial applications are approved on average, requiring those who are denied to apply for reconsideration and advance further in the SSDI process. Individuals can improve their chances of securing benefits earlier in the process by getting help. For example, 56 percent of those who hire Allsup for SSDI representation receive their awards at the initial application. Overall, 98 percent of people who complete the SSDI process with Allsup receive awards.

Individuals uncertain of their eligibility for SSDI benefits can contact the Allsup Disability Evaluation Center at (800) 279-4357 for a free evaluation.

Allsup also provides free financial planning tools to help people with disabilities better manage their finances while awaiting SSDI benefits. This includes information on establishing a budget, managing debt and healthcare costs, and learning about bankruptcy and foreclosure choices. These resources are available online at: http://www.allsup.com/personal-finance.

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That’s why an increasing number of plans are offering self-directed brokerage accounts, also known as “brokerage windows.” This option, available in almost 20% of 401(k) plans, allows participants to set aside part of their investments for opportunities beyond their plan offerings. Doing so allows them access to outside brokerages and a broader array of mutual funds, stocks and bonds.

As stocks rebound, sending the Dow above 11,000 recently, investors will look for more ways to control their portfolios in the wake of a painful recession. Even though retirement plans are starting to offer exchange traded funds on a limited basis, their increasing popularity could lead more investors to consider brokerage windows that would allow them to trade any fund they want at will.

The option also helps level the playing field between 401(k) plans and individual retirement plans.

Self-directed IRAs have long been popular with investors who favor flexibility and control. A self-directed IRA can be used to purchase real estate – specific houses and commercial properties, not just REITs. Commodities, currencies and business ventures (including franchises, art and cattle) are allowed investments.

While brokerage windows create more options for 401(k) investors, they still shun risky securities, such as derivatives and futures.

The brokerage Charles Schwabfirst offered self-directed options in 1994. In 2009, 54% of its plans offered a self-directed brokerage account, up from 52% in 2008.

Brokerage windows are popular among investors with high balances who work at large companies. In the fourth quarter, participant in its personal choice retirement accounts (PCRA) had $136,000 invested in their plans, on average.

“It has definitely grown in popularity, but we do see the usage or the implementation of these types of come and go with the market,” says Robert Jesch, product director for Schwab’s PCRA accounts. “During the 1998-2000 era, we couldn’t add them fast enough. Then, when the market was doing poorly, you weren’t seeing as many new plans starting to offer it. So far this year, I’ve seen a lot more firms looking to add them than I saw in all of last year.”

For those looking to glean recommendations from these hands-on investors, the top stocks chose last year included Apple, General Electric, Berkshire Hathaway, Bank of America, SPDR Gold Trust, Microsoft, Google, PowerShares QQQand MSCI Emerging Markets Index Fund.

While brokerage windows offer more options for participants, they’re also a way for companies to simplify their retirement plans without alienating sophisticated investors, Jesch says. Investors who actively trade through brokerage accounts have been requesting the option.

“At the peak, there were plan sponsors with 20, 30 or even 40 options, which is very confusing for the average person,” he says. “With the popularity of target date funds, which have been steadily increasing in the core options of the plan, plan sponsors are trying to reduce the number of options that the average 401(k) participant has to choose from.”

Jesch sees the increased adoption of brokerage windows as “simplification by addition.”

“They take care of participants who either want to do it themselves or are knowledgeable about what is going on and want to take advantage of different sector moves,” he says. “They are able to move their investments around various sectors based on how the market is performing. And participants who feel uncomfortable with this difficult market can hire an investment adviser and have them navigate it for them.”

Brokerage windows can be risky and are best suited for investors who can afford the hit a bad move could have on their retirement savings.

“We will be the first ones to tell you it’s probably not the best solution for everybody,” Jesch says. “We think the majority of the folks that are in retirement plans should be in the core options.”

– Reported by Joe Mont in Boston.

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But even under the Obama-sponsored reforms, about 23 million people will remain uninsured for reasons including exemptions from the requirement to buy health insurance, the Congressional Budget Office estimates.

It projects that about one-third of those people — 8 million in all — will be undocumented immigrants.

The health reform legislation specifically prohibits illegal immigrants from buying health insurance, even with their own money, from the federal exchanges that are to be created by 2014.

The law also exempts people with religious objections, those who are imprisoned and members of American Indian tribes from the mandate to buy health insurance.

Also exempted would be those for whom even the cheapest insurance would cost more than 8 percent of their income, though it’s likely that some will buy it anyway, says Jennifer Tolbert, associate director of the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured.

