Mega Life, NASE & UICI
1. What lawsuits have been filed against any or all of the above?
2. What were the results of those lawsuits?
3. What are any subsidiaries and/or affiliates of the above?
4. What is the history of any or all of the above with regard to any
regulatory and/or oversight agencies, with particular attention to any
reprimands or punitive actions such as fines, suspensions, etc?
5. What is the history of any governmental or regulatory oversight
agencies? actions against any officers, directors or personnel of the
above entities?
While links are helpful, we also want this answer to be written in a narrative
form.
A friend told me that I would receive a high-quality answer on this
site, and while $200 seems like a lot of money, if I were to receive
an extraordinary answer that is beyond any reasonable expectation I
would be willing to give a more than fair tip.
Thanks |
Request for Question Clarification by
pafalafa-ga
on
05 Sep 2004 15:53 PDT
Hello lettie-ga,
Oh, what a tangled web some companies weave....
The three companies you asked about are more or less one and the same.
Or at least, all are owned and operated by the main entity, UICI,
which is incorporated in Delaware, headquartered in Texas, and
"domiciled" in Oklahoma, just for starters.
UICI has a very well documented track record in the insurance
industry, as does its subsidiaries, Mega Life, NASE, and a number of
other companies. In a nutshell, the company has undergone some
dramatic re-organization in the past year, is party to a fair number
of troubling lawsuits, and doesn't seem to have a great track record
in customer service, judging by the number of complaints on record.
From the research I've done thus far, I believe I can:
--outline the MAJOR lawsuits that these companies (the three you
mentioned, along with other subsidiaries of UICI) are involved in. I
cannot promise you a comprehensive accounting...there are simply too
many.
--provide SOME information on the results of the lawsuits, although
from what I can see, many of them are long dragged-out affairs that
are still ongoing. Those that are done don't always have clear-cut
resolutions.
--detail the subsidiaries and affiliates of these companies, based on
the most recent information available...note, however, that this is a
rapidly changing landscape.
--outline some typical regulatory oversight actions. Since these
companies are involved in all 50 states, I cannot realistically review
each and every state to report on regulatory activities. But I can
certainly access some of the key oversight information for your
review.
--outline some other items of interest, such as non-governmental
company ratings, or records of consumer complaints as filed with
Better Business Bureaus in various states.
--I doubt that I can provide much -- if any -- information on
individual corporate officers. There are simply too many in the
various companies to do any careful tracking of histories.
If the above-described information seems a reasonable approach to
answering your question, please let me know, and I'll do my best to
provide an answer that lives up to your and your friend's
espectations.
Thanks.
pafalafa-ga
|
Clarification of Question by
lettie-ga
on
05 Sep 2004 20:18 PDT
I need extremely thorough answers to each of these questions. Please
go through each of the five questions and tell me which you can answer
completely, and an estimate on the rest of how comprehensive a report
you can provide. If it makes sense to cancel this question and post
five individual questions with different prices for each, I am not
opposed. If you feel you can answer some of the questions in complete
detail and would like for someone else to try that which you cannot
provide completely then let me know. The bottom line is that I am open
to doing whatever gets me very deep and comphrensive answers.
Thanks
|
Clarification of Question by
lettie-ga
on
05 Sep 2004 20:21 PDT
Also please give me an estimate of what you think would be a fair
price for all that I am asking, broken down by each of the five
questions.
Thanks
|
Request for Question Clarification by
pafalafa-ga
on
06 Sep 2004 05:45 PDT
lettie-ga,
A good deal of the information you are looking for (about half, I
would guess) is contained in UICI's filings to the SEC, particularly
their 10K annual reports. Are you already familiar with these
documents? It's important for a researcher to understand your
baseline, so we don't provide you with information that you already
know.
If you're not familiar with the 10K, then please have a look at it here:
http://media.corporate-ir.net/media_files/NYS/UCI/reports/uci_040604.pdf
As you can see, it details (a) subsidiaries and affiliates, including
Mega Life and NASE, and (b) major legal activities, including
individual and class action law suits.
