DOUBLE-DIPPING IN DALLAS:
Texas Mutual Insurance Company reported that Ruben Perez of Dallas pleaded guilty to workers' compensation fraud-related charges and received a two-year deferred adjudication sentence. The court ordered him pay $6,000 in restitution to Texas Mutual, and sentenced him to serve 160 hours of community service. Perez was injured on-the-job and began to collect temporary income benefits (TIBs) from Texas Mutual. After he returned to work, he allegedly lied repeatedly to a Texas Mutual claim adjuster, claiming that he was still unable to work as he continued to receive $356 per week in TIBs. This sort of scam is called "double-dipping" because the claimant is getting paid by his employer for working and, in effect, getting paid by the insurance company for being too injured to work. When Texas Mutual investigator Sandra Milburn uncovered evidence against Perez, she contacted Assistant District Attorney Donna Crosby, who prosecuted the case on behalf of the Travis County District Attorney office. In an announcement, Texas Mutual stated that three years ago, Milburn had investigated Perez's employer for premium fraud, and Crosby prosecuted that case too. Ultimately, the court ordered the employer to pay $200,000 in restitution to Texas Mutual, and the owner received a five-year probated sentence.
WOOLEY WINS IN LA.:
Louisiana voters have given Insurance Commissioner Robert Wooley, a Democrat, the okay to keep his job. In the Nov. 15 election voters favored the incumbent election over his Republican opponent Dan Kyle, a former legislative auditor. According to the New Orleans Times-Picayune, Wooley won 58 percent of the votes to Kyle's 42 percent. Wooley stepped into the commissioner's post as acting commissioner in 2000 after the previous commissioner, Jim Brown, was convicted of lying to FBI agents. Brown's imprisonment, along with the prison sentences of the two former commissioners who held the office before Brown, played a big part in the bitter campaign. Kyle originally started out in the race for the governor's office but switched to go after the commissioner's post. He reportedly tried to use the fact that the three previous commissioners had gone to jail to taint Wooley by association, while painting himself as a reformer. Wooley emphasized his record on consumer protection and combating insurance fraud. The Picayune reported that Kyle took Wooley to task during the campaign for accepting donations from insurance companies and agents, claiming that accepting such donations hampered Wooley's ability to be independent. However, Wooley claimed Kyle also accepted donations from the insurance industry. In the Nov. 15 election Louisianans also voted into office the state's first female governor, Kathleen Blanco, who currently serves as Louisiana's lieutenant governor. Blanco, a Democrat who defeated her Republican opponent Bobby Jindal, will be inaugurated Jan. 12.
USE OF STAFF COUNSEL UPHELD:
A Texas appellate court confirmed the right of insurers to defend their customers with staff attorneys, according to the American Insurance Association (AIA). The insurance trade group, said in the case of American Home & Travelers vs. Dallas County UPLC, the 11th Court of Appeals found the practice of using staff attorneys to be both legal and ethical. AIA, which filed an amicus brief in the case, stated that the court further ruled that this practice is essentially the same as utilizing outside counsel. "This significant decision will help preserve insurers' freedom to efficiently manage their policyholder litigation," said J. Stephen Zielezienski, AIA assistant general counsel. "The Travelers victory removes a cloud of uncertainty, and will allow insurers to initiate or expand staff counsel operations in one of the country's largest insurance markets, saving both insurers and their customers tens of millions of dollars annually." Several legal challenges to the use of staff counsel have been mounted in Texas since 1998, but this decision is consistent with the nationwide trend of courts and ethics committees upholding the use of staff counsel, the AIA said.
LA. AGENT ARRESTED:
A Ruston, La. insurance agent with expired licenses was issued a cease and desist order in the wake of his arrest on charges of felony theft and insurance fraud. According to the Louisiana Department of Insurance the arrest and C&D order actions were taken as part of the collaborative efforts of the LDI Fraud Unit and the Louisiana State Police Fraud Unit. John Hayden Hancock of Ruston (business) and West Monroe (residence), was served with an order to cease and desist from all insurance business activities by Department of Insurance Fraud Unit investigators. He had held a life and health insurance license from August 2000 to May 1, 2002, and a property and casualty license from December 1998 until May 1, 2003, according to DOI records. The department said the C&D order states that Hancock fabricated six bogus life insurance policies. He allegedly misappropriated more than $6,000 in commissions and bonuses on these policies, which were written on six persons who apparently knew nothing about them. LDI said policyholders who bought insurance from John Hayden Hancock or have reason to believe he may have submitted false insurance applications on them should call their insurance company directly. The Louisiana Department of Insurance can be reached at (225) 342-5900, or (800) 259-5300, from 8 a.m. to 5 p.m. weekdays for assistance.
IEF SITES APPROVED:
Two additional universities will host insurance education institute programs next summer, one in Arkansas and one in Mississippi. According to the Insurance Education Foundation (IEF), the University of Central Arkansas was approved to host its first Insurance Education Institute in June 2004 at its Conway, Ark., campus. The institute will follow the traditional two-week format where participants reside on campus while completing this intensive training course. Mississippi State University, Starkville, will host its first Insurance Education Institute in July. Mississippi State is piloting a new format, which will consist of an online segment that will provide a basic introduction to the topics in the three weeks preceding the one-week, on-site segment. All institute programs are a three-credit hour, graduate-level insurance training course for high school teachers, counselors and administrators, community college instructors, and graduate students. They are funded by grants from IEF through the insurance industry, which cover all expenses for the participants, including tuition, room and board, and educational materials, with the exception of travel. The course is designed for educators who teach insurance either as a specific course or as part of another subject. IEF will again fund in 2004 its institute programs at Drake University, Des Moines, Iowa, in June; St. John's University, New York (Manhattan campus) in July; and Illinois State University, Normal, Ill., also in July.
