Holy crap! For lack of a better idea as to where to begin, I'll start with this one:
- Why were so many policies not paid? How many? We've been auditing (ever since first informed of the issue) and have thus far had to inform 12 clients (out of thousands) that although they paid their policy, the payment was not credited to Mapfre. As to who screwed up...I intend to find out for sure, but frankly, between the audit and responding to client inquiries, that will have to wait.
- Where did the money go? Of course the checks were signed by us. Each and every payment received has been noted in the client file. It seems the disconnect has been in the application of payments with the underwriter. It's important that everyone understand that the discrepancy is ONLY with a small number of Mapfre Tepeyac policies. I am personally calling those affected to speak with them and offer them a full refund or a new policy at no cost.
**This issue has NOTHING to do with auto policies, driver's license policies or ACE policies.
- If a claim had occurred with no coverage... what recourse would an insured have in Mexico? Well, I'm not leaving town. I have goals (business, personal and political yet to realize). I've managed to live 63 years without ripping anyone off, so the liability would've been MINE, had anyone with an invalid policy had a claim. Ethically, morally and personally. It is the way I've always conducted myself and can prove it. I must point out that just in the last year we've had
- Is ProAlliance in a position to pay for claims not covered by an insurance policy (ex. with the recent storms, just a few dwellings and we are talking a few hundred thousand in damage)? ProAlliance, maybe not, but Rosie Glover...yes. By the way, all storm damage is covered by HYDRO PHENOMENA and only ACE offers that coverage, so the question is moot because NO ACE POLICIES have been compromised at all. With Mapfre it's a non-issue. Let me point out that most storm damage is to the building itself and therefore the liability lies with the resort Master Policy. As worrisome as storm damage is, it's the least-frequent seen claim. The biggest cost and most frequent claims are for burst plumbing that damages several condos below it. We've NEVER had a claim that wasn't paid...but to answer your question as to whether we could afford it if our clients had had a claim...the average claim amount is under $1,000.
- Why where clients not notified they had no insurance (it took an email from a resort to find out)? You are mistaken. Las Palomas could have (and in my opinion should have) contacted me directly to report the issue. They didn't. Ultimately they did us all a favor because we're now conducting an audit and revamping our process to eliminate any possibility of this happening again. A client came to me in August with a discrepancy in his policy. I personally refunded his money. After my check cleared, he called me with what I consider an extortion attempt. He wanted me to reimburse him every premium he'd paid over the years, even though we could prove those policies had been paid. He threatened to make a big stink at the condos and he also threatened to report us to Hacienda (Mexican IRS). I refused. I knew that we would have to conduct an audit and make everything right with our clients. To pay a guy 'hush money' is ridiculous and I cannot imagine ever buying into that.
So...when that guy went to Las Palomas they opted to release an email to ALL OWNERS rather than contact me. My lawyer fired off a certified letter to them and we began the tedious audit process and the notification of clients who were affected. I will post a letter to clients that I posted on that day. At the time we'd only found 6 policies that hadn't been paid. To date, we've found 12. Excluding the Extortionist, only one client has not agreed to let us give him a new annual policy (at my expense). That said, I'm sorry to lose even one. Not because of the income but because I believe wholeheartedly that for condo insurance, ProAlliance remains the best option.
-Why did it take rumors for clients to find out 'pro-actively' that they did not have insurance? As mentioned above, we have lots of clients and we've got to go through each and every one. Mapfre sent us a list, but that list included policies that were legitimately cancelled (client never paid us). The audit is going in alphabetical order, yet we are stopping to address the inquiries when someone contacts us directly. The vast majority of clients have contacted us directly to ask about their policy status.
- Why a sudden switch in carriers? Is the current carrier suspending service to ProAlliance or is it a voluntary switch to a different carrier? It isn't a 'sudden switch'. We've sold ACE policies as long as we've been in business. This situation is difficult. As far as I'm concerned, Mapfre's reaction has been less than helpful. When all this first came to light I spoke with them at length. A few years ago they up and decided to no longer offer HYDRO coverage. This created a problem for some of our clients. Claims have been taking too long to process and of course we bear the brunt of the client's frustration. Other carriers such as ACE are written in English, paid directly to the underwriter with a credit card number and is the policy we've found to be most like policies in the U.S. I've been a high-producer for Mapfre for over 9 years. I asked them for time to complete our audit and to call each client personally. Request denied. Last year, our contact within that organization lost his battle with cancer. Since then I've not found the relationship to replace the one we had.
- Who cashed the checks and did not apply payment to the policies (is fraud involved)? Checks were made out to me, endorsed by me and deposited in my account. I can assure you that with the average condo policy in the range of less than $150 dollars annually, it's isn't a lucrative business as far as scams go. It appears to have been an honest mistake. I'm not ruling out that someone may have screwed up, though. Policies aren't paid for (us to the carrier) one at a time. Once or twice a month I'll deposit a few thousand dollars for a block of policies. In fact, the bank limits us to $3,000 a pop. We are then issued one receipt for that block. This makes the audit take longer because we must take each receipt and confirm which policies are paid in that particular block. If someone screwed up, I'll deal with it, but the responsibility is all mine and I don't hide from that. I will make things right for all involved.
- Why has their been limited information from the insurance agency (Pro-Alliance)? Uhh...because we're busy putting out fires? Conducting an audit, responding to inquiries and researching bank records...in addition to our regular daily grind.
- How long of a lapse did most of these policies in question have? It varies. Remember we're talking about 12 policies so far. A couple were almost due to renew and others had recently been emitted.
- Is it customary to write a check out to the agency rather than the carrier? Our clients have never written a check to ProAlliance. As is customary in Mexico, my legal name is my fiscal business name and the name on my business account. In recent years it's become increasingly difficult to cash foreign checks. Also, Mexican banks are very persnickety about checks that have poor penmanship, words crossed out, etc. Americans (don't know about Canadians) are used to crossing things out and initialing the error. Taking checks in my own name (in essence cashing checks for my clients) began as a courtesy...especially when clients order policies from home and want to deposit in my account up north
How does a client know if their policy is active (does one just rely on the agency)? Obviously there are some who have called the carrier directly. Others have called us to inquire and on some occasions we've had to inform them that there's a problem and offer them the refund or a new policy. I'm eternally grateful to all those who have opted for a new policy. That new policy was sent to them along with proof of deposit in the Mapfre bank account. Unlike I related above, this time we wrote one check for each policy so each would have its own receipt and then we sent a copy of that receipt to the client with their policy. If they call me or the office, we'll pull their file to check and let them know the status. I'm guessing we'll find more than the 12, but don't expect it will be 20 or more.
