Cruise Critic learned today that the state of Florida has issued to several travel agents in the state of Florida a "notice of intent to issue a cease and desist order" from selling insurance on behalf of unlicensed travel insurers. According to a press release from Florida's Department of Financial Services, the notifications were issued by Chief Financial Officer Alex Sink as a result of "ongoing investigations into complaints about the sale of unauthorized travel insurance in Florida" -- particularly through Colorado-based Prime Travel Protection Services.
Sink issued notices to three agencies: Palm Coast Travel, of Lake Worth, which operates Smartcruiser.com; Vacation Superstore Network, Inc., doing business as Best Price Cruises, of Port St. Lucie; and Legendary Journeys, Inc., of Sarasota. The charge: The agencies violated state law by selling insurance for Prime Travel, which was not licensed to sell insurance in Florida. The travel agencies have 21 days from the receipt of the notice to respond. The release further states that other travel agencies are currently under investigation and may be named for selling Prime's product or that of any other unlicensed insurer.
It's important to point out that these notifications do not require any agency to cease doing any business at this time, despite earlier media reports to the contrary. The state has merely established its intent to issue a cease and desist order, which would stop the agencies in question from selling travel insurance on behalf of unauthorized travel insurers. These allegations do not impact the agencies' ability to sell cruises or other travel products.
One question we have is: Why is this happening now? Prime Travel Protection actually went bankrupt about a month ago, and these three companies are now offering coverage via reputable companies. Best Price Cruises, for example, is currently offering insurance policies through iTravel Insured, Inc., an accredited business with the Better Business Bureau rated as "satisfactory." Legendary Journeys now sells policies through Travelex, a licensed insurance provider. And Smartcruiser.com cites well-known Access America as its current travel insurance provider.
But also unclear is whether the order could stop the agencies from selling other, legitimate travel insurance policies (in the actual notices of intent, copies of which are linked from Elliott.org, the Department of Financial Services alleges that the agencies are not licensed to sell any travel insurance in the state of Florida).
At press time, a spokesperson for the Department of Financial Services had not responded to our additional questions.
So what does this all mean for consumers? At this point, the takeaway here is to read the fine print before purchasing or accepting any travel insurance policy. Reputable providers offer policies that are underwritten by licensed insurers regulated by state insurance departments. You'll want to check your own state's insurance department to verify that a particular company is licensed to do business there.
If you don't want to do your own legwork, the United States Travel Insurance Association's Web site is a good all-around resource. All the companies that are listed as members of the USTIA subscribe to a rigorous code of ethics and are all legitimate, offering policies underwritten by licensed, and therefore highly regulated, insurance companies.
For more information on researching and purchasing insurance, check out At Your Service: Travel Insurance Pros and Cons.
--by Melissa Baldwin Paloti, Managing Editor
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What Does Florida's Insurance Crack-Down Mean for Cruisers?
March 12, 2009