"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
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.
were requiring engineers to provide a draft or preliminary report for the
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.
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
April 2007 Jury verdict
rendered in a case against Allstate.
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
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 challenge insurance estimates of loss after
Hurricane Katrina and Rita.
2007 23 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.
For her 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
For Ashley Ellis a 30 day jail sentence became a death
"Profit-driven organizations are prone to cut costs. The
system failed." - Matthew Valerio
contracts state clearly if anything in the application is incomplete,
coverage may be rescinded." - Tom Epstein, BlueSheild
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,
dystrophy, migraine, miscarriage,
pregnancy, "expectant fatherhood," planned adoption, psoriasis, recurrent
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.
2005 Insurance industry amassed record profits of $44.8 billion
($44,800,000,000) in a year of catastrophic loss.
insurers can get relief you are going to see a pullback by private industry."-
Robert P. Hartwig, chief economist of the industry funded Insurance
$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 policies.
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
"It is disgusting how Health Net
dropped a patient in the midst of
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®;
"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?
May 2004 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 Bristol-Myers'
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' profitability.
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 individuals.
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 bankruptcy.
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
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 gates opened.
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
How could it
be that citizens of the richest nation in the
world were being treated this way?
I realized 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.
heard members of Congress reciting talking points like the ones I used to write
to scare people away from real reform.
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 Potter
Quality and Affordable Healthcare" (AQAH) is a "secretive" group that
organizes "below-the-radar" activities to drum up opposition to health care
AQAH is operated by one of the largest law firms in North
Carolina, Moore and Van Allen.
The 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.
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
The Chamber of
Commerce sponsored online pop-up ads to generate the appearance of
"grassroots" opposition to health care reform.
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.
For 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.
pledged his entire personal wealth to back up his share in the syndicate's
The syndicates accepted business for one year, then allowed
two more years for claims to come in and be settled.
closed its "year of account" and wound up its affairs after the end of the
The Names 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 settled.
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.
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 years.
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
For a 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").
syndicates could thus continue distributing profits after three years, instead
of having to radically alter their long-established and familiar business
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 insurance market.
("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 syndicate.
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 year 2000.
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 wealth besides.
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.
agents passed the old syndicates' massive undisclosed liabilities to select
syndicates populated by "new" Names via inadequate RITC, distributed money that
was deemed to be "profits" to the Names on the closing syndicates, and paid
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.
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.
In 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" campaign.
to under-reserve and/or inadequately reinsure for incurred but not reported
losses, thus hiding the coming losses and maintaining an illusion of
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).
The 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
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.
In 1986, 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 it.
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;
Harm or 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
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 efforts.
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
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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