| Some N.C. Employers to Receive Distribution from Phoenix Fund |
| $6.5 Million Will Go Back to Some Former Phoenix Fund Members |
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| RALEIGH -- Insurance Commissioner Wayne Goodwin today announced the
distribution of $6.5 million to 661 former members of the Phoenix Fund, Inc. The Phoenix Fund was ordered
into rehabilitation in October 2006, by the Wake County Superior Court after the N.C. Department of Insurance
uncovered a more than $20 million fraudulent reinsurance scheme and left several insurance entities, including
the Phoenix Fund, without reinsurance. |
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| Since the Phoenix Fund has been under rehabilitation, the Department has sought
and recovered nearly $18 million for the Phoenix Fund from Thomas G. Reitz, the Fund's purported reinsurance
broker who was at the center of the fraudulent reinsurance scheme. In 2007, Reitz pleaded guilty to mail fraud
and money laundering and was sentenced in 2008 to 70 months in jail followed by three years of supervised release.
In addition, Reitz was ordered to pay over $19 million in restitution to the Phoenix Fund. |
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| Distribution checks will be mailed today to employers that were participating members
of the Phoenix Fund as of Oct. 17, 2006, the date the Court ordered the Phoenix Fund into rehabilitation. The remaining
recovered monies will be used to pay the Fund's obligations. Any monies remaining after the payment of such obligations
will be returned to the same former members in a second and final distribution upon approval of the Court. |
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| "The Phoenix Fund's member companies have gone through a lot over the last few years,
and I'm glad that my Department is able to give back money they are entitled to," said Commissioner Goodwin. "In this
economy every dollar counts, for both individuals and companies, and I am committed to making sure that these member
companies get back every available penny." |
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| The Phoenix Fund was a self-insured group workers' compensation fund whose members
agreed to pool their workers' compensation liabilities rather than seeking coverage in the private market. Self-insured
group workers' compensation funds are licensed and regulated by the North Carolina Department of Insurance. |
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| -- NCDOI -- |
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