Notice of Motion for Leave to Submit Amicus 22 Jan 16 1933 Gmt

8/17/2019 Notice of Motion for Leave to Submit Amicus 22 Jan 16 1933 Gmt

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IN THE COMMONWEALTH COURT

O F P E N N S Y L V A N I A

E R I E I N S U R A N C E E X C H A N G E ,

an unincorporated association, by JOSEPH S.SULLIVAN and ANITA SULLIVAN, JENNA L.

DeBORD, and PATRICIA R. BELTZ, trustees

ad litem, and/o as members of ERIE

I N S U R A N C E E X C H A N G E ,

Petitioner,

vs.

P E N N S Y L V A N I A I N S U R A N C E

D E P A R T M E N T ,

Respondent

vs

ERIE INDEMNITY COMPANY,

Intervenor

)

)))))))))))))))))))))

Notice of Motion for Leave to

Submit an Amicus Brief and

to Request the Court to Toll

the Decision in Erie v The

Commissioner and to

Reconvene en banc to

Further Question Attorneys

NO 872 CD 2015

The only PID regulated entity in this matter is insurance company Erie Exchange [FEIN:

25-6038677 NAIC#: 26271].

But even that is not strictly true. No matter the notional jurisdictional grab,

Commonwealth Court can not obtain jurisdiction that “which isn't” - that which doesn’t

actually exist. And as the court already knows, and as will be confirmed in this brief, Erie

Exchange [FEIN: 25-6038677 NAIC#: 26271] does not exist and is not and can not be a

party to this legal adventurism.

The only canonically regulated persons in this matter are Sullivan, Sullivan, DeBord,

and Beltz.


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Sullivan’s, Sullivan’s, DeBord’s, and Beltz’s counsel, William “Trip” Radcliff Esq, ought

to petition this honorable court for the unequivocal discretion and authority to:

seek out a new attorney-in-fact

who will only extract 24%, or 19%, or maybe only 10% of the lactation which is daily

harvested at 100 Erie Insurance Place Erie PA 16530

Please trust amicus: the Hirt/Hagens do not want this day-by-day granularity talked

about at their next conference call on investor’s day If the 2nd to last supplier of Erie’s

individual, personal separate, and several liability leaves and takes his individual

and separate several liability contract with him; this insurance company ceases to

exist. When that happens, no matter how hard the PID may huff and puff: there is no

more insurance company. All that is left is a loss portfolio, “the tail”, to be wound

down and transferred to Warren Buffett.

Intervenor Erie Indemnity Company [FEIN: 25-0466020 PA SOS Entity #: 112672 SEC

File Number 0-24000 CUSIP: 29530P-102 (Date of Incorporation: April 14, 1925)] is

not a PID regulated entity. It has no NAIC number.

Intervenor Erie Indemnity Company [FEIN: 25-0466020 PA SOS Entity #: 112672 SECFile Number 0-24000 CUSIP: 29530P-102 (Date of Incorporation: April 14, 1925)]

may actually have absolutely no standing in this court.

I have standing as I am in the process of applying to become a supplier of individual,

personal separate, and several liability at Erie Exchange [FEIN: 25-6038677 NAIC#:

26271].

What, exactly, is Intervenor Erie Indemnity Company [FEIN: 25-0466020 PA SOS

Entity #: 112672 SEC File Number 0-24000 CUSIP: 29530P-102 (Date of

Incorporation: April 14, 1925)] doing in this court?

All I hear is whining and kvetching of an understandably very fearful Hirt/Hagen family.


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All I see is the PID faithfully trying to stroke and calm their client: which the PID

believes is the Hirt/Hagen family. Stroking the Hirt/Hagen family obtains luncheon dates

at Pittsburgh's very nice Duquesne Club.

Intervenor Erie Indemnity Company [FEIN: 25-0466020 PA SOS Entity #: 112672 SEC

File Number 0-24000 CUSIP: 29530P-102 (Date of Incorporation: April 14, 1925)]

purports to hold a Certificate of Authority to operate and milk an unincorporated several

liability machine.

The image of a milking barn will supply this court a much more accurate picture of what

is actually going on at 100 Erie Insurance Place Erie PA 16530.

The controversy lodged with this court is that:

a f ew d oll ar s t ha t r ig ht fu ll y b el on g a dd ed to th e s e v e r a l l i a b il i t y

reserves o f t he u ni nc or po ra te d s ev er a l l ia bi li ty m ac h in e are

s ti ck in g t o t he H ir t/ Ha ge n f am il y f in ge r s. I t’ s a s i f t he y w er e e at in g

Haagen Daz with their fingers.

