What happens when "not insurance" is actually insu

NEWS RELEASE
Commissioner Poizner Shuts Down Vehicle Warranty Company
for Allegedly Operating As Unlicensed Insurance Company

California Insurance Commissioner Steve Poizner today filed a cease and desist order against two individuals and a company they own for purportedly selling insurance disguised as "auto additive warranties," without a license. Laurie Cosentino and Robert Konzen, co-owners and directors of Prestige Administration, Inc., d.b.a. Autolife Rx, each face a fine of $5,000 for every day they conducted business in California, or five times the revenue received from California consumers, whichever is greater. This is the second cease and desist order filed in the past 30 days against a company for allegedly selling insurance under the guise of a warranty.

"Let me be clear - I will continue to crack down on every warranty company that attempts to deceive consumers in an attempt to make a profit. Only licensed insurance companies may sell insurance products to California consumers," said Commissioner Poizner. "The law is very specific about what is required for companies seeking to do business in this state, and if a company does not abide by these rules, they will face strict consequences."

The Department of Insurance alleges that Prestige Administration, Inc., unbeknownst to the Department, acted as an unlicensed insurance company, providing mechanical breakdown insurance since early 2008. CDI alleges that company sold the insurance policies through car dealerships. The dealerships offered the policies to consumers who purchased vehicles.

In June 2009, Prestige requested Department of Insurance permission to sell a radiator additive warranty. Such warranties may only be sold with Department approval. The Department refused to provide that approval and explained to Prestige why its so-called "warranties" failed to meet the legal requirements to be considered a true warranty. Additive warranties that the Department of Insurance does not approve are automatically deemed to be insurance policies, and may only be sold by licensed insurance companies with several million dollars in net assets that meet strict accounting and experience requirements, which Prestige did not meet.

The Department contends that Prestige, under the direction and control of Cosentino and Kozen, illegally sold insurance after the Department made it clear that its warranties were disapproved. The company allegedly intentionally disregarded the requirement for an insurance company license.

California residents who have had problems with Prestige, Inc. are encouraged to contact the Department of Insurance.

Prestige, Inc., is headquartered in Phoenix, AZ.

The Department has published a consumer guide entitled "Guide to Auto Service Contracts and Agreements" that explains how to make an informed decision when it comes to buying mechanical breakdown protection for a vehicle. The consumer guide can be found on the Department's website at: http://www.insurance.ca.gov/0100-consumers/0060-information-guides/0010-automobile/upload/New_Complete_Guide_Auto_Repair_103_03_05.pdf.

The Department's pleading against Prestige, Inc. can be found on the Department of Insurance website at http://www20.insurance.ca.gov/epubacc/Graphics/145271.PDF.

Last month, Commissioner Poizner filed a cease and desist order against SafeData Management Services, Inc., d.b.a. Consumer Direct Warranty Services, Warranty Administration Services, Inc., and Warranty Administration Solutions, Inc., for allegedly operating unlicensed insurance companies and using deceptive and illegal telemarketing.