Insurance Scam In Georgia Grounds Taxi Fleets

By Michael Ha

NU Online News Service, March 2, 8:49 p.m.EST?Some 2,000 taxi cabs and limousines in Georgia havebeen grounded temporarily after the insurance department'sdiscovery that more than 155 taxi companies throughout the statehave been sold bogus commercial auto policies.[@@]

According to the Georgia insurance regulators' findings, atleast 155 taxi and limousine companies in the state?bulk of themserving the Atlanta metropolitan region?have unwittingly boughtbogus standard commercial auto policies for collision andliability.

The Georgia Insurance Department said the policies had beenpurchased from Main Street Brokerage and Phoenix Brokers.

A cease-and-desist order has now been issued against thesebrokers and an arrest warrant has been issued for Main Street andPhoenix owners, Geoffrey Waterhouse and Robert Waterhouse,according to the department.

Georgia Insurance Commissioner John Oxendine told NationalUnderwriter that the two have been selling fake insurance forthe past two years, using as underwriter Mark Solofa InsuranceCompany, which happens to be a legitimate insurer based in AmericanSamoa but was not involved in the fraud.

Commissioner Oxendine said that yesterday he sent out a letterto 155 taxi and limousine companies affected by the bogus coverageas of Dec. 2004.

The number of affected taxi and limousine companies is likely torise as the investigation continues, he said.

"Yesterday's notice says that if you are one of these taxi andlimousine companies, you do not have insurance as required byGeorgia law, and that operating vehicles even just one more daywithout proper insurance is illegal."

Taxi firms without proper insurance can have their medallionsrevoked, Commissioner Oxendine said. He said his department hasalso provided the list of these companies to the Georgia StatePolice and the Georgia Department of Motor Vehicles.

According to the state's insurance regulators' at least $3million in premium money has been collected for the bogusinsurance.

Commissioner Oxendine said a court-appointed receiver is tryingto marshal assets of Main Street Brokerage Inc. and Phoenix BrokersInc. and compensate victims. But in the meantime, for some of thesmaller taxi companies, coming up with additional money quickly topay for auto premiums could prove too much and that they may simplygo out of business as a result.