On February 17, the Florida Office of Insurance Regulation (OIR), led by Florida Insurance Commissioner Mike Yaworsky, announced a cease and desist levelled at American Dream Auto Protect, for allegedly entering into motor vehicle service agreements with Florida residents without the required license or approval from the Office.
To “protect the public and reduce consumer disruption,” the Florida OIR said in a press release that American Dream must continue administering in-force auto warranties in compliance with Florida law, allow consumers to cancel coverage and obtain refunds, and pay claims in accordance with Florida law. The Florida OIR is also demanding consumer notification through delivery of the Offices cease and desist consent order, and publication of the consent order on the company’s website.
American Dreams had nearly 900 in-force contracts and more than $2.2 million in unearned written premiums, with roughly 600 in-force contracts reportedly remaining, and 80% of residual contracts set to expire within the next 18 months. The Florida OIR said it issued and served a complaint directing the company to cease and desist from engaging in unauthorized and unlicensed motor vehicle service warranty agreement business in Florida.
For insurance professionals operating in Florida including insurers, brokers, MGAs, underwriters, and compliance teams, the Florida OIR release describes an unlicensed or unauthorized insurance entity as any person or business engaging in the business of insurance without first obtaining necessary licensure or authorization from the Florida OIR, including selling, soliciting, negotiating, or advertising insurance products or insurance-related coverages – including service contracts and extended warranties – and notes that the Florida OIR actively investigates reports of unlicensed activity and is issuing a new consumer website highlighting unlicensed activity gathered by the Florida OIR.
