USA Swimming Not on the Hook for $2.5 Million Settlement

Braden Keith
by Braden Keith 2

September 25th, 2012 National, News

As a follow-up to the earlier story about a judgement in favor of plantiff Brooke Taflinger to the tune of $2.5 million against USA Swimming and Central Indiana Swimming, it is unlikely that the money will come from USA Swimming, at least directly.

According to Taflinger’s attorney Jonathan Little, because “Lexington did not defend their insured Central Indiana Aquatics, they would have to pay the entire judgement, pending the result of the declaratory action.”

The declaratory action is a lawsuit seeking a court order that they do not have to pay.

Swimming’s insurance carrier, USSIC, is not licensed in the USA, so they contract with the Lexington Insurance Company (a part of the Chartis Company, which is a major subsidiary of insurance giant AIG) to ensure USA Swimming.

USSIC has agreed to reimburse Lexington for any losses that Lexington has to pay as a result of USA Swimming’s cases. This means that directly, it’s unlikely that any of the directly named parties in this morning’s judgement will be saddled with the $2.5 million cost: a major relief to those dependent on funding from the organizations. Approximately $3.50 of every USA Swimming membership due goes toward these USSIC insurance premiums.

USA Swimming says that in May of 2012 the judge summarily dismissed the case against USA Swimming and the school, but did not elaborate as to the nature of any other litigation involving their insurance company.

It is not uncommon practice for National Governing Bodies to have insurance through carriers outside of the United States; the Barbados, where USSIC is located, generally has less oversight than in the United States and can act as tax havens. These are similar reasons to why banking is so popular in these areas as well.

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2 Comments on "USA Swimming Not on the Hook for $2.5 Million Settlement"

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A few facts about USSIC… USSIC is owned by USA Swimming. The Barbados incorporation shields USSIC from having to disclose financial information. Tax rate for this entity is 2% instead of 35% in the US. With that being 2% of who knows what unreported amount, this smacks of “pay us to hide it here.” Captive insurance is supposed to be an “arms length” setup. USSIC’s board appears to be populated with former USA Swimming officials. This calls the “arms length” nature of the structure into question. USA Swimming pays “insurance premiums” to USSIC which, by this article, underwrites Lexington to deal with the sex abuse legal settlements. Your dues directly finance sex abuse settlements through this Barbados shell company… minus… Read more »

You’re an idiot. Let me get your tin foil cap for you. Seriously. You take something simple as insurers not fulfilling their obligation to the letter, which happens quite often, believe it or not, and start throwing all these strawman arguments about things that you “think are shady”.

Unfortunately (fortunately), opinions and your little underhanded suggestions don’t hold up in a court of law.

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About Braden Keith

Braden Keith

Braden Keith is the Editor-in-Chief and a co-founder of SwimSwam.com. He first got his feet wet by building The Swimmers' Circle beginning in January 2010, and now comes to SwimSwam to use that experience and help build a new leader in the sport of swimming. Aside from his life on the InterWet, …

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