insurance trustees indiana
In an attempt to recoup some of the $ 23 million owed to school districts in Indiana, Secretary of State Todd Rokita office has filed a lawsuit to freeze the assets of the Indiana State Teachers Association.
The civil complaint, filed in Marion Superior Court, is the latest in a series of blows in the state teachers union, which faces a deficit of 67 million U.S. dollars and has been under investigation for mishandling the investments that have maintained their disability long-term health insurance programs.The Indianapolis Star reported in May that eight trustees and two directors who oversaw ISTA Insurance Trust had received subpoenas from the Secretariat of the Investment Division of the State, but the lawsuit filed Wednesday was the first public acknowledgment of a state investigation. Handling ISTA insurance program has also been the subject of an FBI investigation, sources familiar with the matter said the star.
Rokita effort to freeze the assets ISTA wine as their acting manager, Ed Sullivan, had worked to agreements with school districts, once enrolled in the insurance program of the Union of Health.
ISTA stopped offering health insurance to school districts in June after the National Education Association, through Sullivan, became Union office with problems. However, the union of school districts still owed money for credits arising from health insurance premiums obtained after the program pay more than they received in the claims.
When the union called off its health insurance program, state regulators ISTA insisted he was still responsible for reimbursing districts for the amount of their claims. The lawsuit alleges ISTA should districts $ 23 million in loans.
According ISTA, 30 districts were enrolled in the health insurance program, but Sullivan said Wednesday that only 21 say that the union owes them money.
During the last weeks, Sullivan has been traveling the state trying to get agreements with the districts.
Sullivan offer: Districts could immediately receive 25 percent ISTA than they think they should or 33 percent if you take the amount over a period of three years. "We have tried to structure something with them to resolve the situation "He said." Several school districts have indicated they are very interested in that. "
Find out what to
That might explain the Rokita time of application, which calls for a third party to determine how much is due to the districts. "Recent evidence indicates that the IST is offering these companies Indiana school cents on the dollar, in an effort to clear their responsibility, "Rokita said." The purpose of this action is to request that an independent third party to be allocated to ensure transparent accounting and equitable distribution of remaining funds. "
Any third party analysis or freezing ISTA funds will not affect the payment of funds to 650 school employees previously covered by the union program long term disability, which was suspended this summer.
Sullivan refused to specifically address the lawsuit filed Wednesday, saying that lawyers are reviewing it ISTA.
Rokita's suit came as several school districts previously enrolled in the health insurance program weighing a lawsuit of their own.
School boards in at least two school districts, Delphi and Castón, who had already voted to join a lawsuit, which was being prepared by the law firm of Hamilton County, Church, Church, Hittle and Antrim. David Day, counsel to discuss the matter, did not return phone calls seeking comment.
Ralph Walker, the superintendent in Delphi, predictions up to 15 school districts would join that suit, but said it was even more encouraged to see Rokita's office for action.
"This is a very good news, because this bid for 25 percent of their money or 33 per cent in three years – which is not an acceptable offer, "said Walker." I am very encouraged by this, because those are taxpayer dollars should not have been mismanaged. "
ISTA was attacked in May, when state regulators noticed of the Union health and long-term disability insurance programs faced a deficit of $ 67 million.
A report by a financial company employed by independent regulators in investments showed ISTA Insurance Trust had an unusually high percentage of risky investments and an unusually elevated their trade, and investment broker received an increase in their fees, even as fund assets plummeted.
In August, the union sued to its former CEO, Warren L. Williams, and Robert Frankel, a former director of the trust, what Sullivan calls "terrible investment, fiscal performance horrible .
Offenders also claimed
Lawsuit Wednesday also included four counts of misconduct in support of the freezing of assets ISTA, but not only do any of those sanctions. However, that could come later as the research and continues.Rokita Securities Commissioner Chris Naylor declined any further comment on the lawsuit or investigation.
The ISTA lawsuit alleges that did not follow state law to properly record the values offered to the state; operations as investment advisers without proper state registration, supervised those acting as investment advisers, without a adequate record, and made material misrepresentations about the financial health of the fund, its investment strategy, a lack of reservations "and" lack suitability of investments.
Antonio Page, professor of securities law at the School of Law, University of Indiana, Indianapolis, said the lawsuit, on its face, has merit.
"This complaint is a legitimate concern, no doubt," he said. "Withholding information about an investment or not to disclose the risk of an investment, which is a very basic no-no. The securities lawyer will know immediately that there is a significant problem. "
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