The remainder of the uninsured would be people who are eligible for Medicaid but don’t enroll and those who would rather pay a fine than buy insurance.

The exclusion of undocumented immigrants means many will continue to seek medical care in hospital emergency rooms, where they can’t be turned away, or from low-cost community health centers.

Chuck Weis, chief financial officer of Mount Sinai Hospital, estimates that “roughly one-third of our uncompensated care would probably remain under health care reform, primarily due to the issue of undocumented immigrants.”

Last year, the hospital on Chicago’s West Side provided $33.6 million of uncompensated care, and emergency visits have soared since 2007. Under health reform, special payments to “disproportionate share” hospitals like Mount Sinai that serve large numbers of poor and uninsured patients would be slashed.

But the expansion of Medicaid as part of health reform could offset those losses, says Roberta Rakove, Mount Sinai’s senior vice president of government affairs.

“You would hope that as you see more people covered by Medicaid, you would see fewer ER visits,” Rakove says.

Dan Hawkins, of the National Association of Community Health Centers, says the expansion of insurance coverage ultimately will leave those who remain uninsured with fewer options for care, as doctors take on more patients.

Community health centers, though, would benefit from $11 billion in new federal funding that should allow these centers to double to 40 million the number of patients they serve by 2015. Of those, an estimated 10 million will be uninsured, Hawkins says.

Comment at suntimes.com.

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The White House issued the following blog posted by Jesse Lee:

The guiding principle of health reform was simple: put American families and small businesses – not the health insurance companies – in charge of their own health care.

One of the immediate benefits of the health reform legislation signed by the President is a substantial tax credit for small businesses, designed to help them offer health insurance coverage for the first time or maintain coverage they already have. The tax credit takes effect this year, so we want to make sure word gets out to small business owners far and wide.

That’s why today the Internal Revenue Service today began mailing postcards to more than four million small businesses and tax-exempt organizations to make them aware of the tax credit.

Businesses aren’t required to provide coverage, but what we’ve heard over and over from small business owners is that they want to provide coverage but just can’t afford it – for them and their employees, this tax credit can be a tremendous help, but only if they know to take advantage of it!

The IRS postcard mailing is intended to get the attention of small employers and encourage them to find out more. We urge every small employer to take advantage of this credit if they qualify. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees in 2010. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ low- and moderate-income workers.

Of course, now that you’re here on WhiteHouse.gov, we encourage you to learn more, including who qualifies and for how much, from the small business page of our Health Reform section.

Copyright Targeted News Services

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Goldman Sachs lost $2B USD in the deals on mortgage-backed securities, the financial daily said, citing sources close to the situation.

The civil suit from the Securities and Exchange Commission involved Goldman deals on subprime mortgage-backed securities, a key contributor to the financial crisis because many contained risky mortgages, the FT reported.

AIG’s actions might prompt others to redress their losses on the complex bundles, it said.

If the insurance firm established that their transactions had had disclosure issues like the SEC allegations, they could file a lawsuit, complain to the SEC, or both, said the daily.

Last Friday’s SEC charges against Goldman are thought to be the first against a Wall Street firm for speculating on the collapse of the housing market, still struggling to emerge from the worst financial crisis in decades.

The investment bank is accused of “defrauding investors by misstating and omitting key facts” in the deals.

Earlier this month Goldman Sachs refuted allegations that it had profited improperly from the state rescue of insurance giant AIG.

The bank, noting that in the last year its relationships with AIG had attracted much interest, said that it had handled its credit arrangements with AIG in the same way as with other big groups.

Source: LexisNexis

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The Performance Monitor, which aggregates key statutory financial data reported by individual insurance companies every quarter, also found that the life insurance industry saw net gain from operations more than triple to a five-year high of $76.2 billion, up from last year’s five-year low of $17.6 billion.

The steep rise in net gain from operations was due to a greater decrease in premiums written, 16 percent, than in benefits paid, 14 percent, over the course of the year.  This also drove life insurers’ return on equity to a five-year high of 15.2 percent.

The absence of major catastrophes during the year gave property and casualty insurers their biggest decline in net losses incurred, 11.3 percent in the past ten years.

These findings demonstrate that the industry as a whole has regained a considerable amount of ground lost during the economic crisis, but not all of it.  Insurers entered 2010 in better shape than they did 2009, but were still behind where they were in recent years on many key measures.