The 10K gets you close to "extremely thorough" information for some of
your questions, particularly #3. After having a look, please let me
know your thoughts as to how much additional information you are
seeking.
Please understand that doing a major investigation of a complex
company is a task that takes weeks to accomplish. I am trying to get
an idea of how much information you already have -- and how much
additional information you would need -- before I can respond in
detail to your recent feedback regarding how to best get answers to
your 5 questions.
Thanks for you patience on this.
pafalafa-ga
|
Clarification of Question by
lettie-ga
on
06 Sep 2004 09:31 PDT
The l0K information is helpful but ends 2003. We are in a time crunch
& need any additional information by Wednesday night, Sept.8th, and
perhaps more after that. So do all you can as outlined in your recent
response, especially regarding regulatory oversight actons in
Oklahoma, Texas, and other states that are on the radar. Class Action
suits are in the works, for example, and records of complaints, etc.
As much as you can do in a limited amount of time, please move
forward.
|
Request for Question Clarification by
pafalafa-ga
on
06 Sep 2004 10:08 PDT
lettie-ga,
I wish I could assist you, but I can't in good conscience, take this
on. There is simply too much information to wade through, on too many
topics, for too many companies. On top of accessing, reading and
comprehending their SEC files, I'd have to sort through documents for
multiple companies in multiple jurisdictions -- lawsuits, complaint
files, news reports, regulatory documents, and who knows what else.
Even under normal circumstances I would be hesitant, and the Wednesday
deadline only adds to my overall reluctance.
Perhaps another (bolder) researcher will be willing to dive in here.
However it unfolds, I wish you the best of luck.
pafalafa-ga
|
Clarification of Question by
lettie-ga
on
06 Sep 2004 11:19 PDT
OK, I understand. If you are interested, I'd like for you to do what
you can under the time constraint of Wed. night midnight. We want
whatever you can provide in that limited time. We understand the
complexity, but we need to focus on the legal "bad news" for Mega
Life/UICI.
|
Request for Question Clarification by
pafalafa-ga
on
06 Sep 2004 12:24 PDT
I don't know if I'll be able to do more on this, but just so that the
information I have doesn't fall by the wayside, here's a "data dump"
of what I'd found thus far:
PR Newswire
September 3, 2004
UICI Announces Execution of Agreement to Acquire HealthMarket, Inc.;
Acquisition Will Allow Entry Into Small Employer Group Market With
Suite of Consumer Driven Health Products
UICI (NYSE: UCI) (the "Company") a leader in the health insurance
market for self- employed individuals, today announced that its wholly
owned insurance subsidiary, The MEGA Life and Health Insurance
Company, has executed a definitive agreement to acquire substantially
all of the operating assets of HealthMarket, Inc., a Norwalk,
Connecticut-based provider of consumer driven health plans (CDHPs) to
the small business (2 to 250 employees) marketplace. HealthMarket
currently has enrolled in its CDHP programs over 2,400 companies with
an aggregate of approximately 38,000 members.
...MEGA intends to acquire substantially all of the CDHP technology,
fixed assets and personnel of HealthMarket. HealthMarket will retain
ownership of American Travelers Assurance Company, its wholly owned
insurance subsidiary. Completion of the acquisition is subject to
satisfaction of several closing conditions, including applicable
regulatory approvals and expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act. The Company currently
anticipates that the transaction will close on or about September 30,
2004.
...UICI has the largest direct selling organization in the health
insurance field, with approximately 2,200 independent agents selling
in 44 states.
==========
Fort Worth Star-Telegram
June 14, 2004
As Questions Persist, Insurer UICI Tries to Stick to Its Strength
In the past 12 months, UICI has changed chief executives, settled a
batch of class-action lawsuits filed by customers and unloaded a
troubled subsidiary...
...they're also trying to clean up the company's balance sheet and
respond to criticisms that have sometimes hurt its stock price. Those
include the way policies are sold and the number of business deals
UICI has with its own officers.
