David C. Farmer vs. Harmon - Witness Jeffrey P. Schmidt

NEW DISCOVERY (04-17-09): More evidence of fraud, bad faith, racketeering, money-laundering, undisclosed conflicts of interests, etc. between numerous entities and witnesses involved in this case:

State's 3rd-largest automobile insurer will change names when deal is done in summer

AIG Hawaii, the state's third-largest automobile insurer, is being sold as part of a $1.9 billion deal as owner American International Group Inc. takes steps to repay some of the billions owed in government bailout money.

The deal announced yesterday involves Los Angeles-based Farmers Group Inc. buying AIG's auto insurance unit, a move that will expand Farmers into Hawai'i for the first time.

Yesterday Farmers Chief Executive Officer Robert Woudstra said that Farmers had no immediate plans to make any changes to AIG Hawaii's 310-person staff or operations.

"It's a good fit," Woudstra said from his Los Angeles office, explaining Farmers does not have any business in the state currently.

"I can't tell you right now what we're going to call it, but the AIG name will have to go away."

AIG Hawaii had been contemplating a name change on its own given the stigma of being associated with its parent company, which had severe financial problems and needed a Federal Reserve-led rescue to avoid collapse last year.

In October, AIG put its auto group on the market as it looked for ways to pay off some of the bailout, which now totals about $182.5 billion.

AIG Hawaii President and Chief Executive Officer Robin Campaniano yesterday called the sale a positive development for the local unit. In 2008 AIG Hawaii's premiums written fell to about $100 million, about $18 million less than a year earlier.

Campaniano said some of the decline may have been due to clients departing because of the parent company's problems. A downturn in the Hawai'i economy contributed also.

"We're hopeful and very optimistic that the strength of Zurich and Farmers will greatly add to the presence we have in Hawai'i."

Farmers is owned by Zurich Financial Services Group, a Swiss company that serves customers in 170 countries and has business customers in Hawai'i.

AIG Hawaii insures about 100,000 cars in Hawai'i, along with offering homeowners, life, commercial and other insurance. Only Geico and State Farm insure more cars in the state.

Woudstra said he became familiar with the Hawai'i operations in examining AIG's business and that "it has performed exceedingly well for AIG."

He said he had gotten good reports about Campaniano, with people saying nothing but positive things about his reputation.

The AIG automobile business was operated under a unit known as 21st Century Insurance Group, which owned AIG Hawaii as well as running operations in 28 other states. The sale will require the approval of state insurance commissioners.

"Farmers and Zurich are both good, solid companies, so that's a good thing," Schmidt said. "But we'll be looking at the details and specifics to ensure that the people of Hawai'i are taken care of in the best possible manner.”

The sale may be completed this summer. Schmidt said he and other insurance commissioners had been working on a uniform application process so that the sale approval can be processed efficiently.

Catbird Note: More pages related to “good, solid companies,” Farmers and Zurich:

Due to the new discovery of important FACTS related to this case, I am updating the information for the subject Exhibit and witnesses, which you will find on-line at:

As I have previously advised, I intend to file a MOTION TO REOPEN this case unless you are willing to try to resolve this matter NOW through voluntary NEGOTIATION or, as an alternative, through non-binding MEDIATION.

If you are not open to either of these alternatives, then please let me know immediately if you intend to file any Objections to my reopening this case.

This is to inform you that I have not received an acknowledgment of, or response to, my letter you dated August 1, 2007, regarding the referenced matter. A copy of this letter, and related information, can be found on the Internet at:

Since this information is necessary in order for the subject case to be finally closed, I ask that you provide to me, as soon as possible, an accounting of the settlement recovered for Kamehameha Schools and P&C Insurance Co., Inc. for the fraudulent overcharges which I reported beginning in November, 1996, and which may be continuing to this date.

