- 17 - Mr. Castille, who had been the risk manager of Humana Inc., a competing hospital chain, was hired to head Parthenon's loss prevention and quality assurance operation. Mr. Anderson, a former controller of an insurance brokerage firm in the State of Kentucky, became head of Parthenon's financial operations. On October 28, 1977, HCA contributed an additional $1 million to Parthenon as paid-in capital. During March 1978, HCA management learned that Continental, which had been providing workers' compensation insurance to petitioners, was not interested in renewing coverage under any type of insurance plan. As a captive insurer, Parthenon could not insure workers' compensation risks directly, but it could reinsure7 the risks of an admitted company, if the admitted company agreed to "front" the business; i.e., to insure the risks and then reinsure them with Parthenon. In that event, the States would look to the admitted company for payment of the losses, and the admitted company would look to Parthenon for reimbursement. Accordingly, during March 1978, HCA, Ideal Mutual Insurance Co. (Ideal Mutual), and Parthenon negotiated an arrangement whereby Ideal Mutual agreed to provide workers' compensation insurance to petitioners and Parthenon agreed to reinsure Ideal Mutual on that 7 Reinsurance is a contract with a second insurer in which the second insurer agrees to provide coverage of risks that the first insurer has already assumed under an insurance contract with another party. 1 Couch on Insurance 3d, sec. 1:4, at 1-8 to 1-9 (1995).Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011