PADI getting sued over Insurance Program

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Not to worry; there is a motion to sanction the plaintiff and plaintiff's counsel for bringing a lawsuit that was frivolous and in bad faith. The Court could very likely grant it and impose the costs on the plaintiff and counsel. How bogus was it to sue all these defendants saying that PADI was selling insurance and collecting money for an illusory policy when the policy itself made it irrefutable that it was issued by Lexington, a "real" insurance company? And, that's not to mention that no claim went unpaid.

I hope the motion for sanctions is granted. If anyone from PADI is reading this and needs an affidavit regards plaintiffs' counsel's efforts to discredit PADI using this suit, pm me.
 
1. My name is Bruce and I am proud of it. My user name is "ItsBruce" due to a "fluke" in the process of selecting a user name. I'd rather be called "Bruce" than "ItsBruce."

2. I have some very serious issues with PADI and the other "agencies." However, they are just about all that keeps shops from selling fills to just anyone who will pay for it.

Real divers generally know better than to go to a shop that is not certified by some agency or other. Shops get certified only by complying with certain minimums, including having insurance.Thus "agencies" are a necessary evil.

3. For those who continue to insist PADI did something wrong, there is one simple truth: Regardless of what the plaintiff alleged, the policies at issue were issued by Lexington. Any shop that bought insurance presumably got a copy and could read exactly what it said about deductibles and SIRs.

(Remember all the times I asked for a copy of the policy? Well, no one ever sent me one. I finally got it from the court filings.)

4. I recently had an unhappy experience and I am seriously thinking that anyone who can't take the training and pass the standards used by the scientific diving community, should not be scuba diving. So I am now part of the camp that does not approve of current training.
 
So, for some of you it is illegal, immoral and fattening for PADI to do the same thing that lenders, car dealers, banks, window comapnies, siding companies, finance companies, home sales companies, etc all do - have some type of re-insuranmce or SIR agreement. At least PADI keeps the money here in USA. I can name at least a few offshore companies based in Bermuda, Bahamas and Cayman that are reinsurance only, dealing with policies sold by a corporate cousin only.

IMHO, this is a complaint where some uninformed person thinks anything out of the ordinary is wrong/illegal, or where someone is PO'd because they didn't think of it first. Guess what, Social Security is unlicensed insurance. has anyone taken the feds to court on that?

That and how many GOOD jobs were created? White collar crime??? You must be joking or in a union. Even the NFLPA knows better than that.
 
While no damage may have been actually done, that was a matter of chance. I still think that is was illegal and immoral and it will be interesting to see what happens if and when it gets to the California Insurance Commissioner.
The Insurance commish will likely do nothing -Like I said back in November, the use of an SIR is quite common for large accounts/programs. Look at PADI as having the insurance policy and having many partners(Dive Shops which are certificate holders not policy holders). PADI bought the Master Policy from Lexington a licensed carrier in CA using V&B as the broker also licensed and an independant claims adjusting company York to adjust claims. The SIR is nothing more than a deductible much like you have on your auto insurance and the use of one does not make you an insurer,
The best you can hope for is with all the attention that this suit has broght that it forces PADI to disclose how the funds are used.
 
Just read this thread and it's amazing how many people are in complete denial. Some are clearly in bad faith, some are just ignorant, some have motives and grudges that appear to take away any sense. I think the comparison with birthers is an appropriate one.