Also, as a tax-payer, I ask that you provide to me. and to the general public, complete details– including reimbursement of premiums, damages for wrongfully denied claims, penalties, etc.– regarding the settlement negotiations and monies received which involved any and all claims made by the State of Hawaii against the insurance agents, brokers and carriers involved in your investigations and settlement negotiations.

To: "Bobby Harmon" <bobby_n_harmon@yahoo.com>, "David Farmer" <farmerd001@hawaii.rr.com>, "Michael Mukasey" <AskDOJ@usdoj.gov>, "Kevin Chang" <sa@hid.uscourts.gov>, "Robert Faris" <hib@hib.uscourts.gov>, "Barry M. Kurren" <richlyn_young@hid.uscourts.gov>, "Carol K. Muranaka" <ustp.region15@usdoj.gov>, "J P Schmidt" <insurance@dcca.hawaii.gov>, "Janet Kamerman" <HONOLULU@FBI.GOV>, "Mark Bennett" <hawaiiag@hawaii.gov>, "Hugh Jones" <hugh.r.jones@hawaii.gov>, "Linda Lingle" <governor.lingle@hawaii.gov>

"Mediation Center of The Pacific" <mcp@mediatehawaii.org>, "Sheryl Nicholson" <office@acluhawaii.org>, "Robert Bruce Graham" <bgraham@awlaw.com>, "James Wriston" <jwriston@awlaw.com>, "Andrew Winer" <winer@pacificlaw.com>, "James Cribley" <jcribley@caselombardi.com>, "Lawrence Goya" <hawaiiag@hawaii.gov>, "Pension Benefit Guaranty Association" <participant.pro@pbgc.gov>, "James B Nicholson" <jamesbnicholson@aol.com>, "Executive Office for U.S. Trustees" <ustrustee.program@usdoj.gov>, "Office of Inspector General US Dept of Justice" <oig.hotline@usdoj.gov>, "George Will" <georgewill@washpost.com>, "Haunani Apoliona" <info@oha.org>, "Leroy Colombe" <lcolombe@ckdbw.com>, "Scott Helman" <shelman@globe.com>, "Bob Nichols" <bob.bobnichols@gmail.com>, "Laura Thielen" <dlnr@hawaii.gov>, "Barry Taniguchi" <communications@hcf-hawaii.org>, "Paul Achitoff" <honoluluoffice@earthjustice.org>, "Laurie Bennett" <info@muckety.com>, "Dave Shapiro" <volcanicash@gmail.com>, "Gail Kim-Moe" <Gkim.moe@gmail.com>, "Marshall Chriswell" <mc@whistleblowers.org>, "Greg Palast" <palast@gregpalast.com>, "Dee Jay Mailer" <ksinfo@ksbe.edu>, "Laser Haas" <laserhaas@msn.com>, "Michael Moore" <mike@michaelmoore.com>, "Texas Observer" <editors@texasobserver.org>, "Brian W. Bisignani" <bbisignani@postschell.com>, "Aon Insurance Managers" <mike_coulter@agl.aon.com>, "William Burgess" <hwburgess@hawaii.rr.com>, "Brian E. Schatz" <teamschatz@gmail.com>, "Patricia Case" <pattycase@aol.com>, "Cheryl Nakamura" <CNakamura@rmhawaii.com>, "Bill Yuen" <billyuen@cymlaw.com>, "Randall W. Wulff" <rwulff@wqsadr.com>, "Karen Spiller" <karen.spiller@baesystems.com>, "Andrew Killgore" <akillgore@wrmea.com>, "Patrick Leahy" <senator_leahy@leahy.senate.gov>, "Pamela A. McCullough" <HONOLULU@FBI.GOV>, "James Duke Aiona" <ltgov@hawaii.gov>, "Ken Conklin" <ken_conklin@yahoo.com>, "William H. Donaldson" <enforcement@sec.gov>, "Ian Lind" <diary@ilind.net>, "Jim Terrack" <tnthawaii@aol.com>, "Andrew Walden" <hfpeditor@email.com>, "All Senators" <sens@Capitol.hawaii.gov>, "All Representatives" <reps@Capitol.hawaii.gov>, "Thomas Fitton" <info@judicialwatch.org>, "Stew Webb" <stewwebb@stewwebb.com>, "Judson Witham" <jurisnot@yahoo.com>, "J C Shannon" <Hapa1234@aol.com>, "Jeff Biener" <jeffandmary@ozarkopathy.org>, "V K Durham" <vkdtdht@pionet.net>, "Richard Grove" <Richard@8thEstate.com>, "Bradley Tamm" <btamm@hawaii.rr.com>, "Susan Tius" <STius@rmhawaii.com>, "Paul Alston" <palston@ahfi.com>, "John Goemans" <wip@kamuela.com>, "William K Slate" <Websitemail@adr.org>, "Lissa Andrews" <landrews@rmhawaii.com>, "John D. Finnegan" <info@chubb.com>, "Terry Mullen" <tmullen@johnmullen.com>, "Margery Bronster" <info@bchlaw.net>, "Michael N. Tanoue" <mtanoue@paclawgroup.com>, "Neil Ambercrombie" <Neil.Abercrombie@mail.house.gov>, "Lyn Flanigan Anzai" <lflanigan@hsba.org>, "Lorraine Inouye" <seninouye@Capitol.hawaii.gov>, "Samuel P. King" <leslie_sai@hid.uscourts.gov>, "Arthur Rath" <imua@spamarrest.com>, "Randall Roth" <rroth@hawaii.edu>, "Rick Daysog" <rdaysog@honoluluadvertiser.com>, "Jim Dooley" <jdooley@honoluluadvertiser.com>, "Robin Campaniano" <aigh001@aighawaii.com>, "Blossom Tong" <blossom.d.tong@marsh.com>, "Sammye Richardson" <sammyerichardson@yahoo.com>, "Daniel Hopsicker" <madcownews@gmail.com>, "Richard L Righter" <righterwmx@aol.com>, "Dirk Kempthorne" <webteam@ios.doi.gov>, "Jeffrey Sia" <Jeff.Sia@excite.com>, "Jim Babka" <downsizer-dispatch@downsizedc.org>, "Truth" <truth@grandecom.net>, "J. C. Jones" <JCJJONES@aol.com>, "Dane Field" <danefl@gucl.com>, "Jeffrey Watanabe" <jwatanabe@wik.com>

