Florida Chief Financial Officer Alex Sink said her office's investigation of People's Trust Insurance found that the company committed "numerous violations" of Florida insurance law by allowing some employees without insurance licenses to help sell homeowner policies.
People's Trust Insurance, a property insurer based in Boca Raton, faces suspension for allegedly using unlicensed agents.Chief Financial Officer Alex Sink said today that her office's investigation of the insurer found that the company committed "numerous violations" of Florida insurance law by allowing some employees without agent licenses to help sell homeowner policies.
Under Florida law, only licensed agents can give advice about insurance or solicit and sell insurance policies.
But unlicensed agents can assist in certain tasks and the coverage purchased from unlicensed agents is still valid.Officials from People's Trust, a fast-growing company formed last March with 45,000 policies, said the company met with Sink's office before it started selling policies to review its unusual business model and was told it was fine.
The company doesn't use insurance agents so it can avoid charging customers broker fees.
The Florida Association of Insurance Agents filed a complaint with Sink's office last fall about People's Trust.Mike Gold, the company's chief executive officer, said he met with Sink's office again. "I laid out every single thing procedurally, said I use plenty of unlicensed agents and here's why...Tell me if I'm doing something wrong. I was told I wasn't," he said.
In early January, an attorney from Sink's office called to say they want all of People's Trust employees to be licensed agents. "I said fine," Gold recalled on Thursday. "So I picked up the phone that minute and called Renaissance hotel and booked a large ballroom, called the insurance school we use to book instructors and put 50 people, everyone to the receptionist, through the school."
Gold said he told the CFO's office last week that each of his 150 employees is now licensed.
Sink is asking Insurance Commissioner Kevin McCarty to take action. "I hope that Commissioner McCarty will join me in my work to protect Floridians and take action regarding this blatant violation," she said.McCarty's office said in a statement that it started investigating the issue in December and will review documents from Sink's office.
The insurance regulation office said it "will review those documents, along with the evidence the office has gathered during its comprehensive, ongoing investigation concerning People's Trust Insurance Company's compliance with the insurance code...People's Trust is fully cooperating with the Office to ensure compliance with Florida statutes.""Not every inquiry by a policyholder is required to be answered by a licensed agent," Ed Domansky, a spokesman for the insurance regulation office, said previously.
Auto insurers like Geico don't use agents but People's Trust is the only mainstream home insurer in Florida with that approach.The state Department of Financial Services is continuing to investigate and asks consumers who believe they bought coverage from an unlicensed agent to call 1-877-MY-FL-CFO.
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