The money we are talking about are the penalties which attach to late or bounced-check

cash top ups to the individual subscriber’s several liability account.

Erie Exchange [FEIN: 25-6038677 NAIC#: 26271] is just like a pay-as-you-go cell

phone: you must top it up.

The methods and manner of topping up of individual separate several liability

accounts is not suitable subject material for this court; and the PID should never have

dignified it.

This controversy must be sent back to Court of Common Pleas to be settled as a

standard commercial dispute.


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This Amicus will now do what no other pleading before this court has done. Amicus1

will brief this court on “the deal” at an “ unincorporated reciprocal interinsurance

exchange ” - the “vig”: and amicus will brief the court in proper terms . Amicus starts2

with these simple truths which exclusively characterize and distinguish the putative

reciprocal from all other other enterprises; exhaustively:

1 . E v e ry u n d er w r it i ng d e c is i on a t a p u t a t iv e a n d p u r po r t ed “ r e c i p ro c a l”

p ro du ce s f or o n e s u b sc r ib e r t he d ec la ra ti on o f a n e xa ct several

l i ab i li t y n u me r a to r whic h runs with th e exa ct all-subscriber

liability denominator back-supplied by the total subscribership. 3 4

2 . W hi le we a re a sk ed t o i nf er a nd d ig es t a b eg ui li ng t ru th f ro m th e

p hras e “r eciproc al interinsu ranc e exc hange ”: ther e is no

reciprocating ; there i s n o interinsuring , and there is no

exchanging .

3 . I n f ac t, i t i s c om pl et el y u nd er st oo d b y f in an ce e xp er ts t ha t “ bl oc k

c h ai n t ec hn ol og y ” ( B it co in ) a da pt s p e rf ec tl y t o d a il y s et tl em en t o f

several liability machines.

4. Th e p er so na l s ep ar at e a nd i nd iv id ua l s ev er al l ia bi li ty

numerator s pr in gs i nt o e xi st en ce a t v er y i ns ta nt t he p ro po se d

i nd em ni fy i s a cc ep te d a nd b ou nd . A rt if ac tu al c as h t op -u ps to

1 I t ’s a lm os t as i f a ll t he pa rt i es a nd t he ir c ou ns el w i sh t o k ee p t h e c ou rt i n t h e da rk a s t o w hat a ct ua ll y takes place at a reciprocal.

2 Ami cus w i ll not us e m e t ap ho ri c a l, f i g ur at i v e , t r al a t it i o us , a l le go ri c a l , a l lu s i v e, a na go gi c a l a nd t r op i c al a rg um en t . A m ic u s w i l l n o t t e ll t h e c o ur t t h at s u c h -a nd -s u c h i s l i k e t h is, or s i m il ar t o t h at. Ami cus will

describe the beast in proper terms.

3 T he u nd er wr it i ng d ec i s i on a t i nc o rp or at e d m ut u al s y i el ds a “ pr em iu m o w ed ” w hi c h a re c o ll ec t ed a nd p oo led i n a l im it ed j oi nt l ia bi li ty s c he me. T he un der wri t in g de ci s ion a t a ll o th er i ns ures , w hi c h a re n on -m u t ua l c o rp or at i o ns , b ec o m e c o rp or at e -p ro pe rt y . A l l l i ab i li t i es i n t h es e o t he r c o rp or at e i n s ur an c e companies are pooled limited jo in t liab ilities.

4 M r H ag en t ol d t he w or ld i n 2 009 t hat n o E r ie s ub sc ri ber p ay s a ny p ort io n o f he r o w n c l ai m: t hat i s , o f course, baloney.


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contra a s u bs cr i be r’ s s ev e ra l l ia bi li ty a c co un t m ay c o me l at er ; b u t

are not core to the scheme. 5

5 . C a s h t o p -up s a re w h a t t hi s a c t i o n is a l l a b o u t.

6 . T h e s u bs cr ib e r c la ss , t ot al iz e d ( n ev er c o mb in e d o r p oo le d) , s er v e

as the “all-subscriber” several liability denominator.

7 . W e a re e nc ou ra ge d t o in du lg e in c on ve ni en t i ma ge ry t ha t t he

“ a ll - s ub s cr i be r ” s e v er a l l i ab i li t y” i s s om e s or t o f p oo l - a “ fu nd ”.

It is not “a pool”: but rather a land of a million little lakes.

8. Ea ch la ke is a tiny individual, sepa rate an d sev erally lia ble

insurance company.

