On November 6, 1992, the Office of the Insurance Commissioner for Washington state issued an "Order to Cease and Desist" and an "Order to Replace Policies" against Professional Indemnity Corporation (PIC), Chiropractic Association for Research and Education (CARE), and William A. Rose, D.C., its managing director.
The cease and desist order requires PIC, CARE and Dr. Rose "to cease and desist from, the solicitation and transaction of insurance in the state of Washington." It also orders that the three "shall replace any policy improperly placed in this state with a policy issued by an unauthorized insurer, upon demand of any insured or other entity for whom a certificate was provided."
The basis for the cease and desist order is the "detailed and repeated solicitations" for chiropractic malpractice insurance by PIC, CARE, and Dr. Rose. The order states:
"The transaction of insurance by Profession Indemnity Corporation, Chiropractic Association for Research and Education and William A. Rose is hazardous to insureds and to the people of this state, and its conduct has demonstrated the need for immediate action and justifies the entry of this order forthwith."The Washington insurance commissioner's office sent the Washington State Chiropractors Association a "Notice Regarding Possible Bogus Insurance Company," which stated:
"Please be advised that as far as we can determine, Professional Indemnity Corporation is not authorized to transact insurance business in this state under any possible provision of law (either state or federal). Also, as far as we can determine, Professional Indemnity Corporation is not authorized to transact insurance business in any state. For this reason, purchase of insurance either directly from Professional Indemnity Corporation (or from Professional Indemnity Corporation through CARE) may be hazardous to your members."A November 9th news release issued by the Washington Insurance Commissioner's Office quotes Deputy Commissioner Patricia Petersen:
"We believe Professional Indemnity Corporation is misleading chiropractors by posing as an insurance company. The firm is not licensed to sell insurance in this state, and we cannot find any record of its performance as an insurance firm in any other state.When Ms. Petersen's inquiries to CARE Managing Director William A. Rose did not allay her suspicions, the cease-and-desist was initiated."At the very least, Ms. Petersen warned, "I advise any client of Professional Indemnity Corp. to be skeptical of the firm's claims and to double-check its coverage. To the best of our knowledge, Professional Indemnity Corp. is little more than a mailing address and a telephone number."
The news release further stated: "The case appears to be another in a series of suspect insurance operations turned up by Washington state investigators in recent years. Some companies posing as legitimate insurers dupe customers for years into believing they are insured. Even when such a firm's operations are exposed in one state, it often may continue to do business in others."
Ms. Petersen explained: "Sometimes, the operations last until the pressure of claims forces the insurance company into insolvency, and its officers disappear with the company bankroll. Only then do the firm's customers discover that their insurance protection was nonexistent."
According to industry insiders, the scenario described by Deputy Commissioner Petersen is not unusual: An unlicensed company begins selling insurance at a greatly reduced rate to unsuspecting buyers. They pay off the small claims that tend to be the majority in the first few years. If a large claim is filed, the insurer knows it can be tied-up in court for years. And when the amount of claims and the pursuit by insurance regulators becomes too great, the principals leave the country. A case involving just such a fraudulent insurance company operating in this manner was just reported in the January 25, 1993 issue of Business Insurance.
An second news release issued by the Washington Insurance Commissioner's Office December 8, 1992, added to the intrigue:
"Similar probes are now underway in a number of other states, including California, Missouri, Illinois, Iowa, New York and Florida ... . The National Association of Insurance Commissioners also is helping to distribute information about the firm.Deputy Insurance Commissioner Petersen gave her views of the PIC/CARE situation: "It was a very slick operation. The firm's literature maintained that PIC was a stock company operating under the jurisdiction of the Federal Republic of Corterra, which is described as an independent sovereignty in the Pacific Ocean," she explained. "In fact, investigation to date has found no such country, although there is an island called Cartered in the Soloman Islands."Because Professional Indemnity Corporation policyholders probably did not have legitimate insurance coverage, ... chiropractors also should make certain they purchase coverage that will cover claims from the period in which the PIC policy was supposed to be in force."
"We will certainly keep close scrutiny over this operation to see it has ceased doing business in this state. We also will assist individuals who have purchased this coverage, and we will cooperate with other states that have been affected."
