The Washington State Insurance Commissioner’s office ordered one of
the industry’s largest suppliers of travel insurance to stop
selling policies in that state.
Insurance Commissioner Mike Kreidler on Aug. 8 issued
cease-and-desist orders against Wisconsin-based Travel Guard Group
and its underwriter, Pennsylvania-based Insurance Company of North
America, citing the companies’ failure to obtain approval on
policies and rates from the Insurance Commissioner’s office before
selling to Washington residents, as state law requires.
The order against Travel Guard also alleges that the insurance
carrier uses advertising that is false or misleading with regard to
the extent of its coverage, particularly relating to terrorism.
In a press release announcing the cease-and-desist orders,
Kreidler pointed to Travel Guard’s promotional materials in
relation to its post-Sept. 11 coverage as being of particular
concern.
“Some of Travel Guard’s past promotional materials implied that
this insurance includes terrorism coverage when, in truth, it seems
that much of it does not,” Kreidler said.
The action against Travel Guard comes after a three-month
investigation into a complaint by a Washington woman that she did
not receive a premium refund from Travel Guard. The woman initially
contacted the Consumer Protection Division of the Insurance
Commissioner’s office.
The orders require Travel Guard and Insurance Company of North
America to stop representing themselves as insurance companies to
Washington residents. They also prohibit them from soliciting
Washington residents to purchase unapproved coverage.
A spokesperson from Kreidler’s office said Travel Guard has sold
a variety of unapproved travel insurance products since 1997 and
some 120,000 travel insurance policies to Washington residents in
2001 alone.
In a statement, Travel Guard spokesman Dan McGinnity confirmed
that his company and INA have a contract to file their products in
each state and “are working together right now to resolve this
filing issue.”
McGinnity’s statement did not address the insurance
commissioner’s allegation that Travel Guard’s promotions included
false and misleading wording.
But Sandi Peck, a spokeswoman with Washington’s insurance
office, said a Travel Guard promotional video called “Stand Tall”
focuses on losses from Sept. 11, even though some Travel Guard
policies offered through wholesalers do not cover losses from acts
of terrorism. The company screened the video for state officials
after the investigation began in June.
Peck said her office notified the ASTA regional chapter of the
order against Travel Guard and is mailing out notices to all agents
licensed to sell Travel Guard coverage in Washington.
Meanwhile, Travel Guard remains contractually responsible for
current policies. However, Washington agents who sell Travel Guard
have no choice but to use other insurance vendors for future
sales.
“At this point, we are advising our Washington agencies to pull
the Travel Guard materials out of their public areas and put a hold
on Travel Guard sales,” said Mike Estill, general manager of the
Western Association of Travel Agencies, a co-op with approximately
45 members in Washington.
Travel Guard is one of WESTA’s two preferred insurance vendors.
Estill said WESTA is now helping members expedite the sign-up
process to sell Travel Insured, WESTA’s other preferred insurance
provider, if they’re not already set up to do so.
Agents or clients with questions about their coverage can
contact the Washington State Insurance Commissioner’s office at
800-562-6900 or visit www.insurance.wa.gov.