• Despite their impressive gains in 2009, the $35 billion in net income for property and casualty insurers was still less than half that seen in 2006, $73.2 billion.
• The combined ratio for the property and casualty industry, while down to 101.3% from last year’s high of 105.1%, is still above the break even point.  The combined ratio measures how well a company is performing its daily operations by combining the loss and expense ratios.  Because the ratio was above 100%, the industry as a whole suffered an underwriting loss in 2009.
• Driven in part by the continued pressure on interest rates in equity markets, net investment income for life insurers hit a five-year low of $154.5 billion at year’s end.  Net yield likewise hit a five-year low of 5.1 percent.

“Being the first to deliver annual statement data to the industry once again, we at Highline Data continue to give our customers an edge in the marketplace,” Laurie Dallaire, vice president and director of Highline Data, said.    ”Our findings suggest that property and casualty companies will continue to strive to contain expenses and further reduce their combined ratios while life companies will continue to rebuild capital and improve investment yields this year.”

On March 1, Highline Data was the first to publish comprehensive statutory financial statements from individual insurance companies.  Currently, financial statements for all 3,313 individual companies that have filed are available via Insurance Analyst PRO, including 97 percent of the property and casualty industry and 90 percent of the life industry.  Insurance Analyst PRO is the market’s premier online source for insurance industry statutory and GAAP financial analysis.

All of the data used in this analysis is available in Insurance Analyst PRO. The data is derived from the annual statutory financial statements filed with the National Association of Insurance Commissioners (NAIC) by individual companies.

HIGHLINE DATA 2009 ANNUAL PERFORMANCE MONITOR KEY FINDINGS

———————————————————-

P&C Insurance Industry               Life Insurance Industry

———————-               ———————–

% Change                             % Change

Net Unrealized Capital

Net Income                    274.3%     Gains (Losses)             86.8%

Total Assets                    3.6%   General Account Assets        1.8%

Policyholder Surplus           11.7%   Separate Account Assets      19.0%

Net Premiums Earned            -3.8%   Capital & Surplus            16.5%

Net Losses Incurred           -11.3%   Net Premiums                -16.5%

Loss Adjustment Expense         1.5%   Net Investment Income        -4.7%

Net Premiums Written           -4.0%   Net Gain from Operations    332.7%

——————–           —-   ————————     —–

2009 Ratio                            2009 Ratio

Loss Ratio                     73.0%   Net Yield                     5.1%

Expense Ratio                  28.2%   After Tax Return on Equity   15.2%

Combined Ratio                101.3%   Action Level RBC Ratio      833.6%

Action Level RBC Ratio          638%

———————-          —

Property & Casualty Insurance Industry Net Income, 2005-2009

2005                    $49.8 billion

2006                    $73.2 billion

2007                    $68.7 billion

2008                     $9.4 billion

2009                      $35 billion

Life Insurance Industry Net Gains from Operations, 2005-2009

2005                    $61.9 billion

2006                      $63 billion

2007                    $67.4 billion

2008                    $17.6 billion

2009                    $76.2 billion

About Highline Data

Highline Data is part of Summit Business Media.  Summit Business Media is the leading B2B media and information company serving the insurance, investment and professional services markets through a variety of channels, including print, online and live events. SBM provides breaking news and analysis, in-depth practice management strategies and business-building techniques, and actionable data to the markets it serves. Through its Media and Reference Divisions, the company publishes 19 magazines and 150 reference titles. The Events Division hosts a dozen conferences in support of Summit’s magazine brands and sponsors the International Investment Conferences on global mining investment. SBM’s Data Division, comprised of Highline Data, Judy Diamond Associates, Agent Media and Kirschner’s, is the leading data provider of financial and marketing information on insurance companies, agents and investment advisors.

Summit, a Wind Point company, employs 400 employees in a dozen offices across the United States.  For more information, please visit summitbusinessmedia.com.

SOURCE Highline Data

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“People knew about what was going to happen to New Orleans in the (19)20s and the ’30s and the ’40s and on down the line,” said Dr. Robert Knego, a neurologist and president of the Sarasota County Medical Society.

“Sadly, nothing really happened until Katrina hit.”

More than 400 people, including about 30 physicians, attended Wednesday’s Physicians and Patients Unite Healthcare rally to voice opposition to Medicare cuts the doctors say threaten to limit patients’ access to quality care.

Organizers got 316 of the attendees to sign a petition opposing Medicare cuts. It will be sent to Florida’s U.S. Sens. Bill Nelson and George Lemieux and U.S. Rep Vern Buchanan, R-Sarasota.

Manatee County Medical Society President Dr. Lora Brown emceed the rally, held in a hangar at Dolphin Aviation at the Sarasota-Bradenton International Airport. The rally was sponsored by the medical societies of Manatee and Sarasota counties.

