Behind door #2 – Come on down State Farm Bank (the good neighbor, the good customer, and the Rigsby qui tam)

You see, State Farm has a bank. A thrift to be exact. And it likes to offer loans, and other banking products to its insurance customers. But the people that they do this through are not employees of State Farm. They are the various independent agents (as State Farm likes to call them) that run State Farm offices.

Russell introduced State Farm’s Bank so well in  A different State Farm Battle (January 2008) that it seemed appropriate to give it another run.  It should come as no surprise that State Farm’s website has a more formal introduction (another h/t to Steve):

State Farm Bank, F.S.B. received formal approval for a thrift charter from the Office of Thrift Supervision (OTS) in November 1998 and is generally referred to as “State Farm Bank®”. Its focus is on consumer-oriented financial products, complementing State Farm’s insurance focus on personal lines.

State Farm Bank is a nontraditional financial institution and does not have branch offices. The bulk of direct customer interaction and product assistance is provided by State Farm® agents, augmented by a telephone call center, mail and the Internet. As of December 31, 2005, the Bank held $12 billion in total assets.

Documents filed in Katrina litigation introduce State Farm’s Bank in a different light – suggesting just how nontraditional it may have been following the storm. In fact, the amended RICO complaint added the State Farm Bank as a Defendant:

… State Farm Bank is wholly-owned by State Farm Mutual, and is headquartered in Bloomington, Illinois.  As of March 21, 2003, State Farm Bank had assets totaling in excess of 5,000,000,000 (five billion) U.S. dollars.

State Farm Bank aided and abetted a civil conspiracy by providing substantial assistance in carrying out the civil conspiracy. State Farm Bank aided and abetted a civil conspiracy by committing one or more tortious acts in concert with State Farm, or pursuant to a common design, engaged in same with State Farm.

State Farm Bank knew that State Farm’s conduct in the civil conspiracy was a breach of duty to the Plaintiffs as insured policyholders, and yet the Defendants and each of them gave substantial assistance or encouragement to the scheme. State Farm Bank’s aiding and abetting a civil conspiracy to conduct corrupt property inspections and procure contrived inspection reports was a direct and proximate cause of damages sustained by Plaintiffs.

Interestingly, the Forensic Rebuttal to Relator’s Response to Motion for Clarification of Order Denying Motion for Summary Judgment ignores the obvious connection and steps over those issues to get to the Brian Ford deposition: Continue reading “Behind door #2 – Come on down State Farm Bank (the good neighbor, the good customer, and the Rigsby qui tam)”

The ACC Bee Is Still In My Bonnet

ACC, the anti-concurrent cause issue, is burning up my head again. With health care insurance all the rage, it don’t hurt to remind ourselves how Big Insurance grew to be cracked-out body slammers. Most people don’t know that way back in 1945 the McCarran-Ferguson Act exempted Big Insurance (“Big-I”) from federal anti-trust law so long as long as the states “regulated” insurance. What a farce. Big-I and ISO hand out cash Tootsee Rolls to puppet commissioners and presto, before you know it, we’ve got regional, full-blown monopolies. Take health coverage: Wellpoint controls 71% of the Maine market; Blue Cross controls 90% of the North Dakota market and 100% of the Alabama market. All that said, keep your fingers crossed, the House Judiciary Committee (Senator Leahy) introduced an amendment to the health bill which would strip Big-I’s anti-trust exemption.

George Dale
George Dale

But, let’s revisit the magnolia ACC a minute. In prior posts, I talked about how Nationwide (probably with ISO’s help) quietly slipped the ACC into Mississippi in the ’80’s. By “slipped,” I mean they submitted a new policy form to the Commissioner for approval. Natch, it was instantly accepted. Recall, Mr Commissioner was indicted in ’94 for taking bribes from Big-I, but never went to trial. Undaunted, a mere 5 years later the legislative PEER committee caught him approving rate requests for State Farm, Allstate, Nationwide et al without any actuarial review. Over 380 rate requests, 59% of all, weren’t even looked at by actuaries.

MID Peer Report

Lee Harrell

  Some of you may recall that Dale’s deputy commissioner was the one who incessantly chatted with sycophantic law clerks overseeing Katrina, and probably caused the so-called “MID mediation plan” to be crammed down the throats of Katrina homeowners. Using Dale to the fullest, State Farm employed this sham mediation procedure to defraud hundreds and perhaps thousands of insureds. Evidence was produced showing State Farm staged the mediations in advance and actively concealed material evidence from homeowners during the “mediation” process. Continue reading “The ACC Bee Is Still In My Bonnet”

It’s going to happen – update on O’Keefe v State Farm

Time and again, the Courts of the Southern District have found that State Farm Mutual does not belong in the lawsuits challenging State Farm Fire’s handling of Hurricane Katrina insurance claims…

slide_2747_38345_largeThat certainly is true; however, the Court made an error.  On the other hand,  some say the day the Court corrects an error of this magnitude will  be the day pigs fly – but, according to the Huffington Post, that day has come.

Judge Ozerden, obviously, did not believe pigs could fly when he wrote, It will not be acceptable for Plaintiff to treat “State Farm” collectively in any future pleadings…(Bridgewater v State Farm) without thinking to check and learning that State Farm treat[s] ‘State Farm’ collectively. Continue reading “It’s going to happen – update on O’Keefe v State Farm”