Insurance Claims And Issues

Increasing Risk, Increasing Insurance Role.

    Current market conditions strongly reflect significant risk.  In this situation, Insurance Coverage Issues and Claims are inevitable.  They are coming.  They are coming under all sorts of Insurance Policies.  These Insurance Coverage Issues and Claims will in turn trigger many accusations that Insurance Companies and others acting in Fiduciary settings did not act in Good Faith and Deal Fairly.  In a climate like this one, these Issues and Claims are inevitable.  See generally Peter G. Gosselin, "In This Economy, Failure is an Option" (Los Angeles Times Online Sunday, July 20, 2008).

Please Read The Disclaimer.

To and From Each According to Their Abilities.

     The idea of underperforming corporate executives giving back some or all of their pay, in exchange for the opportunity that exists now of receiving enormous bonuses and other payments when the corporation performs well financially (and now, actually, even if it does not), has been joined by, among others, the president of a New York investment firm quoted in Gretchen Morgenson, "Fair Game/Approve This Deal, or Else" p. 1, col. 3 "SundayBusiness" Section (New York Times Nat'l Ed., Sunday June 15, 2008.

Please Read The Disclaimer.

Planning For Fiduciary Duties in Finances and Insurance.

     A recently published newspaper report discusses what the reporter variously breaks into groups as "investment advisers," "stockbrokers," and "financial planners or consultants", in Alina Tugend, "Personal Business/Shortcuts/Pick a Planner Who Can Spell 'Fiduciary'" p. B5, col. 1 (New York Times Nat'l Ed., Saturday, April 26, 2008).  "Investment advisers have a fiduciary duty, while brokers and financial planners may or may not."

     The linked news article provides many web site resources, including the National Association of Personal Financial Advisors at www.napfa.org; the web site of Ms. Sheryl Garrett, author of "Personal Finance Workbook for Dummies" at www.garrettplanningnetwork.com; and the web site of the Financial Planning Association at www.fpanet.org.  Be forewarned:  I personally have not had enough experience with these sites to feel comfortable enough to recommend them myself and if you go to them, you do so on your own.   Any feedback you are willing to give in a Comment on this web log would be welcome.

Please Read The Disclaimer.

Healthcare Cost Managers Reportedly Benefit Exclusive Distributors of Life-Saving Drugs ...

                                        ...  Themselves.

    Employers hire Healthcare Cost Managers, companies which reportedly contract to help employers manage their Health Insurance programs "and get medicines at the best available prices."  Milt Freudenheim, "The Middleman's Markup/Benefits Managers Earn Profits With Exclusive Rights on Specialty Drugs" p.B1, col. 2 (New York Times Nat'l Ed., Saturday, April 19, 2008).

    Some Drug Benefit Managers also have separate contracts with some Drug Manufacturers.  Under those contracts, the same businesses which contract with employers as Drug Benefit Managers, also enter into exclusive distribution contracts with Drug Manufacturers to  sell  expensive specialty drugs. 

    Drugs like this are so-called specialty drugs not merely because of some inherent novelty, but because there is no generic substitute for them.  An example given in the report is an exclusive contract to distribute an anti-seizure drug prescribed for an epileptic child.

    Separate and apparently conflicting contractual duties in these reported situations certainly benefit the Drug Benefit Managers/Exclusive Drug Distributors, and perhaps these situations also benefit the Drug Manufacturers who contract for the exclusive distribution of their 'specialty' drugs.

    However, what benefit is conferred upon employers who pay for Drug Benefit Management, if any?  What positive effect is there upon the employers' own form of self-administered Health Insurance?

    The linked news article does not suggest one.  Perhaps the Managers/Distributors can suggest one or more.  If so, they are invited to leave a Comment. 

Please Read The Disclaimer.

More On "Socialized Risk, Private Gain?"

      

    In a March 21, 2008 post on Insurance Claims Bad Faith Law Blog at www.insuranceclaimsbadfaith.typepad.com, this question was asked in response to a newspaper editorial that contained the assumption that certain corporate executives would not have to disgorge allegedly ill-gotten gains:  "Why not?"

    Michael J. Missal may have an answer to that question in at least one case.  He is reportedly "a U.S. Bankruptcy Court examiner".  E. Scott Reckard, "Mortgages/Sub-prime Lender Allegedly Inflated its Profit" (Los Angeles Times Online, Thursday, March 27, 2008).   Mr. Mittal filed a Report with the Bankruptcy Court in connection with the Bankruptcy proceeding of former Mortgage Company New Century Financial Corporation.  Bonuses paid to certain former "top executives" and "senior managers" of that  company "were tied to reported financial results".  "These and other bonus payments to executives may be recovered 'under unjust enrichment and bankruptcy law theories,' he said."

    Would Directors and Officers Insurance Coverage respond in the event that such bonus payments are recovered under similar circumstances, or not?

Please Read The Disclaimer.

A.I.G. Alleges Former Officers and Directors Breached Fiduciary Duties.

    American International Group has reportedly sued other people for alleged Breach of Fiduciary Duties.  The seven defendants in the case, filed by A.I.G. in the New York State Supreme Court, are all former A.I.G. Officers and Directors including A.I.G.'s former CEO, Maurice R. Greenberg.

    In a twist, it appears that A.I.G. has alleged claims or causes of action only for alleged Breaches of Fiduciary Duties as stand-alone claims, without also alleging any other causes of action of any kind or nature.  "New A.I.G. Jab at Ex-Chief Focuses on Fiduciary Duties" p. C4, col. 4 (Reuters Report published in New York Times Nat'l Ed., Friday, March 28, 2008).

Please Read The Disclaimer.