Kessner Umebayashi Bain & Matsunaga
220 South King Street, Suite 1900
Honolulu, Hawaii 96813

In the era when cowboys and gold panners roamed, the West was characterized as a wild yet adventurous place to live. Judging by 2006's insurance industry headlines, those sentiments don't seem to have changed.

In the past year, agents and brokers in the western region of the United States pushed to protect their compensations and use of credit scoring. And when not out fighting those battles, the region endured the wrath of Mother Nature. Using earthquakes, La Niña and then El Niño conditions as her weapons -- the latter of which are expected to continue for the next one to three months according to the National Oceanic and Atmospheric Administration -- the grand dame flogged the western states with heavy rains, which led to floods, and warmer than normal temperatures, which sparked wildfires.

If history is any indication of what's to come, living in the West will continue to be a wild ride. Following are the top news stories that occurred in the region in 2006, as picked by Insurance Journal's editors.

Following New York's investigations of improper producer compensation at Marsh McLennan, insurance commissioners in other states looked within their boundaries to see if illegal practices were occurring. Arizona, Hawaii, Oregon and Washington, found no indication of illegal practices and no need to take further steps. California, on the other hand, debated the appropriateness of commissions and whether they should be disclosed to customers.

Toward the end of 2005, California Insurance Commissioner John Garamendi encouraged voluntary compensation disclosure without imposing new rules. Some say that has improved transparency and trust in the industry. Yet in Sept. 2006, he tried to designate a settlement agreement he had reached with American Reliable Insurance Co. as a precedential decision that could be used in future cases to designate brokers as "agents in fact," which could affect commissions.

