High-Tech Fidelity.

Fidelity writers are rolling out coverage for the new risks of e-commerce.

An accountant in a midsize U.S. manufacturing company is caught embezzling hundreds of thousands of dollars over a five-year period. Three warehouse workers for an international electronics firm are discovered stealing thousands of dollars' worth of personal computers. An anonymous tip uncovers a bank officer's bogus loans to nonexistent customers totaling more than $100,000.

These are the everyday claims made by commercial and financial institution policyholders to fidelity insurers. But with the growth of online financial transactions, a new crop of fidelity claims is evolving as criminals use high-tech strategies such as embezzling online bank accounts and denial-of-service attacks. Financial institutions' and commercial businesses' growing dependence on e-commerce is forcing fidelity insurers to create new products for intangible losses like the copying and theft of an identity or personal information.

Fidelity writers' terminology that includes words like embezzlement and forgery is being broadened to include hacker terms like spamming, spoofing, smurfing and pinging. Fidelity insurers are beginning to offer or are developing insurance products for denial of service, e-signature forgery, e-vandalism and identity theft. A typical claim from Chubb Group of Insurance Cos., which rolled out fidelity cyber-crime coverage earlier this year, involves a hacker entering a bank's network, bypassing its firewalls and setting up three phony accounts. The hacker then withdraws $250,000 from each account and wires it to another account in Switzerland.

These high-tech versions of embezzling are forcing insurers to deal with a new type of crime, one where nothing is stolen, just copied, and the perpetrator doesn't have to enter the building to steal. Just five to 10 years ago, companies focused fidelity coverage risk management for cyber-crimes on controlling access to computer rooms. Today, cyber-vandalism is committed by unknown hackers off-premises in the privacy of their own home or office. "Now that everything is Web-enabled, viruses and denial of service can be propagated across operating systems linked to networks. That's where you had the problem with the Melissa virus. No one actually got into your building; you logged on and if you were on a Microsoft operating platform--boom! The impact of the Internet and its risks have exploded in the last two years," said Jeff Grange, vice president and global manager, financial fidelity products, in Chubb's department of financial institutions.

Cyber-crimes also include overloading a Web site to create denial of service to legitimate users and e-vandalism, where Web sites are corrupted with intrusive messages that can harm a company's image. In fact, a recent study by Asta Networks, which markets denial-of-service solutions, found 12,805 attacks were observed over the course of three weeks, covering more than 5,000 distinct victims. The denial-of-service attacks, described as a flood of junk mail targeted to a site, can result in loss of work time and access to other computers and they can occupy valuable information technology staff.

Many Exposures

Some 640 million people use the Internet, and this number is expected to grow to 1.4 billion by 2005. Anyone who has access to a Web browser application can steal from a financial institution irrespective of where they are, and that has changed everything, said Grange. The exposure is growing in proportion with the increase in activity. "Many more banks today are using the Internet in their business whether by home banking or trading. The more connectivity there is, the more access you have for someone to get in," said Greg Hamilton of Zurich North America Financial Enterprises. In fact, the number of people conducting online business transactions is expected to triple to 24.2 million by 2004, according to GartnerGroup Dataquest.

The growth of e-commerce and its impact on banking is also getting the attention of the Federal Deposit Insurance Corp.The government agency is meeting with insurers and reinsurers to understand and to evaluate the evolving cyber-crime coverages that are being rolled out. "Banks' fidelity and liability coverage needs to be examined carefully in light of the more complex risks brought by e-commerce," said James D. Crum, assistant director of the FDIC's banking technical group.

Fidelity insurers say the line's losses are closely tied to the country's economic cycle. The better the economic times, the less inclined a person is to steal, and the lower their losses. And if a business is healthy, it is less likely to monitor and enforce internal controls to count nickels and dimes. "A general rule in financial institutions is when you have a downturn in the economy you have a sharp up-tick in loan losses and employee dishonesty. Frequently when there are layoffs, disgruntled employees see the marriage of opportunity and weakness in internal controls, and disgruntled employees, who are going to be laid off in a downsizing or merger and acquisition, will take advantage of that opportunity," said Grange. In fact, over the last five years, the Surety Association of America ranks dishonesty of employees as the main cause of loss for financial institutions.

