Monday, May 16, 2022

No. 453: My Retirement

I am now fully retired, and I no longer follow the insurance industry closely. As a result, I will not be posting any more items on my blog. Packages offered are still available and we will email any you request. When you ask for them, please include the number and title of the blog post in which the package you request was offered. 


Friday, January 28, 2022

No. 452: The Texas State Securities Board Announces the Top Investor Threats for 2022

On January 10, 2022, the Texas State Securities Board (TSSB) announced the top investor threats and urged caution before purchasing popular and volatile unregistered investments, especially those involving cryptocurrency and digital assets. TSSB also announced guidance for investors, including steps to take to protect from fraud in the new year. The top 2022 threats were determined by a survey of securities regulators conducted by the North American Securities Administrators Association (NASAA).

TSSB is a frequent source of valuable information for persons interested in securities regulation. I recommend that such persons sign up to receive TSSB news releases and updates regularly.


Friday, January 7, 2022

No. 451: A Date That Shall Live in Infamy

On December 7, 2021, I gave considerable thought to the 80th anniversary of the Japanese attack on Pearl Harbor. When President Franklin Delano Roosevelt addressed the nation from the Capitol the next morning, he called the date of the attack "a date that shall live in infamy."

My family learned of the attack on the radio at the north end of the living room in our home in Syracuse, New York. In our driveway was our 1936 Oldsmobile sedan, which provided us with very little transportation during the war because of gasoline rationing.

An important 1960 book about World War II is entitled The Rise and Fall of the Third Reich, by William L. Shirer. The book describes in detail what happened in Adolf Hitler's bunker below the Chancellery in Berlin. It was in that bunker where Hitler spent his final days, where he prepared his last will and testament, and where he shot himself to death on April 30, 1945.

I traveled to Hawaii many years after the war. I was deeply moved when I visited the U.S.S. Missouri memorial.


Tuesday, December 28, 2021

No. 450: The South Carolina Department of Insurance Attacks the SHIP Rehabilitation Plan

On November 16, 2021, the South Carolina Department of Insurance (SCDOI) issued a media release entitled "SCDOI Director Ray Farmer Seeks to Stop the Implementation of the Rehabilitation Plan for Senior Health Insurance Company of Pennsylvania (SHIP) in South Carolina." The first sentence of the media release reads: "Yesterday, Ray Farmer, Director of the SCDOI, took another step toward protecting consumers who have long-term care insurance with SHIP from potentially detrimental rate increases or benefit reductions."

On November 19, Chief Administrative Judge L. Casey Manning of the Fifth Judicial Circuit in Columbia, South Carolina, blocked immediate implementation of the SHIP Rehabilitation Plan. At this writing, the fate of the SHIP Rehabilitation Plan is not known.

I have written extensively about SHIP's financial problems. To review my posts about SHIP, click here or search for SHIP on my blog using the search box in the extreme upper left corner.


Tuesday, December 14, 2021

No. 449: The AM Best Business Trilogy

On August 21, 2020, A. M. Best Company published The AM Best Business Trilogy. The company sent me a review copy consisting of three hardback books.

One book, entitled The Man, is a 275-page (including end notes and index) biography of Alfred M. Best. Another book, entitled The Company, is a 581-page (including end notes and index) history of A. M. Best Company. The third book, entitled The Industry, is an 815-page (including end notes and index) history of the credit rating agencies.

The Trilogy is an impressive piece of work. It is available for $75 from A. M. Best Company or from Amazon.


Wednesday, December 8, 2021

No. 448: A Class Action Lawsuit Against Governor Jay Inslee of Washington State and Others

In 2019, Governor Jay Inslee of Washington State signed into law a state program designed to address the problem of financing the long-term care exposure faced by residents of the state. The statute created a "long term service and support trust fund" referred to as "WA Care," and at the beginning of next year workers will be required to start contributing to the fund. WA Care is the nation's first state-operated long-term care insurance program.

On November 9, 2021, three entities and six individuals filed in federal court in Seattle a class action lawsuit against Governor Inslee and three others. (See Pacific Bells, LLC et al. v. Jay Inslee et al., U.S. District Court, Western District of Washington, Case No. 2:21-cv-1515.) Here is the first paragraph of the introduction in the 21-page complaint:
Beginning January 1, 2022, Washington State workers will pay $0.58 per $100 (.58%) of earnings to the Long-Term Service and Support Trust Fund (the "Trust") pursuant to the Long Term Services and Support Trust Program, referred to as "WA Care" or the "Act" and codified as RCW 50B.04, et seq. This action challenges the Act and requests a declaratory judgment that the Act is unenforceable as it violates ERISA and federal and state laws governing employee benefit plans and multiple employer welfare arrangements ("MEWAs").
The Judge
The case has been assigned to Senior Judge Thomas S. Zilly. President Reagan nominated him in February 1988 and the Senate confirmed him in April 1988. He assumed senior status in January 2004.

General Observations
This interesting case is in its early stages. I plan to provide an update in due course.


Tuesday, November 23, 2021

No. 447: A Class Action Relating to an Alleged Pyramid Scheme

On June 25, 2018, two individuals filed, in federal court in California, a class action lawsuit against a suspended California corporation, five individuals, a Texas corporation, and a California limited liability company. (See In Re Premium Financial Alliance, Inc. Insurance Marketing Litigation, U.S. District Court, Northern District of California, Oakland Division, Case No. 4:18-cv-3771.)

The Original Complaint
The plaintiffs alleged in the 29-page original complaint that they had been victimized by a "classic pyramid scheme." The first paragraph of the "Introduction to the Case" section of the original complaint reads:
The Defendants are operating a classic pyramid scheme. What makes this scam particularly egregious is that the Defendants have never marketed or sold insurance policies to any retail customers, but instead derive 100% of the scheme's revenue from chain recruitment. These practices have been prohibited by the Federal Trade Commission, and violate State and Federal Laws. Plaintiffs and tens of thousands have joined PFA and have become "Associates." Plaintiffs did not make money as promised. The Associates failed because they were doomed from the start by a PFA marketing plan that systematically rewards recruiting Associates over the sale of overpriced insurance product or service to retail customers.
The original complaint does not describe the targets of the pyramid scheme. Other case documents, however, indicate that the program was aimed at Chinese, Vietnamese, and other immigrants who may have limited fluency in the English language.

Subsequent Developments
Subsequent to the filing of the original complaint, there have been amended complaints, answers to the complaints, and unsuccessful motions to dismiss. On May 14, 2021, the plaintiffs filed a motion for class certification.

General Observations
This is an interesting case. Because I am not an attorney, it would be inappropriate for me to express a legal opinion on it. The case has a long way to go, and I plan to provide an update fairly soon.