"Insurance companies are
profit making corporations operating in a
market economy trying to outdo their competitors." - Donald Schwartz MD
"The very word insurance hints at the
life can indeed be made secure, that the unsure can be made sure." - Charles
"All across the country,
insurance companies of every
sort have attempted to reduce their risk by increasing rates, dropping
customers who submit claims and, as a final insult, denying legitimate claims.
Insurance companies are owned
and operated for the benefit of transnational elite, not to 'protect'
the individual from financial calamity.
If there ever was a definition of a "criminal enterprise," the modern
American insurance industry
fits the bill!" - Carl Schellenberg 10/28/07
In the second quarter of
2007 Berkshire Hathaway Inc.
reported record earnings, mostly from it's insurance division, of $3.1 billion
Berkshire Hathaway Inc. made over a billion dollars a
month basically by selling insurance.
Two retired women, Linda Williams and B. Walker were
sued by a neighbor, Juanita Wasson, who suffered a broken hip after being
knocked down by their automatic garage door.
Farmers insurance defended
the homeowners association, to which Williams and Walker belonged, but filed a
cross compliant against them believing that they did not have the resources to
fight in court. The two women maxed out there
credit cards to hire
lawyers and won a $ 8.3 million award against Farmers insurance as punitive
damages for breach of good faith.
aware that many adjusters employed by Allstate were engaging in conduct which
was improper, unlawful, fraudulent, and in bad
I became aware of cases in which the adjuster retained an
engineer and requested that the engineer provide a report determining and
detailing the cause and extent of the damage caused by the earthquake.
Allstate's adjusters were requiring engineers to provide a draft or
preliminary report for the adjuster's review.
Where an engineer's draft
report attributed any amount of damage, in the adjuster's opinion, that could
possibly have been exacerbated by the earthquake and/or damage which may not be
covered under the policy according to the adjusters, the adjuster would
instruct the engineer to alter the report to reflect the adjuster's changes.
Engineers were repeatedly instructed to alter draft reports in order to
minimize the damage attributable to covered losses in order to reduce any
potential payments to the insured and in order to benefit Allstate's financial
interests."- Allstate claims analyst Jo Anne Lowe commenting on the Northridge
earthquake of 1/17/94 in California.
2007 Jury verdict rendered in a case against Allstate.
was ordered to pay over $2 million to a Louisiana homeowner who sued the
insurer for manipulating an engineering report to reduce its payment in the
aftermath of Hurricane
November 7, 2007 Lousiana
attorney general Charles Foti sues Allstate, State Farm, Lafayette Insurance
Co., USAA Casulity Insurance Co., Farmers Insurance Exchange, Standard Fire
Insurance and other insurance companies for colluding to reduce claim values.
A consulting firm, McKinsey & Co. was accused of being the
architect of sweeping changes in the insurance industry beginning in the 1980s.
McKinsey advised insures to "stop 'premium leakage' by undervaluing claims
using the tactics of deny, delay and defend."
The insurance companies
coerced policy holders into settling damage claims for less than their actual
value by editing engineering reports, delaying payments and forcing
policyholders to go to court to
estimates of loss after Hurricane Katrina and Rita.
year-old Ashley Ellis hits a man on a motorcycle two days after her auto
insurance expired. Ashley Ellis is not impaired or speeding but is distracted
by her dog which was riding in the car.
negligence Ashley Ellis
was convicted of a misdemeanor and ordered to spend 30 days incarcerated. She
lost forty pounds, originally 125, from the time of the accident waiting to be
incarcerated - about two years. After two days in jail she died from lack of
medical treatment which was provided by the independently contracted
corporation Prison Health Services.
For Ashley Ellis a 30 day
jail sentence became a death sentence.