According to the cease and desist order, "CARE asserts that it is selling this insurance in 45 states." In an effort to ascertain the status of Professional Indemnity Corporation and CARE nationwide, all state insurance commissioners have been contacted.
Beside the investigation in Washington state, 10 other states are currently investigating PIC/CARE: California, Connecticut, Delaware, Illinois, Iowa Minnesota, Missouri, New York, Texas, and Wisconsin. The complete listing of the responses to the inquiry of the status of PIC and CARE are listed at the bottom of this page. Included is the the consumer services phone number for the state insurance department for each state.
If you are currently a client of Professional Indemnity Corporation, and are concerned about your malpractice coverage, you may want to contact your insurance commissioner's office.
What Is the Status of Professional Indemnity Corporation (PIC) and the Chiropractic Assoc. for Research and Education (CARE) in Your State??
Please check to see what your state insurance commissioner has to say about PIC and CARE. If you are a PIC policyholder and are concerned, you may want to contact your state's insurance department at the phone number provided.
| State Insur. Dept. | Comments |
| Alabama | No response yet. |
| (205) 269-3550 | |
| Alaska | No response yet. |
| Jnu 907-465-2597 | |
| Anh 907-562-3626 | |
| Arkansas | PIC "is not authorized to do business in the |
| (501) 686-2945 | state of Arkansas." |
| Arizona | No response yet. |
| (602) 255-4783 | |
| California | Currently conducting an investigation. |
| (800) 927-4357 | |
| Colorado | No response yet. |
| (303) 894-7490 | |
| Connecticut | Currently reviewing & investigating PIC's status. |
| (203) 297-3877 | |
| Delaware | PIC "has never registered in any way with |
| (302) 739-6775 | Delaware." Currently conducting an investigation. |
| Dist. of Columbia | No response yet. |
| (202) 727-7000 | |
| Florida | Currently conducting an investigation. |
| (904) 922-3130 | |
| Georgia | PIC "is not an authorized carrier, an RRG (risk retention group) or a PG (purchasing group) in the state of Georgia." |
| (404) 565-2070 | |
| Hawaii | We have no information on Professional |
| (808) 586-2790 | Indemnity Corporation doing business in Hawaii." |
| Idaho | CARE "is not licensed or registered with this |
| (208) 334-2250 | Department." |
| Illinois | PIC "is not authorized to transact business in Illinois, nor is it registered as a risk retention group or purchasing group." Illinois is currently conduction an investigation. |
| (217) 782-4515 | |
| Indiana | PIC "is not an admitted carrier, a Risk Retention Group, a Risk Purchasing Group, or a surplus lines company in Indiana." |
| (317) 232-2395 | |
| Iowa | Currently conducting an investigation. |
| (515) 281-4025 | |
| Kansas | PIC "is not an authorized carrier, a RRG, a PG or a non-admitted surplus lines carrier in the state of Kansas." |
| (800) 432-2484 | |
| Kentucky | PIC "is not admitted in Kentucky, nor is this firm eligible as a surplus lines insurer." |
| (502) 564-3630 | |
| Louisiana | PIC "is not authorized to do business in Louisiana as an admitted carrier, surplus lines insurer, risk retention group nor a purchasing group." |
| (504) 342-5300 | |
| Maine | No response yet. |
| (207) 582-8707 | |
| Maryland | PIC "is not authorized in the state of Maryland. It is not an approved surplus lines insurer, risk retention or purchasing group." |
| (410) 333-6300 | |
| Massachusetts | The division's data base of admitted companies and approved surplus lines companies does not include Professional Indemnity Corporation." |
| (617) 727-7189 | |
| Michigan | PIC "is not a licensed insurer, an eligible |
| (517) 373-0220 | approves surplus lines insurer, a registered risk retention group, or a registered purchasing group." |
| Minnesota | We have made a full investigation and determined that Professional Indemnity Corporation is not admitted as an authorized carrier, a risk retention group, a purchasing group or a non-admitted surplus lines carrier in the state of Minnesota." Currently conducting an investigation. |
| (612) 296-4026 | |
| Mississippi | No response yet. |