9. Th e i n d i vi d ua l s e ve r a l l i ab i li t y n u me r a to r s u pp l ie d a d i n it i um to

t he s ub sc ri be r s ta ys w it h h er f or t he e nt ir e p ol ic y p er io d: a nd i s

u sed by th e AIF to c alc ula te thousa nds of daily debits from 6

Unearned premiums (Part 1A, Line 38, Column 5) .

1 0 . T h e “ a l l - s u b sc r i b e r ” s e v e r a l l i a b il i t y d e n o m in a t o r c h a n g e s e a c h

day.

1 1. T h e a ct ua r ie s a t E ri e a nd t he P ID w an t t hi s c ou r t t o b el ie ve t ha t t hi s

is the sort of complex math which governs:

5 Many several liab ility schemes operate witho u t ad van ce cash to p-u ps. T he c o ur t m u s t u nd er s ta nd t ha t s ev eral l ia bi li t y s c hem es c an b e ru n a nd a re ru n o n t he b as i s of l et t ers of c re di t , hy po the cat ed

s e c u ri t i es , p l ed ge d b an k a c c o un t s , a nd t h e g en er al c r ed i t a nd g oo d- f ai t h o f t h e s u bs c r i be r. . E r ie , 2 0 y e a rs f ro m n ow , w i ll b e r un b y s w ee pi ng t h e s u bs c r ib er ’s P ay P al a c c ou nt s o n a s e c on d- by - s ec o nd b as i s . “ H ey honey : our P ay Pal ac count is dow n - w e had a bad day i n t he i ns uranc e bus ines s”. I n f ac t, t he H i rt / H ag ens c oul d ru n t he w ho le s heb ang o n H E LOC ’ s an d a re in sura nc e c ont rac t b ro ke re d b y t he H i rt / H ag en s w i t h B er k s hi re H a th aw a y . A nd i f t h e H i r t /H a ge ns s t o le a r un o n t h e i nd us t ry a nd g ra nt e d s u bs c r ib er s a n i de nt i t y i n t h e L os s P or tf o li o ( Lo s s es ( Pa rt 2 A, L in e 3 5, C o lu mn 8 )) w h ic h s u rv i v ed t h ei r leaving the several liability sc heme, and stopped stealing that money: they’d own the sector.

6 The debits are on the left: the credits are on the right.


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1 2. T h is i s t he m at h w hi ch g ov e rn s t he s et tl em en t o f e ve r y p ay me nt a t

Erie.

(

Thesubscriber’s

severalliability

numerator

/The

“all-subscriber”several liability

denominator) X

The

indicatedloss reserve

provision =

The ding taken by eachindividual subscriber for

each of the thousands ofclaims “reserved for”

each day.

1 3 . T h e p e r i od i c t o p- u p p a y me n t s b y w h ic h s u bs c r ib e r ’s c o nt r a t h ei r

p a rs e d s u b- a cc ou n t o f N AI C U n ea r ne d p r em i um s ( P a rt 1 A , L i ne

3 8 , C ol um n 5 ) a r e a r ti fa c tu a l. T he s e p ay me n ts e x is t i n a n e n ti re ly

s ep ar at e w or ld o f c om me rc ia l r ea li ty w hi ch d ea ls w it h w he n a nd

h o w t o c o ll ec t t he s e ve ra l l ia bi li ty n u me r at or i n c a sh - b ut h a ve n o

effect whatsoever on the several liability numerator itself.

1 4. T h ou gh t he H ag en s w il l p r ot es t m y c h ar a ct er i za ti on : s u bs cr i be r


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t o p - u p p a y m e n ts a r e j u s t l i k e a n y p a y - a s - y o u - g o A T & T c e l l p h o n e :

if we don’t top-up, our cell phone service stops right away!

15. Quis custodiet ipsos custodes?

1 6. F in al ly , E ri e I ns ur a nc e E x ch an ge i s n o m or e t ha n a n o ti on al n am e:

E ri e I ns ur an ce E xc ha ng e d oe s n ot a ct ua ll y e ve n e xi st ! I t’ s m or e 7

“black hole” than star.

1 7. A t i ts t an gi bl e b es t, E ri e I ns ur an ce E xc ha ng e i s l an d o f a m il li on

l ak e s o f p er s on al , s ep ar a te , i nd iv id ua l, a nd s e ve r al l ia b il it y w hi ch

are impleaded by the attorney-in-fact to satisfy claims.

In that way, an unincorporated reciprocal interinsurance exchange is only a very simple

several liability machine which hundreds and perhaps thousands of times each day

picks the pocket of every subscriber to recognize and reserve each indemnity payment

that is thought to be about to “occur” .

