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June 9, 2015- By Steven E. Greer
The BPCA convened a board meeting today. The first item on the agenda was the decision to change the company that oversees all of the insurance policies for the BPCA. The company called COOL Insuring Agency was selected.
COOL executives mentioned the names of the insurance companies that are part of the various policies covering BPCA property. All of the companies were well known except for Lexington Insurance. A board member, Donald Capoccia, asked “Who is Lexington?” and Ira Neifeld of COOL explained that it was an AIG subsidiary. Recall, AIG became insolvent after the 2008 financial collapse and had to be bailed out by the federal government.
Mr. Neifeld also explained that the Lexington Insurance policy was “Non-admitted” by the New York State Department of Finance insurance regulatory arm. According to a COOL executive, “This means that if AIG went belly up, the state would not bail out policyholders.”.
A former BPCA employee who dealt with such contracts stated to BatteryPark.TV, “Occasionally you have you use a non-admitted policy for complicated matters, but for routine property insurance, they did not have to use a non-admitted carrier.”.
COOL executives explained several times that the package of insurance they offered was far below the market rate. The less secured “non-admitted” status of the AIG policy was one reason for the lower cost. However, if a large hurricane or other natural disaster stressed the finances of AIG, would the insurance be worthless? COOL did not address this question.
Of particular note in this agenda item up for a vote is that board member Martha Gallo was recently hired by AIG to run their audit department. Prior to that, she was Global Head of Compliance for JPMorgan during the time when numerous financial misconduct took place resulting in billions of dollars in fines to the DOJ and several criminal prosecutions.
Given the obvious conflict of interest, Ms. Gallo surprisingly did not recuse herself from the vote. Instead, she voted in favor of hiring COOL Insurance which uses her company, AIG insurance. Therefore, just months after being hired by AIG, Ms. Gallo’s BPCA board decided to purchase dubious AIG insurance.
Various federal agencies are aware of this development.
After the COOL Insurance team completed their presentation, BatteryPark.TV approached them in the lobby for questions. They were answering the questions until a BPCA employed woman stormed out of the meeting and tore away the COOL executives (see video).