"Profit-driven organizations are
prone to cut costs. The system failed." - Matthew Valerio
"The insurance contracts state clearly if anything in the application
is incomplete, coverage may be rescinded." - Tom Epstein,
In California it is nearly impossible to purchase individual
health insurance (not employer provided) unless you have never had
allergies, asthma, ear
infections, ulcers or been
"According to regulators' postings, rejection letters and
interviews with insurance brokers, conditions that can lead to outright
rejection or a higher premium include:
implants, cancer, cerebral
palsy, chronic bronchitis,
syndrome, chronic sinusitis, cirrhosis, cystitis,
reassignment" (an impossibility in
reality), heart disease, hemochromatosis, hepatitis,
herpes, high blood
pressure, impotence, infertility, irritable bowel
syndrome, joint pain, kidney infections,
lupus, muscular dystrophy,
miscarriage, pregnancy, "expectant fatherhood," planned adoption, psoriasis,
recurrent tonsillitis, renal
failure, ringworm, severe mental disorders, sleep apnea,
stroke, ulcers and varicose
veins." - Lisa Girion
"Insurance companies are offloading sick people
onto the county system. They want a guarantee that they are going to make
money. That's why they won't take sick people. They are missing the point about
assuming some risk." - Scott Svonkin
Insurance companies refuse to underwrite individual
health insurance policies for people that are employed in - controlling
air traffic; moving
buildings; chemical and rubber manufacturing; circus or carnival work; concrete
or asphalt work; crop dusting; firefighting; furniture and fixtures
manufacturing; as a lumber jack; oil well and refinery operations; police work;
roofing; sandblasting; sports; stables; stockyard; stunt work; telecom
installation; transportation; tree trimming; tunnel excavation;
war reporting and washing windows higher
than three stories up.
Insurance industry amassed record profits of $44.8 billion ($44,800,000,000) in
a year of catastrophic loss.
"Unless insurers can get relief you
are going to see a pullback by private industry."- Robert P. Hartwig, chief
economist of the industry funded Insurance Information Industry
$44.8 billion profit is penny ante stuff to these rough riders of
catastrophic calamity. $44.8 billion is just not the return that the insurance
industry expected on their difficult to understand legalize laden, layers of
lawyers approved insurance policies.
2001 Senior analyst in charge of
rescissions reviews for Health Net, was expected to cancel 15 policies a
month. Barbara Fowler exceeded her quota by canceling 275
2003 Barbara Fowler saved Health
Net $6 million by canceling 301 policies.
2005 Health Net set a goal for Barbara Fowler to save
Health Net $6.5 million which she exceeded. Barbara Fowler's bonuses
ranged from $1654 to $6300 for canceling health insurance policies of
individuals experiencing expensive medical costs.
"It is disgusting how Health Net dropped a patient in
the midst of chemotherapy. Barbara
Fowler, Health Net's "senior analyst in charge of rescission reviews"
profited from it through bonuses. How many years in medical school did Barbara
Fowler study?" - Bill D. Holder
"No surprise that Health Net gave out
bonuses to drop sick insurance policyholders. The for-profit health insurance
industry will always be the winner, as it has to be." - Sheila Hoff
November 2007 Health Net agrees to pay a
$1 million fine and promised to no longer link compensation to coverage
"As long as the word "insurance" is a part of the
American healthcare system, there will be no real reform. It is immoral and
inhumane that we use healthcare as a vehicle to support private industry,
specifically the insurance and
industries. These companies earn obscene profits and fat salaries for their
leaders, who make huge donations to politicians to ensure their continued
financial health." - Susan Guilford Underwriting
guidelines for several individual health insurance plans list certain drugs
that are likely to render the user ineligible for health insurance. The
question then becomes - are the drugs in and of themselves harmful or does use
of the drugs truly point to underlying conditions that frighten insurers
Either way it seems to be in the individuals best interest to not
be using any of the listed drugs unless it is quite obvious that not using the
listed drug brings on life threatening conditions.
