State May Pull Insurer Permits

Insurance Commissioner John Garamendi on Thursday moved to revoke the licenses of three brokerages that allegedly acted as funnels for millions of dollars’ worth of questionable insurance sold to Californians by financially shaky offshore carriers.

The brokerages are accused of allowing brokers’ signatures to literally be rubber-stamped onto policies that otherwise couldn’t be sold in California.

Accused are Toma Surplus Lines Insurance Brokers Inc. of Marina del Rey and its principals, John D. Nordstrom, Robert Thul and Thomas W. Whitaker Jr.; Response Insurance Brokers of Los Angeles and its broker, Chester P. Zalewski, and Great Republic Insurance Agency of San Diego. Garamendi said the brokerages essentially acted as fronts for a suburban Seattle insurance agency that was marketing the offshore carriers’ policies.

The offshore insurers cited in the allegations are also the subject of hundreds of complaints that consumers filed with the Insurance Department for non-payment of claims.

At least three of the carriers--United States & Continental Reinsurance Co., American Trust Insurance Co. Ltd. and Trelawney Insurance Co. Ltd. of Ireland--were earlier identified in a federal indictment that accused them of being part of an international web of fraudulent insurers run by Atlanta insurance promoter Alan Teale, who is under indictment for bilking consumers out of more than $50 million.