Essay Title: 

ARIES INSURANCE COMPANY VS STATE OF FLORIDA

March 30, 2016 | Author: | Posted in business, mathematics and economics

LIQUIDATION OF ARIES INSURANCE COMPANY

Introduction

Insurance companies are required to provide guaranty to businesses and personnel in varied segments of society . These ensure survival of entities be it large sized companies , a group of person or individuals on the occurrence of accidents and other unfortunate circumstances which are not foreseen . Thus these provide a high degree of safety for businesses as well as individuals by protecting them against risks of accidents , frauds , calamities or personal casualties such as injury or demise . Insurance companies are an essential part of business [banner_entry_middle]

environment in a state and were acknowledged as commerce in the United States as early as in 1944

Being an essential part of business climate in a state or a country insurance companies create confidence and have a major role to play in the growth of commerce hedging it against unforeseen risks . There are however instances when insurance companies have defaulted either due to unforeseen reasons or defrauding by their owners and employees . In such cases the state has to provide a guarantee to ensure that companies and individuals who had reposed their faith in the system are provided requisite relief . Application of this principle to Aries Insurance Company by the State of Florida in 2002 ensured that interests of the large number of policy holders of the company were effectively protected . Laws in a state should secure liabilities of an insurance company as it generates greater business confidence and provides safety to life as well as savings of personnel who have placed faith in the ability of the system to support them in times of crisis

The Case

Aries Insurance Company operated in the jurisdiction of the State of Florida . It provided personal as well as commercial insurance to include property and auto . The company also catered for workers compensation insurance . The main line of insurance underwritten by Aries was non-standard automobile private- passenger for individuals and multi peril commercial and coverage of liabilities for small businesses . It had 70 ,000 policy holders . Based in Miami it was placed in liquidation by the Second Judicial Circuit Court on 14 November 2002 with due consent . The receiver appointed for Aries was Florida Department of Financial Services , Division of Rehabilitation and Liquidation . The Guarantee was to be provided by Florida Insurance Guaranty Association and Florida Workers Compensation Guaranty Association . The company was taken into receivership due to fraud by its managers which included Marcus , Paul and Saul Farynd as well as Fanny Farynd . They were also charged with fraud for obfuscating facts in the financial sheet of the company in 2002 and thereby attempting to cover up their scam

A review of the case information revealed that it was the Farynd family with father Marcus as the owner , Paul the President , Saul the secretary and Fanny the treasurer who had indulged in fraud in the case of Aries Insurance thereby resulting in loss to the Florida state to the tune of 100 million in guarantee money . This was provided from state… [banner_entry_footer]

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