Individuals may be refused individual health insurance coverage
if they use any of the following drugs:
cholesterol reducers -
problems - Nexium®, Prevacid®, Protinix®,
asthma control - Advair®, Singulair®;
depression control -
Zoloft®, Celexa®, Prozac®;
attention deficit disorder control -
allergy control - Allegra;
acne control -
arthritis pain control - Celebrex®;
herpes control -
angina control - Imdur®;
migraine control -
fungal control - Lamisil®;
menstrual disorders -
hyperthyroid disorder - Tapazole®;
epilepsy control -
"It is an egregious mistake to think that the mission of
health insurance companies is to provide healthcare for the seriously ill.
Commercial insurers fulfill their legal and corporate mission by making profits
for their investors, not by providing care for the expensively ill." - John W.
"A congressional committee found that Fortis, now known as
Assurant, and two other companies alone saved more than $300 million over five
years by dropping policy holders when they became ill.
The death toll
from the inability of millions of Americans to obtain and keep affordable
health insurance is unconscionable.
This national tragedy should shock
us to the bone when we realize that every year, six times as many Americans die
because they can't get medical insurance than were killed by terrorists on
911." - Andrew Skolnick, September 24, 2009
2003 medicare prescription drug law
special interests, including HMOs and pharmaceutical corporations, dished out
$141 million for 952 lobbyists - nearly twice as many lobbyists as there are
members of Congress - to make sure that the Medicare bill was written for the
benefit of large insurance and drug companies, as opposed to the health needs
of American citizens.
Nearly half of these lobbyists were former
employees of the federal government, including 30 former members of Congress,
and at least 11 top staffers who left federal administration to lobby for the
pharmaceutical industry and HMOs.
Many of the government officials who
worked to get the legislation approved by Congress went on to jobs in the very
corporations that will profit from the legislation.
Tom Scully, a former administrator of the Medicare
program, actually negotiated future employment with corporations that stood to
benefit handsomely from the pharmaceutical law, while actively promoting the
Another six top congressional staffers at the center of
negotiations over the Medicare bill became lobbyists for pharmaceutical
companies or HMOs.
Would it surprise anyone
that 21 executives and lobbyists from HMOs and the pharmaceutical industry
served as major fundraisers for George Walker Bush's presidential campaigns,
collecting at least $100,000 ("Pioneers") or $200,000 ("Rangers") for the 2000
or 2004 campaigns?
Pfizer /Warner-Lambert agreed
to pay $430 million to resolve civil and criminal charges that it defrauded
Medicaid by engaging in an aggressive and complex scheme to illegally promote
Neurontin® for at least 11
July 2004 Schering-Plough
agreed to a criminal fine of $52.5 million, $117 million to settle state
claims, and nearly $176 million to settle federal claims for fraud in the
pricing of Claritin® sold to the Medicaid program.
December 2004 HealthSouth,
the nation's largest provider of rehabilitative medicine services, agreed to
pay a fine of $325 million to settle allegations that the company
systematically defrauded Medicare and other federal healthcare programs.
Gambro Healthcare agreed to pay $310.5 million to resolve civil
liabilities stemming from alleged kickbacks paid to physicians, false
statements made to procure payment for unnecessary tests and services, and
payments made to Gambro Supply Corporation, a sham durable medical
The Gambro Supply Corporation is
permanently excluded from the Medicare program.
2005 Serono agreed to pay $704 million to settle a fraud case
Serostim® which included kickbacks to doctors for
prescribing Serostim®, kickbacks to specialist pharmacies for recommending
Serostim®, illegal off-label marketing,
and non-FDA approved
diagnosis equipment designed to spur more Serostim
Serostim® costs $20,000 for a three-month
June 2006 St. Barnabas Healthcare
agrees to pay $265 million for inflated "outlier" Medicare
July 2006 Tenet Healthcare
agrees to pay $900 million for billing violations that include manipulation of
outlier payments to Medicare, as well as kickbacks, upcoding, and bill padding.
August 2006 Schering-Plough agrees to pay a
total of $435 million to resolve criminal charges and civil liabilities in
connection with illegal sales and marketing programs for
brain tumor medication
Intron-A® which is used in the treatment of bladder
cancer and hepatitis C.
