Earl W. O’Garro, a thirty-one-year-old would-be entrepreneur, who started a specialized excess and surplus brokerage in 2010, Hybrid Insurance Agency, LLC, has had his nonresident license for himself and his company revoked by the Massachusetts Division of Insurance. The Division also fined Mr. O’Garro $8000, personally, while his company, Hybrid Insurance, was fined $2000.
The Massachusetts charges filed by the Division of Insurance alleged that Mr. O’Garro and Hybrid Insurance were in “violation” of § 162R(a)(2) of Chapter 175 (“§ 162R(a)(2)”), by not reporting as required the orders of six other state insurance commissioners, in Connecticut, Kentucky, Maine, Georgia, Ohio and Rhode Island.
In its decision, the Division also alleged that Mr. O’Garro “improperly withheld, misappropriated, or converted premium monies that he received in the course of doing insurance business, in violation of § 162R(a)(4) of Chapter 175.” This allegation apparently arose out of transactions, described below, that occurred in Connecticut.
Because neither Mr. O’Garro nor Hybrid Insurance appeared to contest the charges or explain their actions, the Hearing Officer’s decision contains almost no factual description of what caused Mr. O’Garro and Hybrid Insurance’s problems.
Hybrid Insurance’s apparent explosive growth and sudden collapse
In April 2010, Earl O’Garro, Jr. started Hybrid Insurance Agency, LLC, in Windsor, Connecticut to market excess and surplus insurance.
Mr. O’Garro was a 2005 Wesleyan University graduate. His company resume also listed that he had a Masters of Business Administration from the Barney Business School at the University of Hartford. His most recent insurance experience included having been the Divisional Manager for the Small Accounts Division of S.H. Smith & Company Inc., a major Connecticut excess and surplus wholesaler.
Mr. O’Garro claimed that an undisclosed private equity firm had backed the launch of his new company, Hybrid Insurance. Apparently, the funding was based on a business plan that allegedly would have Hybrid Insurance focus on “transferring difficult or hard to place risks, from retail agents to non-admitted or non-standard insurance carriers.” Mr. O’Garro claimed that “Hybrid aims to fill a necessary void in what some call ‘an antiquated industry’ with the notion that bigger isn’t necessarily better.” He also claimed that his company’s “unique business model” would be more effective and stable over time.
By August 2010, Mr. O’Garro claimed in a “Hartford Courant” interview that within four months, Hybrid Insurance had already “grown to nearly 20 employees and underwritten $8 million worth of policies.”
In September, 2010, Hybrid Insurance announced that it had been qualified as an excess and surplus source for New England members of the Iroquois Group, a major aggregator for independent insurance agencies.
Mr. O’Garro later announced that because of the company’s successes to date “Hybrid plans to expand both nationally and internationally.” Eventually by 2012, Hybrid Insurance had qualified to sell excess and surplus insurance in almost 39 states, including Massachusetts.
All this expansion required money and apparently the undisclosed venture capital firm Mr. O’Garro claimed had funded his start-up apparently was not ponying up any more. When Mr. O’Garro announced in late 2011 that Hybrid Insurance was moving its headquarters from Windsor to Hartford, he sought a loan and a grant from the State of Connecticut.
The state approved the $100,000 loan and $26,320 matching grant announcing the March 2012 award to Hybrid Insurance as being:
“…a fast -growing insurance group, beginning operations in March of 2010 in Windsor, a year later opening a satellite office in Columbus, Ohio, and a service operation in Kathmandu, Nepal. They currently have 11 employees in their headquarters and approximately 650 retail agents and brokers.”
Besides not explaining why a locally-based insurance agency would need a “service operation in Kathmandu Nepal,” the announcement also did not mention that the relocation of the agency would be to a property in Hartford owned by the city treasurer, his brother and father.
Later that year, Mr. O’Garro retained the treasurer’s brother as a lobbyist for Hybrid Insurance..
Mr. O’Garro apparently enjoyed this success while it lasted. In September 2013, he was married in a lavish wedding hosted at the Ritz-Carlton in Montego Bay, Jamaica.
He paid cash for a 7,000 square foot home in Marlborough, Connecticut while owning a second home in Bloomfield, Connecticut. As the company expanded, he acquired a BMW M5 and two Range Rovers in addition to the Maserati that he already owned.
In February 2013, Mr. O’Garro went back to the state looking for $3.5 million to expand Hybrid Insurance by hiring 30 more people.
While that application was pending with the state, in March of the same year, Mr. O’Garro opened a new restaurant with a fusion-soul menu in Middletown, Connecticut. The “Us Restaurant & Lounge” opened with commissioned murals on the wall and a signature chef for the Southern-style cooking.
After reviewing the second loan application, the state of Connecticut finally decided not give Mr. O’Garro his requested $3.5 million loan. It did, however, approve a state loan at a reduced amount of $500,000.
The first $250,000 of the $500,000 was disbursed in August of 2013.
City of Harford’s $670,000 premium payment goes missing at Hybrid Insurance as Mr. O’Garro’s businesses fold and state loans go into default.
The ink was hardly dry on the state’s August 2013 loan documents with Hybrid Insurance before Mr. O’Garro’s whole house of cards began to collapse.
- In July, Mr. O’Garro received $670,000 for premiums on insurance placed for the City of Hartford. The insurance carriers never received the premiums.
- In August 2013, Mr. O’Garro mortgaged his real estate and took out about $800,000 in equity. In subsequent months the mortgages went into default and the mortgagees initiated foreclosure proceedings.
- The September check to the state for a payment due of Hybrid Insurance’s first $100,000 state loan bounced and the loan went into default.
- His Middleton restaurant that opened in March 2013, closed in September 2013 and was sued by the landlord for back rent.
- In September, management for the city and the Hartford school system, filed a complaint with the state alleging that Hybrid did not pay $670,000 in premiums to two of the city’s excess liability insurers, Starr Indemnity and National Casualty.
- Starr Indemnity and National Casualty, along with five other insureds or companies sues
- The Connecticut Division of Insurance revokes Mr. O’Garro’s and Hybrid Insurance’s licenses in November after neither Mr. O’Garro nor Hybrid Insurance appear to contest the 11-count complaint.
- O’Garro is arrested for failing to pay about $25,000 in wages to employees of Hybrid Insurance.
- The State of Illinois revokes Mr. O’Garro’s and Hybrid Insurance’s licenses in that state and entered an order against them totaling $22,500 for the unpaid surplus lines taxes, late charges and a civil penalty of $10,000.
- Mr. O’Garro is arrested for domestic assault against his wife of two years who is now divorcing him.
- More than 16 states other than Massachusetts revoke the various insurance licenses under which Hybrid Insurance and Mr. O’Garro operated their excess and surplus agency.
- Mr. O’Garro is again arrested for failing to pay about $8,000 to his defunct restaurant’s employees.
- A Federal Grand Jury issues subpoenas to City officials regarding Mr. O’Garro, Hybrid Insurance, and Mr. O’Garro and his company’s relationship with certain city officials.
Based on the above (partial) listing of Mr. O’Garro’s financial, administrative, political, and possibly criminal problems, it is unlikely that the Massachusetts Division of Insurance will ever see the fines it levied against Mr. O’Garro and Hybrid Insurance paid in full.