Utah Workers’ Comp Company Ordered to Pay Fine Totaling $390,000

June 18, 2004

North Carolina Insurance Commissioner Jim Long announced that a cease and desist order – levying two fines worth $390,000 – was issued against American Benefits and Insurance Services Inc. of Salt Lake City. According to the order, American Benefits allegedly provided workers’ compensation coverage for at least 39 North Carolina employers without being properly licensed by the Department of Insurance (DOI). American Benefits and its president, Talmage Pond, were both fined $195,000 each and ordered to cease doing any insurance business in the state without first complying with North Carolina’s licensure laws.

At a hearing held by the DOI on May 26, evidence revealed that American Benefits began offering workers’ comp coverage in 2002. Some claims generated through this coverage were paid, but two of the 39 employers have reported approximately $70,000 in unpaid claims. More unpaid claims are expected, according to the DOI.

“North Carolina is considered to have one of the most rigorous company-licensing procedures in the country,” said Commissioner Long. “That’s for good reason – we want to make sure that any company doing business in our state has the financial wherewithal to stand behind its business. We require companies to have a hefty deposit and we monitor a company’s financial status to make sure it is stable.

“American Benefits simply did not have the funds to cover claims, and this left many North Carolinians out in the cold. This would never have happened if the company had been properly licensed. At least we caught on to Mr. Pond’s misdeeds and were able to stop him from cheating any more innocent consumers.”

Today’s cease and desist order is the eleventh since September 2002.

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