Wednesday, July 14, 2021

No. 429: The U.S. Department of Justice Sues Georgia over the State's New Voter Suppression Law

In No. 415 (April 5, 2021), I discussed a lawsuit challenging Georgia's recent election law, often called Senate Bill 202 (SB 202). It was enacted in March 2021 by the Republican-controlled legislature, and signed by Governor Brian Kemp, a supporter of former president Trump. The private signing ceremony was attended by several white men in front of a painting that appears to be an old southern plantation. The new law is called an "election security law" by proponents, and a "voter suppression law" by opponents. If the Republicans dislike the election result in any county or precinct, the new law would allow the result to be altered to their liking.

The DOJ Complaint
On June 25, 2021, the U.S. Department of Justice (DOJ) filed a 46-page complaint against Georgia, its election board, and its Secretary of State. Attached to the complaint is a 99-page exhibit showing SB 202. (See U.S.A. v. Georgia, U.S. District Court, Northern District of Georgia, Case No. 1:21-cv-2575.)

DOJ alleges that SB 202 was enacted "with knowledge of the disproportionate effect that the challenged provisions . . . would have on Black voters' ability to participate in the political process on an equal basis with white voters." DOJ asks the court for declaratory relief and injunctive relief. Specifically, DOJ seeks an order declaring that the challenged provisions of SB 202 violate the Voting Rights Act of 1965 and the voting guarantees of the Fourteenth and Fifteenth Amendments to the U.S. Constitution. DOJ also seeks an order enjoining the defendants from enforcing the challenged provisions, authorizing appointment of Federal observers to observe elections in Georgia, retaining jurisdiction, and requiring certain new voting changes in Georgia.

The Judge
The case was assigned to U.S. District Judge Jean-Paul "J.P." Boulee. President Trump nominated him in July 2018. The Senate confirmed him in June 2019.

The Supreme Court Ruling
On July 1, 2021, the U.S. Supreme Court handed down a major opinion relating to the U.S. Voting Rights Act of 1965. The Court ruled 6 to 3, along political lines, in favor of the Arizona Republican Party and against the Democratic National Committee. The majority opinion was written by Justice Alito, with which the other five conservatives concurred. Justice Gorsuch wrote a concurring opinion with which Justice Thomas concurred. Justice Kagan wrote a strong dissent, with which Justices Breyer and Sotomayor concurred. It remains to be seen what effect the Supreme Court's ruling will have on the DOJ's lawsuit against Georgia. (See Arizona Republican Party v. Democratic National Committee, U.S. Supreme Court, Case Nos. 19-1257 and 19-1258.)

General Observations
The DOJ lawsuit against Georgia is an important case. Also, it raises the question of whether DOJ will take similar action in other states where voter suppression laws have been enacted recently. Readers are encouraged to review No. 415, the DOJ complaint, and SB 202, each of which is available via a link above.


Wednesday, July 7, 2021

No. 428: Executive Compensation in the Insurance Industry—Data for 2020 from 2021 Filings with the SEC

The Insurance Forum, the monthly newsletter I published for 40 years, began with the January 1974 issue and ended with the December 2013 issue. In 1975 I began publishing in the Forum data on executive compensation in the insurance industry. After ending the Forum, I began to publish less elaborate tabulations of executive compensation data through blog posts. The most recent posts are No. 381 (July 13, 2020), No. 385 (August 7, 2020), and No. 404 (December 23, 2020), in which I published data for 2019 from my three sources: the Securities and Exchange Commission (SEC), the New York State Department of Financial Services (DFS), and the Nebraska Department of Insurance (NDI).

In my 2015 book entitled The Insurance Forum: A Memoir, in Chapter 24, I described the history of my executive compensation tabulations. Here I show data for 2020 from the SEC. I plan to show data for 2020 from the DFS and the NDI later.

SEC Data
During the final seven years of the Forum, I showed data for individuals who received at least $1 million in the year covered. In the current tabulation below, I show SEC data for individuals who received at least $5 million in 2020. Each figure in the tabulation is the "Total" shown in the SEC's "summary compensation tables" for 2020. The five components of the "Total" are "Salary," "Bonus," "Stock Awards," "Non-Equity Incentive Plan Compensation," and "All Other Compensation." Where more than one individual in a company is shown, they are listed in descending order of compensation.

