Capsized N.Y. Tour Boat’s Insurance Broker Focus of 3-State Probe

February 26, 2006

Regulators in three states are investigating whether companies in London and Miami sold a fraudulent insurance policy to the owner of a tour boat that capsized on a New York lake and killed 20 elderly tourists, a Detroit newspaper reported.

The 40-foot Ethan Allen capsized Oct. 2 on Lake George with 48 people on board. Nineteen of the 20 victims were from Michigan.

The investigations in Texas, New York and Florida are trying to determine if the owner of the Ethan Allen was duped, the Detroit Free Press reported.

Jim Quirk, whose company owns the Ethan Allen, said he believed the boat’s $2 million insurance policy covered marine accidents. But the insurance broker, Global Property Owners Association, said the Ethan Allen was insured only for accidents on land, leaving the families of the victims stuck with funeral and medical bills.

Texas regulators say associates of the companies that sold Quirk the policy are suspected of peddling millions of dollars in nonexistent insurance, the newspaper said.

Quirk said his company, Shoreline Cruises, bought the policy for the Ethan Allen and four other tour boats in 2004 through Charles H. Wegman of Houston.

Wegman was working with the Global Property Owners Association, which at that time listed its address as a suite in Miami where virtual office services such as answering phones and collecting mail are provided for a fee. Global Property said the policy would be written with United ReInsurance Group Ltd., whose address was another virtual office provider in London.

There was no answer Saturday at a telephone listing for Wegman in Houston. A message seeking comment was left Saturday at a listing for Global Property in Plantation, Fla.

Shoreline Cruises lawyer Michael Allweiss said the Florida Department of Financial Services also has contacted him about the case. Shoreline sent $14,140 to Global Property’s offices for the 2005 policy for the five boats.

New York authorities are investigating because the insurance companies are not licensed by the state.

Neither New York state nor federal requires require tour vessels to carry liability insurance, said Michael Barry, a spokesman for the New York State Insurance Department.

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