The Department of Insurance alleged that American Reliable had violated California law by "permitting" particular retail broker-agents to charge brokers' fees. CDI believed that the brokers in question were "de facto agents," or producers, who were acting as brokers, but whose relationship with the insurer was tantamount to that of an appointed agency, according to Steve Young, general counsel for the Insurance Brokers and Agents of the West. Even worse, Young added, was that the commissioner attempted "to give these distorted opinions the force of law by attempting to designate them as a precedential decision" for use in future disputes.

"CDI is improperly attempting to regulate fees that licensed California producers may charge for professional services, when there is no ... legal authority ... permitting it to do so," said Roger Chaix, president of the California Insurance Wholesalers Association.

IBA West filed a petition with the California Office of Administrative Law (OAL), which was joined by other insurance associations, asking it to declare that Garamendi acted illegally. The OAL is expected to rule on the petition no later than April 2007.

Small businesses may be in for a big insurance rate hike. H.M.S.A. has requested its fifth straight annual increase and this one is the largest in years.

William Donohoe opened up The Shipping Shack in Kaimuki in 2005, and has survived the growing pains of starting a business from scratch.

“Being a small business starting out, keeping costs under control is one of the major factors,” said Donohoe.

Donohoe is able to do that by taking advantage of the State Department of Human Resources SEE program that helps pay for employees wages' and medical. He says he could not stay in business if he had to cover HMSA's proposed 12.8 percent rate hike alone.

After years of smaller, single digit percentage increases, HMSA is asking the State to approve its largest rate hike in 19 years.

“We're trying our best to keep healthcare costs down because we understand how that impacts them. On the other hand, we need to balance that concern with providing quality care,” said H.M.S.A. Chief Financial Officer Steve Van Ribbink.

According to HMSA Chief Financial Officer Steve Van Ribbink, rising health care costs eat up nearly all of dues revenues.

“94.4 percent of it goes right to providers. If this cost goes up quite a bit, we need to raise rates accordingly,” said Ribbink.

The proposed hike would affect 11-thousand businesses with less than 2-hundred employees and 144-thousand members.

“This is actually the largest pool and affects the most people. Because of that, we look at it very carefully,” said Insurance Commissioner JP Schmidt.

The State's Insurance Commissioner will spend the next two months, looking over documents to see if the increase is justified.

“They've stated a part of the reason for the increase is increase in reimbursements to physicians and hospitals. That's been a big discussion in the Legislature this session. We're going to look very closely at that,” said Schmidt.

HONOLULU (KHNL) -- Could a new bill help stem the health care crisis in Hawaii? Many say there's a shortage of physicians across the state because of the rising cost of medical malpractice insurance and the fear of being sued.

Supporters say House Bill 3102 and Senate Bill 3024 will help Hawaii attract and keep good doctors, which in turn makes quality health care available for more Hawaii residents. It's a concern for Hawaii's insurance commissioner JP Schmidt, who supports a medical malpractice bill. "We're losing our doctors. Doctors are leaving to go to Texas, California, and other states that have medical liability reform. We're having a tough time getting new doctors here."

Lawmakers heard testimony Friday on the bill. It would limit the kinds of damages awarded in malpractice suits. "It puts a cap on non economic damages, pain and suffering emotional distress. Things that don't have standards to go by," details Schmidt. Supporters say caps on damages would stabilize insurance rates and make insurance more affordable for doctors.

It would also allow victims to get all their economic damages. "Increased medical expenses, increased cost of living due to injury, lost wages, increased cost of drugs; all the things people need if they've been injured," outlines Schmidt.

Critics largely come from the legal community. They say a cap won't affect insurance premiums, and that it'll be harder to find an attorney to take malpractice cases. The Governor's administration supports medical malpractice reform. But even lawmakers like Representative Rida Cabanilla (D- Waipahu, Honouliuli, West Loch, Ewa) who support the bill aren't sure it'll pass this session. "There's a lot of resistance from the legal community and there's a lot of lawyers in this building."