The summary compensation tables for 2020 for most companies are in proxy statements filed in advance of the 2021 annual meeting of shareholders. For the two Canadian companies, Manulife Financial and Sun Life Financial, the summary compensation tables for 2020 are in 6-K annual reports, and the figures shown are in Canadian dollars. If you want to see any of the summary compensation tables for 2020, go to the EDGAR Search page of the SEC web site and key in the name of the company in which you are interested.

SEC Data for 2020
Daniel P Amos
Frederick J Crawford 5,130,661
Alleghany Corp
Weston M Hicks 7,451,772
Allstate Corp
Thomas J Wilson 18,009,544
Don Civgin 5,873,381
Glenn T Shapiro 5,032,673
Ambac Financial Group Inc
Claude LeBlanc 6,011,501
American Financial Group Inc
Carl H Lindner III 9,631,170
S Craig Lindner 9,596,241
American International Group Inc
Peter Zaffino 24,066,986
Brian Duperreault 18,810,374
Mark D Lyons 10,236,456
Douglas A Dachille 8,666,267
Lucy Fato 8,592,190
Ameriprise Financial Inc
James M Cracchiolo 20,794,703
Walter S Berman 9,200,374
William F Truscott 7,333,308
Colin Moore 5,955,390
Anthem Inc
Gail K Boudreaux 17,109,952
Gloria M McCarthy 5,530,661
John E Gallina 5,401,735
Peter D Haytaian 5,387,111
Felicia F Norwood 5,236,403
Aon plc
Gregory C Case 20,294,496
Christa Davies 12,243,943
Eric Andersen 6,674,303
Arch Capital Group Ltd
Marc Grandisson 8,779,832
Arthur J Gallagher & Co
Pat Gallagher 11,177,460
Assurant Inc
Alan B Colberg 11,855,966
Gene E Mergelmeyer 5,649,562
Assured Guaranty Ltd
Dominic J Frederico 10,876,524
AXIS Capital Holdings Ltd
Albert A Benchimol 7,265,614
Berkshire Hathaway Inc
Gregory E Abel 19,014,250
Ajit Jain 19,014,250
Brighthouse Financial Inc
Eric Steigerwalt 8,133,344
Brunswick Corp
David M Foulkes 7,820,863
Centene Corp
Michael F Neidorff 24,956,777
Kenneth A. Burdick 15,042,226
Jeffrey A Schwaneke 8,006,713
Brandy L Burkhalter 7,807,113
Jesse N Hunter 7,679,402
Chubb Ltd
Evan G Greenberg 20,328,167
John W Keogh 8,627,780
John J Lupica 6,722,380
Paul J Krump 6,438,889
Philip V Bancroft 5,012,115
Cigna Corp
David M Cordani 19,929,493
Timothy C Wentworth 10,780,189
Eric P Palmer 6,336,563
Matthew G Manders 6,204,451
CNA Financial Corp
Dino E Robusto 11,469,174
Douglas M Worman 5,157,796
CNO Financial Group Inc
Gary C Bhojwani 8,260,886
CVS Health Corp
Larry J Merlo 23,043,822
Jonathan C Roberts 13,001,212
Karen S Lynch 11,307,916
Eva C Boratto 8,921,153
Alan M Lotvin MD 7,472,175
Equitable Holdings Inc
Mark Pearson 14,874,955
Seth Bernstein 9,402,563
Jeffrey Hurd 5,359,626
Nick Lane 5,225,351
Anders Malmström 5,120,515
Everest Re Group Ltd
Juan C Andrade 8,063,212
Mark Kociancic 5,791,714
Fidelity National Financial Inc
Raymond R Quirk 9,716,868
First American Financial Corp
Dennis J Gilmore 11,173,959
Kenneth D DeGiorgio 5,538,235
Christopher M Leavell 5,528,016
Genworth Financial Inc
Kevin D Schneider 9,087,804
Daniel J Sheehan IV 8,635,193
Thomas J McInerney 7,357,588
Globe Life Inc
Gary L Coleman 9,158,910
Larry M Hutchison 8,443,364
Hartford Financial Services Group Inc
Christopher Swift 11,806,195
Douglas Elliot 7,542,532
Heritage Insurance Holdings Inc
Bruce Lucas 7,787,404
Humana Inc
Bruce D Broussard 16,489,639
Brian A Kane 5,543,558
Kemper Corp
Joseph P Lacher Jr 9,251,315
Lincoln National Corp
Dennis R Glass 14,300,822
Loews Corp
James S Tisch 5,838,853
David B Edelson 5,698,625
Kenneth I Siegel 5,571,515
Jonathan M Tisch 5,066,530
Magellan Health Inc
Kenneth J Fasola 7,516,266
James Murray 7,382,021
Manulife Financial Corp
(Canadian Dollars)
Roy Gori 14,697,088
Marianne Harrison 5,904,563
Anil Wadhwani 5,700,992
Scott Hartz 5,353,629
Phil Witherington 5,171,813
Marsh & McLennan Companies Inc
Daniel S Glaser 19,695,980
John Q Doyle 8,202,312
Mark C McGivney 5,943,911
Peter C Heam 5,734,867
Martine Ferland 5,145,730
MetLife Inc
Michel A Khalaf 15,434,255
Bill Pappas 7,063,257
Steven J Goulart 6,839,384
John D McCallion 6,800,860
Ramy Tadros 5,681,122
MGIC Investment Corp
Timothy Mattke 5,517,169
Molina Healthcare Inc
Joseph M Zubretsky 17,812,327
Marc S Russo 6,189,788
Mr Cooper Group Inc
Jay Bray 9,261,290
Christopher Marshall 5,747,012
Anthony Ebers 5,261,400
Primerica Inc
Glenn J Williams 5,279,867
Principal Financial Group Inc
Daniel J Houston 15,614,418
Timothy M Dunbar 5,414,165
Deanna D Strable-Soethout 5,234,424
Progressive Corp
Susan Patricia Griffith 15,220,523
Protective Life Ins Co
Richard J Bielen 6,467,503
Prudential Financial Inc
Charles F Lowrey 14,990,254
Robert M Falzon 11,986,516
Stephen Pelletier 9,257,246
Scott G Sleyster 7,672,098
Andrew F Sullivan 6,271,772
Kenneth Y Tanji 5,040,380
Radian Group Inc
Richard G Thornberry 7,944,227
Reinsurance Group of America Inc
Anna Manning 9,044,233
RenaissanceRe Holdings Ltd
Kevin J O'Donnell 9,556,635
Sun Life Financial Inc
(Canadian Dollars)
Dean A Connor 10,090,374
Stephen C Peacher 7,152,382
Travelers Companies Inc
Alan D Schnitzer 18,990,270
Avrohom J Kess 6,576,439
Gregory C Toczydlowski 5,446,367
Michael F Klein 5,136,598
Daniel S Frey 5,122,446
UnitedHealth Group Inc
David S Wichmann 17,872,713
Andrew Witty 12,857,176
Dirk C McMahon 12,606,484
John F Rex 12,597,062
Patricia L Lewis 7,190,693
Unum Group
Richard P McKenney 13,258,738
Voya Financial Inc
Rodney O Martin Jr 13,597,008
Christine Hurtsellers 5,414,402
W R Berkley Corp
William R Berkley 10,153,856
W Robert Berkley Jr 9,982,728
White Mountains Ins Group Ltd
G Manning Rountree 7,170,628
Frank R Bazos 5,417,208
Reid T Campbell 5,255,382


