DISB Places Cabina America Under Restrictive Order

Cabina America Insurance, a risk retention group licensed by DISB in April 2006, has been recently placed under restrictive order, arising out of an insurance agent being charged with fraud.

The 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, of which the agent is a partial owner. Cabina-America was not responding to policyholder claims prior to DISB’s intervention. The 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.

DISB Commissioner Thomas E. Hampton highlighted this case to emphasize the importance of effective financial regulation in preventing and fighting fraud.

“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.”  He 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.

Hampton appointed Robert H. Myers Jr. as a special deputy commissioner in matters related to Cabina-America’s rehabilitation and possible liquidation. Myers is a partner in the law firm of Morris, Manning and Martin LLP and he practices in the areas of insurance regulation, antitrust and trade association law.

DISB Implements District’s New Captive Insurance Laws

DISB’s Risk Finance Bureau staff met on May 15 with captive insurance industry representatives to discuss issues related to implementing the protected cell legislation recently enacted into law by the Council of the District of Columbia. Topics discussed during the meeting included captive formation, licensing, capitalization, operations, financial reporting taxation and examinations.