The Schering settlement also covers best price violations
related to Claritin
RediTabs® (an antihistamine), and
K-Dur®, used in the treatment of ulcers.
2007 Bristol-Myers Squibb
agreed to pay $515 million to settle allegations involved pricing and
promotional activities for more than 50 drugs, 13 drugs of which made up 69% of
2007 pharmaceutical revenue of $10.7 billion, including the blood thinner
Abilify®, the cholesterol treatment
Pravachol®, the cancer therapy
Taxol®, and the
Under the False Claims Act Merck settled $650,000
for pricing fraud, taking kickback and violating Medicaid best price regulations for
Vioxx® (an arthritis drug),
Zocor® (a cholesterol drug),
Pepcid® (an acid-reflux drug),
Cozaar® (a hypertensive medication),
Fosamax® (a bone loss drug)
Maxalt® (a migraine medication) and
Singulair® (an asthma medication).
March 2008 Amerigroup was found liable for
discriminating against pregnant women who were supposed to be recruited into a
state-sponsored Medicaid HMO.
Amerigroup settled allegations for
"I'm the former insurance industry insider now speaking
out about how big for-profit insurers have hijacked our health care system and
turned it into a giant ATM for Wall
In recent years I had grown increasingly uncomfortable
serving as one of the industry's top PR executives.
I also served on a
lot of trade association committees and industry-financed coalitions, many of
which were essentially front groups for insurers.
So I was in a
unique position to see not only how
Wall Street analysts and
investors influence decisions insurance company executives make but also
how the industry has carried out behind-the-scenes PR and lobbying campaigns to
kill or weaken any health care reform efforts that threatened insurers'
What I saw happening over the past few years was a
steady movement away from the concept of insurance and toward "individual
responsibility," a term used a lot by insurers and their ideological allies.
This is playing out as a continuous shifting of the financial burden of
health care costs away from insurers and employers and onto the backs of
If they are unfortunate enough to become seriously ill or
injured, many people enrolled in these plans find themselves on the hook for
such high medical bills that they are losing their homes to foreclosure or
being forced into
As an industry spokesman,
I was expected to put a
positive spin on this trend that the industry forged and euphemistically
refers to as "consumerism" and to
promote so-called "consumer-driven" health plans.
Insurers want to
preserve the image they are working so hard to cultivate - as a group of kind
and caring folks who think only of you and your health.
reached the point of feeling like a huckster.
I thought I could live
with being a well-paid huckster and hang in there a few more years until I
I probably would have if I hadn't made
a completely spur-of-the-moment
decision a couple of years ago that changed the direction of my life.
While visiting my folks in northeast Tennessee where I grew up, I read
in the local paper about a health "expedition" being held that weekend a few
miles up US 23 in Wise, Virginia.
Doctors, nurses and other medical
professionals were volunteering their time to provide free medical care to
people who lived in the area.
That 50-mile stretch of US 23, which
twists through the mountains where thousands of men have made their living
working in the coal mines,
turned out to be my "road to Damascus."
Nothing could have prepared me
for what I saw when I reached the Wise County Fairgrounds, where the
"expedition" was being held.
Hundreds of people had camped out all
night in the parking lot to be assured of seeing a doctor or dentist when the
By the time I got there, long lines of people stretched
from every animal stall and tent where the volunteers were treating patients.
That scene was so visually and emotionally stunning it was all I could
do to hold back tears.
How could it be that citizens of the
richest nation in the world were being treated this way?
that the reason those people in Wise County had to wait in long lines to be
treated in animal stalls was because our
Wall Street driven
health care system has forged one
of the most inequitable health care systems on Earth.
I did not make a
final decision to speak out as a former insider until recently when it became
clear to me that the insurance industry and its allies (often including
drug and medical device
makers, business groups and even the American
Medical Association) were succeeding in shaping the current debate on
health care reform.
