The Texas Commissioner of Insurance Cassie Brown has served an emergency cease and desist order on Peachtree Casualty Insurance Co., also doing business as Go Insurance Co. and Go Car Insurance, after receiving 50 complaints from repair facilities, claimants, and attorneys.

“Go/Peachtree is actively causing harm to Texas consumers because of its unfair claims handling and unfair and deceptive trade practices,” wrote attorneys for the Texas Department of Insurance (TDI) in the cease and desist order application. “Go/Peachtree is in a hazardous financial condition because it does not have adequate capital and surplus and has failed to file required financial statements.”

TDI contends that Go/Peachtree hasn’t timely handled and paid claims because of a shortage of capital stock and surplus.

Texas law requires insurance companies like Go/Peachtree to have at least $2.5 million each in capital stock and surplus. According to TDI, the company’s Q1 2023 statement showed it had $2.5 million in capital stock and a negative surplus of $250,515.

“On August 6, 2023, Go/Peachtree represented to TDI that it contributed an additional $1.4 million in capital in early August 2023, shortly after TDI contacted the Oklahoma Department of Insurance, Go/Peachtree’s domiciliary regulator, as to why the company was impaired in its capital and surplus amounts since March 2023,” the application states. “However, the company’s contribution amount was still not enough to raise Go/Peachtree’s surplus to the minimum $2.5 million.

“Go/Peachtree has provided no updated financial statements or records to TDI showing that the company is financially sound as of the date of this application.”

TDI noted in its cease and desist that Peachtree also has operated Go Insurance Co. and Go Car Insurance without TDI approval to conduct business under those names in Texas.

Regarding the complaints made to TDI, 40 have been filed since the beginning of June, including 21 between Aug. 1 and Aug. 22.

Texas law violations to do directly with claims include, according to TDI:

• • Failing to affirm or deny coverage within a reasonable time;
  • Failing to provide notice of acceptance or rejection of a claim not later than the 15th business day after the insurer receives information required to secure final proof of loss;
  • Failing to pay a claim not later than the fifth business day after notice is made;
  • Failing to timely pay claims when it had received all information reasonably requested and required to pay the claim; and
  • Failing to timely respond to a written request for information.

A sampling of complaints submitted to the TDI are provided as exhibits with the order application.

One complaintant calls Go Insurance “a complete fraud and scam company.” After being insured by the company for three years then making his first claim earlier this year, he states that Go Insurance said they were missing information that should’ve been obtained for eligibility puproses at policy inception including his insurer for the previous five years before Go Insurance.

Another complaintant said in July that they hadn’t received a clear answer on their claim since filing it in April and that the company kept pushing them around, telling them they were busy.

The complaintant noted as well that the Peachtree didn’t provide a phone number for customers to use. TDI’s attorneys also found that a Los Angeles address given for Peachtree’s office location to be a UPS store.

Specifically, the complaints allege that Go/Peachtree delays claims decisions and payments for multiple months, fails to promptly communicate with the claimant, and even requests information not relevant to claims handling.

“The sharp increase in complaints over a very short time period and the nature of those complaints indicate instability and dysfunction within the insurer,” the application states. “Go/Peachtree’s conduct as described in the complaints, constitutes unfair acts and endangers Go/Peachtree’s insureds and the public.”

TDI says it has requested a response to its July 27 request for information, a detailed plan of action for addressing and paying claims, and proof that Go/Peachtree has cash available to pay any claims. In an Aug. 22 videoconference Go/Peachtree Secretary Kevin Adam
Pomplun told TDI he didn’t know that the requested information was due and promised to get them to TDI as soon as possible, according to TDI.

Pomplun also showed TDI a portion of a spreadsheet listing claims associated with TDI complaints, which in part, showed a claims investigation underway by Go/Peachtree including a retroactive look at its initial underwriting of policies.

“Specifically, the spreadsheet showed that Go/Peachtree is looking into the claimants’ criminal background, loss history, traffic violations, prior coverage, and the producing agent’s claim ratio,” the order application states. “Pomplun represented to TDI that in April 2023, Go/Peachtree discovered ‘errors’ in its mobile application which he now contends led Go/Peachtree to issue policies to ‘ineligible customers.’

“However, Pomplun admitted to TDI that most of these policyholders have not been notified that they are under such investigation and that not all claimants listed on the spreadsheet are suspected of being ‘ineligible.'”

TDI hadn’t received a response from Go/Peachtree as of Aug. 24. Brown filed the cease and desist order on Aug. 28.

TDI told Repairer Driven News, “We can’t comment beyond what’s in the order. If policyholders have claims that are not being handled in a timely manner, they should contact TDI and file a complaint. Consumers can also call TDI’s Help Line at 800-252-3439 to ask questions.”

Attempts by RDN to reach Go Insurance weren’t returned. Contact information for Go Car Insurance and Peachtree couldn’t be found.

Go/Peachtree’s certificate of authority could be revoked and restitution plus an administrative penalty of $25,000 per order violation be owed if the order is violated.

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Featured image: Texas State Capitol Building. (Credit: Art Wager/iStock)