NEW YORK
Chartis Pays $495K Fine
The New York Insurance Department has taken disciplinary action against Chartis Claims Inc., imposing a $495,000 fine on the unit for licensing infractions. According to the disciplinary report issued on Jan. 6, 2010, a number of Chartis employees "acted as independent adjusters in [the] state without licenses and transacted insurance business under unlicensed names."
Chartis is a property and casualty unit of the insurer formerly known as AIG. In December 2009, the company agreed to pay the six-figure fine, which was the highest fine listed in the most recent disciplinary report issued by the state insurance regulator. Per the document, other fines ranged from $500 to $6,000. –By Christina Bramlet
GEORGIA
Bookkeeping Dubbed "Enron-Like"
Georgia Insurance Commissioner John Oxendine has ordered a criminal investigation into failed Southeastern U.S. Insurance and its former CEO, comparing the company's business practices to those of Enron.
"After reviewing financial transactions made by the company, I find no other recourse but to open a criminal investigation into the actions of [Former CEO] M. Clark Fain, III," Oxendine said, in a release. "I can only compare the bookkeeping methods of the company to those of Enron."
Oxendine was named liquidator of Southeastern in late October 2009, when Fulton County Superior Court Judge Thomas R. Campbell, Jr., ordered the company into liquidation. Under the consent order, Oxendine's office was authorized to sell off the company's assets to pay claims.
However, department analysts became suspicious of the company when they learned that it had engaged in a questionable transaction regarding a hunting club that it owned. Oxendine said the department also discovered that the company, which had approximately 209 workers' compensation policyholders at the time of liquidation, was overstating assets while significantly understating liabilities.
"Indications are that this is a case of corporate greed," Oxendine said. "The questionable accounting engaged in by the company ultimately has a huge negative impact on the lives of decent, innocent citizens." –By Eric Gilkey
KANSAS
Baptist Arsonist Faces Penance
Amid the haze of usual Halloween shenanigans, a Leavenworth, Kan., church was burning on the night of Oct. 31, 2008. That's because the church's music director, Carva Lee White, set fire to it.
The 45-year-old Kansas City, Mo. resident admitted to igniting the blaze at the Sunflower Missionary Baptist Church in an attempt to cash in on the insurance policy.
About a week prior to the fire, White informed the pastor of the church of his plan to burn down the building to collect kickbacks from contractors who would then submit inflated bids for the repair work. The church's insurance would pay for the repairs, and pay it did. The Church Mutual Insurance Company mailed a check to the Sunflower Missionary Baptist Church for $103,236 to cover the damages.
An investigation by the Kansas Fire Marshal's office later determined that the fire had been intentionally set in various locations throughout the church.
White was convicted on Dec. 15, 2009, and pleaded guilty in federal court to one count of attempted mail fraud and one count of using arson in an attempt to commit mail fraud. His sentencing is scheduled for March. Depending on the outcome, White faces the maximum "penance" of 10 years in prison for the arson charge and 20 years for the attempted mail fraud count. –By Christina Bramlet
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