Liberty Life Athene-RBC Insurance-Protective Life…..$250,000…..$251,702.10
Source: Filings from the court-appointed receiver
Now that captured bank director Aubrey Lee Price has been found alive, at least one insurer that paid out on a life insurance claim is demanding its money back.
Three insurance companies paid $1.8 million in benefits after Price was declared dead in 2012, six months after he disappeared. The money is being held by a court-appointed receiver whose job is to recover as much as possible for victims of Price’s alleged financial crimes.
Price’s capture near Brunswick on New Year’s Eve set up a possible battle over that money and throws new uncertainty over paybacks to his alleged victims.
The former investment adviser and preacher is accused of embezzling $21 million from Montgomery Bank & Trust in Ailey, Ga., and bilking clients in his investment businesses of many millions more. He pleaded not guilty on Wednesday to one federal count of bank fraud.
Price was presumed to have killed himself by drowning in the Gulf of Mexico.
Before his disappearance, Price had changed life insurance policies to predominantly benefit his battered investors. A fourth policy, in Price’s wife’s name, had not yet been paid out when Price was captured.
The $1.8 million collected from life insurance represents the bulk of what the receiver has collected so far. The receiver’s attorney, Kenneth Murena, said he thinks the receiver will be able to keep the money. But insurance experts contend that the companies have a very good shot at getting their payouts back.
“Life insurance policies pay only if the person insured is dead,” said Steven Weisbart, senior vice president and chief economist of the Insurance Information Institute.
In the rare cases when people thought to be dead reappear alive, insurers that paid the claims in full can seek to recover their missing money, said Kevin Glasgow, a vice president in individual claims for Munich American Reassurance, a company that insures insurers.
Murena would not say which insurer made the demand for repayment in Price’s case.
Two insurers that paid claims — Protective Life and HSBC, which sold the rights to Price’s plan to Enstar — wouldn’t comment. Julie Westermann, a spokeswoman for a third company, Genworth, said the company doesn’t comment on specific policies, but added that “in cases where claims have been paid under fraudulent circumstances, we typically do seek to recoup the claim proceeds.”
Harold Skipper, a professor emeritus at Georgia State University who specialized in life insurance, said he would be surprised if all the companies didn’t seek repayment.
“They’re not the ones who should be out the money he defrauded,” Skipper said. “If I were on the board of directors of one of these companies, I would be disappointed in management if they did just let it go.”
Murena, the receiver’s attorney, said he thinks he has a case to keep the money. It has been mixed with other money that has been collected, he noted. Some has already been spent to pay the administrative expenses of finding more money for victims of Price’s alleged fraud.
The receiver collected the life insurance money on a legitimate belief that Price was dead, Murena said. The court authorized all the receiver’s spending and Murena said he believes the receiver has “a legitimate defense” to keep the payout.
Even so, Murena said the disgraced banker might be worth more to his victims alive than the millions he brought in while presumed dead.
Murena expects Price to cooperate in two lawsuits the receiver filed, which he hopes will bring in $8 million. Price, Murena said, will likely “provide valuable evidence to support our claims.”
“Having him in the case should help us recover assets worth substantially more than the face value we recovered,” Murena said.