Because fidelity claims involve employee dishonesty; they are highly sensitive and emotional losses, said Steven Balmer, a spokesman for Travelers Bond, a division of Travelers. "Insureds like to keep these claims as confidential as possible. Typically, they receive an anonymous tip from an outside party or from a fellow employee. The losses can be devastating financially for the company and cause a lot of morale, public relations or productivity problems. Sometimes there is a real attempt to keep them covered up," Balmer said.

Fidelity is also a highly concentrated line with more than 60% of the business written by the top five companies, but it remains a fractional part of the property/casualty business. Most of the top five writers are mega-insurers whose fidelity line is a small percentage of their business. For example, fidelity is 0.9% of American International Group's premiums and 2.3% of Chubb's. In order of direct premiums written, the top five fidelity writers in the United States are Chubb; AIG; Cumis Insurance Society; Travelers and Zurich U.S. The fidelity business written by U.S. fidelity writers makes up 0.3%, or $791 million, of those companies' premiums.

Commercial and Financial

Because fidelity's premiums are so low, any loss has a large impact, and that influences loss ratios, said Ed Gallagher, the general counsel for the Surety Association of America. "Fidelity's loss ratios can't be compared to other line's [loss ratios]. One reason is it's more costly to underwrite fidelity coverage for a bank than to underwrite my auto coverage," Gallagher said.

The fidelity line offers coverage to two major areas: commercial crime and financial institutions. Most of the top-five fidelity writers' business is split evenly between these two types of businesses. Financial institutions like banks and investment houses are mandated by the federal government to carry fidelity coverage. On the commercial side, although the majority of major retail businesses and manufacturers buy fidelity coverage, typically the larger firms with ample cash or property are more likely to purchase in excess of standard coverage.

Because of the rash of consolidation in the banking community over the last three years, the growth opportunities are shrinking for fidelity coverage, but the size of each account is growing larger. 'The outlook for fidelity crime customer growth is severely limited in financial institutions. Conversely on the commercial side, if the economy is strong and new businesses develop, that marketplace is a growth business. The commercial side is a very large market, only limited by the number of businesses there are in the United States or the world. What they all have in common is an employee who wants to steal from them,' said Hamilton of Zurich.

AIG views the commercial middle market as its target for sales growth. Patricia A. Barrett, senior vice president of middle-market fidelity for AIG, targets companies with revenues of $100 million or less, which historically did not find a need for fidelity coverage. Potential buyers include companies who never had electronic funds exposure and were very tightly managed, to businesses who are just becoming aware of their exposure to fraud.

Risks and Underwriting

Fidelity's risks also mirror the movement of U.S. business. As businesses become global or take part in mergers and acquisitions, the environment for fidelity risk exposures grow. "The problem is we have had a period of unrivaled growth and expansion of financial services industries, but there hasn't nearly been the same investment in internal controls, compliance and credit risk management," said Grange.

The tale of rogue trader Nick Leeson, whose loss of $1.4 billion collapsed Barings Bank in 1995, exemplifies the major fidelity risk of global business. "There is an old saying: The further the branch office is from the home office, the higher the likelihood of instances of fraud,' Grange said. The decentralized nature of global businesses, especially immediately after a company enters a new market, are fertile environments for fidelity fraud. As corporations begin setting up international operations, managing them from a distance and focusing on growth, dishonest employees can take advantage of a distracted management.

Chubb says although its international and domestic commercial fidelity accounts have about the same frequency of loss, losses that occur at companies' international locations are typically larger.

"The biggest areas of loss are often in vendor management and accounts payable fraud. A typical scenario occurs when proper internal controls aren't in place to authorize or approve new vendors, and when accounts payable does not adequately reconcile invoices against blind receiving reports and purchase orders prior to payment. In these circumstances an employee can put through a fraudulent invoice to a ghost vendor. Such a process can go undetected for years costing companies millions of dollars in lost profits," said Barry Mansour, assistant vice president and crime insurance underwriting manager at Chubb Specialty.

Fidelity claims also blossom when a business is in the throes of a merger or acquisition. A mix of being distracted by the task and the merging of cultures and tech systems to create a larger business leaves risk management's guard down. Insurers said it's more of a challenge to force internal controls in an M&A environment that's embracing dozens of managers than for a business with a five-person team that sees each other every day and requires two signatures on all transactions. "Because of the inherent nature of an M&A, you have to knock down internal control walls to facilitate putting A together with B to create C. When the walls are knocked down, you are opening up opportunities for the crafty person to exploit," Zurich's Hamilton said.

