See the Excerpt from 2003 Examination Report regarding concerning behavior by the controlling shareholders:
"Company management is not avoiding the appearance of impropriety. If Ms. Renfrow is being developed for a managerial position, she needs a defined job and training program. Due to nepotism within the Company, the Company's President should either actively supervise the training (before it happens, while it is happening, and after the fact) or delegate it where possible. Ms. Renfrow should report to the manager of each department in which she is training. The examiners find it highly unusual that a recent college graduate would be allowed to set their own schedule while receiving a full-time management salary."
The preceding report of examination noted an issue with nepotism and this issue stands to harm the Company due to potential shareholder and/or policyholder lawsuits. It is imperative that the Company avoid the appearance of impropriety with the payment of salaries to family members. Ms. Renfrow should maintain working hours comparable to other employees of the Company and report to someone other than her father, Mr. Raymond Renfrow, in order to avoid internal control weaknesses and the appearance of improprieties.
See the Excerpt from 1999 Examination Report regarding concerning behavior by the controlling shareholders:
It was noted that, during the period covered by this examination and subsequent to this examination period, payments were made to Anne C. Renfrow as an employee of the Company.
Ms. Renfrow is the daughter of Mr. Raymond Rudolph Renfrow Jr., a director, officer, and stockholder of the Company and Mrs. Anne Daugette Renfrow, a director of the Company. Management represented that Anne C. Renfrow worked for the Company on a part-time basis in 1998. Anne C. Renfrow is currently a college student and the company did not provide any evidence that she currently provides any service to the Company although she is still on the Company payroll. Payments made to Ms. Renfrow during 1998, 1999, and 2000 were $14,226, $18.374, and $18,108, respectively. Management represented to examiners that Ms. Renfrow is being removed from the Company payroll effective April 1, 2001.