Case raises questions about travel insurance licensing, liability
Mar 13, 2009
South Florida Sun-Sentinel--March 13, 2009
By Diane C. Lade
Florida Chief Financial Officer Alex Sink on Thursday asked three travel agencies, including one based in Lake Worth, to stop selling trip insurance from Prime Travel Protection Services Inc.
Prime Travel, a Colorado company, has been out of business for two months and never was licensed to sell insurance in Florida or Colorado, officials said.
State officials are investigating the sale of unlicensed travel insurance in Florida. But it left unanswered questions that are surfacing in the travel industry and among consumers.
Do travel agents, who must be registered as sellers of travel under the Florida Department of Agriculture and Consumer Services, also need to be licensed by state insurance regulators if they sell travel insurance? And if the insurance provider goes under, who is responsible for unpaid claims: the provider or the travel agency that sold the policy?
Officials at the Florida Department of Financial Services did not respond to these questions Thursday.
Two of the three travel agencies named by Sink – Legendary Journeys Inc. of Sarasota and Palm Coast Travel of Lake Worth – said they stopped selling Prime Travel coverage months ago, after complaints about unpaid claims. The third agency, The Vacation Superstore Network Inc. of Port St. Lucie, doing business as Best Price Cruises, could not be reached to comment.
Lee Smolinski, CEO of Palm Coast and affiliate Smartcruiser.com, said his company dropped Prime Travel in December after Florida officials warned about the Colorado travel insurer. Smolinski spent more than $50,000 on new coverage for customers who hadn’t traveled yet.
Seniors vs. Crime in Delray Beach, a program under the Florida Attorney General’s Office that investigates consumer complaints, has seven cases involving J.B. Travel of Boynton Beach selling Prime Travel coverage. The retirees have unpaid claims of about $1,000 to $30,000 for a man who had a heart attack and needed to be airlifted off a cruise ship.
“I am kicking myself” for getting involved with Prime Travel, said Janice Oliveira, owner of J.B. Travel, which also has an office in Tamarac. Oliveira sold Prime Travel coverage from May through December last year and is cooperating with state insurance investigators.
She said she did not check whether Prime Travel was licensed to sell trip insurance in Florida but did check the company’s bond. She also said she never was told by the state that she needed to be licensed to sell insurance, though some travel insurance companies require it.
The Colorado Division of Insurance also is looking at Prime Travel and its affiliate, Universal Assurance Ltd., both owned by Jerry Watson. Watson intends to repay as many consumers as possible in the next five years, according to a Feb. 23 letter from his lawyer.