Wednesday, June 30, 2021

No. 427: New York's Regulation 187—A Brief Update

In No. 420 (May 7, 2021), I wrote about legal developments relating to amended Regulation 187 (Reg 187) issued by the New York State Department of Financial Services (DFS). The Independent Insurance Agents and Brokers and other entities and individuals (collectively, the petitioners) challenged in court the constitutionality of Reg 187.

In July 2019, the trial court in New York found in favor of DFS by ruling that Reg 187 is constitutional. The petitioners appealed the ruling.

In April 2021, an appellate court in New York reversed the trial court's ruling by finding that Reg 187 is unconstitutional. In No. 420, I said DFS was reviewing the appellate court's ruling.

The Notice of Appeal
On May 27, 2021, DFS filed a Notice of Appeal to the Court of Appeals, which is New York State's highest court. In the notice, DFS said it is appealing from every part of the appellate ruling. At this time, I do not know when the DFS appellate brief will be filed. I plan to report further developments in this important litigation.


Wednesday, June 23, 2021

No. 426: More on Bitcoin after Recent Ransomware Attacks

Several years ago I posted two items about Bitcoin, a form of "virtual currency" or "cryptocurrency." In view of recent ransomware attacks involving Bitcoin, I decided to prepare this update. My previous posts are No. 34 (March 3, 2014) and No. 268 (May 30, 2018). With regard to each of the four sections of this update, I provide a link to allow interested readers to see the relevant document.

