Worker's Compensation Administration Company, CRM Holding, Under Fire in New York State
CRM Holdings is a workers' compensation administration company. The company was sued by a New York State workers' compensation board, which is seeking $405 million in damages for alleged breaches of fiduciary duty, fraud, deceptive acts and mismanagement. The attorney general's office has also informed the company that they will be filing a separate lawsuit that will charge CRM Holdings with business and security fraud for allegedly engaging in deceptive and illegal business practices.
The attorney general, Andrew M. Cuomo, alleges that CRM Holdings purposely underestimated prospective clients' workers' compensation liability in order to lower premiums and attract more business; the practice would ultimately leave those companies with inadequate reserves for covering workers' compensation liabilities.
State officials charge that tens of thousands of workers have been left without insurance as a direct result of malfeasance by CRM Holdings. The attorney general is seeking $150 million from the company to cover the liabilities they have caused. CRM Holdings, which is based in Bermuda and has a Poughkeepsie, New York based subsidiary called Compensation Risk Management, has denied the allegations.
CRM has already surrendered its license as a New York third-party insurance administrator after the New York state workers' compensation officials charged that the company had given them false information, had not cooperated with an audit, and routinely failed to keep adequate reserves on hand for claims. Find out more about the two lawsuits at State Sues Administrator of Workers' Compensation.
If you have questions about workers' compensation or other business law matters, please contact Wood, Atter & Wolf, P.A. for legal counsel.
