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  #451  
Old 11-16-12, 20:40
D-Queued D-Queued is offline
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Originally Posted by howsteepisit View Post
Here is another angle for you all to consider. Say SCA was aware that Armstrong was doping, and further, upon doing their due diligence to price the indemnity found that cycling was rife with doping, and that the most egregious dopers were more likely to be caught than not. Part of the determination from SCA's view would be that there were other dopers to level the playing field, making a 5 or 6 time winner less likely, and that if Armstrong went too far in doping he would either die, or be caught or suffer physical failure. Given this, it would be at most immaterial if Armstrong doped, or make the odds against LA being able to remain at the top of the heap that long even better. SCA may have bet that there was not way for doping to work that well for that long.

Just a cynical thought for a cloudy day.
You may be over-thinking this.



Accepting violations of contest rules, in any way, would be self-defeating.

Dave.
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  #452  
Old 11-16-12, 20:48
howsteepisit howsteepisit is offline
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No what I am saying is that SCA could have accepted the contract knowing that cheating was likely and that would be way to avoid payment if in fact LA won the requisite number of tours, its an additional layer of protection for SCA. I know it may be over thinking and cynical, but the insurance industry has never been known for being straightforward, and anybody who plays probabilities for a living as pretty damn good at evaluating entire scenarios, even unlikely one, with millions on the table.
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  #453  
Old 11-16-12, 21:07
D-Queued D-Queued is offline
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No what I am saying is that SCA could have accepted the contract knowing that cheating was likely and that would be way to avoid payment if in fact LA won the requisite number of tours, its an additional layer of protection for SCA. I know it may be over thinking and cynical, but the insurance industry has never been known for being straightforward, and anybody who plays probabilities for a living as pretty damn good at evaluating entire scenarios, even unlikely one, with millions on the table.
Understood.

Not to say that there are not many industries with poor ethical track records and business norms.

As noted, though, that would be a self-defeating business practice. All you need is one whistleblower, one piece of email, or one recorded conversation and you have wasted millions.

Insurance companies typically look to re-insure or otherwise lay off part of the risk. In this case, they had LLoyds + one other insurer came in.

SCA would have to apprise them of such a set of assumptions. Otherwise, they could face major lawsuits.

It is just really, really difficult to go there.

The other contextual consideration is that the insurance contract was entered into just after the Festina clean up. Moreover, SCA had no prior exposure to cycling. Their 'hole-in-one' contract was originally developed for golf.

Anything is possible. And, more than a healthy dose of cynicism has been necessary for anything to do with Lance. However, it just isn't very probabl that SCA somehow anticipated doping and saw this as a way out of the contract.

If they had, they would have been far more pro-active about looking for doping before Lance won any TdFs.

If you wanted to game the situation as you suggest, would you rely on anything where the UCI could hide any doping?

Dave.
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  #454  
Old 11-16-12, 21:24
Dr. Maserati Dr. Maserati is offline
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Understood.

Not to say that there are not many industries with poor ethical track records and business norms.

As noted, though, that would be a self-defeating business practice. All you need is one whistleblower, one piece of email, or one recorded conversation and you have wasted millions.

Insurance companies typically look to re-insure or otherwise lay off part of the risk. In this case, they had LLoyds + one other insurer came in.

SCA would have to apprise them of such a set of assumptions. Otherwise, they could face major lawsuits.

It is just really, really difficult to go there.

The other contextual consideration is that the insurance contract was entered into just after the Festina clean up. Moreover, SCA had no prior exposure to cycling. Their 'hole-in-one' contract was originally developed for golf.

Anything is possible. And, more than a healthy dose of cynicism has been necessary for anything to do with Lance. However, it just isn't very probabl that SCA somehow anticipated doping and saw this as a way out of the contract.

If they had, they would have been far more pro-active about looking for doping before Lance won any TdFs.

If you wanted to game the situation as you suggest, would you rely on anything where the UCI could hide any doping?

Dave.
I am pretty sure that SCA did not lay off the risk - from memory Tailwind took out additional policies with Lloyds & Chubb.
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  #455  
Old 11-16-12, 21:27
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I am pretty sure that SCA did not lay off the risk - from memory Tailwind took out additional policies with Lloyds & Chubb.
Were these 'sidecar' policies? Or, completely independent?

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  #456  
Old 11-16-12, 21:51
Dr. Maserati Dr. Maserati is offline
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Were these 'sidecar' policies? Or, completely independent?

