What??! An insurer selling product in violation of the law? How can that happen? While illegal dealings in insurance are not exactly a new thing, a couple of unusual situations have occurred recently that you might find interesting! Here is Part One of two.
The Oregon Insurance Division has recently issued press releases detailing the activities of several insurers that have been cited for illegal sales in Oregon. Normally, we here at the PIB don’t pay much attention to enforcement actions taken against insurers in this blog unless the action deals with strange or unusual circumstances. I think these may fit the bill!
The first instance deals with a Connecticut company called Golf Marketing Worldwide, LLC. This company, on its website, offers “hole-in-one” insurance for golf tournaments and related events. The Insurance Division found out that Golf Marketing issued such a policy to Promax, Inc., for the Quarterback Shootout held June 4, 2004. The Quarterback Shootout was an annual golf event held at Heron Lakes Golf Course in Portland, Oregon that featured professional athletes (current and past) in a tournament format. The event was hosted by Neil Lomax, an ex-NFL all-pro quarterback with the Cardinals and Mr. Lomax’ company, Promax.
So, Promax buys $50,000 of coverage for the tournament in case someone actually hits a hole-in-one. Under the policy, Golf Marketing agreed to reimburse Promax the $50,000 in prize money if a hole-in-one were made. Well…what do you know! A player nailed the ace on the eighth hole! What else do you know? How about this…Golf Marketing didn’t pay the claim!
Promax then demanded payment of the prize amount from the agency that sold the policy, and the agency (plus its errors and omissions insurance) settled the claim. Further investigation by Oregon found that Golf Marketing doesn’t hold a certificate of authority in the state! Something tells me that the state of Connecticut may have something to do with Golf Marketing in the near future as well!
Do you have any favorite stories of illegal dealings? Feel free to share them with me by commenting! Look at the next story for another example of “don’t sell without a license, and make sure what you are selling is actually legal!”