Florida Office of Insurance Regulation Issues Order to Two Insurance Companies for Predatory Practices |
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Written by U.S. Insurance News
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Monday, 19 May 2008 |
Two life insurance companies didn’t play by the rules when soliciting business from U.S. military personnel, and Florida’s Office of Insurance Regulation is taking action against them.
The office has issued an Order to Show Cause to American Fidelity Life Insurance Co. of Pensacola, Florida, and Trans World Assurance Co. of San Mateo, California. It requires the companies to show cause why the office should not enter a final order suspending or revoking their Certificates of Authority
pursuant to Sections 624.418(2) or 626.9581, Florida Statutes, imposing appropriate penalties under the Florida Insurance Code and Florida Administrative Code, or taking other appropriate action allowed by law.
“The office will be vigilant to ensure that our dedicated military personnel are protected from predatory sales practices,” said Kevin McCarty, Florida Insurance Commissioner. “We will continue to vigorously enforce our regulations to prevent unfair and deceptive practices from being perpetrated on Florida residents.”
The office has made the following allegations against one or both of the companies:
- Sold insurance products to U.S. military personnel after providing free prizes and gifts valued at over $25.
- Employed a corporal in the U.S. Marine Corps as a driver who used his military identification to gain access to the military base to pick up military personnel and take them to the companies’ offices.
- Offered to pay referral fees to U.S. military personnel who purchased their insurance products and introduced others who also purchased the companies’ insurance products.
- Failed to provide complete contracts to U.S. military personnel who purchased insurance products.
- Misrepresented that they were affiliated with the U.S. military in the sale of their insurance products.
- Required military personnel to grant access to their MyPay accounts to set up allotments for insurance products.
The order against American Fidelity and Trans World is tied to a rule adopted in September by the Florida Financial Services Commission that protects active duty service members of the U.S. Armed Forces from dishonest and predatory insurance sales practices in the state.
The adoption of the Florida rule came after the creation of a similar Model Law adopted by the National Association of Insurance Commissioners (NAIC) last year that states may adopt to prohibit the same behavior. Florida’s rule, however, goes further than the NAIC Model Law because it applies to every active duty service member, regardless of rank, and has a broader definition of active duty.
If the companies fail to respond within 21 days from the issuance of the order, Commissioner McCarty may take one of the remedies mentioned above. |