Dave.
Sidecar?? Don't lawyer me, please

I don't know what that is - but from the below it appears clear there were separate agreements with Chubb & Lloyds, (yes, I admit I am perturbed that I remember this stuff).
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The bonuses were insured by three companies including SCA* a Dallas-based company that is responsible for $5 million of the payment to Lance.
Two other companies. Chubb and Lloyd's, promptly sent payment along with congratulations and kudos to Lance. We thank them. The day SCA's payment was due, however, we instead received a letter stating they would refuse to pay pending an "Investigation" into drug allegations against Lance.
http://d3epuodzu3wuis.cloudfront.net/R053.pdf
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  #457  
Old 11-16-12, 22:37
howsteepisit howsteepisit is offline
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I hear ya Dave,

It would be extraordinary for SCA to have included that in their evaluation, but as a bettor against the extraordinary I am not sure how far I think SCA would have gone in their due diligence. And as I said, its not a like;y scenario, but a thought I had after spending way too much time reading about structured finance, risk, and investment banking.
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  #458  
Old 11-16-12, 23:07
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Merckx index Merckx index is offline
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Sidecar?? Don't lawyer me, please

I don't know what that is - but from the below it appears clear there were separate agreements with Chubb & Lloyds, (yes, I admit I am perturbed that I remember this stuff).

http://d3epuodzu3wuis.cloudfront.net/R053.pdf
Now I'm a little confused. So in addition to the $10 million or so paid by SCA (plus legal fees), it seems that Chubb & Lloyds also paid $5 million? Why haven't they also sent LA a letter demanding return of the money?

A couple of other points of interest brought up by perusal of the linked letter:

1) If SCA at that time strongly felt that LA must have doped, why did they agree to insure him in the first place? Did they suddenly become aware of all the stories about LA doping, some time between 2000 and 2004? When they originally agreed to insure, did they assume winning six was highly unlikely, and when it happened, did they decide it must have been from doping? Something clearly happened at SCA during that period.

2) The letter says the 6 Tours in a row idea was conceived after LA won his second Tour. I remember pretty clearly at the time LA telling the world that he would never be able to match Indurain's five in a row, that he was grateful to win just two, etc., etc. So though this is very small time compared to his other lies, the reality was he had his sights set on a much longer streak almost from the beginning. Much as he had his sights on winning big endorsement money by being the cancer survivor who won Tours about as soon as he was out of the hospital.

This is a story, I think, that hasn't been emphasized as much. LA did not just build his empire as he went along, Tour after Tour. It was all planned out even before the first Tour. It seems he pretty much envisioned all of it happening.
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  #459  
Old 11-16-12, 23:46
thehog thehog is offline
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Originally Posted by Merckx index View Post
Now I'm a little confused. So in addition to the $10 million or so paid by SCA (plus legal fees), it seems that Chubb & Lloyds also paid $5 million? Why haven't they also sent LA a letter demanding return of the money?

A couple of other points of interest brought up by perusal of the linked letter:

1) If SCA at that time strongly felt that LA must have doped, why did they agree to insure him in the first place? Did they suddenly become aware of all the stories about LA doping, some time between 2000 and 2004? When they originally agreed to insure, did they assume winning six was highly unlikely, and when it happened, did they decide it must have been from doping? Something clearly happened at SCA during that period.

2) The letter says the 6 Tours in a row idea was conceived after LA won his second Tour. I remember pretty clearly at the time LA telling the world that he would never be able to match Indurain's five in a row, that he was grateful to win just two, etc., etc. So though this is very small time compared to his other lies, the reality was he had his sights set on a much longer streak almost from the beginning. Much as he had his sights on winning big endorsement money by being the cancer survivor who won Tours about as soon as he was out of the hospital.

This is a story, I think, that hasn't been emphasized as much. LA did not just build his empire as he went along, Tour after Tour. It was all planned out even before the first Tour. It seems he pretty much envisioned all of it happening.
The change was the book LA Confidential which was cited as the reason for seeking "clarity" on the claims by SCA.

Last edited by thehog; 11-17-12 at 00:02.
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  #460  
Old 11-17-12, 03:28
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Originally Posted by thehog View Post
The change was the book LA Confidential which was cited as the reason for seeking "clarity" on the claims by SCA.
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Originally Posted by Dr. Maserati View Post
I am pretty sure that SCA did not lay off the risk - from memory Tailwind took out additional policies with Lloyds & Chubb.
when I read the same awhile back, I found it very strange he was willing to bet so heavily on himself. With his relationship with the uci, it is apparent why. This too may explain why he had no qualms in being a rat and turning in Hamilton and mayo. Losing a tour to either one would have meant a loss of winnings in excess 10 million if I am understanding the terms correctly.

With such heavy bets on himself, it becomes easy to see why it was perfectly acceptable to himself to justify anything. I kind of wonder if he made hard bets on himself in the comeback and that was the reason for his and the hogs outrage against contador. I too wonder if the comeback wasn't also fueled by insurance companies giving better payouts in the belief that it would be very unlikely for him to win the race after being out of the game for a number of years. Maybe, that was going to be a mega payday.
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