Cabanilla is also a nurse. She says she sees the crisis up close every day. "This state is in a bad position. We are losing doctors every day and we don't have anybody to replace them."

The bill passed its first reading in both the House and Senate, and is currently in committees.

By Cristina Rodriguez / Staff WriterThree months after NevadaCare lost its 14-year contract with Nevada's Medicaid department, Chief Executive Todd Meek is upbeat, acting as if the quarter-billion-dollar contract does not matter.

Just weeks before he was rounding up 300 employees in the breakroom, telling them the bad news. Like how the company would not fight the state's decision to hire a national provider instead. Or how about 175 jobs could be affected directly or indirectly.

But just 25 jobs have been eliminated since then. Some workers chose to resign and take severance packages.

And the company is hiring: Just recently, five new workers joined NevadaCare and about 20 joined the Hawaii office of its sister company, Summerlin Life and Health.

"We're actually in a stronger financial position with the exit of Medicaid," Meek said.

Although Medicaid and the Nevada Check Up children's insurance accounted for 70 percent of NevadaCare's business, the loss of the contract frees up $15 to $18 million that was required to be in a reserve account.

That money is going to help Meek grow the HMO side, NevadaCare and its PPO side, Summerlin.

Work at NevadaCare and Summerlin Life and Health — both private, Las Vegas-born companies — is based out of two side-by-side buildings on Charleston Boulevard, across from the Red Rock Resort. The customer service call center and other departments handle work for some of the other sister companies within the Arizona-based i/mx Cos. family.

There are rumors reported publicly, such as on earnings calls of Las Vegas-based insurer Sierra Health Services, that NevadaCare may be sold. But Meek laughs when asked about them, saying those rumors have always been around....

The company was formed in December 2003, and in 2004 it began selling policies in Hawaii. It obtained a license in Arizona in late 2005, but has not started selling policies there yet.

"We specifically held off in Arizona given the interest in Nevada and Hawaii," Meek said. "We grew 89 percent in 2005 in Nevada."

Mike McCarthy, executive director of the six-location Rainbow Medical Centers, said he has seen that growth,

The flexibility of PPO plans — in which individuals choose their doctors rather than wait for a reference from a primary care physician — has become more popular in general, McCarthy said.

But Summerlin has also done a good job recruiting high-quality, cost-efficient physicians for its network, as well as small businesses to sign on for policies.

"A lot of people don't like to go out and deal with the 20-man group," McCarthy said. "It's a niche they're filling, and I assume they must be doing it fairly well, if they're growing like that."

In Hawaii, the company took the opportunity to compete among a relatively small market dominated by two major players. The state found out about Summerlin — and asked the company to set up shop — after working with one of its i/mx sister companies, HMA.

"I felt it was important to have competition here," said J.P. Schmidt, Hawaii's insurance commissioner. "I did work to try to make the process of getting a license effective and efficient, so they could get up and going."

Summerlin is going up against Hawaii Medical Service Association Blue Cross Blue Shield, with 65 percent of the market, and against California's Kaiser Permanente, with 22 percent.

As the only commercial insurer in Hawaii, Summerlin is the only one that has to pay a 4.2 percent premium tax. Though Schmidt tried to get this rule overturned in the last legislative session, the two big insurers — which have considerable influence in the state — had that bill quashed, he said.

Likewise, the large insurers pushed lawmakers to allow a rate policy to expire this summer. The policy, which exists in Nevada, had required Hawaii insurance companies to submit rate increases or decreases for approval.

That policy was one of the reasons why Summerlin felt comfortable entering Hawaii, Schmidt said company leaders told him.

"Normally you would think an insurance company would not want the government getting involved, but they thought it was a good thing because it ensures a level playing field," Schmidt said. "With the big dominant players, HMSA and Kaiser, they were concerned predatory pricing could force them out of the market."

So far that has not happened, but Schmidt does not expect most rate changes until January.

