Tennessee Insurance Commissioner Paula Flowers, Acting as liquidator for three failed malpractice insurance firms, has filed suit in U.S. District Court seeking to recover damages on behalf of the companies’ more than 50,000 former policyholders.

The 62-page lawsuit, filed in the Western District of Tennessee, asserts that executives of Richmond-based Reciprocal of America and its network of commonly managed companies, together with two reinsurance companies, engaged in a massive conspiracy to defraud the policyholders of The Reciprocal Alliance, American National Lawyers Insurance Reciprocal, and Doctors Insurance Reciprocal. The three Tennessee-domiciled risk-retention groups collapsed in January, 2003, leaving thousands of doctors, hospital and lawyers without malpractice coverage and unpaid claims totaling at least $200 million.

The lawsuit reportedly details a complex web of corporate shells, secret side agreements, loans, and money transfers, all controlled by a small group of corporate officers and investors or Reciprocal of America led by Richmond, Virginia, attorney J. William “Bill” Crews. The complaint details RICO violations, fraud, unjust enrichment, misappropriation of funds, and negligence.

The fraud reportedly turned on a secret side agreement in which the supposed re-insurer of the companies. General Reinsurance Corp., had capped its liability. As the companies continued to slide more deeply into insolvency, ROA’s top officials were still reportedly assuring policyholders, creditors and regulators that all was well. A full copy of the complaint is posted on Tennessee’s Web site at: http://www.state.tn.us/commerce/insurance/reciprocols/index/html

Flowers has hired the law firms of Farmer & Luna, PPLC of Nashville and the Birmingham, Alabama firms of Beasley, Allen, Crow, Methvin, Portis and Miles and Cross, Poole, Goldasich & Fisher, LLP.

The suit is related to the ongoing multi-state receivership actions involving Virginia-based ROA and its various affiliates. Tennessee officials have been working with Virginia insurance officials to resolve the cases and protect the policyholders of TRA, ANLIR, DIR< and ROA. The Tennessee suit was filed in the same U.S. District Court as three now-combined class-action suits filed in March, 2003 on behalf of the three companies' policyholders.

“We are determined to pursue this matter as efficiently as possible, and we hope to make the policyholders of all these companies whole,” said Flowers.



We're here to help!

We live by our creed of "helping those who need it most" and have helped thousands of clients get the justice they desperately needed and deserved. If you feel you have a case or just have questions please contact us for a free consultation. There is no risk and no fees unless we win for you.

Fields marked    may be required for submission.
  1. I'm an attorney

A look inside the Takata air bag assembly

Four major automakers settle Takata airbag MDL claims

Four major automakers have agreed to a pay a combined $553.6 million to settle allegations pending in...

Beasley Allen lawyer appointed co-lead counsel in...

Beasley Allen lawyer W. Daniel “Dee” Miles, III, head of the firm’s Consumer Fraud section, was...
volkswagen

Beasley Allen joins other firms in filing class action...

Beasley Allen has joined with additional law firms to file a new class action lawsuit after it was...
Wells Fargo Fraud

Millions of Wells Fargo customers victims of fraud

Federal regulators revealed an investigation has uncovered a massive fraud scheme at Wells Fargo, whose...
volkswagen

Judge grants preliminary approval to VW emissions...

The settlement between Volkswagen and owners of about a half-million diesel-powered vehicles over the...
Data Breach

Home Depot Data Breach Class Action can proceed, judge...

A class action lawsuit brought by financial institutions against Home Depot for losses suffered during...

Highly recommended

I would highly recommend this law firm to handle any of your legal needs.

—Sandy