Hartford Imposter Closed In Pa.

By Mark E. Ruquet

NU Online News Service, Dec. 29, 10:30 a.m.EST?Pennsylvania regulators have shut down on onlineagency that was selling bogus errors and omissions coverage underthe Hartford name, and has a history of doing the same in otherstates.[@@]

Insurance Commissioner Diane Koken said the state's insurancedepartment has closed the operations of Nations Hazard InsuranceAgency, doing business as Nations Hazard Insurance Company. Thedepartment said that the company sold E&O coverage for homeinspectors, using the Internet as its primary means ofcommunication and solicitation of business.

The department also said that the company's principal, MichaelFrancis Napadow, also operated his fraudulent company under thename "Hartford Casualty Insurance." The department emphasized thatNations Hazard is not affiliated with the Hartford, Conn.-basedcarrier.

Mr. Napadow was ordered to cease and desist his operations andpay a penalty of $230,000. He is also required to make restitutionin full to any Pennsylvania residents from whom the companysolicited and accepted premium payments. Melissa Fox, arepresentative for the department, said that Nations Hazard soldpolicies to four individuals in the state involving less than$5,000 in premium. The matter has been turned over to the state'sattorney general office.

"Mr. Napadow has caused irreparable harm to Pennsylvaniaconsumers by selling fake insurance policies, which may not providesufficient, if any coverage," said Ms. Koken in a statement,reminding consumers to check with the department to ensure thecarrier they are dealing with is properly licensed.

Mr. Napadow's scheme was first uncovered by Washington stateregulators last year. He was ordered to stop solicitations there.Subsequently, in Illinois, where he was based, regulators revokedMr. Napadow's license after the scheme was uncovered.

According to the Illinois Department of Insurance order, datedFeb. 20 of this year, Mr. Napadow was also trading fictitiouspolicies under Lloyd's of London and Liberty Mutual InsuranceCompany brands, which the department discovered he had noassociation with.

Ms. Fox said that in addition to Pennsylvania, Washington andIllinois, insurance departments in Oregon and Arkansas have alsotaken action against him. His Web site, where he solicited thepolicies, is now closed.

Sue Honeyman, a representative for The Hartford, said thecompany is pleased that the fraud was uncovered and his practiceshut down. The company posted a fraud alert letter, last updated inOctober, warning of Nations Hazard scheme. She said the carrier andthe U.S. Postal service are conducting an on-going investigation.The Hartford has also filed suit in federal district court inConnecticut seeking monetary damages from Mr. Napadow.

She said the company does not offer the type of coverage Mr.Napadow was marketing.