PADI getting sued over Insurance Program

[PuMpUi]

Gotta love it !!!


Re: Risk Retention Groups in California

http://law.justia.com/codes/california/2009/ins/125-140.html

(g) Every application form for insurance from a risk retention
group and every policy issued by a risk retention group shall contain
in 10-point type on the front page and the declaration page, the
following notice:

"NOTICE

This policy is issued by your risk retention group. Your risk
retention group may not be subject to all of the insurance laws and
regulations of your state. State insurance insolvency guaranty funds
are not available for your risk retention group."

Did anyone get this mandatory notice from PADI ???

 

[PuMpUi]

:deal::dance3:

It may not be "wrong" ... but it SURE ain't Right !!!

Not having a dog in this fight personally, I can only speculate that there will be more "news" in the near future.

There's WAAAAY to much smoke for there NOT to be a fire !!!


Just my opinion.

(Cue the string section ...) "How can it be wrong ... when it feels so ($2.2 million each year) right ???":guitarist::guitarist:

 

[ItsBruce]

I understand that the theory is that PADI is the insurer and Lexington is either an excess insurer or reinsurer. I get that. I really do.

And, I will assume that there is a $300,000 deductible or self-insured retention on the Lexington policy and that PADI has been paying that whenever there has been a loss.

However, theory or not, that does not mean PADI is the insurer.

Insurance Code, §22 states: "Insurance is a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event." Section 23 states: "The person who undertakes to indemnify another by insurance is the insurer, and the person indemnified is the insured."

Is there a contract under which PADI is undertaking to indemnify the shops? The fact that it is picking up the deductible does not mean there is a contract under which it is undertaking to indemnify the shops.

And, I just thought of this: Unless the policy clearly and unambiguously says there is a $300,000 deductible or self-insured retention, there isn't; and Lexington would be liable for first dollar on any loss. So, I would expect that there is a written policy saying there is a $300,000 deductible.

It may be very bad karma for PADI to be doing what it is alleged to be doing, assuming it is doing what it is alleged to be doing. However, that does not make it illegal. While California law contains provisions requiring insurance companies to be licensed, etc, PADI may have found a "work-around." There are lots of "work-arounds" in the law, and this may be one of them.

 

[PuMpUi]

I didn't get the madatory notice in 10 point font either. Anyone else not get the disclosure?

 

[Thalassamania]

"Work around" that fly in the face of the intent of the law are usually frowned on, especially when thing like mandatory notification are ignored. That can lift a work around into fraud.

 

[djcheburashka]

Gotta love it !!!


Re: Risk Retention Groups in California

http://law.justia.com/codes/california/2009/ins/125-140.html

(g) Every application form for insurance from a risk retention
group and every policy issued by a risk retention group shall contain
in 10-point type on the front page and the declaration page, the
following notice:

"NOTICE

This policy is issued by your risk retention group. Your risk
retention group may not be subject to all of the insurance laws and
regulations of your state. State insurance insolvency guaranty funds
are not available for your risk retention group."

Did anyone get this mandatory notice from PADI ???

PADI isn't a "risk retention group" under the statutory definition because buying insurance through PADI isnt mandatory. The statute is designed for a special type of mutual insurance corporation to be created in California. Providing insurance has to be the primary reason for the group and all members must have the insurance. Those arent padis rules. PADI isn't that kind of corporation. The law you cited doesn't apply to PADI.

So they clearly arent violating that.

Next contestant?

 

[Thalassamania]

I would, respectfully, disagree with your assessment. PADI appears to be either a RRG or an unlicensed underwriter.

 

[ItsBruce]

I anxiously await the next set of motions to dismiss and the rulings on those.

 

[ItsBruce]

Somewhere in the back of my mind, I had a thought based on a partial recollection of a case I had once seen. It is called Medina v. Safe-Guard Products International, Inc. (2008) 164 Cal.App.4th 105. IMHO, it puts a pretty quick and ugly end to a lot of the claims in the case against PADI, et al.

