“That covers disability payments, doesn’t it?” I asked.
“Yes, or death if it’s job-related. Medical bills even if there isn’t lost time. I guess it’s a funny kind of setup. Your rates depend on the kind of business you conduct—a factory pays more than an office, for instance. But the insurance company can be stuck with weekly payments for years if a guy is disabled on the job. We have some cases—not many, fortunately—that go back to 1927. But see, the insured doesn’t pay more, or not that much more, if we get stuck with a whole lot of disability payments. Of course, we can cancel the insurance, but we’re still required to cover any disabled workers who are already collecting.
“Well, this is getting off the subject. The thing is, there are lots of people who go on disability who shouldn’t—it’s pretty cushy and there are plenty of corrupt doctors—but it’s hard to imagine a full-scale fraud connected with it that would do anyone else much good.” He ate some more quail. “No, your real money is in pensions, as you suggested, or maybe life insurance. But it’s easier for an insurance company to commit fraud with life insurance than for anyone else. Look at the Equity Funding case.”
“Well, could your boss be involved in something like that? Rigging phony policies with the Knifegrinders providing dummy policyholders?” I asked.
“Vic, why are you working so hard to prove that Yardley’s a crook? He’s really not a bad guy—I’ve worked for him for three years, and I’ve never had anything against him.”
I laughed at that. “It bugs me that he agreed to see me so easily. I don’t know a lot about insurance, but I’ve been around big corporations before. He’s a department head, and they’re like gynecologists—their schedules are always booked for about twice as many appointments as they can realistically handle.”
Ralph clutched his head. “You’re making me dizzy, Vic, and you’re doing it on purpose. How can a claim department head possibly be like a gynecologist!”
“Yeah, well, you get the idea. Why would he agree to see me? he’d never heard of me, he has wall-to-wall appointments—but he didn’t even take phone calls while we were talking.”
“Yes, but you knew Peter was dead, and he didn’t—so you were expecting him to behave in a certain guilty way and that’s what you saw,” Ralph objected. “He might have been worried about him, about Peter, because he’d promised Jack Thayer that he’d be responsible for the boy. I don’t really see anything so surprising in Yardley’s talking to you. If Peter had been just a stray kid, I might—but an old family friend’s son? The kid hadn’t been in for four days, he wasn’t answering the phone—Yardley felt responsible as much as annoyed.”
I stopped, considering. What Ralph said made sense. I wondered if I had gotten carried away, whether my instinctive dislike of over-hearty businessmen was making me see ghosts where there were none.
“Okay, you could be right. But why couldn’t Masters be involved in a life-insurance fiddle?”
Ralph was finishing off his quail and ordering coffee and dessert. I asked for a large dish of ice cream. “Oh, that’s the way insurance companies are set up,” he said when the waiter had disappeared again. “We’re big—third largest in total premiums written, which is about eight point four billion dollars a year. That includes all lines, and all of the thirteen companies that make up the Ajax group. For legal reasons, life insurance can’t be written by the same company that writes property and casualty. So the Ajax Assurance Company does all our life and pension products, while the Ajax Casualty and some of the smaller ones do property and casualty.”
The waiter returned with our desserts. Ralph was having some kind of gooey torte. I decided to get Kahlua for my ice cream.
“Well, with a company as big as ours,” Ralph continued, “the guys involved in casualty—that’s stuff like Workers Comp, general liability, some of the auto—anyway, guys like Yardley and me don’t know too much about the life side of the house. Sure, we know the people who run it, eat with them now and then, but they have a separate administrative structure, handle their own claims and so on. If we got close enough to the business to analyze it, let alone commit fraud with it, the political stink would be so high we’d be out on our butts within an hour. Guaranteed.”