I heard members of Congress reciting talking points
like the ones I used to write to scare people away from real
Whenever you hear a politician or pundit use the
term "government-run health care" and
warn that the creation of a public health insurance option that would compete
with private insurers (or heaven forbid, a single-payer system like the one
Canada has) will "lead
us down the path to socialism," know that the original source of the sound
bite most likely was some flack like I used to be." - Wendell
"Americans for Quality and Affordable Healthcare"
(AQAH) is a "secretive" group that organizes "below-the-radar" activities to
drum up opposition to health care reform.
AQAH is operated by one of
the largest law firms in North Carolina, Moore and Van Allen.
pharmaceutical industry-funded front group Center for Medicine in the Public
Interest (CMPI) is helping its corporate funders fight health care reform
by disseminating misinformation and orchestrating campaigns to generate fear
about health care reform.
CMPI arose out of the Pacific Research
Institute, a corporate front group that worked with Philip Morris in the past
to fabricate academic support for the tobacco industry.
The Chamber of Commerce sponsored online pop-up
ads to generate the appearance of "grassroots" opposition to health care
The Chamber contracts with a public relations firm which in
turn subcontracts with an online marketing firm that coordinates the tasks of
generating the ads and signing people up for the Chamber's campaign.
The ads tell readers that if they complete a survey and give their
names and personal information, they will get a $150 American Express Gift Card
for use at Hooters Restaurants.
" Liabilities may be imminent or distant, and a
fixed rule which imposes the same reserve for both will sometimes err by
excess, and sometimes by defect."- Walter Bagehot, Lombard Street: A
Description of the Money Market, 1873For nearly
three hundred years, Lloyd's of London insurance policies were backed by
wealthy British investors, who came to be known as "Names" because, in the
early days, their signatures were written on the face of each Lloyd's policy.
The Names participated in one-year venture syndicates, to insure risks,
chiefly in maritime insurance.
Each Name pledged his entire personal
wealth to back up his share in the syndicate's policies.
accepted business for one year, then allowed two more years for claims to come
in and be settled.
Each syndicate closed its "year of account" and
wound up its affairs after the end of the third year.
received their share of the profits, or paid their share of the losses, and
their liability ended.
If, however, all claims could not be settled by
the end of the third year, the syndicate had to remain "open" and the profits
or losses could not be shared among the Names until all claims were finally
This system was efficient and profitable in maritime business;
the outcome of any given voyage was almost always known within the year of
account, and settled within three.
As both commerce and insurance grew
more complex, and especially as Lloyd's expanded into non-maritime business,
syndicates found they could no longer close their affairs after only three
Staying open longer, however, and thus delaying the distribution
of profits, would threaten their financial base: Names might well look
elsewhere for more reliable investments with more rapid returns.
Lloyd's solution was to have each closing syndicate reinsure its
remaining risks with a syndicate from the next year of account.
premium paid, a still-open syndicate, during its third year, would assume any
remaining Incurred But Not yet Reported ("IBNR") liabilities of the closing
syndicate from the prior year by issuing it a specialized policy of
Re-Insurance To Close ("RITC").
Lloyd's syndicates could thus continue
distributing profits after three years, instead of having to radically alter
their long-established and familiar business procedure.
When this RITC
developed, there were only a few thousand members of Lloyd's, of whom perhaps a
thousand, known as "working Names", actually conducted the business of Lloyd's
The rest ("external" Names) relied on their syndicate
managing agents to protect their interests, by carefully evaluating each risk
accepted, and by calculating the RITC in such a way that neither excessive
profit nor loss was realized by the Names on the old syndicate or the new
It was extremely important that RITC be calculated fairly,
because the individual Names who made up those syndicates were not necessarily
the same people.
In order to carve out a share of the U.S. insurance
market while a "buy-American" attitude prevailed in the 1930's, 1940's and
1950's, syndicates at Lloyd's issued many broadly worded policies, without
monetary limits, insuring and reinsuring risks in the United States.