The EscoCapital Case
On April 30, 2021, the Texas State Securities Board (TSSB) issued an Emergency Cease and Desist Order directed at EscoCapital and Anthony Jerome. The order requires the respondents to cease and desist immediately from: (1) offering for sale any security in Texas until the security is registered with the Securities Commissioner or is offered for sale pursuant to an exemption under the Texas Securities Act; (2) acting as a securities dealer, agent, investment adviser, or investment adviser representative in Texas until they are registered with the Securities Commissioner or are acting pursuant to an exemption from registration under the Act; (3) engaging in any fraud in connection with the offer for sale of any security in Texas; and (4) offering securities in Texas through an offer containing a statement that is materially misleading or otherwise likely to deceive the public.

The First Unum/Paul Revere Case
On May 12, 2021, the New York State Department of Financial Services (DFS) entered into a Consent Order with First Unum Life Insurance Company and The Paul Revere Life Insurance Company. The order refers to two "Cybersecurity Events" involving violations of New York State statutes or DFS regulations. The companies will pay a civil monetary penalty of $1.8 million to DFS and meet other requirements.

The Tilford Case
On June 8, 2021, the TSSB issued an Enforcement Action entitled "Richard Gregory Tilford: Convicted." Tilford (of Arlington, Texas) was sentenced to serve 40 years in state prison for engaging in a fraudulent digital marketing investment scheme. He was also sentenced to serve ten years in prison for each of six counts of selling unregistered securities, and ten years in prison for each of six counts of acting as an unregistered dealer. The sentences will run concurrently. Tilford had been indicted in Collin County, Texas, in 2018.

The TSSB Guide
For those interested in cryptocurrencies, I recommend a guide prepared by the TSSB entitled The Investor's Guide to Cryptocurrency Offerings. The guide consists of seven parts: (1) Fiat v. Virtual Currency; (2) How Cryptocurrencies Work; (3) Initial Coin Offerings; (4) Digital Money, Real Risk; (5) Crypto-Scams; (6) Enforcement Actions; and (7) Glossary.


Wednesday, June 16, 2021

No. 425: An Important New Book about the United States Secret Service

Carol Leonnig is a top investigative reporter at The Washington Post. She holds three Pulitzer prizes. Her new book, published May 18, 2021, is entitled Zero Fail and subtitled The Rise and Fall of the Secret Service. When I first saw the 532-page book, I was intimidated. However, I got over that feeling. When I started reading the book, I was hooked, and read the entire book.

The book is divided into five major parts: (1) The Tragedy that Birthed a New Secret Service, Kennedy to Nixon, 1963-1974; (2) Meeting the Test, Ford to Clinton, 1974-1999; (3) Terror and Politics, The Bush Years, 2000-2007; (4) The Wheels Come Off, The Obama Years, 2008-2015; (5) Sliding Backward, The Trump Years, 2016-2020. The book also includes a Prologue and an Epilogue. The final section of the Epilogue summarizes the book. It reads:
Today the [Secret] Service remains spread dangerously thin. In addition to protecting a president and vice president and their families, and key senior leaders, the Service also protects hundreds of foreign leaders who visit the United States every year, investigates a broad range of financial crimes, assesses and investigates violent threats whether they are made in bars, in written letters, or on Twitter, researches the traits of school shooters to help communities prevent future attacks, helps local police track down missing and exploited children, and much more. [One Trump Administration] official told me they and their fellow senior national security advisers revere the commitment of so many of the Secret Service's soldiers on the front line, but they remain haunted that the agency hasn't been given the money, staff, or tools to do all its jobs. This neglect creates an opening for a serious attack on our democracy. "Someone in the near future needs to sit down and figure out: What is their mission? Because they can't do the mission they have now," the person said. "These people are patriots. We're letting them down and we're leaving the country at risk." It should haunt us all.
The book is superb. I think it is essential reading for anyone concerned about the survival of our democracy.


Thursday, June 10, 2021

No. 424: Kemper's Long Struggle Relating to Lost Policyholders

On April 5, 2021, the Florida Supreme Court agreed to take a case that has been progressing in Florida state courts. I have been writing for years about the underlying subject matter, which is the handling of lost policyholders. Here I discuss the background and recent developments.

Retained Asset Accounts
The September 2010 issue of Bloomberg Markets magazine carried a special report entitled "Duping the Families of Fallen Soldiers" and subtitled "Life insurers are secretly profiting from the death benefits owed to the survivors of [military] service members and other Americans." The report became a media sensation.

