PMI: Insurer censured after it is found to have been trading in US state where it has never held a licence
International Medical Group, the US-based parent company of international medical insurer IMG Europe, has had its application for a licence denied by the Florida Department of Financial Services (FDFS).
The announcement follows an investigation last year to determine whether the firm had been transacting business without a licence in the state.
In its notice of denial, the FDFS said a number of "factual allegations" led to its decision to decline IMG's application. In the document, the FDFS said that IMG is not and has never been licensed or authorised by the State of Florida to transact insurance.
It also stated that although IMG agreed to cease and desist soliciting, marketing and issuing certificates of insurance for its Global Medical Insurance in Florida in May 2005, it has failed to adhere to its consent order.
Outlining a series of abuses, the notice said IMG had agreed not to "solicit, market or administer any insurance in Florida without complying with the Florida Insurance Code as well as the provisions set out in the consent order.
"IMG has violated the terms of the Consent Order issued on August 30, 2005 and has violated the agreement made with the Office of Insurance Regulation in May 2005 to cease and desist transacting insurance in Florida.
"IMG has continued to solicit, market or administer insurance in Florida."
IMG was given 21 days to appeal against the decision.
While the Florida regulator refused to confirm whether the insurer has contested the notice, Brian Barwick, executive vice president at IMG, denied improper practice, claiming the firm's application was withdrawn before the denial was issued.
"We are contesting the notice of denial entirely. IMG believes the notice of denial was improper and disputes the allegations.
"We have presented the entire case before an independent judge and look forward to a full presentation of the facts and expect a favourable result," he said.
Concerns are now rife about what impact the situation in Florida will have on the firm's UK-based arm, IMG Europe. Both BIBA and the Financial Services Authority (FSA) are monitoring the situation but are not able to comment on the proceedings while the case is active.
However, Steve White, head of compliance and training at BIBA, said: "We actively encourage our members to 'whistleblow' when they come across serious regulatory issues and we regularly pass this information on to the FSA. In turn, their ability to communicate the status of their enquiries is severely restricted until, and if, they publish details of enforcement proceedings. BIBA will continue to monitor the situation."
Intermediaries are equally concerned, said Paul Walker, managing director of Essential Health.
"It is no great surprise to hear of the denial of the licence for IMG. We initially suspended our account with IMG when first informed and then decided to cancel the agency.
"This situation also re-evaluates the position of the broker. No longer are we simply considering benefits and price, but also the ethics and security behind an insurer," he said.
