Tenn. Latest State to Order Travel Firm to Halt Insurance Sales

September 10, 2006

Tennessee regulators ordered a Crossville-based travel firm already cited by three other states to stop selling trip interruption or cancellation benefits without an insurance license.

Tennessee’s cease-and-desist order Sept. 7 against Trip Assured Inc. followed similar actions by Michigan, North Carolina and Texas based on consumer complaints.

“Because Trip Assured operates as an unauthorized insurance company, those that purchase insurance from or through it face serious risks,” Tennessee Commerce and Insurance Commissioner Paula Flowers wrote.

People from across the country say Trip Assured sold them insurance against the possibility of having to cancel or interrupt trips because of emergencies. Then, when they had to change their travel plans, the company refused to pay their claims.

Trip Assured’s owner, Edward McKinley “Mack” Johnson, has said his products are not insurance and that many consumers’ claims were fraudulent or without merit.

More than 75 complaints have been filed against the company with the Knoxville Better Business Bureau, which continues to give Trip Assured a “satisfactory” rating, according to The Knoxville News Sentinel.

At least 40 consumers have complained to the Tennessee Division of Consumer Affairs since 2002, and at least 20 of the complaints have not been satisfactorily resolved, The Tennessean reported.

North Carolina, Texas and Michigan all ordered Trip Assured to stop selling insurance without a license in the past year. Michigan issued its order just last week, threatening fines of $25,000 each for “further knowing violations.”

Some Tennessee consumers complained that Tennessee moved slowly because Consumer Affairs is run by Mary Clement. Her husband, former U.S. Rep. Bob Clement, is a longtime friend of Johnson, who has contributed to Clement’s current campaign for mayor of Nashville.

Mary Clement has said she recused herself from any official dealings with the company about 18 months ago.

Trip Assured said in a statement that its Nashville-based attorneys “expect to file litigation at once in Chancery Court requesting a restraining order permitting Trip Assured Inc. to continue to perform membership services.”

“Trip Assured Inc. has always cooperated fully with all regulatory authorities and does not want to be singled out because of political influence,” the company said.

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