It is convenient for the Hagen family to purposefully mislead and Hagen Dazzle

subscribers, regulators and courts with the word “exchange”. The borderline criminal

assertion by the Hagens of the existence of “an exchange” is often accompanied by

absurd graphics such as this:

7 A path to appreciating how it is that Erie Insurance Exchange doesn’t actually even exist is found inCouch on Insurance 3d: 39:47-48 on Lloyds Exc hanges.

A sui t agai nst “Underwri ters at Ll oyd’ s, London” i s a nul l ity as a bei ng a sui t brought

against a party that is neither a natural or artificial person and cannot be sustained on the

theory of a cl ass acti on . . .

The 3rd circuit mirrored this logic when it wrote in:

Exchange [Erie] is an unincorporated Pennsylvania association that issuesinsurance policies. It has no employees, officers, board, bylaws, or organizing

documents . . .


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There is no exchange. Nothing is ever “exchanged” at a reciprocal interinsurer: except

a wink of the eye by the Hagen family members - one to the other. And the wheely

graphic does not depict in any sense what actually happens.

The Hirt/Hagen whirligig wheelabrator (above) specifically proposes that all cash goes

through a hub called the AIF. That very act, palming the money, rises to the level of a

jailable offense. And the Hagens know it.

These two graphics depict what actually happens - two reserve provisions being made

for exemplar indemnification payments: one at 09:00:01 and the next one second later

at 09:00:02. The object of the two exemplar cash-flow provisions is being expressed as

the intended beneficiary - the hurting subscriber. But until the claim is approved, fixed,

and settled: the folding cash dollars actually transfer into the litigation reserves which


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insurers now beguilingly call “Losses (Part 2A, Line 35, Column 8)”.

Loss reserve # 1 at 09:00:01


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Loss reserve # 2 at 09:00:02

These two graphics (above) depict what takes place at Erie Exchange [FEIN:

25-6038677 NAIC#: 26271] several hundred times a day. Just the likelihood (e.g. news

reports of a bad storm) that a subscriber may be entitled to a payment is immediately

recognized by an instant picking of the pockets of each of the 1,000,000 or so Erie

subscribers, in advance of even hearing about the first claim, with this very simple

accounting transaction:


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dr cr

Reduce Unearned premiums (Part

1A, Line 38, Column 5)

Add to Losses (Part 2A, Line 35,

Column 8)

$_____________

$_____________

All the action at Erie Insurance Exchange takes place only between these two actually

quite exciting accounts :8

● U n e a rn e d p re m i u ms (P a rt 1 A , L in e 3 8 , C o l u mn 5 )

● L o s s e s (P a rt 2 A , L i n e 3 5 , C o l u m n 8 )

8 If the court thinks I am exaggerating; please visit t he Erie War Room while a major hurricane is in force.It’s quite exciting. It is indeed possible that the several liability of the subscribers and their reinsurers couldbe tapped out by one single occurrence. Would the recently non-asses sable subscriber at Erie haveinsurance the next day? Is that what non-asses sable means?


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And here these two accounts as they appear on the pertinent NAIC form..

In summary: the three words “Erie Insurance Exchange” are only the notional name

for a non-existent one-trick several liability machine which is bereft of legal persona

but which is actually 1,000,00 subscribers herded about like sheep by the Hagen family

with only one purpose:

a nd that is to milk small a mou nts of money out each of the ~

1 ,0 00 ,0 00 s ev er al l ia bi li ty a cc ou nt s i nt o t he p oc ke t o f o ne f el lo w

subscribing member. 9

9 T hi s i s s ue o f a r ec i pr oc a l i ns u ra nc e e x c ha ng e “ no t e x is t i ng ” i s a s o re s o re p oi nt w i t h t h e o p er at o rs o f s ev er al l i a bi l i t y i n su r an ce s ch em e s. U n it ed S er vi c es A ut om ob il e A s s oc i at i on j ai l ed m e f o r a w e ek i n

