"The company made a business out of propping up troubled insurers with reinsurance that appeared to reduce liability, says W.O. Myrick, a retired Alabama state insurance examiner. The contracts carried little, if any, risk to Alabama Re, he says. One client, Inter-American Insurance Co. of Illinois, went into liquidation in 1991, according to Cook County court documents.
'Historically, Alabama Re has entered into contracts to assume liabilities from problem insurers to help them appear to be in better financial condition than they actually are,' Myrick says in a telephone interview."Experts told Bloomberg that the whole point of Alabama Reassurance was to hide dog track profits.
"Mississippi also examined Alabama Re.
'They were propping up broke companies for a fee,' says Tom Gober, who was examiner-in-charge at the Mississippi Insurance Department in the early 1990s. 'Companies knew they could call on Alabama Re because Alabama Re had to offset dog track profits.'"
|Paul Bryant Jr.
Photographer: Glenn Baeske/The Huntsville Times/Landov