This courtesy of Real Clear Politics as we gain much greater clarity why $enator Dodd is so against the ordinary people on the Gulf Coast that struggle to make ends meet because of outragious wind insurance. Simply put he and his family are pigs at the trough:
No wonder Senator Christopher Dodd (D-Conn) went wobbly last week when asked about his February amendment ratifying hundreds of millions of dollars in bonuses to executives at insurance giant AIG. Dodd has been one of the company’s favorite recipients of campaign contributions. But it turns out that Senator Dodd’s wife has also benefited from past connections to AIG as well.
From 2001-2004, Jackie Clegg Dodd served as an “outside” director of IPC Holdings, Ltd., a Bermuda-based company controlled by AIG. IPC, which provides property casualty catastrophe insurance coverage, was formed in 1993 and currently has a market cap of $1.4 billion and trades on the NASDAQ under the ticker symbol IPCR. In 2001, in addition to a public offering of 15 million shares of stock that raised $380 million, IPC raised more than $109 million through a simultaneous private placement sale of 5.6 million shares of stock to AIG – giving AIG a 20% stake in IPC. (AIG sold its 13.397 million shares in IPC in August, 2006.)
Clegg was compensated for her duties to the company, which was managed by a subsidiary of AIG. In 2003, according to a proxy statement, Clegg received $12,000 per year and an additional $1,000 for each Directors’ and committee meeting she attended. Clegg served on the Audit and Investment committees during her final year on the board.
IPC paid millions each year to other AIG-related companies for administrative and other services. Clegg was a diligent director. In 2003, the proxy statement report, she attended more than 75% of board and committee meetings. This while she served as the managing partner of Clegg International Consultants, LLC, which she created in 2001, the year she joined the board of IPC. (See Dodd’s public financial disclosure reports with the Senate from 2001-2004 here.)
Dodd is likely more familiar with the complicated workings of AIG than he was letting on last week. This week may provide him with another opportunity to refresh his recollections.
20 thoughts on “A bit more on $enator Chri$ Dodd’$ ties to offshore reinsurers as we follow the $$$$$$$$”
Just anouther AIG and General Re offshore partnership mixed with politics.
TWST: Would you give us an introduction to IPC Holdings, what you see as the company and organization today?
Mr. Bryce: IPC was set up about 10 years ago in May 1993. We actually commenced doing business in June 1993. We were set up under the sponsorship of AIG, American International Group, which is the largest insurance carrier operating in the United States. We also had a founding shareholder, General Re, which is a well known reinsurer operating in the United States. When we were set up in 1993, there was really an acute shortage of capacity, which followed a whole series of losses, starting in 1987 with the European storms and ending in 1992 with the largest loss in insurance and reinsurance history, at that time Hurricane Andrew. We specialize in property catastrophe. We are basically the financial oxygen mask for all the insurance carriers that are selling insurance in the United States and around the globe. We absorb the catastrophe losses, both natural catastrophes and man- made losses, which would include the tragedy of 9/11 last year. As I said, we are in our 10th year of operation and we are rated A+ from AM Best and A+ from Standard & Poor’s. We had no change in our credit ratings as a result of 9/11 and we had no negative credit watch, which puts us really in a very exclusive club of reinsurance carriers around the globe. Right now we are in our strongest financial position in the history of the company and we probably have one of the strongest balance sheets in the world on a risk-adjusted basis. So we are quite strong and we are in business and market conditions right now that are very attractive.
PS When did Spitzer start looking into General Re and AIG’s offshore dealings?
From what I can tell Dodd’s wife left the Board sometimes april 2004
Six nominees are presented for election at the Annual General Meeting to hold office on your Board of Directors until the next Annual General Meeting or until their respective successors are elected or appointed or their office is otherwise vacated. All of the nominees are currently members of your Board of Directors. Jackie M. Clegg served on the Board throughout 2003 and into 2004 until her resignation on March 1, 2004. The Board appointed Kenneth L. Hammond to fill the vacancy created by her resignation. YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED ON THE ENCLOSED PROXY CARD. It is not expected that any of the nominees will become unavailable for election as a director but, if any nominee should become unavailable prior to the meeting, proxies will be voted for such persons as your Board of Directors shall recommend.
tax havens AIG
Arthur Andersen has served as IPC’s auditor since 1993.(2001 statement)
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following descriptions summarize certain relationships and the terms of certain agreements of IPC. For more information, please see all of the provisions of the relevant agreements. A copy of each such agreement has been previously filed with the Securities and Exchange Commission (the “Commission”) and is listed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, a copy of which will be provided upon request. See “Additional Information.”