| (601) 359-2127 | |
| Missouri | In a check of our licensing records, Professional Indemnity Corporation does not appear." Missouri is currently conducting an investigation. |
| (314) 751-2640 | |
| Montana | In reviewing our records, we were able to determine that PIC is neither a licensed (admitted) insurer in Montana, nor is it an eligible (non-admitted) surplus lines insurer. Additionally, PIC is not registered in Montana as a risk retention group (RRG) or a purchasing group (PG)." |
| (800) 332-6148 | |
| Nevada | PIC "is not admitted, is not an approved risk retention group or purchasing group and is not on the list of eligible non-admitted insurers," |
| (702) 687-4270 | |
| New Hampshire | PIC "is not licensed, authorized for surplus lines or registered as a risk retention or purchasing group." |
| (800) 852-3416 | |
| New Jersey | No response yet. |
| (609) 292-5317 | |
| New Mexico | PIC "is not licensed in New Mexico as an insurance company. It is also not registered in New Mexico as a risk retention group or a purchasing group." |
| (505) 827-4592 | |
| New York | Please note that PIC did not register in this NYC state neither as a purchasing group nor as a risk retention group pursuant to the Federal Liability Risk Retention Act of 1986, therefore it cannot do business as such in this state." New York is currently conducting an investigation. |
| (212) 602-0203 | |
| Alb 800-342-3736 | |
| North Carolina | No response yet. |
| (800) 662-7777 | |
| North Dakota | No response yet. |
| (800) 247-0560 | |
| Ohio | No response yet. |
| (800) 686-1526 | |
| Oklahoma | No response yet. |
| (405) 521-3966 | |
| Oregon | Be advised that Professional Indemnity Corporation or CARE (Chiropractic Association for Research and Education) is not a recognized entity with the Oregon Insurance commissioner's office. Neither is shown as having a status as an admitted carrier, non-admitted surplus line carrier, risk retention group or risk purchasing group authorized or registered in this state." |
| (503) 378-4636 | |
| Pennsylvania | PIC "is not a licensed insurer, eligible for surplus lines insurance, or registered as a risk retention group in Pennsylvania. In addition, the department has no record that CARE (Chiropractic Association for Research and Education) is registered as a purchasing group in Pennsylvania." |
| (717) 787-2317 | |
| Rhode Island | Please be advised that the Professional Indemnity Corporation has no status whatsoever in the state of Rhode Island." |
| (401) 277-2416 | |
| South Carolina | PIC "is not a licensed insurer, approved eligible surplus lines carrier, nor registered risk retention or purchasing group in this state." |
| (803) 737-6140 | |
| South Dakota | Please be advised that PIC has no status in this state." |
| (605) 773-3563 | |
| Tennessee | No response yet. |
| (615) 741-4737 | |
| Texas | Currently conducting an "inquiry." |
| (800) 252-3439 | |
| Utah | A search of our records indicates the organization is not licensed or authorized as either a recognized carrier, an RRG or a PG in the state of Utah." |
| (801) 538-3800 | |
| Vermont | No response yet. |
| (802) 828-3301 | |
| Virginia | PIC is not licensed or otherwise authorized to transact the business of insurance in the Commonwealth of Virginia." |
| (804) 786-5185 | |
| Washington | Filed cease-and-desist order on November 6, 1992 |
| (800) 562-6900 | |
| West Virginia | West Virginia has no record of the above captioned entity (Professional Indemnity Corporation) as either a risk retention group or a purchasing group." |
| (304) 558-3386 | |
| Wisconsin | Currently conducting an "investigation." |
| (800) 236-8517 | |
| Wyoming | PIC is not an authorized insurer in Wyoming. I can also advise you that PIC is not registered in Wyoming as a RRG or as the insurer on a RPG. To my knowledge, this insurer has not tried to solicit any business from Wyoming residents at this time. However, to stop a situation before it starts, I will be writing to PIC advising them of Wyoming laws and requesting that they do not solicit any business in Wyoming until they have contacted this department." |
| (307) 777-7401 | |
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