Missouri Ins. Dept. Files Complaint Against Capital Reserve Life Former CEO
July 14, 2006
The Missouri Department of Insurance has filed a complaint seeking discipline of the former Chief Executive Officer of Capital Reserve Life Insurance Company.
The complaint names Joseph E. Warden, of New Albany, Ohio, as an insurance producer who misappropriated company funds for his own use. Mr. Warden was hired by Capital Reserve Life Insurance Company in September 1995 and became president and CEO in November 1999. He served in this role until his resignation in September 2005. Warden's wife, Linda Warden, was also employed by the company, from October 2000 until she was terminated by the company's Board of Directors in September 2005.
During the Wardens' employment a revised employee health insurance policy was implemented which allowed the company to pay employees for their out-of-pocket medical expenses. In the time that followed this implementation, the Wardens submitted claims to the company for medical and dental expenses totaling nearly $600,000. The company reimbursed the Wardens for those medical and dental claims in amounts which totaled $571,176.36. According to those requests, the eligible medical services were provided by Boone County Regional Hospital. The Department contacted Boone Hospital to verify the expenses in question. Boone Hospital was unable to verify many of the charges that the Wardens had submitted..
During an informal interview in September 2005, Warden verified that documents had been falsified in order to obtain reimbursements from the company. In February of this year, employees of the company stated that the former CEO personally requested reimbursements for his own expenses and even signed for some of the reimbursements. To date, the Wardens have not repaid the questionable amounts back to the company.
"My office appreciates the cooperation provided by employees of Capital Reserve in bringing this situation to light and working with the department to make certain this did not strain the company," said Dale Finke, director of the Missouri Department of Insurance. "Because of the employees' cooperation, Capital Reserve Life Insurance Company remains a viable company in compliance with our department's financial standards."
The complaint filed by the department with the Administrative Hearing Commission seeks to discipline Warden's insurance producer license, which expired on June 20, 2006. That discipline can include revocation of the license.
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