For the moment, Summerlin seems to be aggressively selling policies to group plans like chambers of commerce or professional associations, Schmidt said.

It would be harder for Summerlin to recruit elsewhere. Hawaii, unlike any other state, requires all employers to provide employees with health insurance, he said.

Arizona, like Hawaii, also has some big players to tackle. The Summerlin plans are expected to launch around July there, Meek said....

Hawaii State Insurance Commissioner J.P. Schmidt will be among the U.S. officials working with the governments of China and Japan to improve regulation in the financial services industries.

According to the Hawaii Department of Commerce and Consumer Affairs, Schmidt has been asked by the National Association of Insurance Commissioners (NAIC) to represent U.S. regulators in Financial Sector Working Group Dialogues in Tokyo, Japan, and Beijing, China. Schmidt will be joining representatives from the U.S. Treasury Department, Federal Reserve Board, Federal Deposit Insurance Corp., Securities Exchange Commission, Office of Comptroller of the Currency and the Commodity Futures Trading Commission.

The meetings are scheduled for next week. Among the issues scheduled to be discussed are the Interstate Compact for Life Insurance Products, the Reinsurance Evaluation office and other new initiatives at NAIC. There will be discussion on the progress of the privatization of Kampo (the insurance arm of the Japan postal service), regulation of Kyosai (small insurance associations) and bank insurance.

The agenda in China will also include new product approval, investment performance of insurers and asset allocation. The Hawaii Insurance Division hosted four officials of the China Insurance Regulatory Commission (CIRC) as part of the NAIC internship program over the past three years.

"The business of insurance has become a global industry, which requires adherence to best principles in regulation for the benefit of companies and citizens," stated Commissioner Schmidt. He believes the improvement of regulations in each country will make it easier for companies in Hawaii and the U.S. to do business in Japan and China. Companies in China and Japan may also find it easier to do business in Hawaii and the United States.

HARTFORD, Conn. - The former chairman and CEO of the world's largest insurer initiated a deal that led to five ex-executives being charged with participating in a scheme to manipulate the company's financial statements, a federal prosecutor said Monday during opening arguments at their trial.

Four former executives of Berkshire Hathaway (nyse: BRKA - news - people )'s General Re Corp. and a former executive of American International Group Inc. (nyse: AIG - news - people ) are charged in the scheme involving AIG's financial statements.

Prosecutor Raymond Patricco said former AIG CEO Maurice "Hank" Greenberg, who has not been charged in the case, started the scheme in 2000, after AIG's stock price dropped 6 percent, representing a loss of $12 billion to shareholders. The price dropped because loss reserves had declined.

Attorneys for the defendants denied their clients did anything wrong Monday and said the case involved complex, subjective accounting. They attacked government witnesses - two senior Gen Re executives who pleaded guilty to conspiracy to falsify SEC filings - as out to save themselves.

"This is not Enron or WorldCom," said Anthony Pacheco, attorney for former General Re Senior Vice President Christopher P. Garand, referring to two of the biggest recent business scandals.

Greenberg, who headed New York-based AIG for nearly 40 years, has denied any wrongdoing. He was referred to as an unindicted coconspirator in an indictment.

Allegations of accounting irregularities, including the Gen Re transactions, led to his resignation in 2005.

At issue in the trial of the former executives are two reinsurance transactions between AIG and Stamford-based General Re. Reinsurance policies are backups purchased by insurance companies to completely or partly insure the risk they have assumed for their customers.

Prosecutors said the transactions were initiated by an AIG senior executive to quell criticism by analysts of a reduction in AIG's loss reserves in the third quarter of 2000. The indictment alleges that the aim was to make it appear that AIG increased its loss reserves by about $500 million in 2000 and 2001, pacifying the analysts and investors and artificially boosting the company's stock price.

"But the evidence in this case will show that deal was nothing more than a sham transaction," Patricco said. "The defendants in this case knew what appeared in the contracts was a lie."

