Catastrophe fund backed to insure coastal homes

A special legislative commission called for the creation of a state-run catastrophic event fund to help reduce the cost of home insurance in Massachusetts. Few details were provided in the report, but the fund would be set up to sell reinsurance to companies at below-market rates. Industry officials participating on the commission dissented from the majority view, saying the fund would drive up insurer costs. Consumer groups also dissented, saying they wanted caps on the increases being sought by the Massachusetts Fair Plan, the home insurer of last resort. Insurers have been canceling policies or raising premiums along the coast on fears of a major hurricane. The Fair Plan provides coverage for about 40 percent of homes on the Cape and islands. (Bruce Mohl)

A subsidiary of Progressive Insurance, the nation's third-largest automobile insurer, has won preliminary approval to sell auto insurance in Massachusetts, but company officials say they haven't decided whether to enter the market. Progressive Direct Insurance Co., which sells policies direct to drivers, applied for the license. A separate Progressive subsidiary called Progressive Casualty Insurance, which sells policies through agents, has had a license to operate here since the 1980s, state officials said. Progressive spokeswoman Cristy Cote said the company has made no decision about entering the Massachusetts market, which is transitioning from state regulation of rates to companies setting rates subject to regulatory approval. (Bruce Mohl)

Governor Deval Patrick has signed a measure seeking to slow the state's recent spike in home foreclosures. Patrick says the law gives Massachusetts one of the nation's most consumer-friendly mortgage lending statutes. The legislation requires mortgage companies to file a 90-day notice of intent to foreclose with the homeowner and the state. Borrowers would be required to receive consumer counseling before obtaining certain high-cost mortgages. Grants totaling $2 million would establish 10 education centers statewide and promote first-time home buyer and foreclosure counseling. (AP)

The Massachusetts official in charge of selling the state's bonds is joining Lehman Brothers Inc. and will focus on healthcare management. Patrick Landers, assistant state treasurer in charge of debt management, will become an investment banker at Lehman in the Boston office, he said. Former Treasurer Shannon O'Brien hired Landers in 1999 after he served 13 years in the Legislature as a Democratic representative from Palmer. (Bloomberg)

Chief investment officer for holdings in large company stocks, Josh Brooks, has left Putnam Investments, a spokeswoman for the Boston asset-management company said, for reasons she declined to discuss. Brooks had helped manage Putnam Fund for Growth & Income, Putnam Classic Equity Fund, and Putnam Research Fund. His duties will be assumed by Kevin Cronin, head of investments, the company said. (Ross Kerber)

Ed Zander is out as Motorola Inc.'s chief executive after a roller-coaster four years that saw him oversee the cellphone maker's Razr-led resurgence but ultimately bear blame for strategic gaffes and product whiffs that led to its steep decline. The announcement that Zander is resigning and that president and chief operating officer Greg Brown will succeed him Jan. 1 produced little surprise on Wall Street. Industry experts voiced skepticism the change will produce a turnaround unless accompanied by a new wave of top-selling phones and other mobile devices. (AP)

Colt Telecom Group SA, the UK phone company with 50,000 business customers, rose the most in more than four years in London trading after the Guardian reported AT&T Inc. is bidding for the company. Shares climbed 18 percent, valuing the company at $2.6 billion. AT&T offered $4.94 to $5.14 a share, the newspaper reported. Fidelity Investments, Colt's largest shareholder, is trying to persuade AT&T to offer $6.17, the newspaper said. (Bloomberg)