People’s Trust Insurance to Stop Writing New Policies
– 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.
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.
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.
People’s Trust 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.
The Office’s investigation of People’s Trust began in December, and an onsite examination was conducted from Feb. 1 through Feb. 20.