Insurer Hit With 341% Surge of Lawsuits in Florida Federal Courts Involving Insurance Office of America By Michael A. Mora

March 26, 2024 at 09:27 AM

Among the lawsuits is a civil RICO #RICO action over allegations that the insurer and 10 other carriers have operated as a 'cartel.' Insurance Office of America

Insurance Racketeering "RICO" Cartel

U.S. District Court for the Southern District of Florida in Miami. (Credit: Michael A. Mora/ALM)

The Hartford has been battered by a barrage of?lawsuits?in the Sunshine State this month, with at least 10 federal district court actions filed during the week of March 11, 2024. This is roughly four times the typical weekly average.

Among those lawsuits is one filed by Jay Farrow of the Farrow Law Firm #FarrowLawFirm in Coral Gables, in which Hartford and 11 additional major insurers face a civil RICO action over claims that the companies have allegedly operated as a cartel by offering back-end profits and commissions to independent brokers who steer customers into policies with higher premiums. Florida Department of Financial Services Florida Department of Business and Professional Regulation

The Hartford and Insurance Office of America

“The implication of this lawsuit is a more fair, honest and transparent insurance system,” Farrow said. “It’s never been done before where?Florida statute 895.05(6)?is being used to effectuate an injunction to hold an insurer accountable for those types of instruments that profit off both sides. I’m hoping this brings some stability to the insurance craziness.”

Fraud Advisory Panel Anti-Fraud Collaboration Association of Certified Fraud Examiners (ACFE)

Credit: ALM

Among the defendants in that action besides Hartford are Bershire Hathaway Homes Services ., American Casualty Co of Reading Pennsylvania , Zurich North America , and Chubb . Only Zurich and Chubb responded to a request for comment in which they declined in writing to comment on individual claims.

Risk Management Operational Risk Management Enterprise Risk Management

Now, the civil RICO action is pending before U.S. District Judge Rodney Smith, who sits on the Southern District of Florida bench, in which the plaintiff, Louis Spagnuolo, is seeking at least $30 million in damages. #risk #riskmanagement #insurancefraud

In that case, Spagnuolo claimed that undisclosed fraudulent schemes and agreements between insurance carriers and their appointed brokers or agents have become so normalized that “illegal profiteering is just another day at the office.”

The plaintiff claimed in the lawsuit that insurance companies have chosen to abdicate their professional responsibilities in favor of obtaining a windfall of profits, which they bribe their appointed reps to procure.

And the plaintiff alleged that over the last decade, the carriers have had plenty of actual and constructive notice that their appointees were violating the Florida Insurance Code.? The defendants allegedly have been exposed to “numerous red flags to follow up on and more than enough reasons to deny their reappointments, which are required every 24 months,” according to the lawsuit. National Insurance Crime Bureau National Association of Insurance Commissioners (NAIC) Florida Office of the Attorney General U.S. Attorney's Office for the Southern District of Florida

Instead, the defendants allegedly “cared more about profits and premium renewals than complying with their obligations under the FIC to protect individuals like plaintiff, the insured and what hard-working Floridians who have to sacrifice to pay overly inflated insurance rates,” per the lawsuit.

Carriers & Insurance Office of America

In turn, the plaintiff is seeking to have the federal district court restrict current profits realized by the carrier defendants related to expired policies, immediately divest the defendants’ interest in and “dissolve the quid pro quo enterprise association in fact,” and order the immediate suspension of the defendants’ certificate of authority to transact insurance within the State of Florida.

#insurancecompany #insurancebroker #insurancefraud