CU Hoping Change In CUNA MutualManagement Will Aid Settlement

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RYE, N.Y. - (08/23/04)-- A pre-trial conference has beenslated for Sept. 24 in the complaint filed by USAlliance FederalCredit Union against CUMIS Insurance Society, Inc. USAlliancealleges CUMIS breached its insurance contract for employeedishonesty and lack of faithful performance. The CU is seekingreimbursement from CUMIS for losses totaling about $8 million itsustained when a long-time employee overseeing an auto leasingprogram intentionally failed to disclose serious operational andfinancial problems and legal activities in the leasing company.Following the discovery of the employee misconduct, USAFCU filed apolicy claim with CUMIS under its indemnity bond policy, but CUMISdenied the claim in April 2003. "We’re hopeful the change inleadership of CUNA Mutual Group, though occurring under unfortunatecircumstances, will help facilitate a fair and equitable resolutionto this issue that truly protects our members’interests,” said USAlliance CEO Michael F.Ambrose.

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