Troubled diver insurance company finally settles dispute over unpaid bills
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by LAMAR BENNINGTON - CDNN Industry News Editor
CAYMAN ISLANDS (28 Apr 2006) -- A scandal-plagued diver insurance company based in the Cayman Islands has agreed to settle a dispute over hyperbaric chamber bills it failed to pay since 2004.
Divers Alert Network (DAN) finally caved in after SSS, the world's largest network of recompression chambers sued to recover unpaid bills and cut off hyperbaric medical treatment for DAN policy holders at chambers around the world.
Despite its "divers helping divers" advertising slogan, DAN's ill-advised decision not to pay outstanding claims put it policy holders at increased risk of injury or death as SSS chambers in the Bahamas, Belize, Galapagos, Mexico and Thailand announced they would no longer accept DAN insurance.
Under growing criticism from thousands of policy holders no longer covered for hyperbaric medical treatment at popular scuba diving destinations around the world, DAN belatedly withdrew its strident and unfounded accusations that SSS chamber fees were exorbitant.
Throughout the dispute, SSS referred to the fact that all other insurers, including DAN's own corporate affiliates outside the USA, as well as PADI, NAUI, Dive Safe and DiveAssure accepted its fees as fair, reasonable and appropriate. Only DAN refused to pay.
The settlement effectively ends DAN's attempt to dictate chamber pricing and boost profits of its off-shore tax-free insurance company.
The latest debacle comes in the wake of a series of corporate scandals that have threatened to collapse an organization formerly revered for its commitment to diver safety.
In the early 1990s, DAN drifted away from its safety mission to pursue corporate profits generated primarily by sales of insurance products.
In 2002, DAN's board of directors finally sacked CEO Peter Bennett after ugly corporate infighting and lawsuits over financial improprieties and accusations that Bennett and DAN attorney Wes Covington had conspired to secretly take over AGI, the multi-million dollar diver insurance business.
Despite ousting Bennett, Divers Alert Network continues to be plagued by a corrupt corporate culture, ill-advised territorial marketing schemes and lavish, wasteful spending that has earned it the dubious distinction of being rated among the worst non-profits by independent auditors.
The prestigious Charity Navigator, which is universally acknowledged as the most unbiased independent authority on non-profits and charities, has rated Divers Alert Network as an organization that "fails to meet industry standards and performs well below most charities in its Cause."
DAN received only one star out of a possible four and received an overall score of only 37.50 in the all important "Peer Analysis" assessment.
Conversely, the Burke Medical Research Institute and Huntington Medical Research Institutes, which are both rated as peer organizations, received four stars and overall scores exceeding 60.
Although DAN is a member supported non-profit, it has defiantly refused to reveal the financial terms of what critics describe as ousted CEO Peter Bennett's "golden parachute".
But 990 income and expense statements filed by Divers Alert Network according to laws that govern non-profits based in the United States reveal that in fiscal 2004, DAN diverted $140,000 of member fees paid to Bennett presumably as part of his "golden parachute" deal.
Another $25,000 in member fees went to Bennett's son, a former DAN vice president who no longer works for the organization.
Expenses listed in DAN's 2004 "Exempt from Income Tax" statement include over $140,000 for "former President and CEO Peter Bennett", nearly $25,000 for "former Vice President Chris Bennett" (Bennett's son), more than $100,000 each for a small army of "Vice Presidents", $80,000 for DAN's webmaster and over $3 million for the four-story 27,000-square-foot Peter B. Bennett Center, DAN's luxurious corporate headquarters paid for by member fees.
New Deck, Same Old Dirty Cards?
Although DAN board members finally prevailed and ousted Peter Bennett, they failed to clean house. Bennett's right-hand man Dan Orr and left-hand man Chris Wachhoz still hold key positions in the organization although both were implicated in Bennett's financial shenanigans.
Orr along with Bennett and DAN attorney Wes Covington were investigated for lining their pockets with profits from AGI, DAN's off-shore for-profit insurance spin-off.
Wachholz got his chunk of the cash cow when Bennett and Covington cut him in on another insurance spinoff called Travelers Emergency Network, a Divers Alert Network clone aimed at travelers.
Together, Orr and Wachholz pocket more than a third of a million dollars annually from DAN member fees and donations.