Update on Alleged Life Agents E&O Fraud

January 27, 2004

Insurance Journal has discovered that there is an ongoing investigation into Torrance, Calif.-based Manning Riddell Insurance Services Inc. (License #0827722) in connection with the issuance of more than 1,000 phony Errors & Omissions policies for life insurance agents in some 30 states. IJ first learned of this matter when a tip came through from jilted life insurance agent Tom Herz in the San Francisco area, and soon thereafter uncovered another agent who has been affected, William Botsch of New Ideas Insurance Agency in Catonsville, Maryland.

The allegations were confirmed in a letter addressed to Botsch from the San Francisco office of law firm LeBoeuf, Lamb, Green & MacRae LLP.

According to the letter, Manning Riddell issued several hundred certificates allegedly through Dakota Specialty Insurance Company, now Aspen Specialty Insurance Company, a subsidiary of Aspen Insurance Holdings Limited. Dakota reportedly never authorized issuance, and did not collect any premium monies from Manning Riddell.

“Manning Riddell apparently sold a number of insurance policies to life insurance agents—on those policies, they placed the name Dakota Specialty Insurance without their knowledge,” Dean Hansell, partner with LeBoeuf, Lamb, Green & MacRae, said. “The CDI is involved and we are in communication with them regarding the investigation.”

Botsch said he had been purchasing E&O insurance from Manning Riddell since 2001. He received a copy of his renewal certificate for the 2003-2004 year, but when he tried contacting Manning Riddell, there was no response. The policy was written under Choice E&O RPG.

Herz also received a letter from Los Angeles firm Cotkin, Collins & Ginsburg, stating, “We have been asked by Manning Riddell Insurance Services Inc. to contact you regarding the Insurance Agency Liability Trust Risk Purchasing Group Program.

“It would appear your insurance agent’s professional liability errors and omissions insurance was not in effect on the date in question. Because the coverage did not go into effect, upon your request, the premium will be fully refunded if you have not already received a refund or applied your premium to new coverage.”

To date, Herz has not received any refunded monies from Manning Riddell or Cotkin, Collins & Ginsburg.

A call to Joan Cotkin of Cotkin, Collins & Ginsburg revealed that the firm is no longer representing Manning Riddell. Manning Riddell has reportedly retained the legal services of Peter Morris of Los Angeles-based Altman & Morris. Morris offered no comment.

IJ contacted several listed telephone numbers for Manning Riddell, including (800) 437-4433, (310) 379-3550 (both disconnected) and (310) 465-1426, (310) 465-1412 (both no answer). Manning Riddell’s address is listed at 23639 Hawthorne Blvd. #300, Torrance, Calif. 90505.

Over the weekend, IJ received several phone calls from concerned agents who were insured by Manning Riddell or know of the company. One such agent is Mark Kontz from the Sioux Falls, South Dakota area. Kontz said he held his E&O policy with Manning Riddell for approximately seven years without problem. In June of 2003, Kontz was sued, but when he went to enforce his E&O policy, he found out that his coverage with Manning Riddell was non-existent.

Kontz said he contacted Chubb directly because the company was listed on the certificate as Manning Riddell’s E&O carrier. At that time, Chubb informed Kontz that they dropped their E&O with Manning over a year ago. Chubb has not yet confirmed their role as Manning Riddell’s E&O carrier, nor have they commented on the investigation.

So far, IJ has received calls and e-mails from agents affected in the following states: California, Texas, Maryland, South Dakota and New York. IJ received copies of a number of the insureds’ certificates from agents who said they had purchased E&O coverage through Manning Riddell. Several certificates state that the policy was written under Choice E&O RPG, several others state Insurance Agency Liability Trust RPG. The carriers range from Illinois Union Insurance Company, Illinois Union Insurance Group, and Dakota Specialty.

Christine Joann Riddell is also licensed under the name Choice E&O Insurance Services (License #0485661) with a business address listed at 408 N. Prospect Ave., Redondo Beach, Calif. 90277.

The California Department of Insurance (CDI) is currently investigating the case. The CDI has not yet commented on the investigation.

Insurance Journal is still investigating the allegations and will bring you the latest as it is uncovered.

If you were insured by Manning Riddell, or you have any information regarding this investigation, please contact Cynthia Beisiegel at (800) 897-9965 ext. 111 or e-mail cbeisiegel@insurancejournal.com.

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