AIG RELATIONSHIP AND SHARE OWNERSHIP
IPC commenced operations in July 1993 through the sponsorship of AIG, a holding company incorporated in Delaware which through its subsidiaries is primarily engaged in a broad range of insurance and insurance-related activities and financial services in the United States and abroad. AIG purchased 24.4% of the initial share capital of the Company and an option (exercisable in specified circumstances) to obtain up to an additional 2,775,000 common shares (the “AIG Option”). On December 12, 2001, the Company completed a follow-on public offering (the “Offering”), which is one of the circumstances in which AIG is permitted to exercise its option. In the Offering, 17,480,000 ordinary shares were sold (including the exercise of the over-allotment option of 2,280,000 shares) at $26.00 per share. Concurrent with the Offering, the Company sold 2,867,000 shares in a private placement to AIG at a price equal to the public offering price. Furthermore, AIG exercised its option referred to above, whereby it acquired 2,775,000 shares at an exercise price of $12.7746 per share. Immediately subsequent to the Offering, AIG owned 24.3% of the share capital of the Company.
Since IPC’s formation, subsidiaries of AIG have provided administrative, investment management and custodial services to IPC, and certain of IPC’s officers are also officers of subsidiaries and affiliates of AIG. In addition, the Chairman of your Board of Directors is an officer and director of several AIG affiliates and subsidiaries. AIG has informed the Company that AIG presently intends to continue its share ownership in the Company for the foreseeable future.
CERTAIN BUSINESS RELATIONSHIPS
ADMINISTRATIVE SERVICES. IPC’s day-to-day administrative services are performed by AICL, a wholly-owned subsidiary of AIG, pursuant to an administrative services agreement (the “Administrative Services Agreement”). Services and facilities provided pursuant to the Administrative Services Agreement include tax, legal and accounting services, office space in Bermuda, electronic data services and other services required by IPC in the ordinary course of business. The fees payable in connection with such administrative services are equal to 2.5% of the first $500 million of annual gross premiums written, 1.5% of the next $500 million of annual gross premiums written and 1.0% of any additional gross premiums written. The Administrative Services Agreement terminates on June 30, 2003 and is automatically renewed thereafter for successive three-year terms unless prior written notice to terminate is delivered by or to AICL at least 180 days prior to the end of such three-year term. Fees payable for such administrative services totaled $3.2 million for the year ended December 31, 2001. In addition to such fees, IPC pays $50,000 per year to AICL for Mr. Johnson’s services as Chairman of your Board of Directors. Mr. Johnson is President and Chief Executive Officer of AICL.
IPCRe Europe Limited, a wholly-owned subsidiary of IPCRe, is party to an agreement with AIG Insurance Management Services (Europe) Limited (“AIMS”), an indirect wholly-owned subsidiary of AIG, under which AIMS provides administrative services for an annual fee of approximately $30,000 per annum.
INVESTMENT MANAGEMENT SERVICES. AIG Global Investment Corp. (Ireland) Ltd. (“AIGIC”), an indirect wholly-owned subsidiary of AIG, provides investment advisory services to IPC. AIGIC manages IPC’s entire investment portfolio, subject to IPC’s investment guidelines, pursuant to an investment advisory agreement (the “Investment Management Agreement”). The current term of the Investment Management Agreement is set to expire on June 30, 2002. The Investment Management Agreement will continue to be automatically renewable for additional three-year terms, subject to termination of any such three-year term by either party on 90 days’ prior written notice. We pay AIGIC an annual fee equal to 0.35% on the first $100 million of funds under management, 0.25% on the next $100 million of funds under management and
0.15% on all funds managed greater than $200 million. The management fee totaled $1.3 million for the year ended December 31, 2001. The performance of AIGIC under the Investment Management Agreement is reviewed periodically by your Board of Directors. AIGIC has entered into a Sub-Advisory Agreement with AIG Global Investment Corp. Ltd. (Europe) (“AIGIC (Europe)”), an indirect wholly-owned subsidiary of AIG, pursuant to which AIGIC (Europe) advises AIGIC on the management of IPC’s investment portfolio.
