Archive for September 16th, 2024

At last! Something even more boring to my readers than gun books!

Monday, September 16th, 2024

I admit, Lawrence probably isn’t going to cover this in his Linkswarm, and it is of interest to me partly because of my peculiar background. (I was with an auto insurance adjacent organization for quite a few years.)

But I do think there are some things in this story that are worth attention. Otherwise I wouldn’t be blogging it, right?

American Transit Insurance Company is an auto insurance company. They specialize in covering “for-hire vehicles”, which is basically your taxi cabs and Lyft/Uber drivers (at least, the ones who actually bother to get the specialized insurance they need to have). The paper of record claims that ATIC covers “60 percent of the available vehicles” in New York City.

American Transit Insurance Company is also insolvent. As in, “can’t pay their bills” insolvent. As in “can’t pay claims” insolvent.

In its latest financial filing, the privately owned company reported that it was insolvent, with more than $700 million in losses from existing and projected claims from past accidents — a huge hole that has been growing for years in part because of questionable financial practices, according to state officials.

Worthy quote:

That means American Transit does not have enough money in reserve to pay out those claims despite years of collecting premiums on those policies. Instead, the company has managed to continue operating by using money coming in from new premiums to help cover those costs, essentially leaving its current clients underinsured in the event of an accident, state officials said.

“Ponzi scheme”. The words we were looking for were “Ponzi scheme”.

That’s about the point where archive.is cuts off archiving the article, so I’ll have to summarize and use unlinked pull quotes from here on out.

What does this mean for me, Al Franken? There aren’t many companies that compete with ATIC in the NYC marketplace, so if ATIC collapses, a lot of “for-hire” cars will be without insurance, or have to pay more for insurance, which means either fewer taxis/Ubers/livery cars/etc. or higher costs, or both. Plus (and it probably goes without saying), people who have valid claims against ATIC insured drivers may not actually get paid. You got hit by an ATIC insured livery driver? Fark you, we don’t have any money to pay for your hospital bill.

How did they get this much in the hole?

…the department released two reports about American Transit’s finances from 2014 to 2019, which said that the company’s books showed evidence of accounting errors, unverified expenses and potential mismanagement.
According to the reports, American Transit paid nearly $100 million in commissions to an affiliated company for work signing up new policyholders and renewing existing policies, but the department could not confirm that the work had taken place.
American Transit also paid nearly $10 million for unclear reasons to Global Biomechanical Solutions, a consulting firm in which American Transit’s chief executive, Ralph Bisceglia, and a daughter-in-law of its co-founder had controlling interests, according to the reports.

Quel fromage! And I personally think the reasons are very clear, but publically stating them here might get me sued.

The firm submitted two remediation plans, which included rate increases and setting up a blockchain platform where policies could be bought and sold as nonfungible tokens.

You. Have. Got. To. Be. Kidding. Me. A blockchain platform. NFTs. If I were the NY State Department of Insurance, I’d be looking in every corner for the Jerky Boys or the “Jackass” guys or even for someone trying to do a revival of “Candid Camera”.

Almost from the beginning, the company had financial problems. State regulators flagged its reserves as inadequate in 1979, and later found increasing levels of insolvency in eight examinations that were conducted between 1987 and 2020.

1979, ladies and Germans. 1979.

…in 1991, state officials again filed a petition to rehabilitate the company and later moved to liquidate it.
American Transit challenged those proceedings, and in 1996, reached a settlement with state regulators that allowed it to remain in business under certain conditions, including that it be closely monitored by state regulators.

“closely monitored by state regulutors”. How’s that working out for you?

Since then, however, the firm’s finances have continued to deteriorate. Last week, state officials said they had not been approached by any credible company seeking to acquire American Transit or its insurance policies.

Ooooooh. Maybe not so good?

To be fair…

American Transit has suggested that insurance fraud contributed to its financial problems. In response to an email from The Times seeking clarification about the company’s statement this month, American Transit said that “rampant insurance fraud” threatened the commercial market and allowed lawyers and “opportunistic medical service providers” to inflate costs, undermining the insurance system.

