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CALIFORNIA Insurance Commissioner John Garamendi last month ordered a Tennessee-based travel insurance company to stop doing business in the state, saying the company was defrauding the consumers it was supposed to protect.

The insurance commissioner said Trip Assured, which is based in Crossville, Tenn., was selling insurance illegally in California. Trip Assured has disputed that assertion, saying what it sold was not insurance.

"No matter what Trip Assured wants to call it, the product they are offering meets the definition of insurance," Garamendi said in a statement issued Oct. 4. "This company's whole reason for being appears to be to defraud and intimidate senior citizens."

As of the Travel section's deadline Tuesday, Trip Assured had not returned phone calls seeking comment.

California's action comes after state insurance departments in Florida, Michigan, Texas, Tennessee and North Carolina took similar steps in response to complaints about the company. Trip Assured has denied at least 30 claims in California for what the California Department of Insurance calls "questionable reasons."

Sylvia Resnick of Orange was among those whose claims were denied. She bought trip interruption insurance from Trip Assured through her travel agent, Cruise VIP in Van Nuys, for a European trip on Crystal Cruises in May. Resnick, a frequent cruiser, said she scrimped and saved to pay for the higher-end voyage and bought insurance to protect her investment.

"I kept asking … to make sure everything was covered [because I was] going abroad and by myself," said Resnick, who is a senior citizen.

After eight days of touring London, she experienced back problems that she said made it impossible for her to continue. She canceled her cruise and returned home.

She saw her doctor four days after her cancellation — the first available appointment, she said — and obtained a doctor's note certifying that she was medically unable to sail.

Trip Assured denied her claim, saying in a letter to her that she had not seen a physician within 72 hours of cancellation as required in its contract. It further denied her claim because of a contract clause that says, "Unforeseeable sickness or illness … must be so disabling as to reasonably cause a trip to be canceled or interrupted upon the directive of the medical physician."

Resnick's son Barry, a professor of counseling at Santiago Canyon College, said he pored through court records around the country and found more than three dozen other travelers who alleged their claims were wrongly denied. "They're still coming in through the door," he said, "and are mostly senior citizens."

Cruise VIP owner Lewis Kerstine said he had no complaints about Trip Assured before Resnick's claim. But, he said, he stopped selling Trip Assured insurance in July for what he called "business reasons." He declined to elaborate.

Trip insurance is a big and growing business, especially for expensive trips such as cruises and international trips. Americans spent more than $1 billion on trip insurance in 2004, insuring 17 million individuals, according to the U.S. Travel Insurance Assn., a Richmond, Va., trade group founded two years ago to foster best practices.

Nearly a third of leisure travelers taking cruises, air/tour vacations and international trips bought travel insurance in 2004, compared with 10% of U.S. travelers who bought such coverage before the Sept. 11, 2001, terrorist attacks.

UStiA members, which are mostly insurance companies, subscribe to a code of ethics that obligates them to, among other things, present their products clearly and accurately and to pay valid claims fairly and promptly. The UStiA website, http://www.ustravelinsurance.org , has a list of its members. Trip Assured was not a member.

The UStiA does not comment on specific companies, a spokesman said, but earlier this year issued a statement saying, "As is the case in virtually every sector of commerce, there are a few companies in our industry that do not operate in the best interests of the clients they serve" and recommended that consumers purchase travel insurance only from reputable companies that adhere to ethical standards, such as its members.

Trip Assured's membership in the Better Business Bureau in eastern Tennessee was revoked, its website said, because the company did not "meet standards of conduct expected of a BBB member."

The bureau had received 76 complaints in the last 36 months about the company. By contrast, AIG Travel Guard, based in Stevens Point, Wis., sells 6 million policies per year, spokesman Dan McGinnity said. Fifty-eight complaints were filed with the Better Business Bureau in the last three years.

"The number of complaints we have at any given time is infinitesimal compared to the number of policies we have in force," McGinnity said.

Companies are given the opportunity to address and correct complaints and, according to the Better Business Bureau, Trip Assured had done so to the bureau's satisfaction in all 76 cases.

Travel Guard requires a doctor's note certifying a medically valid reason for canceling a trip, but it does not require its customers to see a physician within 72 hours.

"If a trip is going to be canceled for a medically related reason, some type of document would need to be produced from an appropriate health-care provider," McGinnity said. "But it would not be within that time frame."

Most travel insurance is sold through travel agents, so the American Society of Travel Agents has alerted its members in the states where the government has intervened, but ASTA has not issued a national advisory.

"After we confirm the situation in California, we will send another alert to our members to that effect," said ASTA spokeswoman Jada Irwin. "Agents in states not yet barred will decide for themselves what they want to do."

Trip Assured is still obligated to honor any current policies in effect, said Lauren Hersh, a spokeswoman for the California Department of Insurance. "Efforts are always being made to get people their money back if there's a claim that hasn't been paid," she said, "but each claim has to be investigated."

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(INFOBOX BELOW)

What to do if you have a complaint

California consumers who have complaints about Trip Assured can call the state Department of Insurance hotline at (800) 927-4357 or file a complaint online at http://www.insurance.ca.gov . (See Consumer Tools at left; pull down to "Get Help.")

Trip Assured's bank, First National Bank of Tennessee, has set up a hotline, (931) 707-3562, for MasterCard customers only. It is staffed

6 a.m. to 2:30 p.m. Pacific time.

— James Gilden

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