Raymond Ankner -Expected to be the biggest life insurance failure in Illinois : Raymond Ankner -Expected to be the biggest life insurance failure in Illinois : IRS Attacks CJA & CJA and Associates’ plans
III. The Insurance Companies The Inter-American Insurance Co. of Illinois (InterAmerican) specializes in providing to small, closely held corporations products such as qualified pension and profit sharing plans and group life insurance plans. When Inter- - 16 - American was formed in the late 1970’s, it was owned indirectly by Beaven/Inter-American Cos., Inc. (Beaven/Inter-American), the wholly owned company of Raymond G. Ankner (Mr. Ankner), who has worked in the insurance industry for more than 30 years. InterAmerican liquidated on December 23, 1991, pursuant to a court order to do so, and Beaven/Inter-American changed its name to Beaven Cos., Inc. Mr. Ankner currently markets the life insurance products described herein through a company of his called CJA & Associates.
Class Action Filed against CJA and Associates and Fidelity Security Life
Hartford, CT: A consumer fraud class action lawsuit has been filed against Chicago-based CJA and Associates and Kansas City, Missouri-based Fidelity Security Life Insurance Company (FSL).
The lawsuit alleges that CJA and FSL breached fiduciary duties in duping small business owners into investing millions of dollars of employee retirement benefit money in FSL annuities when up to 95% of the initial money invested was being siphoned off in commissions and fees.
The so-called Section 412 (e)(3) plans are under attack from the IRS as illegitimate attempts to avoid federal taxes. The lawsuit alleges that by advising investment in these plans CJA and FSL breached federal laws governing advice given to employee benefit plans.
Liquidation Comes For Lavish Insurer January 26, 1992|By Laurie Cohen.
379 In 1990 Chicago insurance executive Raymond Ankner flew about 100 of his top agents to Germany to celebrate Oktoberfest in Cologne. The cost of the trip was $800,000, billed to Ankner`s businesses.
Most of those acquainted with him didn`t view the expensive junket or other lavish activities as out of line. To them, the red-haired, Brooklyn-born Ankner epitomized the successful insurance man, with a fast-growing operation, a company ADVERTISEMENT
plane, homes in Florida and Vermont and an apartment in Water Tower Place.
But insurance regulators were already beginning to question expenses at his main insurance unit, InterAmerican Insurance Co. of Illinois. When the Illinois Insurance Department obtained a court order last month to liquidate the company, court papers showed a balance sheet crowded with overvalued real estate and questionable intercompany transactions and reinsurance arrangements.
The collapse of InterAmerican is expected to be the biggest life insurance failure in Illinois history, with a gap of more than $30 million between assets and liabilities. It has placed in the hands of state regulators the largest real estate and mortgage portfolio ever managed by the department. InterAmerican`s $33 million portfolio of mortgages and real estate covers several investments on Chicago`s Near West Side, including a loan on its headquarters at 901 W. Jackson Blvd. There also are more far-flung holdings, such as loans to donut shops in Michigan and a bed-and-breakfast in Vermont. Nearly half the $20.5 million in mortgage loans are behind on payments, according to department officials.
Regulators are still investigating the possibility that company funds were improperly used. No charges have been filed, and Ankner denies any suggestion of wrongdoing.
A report by an independent accountant hired by the Insurance Department highlights several questionable charges, such as a $53,681 check to Neiman-Marcus Co. for catering a 1989 Christmas party at Ankner`s apartment here, the company`s payment of most of his $5,200 monthly rent and even a portion of the salaries of Ankner`s gardener and housekeeper in Vermont.
The failure of InterAmerican is a major headache for the many independent agents who represented the company. Many of them apparently believed that the insurer had virtually all its investments in government bonds and was financially sound-or ``hunky-dory,`` according to Eric Wiltshire.
``The agent`s got egg on his face,`` said Wiltshire, chairman of a Birmingham, Mich.-based pension-consulting and insurance firm that dealt with InterAmerican.
InterAmerican`s approximately 25,000 customers can`t currently cash in their insurance policies and annuity contracts or collect benefits. Most of their claims are expected to be covered in the next few months by life insurance guaranty associations in Illinois and the other 44 states in which InterAmerican did business.
Though big by Illinois standards, InterAmerican`s demise is small potatoes compared with several widely publicized out-of-state failures that rocked the life insurance industry last year. Failed Executive Life Insurance Co. of Los Angeles, for example, had assets of about $10 billion;
InterAmerican`s assets totaled about $140 million as of year-end 1990.
Yet the company`s problems are typical of many ailing life insurers, regulators say. Besides a heavy dose of non-performing real estate, the troubles include rapid growth supported by a controversial financial technique known as surplus relief reinsurance, used by insurers to boost their regulatory capital.