I’m willing to concede there may be some truth to that. I mean, this is New York City…

If it is not purchased, the company could go into receivership with the New York Liquidation Bureau, which would use American Transit’s remaining assets or a state fund to pay off active claims, said Mark Peters, a partner at the law firm Peters Brovner and a former head of the bureau.

Your tax dollars at work, New York residents. Paying off for an insolvent insurance company.

Posted in Cars, Geek | 1 Comment »

Obit watch: September 16, 2024.

Monday, September 16th, 2024

Dr. George Berci, Holocaust survivor, violinist, and big damn hero, passed away on August 30th. He was 103.

Dr. Berci was one of the pioneers of minimally invasive surgery.

Dr. Berci brought a precise eye and an inventor’s zeal to innovations that enabled doctors to better visualize the bladder, colon, esophagus, prostate, common bile duct and other body parts. Until earlier this summer, he was the senior director of minimally invasive surgery research at Cedars-Sinai Medical Center in Los Angeles, where he had worked since 1969.
His innovations were critical to the revolution in minimally invasive endoscopies and laparoscopies, which dramatically reduced the need for surgeons to make large incisions.
In endoscopies, doctors use a flexible tube with a light and a camera to examine the upper and lower digestive system. Dr. Berci focused mainly on the area around the throat and vocal cords.
In laparoscopies, surgeons place a thin rod with a video camera attached at the end through a small abdominal incision. Carbon dioxide is then used to inflate the space to give doctors enough room to use small instruments to, among other things, remove gallbladders, cysts, tumors, appendixes and spleens; diagnose endometriosis; and repair hernias.

…

“It is unlikely that there will ever be another surgeon who so single-handedly impacts an entire field of surgery as Dr. Berci did,” said Dr. Brunt, the producer of the documentary, who is a professor of surgery at Washington University School of Medicine in St. Louis. “He understood the potential for laparoscopy and its applications long before most surgeons saw any value in it.”

Tito Jackson. THR.

Herbie Flowers, session musician who played bass on “Walk on the Wild Side”.

Tommy Cash, Johnny’s brother, but he had a music career of his own. THR.

Posted in Heroism, History, Music, Obits | No Comments »

You’re going down in flames, you tax-fattened hyena! (#129 in a series)

Monday, September 16th, 2024

This is still breaking. Two chiefs with the New York Fire Department have been arrested on bribery charges.

The six-count indictment accuses them of soliciting and receiving bribes in that role from 2021 to 2023 for projects underway in Manhattan, Brooklyn and Queens.
“For nearly two years, Saccavino and Cordasco misused this authority for their own financial gain,” the indictment charges. The men were also charged with lying to the F.B.I. in February about their involvement in the scheme.

These, by the way, are the same two chiefs whose homes and offices were raided by the FBI in February.

A retired firefighter who expedited building projects, Henry J. Santiago Jr., was identified by federal prosecutors as a co-conspirator who solicited and accepted bribes, but he was not named or charged in the indictment. The New York Times had previously reported his involvement, and he was identified by name by the authorities at a news conference about the case on Monday.

I’m going out on a limb here and saying: they flipped him.

According to the indictment, the two chiefs steered potential clients who wanted to expedite approval of their building projects to Mr. Santiago, and then ordered that those projects receive preferential treatment. Among the projects they fast-tracked were a high-end restaurant in Manhattan, a Brooklyn apartment building and two hotels near Kennedy Airport in Queens.
After getting paid by his clients, Mr. Santiago delivered bribes to Mr. Saccavino and Mr. Cordasco in cash and by check in face-to-face meetings at Fire Department offices in Brooklyn and steakhouse dinners in Manhattan, prosecutors said.
Mr. Saccavino funneled the illicit payments through a company started by his wife, while Mr. Cordasco received them through a company he had created and claimed was an entertainment business, prosecutors said.

Just in case you were wondering…

There is no indication that the case is related to any of the four separate federal corruption investigations swirling around Mayor Eric Adams, his campaign and some of his most senior aides. The inquiry focused on the mayor is being conducted by the same agencies that investigated the chiefs, however, and also relates in part to fire safety inspections, according to several people with knowledge of the matter said.

Posted in Law, Politics | 1 Comment »