...Several states, and the National Association of Insurance
Commissioners, are looking into companies like UICI that sell
insurance policies through associations, which are often exempt from
some of the regulations affecting traditional insurance companies.
UICI has come under fire for its links to the two associations that
market most of its self-employed and small-business policies.
...It recently settled several class-action lawsuits charging that it
misled consumers by not disclosing links with the National Association
for the Self-Employed and the Alliance for Affordable Services.
...Gedwed said that the associations are independent groups that offer
members a variety of services, including overseeing legislation in
Washington that affects small businesses. Each has a contract with
UICI to help them enroll members. A second contract allows UICI to
market its products to association members, he said. Both associations
also have contracts with a company owned by the son of UICI's chairman
that operates call centers for them.
...UICI officials said there were never any hidden links between the
associations and UICI. Executive vice president and corporate counsel
Glenn Reed said the information about their business dealings is in
Securities and Exchange Commission filings. UICI agreed in settling
the suits to put that information in the materials given to consumers.
...The National Association of Insurance Commissioners also set up a
task force to look at coverage sold through associations, after a
highly critical article in The Wall Street Journal in 2002 that cited
UICI.
...The company also has been the target of complaints and suits from
consumers, who said they were misled about the limits of the coverage
they bought. Gedwed acknowledges some problems but describes them as
limited to a few bad apples who were terminated when it was discovered
that they were misrepresenting the policies being sold.
...At the end of last year, 11 states were investigating the company's
marketing practices, according to SEC filings. UICI said it has been
fined by some states in the past, but the fines haven't affected its
financial condition.
...UICI also got rid of Academic Management Services Corp., a student
loan subsidiary that had financial problems, selling most of the loans
and the infrastructure to Sallie Mae, the federal loan program.
...AMS also had links to a UICI executive: Some of its loans were
generated by a bank owned by UICI founder and Chairman Ronald Jensen.
Jensen and his children own 23 percent of UICI's stock.
==========
PR Newswire
June 3, 2004
Shareholder Class Action Filed Against UICI, Inc. by the Law Firm of
Schiffrin & Barroway, LLP
...The complaint charges that UICI, Gregory T. Mutz, Ronald L. Jensen,
J. Tim Clark, Glenn W. Reed, David W. Keeler, Mark D. Hauptman and
Matthew R. Cassell violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by
issuing a series of material misrepresentations to the market between
January 17, 2000 and July 21, 2003, about the Company's revenues,
thereby artificially inflating the price of UICI common stock. More
specifically, the Complaint alleges that the Company failed to
disclose and misrepresented the following material adverse facts which
were known to defendants or recklessly disregarded by them: (1) that
the Company lacked adequate internal accounting controls; (2) that as
a result of these inadequate accounting controls, the Company's
financial results were materially inflated at all relevant times; (3)
that Defendants' statements about its financial results and prospects
were lacking in any reasonable basis; and (4) that defendants knew
that its AMS division has insufficient collateral, a higher percentage
of alternative loans than permitted by the loan eligibility
provisions, and that AMS had deficiencies with respect to reporting
requirements, which caused the material inflation of the Company's
overall financial results.
...On July 21, 2003, UICI announced the discovery of a shortfall in
the type and amount of collateral supporting two of the securitized
student loan financing facilities entered into by three special
financing subsidiaries of Academic Management Services Corp. ("AMS"),
UICI's wholly-owned subsidiary. On news shares of UICI fell $4.85 per
share, or 29.90 percent to close at $12.00 per share on heavy volume.
=========
Other recent class-actions:
June 3, 2004, Thursday, Geller Rudman Announces Class Action Lawsuit
Against UICI, Inc. on Behalf of Investors
June 3, 2004, Thursday, Schatz & Nobel, P.C. Announces Class Action
Lawsuit Against UICI
June 2, 2004 Wednesday The Law Firm of Lasky & Rifkind, Ltd.