The loose language of these policies gave Lloyd's a temporary
competitive advantage over many U.S, carriers; however, these overly generous
policies eventually came back to haunt them.
By the 1960's and 1970's it was clear to a handful of the
highly placed working Names that claims due to asbestosis, pollution and other
health hazards (so-called "APH" losses) were ripening into lawsuits in which
unanticipatedly large damages were being awarded by American courts.
American companies turned to their insurers, and their insurers turned
to their reinsurers, who in very many cases were syndicates at Lloyd's.
An avalanche of claims was thus working its
way through the courts and down the chain of reinsurance obligations, toward
the Lloyd's syndicates that held the RITC policies issued to the syndicates
who, in prior years, had written the original, broadly worded policies.
The avalanche was moreover apparently going to continue well past the
Since the original policies were written without monetary
limits, the Names backing the syndicates that had assumed liability for these
policies through the annual RITC process were facing financial ruin, and
Lloyd's ability to "pay all claims" was in jeopardy.
The Names would
soon be personally liable for coming claims far in excess of their original
investments in Lloyd's syndicates, and apparently in excess of their combined
If word got out about the magnitude of the undisclosed
liabilities latent within numerous syndicates at Lloyd's, incoming investment
would cease, and Lloyd's would become extinct.
In the early 1970's the
ruling Committee of Lloyd's lowered the minimum net worth requirement for Names
to $150,000 in assets, and opened membership at Lloyd's to the British
upper-middle class, and foreigners, especially American, Canadian, Australian,
and South African citizens, in which countries Lloyd's had an excellent
Lloyd's began recruiting large numbers of new Names, and in
1973 even allowed women to join.
Lloyd's also placed a new layer of
bureaucracy, known as "members' agents", between the external Names and the
syndicate managing agents.
By their Agreement with Lloyd's, the
external Names were strictly passive investors who delegated all authority to
conduct insurance business to their member's and managing agents, who placed
the Names on syndicates and otherwise handled all their business at Lloyd's.
The formerly close and trusting relationship between Names and their
managing agents disappeared.
Many of the aristocrats who had been Names
on the threatened syndicates before 1970 also quietly "disappeared" as soon as
RITC had been contracted for them, either resigning from Lloyd's altogether or
moving to "safe" syndicates.
There were about 6,000 Names in
None of the new Names were told of the billions in losses sliding
inexorably down the chain of reinsurances toward them.
although nearly 31,000 new Names had been recruited, the total number had only
risen to about 33,000. Two thirds (over four thousand) of the "old" Names had
quietly got out of harm's way.]
The members' agents for the new
external Names (and some unwitting old Names) placed them on the endangered
syndicates' next year(s) of account by the hundreds.
The managing agents passed the old syndicates' massive
undisclosed liabilities to select syndicates populated by "new" Names via
distributed money that was deemed to be "profits" to the Names on the closing
syndicates, and paid themselves handsomely.
In August 1980, a formal
study group of insiders, called the "Asbestos Working Party," was established
at Lloyd's to formulate a strategy to deal with the ever-growing and
ever-more-difficult to conceal problem of asbestos claims.
In October 1980, the United States Court of Appeals for
the Sixth circuit announced its decision in INA v. Forty-Eight Insulations,
Inc. holding that every exposure to asbestos fibers was a separate harm, and
that every insurer along the way during the entire period of exposure, which
might be twenty years or more, had a duty to defend and indemnify.
response, Lloyd's inner circle continued to conceal their knowledge of the
massive impending losses, and intensified the aggressive recruitment of more
and more external Names, which was being conducted at their direction by
members' and managing agents, in what became known as the "recruit to dilute"
Syndicates continued to under-reserve and/or
inadequately reinsure for
incurred but not reported losses, thus hiding the coming losses and
maintaining an illusion of profitability.
In 1982, Lloyd's persuaded
Parliament to pass a Private Act, the Lloyd's Act of 1982, granting Lloyd's
immunity from most lawsuits (much like government agencies have).