N a s s a u C o un t y N Y f o r v i o l a t in g T e x a s l a w w h i c h p r oh i bi t s d i s c us s i o n o f i n di v i du al , s e pa ra t e a n d s e v e ra l l i ab il i ty a t U S A A. N o w d ec e as e d T e x as J u dg e M i re le s r ef e rr ed t o s u c h d i s c us s i on s a s s h en an ig an s . W hen U S AA w as t ry i ng t o j ai l m e a t he s ec on d t im e i n V erm on t f or v i ol at in g T ex as a nd V erm on t L aw a ga in s t d is c u ss i ng s e v er al l i ab il i ty , I c a s ua ll y a s id ed t o a U S A A l aw y e r a n d U S A A s u bs c ri bi ng m em be r, S am ue l H o ar , a s f o ll ow s : y o u k n ow , M r H o a r, U S A A d o es n ’t r ea ll y e x is t . T hi s l aw y e r ( Ho ar ) t h re w a c o m pl e t e d o o- do o f i t r i gh t t h e c o nf e re nc e r oo m , o n t a p e , w i t h a c o ur t r ep or t er p re s en t : r i gh t i n f r o nt o f m y d au gh t er , w h om h e h ad h ar as s e d w i t h w e ek s a nd m on t hs o f 2 4- ho ur s u rv e il l an c e i n h er h om e a nd a t h er p la ce o f w ork : t hi s g uy , H oa r ( no w a j ud ge), be ca me a pop le ct i c t o t he p oi nt w he re a c al l t o 9 11 w as i n di c a t ed . T he o p er at o rs o f several liab ility in su ran ce schemes a bs o lu t el y d o n ot w a nt t h e w o rd s n o l e ga l p er s on a a nd o nl y “ s ev er al l i a bi l i t y” u t t e re d i n a ny p ro mi n en t f a s hi o n. A n d t h e s e g u y s d es p er at e l y


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And to that end, the Jonathan O Hirt family and his descendants, the Hagens, likely

deserve every single penny of the 25% override that they clip off the top when the

subscribing members top-up their subscriber accounts .

What a money machine - for the Hirt/Hagens.

And by any measure (except possibly one) , the Hirt/Hagens have done a magnificent

job of giving the subscribers the party they came for. Pretty darned good insurance!

The way the Hirt/Hagens run this show, I see no reason why they shouldn't get 35% or

even 40% off the top. These are great people! Great operators.

That is not to say that the subscribing members at Erie Insurance Exchange could not

use the services of a real guardian ad litem to obtain a new a better AIF deal at the

beginning of every new insurance year: more about that later in the relief demanded

section.

But this (and for the first time) truthful depiction of the several liability machine is not

the gravamen of this action before this court. The ambit of this exemplary complaint

before the Commonwealth Court is whether the Hirt/Hagens should be allowed to steal

money from the subscribing members.

I f t he t as k o f a ss iz in g t ar dy s ub sc r ib er s f or l at e f e e s i s t ru ly b ey on d

t he a mb it o f t he ta sk s p ro vid ed fo r b y t he 2 5% h air cu t th at th e

Hirt/Hagens give every subscriber top-up:

then mayb e this court must supply a mech anism fo r the

Hirt/Hagens to be fairly and fully compensated.

n ee d f o r t h e s h ee p w h o a re b ei n g h er de d a nd s h o rn t o b e l i ev e t h at “ t he y p al p ab l y o w n s o m et h i ng ” a n d t h a t “ t he s o m et h i ng ” i s a corporati on. A nd U S AA j ai ls t ho se w ho e ven h in t at d is abu si ng t he s hee p o f s uc h a notion. Colorado has similar laws for criticizing feedlot operators who make cattle lie in their own doo-doo.


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But the Hirt/Hagens have never taken one iota of risk in the operation of their sheep

farm where the subscribers are herded and second-by-second shorn to provision

Losses (Part 2A, Line 35, Column 8) for fuzzy claims which arise on the horizon.

THE ONLY RISKTAKERS AT THE ERIE INSURANCE

EXCHANGE [FEIN: 2 5-60 38677 NAIC#: 262 71] ARE THE

S UB SC RI BE RS : A ND I N T HE C AS E O F E AC H I N DI VI DU AL A ND

SEPARATE SUBSCRIBER THAT RISK IS THE NOT

I NS UB ST AN TI AL S EV ER AL L IA BI LI TY N UM ER AT OR SHE

AGREED TO AD INITIUM .

T HE C OUR T I S A SK ED T O T AK E J UD IC IA L N OT IC E T HA T I N

S PI TE OF I TS N AM E, E RI E “ IN DE MNI TY ” C OMP AN Y [F EI N:

2 5-04 66020 PA SOS ENTITY # : 11267 2] IS NOT EVEN AN

INSURANCE COMPANY.

E RI E I ND EM NI TY C OM PA NY [ FE IN : 2 5- 0 46 6 02 0 P A S OS E nt it y

# : 11267 2] IS A SHEEP SHEARING CORPORATION

CHARTERED BY THE PA SOS AND NOT THE PID.