Infrequent Audits

Insurers are also seeing internal audits of accounting being scaled back in decentralized global businesses. Grange said it's typical now for internal audits to be conducted once a year or sometimes they will occur once every two years, or worse, they rely on external auditors to look at their finances. "The reality is only 2% of fraud is identified by external audit, where 56% of fraud is identified by internal audits. You're dealing with much more complex entities because of mergers and acquisitions with larger global reach, and it becomes a difficult beast to control," Grange said.

The largest fidelity writer for financial institutions likens underwriting this line of business to a physician making a diagnosis of a patient. Chubb's Grange says underwriters look at the quality of a company's management and for symptoms that could point to a problem. "You look at their financial health, whether they are meeting their objectives as opposed to one that's in poor health with poor management and controls and a culture under a strain that potentially can run into vulnerabilities," Grange said. It's especially important to weed out the companies that are distracted by financial problems, turnovers in management and criticism by regulators. If both a well managed company and one with little or no controls employ the same type of criminal-minded person, that person would have a greater chance of committing fraud in the less controlled company, said Zurich's Hamilton.

AIG's Barrett sees underwriting this line of insurance in a good news/bad news light. The second largest fidelity writer in the United States believes these companies have growing fraud exposure, but says technology is allowing companies to uncover the problems. "I believe the problem of fraud is growing. We've seen a lot of severity cases that have been uncovered in the last three to four years, and I believe one of the reasons that it's happened is that companies have become much more skilled at uncovering fraud. They are using programs that allow them to compare vendor payments amongst vendors or from year to year. The ability to identify a variance allows them to uncover what has been undetected for several years," Barrett said.

Financial Sector Catches Up

Once criticized by Microsoft Chairman Bill Gates for being dinosaurs technologically, financial institutions have become the most dependent and biggest users of technology Not only are banking customers able to transact business online, but business-to-business transactions between banks and vendors also are growing. Financial institutions are driving business costs down by integrating their traditional business processes into a fully networked environment-initiating supply-chain management and e-procurement between corporate customers, Grange said.

In addition, all sizes of financial institutions are able to conduct business online. "Community banks have leveraged technology to give their banks the look, touch and feel of dealing with a Citigroup. Imagine the power of technology that you can be a single branch sitting in the middle of wherever and have the same Internet banking services that you would attribute to a regional, national or multinational bank. All this means there is a lot more risk today," Grange said.

After the rash of denial-of-service attacks to CNN and Yahoo last year, Chubb's insureds began to realize how vulnerable they were to cyber-attacks and began inquiring about coverage. Grange admits that while creating its CyberSecurity product, it had to think of theft in a new way. Traditional insurance policies define theft as the unlawful taking of property. But the theft of identity and information doesn't fit those traditional categories. "We're in the world now of theft without taking. You can copy, replicate or window into a place that you are not permitted to be, and that's a huge difference. You don't need insiders anymore to do insider trading;' Grange said.

Chubb's new CyberSecurity policy for financial institutions covers theft, denial of service, e-signature violations, vandalism and threats. Vandalism is another growing form of cyber-crime. Hackers are breaching a bank's network but not stealing; they are just sending out malicious codes. This vandalism can lead to unwanted information showing up on a Web site, such as this summer's Code Red virus that blanketed infected sites with the words "hacked by Chinese," or using deep linking or meta tags to create unwanted links that can be attached to a Web site.

Along with this public relations risk comes the misuse of e-signatures that can cost a bank a small fortune. Digital signatures were designed and approved for use so that business can be transacted online. But according to the U.S. Federal Reserve Bank in Atlanta, more than $500 million in fraudulently originated loans have been created through the misuse of e-signatures. Hackers steal good credit histories and apply for loans electronically. "There are 14-year-olds out there with three mortgages. Loan fraud is a big concern of financial organizations. All of this has introduced a level of complexity in financial institutions that's never been there before," Grange said. Chubb's CyberSecurity product protects financial institutions from a direct loss resulting from accepting a customer's electronic signature on secured loan agreements and later finding the signature is fraudulent.

Listening Skills

Fidelity's biggest challenge, according to insurers, continues to be hammering the message into management about the importance of implementing and using controls in accounting or warehouse departments.

