The Division of Banking and Insurance has fined two insurance companies in the territory.
Lt. Gov. Gerard Luz James II said the violations were uncovered while the division was preparing for Sunday's implementation of compulsory automobile insurance.
Speaking at a midmorning news conference Thursday, James said, "My office discovered that Guardian Insurance was running an ad campaign encouraging consumers to obtain auto liability coverage from them in exchange for frequent flier miles on American Airlines."
That type of offer, he said, "constitutes an illegal inducement of insurance laws." James said the company was ordered to halt the practice and was fined $1,000, which has been paid.
His office also slapped a $500 fine on Complete Business Systems, which he said was issuing auto insurance policies without the appropriate license.
Christopher Gordon of Complete Business was ordered to stop selling insurance policies and to cease advertising that coverage could be purchased from his business.
James reported on Thursday that the $500 fine has been paid and that Gordon has filed all necessary paperwork to sell insurance. He expects a license to be issued shortly to Complete Business Systems.
James spent considerable time in the news conference explaining that his office will continue its oversight to make certain that the laws are adhered to. He said the process will continue beyond Sunday's implementation date to educate the public on the need for basic liability automobile insurance.
"Education will be an ongoing process, I expect my efforts to educate the public will continue even after Feb. 13," James said.
Motorists driving without insurance after Sunday run the risk of being fined anywhere from $250 to $500 for the first violation, not less than $500 and not more that $1,000 for the second offense and forfeiture of the right to operate a motor vehicle for not less than a month nor more than two years from the date of the conviction.
James was joined at the news conference by Director of Banking and Insurance Maryleen Thomas, Nathan Simmonds, chief of staff, and Jerain Fleming, public information officer.