Announces Class Action Lawsuit Against UICI
==========
PR Newswire
May 28, 2004
UICI Announces That It Has Been Named a Defendant in Securities Class Action Suit
UICI (NYSE: UCI) (the "Company") today announced that the Company and
certain of its current and former executive officers have been named
as defendants in a securities class action lawsuit alleging, among
other things, that the Company failed to disclose all material facts
relating to the condition of the Company's former Academic Management
Services Corp. subsidiary, in violation of Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder (Deloris
Miele v. UICI, Gregory T. Mutz, Ronald L. Jensen et al, pending in the
United States District Court for the Northern District of Texas,
Dallas Division, Case No. 3-04-CV-1149-P)...
... Based on its review of the complaint, the Company believes that
the allegations are wholly without merit, and the Company intends to
conduct a vigorous defense in the matter.
==========
The Dallas Morning News
May 15, 2004
Texas-Based Firm Settles Some Lawsuits on Health Insurance Marketing
UICI said Friday it has settled "a substantial number" of its lawsuits
stemming from its health insurance marketing tactics, but the North
Richland Hills-based company didn't acknowledge "any fault or
liability or wrongdoing of any kind."
...Since late 2002, UICI has been beset by lawsuits alleging the
company sold insurance policies through business associations without
properly revealing close links to those organizations. The
associations, including the National Association for the Self-Employed
and the Alliance for Affordable Services, were managed by executives
with direct ties to UICI
...UICI has agreed to improve disclosures about its relationships with
its insurance subsidiaries and the associations. And it has also
agreed to cease other practices. The company didn't disclose further
details and didn't return telephone calls for comment.
...As compensation, some past policy-members will be entitled to free
coverage for "a period of months under a personal accident policy."
==========
http://www3.ambest.com/ratings/RatingsSearch.asp?GRPNUM=69860&Site=ratings
A.M Best Ratings on UICI subsidiaries/affiliates:
Chesapeake Life Insurance Company A- United States: Oklahoma
MEGA Life and Health Insurance Co A- United States: Oklahoma
Mid-West National Life Ins Co of TN A- United States: Tennessee
==========
UICI-related companies with records at the Better Business Bureau
based on searches for both UICI and Mege Life at:
http://search.bbb.org/
Each of these records can be accessed for more detail on consumer
complaint histories:
THE MEGA LIFE AND HEALTH INSURANCE COMPANY
4000 Eagle Point Corporate Drive Suite 1
BIRMINGHAM, AL
UICI
(MEGA LIFE & HEALTH)
9151 GRAPEVINE HWY
N RICHLAND HILLS, TX
MEGA LIFE AND HEALTH INSURANCE CO.
P O Box 13427
PENSACOLA, FL
HIGGINBOTHAM INSURANCE
(MEGA LIFE)
213 Lana Dr.
LAFAYETTE, LA
MEGA LIFE & HEALTH
16882 125th Ave SE
RENTON, WA
U G A ASSOCIATION FIELD SERVICES
(MEGA LIFE AND HEALTH)
505 N. Argonne Rd. Bldg. #1, Suite 6
SPOKANE VALLEY, WA
RAY & JANE BAKER HEALTH INSURANCE
(MEGA LIFE & HEALTH INSURANCE)
1101 Gulf Breeze Pkwy
GULF BREEZE, FL
MEGA LIFE & HEALTH INSURANCE
P. O. Box 18249
OKLAHOMA CITY, OK
MEGA LIFE & HEALTH INSURANCE
101 E 8th St
VANCOUVER, WA
COLLEGE LIFE FUND DIVISION
(MEGA LIFE & HEALTH INSURANCE CO.)
