[tag]UnitedHealthcare[/tag], a unit of UnitedHealth Group Inc., and two affiliates have been fined $600,000 for failing to properly respond to consumer complaints, no paying certain benefits, and violations of other insurance regulations. The settlement was reached between the company and the Office of the [tag]Commissioner of Insurance[/tag] in November, but announced yesterday.
Included in the violations are allegations that:
- UnitedHealthcare did not comply with state regulations on grievances and independent reviews when claims were denied
- UnitedHealthcare applied a separate deductible to mental health benefits and did not tell customers when mental health benefits were reduced
- UnitedHealthcare failed to respond to requests for information from the Office of the Commissioner of Insurance
As part of the settlement, UnitedHealthcare will put $2.5 million into an escrow account. If there are any significant violations of insurance regulations before the end of 2008, the money will be forfeited. The insurance company has submitted a compliance plan and it is expected that there will be no violations.
Homeowners hit by [tag]Hurricane Katrina[/tag] are suing [tag]Nationwide Insurance[/tag] to try to force the company to pay out billions of dollars to pay for [tag]flood damage[/tag] that was not covered by their insurance policies.
Richard F. Scruggs, the Pascagoula attorney who is representing Nationwide customers Paul and Julie Leonard, and argues that the policy sold to them (and other homeowners) included references to [tag]windstorms[/tag] and [tag]hurricanes[/tag]. This made homeowners erroneously believe that they’d be covered for [tag]hurricane damage[/tag], whether from water or wind. Scruggs also says that insurance agents told customers that they didn’t need to seek coverage for flood damage.
Daniel F. Attridge, lawyer for Nationwide, argues that the insurance policy was very clear in its [tag]exclusion[/tag] of flood damage.
Homeowners have been upset that some insurance policies only pay for damage above the highest water stains on their walls. Some homeowners are saying that their homes suffered excessive wind damage long before the flood waters damaged the houses.
Scruggs has filed suit on behalf of approximately 2,000 clients, but opted not to seek [tag]class action[/tag] status for them because that would have delayed the cases too long.
At the heart of many of the cases is the claim that the insurance agent told homeowners they didn’t need flood insurance. Scruggs claims that this expanded the coverage under the policies to include flood insurance. Nationwide counters that the agent was not authorized to expand covereage.
[tag]Microsoft[/tag] Corp. was fined $357 million today by the [tag]European Union[/tag] for disobeying the 2004 [tag]antitrust[/tag] order to share program code with competitors. Additional fines of $3.82 million per day could be assessed beginning July 31 if the company fails to supply complete and accurate technical information to program developers to help them make software that works well with the [tag]Windows[/tag] operating system.
Microsoft contends that it made a good-faith effort to comply with the commissioner’s original decision, but that the order lacked clarity and the fines were unjust. The company further says that the EU is trying to force them to hand over patented information which would help developers benefit from Microsoft’s hard work and innovation. The EU counters that the code requested from the company is communications code that has little innovative value.
The ACFE’s 2006 [tag]Report to the Nation[/tag] on [tag]Occupational Fraud[/tag] and Abuse has arrived! Get your free download at the ACFE’s website.
Read my related post on the report about on-the-job fraud.
A rule in U.S. law called “[tag]abatement ab initio[/tag]” means that [tag]Kenneth Lay[/tag] will have his [tag]conviction[/tag] on [tag]federal charges[/tag] related to the [tag]Enron[/tag] [tag]fraud[/tag] wiped out. A defendant who dies before having the opportunity to [tag]appeal[/tag] the conviction has everything related to the case extinguished, meaning that the record will show that Lay was never indicted or convicted.
The theory behind this law is that the appellate process is a key part of protecting the integrity of the criminal justice system. It is part of the due process afforded to defendants, and since Lay’s death rendered him incapable of participating fully in the [tag]due process[/tag], his conviction must be nullified.
