Kan. Department Steps Up Monitoring of Brooke Franchise Legal Issues
The Kansas Insurance Department is following up on consumer
inquiries and closely monitoring the legal issues surrounding Brooke Corp. and its insurance related affiliates, said Sandy Praeger, Commissioner of Insurance and National Association of Insurance (NAIC) president..
Commissioner Praeger said the department is interacting with the corporation’s appointed special master and staff members regarding contractual concerns between the corporation and its franchisees. The insurance department does not have regulatory oversight in those contractual matters. However, the Commissioner said that customers who paid premiums to those agents and agencies are considered to have coverage.
“Our consumer assistance, legal, financial surveillance, producers (agents/company) and antifraud divisions within the agency continue to receive phone calls regarding the Brooke situation,” Commissioner Praeger said. “There are many concerns from Brooke agents regarding
their contractual issues and inquiring about their clients’ well-being. We want consumers to know that we will advocate for policyholders in every instance that we can. We are proceeding with the consideration that policyholders have insurance in force.”
Brooke Corp., an Overland Park-based company with operations in almost half of the United States, operates an insurance agency franchise business, along with several related corporations.
Currently, lawsuits filed by financial institutions against Brooke Corp. concern loan contracts. A federal judge recently gave former Jackson County (Mo.) prosecutor Albert Riederer control of Brooke.
Riederer is acting as a special master in handling Brooke business and dealing with lawsuits filed concerning loan agreements with banks.
“Those Brooke lawsuits deal with contractual issues that are not part of the insurance department’s regulatory authority,” Commissioner Praeger said. “Mr. Riederer has met with our department personnel here in our office and, through weekly calls, is keeping us posted on
activities. We have always reminded him that premiums for policyholders were first priority and should be forwarded to the insurance carriers.”
“We will step in as needed when our regulatory control allows us,” the Commissioner said.
Source: Kansas Insurance Department
.