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Gallagher Shuts down Unlicensed Company Selling Medical Malpractice Insurance


Immediate Final Order

TALLAHASSEE - Florida Treasurer and Insurance Commissioner Tom Gallagher today ordered an unlicensed company selling medical malpractice insurance to health care practitioners throughout the state to immediately halt sales and turn over its records.

"Unlicensed entities prey on medical professionals who may be having difficulty obtaining medical malpractice insurance," Gallagher said. "They target physicians because medical malpractice scams can cost a doctor tens of thousands of dollars before they are discovered."

The company, Embassy Bonding & Surety, Ltd., claims it is associated with an unidentified New Zealand-based insurance operation. The department, however, has determined that there is no connection between Embassy and any legitimate insurer.

According to Gallagher, Embassy representatives have told Florida doctors that the company is "internationally authorized" to transact insurance business and therefore does not need a Florida license. However, Gallagher said, there is no such thing as international licensure, and this sales pitch should alert medical professionals to the need to verify before buying.

Earlier this month, the department issued a warning to physicians and other health care providers about unlicensed companies targeting them for sales of medical malpractice insurance.

Since the companies are unlicensed, there is nothing to prevent them from refusing to defend or pay a claim, or from simply getting out of business if they can't keep up with claims, Gallagher added.

Embassy's primary Florida promoter, Michael Edward Rock, of Illinois, claims that the coverage can be sold in the surplus lines market through a Florida-licensed surplus lines agent. Rock is not licensed as a surplus lines agent. Nor is Embassy a registered surplus lines company. Consumers should know that the policies sold in the surplus lines market, and the rates charged, are unregulated. Moreover, surplus policyholders do not have the protection of a guaranty fund to pay claims if the insurer becomes insolvent.

Department regulators advise medical providers seeking coverage to identify the entity that would be financially responsible for paying their claims, then check with the department to be certain the company is licensed to conduct insurance business in Florida. Gallagher said it is not enough that the agent who is offering the insurance is licensed. For more information, contact the Department of Insurance at 1-800-342-2762.