D.C. Places Risk Retention Group, Cabina-America, Under Restrictions

May 21, 2007

Risk retention group Cabina-America, whch was licensed in April 2006, has been placed under restrictive order by Commissioner Thomas E. Hampton of the District of Columbia Department of Insurance, Securities and Banking (DISB).

An insurance agent of Columbus, Georgia, 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, according to officials.

“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.”

Hampton said 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.

Hampton 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.

Source: D.C. Department of Insurance, Securities and Banking

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