This nullification will also impact the ability of the government to collect money from Lay’s estate. The government announced that it would try to seize $43.5 million in [tag]ill-gotten gains[/tag] from Lay. Now that Lay is dead, the process to collect that money will be affected. The government will ikely have to bring a [tag]civil lawsuit[/tag] against Lay’s estate. Unfortunately, a civil suit will probably require the government to re-prove all the facts already established in the criminal proceedings.
According to the Wall Street Journal, the demand for [tag]disaster insurance[/tag] far exceeds the current available supply, and this is affecting our entire economy. Companies and individuals are quickly buying disaster insurance, and the insurance companies themselves are scrambling to buy coverage of their own on the policies they write (known as [tag]reinsurance[/tag]). Reinsurers have significantly raised their rates because of the volume of claims last year, and businesses and homeowners are feeling the effects. [tag]Hurricane Katrina[/tag] caused almost $40 billion in insured losses, and about half of that was covered by reinsurers.
Rates have risen so significantly that companies are opting to cancel projects which require disaster insurance versus paying the extremely high rates. It seems the only people benefitting from the high rates are investors in insurance companies.
Tracy Coenen: Energetic force behind local firm Sequence Inc.
Accounting Magazine – Marquette University
By Dan Love
A typical workday for Tracy Coenen may start in the early morning hours, or perhaps at 5:00 in the evening, and she may be conducting business from her office in Milwaukee’s Third Ward, or at a second office in downtown Chicago, or at any number of client sites in either city.
Ms. Coenen has thrived on the flexibility of her schedule since she combined her independent and ambitious personality with her strong technical and instinctive knowledge of accounting and criminology to form Sequence Inc., a forensic accounting firm specializing in fraud investigation and litigation. Now, six years into her venture, Tracy is encouraged by her success and continues to be the sole driving force that has put Sequence Inc. in a remarkable position for growth while earning her tremendous respect among her colleagues. Continue reading
I ran across an interesting post about splog software. What’s splog software, you say? Basically, it’s software that creates spam blogs, or splogs.
The splogs are used to link to other sites, so that those other sites can increase their search engine rankings, get more traffic, and also get pay-per-click advertising revenue. The splogs often have gibberish content or use content stolen from other blogs. Continue reading
Tonight on Windfall on NBC, and I quote:
“I’m a P.I., not a [tag]forensic accountant[/tag].”
Three people were charged in federal court with [tag]theft of confidential information[/tag] from The [tag]Coca-Cola[/tag] Co., which they tried to sell to competitor [tag]PepsiCo[/tag] Inc. The group includes Coke employee Joya Williams, an executive administrative assistant. The other two charged in the case are Ibrahim Dimson and Edmund Dhaney.
On May 19, [tag]Pepsi[/tag] provided to [tag]Coke[/tag] a copy of letter mailed to Pepsi in an official Coca-Cola envelope. The letter was postmarked in the Bronx, and purported to be from “Dirk”, a supposed high level employee of Coke with detailed confidential information. Coke then contacted the [tag]FBI[/tag] and an [tag]investigation[/tag] began.
An FBI [tag]undercover[/tag] agent received from “Dirk” 14 pages of confidential documents from Coke. Representatives from Coke confirmed that the documents were authentic, and did indeed contain highly confidential information considered to be [tag]trade secrets[/tag]. “Dirk’s” fee for the documents was $10,000, but he also agreed to receive $75,000 in exchange for a sample of the confidential new product.
The FBI went even further, offering “Dirk” $1.5 million for other Coke trade secrets. “Dirk” was actually Ibrahim Dimson. Joya Williams was caught by video surveillance cameras putting confidential documents on a new product into a personal bag. She was also taped holding a container with liquid in it, and putting it in her bag. Coke officials verified that it was, in fact, the confidential new product.
The suspects have been arrested on federal charges of wire fraud and unlawfully stealing and selling trade secrets.