Union Labor Life Insurance Company, Inc. (“Ullico”) is a union-owned company that provides health and life insurance and other insurance and investment products to members of more than 13 labor unions, including the Teamsters, the United Food and Commercial Workers, and the Laborers International Union of North America (LiUNA). Through its investment funds, Ullico is a major player in financing residential and commercial properties and infrastructure projects across the United States.

Founding

In 1923, Matthew Woll, president of the Photo Engravers Union and George Perkins, president of the Cigar Makers Union, proposed the formation of a labor-financed life insurance company during the 1923 American Federation of Labor (AFL) national convention. At the time, many union members in industrial trades were uninsurable because their jobs were considered too dangerous. AFL leader Samuel Gompers supported the effort, and two years later the Union Labor Life Insurance Company was founded. Fifty international unions provided seed money through a $400,000 investment from the Bank of Labor. Ullico issued its first policies in 1927 and by the end of its first year of operations, had issued life insurance policies to nearly 50,000 union members. ³

Regulators became concerned about Ullico’s lack of diversification, and the company’s value plummeted during the 2000 tech recession. But it was later revealed that company management had changed stock purchase and repurchase rules, permitting senior management to cash out millions of dollars in stock gains. These cash-outs were facilitated by Ullico’s unusual structure, under which the board priced its stock once per year, which allowed managers to buy stock at a lower price and then sell it after the board revalued its price. ³ All told, the board members at the time—including then-Ullico chairman and CEO Robert Georgine; Morton Bahr, then-president of the Communications Workers of America; Douglas McCarron, then-general president of the United Brotherhood of Carpenters; and Martin Maddaloni, then-president of the United Association (Plumbers and Pipefitters)—dealt themselves more than $14 million in company stock. ³

At the time of the management ouster, Ullico was losing millions of dollars a week and was very close to bankruptcy. State regulators threatened to close the company down. It survived only after a $50 million capital infusion and $100 million in cost-cutting across its entire business line. ³

Operations

Since its founding, the company has expanded to offer health insurance, workers’ compensation, fiduciary and union liability insurance, and investment products. ⁸