Perspectives: Convicted Insurance Execs Share Personal Stories, Good Deeds in Effort to Sway Judge

HARTFORD, Conn., Oct 06, 2008 (A. M. Best via COMTEX) -- AIG | Quote | Chart | News | PowerRating -- The personal life stories of the five insurance executives convicted earlier this year of helping American International Group manipulate its loss reserves in 2000 and 2001 were hardly mentioned in the trial, which centered on audio conversations and the technicalities of finite reinsurance and risk transfer.

That has changed. Today, the defendants, who, not too long ago, were well-liked members of the insurance industry, are revealing intimate stories about their childhood and families in a last bid effort to show their human qualities and extract sympathy from the judge. They list among their personal characteristics, their devotion to family, friends, and community, as well as many notable good deeds and charity work. And some, for the first time, are revealing the toll this case has taken on them and their families, and their fears of going to prison for a long time.

Some may find disheartening the letters friends and relatives ? particularly from the children of the defendants ? have written to the court, pleading for mercy.

A neighbor and former colleague observed how Ron Ferguson, the former chief executive of General Reinsurance Corp., "has aged considerably" before his eyes. This is blamed on the enormous stress of imprisonment ? the loss of freedom, privacy, and the fact that Ferguson, who turns 67 in January, might not get to see his grandchildren grow up. "[It's] bound to exact a serious physical and psychological toll," he writes.

The personal life stories may be seen as equally distressing. For instance, in a sentencing memorandum filed recently, Christian Milton, the former head of reinsurance at AIG, described his difficult childhood, growing up in "cold-water flats without central heating in London," with a mother who suffered from polio and a father who was also partially disabled, having lost his sight in one eye as a teenager.

As a teen, Milton worked several jobs to support his father's meager income, stacking grocery bags, delivering newspapers, and writing credit applications at a tailor shop when he got older. Still, his parents couldn't afford to put him through college even though he was at the top of his class in secondary school.

And Christopher Garand recounts growing up with a suicidal mother who struggled with mental illness, and a verbally abusive father who berated him and his brother in public, and abandoned the family on a number of occasions. In one document, there's details about the strict upbringing of the Garand boys, who had to serve their father dinner donning ties, white shirts, jackets and a white starched napkin over the serving arm.

"Any slight error ? forgetting to ask if you would 'care to serve yourself' as they lowered the meat platter to within a prescribed distance of your left hand or not keeping the platter level in case the juice should drop over the edge ? any small thing would cause a stomach-tightening comment from Mr. Garand," a close friend recalls.

Garand, a former senior vice president and chief underwriter at Gen Re, has also endured a number of personal struggles. His first wife died unexpectedly at age 39, and he nearly lost his second wife to a life-threatening brain aneurysm.

As distressing as all this may be, these personal stories have had no sway on Assistant U.S. Attorney Eric Glover and his team of federal prosecutors. In fact, the prosecutors counter, "most persons facing incarceration have one or more persons to whom they have an emotional commitment, and for whom the separation caused by incarceration will cause pain and suffering...and does not ordinarily warrant special leniency." Left to them, each defendant would serve "a substantial period of incarceration."

Also, the government has said that it wants to make an example of the defendants, by sending a strong message of deterrence to all corporate executives.

(By David Dankwa, senior associate editor, BestWeek: David.Dankwa@ambest.com)

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