Ohio Insurance Director Ann Womer Benjamin, acting in her capacity as liquidator of Cleveland-based health insurer Renaissance Health Plan, Inc., has sued 12 former officers and directors of the former insurer.
The eight-count civil complaint filed in the Franklin County Court of Common Pleas alleges that the defendants’ breach of their fiduciary duties, negligence, gross negligence, and reckless conduct caused serious fiscal injury to Renaissance, its creditors and policyholders/members.
The suit claims that the defendants are liable for unspecified damages in excess of $25,000 sufficient to compensate for the damage to the former insurer.
The complaint alleges that the damages to the insurer were due to action and inaction by the directors and officers of Renaissance. The complaint alleges that the company’s officers were negligent by failing to perform their duties and responsibilities as officers by, among other things, mismanagement, wasting corporate resources, and issuing financial statements that misstated Renaissance’s true financial condition. The complaint also alleges that the company’s directors breached their fiduciary duties and were negligent by failing to perform their duties and responsibilities as directors by, among other things, failing to properly oversee the management of Renaissance.
In addition, the complaint claims that the defendants made payments to a number of companies at a time when the defendants had reasonable cause to believe that Renaissance was insolvent or was about to become insolvent.
Renaissance was one of seven health maintenance organizations serving Medicaid patients across Ohio. The health insurer, formerly known as Emerald HMO, was founded in 1994, purchased in early 2000, and subsequently renamed. It served Medicaid enrollees in Cuyahoga, Lorain, and Summit Counties. The company’s Medicaid business was funded by monthly payments from the Ohio Department of Job and Family Services.
On Aug. 22, 2002, Renaissance reportedly agreed to an order of rehabilitation entered by the Franklin County Court of Common Pleas and on Nov. 6, 2002, the court ordered the company to be liquidated.
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