Prosecutors said Greenberg called his friend, former General Re CEO Ronald Ferguson, who is one of the defendants, and told him that AIG wanted to increase its loss reserves by $500 million, but did not want to bear the risk.

For a reinsurance transaction to be legitimate, there must be a transfer of risk, which was lacking in the deal in question, prosecutors said.

"The evidence in this case will show the defendants knew this would be a no-risk deal for AIG," Patricco said.

"Plain and simple, ladies and gentlemen, the statements about AIG's loss reserves were lies," Patricco said.

In opening arguments, Patricco never mentioned billionaire investor Warren Buffett, who could play a role in the trial. Some of the executives say they believed Buffett was involved and supported the deal that led to the charges. Buffett leads Berkshire Hathaway.

But prosecutors say they only named Buffett, who has not been charged with any wrongdoing, as a potential witness to rebut any suggestion by the defense that he was involved in or approved the deal.

Michael Horowitz, Ferguson's attorney, said Monday that his client told Buffett and others about the requested transaction.

The former General Re executives charged were Ferguson, chief executive officer from about 1987 through September 2001; Elizabeth Monrad, chief financial officer from June 2000 through July 2003; Robert Graham, a senior vice president and assistant general counsel from about 1986 through October 2005; and Garand, a senior vice president from 1994 until 2005.

Also charged was Christian Milton, AIG's vice president of reinsurance from about April 1982 until March 2005. Patricco said Monday that he lost $360,000 when the stock price dropped.

AIG filed a restatement in 2005 related to the transactions and agreed to pay a record $1.64 billion in a settlement with federal and New York authorities.

In 2005, two senior Gen Re executives, John Houldsworth and Richard Napier, pleaded guilty to conspiracy to falsify SEC filings in connection with the investigation and are awaiting sentencing.

If convicted of all the charges, Ferguson, Monrad, Milton and Graham each face up to 230 years in prison and a fine of up to $46 million. Garand faces up to 160 years in prison and a fine of up to $29.5 million.

Gov. Linda Lingle yesterday appointed Maui attorney J.P. Schmidt as state insurance commissioner.

Schmidt will head the state Insurance Division, which oversees the insurance industry and administers licensing, rate changes, policies and insurance-related complaints. The division is part of the Department of Commerce and Consumer Affairs.

Schmidt previously served as Maui corporation counsel from 1995 to 1999 and deputy corporation counsel from 1991 to 1995 under Lingle when she was mayor.

Schmidt is a partner with Lingle's ex-husband, William Crockett, at the Maui law firm of Crockett Nakamura & Schmidt, practicing general civil and trial law. He will leave that position Saturday.

"In the eight years that J.P. served the people of Maui County as corporation counsel and deputy corporation counsel, he consistently demonstrated a strong work ethic, integrity and sound judgment," Lingle said. "I know he will show the same dedication as our state's insurance commissioner to create a fair and open environment that encourages investment and competition in the insurance industry, while also looking out for the best interests of Hawai'i consumers."

Schmidt said, "I look forward to re-entering public service and working with Governor Lingle and the administration to address the issues facing the insurance industry to benefit both providers and consumers."

Lingle also appointed attorney Lawrence Reifurth as deputy director of the Department of Commerce and Consumer Affairs. Mark Recktenwald was appointed director of the department last month.