AIG's Barrett considers meeting with policyholders the challenge of the underwriter. "Even if a company has had a loss, if I have an opportunity to sit across the table from them, I find out quickly if the company has gained experience on its own from its losses," Barrett said. AIG expects policyholders to establish a written fraud policy and to notify the appropriate parties in the event they see an incident that could be fraudulent. "If we don't have the opportunity to gain that certainty that the company will have zero tolerance for fraud, then an insured will be more likely to bring us loss and possibly continued loss," Barrett said.

Over the years, Travelers Bond has seen the same kinds of claims occur repeatedly, where a breakdown in the control process allows an employee to control a transaction from start to finish. In other instances, policyholders either have no internal controls or allowed them to lapse over time, substituting employee trust for controls. "Greater awareness of the importance of internal controls has to be part of the company's culture," Balmer said.

Fidelity, Top Writers--2000
                           2000 Direct
                      Premiums Written  % Change in
Group                    ($ Thousands)     Premiums
Chubb Grp of Ins Cos          $128,935          7.4
Amer Intern Grp Inc            113,343         32.1
Cumis Ins Society              107,425         -1.9
Travelers/Citigrp Co           104,729         27.0
Zurich/Farmers Group            60,287         12.7
CNA Ins Companies               47,952        -11.5
St Paul Companies               44,894          5.9
Hartford Ins Group              36,994         14.0
Great Amer P&C Group            12,709         13.3
Progressive Group               12,314         -9.6
FM Global Group                 10,037          5.7
ICI Mut Group                    9,517         18.1
Kemper Ins Cos                   9,300          4.0
Liberty Mut Ins Cos              7,814          3.2
Berkshire Hathaway               6,645         -3.4
Ohio Casualty Group              5,531          2.1
Cincinnati Ins Cos               5,237         -5.4
Bancinsure Inc                   4,938         -9.0
Old Republic Gen Grp             4,517          2.1
Royal & SunAlliance              4,012         65.6
Allmerica P&C Cos                3,422         -4.3
State Farm Group                 3,173         -4.3
Westfield Group                  3,043          9.0
Selective Ins Gr Inc             2,790          2.8
Federated Mut Grp                2,790         10.2
Total U.S. Cos.               $791,797          3.2
                            Market Share (%)
Group                             2000         1999   1998
Chubb Grp of Ins Cos              16.3         15.6   16.3
Amer Intern Grp Inc               14.3         11.2   12.9
Cumis Ins Society                 13.6         14.3   14.5
Travelers/Citigrp Co              13.2         10.7   12.4
Zurich/Farmers Group               7.6          7.0    6.6
CNA Ins Companies                  6.1          7.1    6.3
St Paul Companies                  5.7          5.5    5.6
Hartford Ins Group                 4.7          4.2    4.3
Great Amer P&C Group               1.6          1.5    1.3
Progressive Group                  1.6          1.8    1.3
FM Global Group                    1.3          1.2    1.2
ICI Mut Group                      1.2          1.1    1.2
Kemper Ins Cos                     1.2          1.2    1.1
Liberty Mut Ins Cos                1.0          1.0    1.0
Berkshire Hathaway                 0.8          0.9    0.9
Ohio Casualty Group                0.7          0.7    0.7
Cincinnati Ins Cos                 0.7          0.7    0.6
Bancinsure Inc                     0.6          0.7    0.9
Old Republic Gen Grp               0.6          0.6    0.6
Royal & SunAlliance                0.5          0.3    0.2
Allmerica P&C Cos                  0.4          0.5    0.4
State Farm Group                   0.4          0.4    0.4
Westfield Group                    0.4          0.4    0.3
Selective Ins Gr Inc               0.4          0.4    0.3
Federated Mut Grp                  0.4          0.3    0.3
Total U.S. Cos.                  100.0        100.0  100.0
                            Adjusted Loss Ratios
Group                                 2000         1999   1998
Chubb Grp of Ins Cos                  68.0         59.2   78.1
Amer Intern Grp Inc                   77.0        108.3   82.5
Cumis Ins Society                     69.0         62.8   67.2
Travelers/Citigrp Co                  32.4         41.2   49.2
Zurich/Farmers Group                  71.9         52.1   40.2
CNA Ins Companies                     24.9         84.5   -4.0
St Paul Companies                     67.3         68.1   16.2
Hartford Ins Group                    40.3         21.6   37.7
Great Amer P&C Group                  68.3         14.9   30.2
Progressive Group                     43.9         41.3   31.7
FM Global Group                       67.3         57.1  303.5
ICI Mut Group                          6.1        -29.9   -7.5
Kemper Ins Cos                        25.3         41.5   64.1
Liberty Mut Ins Cos                   26.3          4.1  120.1
Berkshire Hathaway                    84.0         46.1   74.8
Ohio Casualty Group                  -12.6          3.0   40.4
Cincinnati Ins Cos                    39.7         12.9   63.9
Bancinsure Inc                        82.3         42.5   35.0
Old Republic Gen Grp                   1.3          6.4   18.3
Royal & SunAlliance                  124.7         42.7    7.4
Allmerica P&C Cos                    -12.0         68.8   46.7
State Farm Group                       5.1          8.8    8.4
Westfield Group                       27.6         19.5   38.2
