The sudden financial collapse of Reciprocal of America (ROA) in 2003 left hundreds of doctors and lawyers with no malpractice coverage and many with six-figure unsatisfied malpractice judgments. Top ROA management recently pled guilty to federal criminal charges of malfeasance in connection with claims reserving and financial management. State and federal investigators have critically examined the role of Berkshire Hathaway subsidiary Gen Re in ROA's problems. Berkshire's voluntary disclosures regarding the ROA account in turn led investigators to closer scrutiny of similar Gen Re dealings with AIG. That in turn led to the recent resignation of its longtime top manager, Maurice "Hank" Greenberg.
This Times article looks at the impact of ROA's collapse on its insureds, professionals left with policies worth little but a future claim against ROA's insolvent estate, and injured claimants without financial compensation for their losses. "The Insurance Scandal Shakes Main Street" (New York Times, April 17, 2005)
Posted by dougsimpson at April 17, 2005 03:17 PM