Point Insurance Takes Its Appeal To The CAR Governing Review Panel This Week

The agency is appealing the January 12th Market Review Committee decision

For those following the ongoing saga between Point Insurance (formerly Rapo & Jepsen) and its insurer Arbella, the CAR Governing Committee Review Panel will convene today at 1 PM to hear the Request for Review filed by Point Insurance. This latest Request for Review stemmed from the CAR Market Review Committee’s refusal of Point Insurance’s Request for Relief Against Arbella. We’ll keep you posted on the outcome. In the meantime, here is some background on the matter.

What is the CAR Governing Committee Review Panel

The CAR Governing Committee Panel is a sub-committee of the CAR Governing Committee that is charged with the following:

the responsibility to review appeals made by member companies and licensed producers aggrieved by any alleged unfair, unreasonable, or improper practice of CAR or a Member with respect to the operation of CAR. Only Governing Committee members may serve on this Committee and decisions of the Governing Committee Review Panel are considered to be those of the full Governing Committee.

The following individuals are members of the current CAR Governing Committee Review Panel:

What Point Insurance alleged

On January 12, 2017 the Market Review Committee of Commonwealth Automobile Reinsurers heard the Request for Review of Point Insurance on ten requests for relief. The agency asked the committee to find that the following practices and procedures employed by Arbella, in dealing with Point Insurance and its customers, were unfair, unreasonable, and improper conduct:

1. The issuance by Arbella of non-renewal notices to Point commercial customers based on improper eligibility grounds not set forth in the CAR Rules.
2. Arbella’s denial, cancellation or non-renewal of commercial auto insurance policies for Point customers who are eligible for same under CAR Rules, including those lawfully existing and organized entities and those entities’ whose vehicles may be operated by individuals who possess operator’s licenses from foreign countries or may otherwise be eligible to obtain an operator’s license.
3. The creation and issuance by Arbella to Point Customers only, of an improper form “Commercial Auto Renewal Application” and the imposition of the requirement that Point’s customers complete the application, and that Point attest under the pains and penalties of perjury to the information supplied, as a condition of renewing coverage.
4. Arbella’s use of improper and different underwriting standards for Point customers than it uses for other commercial customers in the residual market and which are inconsistent with CAR Rules.
5. Arbella’s wrongful imposition of terms and condition on Point’s ERP appointment that are unreasonable, improper, and unlawful and which are inconsistent with and more onerous than the terms and conditions of its contracts with other ERPs and voluntary producers.
6. Arbella using a Limited Servicing Carrier Agreement with Point which contains different and far more onerous terms and conditions than its contracts with voluntary producers.
7. Arbella’s use of different correspondence, forms and applications for Point and its customers than it uses for customers and producers in the voluntary market.
8. Arbella’s practice of requiring Point to follow procedures which it does not require other voluntary or involuntary producers to follow.
9. Arbella’s use of its SIU department to intimidate and harass Point’s customers and damage Point’s business;
10. Arbella’s wrongful, unlawful, discriminatory, improper and unreasonable treatment of Point’s customers, many of whom are minorities and or of foreign national origin.

Ten votes by Market Review Committee in favor of Arbella and against Point Insurance

Following the completion of her argument, no additional questions were submitted to Arbella’s counsel, Roberta Fitzpatrick. At that point, the committee’s chairperson, Mr. Boynton, called for discussion on the Request for Review. Committee member Sumner Gilman advised, that he was disposed to make a motion to deny the Request for Review, based upon his view that the actions taken by Arbella seemed reasonable. He also noted that Point Insurance’s owner had worked at Rapo & Jepsen for a number of years before purchasing the agency.

After some discussion, the Market Review Committee Chair indicated, that instead of voting on Point Insurance’s Request for Relief with one vote for or against, the committee would vote individually on each of the ten requests for relief asked for by Point Insurance. CAR counsel concurred in this procedure and the committee voted on each of the requests listed earlier in this article.

On the votes taken on requests two through nine, the committee unanimously voted to deny Point Insurance’s requests for relief. The committee also denied requests one and ten with one member filing a dissenting vote.

Following the ten separate votes, the chair of the Market Review Committee advised Point Insurance of its right to appeal within thirty days to the Governing Committee Review Panel. If the Governing Committee Review Panel upholds the decision of the Market Review Committee, any further appeal would be heard by the Division of Insurance.

As previously reported in Agency Checklist’s article of January 10, 2017, “Rapo & Jepsen Round Two: Agency’s Purchaser Files In Court, At The DOI, And At CAR, Actions Alleging Discrimination by Arbella,” Point Insurance requested relief from the Market Review Committee from alleged unfair, unreasonable, and improper conduct by the Arbella Protection Insurance Company (Arbella).

Background of dispute between Arbella and Point Insurance

For those readers new to the Arbella/Point Insurance dispute’s history, since May 2016, Agency Checklists has published six in-depth article on the matter. Besides Agency Checklists’ January 10 article on Point Insurance’s complaint, “Rapo & Jepsen Round Two: Agency’s Purchaser Files In Court, At The DOI, And At CAR, Actions Alleging Discrimination by Arbella,” the original five articles explain the original allegations of Arbella against Rapo & Jepsen:

• May 3, 2016, Agency Appeals Arbella Cancellation For Alleged Premium Fraud Scheme;
• May 10, 2016,Arbella Filing Seeks To Prove Its Claim Of Premium Fraud Against Rapo & Jepsen;
• May 17, 2016,Arbella Presents Its Fraud Claims At CAR Against The Rapo & Jepsen Agency;
• June 21, 2016,Arbella Alleges New Evidence That Key Witness Sent To Brazil by Rapo & Jepsen; and
• June 28, 2016,Arbella’s Cancellation of Rapo & Jepsen Upheld By CAR.