Appeal Court Upholds Florida Commissioner's Order Against N.A.P.T.
By Marie Suszynski, associate editor
BestWeek
TALLAHASSEE, Fla. May 10 (BestWire) - The First District Court of Appeal in Florida has upheld an order by Insurance Commissioner Tom Gallagher for a company to stop doing business in the state because it was allegedly selling bogus health insurance.
The company, based in Philadelphia and run by David Weinstein, allegedly sold phony health insurance under the acronym N.A.P.T., said Nina Bottcher, a spokeswoman for the Florida Department of Insurance.
The company used the acronym N.A.P.T. to stand for various unlicensed association names to appeal to people who approached them for business, she said. If someone from a trucking company approached the company, for example, the individual would be told the company's name was The National Association of Professional Truckers.
The company also operated under the names National Association of Professionals & Technicians and National Association of Professional Traders (BestWire, Aug. 14, 2002).
When Gallagher took emergency legal action against the operation in March 2001 for being unlicensed, the company had about $2.5 million in unpaid claims, Bottcher said. N.A.P.T. is now in state receivership.
In his appeal, Weinstein argued that the receivership of N.A.P.T. should terminate Gallagher's order, claiming to be self-insured and exempt from needing a state license under federal Employee Retirement Income Security Act statutes, Bottcher said. But the court upheld Gallagher's order May 3. Weinstein has 30 days to appeal.
The department of insurance suspects that N.A.P.T. may have directed policyholders to a Nevada-based company called Employers Mutual L.L.C. after being shut down. In August, Gallagher ordered Employers Mutual to stop selling unauthorized health insurance policies in the state because he said the company isn't licensed to sell insurance in Florida (BestWire, Aug. 14, 2001).
Gallagher said Employers had been marketing plans to employers, who were being led to believe by insurance agents that they were establishing qualified plans under ERISA. While ERISA plans aren't regulated by states, multiple-employer welfare-arrangement policies don't qualify for exemption from the state regulation under ERISA (BestWire, Aug. 14, 2001).
Since February 2001, Gallagher has taken action against five unlicensed entities which allegedly lured almost 30,000 consumers to buy bogus health plans, the department said in a statement.
In April, Gallagher ordered Texas-based American Benefit Plans, which has operated in Florida under more than a dozen different names, to stop operations. In Louisiana, American Benefit Plans, six other unauthorized insurers and four individuals were alleged to be selling illegally. Regulators said they had identified activity in as many as 47 states, with more than 32,000 consumers affected (BestWire, March 8, 2002).
A month ago, the department released a public service announcement and a video news release to television news markets throughout the state as part of a campaign to alert consumers of the dangers of buying unauthorized health insurance.