Any and all events that deprecate the subscriber reserves do not impact on the

Hirt/Hagens: it is only the collective subscriber’s interest which is impacted. Serial,

secular, and systematic late and non-payment of top-ups could severely damage the

capability of the several liability machine to deliver the goods.

The AIF Hirt/Hagens have a duty to mitigate that situation: and their discretion extends

to sending out the sheepdogs to nip at the errant bellwether’s ankles.. And while

amicus thinks that the kennels, feed, and vet bills for the sheepdogs is paid for by the25% top-up haircut, the Commonwealth Court has its work cutout. to determine if that is

so.

But the usufruct of the proceeds of disciplining the subscribers belongs to the insurance

company. The only insurance company at the bar is Erie Exchange [FEIN: 25-6038677


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NAIC#: 26271].

And all fines and late charges etc etc etc (amicus sounds like the King of Siam) must

accrue to the benefit of the subscribers : and these fines must be reverse-allocated by

the same formula which dings the severally liable subscriber for her share of each

claim.

Letting the Hirt/Hagens grab the dough is encouraging an almost obscene AIF

perception of subscriber lèse majesté. Who works for whom here?

It would please me to see the PID circle the wagons around the insurance company :

which in this case is not the Hirt/Hagens. the Hirt/Hagens are sheep shearers.

The Hirt/Hagens haven’t even bribed the PID with premium taxes. The Hirt/Hagens are

not even an insurance company . The 1,000,000 severally liable subscribers of Erie

Insurance Exchange [FEIN: 25-6038677 NAIC#: 26271] are each a mini-insurer which

has paid the PID their cumshaw. The baksheesh having been forked over by

subscribers in the form of premium taxes, it is now time for the PID to remember who

their paymasters really are.

Maybe it’s ok for The Commissioner to side time-and-time again with her paymastersagainst the policyholders of corporate insurers. That is her job, after all. Still, the

Commissioner must not forget that in this one single exemplary, unique, and sui generis

case: the policyholders are the insurance company. And the ambiguity on who gets

to keep the fines must be resolved against the writer of the adhesion contract.

The loud sucking noise amicus hear as the PID cozies up to the Hirt/Hagens is pretty

revolting to behold. It’s like a baby being given a wooden stick instead of it’s mother’s

breast. The PID should cleave only to the true risk takers in this matter.

The risk takes, and the only risk takers, are the individual, separate and several liable

supplies of the reserves at Erie Exchange [FEIN: 25-6038677 NAIC#: 26271].


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And the Commonwealth Court should make it so.

Amicus opens the door, here and above, to some additional areas the Commonwealth

Court may want to look into.

1 . T h e H i rt /H a g e n s s o l d t he s u b s c ri b e rs a t E ri e E x c h a n g e [ FE I N : 2 5 -6 03 8 6 7 7

NAIC#: 26271] $600,000,000 of unsuitable insurance companies that have no

place in FEIN: 25-6038677 NAIC#: 26271’s stock portfolio.

a . T h i s i s a c a s e o f i n v e rs e corporate opportunity .

b . U SA A’ s i n- ho us e c ou ns el D o n Gu tt er id ge e xp la in ed in an 1 0

i nt er n al A BA p ub li ca ti on t ha t A IF ’s “ mu st s h ow s u bs cr i be rs

t o a s e ve r a l l i ab i li t y s c h em e a l l o p po r tu n it i es b e fo r e h e l p in g

themselves.

c . H er e w e h av e a c a se o f “ a n o p p or tu ni ty ” t h a t p e rh ap s s h o ul d

not have been shown to the subscribers.

d . In a ny c as e, t he c or po ra ti on s i n q ue st io n s ho uld h av e a ll b ee n r e gi st er e d w it h t he S EC p ri or t o b e i ng u nl oa de d o n t he

s he ep a t E ri e I ns ur an ce E xc ha ng e: m ay be s om e o f t he m

were.

e . T hi s m an eu v er s ma ck s o f s el f- d ea li ng : a nd t h e t r a ns ac ti on

should be unwound by the Commonwealth Court.

2 . W h i l e t h e H irt / H a ge n s t a ke c a re :

a . t o i d en ti fy t h e s ub -a cc ou nt s f or U n ea r ne d p r e mi u ms ( P a rt

1A, Line 3 8, Column 5) i n t he n ame s o f t he i nd iv id ua l

1 0 Don Gutteridge #, The Forum (Section of Insurance, Negligence, and CompensationLaw), American Bar Association, Vol.7, No.1 (October, 1971) pp. 42-48.