Metropolitan Life Insurance Company (Met) was heavily involved in the administration of government life insurance for members of the military. An attorney at Met dreamed up the idea of sending the beneficiaries of deceased members of the military a book of drafts instead of a check for the death benefit. Met then set up for the beneficiary a "retained asset account" (RAA). Other life insurance companies did the same. As beneficiaries moved around, companies lost contact with many of them. When state unclaimed property agencies learned that companies had not been remitting unclaimed RAA funds in accordance with state unclaimed property laws, the agencies began to investigate.

During the 1990s, many mutual life insurance companies, which at least in theory are owned by their policyholders, converted themselves into shareholder-owned companies through a process called "demutualization." When that occurs, the companies must contact their policyholders, for two reasons. First, they must ask their policyholders for permission to demutualize. Second, if they go through with demutualization, they must compensate their policyholders—with cash or with shares of stock in the new company—for the loss of the policyholders' ownership rights.

Unfortunately, however, the companies may have lost contact with many of their policyholders. The problem was most acute for Met, Prudential, and John Hancock. Those large companies had long been prominent in the sale of so-called industrial life insurance, which is also called "home service life insurance." When the companies exited that business many years ago, they stopped collecting premiums and deemed all their industrial policies as paid-up. Consequently, the companies lost contact with many of their policyholders.

For example, John Hancock, then based in Massachusetts, received huge amounts of undeliverable mail because the mailing addresses were outdated. That attracted the attention of Massachusetts unclaimed property officials. They were concerned that huge amounts of unclaimed property were not being turned over to the state, as required by the state's unclaimed property law, and they launched investigations. Later the matter attracted the attention of state insurance regulators, who also launched investigations.

Kemper's Litigation
In No. 133 (December 16, 2015), I wrote about a lawsuit filed by several Kemper companies against an auditing firm that was conducting an investigation on behalf of state treasurers about unclaimed property held by the companies. In that litigation, Kemper was not successful in blocking the investigation.

Florida's Tough New Rules
In 2016, the Florida Legislature imposed tough new rules on insurance companies with regard to lost policyholders and unclaimed property. Kemper has been fighting the new rules, arguing they are unconstitutional. On June 3, 2020, a three-judge panel of the District Court of Appeal of Florida, First District, in a 2-1 decision, upheld the constitutionality of the new rules. A 26-page document containing the majority and the dissenting June 3, 2020 opinions is here.

Recent Developments
As mentioned at the beginning of this post, on April 5, 2021, the Florida Supreme Court agreed to hear Kemper's appeal of the June 3, 2020 decision by the Florida First District Court of Appeal. As of May 31, 2021, several insurance industry parties have received approval to file amicus briefs in support of Kemper's argument that Florida's new rules are unconstitutional. It appears that no one has indicated an interest in filing an amicus brief in support of the argument that Florida's new rules are constitutional. Clearly the case has a long way to go. (See United Insurance Company of America v. Patronis, Florida Supreme Court, Case No. SC20-1306.)


Wednesday, June 2, 2021

No. 423: William Barr's New Legal Problem: An Update

On May 3, 2021, as reported in No. 421 (May 20, 2021), U.S. District Judge Amy Berman Jackson issued a 41-page partially redacted opinion. The opinion grew out of a lawsuit filed in 2019 by Citizens for Responsibility and Ethics in Washington (CREW) under the federal Freedom-of-Information Act against the U.S. Department of Justice (DOJ). (See CREW v. DOJ, U.S. District Court, District of Columbia, Case No 1:19-cv-1552.)

DOJ's Two Recent District Court Filings
On May 24, 2021, DOJ filed in the district court a one-page notice of appeal, and a 21-page motion for a partial stay pending appeal along with a partially redacted 10-page Exhibit A. Those documents are here.

Circuit Court Developments
On May 25, 2021, DOJ filed its appeal of Judge Jackson's opinion. (See CREW v. DOJ, U.S. Court of Appeals, District of Columbia Circuit, Case No. 21-5113.)

On the same day, the circuit court clerk issued a 2-page order scheduling several items to be filed by June 24, 2021, and dispositive motions (if any) to be filed by July 9, 2021. The clerk's order is here.

General Observations
I do not know how long it will take for the circuit court to handle DOJ's appeal of Judge Jackson's opinion. I plan to report further significant developments in another update.