CUSTODIAL SERVICES. AIG Global Investment Trust Services Ltd. (“AIGTS”), an indirect wholly-owned subsidiary of AIG based in Ireland, provides custodial services to IPC pursuant to a custodial agreement (the “Custodial Agreement”). The Custodial Agreement provides for an annual fee of 0.04% of the market value of the portfolio plus reimbursement of reasonable out of pocket expenses including, but not limited to, legal fees. The Custodial Agreement has an open term and may be terminated by us or AIGTS on 90 days’ prior written notice. Fees incurred under the Custodial Agreement were $316,000 for the year ended December 31, 2001.
UNDERWRITING SERVICES. The Company’s new subsidiary, IPCUSL, has entered into an underwriting agency agreement with Allied World Assurance Company, Ltd. (“AWAC”), a newly formed multi-line insurance and reinsurance company. AWAC is a wholly-owned subsidiary of Allied World Holdings, Ltd., in which AIG holds a 23.4% ownership interest. Under the agreement, IPC will underwrite and place, on an exclusive basis, property catastrophe treaty reinsurance written by AWAC. IPC will receive an agency commission of 6.5% of gross premiums written. The initial term of the underwriting agency agreement is for three years commencing December 1, 2001.
Pursuant to an agreement executed prior to the closing of the Company’s initial public offering in March 1996 (the “Offering”), the Company agreed to provide certain original shareholders and AIG as holder of the AIG Option with registration rights for Common Shares held by them and certain of their subsidiaries at the time of the Offering (or obtainable pursuant to the AIG Option) and not sold pursuant to a registration statement or Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). Under this agreement, AIG has the right to require the Company, on two occasions, and General Re Corporation (the only remaining holder with such right) has the right to require IPC on one occasion, to register Common Shares, including shares obtainable through the AIG Option, under the Securities Act for sale in the public market, in an underwritten offering, in block trades from time to time or otherwise; provided, however, that the Company is not obligated to register shares unless the total number of common shares requested to be registered pursuant to any such demand equals or exceeds 2,500,000. Any other holder of registration rights has the right to participate in any such demand registration on a second-priority basis subject to a customary underwriter’s reduction. The Company may include other Common Shares in any such demand registration on a third-priority basis subject to a customary underwriter’s reduction. If the Company proposes to file a registration statement covering Common Shares at any time, each of AIG and General Re will have one right to include Common Shares held by it in the registration, in each case on a first-priority basis with any shareholders and on a second-priority basis with the Company, pro-rata according to the relevant respective holdings and subject to a customary underwriter’s reduction. The Company has agreed to indemnify each of AIG and General Re in respect of certain liabilities, including civil liabilities under the Securities Act, and to pay certain expenses relating to such registrations. The agreement terminates on June 29, 2003.
TRANSACTIONS IN ORDINARY COURSE OF BUSINESS WITH SHAREHOLDERS
IPC has assumed premiums from, and paid brokerage fees to, companies affiliated with shareholders of the Company. Premiums assumed from subsidiaries of AIG and of General Re Corporation were approximately $13.5 million and $2.1 million, respectively, for the year ended December 31, 2001. Premiums ceded to a subsidiary of AIG during the same period were $442,000. In addition, during the same period, the Company paid brokerage fees and commissions to Herbert Clough, Inc. of approximately $487,000. Herbert Clough is a wholly-owned subsidiary of General Re Corporation (which beneficially owned 1,250,000 Common Shares during the year ended December 31, 2001). All brokerage transactions are entered into on an arm’s-length basis.
I thought ole CLS might like this info.
SOP Greenberg is following his typical pattern so far asto the physical and management stucture of IPC.
I will check for physical location of the business’s. Cross employee relationships on Boards.
The chief counsel for the organizations and their history.
Here is what I found on my first goodle search—
AIG Investments Ireland Limited
AIG Investments Trust Services Limited
AIG Investments Fund Management Limited
AIG Securites Lending (Ireland) Limited
North Wall Quay
There is a similar company practise which the AG of Texas investigated and had an out of court settlement. It is worth exploring from a structural perspective. I believe in that case he told AIG to seperate out the two companies as they were sharing the same building and maybe even staff. I’ll look it up and post it. We could use it for a road map.
