4 Unlicensed Insurers Barred by Garamendi
Insurance Commissioner John Garamendi has barred four unlicensed insurers from doing business in California, citing them for either misrepresenting their assets or otherwise lacking the financial strength to make good on claims.
“These companies were selling insurance in this state with no apparent intention of meeting obligations to their policyholders,” Garamendi said Wednesday.
His action comes on the heels of his report last week that unlicensed carriers boosted their share of California’s auto insurance business to $128.7 million in 1991 from $3.9 million in 1988. At the same time, consumer complaints soared from 22 to 2,303.
The firms cited Wednesday are:
* Trelawney Insurances Ltd. of Dublin, Ireland. Garamendi said the firm’s “claimed assets appeared to be non-income producing and . . . merely rented.” Between January and September, Trelawney wrote $8.9 million in auto and health insurance premiums in California.
* Freedom Insurance Co. Ltd. of Dallas, which said it held an $8-million certificate of deposit in a Denver bank. Freedom failed to prove that the CD existed, however, and its other assets “were of questionable value or could not be proven to exist,” Garamendi said. Its premiums have totaled $2.4 million this year, mostly in auto insurance.
* Avalon Insurance Co. Ltd. of Bermuda, which wrote $623,000 in California premiums this year. The firm’s assets consisted of “risky investments with deteriorating value,” Garamendi said.
* Provident Capital Indemnity Co. of Dominica, West Indies, which had premiums of $130,000. Provident claimed $75 million in a CD with a nonexistent Hong Kong bank, Garamendi said.
