Monday, April 30, 2012
Thursday, April 19, 2012
Liberty Mutual
Mr. Syre is quite correct, the policy holders and owners of Liberty
Mutual are quite powerless to affect the fate of the Company (Ted
Kelly's pay shocking on several levels, Boston Globe, April 13, 2012).
Several years ago in 2002, with no compensation to policy holders and
owners, the Company adopted a byzantine legal and organizational
structure that seems to have allowed the Board to spend freely with
little or no accountability!
* The lines of insurance are provided by three companies which are
wholly owned subsidiaries of Liberty Mutual Group, Inc..
* Liberty Mutual Group Inc. is a wholly owned subsidiary of LMHC
Massachusetts Holdings Inc.
* LMHC Massachusetts Holdings, Inc. is, in turn, a wholly owned
subsidiary of Liberty Mutual Holding Company, Inc.
The insurance commissioner allowed the Company to adopt this structure
after the Company threatened to move its headquarters out of state.
This three-tier structure leaves lots of questions unanswered: Was the
structure designed to weaken accountability or, as the company
claimed, improve access to the capital markets? At what level were the
extravagant expenses on a fleet of five airplanes and excessive
executive salaries incurred? At what level were they authorized? At
what level were the benefits received? Finally, how much did these
costs detract from the benefits received by the owners and policy
holders?
I hope the Commissioner will get answers to these questions. We policy
holders don't know where to begin.
Sent to Boston Globe
Mutual are quite powerless to affect the fate of the Company (Ted
Kelly's pay shocking on several levels, Boston Globe, April 13, 2012).
Several years ago in 2002, with no compensation to policy holders and
owners, the Company adopted a byzantine legal and organizational
structure that seems to have allowed the Board to spend freely with
little or no accountability!
* The lines of insurance are provided by three companies which are
wholly owned subsidiaries of Liberty Mutual Group, Inc..
* Liberty Mutual Group Inc. is a wholly owned subsidiary of LMHC
Massachusetts Holdings Inc.
* LMHC Massachusetts Holdings, Inc. is, in turn, a wholly owned
subsidiary of Liberty Mutual Holding Company, Inc.
The insurance commissioner allowed the Company to adopt this structure
after the Company threatened to move its headquarters out of state.
This three-tier structure leaves lots of questions unanswered: Was the
structure designed to weaken accountability or, as the company
claimed, improve access to the capital markets? At what level were the
extravagant expenses on a fleet of five airplanes and excessive
executive salaries incurred? At what level were they authorized? At
what level were the benefits received? Finally, how much did these
costs detract from the benefits received by the owners and policy
holders?
I hope the Commissioner will get answers to these questions. We policy
holders don't know where to begin.
Sent to Boston Globe
Sunday, April 1, 2012
Draw Down Oil Reserves
So the US and Europe are considering releasing oil from the strategic reserve in order to cut gas prices (Global Agreement Said to Be Near on Drawing From Oil Reserves. New York Times, March 30, 2012: B1, B6).
To do this would be sheer madness!
If gas prices were at European levels -- due to high taxation -- there might be a weak case for doing so.
But look at the purpose of the reserve: it is to ensure that the US will have sufficient oil if there is a constriction in overseas supply. If the Straits of Hormuz are closed so that imports from the middle east dry up, then that is the time to release oil from the reserves.
To release oil as a price stabilizer would put us in danger of an oil famine if the Straits were to be closed in the future.
To release oil as a price stabilizer would be to pander to the worst instincts of Americans -- very few of us are willing to make a sacrifice any more. We wouldn't even accept tax hikes to pay for the Iraq war.
This unwillingness will lead to our passing on an impoverished America to our children.
Sent to New York Times
To do this would be sheer madness!
If gas prices were at European levels -- due to high taxation -- there might be a weak case for doing so.
But look at the purpose of the reserve: it is to ensure that the US will have sufficient oil if there is a constriction in overseas supply. If the Straits of Hormuz are closed so that imports from the middle east dry up, then that is the time to release oil from the reserves.
To release oil as a price stabilizer would put us in danger of an oil famine if the Straits were to be closed in the future.
To release oil as a price stabilizer would be to pander to the worst instincts of Americans -- very few of us are willing to make a sacrifice any more. We wouldn't even accept tax hikes to pay for the Iraq war.
This unwillingness will lead to our passing on an impoverished America to our children.
Sent to New York Times
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