Investigations of Prime Travel Protection, travel agents coming “to a head”

Authorities in two states appear poised to take enforcement action against Prime Travel Protection and travel agents who sold its policies.

“There’s an ongoing investigation,” says Chris Lines, a legislative liaison for Colorado’s regulatory agencies. “We expect it will come to a head in a matter of weeks.”

The state of Florida, which is looking at travel agencies that sold Prime Travel Protection policies — a product it considers unlicensed insurance — may be even closer to taking action.

Two more state agencies, Florida’s Office of Consumer Regulation and the Division of Insurance Fraud, have now joined its investigation. The involvement of the latter agency increases the likelihood that criminal charges will be filed.

The Federal Trade Commission, the agency created to investigate and eliminate unfair and deceptive trade practices in business, also appears to be in the early stages of its own investigation. Numerous travelers report they have filed complaints with the FTC, and one high-level official at the agency has confirmed today that the agency is reviewing the grievances.

In a related development, last week’s letter to creditors that purporting to come from Prime Travel Protection’s trustees, appears to have misstated certain facts. A review of bankruptcy filings in United States Bankruptcy Court reveals no record of a filing by Jerry Watson, Prime Travel Protection’s principal, or of his company.

The next several days may prove to be interesting, not only for Prime Travel Protection policyholders, but also for agents who sold trip protection policies and Prime Travel Protection’s owners.

Update (3 p.m.): Colorado has followed up with a statement regarding possible actions it could take regarding Prime Travel Protection.

Prime Travel Protection and Universal Assurance Group, Ltd. were not licensed to conduct the business of insurance in Colorado, thus the Colorado Division of Insurance is only authorized by law to issue a cease and desist order.

  • James

    Isn’t it funny how these agencies are quick to post on this blog to counter every allegation made by posters except the fact that they may have engaged in selling illegal trip protection plans previously? My guess is there is a criminal investigation as Chris has posted, this will be the focus.

  • Al

    Welcome to the Division of Insurance Fraud

    Serving and safeguarding the public and businesses operating in the State of Florida against acts of insurance fraud
    About the Division

    Established by the legislature in 1976, The Division of Insurance Fraud is the law enforcement arm of the Department of Financial Services and is responsible for investigating insurance fraud; crimes associated with claim fraud, insurance premium fraud, workers’ compensation claim fraud, workers’ compensation premium avoidance and diversions, insurer insolvency fraud, unauthorized insurance entity fraud and insurance agent crimes. The law enforcement detectives of the Division of Insurance Fraud also investigate viatical application fraud, defalcations of escrow funds held in trust by title insurance firms, and non-Medicaid related health care fraud.

    According to the Coalition Against Insurance Fraud (CAIF), Florida’s Division of Insurance Fraud leads the nation in the recovery of insurance fraud related losses through court ordered restitution. In Fiscal Year 2007/2008, cases presented for prosecution by The Division of Insurance Fraud resulted in $94 million in court ordered restitution which is 5.5 times greater than the operating budget allocated for the Division. Additionally, according to the Coalition, Florida ranks in the top four (4) among all states’ fraud divisions and bureaus in key measurements of success:

    * 2nd in the number of arrests
    * 3rd in the number of cases presented for prosecution
    * 4th in the number of referrals

    Under the leadership of Colonel Vicki Cutcliffe, Florida’s Division of Insurance Fraud continues to be a perennial leader in the fight against insurance fraud. During Fiscal Year 2007/2008, investigative efforts by The Division of Insurance Fraud resulted in 873 cases presented for prosecution, 816 arrests, and 663 convictions. Also during Fiscal Year 2007/2008, The Division of Insurance Fraud received and reviewed 9,916 insurance fraud referrals and opened 1,742 cases for investigation.

    Insurance fraud is not a victimless crime! It is estimated that insurance fraud costs the US $80 billion dollars or more a year. Those costs get passed down to you, the consumer. The CAIF estimates that cost to be approximately $950 per family. Reporting insurance fraud is easy and just a click away.

  • Joe Farrell

    Guess those arrests will take Elliott.org off the target list of the PTS owners and operators . . . can’t destroy someone’s reputation when there are criminal charges pending against you . . .

  • charles plumer

    If there was a Bankruptcy filing Watson and his wife would have to give back all money they have taken out in the last year. In addition all claims paid in the last 90 days would have to be given back to the Court to divide among all claim holders.

  • Pat Burk

    Charles; I’m not really up to date on how bankruptcy works, but I’ve always thought that any incorporated business, whether it be a Subchapter S or otherwise, was only bound by the assets of the corporation, and that all creditors had to get in line to divide up the assets. You seem to be implying something different. Would you enlighten me?
    Of course, if Watson DIDN’T declare bankruptcy, an additional can of worms has been opened. I find it stunning that, as of today, http://www.primetravelprotection.com is still operational, and you can probably still communicate with Jerry using the email provided. One can only hope that he took, or is taking, some action that would be regarded as a felony.

  • http://insurealltrips.com scott weinbrand

    It’s a shame that after VTP and others, that the same thing with the same people can be run in the same state.

    I work in the travel insurance arena, and advised agents that asked, that like with VTP before, that these products do not appear to be insurance, along with the old adage that anything that looks to good to be true…

    I am glad that Florida is again acting swiftly to resolve, and I hope other states react in a manner equally swift.

  • james

    To: Scott Weinbrand

    Your statement that Florida “is again acting swiftly…” might be a little overly optimistic. It took Florida insurance regulators a few years to crack down on Trip Assured and it appears despite a more visible group of victimized consumers, the confirmation that it’s the same group of travel agents selling the illegal products, the state seems to be in a holding pattern.

    You are to be commended for warning your clients about PTP and its predecessor companies. Too bad the travel agents who sold these bogus policies before abd saw their clients scammed, didn’t offer any warnings. Instead they continued to sell these worthless policies in order to claim their fat commissions, large overrides and bonuses.

  • Gilbert Alberding

    Mr. Elliott, With all these scams and questionable selling of travel insurance policies by out of state outfits going on, the traveler has little comfort in the loss
    of his/her monies in being told caveat emptor. Does a travel insurance company
    which is not licensed in a state be o.k. to sign up with on the fact that it is underwritten by an”A” rated insurance company that is also out of state?
    Thanks for your fine job in dealing with these problems on the web. Gilbert

  • Buckster

    Where is the liability of the travel agents in all of this? If someone walks into my company and wants me to sell their product you’re darn sure I’m going to check them out. Did nobody even look into this??

    This is exactly why I never use a travel agent anymore. Too many times they are eager to take your money but when there’s a problem they say “oh we’re just a sales agent”.

  • Marilyn Dunikoski

    I had wrote to you before, but you maybe didn’t get it. We were scheduled to cruise 10/28/08. I had to have en eye operation so had to cancel. We paid for insurance with Universal Assuarance Insurance and filed the necessary papers to them through the travel agency. Had only received a letter from Prime Time. The travel agency had not called me at all. I have been going to the office, but there is no solving this even though they have the trip money and we paid the insurance fee to them.

  • Arthur

    Recent posts contact: king2j@aol.com a volunteer activist group.