Martin Frankel

  • 2000 - LC - Insurance Commissioners v. Martin Frankel - 3:00-cv-359L Complaint - 31p
  • 2000 09 - GAO - Scandal Highlights Need for Strengthened Regulatory Oversight - 80p
  • 2000 0919 - GOV (House) - Improving Insurance for Consumers—Increasing Uniformity And Efficiency In Insurance Regulation - [PDF-111p]
    • Terri Vaughan, John Dingell
  • Booknotes - The Pretender: Martin Frankel, by Ellen Polluck - [VIDEO-CSPAN]
  • 2003 - LC - US Court of Appeals for the Eighth Circuit - 348 F.3d 704 (8th Cir. 2003) Submitted: December 12, 2002 - Filed: November 4, 2003
  • 2009 0305 - GOV (House) -  Perspectives on Systemic Risk - (Part 1 of 2) - [PDF-254p,
    • Martin Frankel, Terri Vaughan -  (NAIC CEO / Former IA Insurance Commissioner)
  • We will hear important testimony today about how regulators failed to protect consumers in the insurance fraud case of Martin Frankel.
  • Perhaps most alarming is the fact that even when Tennessee’s insurance regulators finally figured out what Mr. Frankel was doing, they did not warn the public or regulators in other states.
  • Instead, they gave him 60 days to redeposit the assets of Franklin American Life Insurance Company in an account in Tennessee.
  • That’s like saying, ‘‘I know you have been stealing from me, but I’m giving you 60 days to steal from someone else so you can pay me back.’’

--  John D. Dingell, A Representative in Congress, from the State of Michigan

2000 0919 - GOV (House) - Improving Insurance for Consumers—Increasing Uniformity And Efficiency In Insurance Regulation - [PDF-111p]

  • Booknotes - The Pretender: Martin Frankel, by Ellen Polluck - [VIDEO-CSPAN]
    • Ms. Pollock talked about her book, The Pretender: How Martin Frankel Fooled the Financial World and Led the Feds on One of the Most Publicized Manhunts in History, published by Wall Street Journal.
    • Mr. Frankel bought a chain of insurance companies in the 1990s by pretending to be a successful investor.
    • Then he allegedly spent the assets of the companies rather than investing them.
    • He evaded an international manhunt for several months and was finally captured in Hamburg, Germany. 
  • FRANKLIN PROTECTIVE LIFE Insurance Company - Martin Frankel
    • mid.ms.gov/companies/pdf/fplicliquidorder.pdf
      • John Hackney, President of the Company, has advised that he invested the Company's assets in bonds through the broker known to him as LNS, Inc. Petitioners have confirmed that records of the Company reflect these investments, however, LNS, Inc. and the money invested in bonds throughLNS, Inc. is missing. With total liabilities of$21,857.487, and the missing bonds, the Company is insolvent.
  • To help us learn what happened in the Frankel scheme and to recommend possible improvements in our system of state regulation, we have formed the Ad Hoc Group on Solvency and Antifraud Issues. (p4)

--  Hon. George M. Reider Jr., Commissioner of Insurance (State of Connecticut) - NAIC President

1999-3, NAIC Proceedings

  • Mr. Bridgeland requested that the commissioners discuss state perspectives on insolvencies at the Summer National Meeting due to recent insolvencies in the state of Massachusetts and in light of the Martin Frankel situation. (p1191)

2000-1, NAIC Proceedings

2000-2, NAIC Proceedings

  • 1. Consider Adoption of the Final Report from the Ad Hoc Task Force on Solvency and Antifraud
    • Commissioner Sebelius gave an overview of the final report from the Ad Hoc Task Force on Solvency and Antifraud (Attachment Four-A).
    • Commissioner Sebelius further reported that several NAIC members would be meeting in Connecticut with representatives of the General Accounting Office (GAO) on April 26.
      • She stated the GAO was charged by Congressman Dingell with investigating the Martin Frankel situation.  (p24-28)
  • Reinsurance (G) Task Force
    • 1. Received a new charge from the Executive (EX) Committee relating to the current regulatory investigation of the alleged fraud scheme involving Martin Frankel and several insurance companies.  (p34)
  • Finally, Mr. Calderon reported that the group discussed three additional charges referred to the group from the Financial Condition (E) Committee.
    • These charges were a result of a study conducted by the Ad Hoc Task Force on Solvency and Antifraud regarding the Martin Frankel scheme.
    • It was determined that the Investment SRA (Specific Risk Analysis) Subgroup would address the charges involved with the additional development of examination procedures to review the investment management practices of the insurer.
    • The entire technical group will consider the charge related to the analysis of significant elements of Part A Accreditation Standards at the next meeting.
    • The group will submit a work plan to the Financial Condition Committee at the Fall National Meeting for completion of this charge.  (p774)
  • 7. Discuss Additional 2000 Charges
    • Mr. Calderon stated that the next agenda item was to discuss the additional 2000 charges referred to the group from the Financial Condition (E) Committee.
    • Ms. Deetz explained that the group was given three additional charges as a result of the work performed by the Ad Hoc Task Force on Solvency and Antifraud concerning activities related to the Martin Frankel scheme.
    • These additional charges were developed to further enhance current examination processes.
    • The first two charges relate to adding additional guidance to the Handbook regarding the evaluation of a company's investment management practices.
    • Ms. Deetz explained that the group's in-progress revision of the Investment SRA would address the majority elements in the first two charges.  (p778)
  • REINSURANCE (G) TASK FORCE
    • 2. New Charge
      • The task force had received a new charge from the Executive (EX) Committee relating to the current regulatory investigation of the alleged fraud scheme involving Martin Frankel and several insurance companies (Attachment One).
      • Deputy Director Dutcher (IL) observed that the charge referred to the NAIC Assumption Reinsurance Model Act and Disclosure of Material Transactions Model Act and suggested that it might be appropriate to include the Model Insurance Holding Company System Regulatory Act in the documents to be reviewed pursuant to the new charge. Steve Johnson (PA) stated that since none of the reinsurance transactions effected in the context of the Frankel scheme had been between affiliated companies, the provisions of the holding company statutes would not be relevant.  (p1073)

2000-4, NAIC Proceedings

  • 3. Other Business
    • Commissioner Vaughan referenced two letters from the Securities and Exchange Commission (SEC) regarding the development of on-going communications between the SEC and state insurance commissioners, and regarding the Frankel matter.
    • The NAIC plans to meet with the SEC early in 2001 to discuss areas of potential cooperation.  (p878)
  • REINSURANCE (G) TASK FORCE
    • Letter from Commissioner John W. Oxendine (GA) Dated Nov. 29, 2000, Regarding Charges of the Reinsurance (G) Task Force as They Relate to the Alleged Fraud Scheme Involving Martin Frankel (Attachment Four) 968
    • Nov 9. - Commissioner Oxendine reminded the task force of Congressman Dingell's letter to Commissioner George Nichols III that was very critical of state regulation as a result of the recent fraud scheme involving Martin Frankel and a number of insurance companies and stressed the need to expedite the charge of the task force to address the Frankel situation.  (p967)
    • To: Members of the Reinsurance Task Force
      • From: Robert Graham (General Re) for Interested Persons, Date: November 6, 2000, Re: Notice or Disclosure of Significant Reinsurance Transactions (p969)