In 2004, the IRS made several rulings about funding 412(i) plans. The plaintiffs alleged that the firm member wrongly represented that the rulings would not affect them, which induced them to pay Hartford additional premiums and file tax returns without the required forms for a listed transaction.  As a result, the plaintiffs incurred substantial audit-related expenses and may be liable for impermissible deductions.

In January, Trice, Geary & Mayers learned that the plaintiffs intended to pursue claims against them for the transaction unless a settlement was negotiated.  They gave notice to Camico of "potential claims" under the policy.  Camico explained that any accounting and financial services provided by the firm member associated with the sale had been in his capacity as an agent of Hartford, and were therefore outside the scope of "professional services" covered by the policy and within the "Special Exclusion Endorsement."

The U.S. District Court for the District of Maryland agreed with Camico, finding it had no duty to defend or to indemnify under the policy.

"The Maryland Federal District Court's recently issued ruling in TGM v. Camico affirms Camico's position that claims based on an insured's sale of life insurance policies as a licensed life insurance agent is not covered under the Camico accountants professional liability policy," said Christopher G. Piety, Esq., vice President of claims at Camico. "In this case, the court found that all of the alleged claims originated out of the sale of life insurance policies, for which the insured received commissions as a licensed life insurance agent.  As such, the court found it did not fall within the coverage contemplated by the Camico policy. Generally, coverage for such services is provided under insurance agents errors and omissions policies."