Saturday, September 03, 2005

The M.O.B. Meeting On Blumenthal's Suit

EXPURGATED MINUTES OF THE M.O.B. MEETING

The meeting commenced on Sept 11, 2005. Present were the parties, whose names are here omitted, involved in a settlement, a polite expression for plea bargain, with Connecticut’s Attorney General Richard Blumenthal. The meeting was addressed by one of the lawyers, name omitted, who arranged the $30 million settlement deal. Noticing that the audience appeared downcast, the attorney sought to introduce a little levity into the proceedings.

“Welcome to the M.O.B.,” he began, causing a few eyebrows to arch upwards. The acronym, he explained, stood for Meeting of Brokers, “Not, you know, that other thing.”

Eventually, the attendees – some brokers and representatives of the three major Connecticut insurance companies involved in the settlement, names omitted, warmed to the speaker, but it was a stiff climb upwards.

“Why all the frowns?” the speaker asked. “Ah, I think I know. As everyone here is aware, a brokerage house,” name omitted, “had arranged to steer insurance products to three major Connecticut companies,” names omitted, “so as to maximize commissions and stiff the competition. An alert New York Attorney General early on got wind of the scheme and began to prosecute. It was not long before copy-cat prosecutors in other states followed suit – no pun intended. Anyway, to make a long story short, we settled with Connecticut’s attorney general, and all of us now are understandably glum because the settlement calls upon us to disgorge $30 million of our alleged ‘ill gotten gains’ to the clients steered by brokers to three large insurers – herein after ‘The Big Three.’ But every dark cloud has a silver lining. Under terms of the settlement arranged with the attorney general, we have been permitted to keep the remainder of the alleged ‘ill gotten gains’ – a cool $150 million.”

At this announcement, the room brightened up considerably.

“And,” the speaker continued, smiling broadly, “none of you will be Stewartized,” an arcane reference, we learned afterwards, to Ms. Martha Stewart, who did not enter into a plea bargain with prosecutors and ended up spending some time in prison. Upon her release, Ms. Stewart was forced to wear an unfashionable and unsightly ankle bracelet.

“No ankle bracelets for you,” the speaker joked.

Pumping his fist in the air, the speaker continued, “All the damaging publicity has been marginalized. Although the CEO’s of the Big Three, some of whom are here with us, conspired with a major brokerage firm to fix the market on insurance products, none have been named in Mr. Blumenthal’s suit as defendants. They will emerge from this ‘close call’ with their reputations and future earning potential intact.”

Though some news reports, the speaker said, described the verbiage of the suit as “scathing” towards the CEO’s of the Big Three, industry analysts – and very likely the consumers of insurance products – tend to regard such legal documents as press releases; and indeed, it is common practice for attorneys general such as Spitzer and Blumenthal to pre-release such information to reporters, pad their suits with self serving propaganda, and cut deals to make themselves look heroic to the general public. Blumenthal, he noted, used to dabble in journalism while in law school. Some bad habits, he said, are impossible to shake.

The bottom line, the speaker said, is this: Everyone gets a little piece of the political pie – except, maybe, clients served by the insurance companies. In the short term, they’ll get a few pennies rebated from commissions. But in the long term, they’ll be paying more for their insurance products because, the speaker said, the arrangement found offensive by Spitzer and Blumenthal might have provided insurance carriers with more customers, thereby enabling them to reduce the cost of their product to compete in an aggressive business environment made less profitable by, among other things, publicity hunting attorneys general willing to make political hay from well known and widespread industry practices.

This last remark produced a hearty round of applause.

END OF MINUTES

ADDENDA

The CEO’s of the Big Three, whose names were not mentioned in Attorney General Richard Blumenthal’s suit, requested the same courtesy in these minutes. For reasons of clarity, the secretary would like to mention their names in this ADDENDA, which may become a public document. During the time of the alleged unethical activity, the CEO of Travelers was Jay Fishman; the CEO of the Hartford was Ramani Ayer and the CEO of CNA was (NAME DELETED OVER PROTEST OF THE SECRETARY.)
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