Lloyd's Act of 1982 also gave the Council of Lloyd's the power to unilaterally
and even retroactively change Lloyd's by-laws, which formerly could only be
done by majority vote of the Names at a General Meeting.
The extent and
implications of Lloyd's (effectively complete) legal immunity, and the
Council's by-law-changing powers were kept secret from the Names for another
nine years, until 1991 (the year that losses for the 1988 year of account first
became public knowledge).
In late 1986, for the upcoming 1987 year of
account, Lloyd's required all Names to sign a new General Undertaking, that
included "choice of forum" and "choice of law" clauses in which the Names
unwittingly agreed that any legal disputes with Lloyd's would be brought in
English courts under English law.
Lloyd's explained the new Undertaking
as a procedural technicality, and did not tell the Names that Lloyd's was by
fiat of Parliament effectively immune from suit in England.
Lloyd's also required that all Names sign a new Members Agency Agreement.
In stark contrast to the minimal disclosures Lloyd's made concerning
the General Undertaking, extensive, detailed explanations of the implications
of the new agency agreement were given to Names prior to the deadline to sign
Lloyd's premium capacity increased dramatically as a result of the
exponential growth in the number of Names, but Lloyd's brokers and managing
agents were not generating that much new business.
To keep all the
Names' capital "in play", and thus keep the 30% deposits required for
underwriting in place, the syndicate managers cleverly absorbed the excess
capacity in a "reinsurance spiral" (properly, "retrocessional spiral"):
syndicates reinsured other syndicates, then sought reinsurance on that
reinsurance from other syndicates, who then did the same with still others,
taking fees and commissions "off the top" each step of the way, in what became
known as the "LMX" spiral.
(Although "LMX" is an acronym for "London
excess of loss market",
it has in
hindsight been euphemistically referred to as the "London excess of
The limited information in the Names' financial
statements made it appear that their investments were doing very well.
In actuality, since each Name's risk was spread across multiple
syndicates, the "turns" of the spiral tended to re-focus their risk back on
The members' agents and managing agents on the various
syndicates had in fact put many of the Names in the position of repeatedly
The illusion of Lloyd's as a sound investment
could thus be, and was, maintained for several years.
syndicates wrote their usual "book" of business, capable of maintaining the
appearance of stability as long as all was calm; but when (not "if") major
catastrophic losses occurred, those affected syndicates and their Names were
The commissions taken "off the top" by all the brokers in the
spiral had eaten away the premium reserves.
The reserves that remained
were dangerously low - as low as 35% of premium in many instances.
is why "typical" disasters such as hurricanes and oil rig fires resulted in
"atypical" and exponential losses in the late 1980's and early 1990's.
The unwitting new Names, who believed they were investing in one of the
world's oldest and safest
institutions, were left to bear the losses when they hit, and hit they did,
with a vengeance.
In 1991, Lloyd's announced losses of 500 million
pounds ($800 million), at the time, this was the largest single-year loss in
its history (by 1995 the cumulative loss had grown to $15 billion even by
Lloyd's unaudited accounting figures).
Lloyd's paid out premium
reserves at first, and then began making cash calls on the Names on the
affected syndicates, not only to cover the outstanding claims, but to amass
reserves to pay the IBNR claims that would come due against syndicates in the
It was generally agreed that any Names on a syndicate insuring
or reinsuring APH risks was financially ruined the day they were placed on it
by their agents.
The premium reserves of hundreds of syndicates were
exhausted by the end of the traditional three-year accounting cycle.
The syndicates could not close, and the Names bore unlimited personal
responsibility for all the future (and still unquantifiable) claims.
APH claims are expected to continue to flow into Lloyd's until the year
2030 and possibly beyond.
Since 1991, thousands of Names have been
bankrupted, and more than 30 have committed
has continued to make cash calls, and English courts have continued to issue
rulings in Lloyd's favor, making it easier for Lloyd's to collect more and more
money from the remaining Names and/or their estates.