If there were that many cheaper and better and more reliable insurance providers out there, I and everybody else in the industry would flock to it. It's the market, baby.
The alternatives are scant and every saving (pennies) comes at a price in amount and extent of coverage. Plain and simple.
The business model is clear: an agency negotiates rates for its members and gets in return A) price saving for the expected number of agency members, B) price saving because its standards, bylaws, guidelines, and other member contrains guarantee the underwriter reduced exposure, C) the underwriter provides further discount for the deductible, D) the agency gets a commission back based on the group of customers it brings to the underwriter, E) the agency knows that its exposure is limited and partially covered by the commission it gets, F) the agency members get a good deal as they get a lower cost insurance without the exposure to the deductible.
The bigger the agency and the more solid its business practices, the lower the risk and the more spread the coverage for claims, thus the lower the premium.
Under this model everyone wins. If the members can get better insurance ("better" includes access to it, availability, lower price in conjuction with identical or broader coverage, similar or superior customer service, security of claim handling) they will move elsewhere and most likely the agency, the broker and the underwriter would start offering improved terms. Until that happens it seems that the model is optimized for maximum return for all sides.
Unless it becomes illegal and immoral to profit from building a solid business based on sound standards and member practices.
The lawsuit was very clearly a shakedown that the lawyer with inside information was hoping it would never go to trial for fear of some "secrets" being exposed - we know how it went... This lawyer had been threatening openly its former employer for years about how it would eventually take it down. From the start, the clue was that there were no damages.
It seems the usual story of the disgruntled employee who thinks can play whistleblower, however for one Enron that really deserved to go down, the greatest majority of cases have no merit and no basis for action.

just my $0.02
 
I can name at least a few offshore companies based in Bermuda, Bahamas and Cayman that are reinsurance only, dealing with policies sold by a corporate cousin only.

I think you are referring to what is commonly known as "captive insurance", in which case it would not normally be a corporate cousin, but a parent company. It is a pretty commercially legitimate way to manage your own insurance risk by tapping the reinsurance markets directly, and retain the benefit of broking fees rather than paying them across to a middle man.

What it is not, however, is anything like what PADI is suggested to have done. PADI was not seeking reinsurance for its own liabilities through a captive, it was (rightly or wrongly) arranging cover for dive stores and dive professionals. Apples and things-that-don't-look-much-like-apples.

Just to round out the topic - although captives are commonly incorporated in offshore jurisdictions (like Bermuda, Cayman, BVI), they by no means have a monopoly. Vermont, Utah, Arizona, Nevada and even the good ole' District of Columbia offer licensing and formation of captive insurance companies.
 
An update on the case: On August 10, Judge Carter denied defendant's motions for sanctions against plaintiffs. See Order Denying Defendant York Risk Services Group, Inc.'s Motion for Sanctions (PDF).

Plaintiffs have appealed the dismissal to the 9th Circuit (No. 11-56346). Initial appellant's brief isn't due until January 2012, so won't be much activity before then.

Can you try that one again in English for the non-bar members? :D

flots.
 
Can you try that one again in English for the non-bar members? :D
flots.
I'm sorry. I can certainly try. I'm a newbie here, but just noticed that the case status hadn't been updated for a few weeks, so I thought I would provide some basics, assuming you all knew more than I did already! (And I still assume that!)

FIRST: As noted previously, the Court (Judge Carter) dismissed the case against PADI. If you're interested, you can read Judge Carter's order/opinion here.

The "new" event is that Plaintiffs are appealing this order dismissing their case. They are appealing the decision to the 9th Circuit. This appeal process will likely take around a year (or more), so there won't be much news for quite a while (except for the legal geeks who love to follow cases and read party briefs).

SECOND: As also noted previously, Defendants asked for sanctions against the plaintiffs for even filing the lawsuit.

The "new" event is that the court denied that motion. In other words, the court found that the complaint was not frivolous as a matter of law.

~~
I have not studied the entire case much yet, so cannot express any personal opinion on the merits, or lack thereof, of the case. I will note that I've read countless orders and opinions by Judge Carter (in an entirely different context) and I am not at all surprised by his order denying sanctions. He very rarely ever imposes sanctions and has declined to impose sanctions in at least one or two cases far more obviously frivolous than this case.

My personal impression is that Judge Carter is a thoughtful, careful, and precise judge. And, he has a pretty good record on appeal too -- which means that his orders do not get overturned that often

So, even without knowing much about the case (yet), I can fairly say that it is more likely than not that his decision will be upheld. (That is, Plaintiffs will lose on appeal -- and PADI will win.)

Is that any better -- or did I just make it worse ?
 

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