IPC Holdings, Ltd., IPCRe Limited & IPCRe Underwriting Services LimitedAmerican International Building,29 Richmond Road, Pembroke HM 08, BermudaTel: +1 441 298-5100 Fax: +1 441 292-8085E-mail: [email protected] site: http://www.ipcre.bmMailing Address:P.O. Box HM 152, Hamilton HM AX, Bermuda
IPCRe Europe LimitedAIG Centre, North Wall Quay, Dublin 1, IrelandTel: +353 1 672-0202 Fax: +353 1 672-0288
AIG Cat Excess Liability
Company Contact: Page Rouse ([email protected])
Company Address: AIG Building, 29 Richmond Road, Hamilton, HM 08, Bermuda
Postal Address: P.O. Box HM 152, Hamilton, HM AX, Bermuda
Phone Number: (441) 295-7827
Fax Number: (441) 292-8099
Great work. I wonder how her departure date from the board at IPC lines up with the indictments of those General Re exec for those sham reinsurance transactions with AIG. or perhaps Greenberg’s departure from AIG.
What I’m saying is she didn’t leave the board at IPC because the pay and bennes were bad.
AIG cases in Texas which might give a peek into the regulatory problems in insurance.
We must remember correlation is not causation. So these matters are only related to the extent we can find something which says they are related.
How you like them apples CLS? They don’t fall far from the tree.
Feel free to take these links offline. I put them here out of convience or you can keep them here. Its getting rather messy here. FYI this is why we need Gene’s bill. To ensure 9/11 tradgedy reinsurance is not turned into AWAC ever again. This case clearly involves issues which Gene’s Bill is designed to monitor, prevent and if necessary stop.
AWAC’s Chairman, AIG CEO Maurice “Hank” Greenberg, commented: “AWAC was formed in the aftermath of the 9/11 tragedy [by AIG, along with Chubb and investment bank Goldman Sachs] and Mike Morrison has built the company into a dynamic and innovative company and a premier market force. I am confident that under Scott Carmilani’s leadership, AWAC will go from strength to strength.”
Hank Greenberg is no longer running either company.
Hope this link works better to Texas Ag’s office.
Feel free to take these links offline. I put them here out of convience or you can keep them here. Its getting rather messy here. FYI this is why we need Gene
Key part of ruling—
According to the judgment, AWAC must maintain an operational separation from its founding companies.
PS. The CEO of Lexington left in December to work with a partnership formed by Hank Greenberg and others. FYI This is covered indepth here.
Could this be a cloning of AIG?
Ironshore building staff
Mr. Kelley and Mr. Kelly will be based in Ironshore’s Boston office, which now consists of four employees but will expand significantly, Mr. Deutsch said.
Asked whether he expects to hire more employees from Lexington, he said, “We will certainly be hiring additional people, but where they will come from is pure speculation….It’s not like we’re targeting anybody.”
The departures are the latest in a string of executive defections from various AIG units, including Lexington, that began after AIG reached an agreement on a bailout by the Federal Reserve in September and outlined plans to sell most of its operations except for its core U.S. property/casualty and foreign general units.
Several surplus lines executives say they understand that Mr. Kelley explored the possibility of buying out Lexington with an investor group.
An AIG spokesman denied that the company considered spinning off its surplus lines unit, though, noting that AIG CEO Edward M. Liddy has identified Lexington as one of the core operations that the insurer plans to keep.
The impact of the two executives’ departure on Lexington’s ongoing business remains to be seen, though the insurer is expected to remain a major force in the surplus lines market.
“In one sense, this is familiar territory for AIG, in that they have a history of developing strong managers who are, from time to time, recruited as senior managers at other companies,” observed Bruce Ballentine, vp and senior credit officer at Moody’s Investors Service in New York. “On the other hand, this is an especially challenging time for AIG and several other financial services firms.”
“It’s a huge blow to them,” said the wholesaler who requested anonymity. “Will Lexington survive? Of course they will.
“The big question,” he added, “is how many people are both of them going to take with them?”
