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