LINGLE, LINDA : INDUSTRY: Insurance

Total number of records: 14

Top of Form 1

Bottom of Form 1

Contributor / Industry	Recipient	Amount	Date
DIVERSIFIED INSURANCE BROKERS Insurance	LINGLE, LINDA	$6,000	05/03/2005
HAWAII MEDICAL SERVICE ASSOC/HMSA Insurance	LINGLE, LINDA	$4,600	04/13/2005
FIRST INSURANCE CO OF HAWAII Insurance	LINGLE, LINDA	$3,900	06/28/2005
KING, HARVEY C Insurance	LINGLE, LINDA	$3,800	04/22/2005
HAWAIIAN INSURANCE & GUARANTY CO Insurance	LINGLE, LINDA	$3,000	11/16/2005
MONARCH INSURANCE SERVICES Insurance	LINGLE, LINDA	$2,000	06/27/2005
ZEPHYR INSURANCE CO Insurance	LINGLE, LINDA	$1,000	11/29/2005
ISLAND INSURANCE CO Insurance	LINGLE, LINDA	$1,000	03/23/2005
INSURANCE ASSOCIATES Insurance	LINGLE, LINDA	$1,000	06/09/2005
HAWAII EMPLOYERS MUTUAL INSURANCE CO Insurance	LINGLE, LINDA	$1,000	05/03/2005
HAWAII INSURERS COUNCIL Insurance	LINGLE, LINDA	$1,000	05/02/2005
FIRST INSURANCE CO OF HAWAII Insurance	LINGLE, LINDA	$1,000	05/25/2005
ZEPHYR INSURANCE CO Insurance	LINGLE, LINDA	$200	05/25/2006
RICHARD K Y LAU INSURANCE AGENCY Insurance	LINGLE, LINDA	$200	05/27/2005

EARL I. ANZAI
Attorney General of Hawaii

DOROTHY D. SELLERS
HUGH R. JONES
Deputy Attorneys General
425 Queen Street
Honolulu, Hawaii 96813

Attorneys for the Beneficiaries

IN THE CIRCUIT COURT OF THE FIRST CIRCUIT

STATE OF HAWAII

In the Matter of the Estate

BERNICE P. BISHOP,

Deceased.

EQUITY NO. 2048 KSCC

~ ~ ~

REPORT OF ATTORNEY GENERAL CONCERNING MAY 7, 1999 ORDER

The May 7, 1999 order regarding orders to show cause requires the former trustees immediately to resign offices and directorships in the trust’s subsidiary and affiliated organizations... P&C Insurance Company, Inc., is a captive insurance company, the sole stock holder which is Pauahi Holdings Inc.

The Attorney General respectfully invites the court’s attention to the annual report publicly filed on March 28, 2000 by P&C (Ex. 1). The annual report lists Henry H. Peters as a director. The Attorney General is unable to determine whether the listing is incorrect; or whether Peters remains a director in violation of court order. The Attorney General’s several inquiries of the trust concerning this matter remain unanswered despite the passage of three months (Ex. 2).

DATED: Honolulu, Hawaii, May 5, 2000

Respectfully submitted,

<s> DOROTHY SELLERS
Deputy Attorney General

~ ~ ~

DECLARATION OF DOROTHY SELLERS

DOROTHY SELLERS hereby states:

1. I am a deputy attorney general, and I am familiar with the case records and files in Hawaii First Circuit Court Equity No. 2048 going back to approximately August 1997.

2. I have personal knowledge of the facts contained in this declaration and am competent to testify to them.

3. Exhibit 1 is a true and correct copy of the annual report of P&C Insurance Company for the year ending Dec. 31, 1999, filed in late March 2000.

4, Exhibit 2 is a true and correct letter of my February 15, 2000 letter to counsel for the trust asking for verification that Henry Peters had resigned from P&C and the effective date of the resignation. I have never received a response to that letter.

5. On March 13, 2000, deputy attorney general Hugh Jones wrote trustee Libkuman (with a copy to general counsel Colleen Wong) about a number of matters. The final two paragraphs of that letter are:

Finally, we also requested some time ago copies of Henry Peters’ letters of resignation from directorships and ex officio positions, and specifically from P&C Insurance Company. Although the resignation letters of the other trustees were filed with the Court, Peters’ were not.

Please respond to these requests before March 31, 2000. Thank you.

I DECLARE UNDER PENALTY OF PERJURY THAT THE FOREGOING IS TRUE AND CORRECT.

DATED: Honolulu, Hawaii, May 5, 2000

www.kycbs.net/Doc-EQ2048-PC-Peters-5-5-0.pdf