Today it has been reported that a company officer of 'Hartford Financial Services Group,' William Kelly Jnr., has lost his job for disclosing that he and his former employers have refused to sell litigation insurance to the company officers of 'Herbalife.'
Certain people at 'Hartford' have evidently worked out that anyone deeply-involved with 'Herbalife' is an extremely bad risk, but any insurance company which has previously sold litigation insurance to any company officer(s) of any corporate structure peddling a so-called 'MLM income opportunity,' has quite obviously been misled.
An anonymous reader has asked me: What do I think this means?
Anonymous - First of all, the modern insurance industry has often been compared to bookmaking, because insurance companies have been able to offload their own risk through the buying of re-insurance. Independent bookmakers follow essentially the same procedure - laying off large bets that they have accepted, and which they judge they will probably have to pay out on, with other bookmakers.
To put this into context, imagine a gang of 'Mafia' wise-guys pretending to be innocent and respectable businessmen / philanthropists, trying to buy insurance against the risk that they might be charged with racketeering and put on trial. No well-informed, law-abiding insurance company, or underwriter, would voluntarily agree to sell litigation insurance to such a toxic gang, because the inevitable legal fees the final insurers would have to pay out, would far outweigh the price of any policy.
In simple terms, the odds on 'Herbalife's' bosses getting sued/prosecuted, have shortened to the point where this eventuality has now become a racing-certainty. Thus, certain persons at the 'Hartford' insurance company (and its underwriters) have evidently looked hard at the evidence collected by 'Pershing Square Capital,' applied common-sense, and concluded that the corporate officers of 'Herbalife' have been committing fraud on an industrial scale and, therefore, they can be personally held to account by an almost unimaginable number of individual victims and government agencies around the world. Consequently, the bosses of the 'Herbalife' racket have been denied litigation insurance in the USA by 'Hartford,' and this key intelligence has managed to escape into the public domain.
This means that 'Herbalife' has been recognized as toxic by responsible persons working in least one major (traditional) financial industry.
It also means that the bosses of 'Herbalife' and other 'MLM' racketeers have lied through their teeth to insurers for decades about the real nature of their criminal enterprise, in order to obtain litigation insurance.
Self-evidently, these shameful matters form yet another part of an overall pattern of ongoing, major, racketeering activity as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970.
David Brear (copyright 2014)