Like many of the speakers at the rally, Knego said government-run health care is no cure for what ails the system. Several physicians spoke out in opposition to President Barack Obama’s health care reform proposal.

“There’s about as much chance of them fixing this as there was of them getting ready for Katrina,” Knego said.

A 21.2 percent cut in Medicare reimbursement to physicians went into effect March 1 before Congress delayed the move until April 1. On Wednesday, the U.S. Senate voted to push back the cuts until Oct. 1, and the measure will be sent to the House.

The rally’s most charismatic speaker was Dr. David McKalip, a St. Petersburg neurosurgeon who mounted the stage as the theme from “Rocky” blasted through the sound system.

McKalip railed against aspects of health care reform proposals that call for mandatory insurance coverage and government committees dictating how doctors treat patients.

“This health care bill is like the zombie bill,” McKalip said. “It’s a bill that will never die. You can’t kill it.”

McKalip advocated health care savings accounts and the ability of patients to contract with doctors for care not covered by Medicare.

“Don’t think for one minute that Obama and (Speaker of the House Nancy) Pelosi and (Senate Majority Leader Harry) Reid, or anyone in Washington, seeks to change the status quo,” McKalip said. “They are expanding the status quo by giving more power to the very groups that created the crisis we’re in.”

Dr. Alberto Montalvo, a Bradenton cardiologist, said his profession is already suffering the effects of Medicare cuts. The government has reduced reimbursements for nuclear stress tests, a common diagnostic tool, by 40 percent, he said.

Montalvo said he and other cardiologists begged the Obama administration to reconsider the cuts to no avail.

“He has his own ideas about how to do things, and he doesn’t listen,” Montalvo said.

Several speakers also discussed the need for tort reform. Dr. Aaron Sudbury, a Bradenton obstetrician/gynecologist, said none of Manatee County’s six OB/GYN practitioners have liability insurance because of the cost: $90,000 for $250,000 worth of coverage.

“Would you insure your car by paying 40 percent of its value?” he asked.

Source: Thomson Business Intelligence

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“When we started this health care debate a year ago, 85 percent of the American people had health insurance, and 95 percent of the 85 percent were happy with it.”

George Will, columnist, Feb. 21 on ABC’s This Week

The ruling

First, we’ll dispatch with Will’s claim that 85 percent of Americans had health insurance. According to the U.S. Census Bureau, 255.1 million Americans had health insurance in 2008, while 46.3 million did not. That’s 84.6 percent, or rounding up, 85 percent – just as Will said.

Now, for the polling data.

We found eight surveys taken in 2008 and 2009 that asked Americans whether they were satisfied with their health coverage. To determine whether respondents were “happy” – as Will phrased it – we lumped together percentages for “very satisfied,” “somewhat satisfied” and, where applicable, “extremely satisfied.”

Here’s what we found:

* Quinnipiac University, Sept. 2009. 54 percent very satisfied, 34 percent somewhat. Total: 88 percent satisfaction.

* Quinnipiac University, June 2009. 49 percent very satisfied, 36 somewhat satisfied. Total: 85 percent satisfaction.

* ABC News/Washington Post, June 2009. 42 percent very satisfied, 39 percent somewhat satisfied. Total: 81 percent satisfaction.

* Mathew Greenwald & Associates for the Employee Benefit Research Institute, May 2009. 21 percent extremely satisfied, 37 percent very satisfied, 30 percent somewhat satisfied. Total: 88 percent satisfaction.

* ABC News/Washington Post, June 2009. 42 percent very satisfied, 39 percent somewhat satisfied. Total: 81 percent satisfaction.

* Mathew Greenwald & Associates for the Employee Benefit Research Institute, Aug. 2008. 31 percent extremely satisfied, 41 percent very satisfied, 23 somewhat satisfied. Total: 95 percent satisfaction.

* Mathew Greenwald & Associates for the Employee Benefit Research Institute, Aug. 2008. 23 percent extremely satisfied, 38 percent very satisfied, 30 percent somewhat satisfied. Total: 91 percent satisfaction.

* Mathew Greenwald & Associates for the Employee Benefit Research Institute, May 2008. 17 percent extremely satisfied, 36 percent very satisfied, 33 percent somewhat satisfied. Total: 86 percent satisfaction.

If you average these scores, the total rate of satisfaction is 87 percent. In all but one poll, the satisfaction level was below Will’s stated level of 95 percent.

Even though Will modestly overstates the number, we rate his comment Mostly True.

Louis Jacobson, Times staff writer

Source: LexisNexis

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The head of the U.S. Securities and Exchange Commission, Mary Schapiro, said banks that deal in the swaps must be subject to rigorous requirements for holding capital. They must also conduct their business in accordance with rules and their price information must be transparent, she said.

