Beacon Mutual Director Resigns In Wake Of Audit

Audit Shows Sollosy's Manpower Pays Less For Insurance Than Competitors

The Street.com
Feb. 2, 2006
Posted March 7, 2006


PROVIDENCE -- A director of Beacon Mutual Insurance Co., the Rhode Island's largest workers' compensation insurance company, resigned Thursday in the wake of an internal audit, NBC 10 News reported.

NBC 10's Bill Rappleye reported that Sheldon Sollosy's departure follows allegations that Beacon Mutual gave favorable insurance rates to Sollosy and potentially to other directors.

NBC 10 obtained a draft copy of the internal audit of Beacon Mutual, which showed that insurance rates charged to Manpower Temporary Services, run for many years by Sollosy, are lower than Manpower's competitors.

The audit showed Manpower pays $1.55 per $100 of payroll, while competitors Rhode Island Temps pays $2.69 and Job Pro pays $3.23 for the same $100 of payroll.

The audit said Sollosy got the lower rate by not providing required information.

"Not true. I provided all required information. I do not believe I've done anything wrong," Sollosy told NBC 10 on Thursday.

Nonetheless, NBC 10 News has learned that he resigned from the board of directors.

The governor's appointment to the board of directors is Adelita Orefice, of the state Department of Labor and Training.

Orefice sent a letter to Gov. Don Carcieri last week, stating her serious concerns about the actions of the insurance company, including her assessment that the audit reveals "serious ethical and management issues."

"I have grown to distrust both the president and the chairman of the company," she wrote.

The president of the company is Joseph Solomon. Late Thursday, he told NBC 10 the board's audit committee took action "resulting in Mr. Sollosy's resignation. This incident is proof that our system is working."

A member of Carcieri's staff said the governor is urging the state Department of Business Regulation to conduct a forensic audit of Beacon Mutual.

The governor has been fighting legislation that would reduce public oversight of the company.

Copyright © 2006 turnto10.com



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