Received Your Latest "Discount" Insurance Ad In the Mail?
LABELLE, FL. -- Florida Insurance Commissioner Kevin McCarty today announced that the Office of Insurance Regulation (Office) and People's Trust Insurance Co. (People's Trust) have entered into a Consent Order that requires People's Trust to stop writing new policies until it complies with provisions of the order.
People's Trust, heavily advertising it's "discount" home owner's policies by direct mail, will not be able to sell new policies until it meets the conditions of the order, but it still must continue to service existing customers and claims. It's latest ad doesn't quote prices like previous ads but does still claim lower prices than other companies. Not too hard to do since the comparison companies have some of the highest rates in Florida to begin with.
As the result of the Office's comprehensive investigation of People's Trust, the Office found, among other things, that People's Trust: failed to obtain inspection reports to confirm replacement cost values and/or insurability; failed to obtain proof of protective devices; failed to comply with various practices related to claims submission, investigation and payment; and failed to comply with its approved business plan, by writing more policies than allowed – an issue that could have created exposure beyond the company's claims-paying ability.
"I appreciate the new concept that People's Trust has introduced to the sale of property insurance in Florida," said Commissioner McCarty. "The company has expressed some ideas that, if implemented, would address some of the most difficult issues in the property insurance market. However, insurance companies are required by law to meet certain standards. The Consent Order is intended to bring the company into compliance with those legal standards."
The Consent Order requires People's Trust to, within 30 days: pay an administrative penalty of $150,000 and $5,000 in costs; deposit $500,000 with the Bureau of Collateral Management; and provide the Office with a certification that required corrective measures have been implemented in compliance with the order.
Florida Chief Financial Officer Alex Sink today released the following statement in response to the Office of Insurance Regulation’s (OIR) Consent Order with People’s Trust Insurance Company:
"The Office of Insurance Regulation’s Consent Order with People's Trust Insurance Company shows that People’s Trust committed numerous violations of the laws designed to protect Florida’s insurance consumers. These violations confirm my concerns about People's Trust MGA’s use of unlicensed agents to advise consumers on insurance matters. I am deeply troubled by these violations, and commend Commissioner McCarty for taking action.
"It is my responsibility to make sure Floridians are getting the best advice and making informed decisions on insurance products by dealing with properly licensed insurance agents. My office will continue to work to ensure that People's Trust Managing General Agent is prevented from using unlicensed agents to sell insurance products."
The Consent Order also requires People's Trust to use licensed agents and customer service representatives in compliance with the Insurance Code when soliciting and transacting insurance business and to provide proof of adequate reinsurance to the Office.
The Office's investigation of People's Trust began in December, and an onsite examination was conducted from Feb. 1 through Feb. 20.