insolvencies, although it is doubtful that even treble damages will allow full recovery.

Thus, it is extremely important to the Receivership, on behalf of citizens throughout the United States, that it continue to have available all the remedies, including treble damages, in the present RICO statute.

Although insurance receiverships are not governmental authorities per se, they are by their nature

quasi-governmental, in view of their relationship to state commissioners of insurance, superintendence by the court of the domicilary jurisdiction and representation of broad

citizen interests throughout the United States. As such, Receiverships should not be subjected to any added evidentiary burden for treble damages or to the proposed requirement for proof of prior criminal convictions

MAIL AND WIRE FRAUD SHOULD REMAIN AS PREDICATE ACTS

Mail and wire fraud should remain as predicate acts for civil treble damage RICO actions. Mail and wire fraud are the principal tools of white collar fraud resulting in failures and disastrous effects upon

calamitous business

numerous citizens.

Mail and wire fraud are essential

predicate acts in past and present RICO actions of this Receivership and will likely be the basis for any further such RICO actions in the future.

PRIOR REGULATORY APPROVAL SHOULD NOT BE SPECIFIED AS AN AFFIRMATIVE DEFENSE

It would be ironic that Judiciary Committee RICO

"Reform", if adopted,

would allow state "regulatory action,

approval or interpretation of law" as an affirmative defense at the same time that House Oversight hearings have raised questions about the effectiveness of state regulation of the insurance industry. I would respectfully suggest that this

change not be made.

VIOLATION OF STATE INSURANCE LAWS SHOULD BE MADE A
PREDICATE ACT

and

At a time when the House Oversight Committee is considering the adequacy of state regulation and the difficulty of the states individually to police property and casualty insurance reinsurance companies operating throughout the United States and elsewhere, the RICO statute should be strengthened rather than weakened. The ability of insurance insolvencies to minimize losses due to fraudulent schemes would be enhanced by making violation of state insurance laws a predicate act for Federal RICO actions. This Federal remedy, in the hands of an insurance Receivership, might lessen the extent of further

that would otherwise be necessary.

regulation

THE STATUTE OF LIMITATIONS SHOULD BE EXTENDED TO 5 YEARS TO RUN ONLY UPON ASCERTAINMENT OF THE LAST ITEM OF DAMAGES RESULTING FROM THE WRONG DONE

Because determination of damages may be long obscured and discovery of schemes between interlocking companies and reinsurers may be extremely difficult, the limitation should

be extended to 5 years to run only upon ascertainment of the last item of damages resulting from the wrong done.

CONCLUSION

We at the Transit Casualty Receivership have reviewed the statement of the National Association of Insurance Commissioners and strongly and fully support its opposition to the proposed RICO legislation in its present form. The Transit Receivership requests the Committee to not lessen or otherwise impair RICO actions that have been filed or RICO actions that have heretofore accrued, to preserve the present RICO remedy for insurance Receiverships without any additional burden of proof requirements, and to strengthen, rather than weaken, existing law by providing that violation of state insurance laws shall be an additional predicate act and by extending the statute of limitations to 5 years from discovery of the last element of damages.