Question: What ever happened to the United Independent Insurance Agencies that the state closed down around 1985?
Man who looted United
died in prison
Answer: The case involving United Independent Insurance Agencies "was a very unfortunate chapter in Hawaii insurance history," state Insurance Commissioner Wayne Metcalf said, because it involved the outright looting of a company as opposed to one that failed because of bad management.
Metcalf said UIIA was a company teamed with another, Financial Services Insurance Co. Ltd. (FSIC), both of which were headed by a man named Robert Keller.
Keller's FSIC business would funnel clients to UIIA for life insurance policies, Metcalf said.
In 1984, "Mr. Keller basically took the money that was paid for premiums and left town," Metcalf said.
"FSIC and UIIA were left holding the bag for their unpaid bills."
Keller was arrested in the late 1980s on the West Coast, Metcalf said, and the state of Hawaii obtained a $16 million judgment against him.
Keller died in prison in the early 1990s, and the companies were able to recover only part of the judgment, Metcalf said.
Policyholders were covered by a guarantee fund that exists to cover losses of failed insurance companies, Metcalf said. He did not have figures on the number of policyholders affected by Keller's action.
The $16 million represented money that was owed to other creditors for things such as operating expenses, Metcalf said.
Both companies were forced to close, Metcalf said.
In fact, the insolvency case involving FSIC concluded in March.
"It concluded based on the fact that after a pretty thorough search, the estate concluded that there was no way to recover the money that was looted," Metcalf said.
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