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Path: utzoo!linus!philabs!seismo!harpo!ihnp4!pyuxbb!drew
From: drew@pyuxbb.UUCP (RD Davis)
Newsgroups: net.legal
Subject: Re: Insurance companies question
Message-ID: <319@pyuxbb.UUCP>
Date: Wed, 18-Jan-84 13:38:02 EST
Article-I.D.: pyuxbb.319
Posted: Wed Jan 18 13:38:02 1984
Date-Received: Thu, 19-Jan-84 05:22:55 EST
References: <488@hou5a.UUCP>
Organization: AT&T Bell Laboratories, Piscataway
Lines: 18

I re-call a great fraud case in the re-insurance business that came
to light a few years back:  an insurance company was selling off
trumped up policies to re-insurers.  Thanks to the clever use of computers,
the company was able to keep up payments & make a few claims to get
some money back, but not enough to raise anybody's suspicions.  It all
depended on continuing to sell off still more imaginary policies to keep
the cash flowing in to keep up payments & skim off a profit.  Eventually
they got caught - though I don't remember how.

One thing that bothers me is that I never heard of any programmers getting
charged in that case.  It sure sounds to me like the executives who ran
the insurance company would have needed some technical support.  Its
hard for me to see how the programmers could have worked in ignorance
of what was going on.  ("I was only following orders."?)

Anybody remember a few more details about that case?

R. Drew Davis  AT&T Bell Laboratories  pyuxbb!drew