Some N.C. Employers to Receive Money from Phoenix Fund Fraudulent Reinsurance Scheme
North Carolina Insurance Commissioner announced the distribution of $6.5 million to 661 former members of the Phoenix Fund Inc.
Distribution checks will be mailed to employers who were participating members of the Phoenix Fund as of Oct. 17, 2006, the date the Court ordered the Phoenix Fund into rehabilitation. The remaining recovered monies will be used to pay the Fund’s obligations. Any monies remaining after the payment of such obligations will be returned to the same former members in a second and final distribution upon approval of the Court.
The Phoenix Fund was a self-insured group workers’ compensation fund whose members agreed to pool their workers’ comp liabilities rather than seeking coverage in the private market. Self-insured group workers’ comp funds are licensed and regulated by the North Carolina Department of Insurance
After the N.C. Department of Insurance uncovered a more than $20 million fraudulent reinsurance scheme, leaving several insurance entities, including the Phoenix Fund, without reinsurance, The Phoenix Fund was ordered into rehabilitation in October 2006, by the Wake County Superior Court. (workersxzcompxzkit)
Since the Phoenix Fund has been under rehabilitation, the Department has sought and recovered nearly $18 million for the Phoenix Fund from the Fund’s purported reinsurance broker, at the center of the fraudulent reinsurance scheme. The broker pleaded guilty to mail fraud and money laundering and received a sentence of up to 5 years in jail followed by three years of supervised release and was ordered to pay over $19 million in restitution to the Phoenix Fund.
Author Robert Elliott, senior vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: [email protected] or 860-786-8286.
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