10001 Derby Lane, #209
WESTCHESTER, IL
MEGA LIFE & HEALTH INSURANCE CO
112 E Lincoln Ave
FERGUS FALLS, MN
MID-WEST NATIONAL LIFE INSURANCE COMPANY
(MEGA LIFE & HEALTH INSURANCE COMPANY)
16 N. Florida St.
MOBILE, AL
COLLEGE FUND DIVISION OF U I C I
(MEGA LIFE & HEALTH INSURANCE COMPANY)
3320 Holcomb Bridge Rd PO Box 7100
NORCROSS, GA
MEGA LIFE & HEALTH INSURANCE COMPANY
1845 Post Road, Suite 8N
WARWICK, RI
THE MEGA LIFE AND HEALTH INSURANCE COMPANY
2563 Triumph Drive
MYRTLE BEACH, SC
MEGA LIFE & HEALTH INSURANCE COMPANY, TH
4861 N Dixie #200C
FORT LAUDERDALE, FL
MEGALIFE AND HEALTH INSURANCE COMPANY
1701 K Street NW, Suite 300
WASHINGTON, DC
CORNERSTONE MARKETING OF AMERICA
(UICI)
5201 Forest Oaks Drive
HOLLYWOOD, SC
==========
Texas Department of Insurance records
https://wwwapps.tdi.state.tx.us/pcci/pcci_show_profile.jsp?tdiNum=49010&companyName=Mega+Life+and+Health+Insurance+Company%2c+The&sysTypeCode=CL
MEGA LIFE AND HEALTH INSURANCE COMPANY, THE
Complaint Information:
Accident and Health
DEC 31, 2002
40
DEC 31, 2003
34
AUG 31, 2004
27
Index
2.5097 -- 2002
2.8178 -- 2003
Complaint Index: indicates how a company's ratio of the number of
complaints to the number of policyholders compares to the average for
all insurers. The index is calculated by dividing the company's
percentage of complaints for a specific line of insurance by the
company's percentage of the policies in force for the same line of
insurance. The average index is 1.00. A number less than 1 indicates
fewer complaints than average; a number greater than 1 indicates more
complaints than average.
Company History
01-08-2004 EFFECTIVE 9/30/2003, LONG TERM CARE INSURANCE REINSURED BY
AF&L INSURANCE COMPANY (94425) WARRINGTON, PENNSYLVANIA
11-04-2003 EFFECTIVE 1/1/2003, REINSURED CERTAIN SELF-INSURED WORKERS'
COMPENSATION LOSS PORTFOLIOS OF FIDELITY FIRST INSURANCE COMPANY
(29505) DALLAS, TEXAS
Company Officers:
President Phillip Jerome Myhra
Secretary Peggy Gibbons Simpson
Treasurer Maria Del Consuelo Palacios
==========
|
Clarification of Question by
lettie-ga
on
06 Sep 2004 14:04 PDT
I appreciate your concern for the time constraints I am working under,
but I am confident that I can get some portions of my overall question
answered completely. Last night I asked that you give me both a fair
price and your thoughts on how completely you can answer each of the
five questions. Maybe you can only answer # 3, maybe you can answer
two of the five questions completely, whatever you can do let me know
and I can repost those questions that you feel you cannot answer
completely immediately after your response. My thinking is that if you
were to tackle a portion of this and then give me a suggestion on how
to break the five questions into smaller parts, several researchers
could realistically get me what I need. For example on question # 1
maybe it should be broken down to two questions..e.g. what lawsuits
have been filed against UICI or any of it's subsidiaries or affiliates
in half of the states it operates(to be named in the question) and
another question for the other half. If this question needs to be
broken into 3 questions or 10, I am not opposed. I just want to get a
comphrensive report, for all that I have asked.
Thanks
|
Clarification of Question by
lettie-ga
on
08 Sep 2004 17:23 PDT
Why won't you answer my clarification? I just want to know how I
should go about getting what I want.
|
Request for Question Clarification by
pafalafa-ga
on
08 Sep 2004 17:41 PDT
lettie-ga,
I basically gave you the information I had on your companies. I'm not
sure what other information or guidance I can provide at this point,
especially
since your deadline is in a few hours.
This is a tricky situation -- I'm not sure it makes sense to divide up
your question, since that will mean several researchers going over
much the same territory,documents, etc. On the other hand, there's
just too much here to get it all done in the short time frame you have
available.
Again, I can only wish you luck at this point. I hope the information
I gave you already is of some help.
pafalafa-ga
|