Selective Ins Gr Inc                  13.4         16.2    3.6
Federated Mut Grp                     38.9         77.3   83.3
Total U.S. Cos.                       55.7         54.4   56.7
                          % of
                       Company
Group                 Premiums
Chubb Grp of Ins Cos       2.3
Amer Intern Grp Inc        0.9
Cumis Ins Society         40.2
Travelers/Citigrp Co       1.0
Zurich/Farmers Group       0.3
CNA Ins Companies          0.5
St Paul Companies          0.8
Hartford Ins Group         0.5
Great Amer P&C Group       0.4
Progressive Group          0.2
FM Global Group            1.0
ICI Mut Group             22.3
Kemper Ins Cos             0.3
Liberty Mut Ins Cos        0.1
Berkshire Hathaway         0.1
Ohio Casualty Group        0.4
Cincinnati Ins Cos         0.3
Bancinsure Inc            22.5
Old Republic Gen Grp       0.3
Royal & SunAlliance        0.1
Allmerica P&C Cos          0.1
State Farm Group           0.0
Westfield Group            0.3
Selective Ins Gr Inc       0.3
Federated Mut Grp          0.3
Total U.S. Cos.            0.3
Surety, Top Writers--2000
                           2000 Direct               Market Share (%)
                      Premiums Written  % Change in
Group                    ($ Thousands)     Premiums       2000
St Paul Companies             $379,742          7.7       11.5
CNA Ins Companies              282,840          4.2        8.5
Travelers/CitigrpCo            260,891         70.0        7.9
Zurich/Farmers Group           215,905        -16.0        6.5
Amer Intern Grp Inc            198,175        -25.5        6.0
Ace INA Group                  125,618        872.3        3.8
Safeco Ins Cos                 123,814         14.1        3.7
Liberty Mut Ins Cos            122,669         -0.9        3.7
Chubb Grp of Ins Cos           111,675          8.5        3.4
Amwest Ins Grp                 105,006         -0.9        3.2
Allianz of America             102,716         -3.0        3.1
Kemper Ins Cos                  99,111         34.0        3.0
Hartford Ins Group              87,822         18.6        2.6
Fairfax Fin (US) Gr             80,963         20.6        2.4
GreatAmer P&C Group             63,702         13.4        1.9
Frontier Ins Grp Inc            58,446        -49.8        1.8
Swiss Reins Group               53,430         -1.7        1.6
XL America Group                42,753         83.4        1.3
RLI Group                       35,234         36.0        1.1
Internat Fidelity               34,711         19.0        1.0
Ohio Casualty Group             32,901          0.0        1.0
CGU Group                       32,612          2.8        1.0
Insco/Dico Group                30,261         11.8        0.9
Amer Contractors Ind            28,002         36.9        0.8
Old Republic Gen Grp            26,845         -1.2        0.8
Total U.S. Cos.             $3,315,873         -0.4      100.0
                                    Adjusted Loss
Group                  1999   1998      2000       1999   1998
St Paul Companies      10.6   11.0      55.8       37.6   23.6
CNA Ins Companies       8.2    8.2       7.4       12.9   30.2
Travelers/CitigrpCo     4.6    4.9      24.9        7.0   12.2
Zurich/Farmers Group    7.7    6.2      39.4       20.5    4.0
Amer Intern Grp Inc     8.0    6.2     120.0       63.8   36.5
Ace INA Group           0.4    0.5      71.6        2.1  226.9
Safeco Ins Cos          3.3    3.5      45.1       22.4   44.1
Liberty Mut Ins Cos     3.7    3.7      57.3       41.3   24.0
Chubb Grp of Ins Cos    3.1    2.8      66.0       32.1   17.8
Amwest Ins Grp          3.2    3.3      64.2       36.1   22.2
Allianz of America      3.2    3.3      33.1       15.3    3.9
Kemper Ins Cos          2.2    1.6      70.8       27.9   28.0
Hartford Ins Group      2.2    2.6      38.4       51.9   29.5
Fairfax Fin (US) Gr     2.0    1.3      47.9       40.4   83.5
GreatAmer P&C Group     1.7    1.8      24.2       25.9   22.3
Frontier Ins Grp Inc    3.5    2.9     104.4       31.9   34.0
Swiss Reins Group       1.6    1.8      32.1       47.1   34.3
XL America Group        0.7    0.7      30.7       39.4   12.6
RLI Group               0.8    1.0      41.5       38.5   28.8
Internat Fidelity       0.9    1.2      48.5       35.9   25.7
Ohio Casualty Group     1.0    1.1      11.6        6.7    9.8
CGU Group               1.0    0.9      26.6       22.3    9.3
Insco/Dico Group        0.8    0.8      11.7       13.8   -9.7
Amer Contractors Ind    0.6    0.6      21.4       20.7   23.0
Old Republic Gen Grp    0.8    0.9      19.2       12.1   15.1
Total U.S. Cos.       100.0  100.0      46.6       28.8   26.8
                          % of
                       Company
Group                 Premiums
St Paul Companies          6.9
CNA Ins Companies          2.8
Travelers/CitigrpCo        2.4
Zurich/Farmers Group       1.2
Amer Intern Grp Inc        1.5
Ace INA Group              4.5
Safeco Ins Cos             2.6
Liberty Mut Ins Cos        1.3
Chubb Grp of Ins Cos       2.0
Amwest Ins Grp            73.9
Allianz of America         2.1
Kemper Ins Cos             2.7
Hartford Ins Group         1.3
Fairfax Fin (US) Gr        3.6
GreatAmer P&C Group        1.9
Frontier Ins Grp Inc      16.8
Swiss Reins Group         10.8
XL America Group           5.1
RLI Group                  8.3
Internat Fidelity        100.0
Ohio Casualty Group        2.3
CGU Group                  0.7
Insco/Dico Group         100.0
Amer Contractors Ind     100.0
Old Republic Gen Grp       1.9
Total U.S. Cos.            1.1
To access this statistical study online, visit www.bestreview.com
and click on this story. The full statistical report and the data
in spreadsheet format can be downloaded.

