JPAs, insurance brokers, lawyers: who is profiting from school litigation? Santa Clara v. Keenan & Associates

Photo: Lora Duzyk (left) is San Diego County Office of Education's Assistant Superintendent for Business Services.

Who is profiting from inflated insurance premiums in San Diego schools? Perhaps just about everyone involved in school liability insurance.

Sometimes my commenters know more than I do about a subject, and school insurance is one of those subjects. A recent comment caused me to do some research. I already knew that the San Diego County Office of Education-Joint Powers Authority was paying millions of tax dollars each years for lawyers who cover up wrongdoing in schools. I didn't know how far up (or down) the corruption went.

I found this:

County pushing suit alleging misdeeds in insurance industry
By Julie O'Shea
San Jose Recorder

Following New York's lead, Santa Clara County is suing several top insurance brokerage firms, claiming they have duped customers out of millions through secret "kickbacks" and other "lucrative" service deals.

"It's almost cartel-like," said the county's outside counsel, Louise Renne, a for-mer San Francisco city attorney who wasbrought on board because of her extensive experience with this type of litigation. "We believe that every public agency in the state of California has been affected."

In a complaint filed in Alameda County Superior Court in November, Santa Clara is alleging that industry giants Marsh & McLennan Cos., Driver Alliant Insurance Service and Keenan & Associates are "steering" clients toward insurers that are offering brokers undisclosed commissions, funded through insurance premiums.

"In the end," the complaint alleges,"clients paid more for less insurance, with defendants siphoning off the difference to pad their bottom line..."





Here is part of what my commenter wrote:

"...Three insurance brokers namely Driver Alliant, Keenan and Associates and Marsh & McLennan manage these super pools. These insurance brokers are being sued in Alameda County where the allegations are for unlawful business practices, in violation of California Business and Profession Code section 17200 et. seq. false and misleading advertisement where they cream millions of dollars in public funds in violation of Business and Profession Government Code Section 17500 et. seq., breach of fiduciary duty, illegal and secret kickbacks, steering premium dollars and getting public agencies to purchase services at high rates.

"...Keenan and Associates has a “HYBRID SELF-INSURANCE and REINSURANCE” [SDCOE has SELF-JPA where Keenan is also a member of this “Super Pool”] pooling program for nearly 400 schools and community colleges.

"Keenan advertised for its Super Pool’s conference at Lake Tahoe as, “The Pudding is in the Pooling,” in their invitations. Yes, the pudding is good, they are raking in Millions of PUBLIC FUNDS through their billable hours...

"Daniel Shinoff and his SASH firm takes the cream of the Southern District billable hours for BOTH Keenan and SELF which are brokered by Marsh & McLennan. The premium billable hours are steered to his firm with the blessing of Keenan, SELF and Diane Crosier.

"Keenan and Marsh and McLennan as the agents of California’s public entities have a fiduciary duty to recommend the best coverage at the best price for its clients. They are to provide independent, objective advice, and to put ‘their clients best interests’ ahead of their own. Keenan and Driver and Marsh and McLennan are hired to act as consulting, billing/premium administration, and claims administration. Their duty is to provide full disclosure, candor, and loyalty. Disclose the amounts of income; Contingent Commissions Agreements and remuneration they receive form all transactions to the public agencies they represent. Keenan has a policy where every employee, associate and partner has to belong to several churches, golf clubs, non-profit organizations and civic groups. This is how they create friendships with judges, political figures, churches and organizations who look the other way. While attorneys like Daniel Shinoff bully public boards into contractual agreements and decisions that are not in the best interest of PUBLIC AGENCIES but bring in a lot of billable hours to his firm and bigger premiums for insurance Brokers and JPA’s.

"The agreements that the PUBLIC AGENCIES get pressured into signing with the JPA’s have different names like: “Contingent Income Agreements” “Production Service Agreements” “Volume Based Commission Agreements” “Profit-Sharing Commission Agreements” “Commission Override Agreements” Premium Value Contingent Commission Agreements” “Preferred Agency Agreements” and “Platinum Profit Sharing Agreements.”

"These commissions create a blatant CONFLICT of INTEREST and a direct financial interest for these brokers, JPA’s and preferred law firms. These commission and preferred agreements cause CONFLICT of INTEREST, along with premium prices in many cases with lower benefits. The insurance companies recoup the kickbacks paid to marsh & Marsh and McLennan, Keenan and Driver by higher insurance prices passed on to the public agencies. Whereby, suppressing competition in the market of insurance.

"This is the reason why the PUBLIC AGENCIES in San Diego cannot get insurance apart from the JPA’s. No insurance company can do business in California without belonging to one of the three “insurance brokers.” The insurance brokers have contractual agreements with certain JPA’s; like SDCOE SELF and these JPA use the same law firms they have contractual agreements with like Best Best and Krieger, Stutz, Artiano, Shinoff and Holtz “SASH” and Winet..."

(End of quote of commenter to this blog.)

It turns out that insurance companies were doing a lot of harm long before they helped bring down the US economy in 2008 with their credit default derivatives. The derivatives were too complicated and clever by half, a scheme to get rich quick while promising that there would be no consequences. The government failed to regulate these scams, pretending they weren't really insurance policies. Institutions began to fail once it was discovered that the institutions didn't have any protection against defaults because they were unknowingly insuring themselves.


Many local school districts belong to the San Diego County Office of Education-JPA. Diane Crosier is the Executive Director of the SDCOE-JPA, and she works under the direction of SDCOE Superintendent Randolph Ward and Asst. Supt. Lora Duzyk. Crosier represents the SDCOE-JPA at a bigger JPA called SELF.

Diane Crosier then goes on to represent SELF when the other JPAs come together to form what it is called a “super pool,” then she reports back (delivers instructions) to SELF and SDCOE-JPA (which she herself directs).

This complete circle leaves me wondering who is in charge, the people at the bottom or the people at the top? There is some evidence that the person in charge is Stutz Artiano Shinoff & Holtz attorney Daniel Shinoff, whom Diane Crosier most often selects to represent school districts in San Diego.