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Smart Shopper Warranties Backed by a Risk Retention Group
68 messages, Last post on Sep 16, 2009 at 10:47 AM
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Can you post where you found the info on INDS and the fact that their review is still open and that they own NSC? I called Interstate today and they said that their review is closed. They also said that they are the only RRG rated by A.M. Best. They said the B++ rating was a result of A.M. Best nervousness over the Warranty Gold fiasco. Not sticking up for anyone...just want the facts laid out and backed up. xpfshost |
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Under 'news', AM Best company number 11820. Lists a press release dated 12/23/03, Oldwick, NJ. Might be just nervousness, but I'd be nervous, too. I think www.ambest.com will get you there. |
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Sounds like Interstate is not telling the whole truth too you xpfshost! The AM Best article dated December 23rd states why they downgraded the RRG as well why it still is under negative implications and I quote: "NSC's rating historically had been supported by the strong capital position of INDS. However, to fund the buy-out of INDS'existing shareholders, its retained earnings were liquidated and management invoked bank debt. At the conclusion of INDS' privatization in January 2003, the strong capital cushion between INDS and NSC was removed. The reduction in capital and addition of bank debt significantly increased INDS' leverage." So as you can see AM Best didn't downgrade National Service Contract RRG because of nervousness of Warranty Gold. It did based on the action that Interstate took when they bought out their shareholders and invoked bank debt. "AM Best remains concerned that NSC's capitalization may no longer support its current rating should INDS' LRF (Loss Reserve Fund) develop advsersely. This concern is due to the fact that under its reinsurance agreement with INDS, NSC is subject to all of the potential adverse reserve development of INDS' LRF." Just thought you liked to know.
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Thanks. I tried getting the article before, but the navigation on the site was confusing and it looked like I might have to pay for it (which wasn't the case). Also, I couldn't read it because you have to register first, which I eventually did. It's easier to question INDS when you have the information right in front of you. Thanks again. xpfshost |
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News Release For Immediate Release Contact: Patrick Shaughnessy DATE: January 12, 2004 512-463-3208 TDLR INJUNCTION HALTS SALE OF UNSECURED VEHICLE WARRANTIES Company Must Provide Financial Assurance Before Selling New Policies AUSTIN - The Texas Department of Licensing and Regulation (TDLR) has obtained a permanent injunction ordering a New Mexico service contract provider to stop offering or selling extended warranties for automobiles in Texas for which it lacks proof of adequate financial security. Judge Suzanne Covington of the 201st District Court in Austin Monday ordered First Automotive Service Corp. (FASC) of Albuquerque to stop providing, offering, advertising, selling or marketing service contracts unless it can show that the policies will be properly backed. FASC did not contest the injunction. It was entered as an agreed final judgment. Under the Texas Service Contract Regulatory Act, companies in Texas that provide service contracts are required to prove before they sell policies that they have sufficient funding to service the contracts they sell and they must maintain adequate security during the terms of those contracts. This can be done through the purchase of reimbursement insurance from a third party. While investigating Warranty Gold, a licensed service contract provider that declared bankruptcy November 11, 2003, TDLR discovered that policies sold by Warranty Gold since June 2003 named FASC, rather than Warranty Gold, as the company that would actually provide the warranty coverage. FASC, in turn, stated in the policies that reimbursement insurance to cover claims was provided by Dealers Assurance Corp. (DAC) of Columbus, Ohio. However, DAC has informed TDLR that it never agreed to provide reimbursement insurance and never provided financial backing for the policies. The injunction prevents FASC from offering or selling any policies that are purportedly backed by DAC. The order does not affect FASC’s ability to sell policies properly secured by other insurers. Created in 1909 as the Bureau of Labor Statistics, TDLR protects the public welfare and safety and promotes a fair and competitive business environment by regulating twenty diverse industries and programs, including service contract providers, boxing, air conditioning contractors and architectural barriers. |
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| RRG's are not backed up or regulated like real insurance companies. A service contract "insured" by an RRG can become worthless a split-second after you purchase it. (That was a $1200.00 lesson for me)Always read the fine print! | |
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http://www.journalstar.com/warranty.php?story_id=116536 Warranty Direct Warrantybynet 1Source Warrantywarehouse These are just a few of the companies backed by Risk Retention Groups. Notice in the article it speaks of several RRG's that are insolvent. The author says National Warranty Insurance was insolvent back in 2001. Be careful! |
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Warranty Direct administered and owned by Interstate National Dealers Service and backed by National Service Contract Insurance Risk Retention Group...Rated B++ with the rating still under review with negative implications!!! Warrantybynet administered and backed by Heritage Warranty Mutual Insurance Risk Retention Group...Rated NR-1 (Insufficient Data)!!!! 1SourceAutoWarranty.com administered by 1Source and backed by PrimeGuard Insurance Company, Inc RRG...Rated NR-1 (Insufficient Data)!!!! Warrantywarehouse.com is backed by a Risk Retention Group but I am not sure who it is yet. But I will find out soon and let you all know!! I will continue to bring more information on these companies when I get it so that no one else will have to go through what myself and thousands of others did when NWIG collapsed....Stay tuned!!
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Keep us posted! I was burnt by WG and decided to go with WarrantyDirect...but after the info in this thread, I've toasted that policy and am awaiting a refund. Thanks for the good info to all here. xpfshost |
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I finally got who their insurer thanks to another post. The administrator is American Guardian Warranty who is backed by....you ready for this??? St. Charles Insurance Company Risk Retention Group!!! Guess, what they are rated....NR-1 (Insufficient Data)!!! I will keep you all informed as I find out more information. It seems my goal in life has become not to let anyone else get hurt by the Warranty Gold type companies like I did. |
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