Thursday, April 23, 1998 | 10:45 a.m.
1. Gem decided not to renew its Nevada business due to changes in the insurance marketplace that made Gem's low costs unrealistic, not in response to pressure from the State Insurance Commission.
2. Gem -- which still has remaining insureds in Nevada -- would like to acknowledge the Nevada Insurance Division's instrumental role in helping Gem find coverage for our insureds. The division supported our initiative to seek guaranteed-issue coverage for our insureds, and in fact helped bring Gem and Blue Cross Blue Shield together.
3. Gem did not intentionally engage in the unfair trade practice known as "predatory pricing." Gem's rates were in fact not the lowest in the market, and had been approved by the Nevada Insurance Department. Gem's management at that time believed its rates were adequate, as underscored by the department's approval. It is also important to note that Gem's management was replaced in 1997.
Thank you for allowing Gem the opportunity to further clarify these issues.
Darnell Dent, president and chief executive officer, Gem Insurance Company
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