A company that has helped to administer workers’ compensation insurance has been informed by the New York attorney general’s office that they are being charged with business and security fraud. Charges include claims that the company engaged in deceptive and illegal practices to attract business.
The company, CRM Holdings, also faces a $405 million lawsuit alleging fraud. According to the New York Workers’ Compensation Board and the attorney general’s office, CRM tried to artificially lower their premiums by intentionally underestimating the workers’ comp liabilities of their clients.
As a result of these deceptive practices, CRM was left without enough reserve funds to cover their liabilities. This leaves workers without coverage, unable to collect money they deserve for their injuries on-the-job.
The workers’ comp board filed their civil lawsuit in the Albany based State Supreme Court. The suit alleged that CRM breached their fiduciary duty, committed fraud, and engaged in deceptive acts and mismanagement in pressuring their actuaries to provide misleading analyses in order to attract and retain trust customers.
CRM has already been forced to surrender their license as a third-party insurance administrator in New York after allegations that they gave inaccurate information to the NY workers’ compensation board, failed to cooperate with an audit, and failed to set aside adequate reserves for claims.
CRM has denied any wrongdoing, and has stated that they believe the current attorney general’s allegations are without merit.