In legal terms, there are five elements to a fraud:
"Scienter", or knowledge of facts, events, or circumstances by one
Misrepresentations (including non-disclosure) of that knowledge
by that party in dealings with another;
Reliance on those
misrepresentations by the second party;
An agreement, contract, or
transaction between the parties which a reasonable person would not have
entered into if privy to the first party's knowledge;
damage to the second party as a result.
English Justices, even at the
appeals level, have acknowledged on the record that there was ongoing fraud at
Lloyd's, but they nonetheless have thus far decided every case and every point
of law in Lloyd's favor.
The UK courts have even gone so far as to rule
that Names cannot use fraudulent non-disclosure and/or fraudulent
misrepresentation as a defense or counter-claim to offset Lloyd's collection
This web site is not a commercial web site and
is presented for educational
This website defines a
new perspective with which to engage reality to which its author adheres. The
author feels that the falsification of reality outside personal experience has
forged a populace unable to discern propaganda
from reality and that this has been done purposefully by an international
corporate cartel through their agents who wish to foist a corrupt version of
reality on the human race. Religious intolerance occurs
when any group refuses to tolerate religious practices, religious beliefs or
persons due to their religious ideology. This web site marks the founding of a
system of philosophy named The Truth of the Way of the Lumière Infinie -
a rational gnostic mystery religion based on reason which requires no leap of
faith, accepts no tithes, has no supreme leader, no church buildings and in
which each and every individual is encouraged to develop a personal relation
with the Creator and Sustainer through the pursuit of the knowledge of reality
in the hope of curing the spiritual corruption that has enveloped the human
spirit. The tenets of The Truth of the Way of the Lumière Infinie are
spelled out in detail on this web site by the author. Violent acts against
individuals due to their religious beliefs in America is considered a "hate
This web site in no way condones violence. To the contrary the
intent here is to reduce the violence that is already occurring due to the
international corporate cartels desire to control the human race. The
international corporate cartel already controls the world economic system,
corporate media worldwide, the global industrial military entertainment complex
and is responsible for the collapse of morals, the elevation of
self-centered behavior and the destruction
of global ecosystems. Civilization is based on coöperation.
Coöperation does not occur at the point of a gun.
mores and values have declined precipitously over the last century as the
corrupt international cartel has garnered more and more power. This power rests
in the ability to deceive the populace in general through corporate media by
pressing emotional buttons which have been preprogrammed into the population
through prior mass media psychological operations. The results have been the
destruction of the family and the destruction of social structures that do not
adhere to the corrupt international elites vision of
a perfect world. Through distraction and
coercion the direction of thought of the bulk of the population has been
directed toward solutions proposed by the corrupt international elite that
further consolidates their power and which further their purposes.
views and opinions presented on this web site are the views and opinions of
individual human men and women that, through their writings, showed the
capacity for intelligent, reasonable, rational, insightful and unpopular
thought. All factual information presented on this web site is believed to be
true and accurate and is presented as originally presented in print media which
may or may not have originally presented the facts truthfully. Opinion and
thoughts have been adapted, edited, corrected, redacted, combined, added to,
re-edited and re-corrected as nearly all opinion and thought has been
throughout time but has been done so in the spirit of the original writer with
the intent of making his or her thoughts and opinions clearer and relevant to
the reader in the present time.
Fair Use Notice
This site may contain copyrighted material the use of which has
not always been specifically authorized by the copyright owner. We are making
such material available in our efforts to advance understanding of criminal
justice, human rights,
political, economic, democratic, scientific, and social justice issues, etc. We
believe this constitutes a 'fair use' of any such copyrighted material as
provided for in section 107 of the US Copyright Law. In accordance with Title
17 U.S.C. Section 107, the material on this site is distributed without profit
to those who have expressed a prior interest in receiving the included
information for research and educational purposes. For more information see:
www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted
material from this site for purposes of your own that go beyond 'fair use', you
must obtain permission from the copyright owner.
© Lawrence Turner
All Rights Reserved