III. The Insurance Companies
ReplyDeleteThe Inter-American Insurance Co. of Illinois (InterAmerican)
specializes in providing to small, closely held
corporations products such as qualified pension and profit
sharing plans and group life insurance plans. When Inter-
- 16 -
American was formed in the late 1970’s, it was owned indirectly
by Beaven/Inter-American Cos., Inc. (Beaven/Inter-American), the
wholly owned company of Raymond G. Ankner (Mr. Ankner), who has
worked in the insurance industry for more than 30 years. InterAmerican
liquidated on December 23, 1991, pursuant to a court
order to do so, and Beaven/Inter-American changed its name to
Beaven Cos., Inc. Mr. Ankner currently markets the life
insurance products described herein through a company of his
called CJA & Associates.
Class Action Filed against CJA and Associates and Fidelity Security Life
ReplyDeleteHartford, CT: A consumer fraud class action lawsuit has been filed against Chicago-based CJA and Associates and Kansas City, Missouri-based Fidelity Security Life Insurance Company (FSL).
The lawsuit alleges that CJA and FSL breached fiduciary duties in duping small business owners into investing millions of dollars of employee retirement benefit money in FSL annuities when up to 95% of the initial money invested was being siphoned off in commissions and fees.
The so-called Section 412 (e)(3) plans are under attack from the IRS as illegitimate attempts to avoid federal taxes. The lawsuit alleges that by advising investment in these plans CJA and FSL breached federal laws governing advice given to employee benefit plans.
Liquidation Comes For Lavish Insurer
ReplyDeleteJanuary 26, 1992|By Laurie Cohen.
379
In 1990 Chicago insurance executive Raymond Ankner flew about 100 of his top agents to Germany to celebrate Oktoberfest in Cologne. The cost of the trip was $800,000, billed to Ankner`s businesses.
Most of those acquainted with him didn`t view the expensive junket or other lavish activities as out of line. To them, the red-haired, Brooklyn-born Ankner epitomized the successful insurance man, with a fast-growing operation, a company
ADVERTISEMENT
plane, homes in Florida and Vermont and an apartment in Water Tower Place.
But insurance regulators were already beginning to question expenses at his main insurance unit, InterAmerican Insurance Co. of Illinois. When the Illinois Insurance Department obtained a court order last month to liquidate the company, court papers showed a balance sheet crowded with overvalued real estate and questionable intercompany transactions and reinsurance arrangements.
The collapse of InterAmerican is expected to be the biggest life insurance failure in Illinois history, with a gap of more than $30 million between assets and liabilities. It has placed in the hands of state regulators the largest real estate and mortgage portfolio ever managed by the department. InterAmerican`s $33 million portfolio of mortgages and real estate covers several investments on Chicago`s Near West Side, including a loan on its headquarters at 901 W. Jackson Blvd. There also are more far-flung holdings, such as loans to donut shops in Michigan and a bed-and-breakfast in Vermont. Nearly half the $20.5 million in mortgage loans are behind on payments, according to department officials.
Regulators are still investigating the possibility that company funds were improperly used. No charges have been filed, and Ankner denies any suggestion of wrongdoing.
A report by an independent accountant hired by the Insurance Department highlights several questionable charges, such as a $53,681 check to Neiman-Marcus Co. for catering a 1989 Christmas party at Ankner`s apartment here, the company`s payment of most of his $5,200 monthly rent and even a portion of the salaries of Ankner`s gardener and housekeeper in Vermont.
The failure of InterAmerican is a major headache for the many independent agents who represented the company. Many of them apparently believed that the insurer had virtually all its investments in government bonds and was financially sound-or ``hunky-dory,`` according to Eric Wiltshire.
``The agent`s got egg on his face,`` said Wiltshire, chairman of a Birmingham, Mich.-based pension-consulting and insurance firm that dealt with InterAmerican.
InterAmerican`s approximately 25,000 customers can`t currently cash in their insurance policies and annuity contracts or collect benefits. Most of their claims are expected to be covered in the next few months by life insurance guaranty associations in Illinois and the other 44 states in which InterAmerican did business.
Though big by Illinois standards, InterAmerican`s demise is small potatoes compared with several widely publicized out-of-state failures that rocked the life insurance industry last year. Failed Executive Life Insurance Co. of Los Angeles, for example, had assets of about $10 billion;
InterAmerican`s assets totaled about $140 million as of year-end 1990.
Yet the company`s problems are typical of many ailing life insurers, regulators say. Besides a heavy dose of non-performing real estate, the troubles include rapid growth supported by a controversial financial technique known as surplus relief reinsurance, used by insurers to boost their regulatory capital.