Litigation

Kudos to Forge Consulting for attempting (albeit 3 weeks after the fact) to be the face of calm to members of a trial lawyer association to whom it is classified a "hero" merely because of size of its wad.

Forge Consulting claims "the power of state insurance regulation isn't hypothetical. It's been tested and proven throughout history, such as the reorganization of Executive Life of California in the mid-1980s. We think this is proof positive that structured settlement recipients have protections".

Those who experienced the Executive Life debacle know an entirely different story than Forge Consulting paints.

The important lesson learned by consumers, regulators and industry professionals from the Executive Life debacle is that Insurance regulation may be powerful but that DOES NOT guarantee effectiveness.

Executive Life Insurance Company (ELIC) was a large issuer of life insurance, structured settlement annuities, group annuities, and guaranteed investment contracts (GICs) issued to pension plans and municipalities.

Until its seizure, Executive Life was the primary operating subsidiary of the First Executive Corporation, notorious for having assembled the industry's largest portfolio of high-risk junk bonds. Executive Life was seized after junk bond defaults led to large losses and to a run on the company by customers, who were nervous about its ability to pay claims. State regulators in New York seized a separately financed subsidiary, the Executive Life Insurance Company of New York.

A conservation order was issued for ELIC on April 11, 1991, and a liquidation order was entered on December 6, 1991. Most of the company's policies were assumed by Aurora National Life Insurance Company in 1993 (see below).

In 2003, the French Company Credit Lyonnais and others agreed to pay $771 million in settlements resulting from false statements to bank regulators in connection with the acquisition of junk bonds and the insurance business of the failed Executive Life Insurance Company of California. Click here for the United States Department of Justice press release from December 18, 2003.

On February 1, 2005  Claims Journal reported that The Executive Life Action Network (ELAN), an activist group of former Executive Life Insurance Co. policyholders, on Tuesday filed a second California Public Records Act (CPRA) request with Insurance Commissioner John Garamendi urging him to release documentation of more than $4 billion in policyholder losses that resulted from the largest financial fraud in California history

Here is a 2005 quote from Sue Watson, co-founder of the Executive Life Action Network, and mother of Katie, an annuitant who suffered brain damage as an infant due to reported hospital error (exactly the type of claimant that those of us in the structured settlement, settlement planning and recovery managenment space serve and are trying to protect). "Our first request for documentation of our losses was met with a disappointing response from the Commissioner and his department. In no way did their response address the billions of losses that policyholders suffered since 1991"

January 31, 2008
California State Auditor Report: Former Executive Life Insurance Company Policyholders Have Incurred Significant Economic Losses, and Distributions of Funds Have Been Inconsistently Monitored and Reported  Source: Yubanet.com

It's certainly "refreshing" to see that Forge Consulting still sports the same lazy enthusiasm and inattention to detail that led to it in 2006 print up a typo laced brochure Download FORGEBrochure.pdf , and then distribute it at national meetings of trial lawyers in 2006 and 2007 hoping that nobody would notice.

In it's October 2, 2008 press release Forge Consulting says that it is critical that plaintiffs get advice from experts working only with plaintiffs. It also serves the needs of "plantiffs"  Given what we've proven here perhaps plaintiffs AND/OR "plantiffs" would be better off getting advice from someone who, for starters, knows what the heck they are talking about!

Speaking about the same subject, in 2005 the self righteous Forge Consulting President John T. Bair, along with Partners Charles Schell and Spooner Phillips  (Bair also in 2006) executed declarations under penalty of perjury to get on a list which would enable them to receive case assignments from Assistant United States Attorneys with the United States Department of Justice on behalf of the United States where it was a defendant. The declarations affirmed that Bair, Schell and Phillips provided substantial work for defendant, and their cousnel in each of the preceding 3 years to the declaration. These men knew what they were signing and yet still had the nerve to publically advertise that they were plaintiff exclusive. The scales of false advertising and perjury were in the balance at the time.