Schapiro made the statement as credit default swaps, a form of insurance against loan defaults, have come under heightened scrutiny in the U.S. and Europe.

The leaders of France, Germany and Greece have called for a clampdown on trading in the swaps, which they blame for worsening Greece’s debt crisis and undermining the European currency in recent weeks. A nationwide strike in Greece to protest the cash-strapped government’s austerity measures _ the second strike in a week _ brought the country to a virtual standstill Thursday.

Another U.S. regulator, Commodity Futures Trading Commission chairman Gary Gensler, said Wall Street banks are seeking exemptions to the proposed new regulations for derivatives that could shield more than half the trades that should be subject to disclosure. Gensler criticized Wall Street’s stance on proposed oversight for the shadowy US$600-trillion market for derivatives _ blamed for hastening the 2008 financial crisis.

Credit default swaps account for an estimated $60 trillion of the worldwide derivatives market.

Gensler told a financial industry gathering in Florida that Wall Street has not been “enthusiastic” about the proposed new regulations now before Congress.

Schapiro didn’t specifically address the Greek situation or the call by European leaders for restraints on swaps trading, in her response to a question from The Associated Press. On Tuesday, the European Commission threatened to ban speculative trading of credit default swaps by investors who don’t actually own a country’s underlying debt _ known as “naked” trades.

Referring to credit default swaps generally, Schapiro said in the statement: “If we continue to allow these risky financial products to operate in the dark we should not be surprised at the damage we find when the lights come on. That’s why it is so important for Congress to bring … derivatives under the regulatory umbrella.”

In addition to capital requirements that are needed for dealers in the swaps, regulators and market players “must have access to information to know what is being traded, at what price and in what volume,” Schapiro said. “And regulators must have the tools to police the markets, including monitoring trends and writing rules to address abuses.”

The collapse of credit default swaps nearly toppled American International Group Inc. in the fall of 2008, prompting the government to support the insurance conglomerate with about $180 billion in aid.

Gensler, in several speeches in recent days, has been renewing his call for new regulation aimed at bringing transparency to, and prevent manipulation in, the sprawling global derivatives market. At his address Thursday to the meeting of the Futures Industry Association in Boca Raton, Fla., he also got in some mild barbs at Wall Street.

Billions in trading profits for the big investment banks could be threatened by new rules for derivatives, which passed the House in December as part of the overhaul of financial regulation and is now before the Senate. Many in the financial industry have indicated support for requiring derivatives trades to go through clearinghouses, “that is, as long as it only applies sometimes,” Gensler said.

While more than 1,000 U.S. banks trade derivatives, five big Wall Street institutions _ JPMorgan Chase&Co., Goldman Sachs Group Inc., Bank of America Corp., Citigroup Inc. and Wells Fargo&Co. _ account for about 97 per cent of the total reported to be held by U.S. banks.

“Wall Street appears to be aligning themselves with corporate end users in an effort to exempt customer transactions from central clearing,” Gensler said. “Wall Street seems to be making the case” that banks using derivatives to hedge against risk should be exempt from having to use clearinghouses in the same way as derivatives trades involving companies, he said.

Only about nine per cent of derivatives trades involve companies using them as a hedge, which Gensler and other regulators consider a legitimate exception from the clearing requirements.

The exception the banks are seeking, he warned, could leave hidden 60 per cent of the derivatives trades that rightfully should go through clearinghouses because they aren’t customized transactions designed for companies.

“Let there be no mistake: Wall Street has not been enthusiastic about this reform,” Gensler said in the text of his speech. “After the worst crisis in 80 years, though, we need real reform that protects the American public.”

The value of derivatives hinges on an underlying investment or commodity _ such as currency rates, oil futures or interest rates. The derivative is designed to reduce the risk of loss from the underlying asset.

Companies of all kinds use derivatives to hedge against risks _ airlines ensuring against spikes in fuel prices, for example. A potent coalition of nearly 200 companies that use derivatives _ including Boeing Co., Caterpillar Inc., Ford Motor Co., General Electric Co. and Shell Oil Co. _ has lobbied Congress to make the case that legislative proposals to regulate derivatives could severely increase costs for corporate America.

Financial institutions that deal in derivatives are opposed to mandatory clearing for corporate customers because banks say it would have the effect of discouraging companies from using swaps to manage risks, Cory Strupp, managing director for government affairs of Wall Street’s biggest lobbying group, the Securities Industry and Financial Markets Association, said Thursday.

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