AG Focuses on Non Profits

In the last issue of the Insurance Advocate, we were pleased to report that former Superintendent James Wrynn had landed-happily-in a new position where the opportunities seem to be extraordinary, placing him on an international stage in the insurance law sphere. Wrynn left the Department in good standing and in good report, according to what we have heard and sets out on a new path. We wish him luck in his new uniform… New York Attorney Schneiderman, as we report in this issue, has targeted the non-for-profit sector as an area of his concentration. While we are not fans of overreaching Government, that is, government officials finding new areas and new places to become involved without a proper, organic type of demand from the public, this effort will not take much of the State’s resources and may actually wind up helping the insurance industry and insurance practitioners by upgrading the insurability of Boards and their best practices. We understand, too, that so much of insurance in New York State is advanced and improved by non-profits and that we can only believe that other sectors are affected the same way. Therefore, the overall health of the non-profit community is a worthwhile pursuit for the Attorney General. We just hope that it does not become a permanent one, nor that State resources begin to be used for still another area of pursuit… In another article in this issue, we note that a longstanding injustice is rectified, as agents who write business for Demotech rated companies will now have available E & O coverage. This is a positive advance… Shame. Three insurance agents have been accused of an insurance scheme; it brings down all of us in the field: James Kergil or Peekskill, Michael Binday of New York and Mark Resnick of Orlando, Fla., were indicted on federal charges of conspiracy to commit mail fraud and wire fraud charges as the three are accused of a $100 million insurance scam. Binday is the owner and president of a Scarsdale insurance firm. The three were accused of conspiring to defraud major insurance companies into issuing life insurance policies valued at more than $100 million to fake buyers who were paid. The three allegedly earned millions of dollars in commissions from their scheme and arranged to purchase policies from the buyers to gain the benefits when the buyers passed away, according to the US Attorney. According to the US Attorney’s release, the scam spanned the past five years as they recruited older clients of modest means as “straw buyers” to apply for policies, promising them payments that would come from reselling the policies. Binday submitted applications with incorrect information including inflated assets and net worth so the insurance companies would issue policies for larger amounts, the U.S. Attorney’s Office said. Binday, surrendered to authorities. Kergil and Resnick were arrested. The companies deceived in the scheme include American General Life Companies, Lincoln Financial Group, Security Mutual Insurance Company and Union Central Life Insurance. [