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Release Date: 10/04/2001
Release
Number: 01-193
Contact Name: Sharon Morrissey
Phone Number: 202.291.8921 |
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Atlanta, Georgia - The U.S. Department of Labor has
sued Decatur, Alabama-based Employers Underwriters, Inc. (EUI), the Southeastern
Lumberman’s Association, Inc. (SLA) and its owner for improperly receiving
at least $4.15 million in commissions, fees, expenses and loans from plans they
administered . |
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The five plans, labeled Southeastern
Lumberman’s Association Benefit Plan and Trust Number 1, 2, 3, 4 and 5 and
identical except for the geographic areas they cover, provided benefits for
work-related injury, illness or death to employees and eligible employee
dependents of participating employers. Defendant Roel B. Nabors founded SLA to
market insurance coverage to employers in high-risk industries. He also works
as an insurance agent selling accident, death and dismemberment (AD&D)
policies to the plans. Employers gained access to the plans by joining SLA and
paying EUI to cover AD&D; insurance premiums, insurance commissions to EUI
and Nabors and fees and expenses charged to be plans the EUI and Nabors.
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The department alleges in its lawsuit that Nabors
and EUI received at least $3 million in insurance commissions from plan
contributions made by employers since March 1, 1995 as well as $656,000 in fees
and expenses that EUI and Nabors charged the plans. The complaint also alleges
that EUI and Nabors arranged for plan loans in the amount of $890,618 between
January 1993 and July 1997. As of July, 1999, $500,000 of the loans had not
been repaid to the plans. EUI and Nabors also allegedly caused the plans to
transfer additional plan assets between plans as loans. |
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The department is asking the court to remove EUI
and Nabors from their positions as fiduciaries, to bar them from serving as
fiduciaries to any employee benefit plan subject to ERISA and to appoint an
independent fiduciary to take over the operation of the five plans. The lawsuit
also seeks to have Nabors, EUI and SLA restore all losses to the plans,
including interest, for their fiduciary breaches. |
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“Our goal is to assure that consumers know
the department is only a phone call away to help protect the benefits promised
by employers,” said Howard Marsh, director of the Atlanta Regional Office
of the department’s Pension and Welfare Benefits Administration, which
conducted the investigation. “Employers and workers can reach us in
Atlanta at 404.562.2156 for help with any problems relating to pension and
health plans provided in the private sector.” |
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The complaint was filed September 27 in the federal
district court in Decatur, Alabama. |
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(Chao v. Employers Underwriters, Inc., Roel B.
Nabors, and Southeastern Lumberman’s Association, Inc.
Civil Action
No. 5:01cv02435) |
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U.S. Department of
Labor news releases are accessible on the Internet. The information in this
news release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing your
request. Call 202.693.7773 or TTY 202.693.7775. |
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