People’s Trust ordered to stop writing policies
Mar 18, 2009
South Florida Business Journal--March 18, 2009
Boca Raton-based People’s Trust Insurance has agreed to stop writing property insurance policies in the state until it complies with a consent order it signed with the Florida Office of Insurance Regulation.
A state investigation found 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, according to the state.
Click here to read the order.
In agreeing to the terms of the order, People’s Trust waived a hearing and its right to challenge the findings.
The insurance company must comply with the order within 30 days, pay a $150,000 fine and $5,000 in state costs. It also must deposit $500,000 with the Bureau of Collateral Management and provide state regulators with proof that it is in compliance with the order, which requires it to use licensed agents and customer service representatives when soliciting and doing business.
The company, founded by Michael Gold, started issuing policies last spring. People’s Trust had 2,639 policyholders in Palm Beach County, 1,655 in Broward, and 478 in Miami-Dade as of Dec. 31, according to the Florida Office of Insurance Regulation.
Statewide it has written more than 35,000 policies to date, according to a company spokesman.
In a statement, People’s Trust said it has implemented “several important changes” and is committed to satisfying all the remaining requirements as soon as possible.
The company said existing policyholders are not impacted, and their insurance coverage remains in full effect.
“While we fine-tune operations to meet state standards, People’s Trust has agreed not to take on additional policyholders,” Gold said in the statement. “Achieving full compliance will ultimately make us a stronger organization, and we look forward to again providing Floridians cost-effective insurance coverage.”