Insurer to Stop Issuing Policies Without License

California Insurance Commissioner Steve Poizner announced that Auto Dealers Risk Retention Group Inc., formerly known as AD-COMP MED Risk Retention Group Inc., an insurance company licensed in Montana, has agreed to stop issuing insurance policies in California without proper licensing.

The settlement signed yesterday marks the conclusion of an ongoing legal dispute in which the Department of Insurance alleged the company wrote health insurance policies without proper licensing.

Under the federal and state Risk Retention Acts, Auto Dealers Risk Retention Group Inc., formerly known as AD-COMP MED Risk Retention Group Inc., could provide liability insurance in California, but not health insurance. The insurance company wrote health or "stop-loss" policies to employers, which cover employers' excess losses for health benefits of their employees. The insurance company was not authorized by the Department of Insurance to sell this type of health insurance in California.