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Saturday, November 01, 2008

Open thread - caption this.





(photo credit: here)


____________UPDATE ON NASSERGATE_________
A friend with experience in specialty underwriting emailed off-the-top-of-the-head thoughts that I found helpful:

Generally, service fees in lieu of commission are for larger policies. However, one would wonder the size of the premium for the alleged policies in question since AON is the broker for the account per McKim. I don’t know the size of revenues of the company in question, however, I would like to know the premium it would pay? [I have seen McKim reporting a million dollar cost for coverage not via Hays Companies, on the web, possibly in one of the links already given.]

If for example, it pays $1 million in premium, an average commission might be in the 7 to 10% range. You wouldn't expect extra fees to be too much larger than the whole commission on the involved policies.

When you get a larger account, you can have risk management fees in addition to commission or accept a flat fee. It’s not really done on small accounts very often but could be. Some states require that it be filed by the insurance company in their rate structure if you deviate from a straight commission in your rates and premiums. You would expect that it would be a specialty kind of service for a unique business. [...] You can have 2 brokers involved, one as the account servicing broker, the other as a consultant, either providing risk management or overseeing the other broker. Get’s a little weird.

Hays would have to be licensed in MN. TX is known as a tough state to do business in from an insurance co perspective. [...] An assistant to a broker doesn’t usually get commission unless it’s a small amount, however, when you are employed as a broker, you share commission with your company, the company getting a larger share of the pie because they supply the office space, equipment, mail room, etc. An example of commission share would be 40% on new business, 25% on renewal business. An employee would not get the entire amount. It’s just not done.

[italics added] So, even with Hays possibly not writing the primary coverage it would still not be abnormal for them to consult. With Kazeminy having Minnesota ties, his developing a relationship with a Minnesota insurance specialist firm would not be abnormal, nor would it be abnormal to have risk assessment or other aid contracted across state lines. With law firms, wealthy people using multiple firms, and spreading work depending upon established trust and capability feelings and past arrangements is not abnormal.

Again, the quote's a friend's top-of-the-head experience-based generic thinking, without any specific knowledge of arrangements between Hays Companies and Sen. Coleman's spouse. I did not ask whether any special "bird dog" or "rain maker" consideration exists, but I know in law firms the partners bringing the bucks in through the door are treasured. Again, the question would be, what unique talent or aspect of customer appeal does Laurie Colemann offer an insurance firm, other than as a conduit of communication to an influencial U.S. Senator, and as soon as the situation is reviewed and, presumably no special talent exists, then is it akin to access assurances, or even worse, influence peddling?

There is not enough time between now and election day to resolve that.

Juxtapose -

Franken and questions of his tax payments, where with little fanfare or name calling or finger pointing he opened his books, showed how he had overpaid Minnesota taxes, and how corrections were being made, with a new accountant in place.

Coleman fuming, not presenting a single fact, accounting statement, or other item of veracity, beyond his word, "It's groundless, it's scurilous," or the equivalent bloviating where you know the numbers, in a paper trail have to exist and you have to question what's the cause for their not being produced publicly, expeditiously.

Who do you trust? And how does that say how you will vote.

Go figure what the implications are about what a paper trail might show, when, as with Alaska's Sen. Stevens, there was more heat than light in responding to charges and inquiries. What would YOU reasonably expect as a response, if there was only smoke but no fire? Clearing the air promptly and unemotionally is what I'd expect, dispell the smoke, show there's no fire. Franken did exactly that, earlier, tax-wise.