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 online agency that was selling bogus errors and omissions coverage under the Hartford name, and has a history of doing the same in other states.



Insurance Commissioner Diane Koken said the state's insurance department has closed the operations of Nations Hazard Insurance Agency, doing business as Nations Hazard Insurance Company. The department said that the company sold E&O coverage for home inspectors, using the Internet as its primary means of communication and solicitation of business.



The department also said that the company's principal, Michael Francis Napadow, also operated his fraudulent company under the name “Hartford Casualty Insurance.” The department emphasized that Nations Hazard is not affiliated with the Hartford, Conn.-based carrier.



Mr. Napadow was ordered to cease and desist his operations and pay a penalty of $230,000. He is also required to make restitution in full to any Pennsylvania residents from whom the company solicited and accepted premium payments. Melissa Fox, a representative for the department, said that Nations Hazard sold policies to four individuals in the state involving less than $5,000 in premium. The matter has been turned over to the state's attorney general office.



“Mr. Napadow has caused irreparable harm to Pennsylvania consumers by selling fake insurance policies, which may not provide sufficient, if any coverage,” said Ms. Koken in a statement, reminding consumers to check with the department to ensure the carrier they are dealing with is properly licensed.



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



According to the Illinois Department of Insurance order, dated Feb. 20 of this year, Mr. Napadow was also trading fictitious policies under Lloyd's of London and Liberty Mutual Insurance Company brands, which the department discovered he had no association with.



Ms. Fox said that in addition to Pennsylvania, Washington and Illinois, insurance departments in Oregon and Arkansas have also taken action against him. His Web site, where he solicited the policies, is now closed.



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