Rhode Island Beacon Mutual's looks to write next chapter
Parting Shots • February 6, 2006
Nearly 15 years ago, Rhode Island employers faced an uncertain future: state law required businesses to carry workers' compensation insurance to cover their employees, yet no commercial insurer ...
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Subject: Questionable Insurance Practices
Posted On: August 21, 2007, 10:30 am CDT
Posted By: H.Ali
Comment:
An updated article is needed to clarify what has really transpired at Beacon Insurance in Rhode Island. As with the other RI "nonprofit" insurance company, Blue Cross of RI, Beacon's financial officers misused funds in the millions. In both cases the CEO's walked off with little more than a slap on the hand. In 2007 Beacon hired a new CEO, James Rosati, who sent a letter to policy holders on July 27, 2007, stating that as part of a restructing, Beacon Mutual "has adopted two seperate rate reductions of 16% and 5.9%," and is also "issuing a $20 million dividend to policy holders." Better than the multi million dollar loan to Blue Cross's CEO that was "forgiven".
There is a major misconception that a "nonprofit" organization is assumed to have ultruistic motivations, and that all money is spent carefully for the right cause. Nothing can be further from the truth. "Nonprofit" simply means that all money received is spent, or accounted for in the company's expense report. A major aspect of the expense report includes salaries and various administrative expenses, which can be excessive and include payouts to "friendly" companies for services such as the Blue Cross survey's that have meaningless results, yet cost policy holders millions.
Subject: Questionable Insurance Practices
There is a major misconception that a "nonprofit" organization is assumed to have ultruistic motivations, and that all money is spent carefully for the right cause. Nothing can be further from the truth. "Nonprofit" simply means that all money received is spent, or accounted for in the company's expense report. A major aspect of the expense report includes salaries and various administrative expenses, which can be excessive and include payouts to "friendly" companies for services such as the Blue Cross survey's that have meaningless results, yet cost policy holders millions.