Florida issued a warning to the state's travel agencies that they must be licensed to sell travel insurance in Florida and they must sell only the products of insurers that have authority to sell in the state -- or the consequences could be severe.
In the document, issued Dec. 24, the Department of Financial Services said it prepared the alert because a "significant" number of agencies have recently been identified as selling travel insurance without proper licenses or selling on behalf of companies that are not authorized to sell in Florida.
In the past year, the department has obtained cease-and-desist agreements from three travel agencies, warned four additional agencies that it intended to seek similar orders against them and filed complaints against two individual travel agents, all in connection with alleged improper sales of travel insurance.
The department said that selling on behalf of an unauthorized insurance firm is a third-degree felony. Under Florida law, if an unauthorized insurance company fails to pay claims, the seller of the policies can be held liable for those unpaid claims, it said.
In the three cease-and-desist orders last year, the agencies agreed in consent orders to pay administrative penalties, to make good to those clients who had valid unpaid claims and to refund premiums to those still holding policies or move them to an authorized insurer.
The agencies were High Performance Travel in South Daytona ($1,000 fine), Cruise Options in Plantation ($2,500 fine) and Cruise Supermarket, also in Plantation ($2,500 fine).
High Performance was selling for Prime Travel Protection and Traveler Protection Services, and the others sold for Prime Travel. Neither insurance firm was authorized to sell in Florida, and both are now out of business.
Florida also served notices of intent to issue cease-and-desist orders against four agencies that it says were selling travel insurance without required licensing and also were selling for insurers not authorized to sell in Florida.
The agencies are Legendary Journeys, Sarasota; Palm Coast Travel, aka SmartCruiser.com, Lake Worth and Boca Raton; Super Travel, West Palm Beach; and Vacation Superstore, dba Best Price Cruises, St. Lucie.
The state said the four also were selling products of the unlicensed Traveler Protection Services or Prime Travel Protection.
In March, in response to the first of the orders, Al Ferguson, vice president of Legendary Journeys, said his agency had stopped selling Prime Travel Protection in September 2008. He also said the state was incorrect in stating that his agency was not licensed to sell travel insurance. He said the state requires that one person in each agency hold a "point-of-contact" license for selling travel insurance, and the president of Legendary Journeys is that person.
The department also filed administrative complaints against Natalie Block, described as the sole director and officer of the Cruise Agency in Lake Worth and Coral Springs, Fla., and Cynthia Drubin Burdige, an employee of Bruce Travel in Plantation.
Block is accused of selling for Prime Travel Protection and/or a second unauthorized company, Universal Assurance Group. Burdige is accused of selling for Prime Travel Protection and/or the unauthorized Ciela Capital Insurance Co.