The position taken by the defendants is simply put, not defensible. I feel badly they will have to do some time. That having been said, does not make the action any less wrong.
We are all much better served to refrain from defending actions that are detrimental to the industry.
Today’s announcement of the AIG convictions on securities laws violations and the Marsh convictions on big rigging clearly document the critical importance for insurance organizations and their leaders to adopt and follow appropriate compliance and internal controls processes to maintain the legally required and operationally indispensible culture of ethics.
The problem here is that the AIG-Gen Re insurance transaction did not pass the smell test. The sad part of this is that Gen Re could have accommodated AIG’s request with a legitimate–if low risk–transaction involving essentially a transfer of mature reserves. The lesson for all insurance execs is this: even when the request comes from a valued and powerful client, BE SURE the transaction you set up will withstand scrutiny as having a business purpose, the documentation reflects the facts, and the fees/premiums/income earned are consistent with the structure of the transaction.
I have no idea why they went after Milton. He’s head of ceded reinsurance at AIG, but there was nothing in it for him. He just did what he was told. He used to teach nights at The College of Insurance for goodness sakes. He’s not a “bigwig”; he’s a workaday guy.
I wonder if these are some of the ‘A’ students we need in our industry just thinking outside the box. Hopefully, they will do some thinking while inside the box.
A lot of the really really bright people are just bored by our business. They need to find ways to make it more interesting. Us ‘C’ students aren’t bored, just boring.
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The position taken by the defendants is simply put, not defensible. I feel badly they will have to do some time. That having been said, does not make the action any less wrong.
We are all much better served to refrain from defending actions that are detrimental to the industry.
So, what kind of standard of ethics are we the people living by now? Are we that desensitized in believing “it’s okay, it’s just part of the job”?
Today’s announcement of the AIG convictions on securities laws violations and the Marsh convictions on big rigging clearly document the critical importance for insurance organizations and their leaders to adopt and follow appropriate compliance and internal controls processes to maintain the legally required and operationally indispensible culture of ethics.
The problem here is that the AIG-Gen Re insurance transaction did not pass the smell test. The sad part of this is that Gen Re could have accommodated AIG’s request with a legitimate–if low risk–transaction involving essentially a transfer of mature reserves. The lesson for all insurance execs is this: even when the request comes from a valued and powerful client, BE SURE the transaction you set up will withstand scrutiny as having a business purpose, the documentation reflects the facts, and the fees/premiums/income earned are consistent with the structure of the transaction.
I have no idea why they went after Milton. He’s head of ceded reinsurance at AIG, but there was nothing in it for him. He just did what he was told. He used to teach nights at The College of Insurance for goodness sakes. He’s not a “bigwig”; he’s a workaday guy.
Pud,
Your take is very anti-economic. Do you really think that there should be no incentive for a CEO to have his/her company perform well?
Tell us more – why was Brandon not indicted? Or was he one of the stool pigeons?
I wonder if these are some of the ‘A’ students we need in our industry just thinking outside the box. Hopefully, they will do some thinking while inside the box.
Excellent point… the average “C” student is not schmart enuf to think of a scam like dis. We need more “C” students running the insurance bizness!
A lot of the really really bright people are just bored by our business. They need to find ways to make it more interesting. Us ‘C’ students aren’t bored, just boring.