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Rod, As I understand it from the last staff meeting we had, you are taking the l= ead (for Stan's group of businesses) in dealing with the many insurance iss= ues we have. I want to add to the list as follows: -=09Panama: after many months of work with the CPA and adjuster on a claim= of approximately $3.5 million, we are still waiting to receive an advance = payment of $1.5 =09million which was recommended by the adjuster. The unde= rwriter is simply using delay tactics. I understand from my team that the = overwhelming conclusion is that =09this will take at least initiating a leg= al procedure. =20 -=09Dominican Republic: steam turbine claim of approximately $16 million. = This claim has been sitting with HSB for months. HSB has simply refused to= recognize any =09of the BI beyond the 90 day deductible. Several meeti= ngs/conference calls have taken place and our view is that we will have to = apply high leve pressure (potentially =09using Ken Lay's relationship with = AIG) or pursue them legally if we want anything to happen in the near futu= re. Unfortunately, it appears that due to the absence of a =09cut-through = clause we would have to pursue them in DR courts through the fronting compa= ny. On top of all this, in securing this year's insurance coverage (which = as =09you know was allowed to expire without notice), we asked that the cut= through clause be dealt with this time around (apparently, this was someth= ing that was =09pursued last year and didn't get done). We have made the p= ayment of the policy and after being told that the insurer (verbally) appro= ved the cut through, now it =09appears that is no longer the case! To top = it all off, it looks like we have lost 5% of our underwriting coverage. In= short, we are about to go to litigation on a $16 =09million claim against = HSB; our current policy still lacks a cut through clause, and we have lost = 5% of our underwriting coverage. SECLP can hardly afford these =09types of= problems. -=09Nicaragua: the situation there hasn't changed much. We are being asked= to pay $1.2 million (for a 70 MW project!) with a deductible of $5 million= for physical =09damage and 90 days for BI. Essentially no coverage for a = project of this size. We are told we should be very happy (!) to be able t= o have the possibiilty of securing =09this, which, by the way, hasn't even = been fully secured. Note that this is adding one more plant (with a fairly= clean loss record) to the existing Enron umbrella. =09Finally, although a= t the beginning we were told that we could cancel at any time with the only= cost being the pro-rata portion of the annual premium, now, upon our =09ve= ry clear request for confirmation of such right, we have yet to receive sam= e. I wanted to make sure that you had this information as we attempt to find s= olutions to our insurance problems. =20 Thanks=09

Subject Line:
Insurance Difficulties