There, Pedro Medina purchased a new 2006 BMW. He also bought a tire and wheel service contract from Safe-Guard Products International as part of the deal. Safe-Guard never denied any claim Medina brought to it under the tire and wheel service contract, or gave Medina inferior service or products as a result of the contract.

After the State brought an action to enjoin Safe-Guard from selling what amounted to insurance, Medina sued Safe-Guard under the Unfair Competition Law or “UCL” (Bus. & Prof. Code §§ 17200 et seq.), based on the fact he had purchased the plan, which was really an insurance contract, from a company not licensed to sell insurance in California.

The trial court reasoned that Medina did not meet the requirement set forth in Business and Professions Code section 17204, as amended by Proposition 64, that a UCL plaintiff have suffered “injury in fact and has lost money or property as a result” of the unfair competition. It thus sustained a demurrer without leave to amend and dismissed the case.

The Court of Appeal affirmed. The court made it clear that regardless of Safe-Guard’s status and an unlicensed insurer, i.e. one issuing invalid policies, an injured consumer would not be without recourse. However, it held that Medina was not an injured consumer because he had not been damaged.

As I see it from the amended complaint here, Kauai Scuba Center is in about the same position as Medina...at least in the absence of some allegation that payment of a claim was unreasonably withheld.

 

[CoconutDiver]

PADI isn't a "risk retention group" under the statutory definition because buying insurance through PADI isnt mandatory. The statute is designed for a special type of mutual insurance corporation to be created in California. Providing insurance has to be the primary reason for the group and all members must have the insurance. Those arent padis rules. PADI isn't that kind of corporation. The law you cited doesn't apply to PADI.

So they clearly arent violating that.

Next contestant?

The Padi Risk Purchasing Group, Inc.: a California corporation

The Padi Risk Purchasing Group, Inc.

The Padi Risk Purchasing Group, Inc. is a corporation registered in the state of California.

It is a domestic corporation, meaning it was formed, as well as registered, in California. Its articles of incorporation were filed on January 22, 2010.

The Padi Risk Purchasing Group, Inc.'s business registration is active, and the corporation is authorized to do business in California, as long as they meet any other legal requirements that may be subject to.

The Padi Risk Purchasing Group, Inc. is a for-profit entity.

President
Steve Vicencia
20 Centerpointe Dr #100
La Palma CA 90623

Registered Agent
Steve Vicencia
20 Centerpointe #100
La Palma CA 90623

Mailing Address
20 Centerpointe Dr Ste 100
La Palma CA 90623

Corporation Number C3269605
Type Domestic

Formation Date 01/22/2010
Status Active
Alive/Dead Alive
Profit/Nonprofit For-profit


AND THEN ...


The Padi Risk Purchasing Group, Inc. Company Profile - Located in La Palma, CA

Padi Rpg inc. was originally formed in 2000 ...


AND ....

The Padi Risk Purchasing Group, Inc.
The Padi Risk Purchasing Group, Inc. is located at 20 Centerpointe Dr Ste 100 La Palma, CA 90623. The officers include .

The Padi Risk Purchasing Group, Inc. was incorporated on Friday, April 07, 2000 in the State of CA and is currently not active.

Steve Vicencia represents The Padi Risk Purchasing Group, Inc. as their registered agent.
Source: Public Record data - Department of State - Division of Corporations
• Relationship Visualizer
The Padi Risk Purchasing Group, Inc. Company Profile - Located in La Palma, CA


Then it appears they let it lapse ( no filings) untill Jan 22nd 2010. so 9 years it was a defunct corp.

These are the only 2 filings I can find - 1 on April 7th 2000 and 1 on Jan 22nd 2010 ... with no annual filing in-between.


If it walks like a RRG ... and it looks like a RRG ... and it smells like a RRG ...