New Jersey Insurance Company
Nina Rajaratnam Mishaal Hamza
The law division of NJIC was responsible for all legal matters
relating to the company’s operations. It advised company management on current and prospective developments in tax and other legislation, among other things.
William Somersby had as much freedom of opinion as an outside
counsel would. Law division was divided into 5 sections. The case is concerned with 2 of these sections.
Individual Loan Section
Responsible for legal processing of loans made to individuals
and secured by mortgages on real property. The company made no loans directly to individual borrowers- the loan instruments were submitted by independent companies situated throughout the country. The major function was to perform the legal work necessary on all new loans purchased and on all existing loans.
Department had 5 lawyers and 26 mortgage examiners. Work standard- 12 transactions per examiner per day.
Revised to 15 transactions.
Corporate Loan Section
Much Larger amount than Individual loan
Amount of the loan, Interest rate, Timing of repayments made by
Investment division Responsibility of the division to protect the interest of NJIC Borrowers to pay all expenses in employing outside counsel
Q1 -In what way does Mr.Somersby control the operation of the sections of his division? In what ways does top management control the operation of the law division? Same tasks; different operational and control mechanism
Individual companies batch together a number of loans and sell
them to NJIC in a package. After loans get approved by the investment division, it gets forwarded to the law division for legal procedures. Loans were batched on the basis of geographical locations as they had similar transactions
Comparison of budget with actuals will have to be done on a
regular basis, so as to exercise more control. Monthly...
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