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mini-insurance companies who are “the subscribers”:

b . It i s no t c le ar t h at L o s s e s ( P a r t 2 A , L i n e 3 5 , C o l u m n 8 ) are

s im il ar ly p ar s ed a n d i de n ti fi ed ( b y t he H ag en s ) i n t he n am e

of the in div idu al mini-insur anc e compan ies who ar e

severally liable subscribers.

c . In ste ad , th e H ag en s m ay p oo l L os s es ( Pa r t 2 A , L in e 3 5,

Column 8) in a completely untoward joint liability scheme.

3. In fac t, amicus b e li ev es t ha t t he H ir t/ Ha ge ns t re at t he t ra ns fe r s o f

s u bs cr ib e r p ro p er ty f ro m U ne ar n ed p re mi um s ( Pa r t 1 A, L in e 3 8,

C o lu m n 5 ) to L os se s ( Pa r t 2 A, L in e 3 5 , C o lu mn 8 ) a s s o m e s o r t

o f ar m’s length L o ss P o rt f o li o T r an s f er to s om e s or t o f e nt ity

which is external to the several liability scheme.

4 . T he f un di ng o f L o s s e s ( P a r t 2 A , L i n e 3 5 , C o l u m n 8 ) i s o b v i o u s l y a

c o n se r v at i ve o p er a t io n w h er e m a t e r ia l o v e r - r e se r v i n g m us t t a ke

place.

a. But amicus b e li ev e s t ha t t he H ir t/ Ha g en s m ay f or g et t o p ay b a ck e x ce s s r e s er v e s [ o ve r - co n se r v at i ve r e se r v es ] t h at a r e

o we d t o d ep ar ti ng a nd e ve n l on g d ep ar te d s ub sc ri bi ng

members.

b . N o s uc h fo rg et fu ln es s w ou ld ta ke p la ce i n a n i nd us tr ia l

r e c ip r o ca l w h er e t h e s u bs c r ib e rs a r e k n o wl e dg e a bl e p a r ti e s

i n h an ds -o n c on tr ol : a nd I a dd re ss t he n ee d f or a n a d l i te m

in my relief requested section below.

The relief very respectfully asked for:


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1. P r o this s ev er al l ia bi li ty n um er at or s ch em e: t he c ou rt s ha ll

a p p oi n t a r e a l f u l l - ti m e G u ar d i an a d l i t e mw i t h f e e s t o b e d e t e r m i n e d

b y t h e P I D . Amicus i s i n d u b i t a b l y t h e m o s t k n o w l e d g e a b l e p e r s o n i n

the cou ntry as to s ev e ra l l ia bi li ty i ns ur an c e s ch em es, and I

p r op o se amicus a s a c an di da te . W hi le I ’d l ik el y n o t s u rv iv e a s t he

f in al c an di da te f or h a vi ng b ee n j ai le d b y U SA A f o r t h i n k i n g t o o m u c h

- I’d create a very good base point for interviewing other candidates.

2 . T o e n j o i n D e fe n d a n t P I D f ro m e v e r a g a i n p e rm it t i n g E rie I n d e m n i ty

Company:

a . I nc lu di ng i n i ts n am e t he w or d “ In de mn it y” w hi ch a sk s u s t o

infer that it is an insurance company , which it is not.

b . M is - de sc r ib in g t he s ch e me a t E r ie I ns ur a nc e E xc ha n ge a s

either an “exch ange”, or a “reciproc al”, or as an

“ in te ri ns ur a nc e ” o pe r at io n: i t i s n o n e t h es e. A nd t he w or d s

are meaningless

c . M i s re pre s e n t in g t o t h e s u b s c rib e rs a n d t he P I D :

i. That the Erie In sura nce Ex chang e has a le gal

persona which it has not.

ii. That the Erie Ins uran ce Exchan ge h as a Bo ard of

Directors, which it has not ( Exhibit “A”).

iii. That any of the ~1 ,00 0,00 0 sub scribe rs “own”:

anything - which they do not.

3. Hen ceforth, the PID shall require any AIF of an y PA several

l i a b il i t y n u m e r at o r s c h e m e t o r e pr e se nt t o t he o ff er e rs o f s e ve ra l

l ia bi li ty ( th e s he ep ) t ha t a ny A IF i s d oi ng j us t t ha t a nd o nl y t ha t:

s e c u r i n g a n d t h e n o f f e r i n g t h e s u b s c r i b e r ’ s i n d i v i d u a l , s e p a r a t e , a n d

http://-/?-


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several liability in a several liability numerator scheme.