Cumis Provides Fidelity Insurance for Most Credit Unions

Cumis Insurance Society, a member of the Cuna Mutual Group, the third-largest fidelity writer with $107 million in direct premiums written in 2000, provides coverage to more than 90% of the 10,500 credit unions in the United States. A credit union is a nonprofit, cooperative financial institution owned and run by its members. Members pool their funds to make loans to one another, according to the National Credit Union Association. Cuna Mutual covers credit unions of various sizes, but just over half are under $10 million in assets, said Marc Krasnick, senior vice president of Cuna Mutual Corporate Property and Casualty division.

Since its market penetration is so deep, Cuna focuses most of its efforts on loss management and selling products of its parent company, Cuna Mutual Insurance Society. Cuna is responding to credit unions' desire to be fullservice providers of financial services by offering a wide array of products through a network of relationship managers nationwide. Cuna's products include financial counseling, long-term disability, 401(k) programs, auto and homeowners coverage.

Cuna's loss-prevention programs focus on credit unions' typical claims of employee embezzlement, credit and debit card fraud and new account fraud. "We send risk managers in the field to hold seminars and training programs on a regular basis. Using an assessment guide, we make a collaborative effort to locate the most important area to focus on eliminating losses. Credit unions suffer from more external than internal losses," Krasnick said. The risk managers go into a credit union and assess how security is implemented and look at new account practices to minimize exposures up front. Cumis also compiled a bondability programs database listing individuals who have committed a dishonest act in a credit union. "Credit unions will call us when they have a prospective employee to see if they are on the list. It's important, because unfortunately many people who perform dishonest acts don't get prosecuted," Krasnick said. Cumis is part of Cuna Mutual Insurance Society's property/casualty division. Whereas fidelity insurance makes up a huge part of the company's P/C business, it's only 4% of the Cuna Mutual Group's total revenues.