Facing financial pressures and a battered stock price, AIG has made an effort to hold onto key executives with a retention payment program, which Mr. Liddy defended earlier this month against criticism from Rep. Elijah E. Cummings, D-Md.
Responding to a letter from Rep. Cummings questioning the payments, Mr. Liddy said they were necessary to retain executives on whom AIG’s credit rating may partially depend. Mr. Liddy cited a Standard & Poor’s Corp. announcement that if losses of business and personnel at AIG are “significant and threaten future business prospects,” S&P could lower the insurer’s credit ratings in 2009.
Mr. Liddy also noted that some AIG reinsurers have begun asking for provisions in their treaties that would allow them to cancel coverage upon the departure of critical AIG employees. A spokesman declined to comment on whether Lexington reinsurers are among this group.
In his Dec. 5 letter, Mr. Liddy reported that 168 AIG officers with base salaries ranging from $160,000 to $1 million have been offered retention awards ranging from $92,500 to $4 million.
Thirteen executive officers who will receive retention awards have agreed to defer the first installment from the end of this year to April 2009, he said, while 40 participants in the retention pool will not get salary increases through 2009.
I find it odd that a rating agency downgraded AWAC because it was no longer engaging in anti competitive behavior with AIG.
I wondered what some of this ment. Probably standard language for an independant Bermuda based offshore company?
Item 2. Properties
Pursuant to an administrative services agreement with American International Company, Limited (
Well well well what do we have here?
Seems AWAC and IPC had an underwriting services contract dating back to 2001. We will look into the original contract and the termination of services. I wonder if it had anything to do with the Texas AWAC order to unravel the enmeshed business structure AWAC held with AIG? Enquiring minds want to know.
ITEM 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
On December 5, 2006, IPCRe Underwriting Services Limited (“IPCUSL”), a subsidiary of IPC Holdings, Ltd. (the “Company”), and Allied World Assurance Company, Ltd (“AWAC”), a subsidiary of Allied World Assurance Company Holdings, Ltd, executed Amendment No. 5 (“Amendment No. 5”), dated as of December 1, 2006, to the Underwriting Agency Agreement, dated December 1, 2001 as amended, by and between AWAC and IPCUSL (the “Agency Agreement”). On December 5, 2005, AWAC delivered notice to IPCUSL terminating the Agency Agreement effective as of November 30, 2007. Pursuant to Amendment No. 5, AWAC and IPCUSL mutually agreed to terminate the Agency Agreement effective as of November 30, 2006. In accordance with Amendment No. 5, AWAC shall pay to IPCUSL a $400,000 early termination fee, $250,000 of which is immediately payable and $75,000 of which is payable on each of December 1, 2007 and 2008, respectively. AWAC will also continue to pay to IPCUSL any agency commission due under the Agency Agreement for any and all business bound prior to November 30, 2006, and IPCUSL will continue to service such business until November 30, 2009 pursuant to the Agency Agreement. As of December 1, 2006, Allied World Assurance Company Holdings, Ltd began to produce, underwrite and administer property catastrophe treaty reinsurance business on its own behalf.
American International Group, Inc. (“AIG”) was one of the founding investors that formed the Company in 1993 and was a principal shareholder of the Company until August 2006. AIG is also a principal shareholder of Allied World Assurance Company Holdings, Ltd. A copy of Amendment No. 5 is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The description of Amendment No. 5 contained herein is qualified in its entirety by reference to Amendment No. 5 filed herewith.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
Hank Greenberg is bringing back together the same team back together again. AWAC shared office space with Lexington in their Boston office. Now they share the same employee’s again under a new name all controlled by one Hank Greenberg—New name, same old team—
Tuesday, January 13, 2009
Hamilton, Bermuda, January 13, 2009
This action is brought in the name of the State of Texas by the Attorney General of
Texas, acting within the scope of his official duties under the authority granted to him by the
Constitution and the laws of the State of Texas, and specifically under the authority granted by the
Texas Free Enterprise and Antitrust Act of 1983. TEX. BUS. & COM. CODE
Newmarket Underwriters Insurance Company and Allied World Assurance Company (U.S.) Inc. were parties to separate reinsurance agreements with The Hartford Steam Boiler Inspection and Insurance Company, a wholly-owned subsidiary of AIG. The parties agreed to terminate the reinsurance agreements effective January 1, 2005. These agreements are described in
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