4 . H e n ce f or t h, t h e P I D s h a ll r e q u i re t h at a n y l e ga l a c t i on t a ke n a g a i ns t

the s ubscribers to any PA unincorporated s e v er a l l i ab i li t y

numerator scheme shall be captioned either:

a . In th e n am e o f o ne ( or m or e) p ar ti cu la ri ze d a nd s pe ci fi c

subscriber(s) (by explicit legal name); or,

b . I n t he n a me t he s ub s cr ib e rs ’ a g e nt a nd d e le g at e, t he A IF , a s

the captioned defendant.

5 . T o r ec on ve ne , e n b an c , a nd d et er mi ne i f a ny q ue st io ns , i ss ue s,

a n d m at te r s o f s ub st an c e w er e h e ld b ac k f ro m t he C om mo nw ea lt h

Court or from any of the preceding courts in this matter.

S wo rn : E ve ry th in g i s t ru e e xc ep t w ha t i s s ta te d t o b e u po n i nf or ma ti on

and belief.

Robert J KoenigPOB 2768

New York NY 10163

+1.212.293.9712

fax: +1.212.208.0938

[email protected]


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Authorities

Primary:

Lee v. Interinsurance Exchange of the Automobile Club of Southern California,

50 Cal. 4th 694 (1996)

Lee v. Interinsurance Exchange of the Automobile Club of Southern California,

57 Cal. Rptr.2d 798, 802 Col.App. (1997)

Tuck v. United Services Automobile Ass'n, 859 F.2d 842 (10th Cir. 1988)

The Intervenor (Erie Indemnity Company) as an “authority”:

Maciulewicz, T. (Ed.). (2009, November 25). Ever Wonder About ReciprocalInsurance. The Bulletin [Erie Indemnity Company] , 1-8.

Secondary:

Dennis F. Reinmuth, The Regulation of Reciprocal Insurance Exchanges, 1st ed.

Homewood: Published for the S.S. Huebner Foundation for Insurance Education,

U of Pennsylvania, by R.D. Irwin, 1967 (Library of Congress Catalog card No.

67-26286)

Couch on Insurance 3d: 39:47- [Reciprocals]

Couch on Insurance 3d: 39:45-46 [Lloyds]

Richard L Norgaard, "Reciprocals: A Study of an Insurance Institution",

(unpublished Ph.D. dissertation, University of Minn, 1962)

Richard L Norgaard, "What is a Reciprocal?" Journal of Risk and Insurance, Vol.

XXXI, No. 1 (March. 1964)

Robert J Brennan, "Inter-Insurance Its Legal Aspects and Business Possibilities"

Central Law Journal (1904

Don Gutteridge , The Forum (Section of Insurance, Negligence, and1 1

Compensation Law), American Bar Association, Vol.7, No.1 (October, 1971) pp.

1 1 Gutteridge, who is alive and available, wrote this article when he was a USAA employee. His f atherplayed for the Pittsburgh Pirates before going on to manage the White Socks.


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42-48

C A Kulp, Casualty Insurance An Analysis of Hazards, Policies, Insurers, and

Rates (3d ed.; New York: Ronald Press Co., 1956), pp 423-527

Statutes:

31 U.S. Code § 3729 [False Claims] with respect to US Government Program IRS §

835(a)

SEC 1933 and SEC 1934

Agency Rulings:

Commissioner’s Declaratory Order of April 29, 2015 [PA Insurance Department]

Rev. Rul. 74-196, 1974-1 C.B.140 [IRS]

Capital Risk Test


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Exhibit “A”: A Board of Directors is purported where no Board of Directors actually

exists.


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I warrant that this amicus brief has been served on the parties through their attorneys:

William M “Trip” Radcliffe Esq

Radcliffe & deHaas LLP

2 W Main Street Suite 700

Uniontown PA 15401

+1.724.439.3900

fax: +1.724.439.3335

[email protected]

Steven B Feirson Esq

Dechert LLP

2929 Arch Street Cira Center

Philadelphia PA 19104-2808

+1.215.994.2489 fax: +1 215.994.2222

[email protected]

Jodi A Frantz Esq

Law Department

Pennsylvania Insurance Department

1209 Strawberry Square

Harrisburg PA 17120

fax: +1.717.772.1969

[email protected]

Respectfully submitted __ December 2015

Robert J Koenig

POB 2768

New York NY 10163

+1.212.293.9712

fax: +1.212.208.0938

[email protected]

mailto:[email protected]:[email protected]:[email protected]


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The Commonwealth Court

Judicial Center

601 Commonwealth Avenue

Suite 2100

Harrisburg PA 17106

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