Commissioner Thomas E. Hampton of the District of Columbia Department of Insurance, Securities and Banking (DISB), today announced that Cabina-America, a risk retention group licensed by DISB in April 2006, has been placed under restrictive order. He highlighted this case to emphasize the importance of effective financial regulation in preventing and fighting fraud.
An insurance agent of Columbus, GA, has been charged with insurance fraud for allegedly pocketing more than $200,000 premiums paid for property and taxicab liability coverage instead of forwarding the payments to Cabina-America Insurance, of which the agent is a partial owner. Cabina-America Insurance was not responding to policyholder claims prior to DISB’s intervention.
“DISB will make sure all claims are paid to the policyholders,” said Commissioner Hampton. “This is a typical agent fraud case and unfortunately one of our licensed companies was involved, but it was because of the District’s responsible regulation, the safeguards in place, and the oversight by the captive manager, that we were able to intervene quickly and mitigate the impact on the policyholders.”
The insurance agent was president of both Cabina-America and the insurance company that served as a managing agency responsible for billing and collecting premium and capital contributions from Cabina-America’s insureds. The investigation into the agent’s business practices was conducted over the last six months in collaboration with the Georgia Department of Insurance. Commissioner Hampton added that because of the effective partnership with the state of Georgia, DISB was able to catch the fraud and prevent it from going further.
The Commissioner appointed Robert H. Myers Jr., a law partner in the firm of Morris, Manning & Martin LLP as a special deputy commissioner in matters related to Cabina-America’s rehabilitation and possible liquidation. “We’re working hard so that claims against all bona fide policies are paid in a timely fashion,” Myers said.
To learn more about DISB’s anti-fraud work and financial regulation, please visit disb.dc.gov or call (202) 727-8000.