Madoff Whistleblower Sets Sights on Insurance Industry

Nov 4, 2016

  1. Brian Anderson
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    Brian Anderson Executive Editor

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    The whistleblower who uncovered the $65 billion Bernie Madoff Ponzi scheme has identified the insurance industry as the next big sector for major financial fraud to come to light.

    Independent financial investigator Harry Markopolis says he intends to make public “some large insurance fraud cases” in 2017 that are going to be in the tens of billions of dollars each.

    He says he hopes the cases will be the catalyst for reform, congressional hearings and national regulation of insurance.

    He makes some interesting points in the article linked below, but I think he faces a stiff uphill battle if he wants to eliminate state insurance commissioners in favor of federal regulation.

    Bernie Madoff whistleblower Harry Markopolos insurance industry fraud - Business Insider
     
  2. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    Harry may have bitten off more than he can chew.

    It's one thing to expose a single firm... but quite another to expose an entire industry. I sure hope he has cleaned out the skeletons in his closet... unlike Spitzer. At some point, if he's not squeaky clean, then his own past (whatever might be there) may come back to bite him.
     
    DHK, Nov 4, 2016
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  3. walthamny
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    walthamny Guru

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    He is on to something here. I had some discussions with him on another board. CPA firms stress test companies for all kind of much more realistic scenarios. State insurance companies review stress results prepared by the insurance companies themselves and state agencies may do a little more extra digging, but life insurance companies are generally not subject to the same rigor as commercial banks.

    As a life insurance agent, if I knew ABC company was cooking their books and I posted this info online, I would loose my license in my State of MA for slander and causing a run at an insurance company. I can not imagine any other industry where reporting of fraud by your competitor is grounds for lifetime ban.

    Lets talk about again the life insurance industry and see if they would agree to stress test their portfolio against a change in tax laws that takes away tax free build up of cash value. The life insurance companies will never truely stress test this and publish it, because if it shows they can withstand it, congress will take it away easily in a crisis. And if they can't withstand it, well, that means their current financials are not being completely honest.
     
  4. marindependent
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    marindependent Guru

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    Thanks for the post Brian... interesting, wait and see I suppose.