Industry
Larry Cossio rebuts MIC Press Release
By CIA
Feb 4, 2008, 09:32

DISCLOSURE ??

We have recently seen a barrage of emails and newsletters from Cossio Insurance demanding a full disclosure of OUR insurance program and a number of the insurance professionals charged with maintaining the program’s INTEGRITY.

What we have seen in these diatribes is an unwarranted attack by Mr. Cossio on our agents and a lack of DISCLOSURE by the C. I. A. (cute name)

1. Mr. Cossio states he came up with a competitive program in 1996, but by 1998-99 he was writing with us and WE developed the program that is still in place today. Did his program only last TWO years?

Mr. Sturgeon, is partially correct with his statement. He approached me to write paintball fields in 1997 and asked me to share my underwriting data and put a program together and he would include in his program. So he adopted our program and safety guidelines and wrote paintball fields for me through 2003, not 1999.

2. Mr. Cossio bashes our agents for charging fees but Mr. Cossio charged fees himself back in 1999-2003 under the PAINTBALL BUSINESS ASSOCIATION

I am not bashing, just providing disclosure since there is no line item on any invoice that I have seen that discloses exactly how much the association dues are. And if it is a real association, why is it not filed with the State? And if you are writing insurance for this association, why is this association not licensed as an insurance agency per Insurance code????

And I did charge association dues for National Paintball Association through 2001, which did have a fictitious name filing license in San Diego, Ca. This changed when Rick Fairbanks purchased my paintball book of business in 2001 and sold the name NPA to Gino Postorivo, Rick then named and owned ILM, Inc. dba Specialty Insurance Services with a dba of Paintball Business Association, I was not the owner, I was an employee of National Paintball Supply, Inc. which later changed to Paintball Inc. Rick Fairbanks never did produce documents to me where he had formed the corporation or association. He said he did not have to, even after I provided documentation to him. He said we are in South Carolina, and that is not how we do things here.

When I left in March 2003 Rick and Nathan came up with Nsera who is charging dues, I have nothing to do with that.

3. Mr. Cossio has FAILED to point out that his lead GENERAL LIABILITY carrier, LEXINGTON INSURANCE COMPANY, IS NON-ADMITTED. A non-admitted carrier has no protection under the STATE GUARANTY FUND in the event of CARRIER INSOLVENCY. Mr. Cossio also fails to point out that it is ILLEGAL, in many states, for an agent to switch from an ADMITTED INSURANCE COMPANY, (such as PHILADELPHIA) to a non-admitted company. THIS IS ACTUALLY AGAINST MANY STATE INSURANCE LAWS.

Once again Mr. Sturgeon is correct, I have not pointed out that Lexington is non admitted. By the way Lexington is an A+ rated carrier with more surplus than his carrier, and Lexington is part of the AIG Group, the largest and most financially sound insurance company in the USA. If they go insolvent the whole industry is in trouble….

Once again Mr. Sturgeon is correct, it is illegal to switch from an admitted carrier to a non admitted carrier, unless there are some circumstances that he has forgotten. First, Mr. Sturgeon will not allow me to write “his” or “their” program since 2004 so I had no access to it. Second, if the non admitted carrier provides better coverage or different coverage and endorsements, less exclusions etc. it is legal. We do all the above, not just a lower premium.

4. Mr. Cossio questions whether our agents are licensed. We write no coverage for anyone if they do not hold a valid license.

Mr. Sturgeon might be confused here. In 2003 and 2004 he was notified that the Nsera group were not properly licensed and ignored it. He has accepted applications from unlicensed agents since then. Now if you need to you may check the department of insurance in your state and see if Cathy Turner, who “transacts” 95% of the insurance for Nsera has a current license in each state. I believe she used to but now they are all expired. Why would you secure licenses in 2004 and allow them to expire……? In January 2006 Cathy Turner, Nathan Smith and ILM were fined by the South Carolina Department of Insurance, (all public records) for transacting insurance without the appropriate licenses in South Carolina, they could not be charged for activities outside the state. Now as far back at 2003-2004 they were not correctly licensed by the attached spreadsheet. There is also a new spreadsheet showing who is licensed in what state for myself, Rick Fairbanks, Cathy Turner and Bob Mcguire. Interesting stuff. Mr. Sturgeon was notified by me and ignored it. I have provided copies of statements showing coverage bound in states where they were not licensed. There is another document showing coverage bound for an account in Alaska for Nsera in July 2005, none of the employees have ever been licensed in Alaska. For clarification purposes, since that is what we are doing is clarifying, in order to transact insurance in each state you must be licensed as a fire and casualty and life and health insurance agent as we sell liability and accidental medical policies. The insurance code states that if you solicit, negotiate, procurement, or effectuation of insurance or renewals, dissemination of information as to coverage or rates, or forwarding of applications, you must be licensed, oh yeah, correctly. So, bottom line you must be correctly licensed in your state and any other state you “transact” in. Mr. Sturgeon knows, he is also licensed in all states, correctly I might ad.

5. Mr. Cossio states he used to write business for us. This is true, but we discontinued this in 2003. There are a number of reasons we decided against continuing a business relationship with Mr. Cossio.

6. Our Paintball program has been around over 10 years with stable, competitive pricing achieved by experience and solid underwriting. ALL Mr. Cossio talks about is how cheap his pricing is. Where has he been for 5 years, when there was a struggle to find coverage? Are his insurance carriers familiar with paintball risks and claims? With his promises of cheap rates, will they disappear, like Mr. Cossio did, after a couple of years? Ask your state insurance department about these “NEW” carriers. One is totally NEW TO PARTICIPANT ACCIDENT coverage and one has a TERRIBLE CLAIMS PAYMENT REPUTATION. You can actually check out these facts.

I have not disappeared, I chose not to deal with Rick Fairbanks when he wanted to declare bankruptcy and affect so many companies that he owed over $5,000,000 to, including Marcela and I. I have still been insuring fields, just not with a competitive market. This industry shops price most of the time. Did not blame them for going with Nsera or Apl or Mic. Apparently Mr. Sturgeon is confused as neither of the insurance companies we write for are “NEW”, or they would not be able to have such a strong financial standing in the insurance industry. Both of these inflammatory statements are being made against sound insurance companies which might have some legal issues for Mr. Sturgeon.

7. Paintball insurance has always been hard to find at a reasonable price with quality ADMITTED carriers that provide needed coverages. Watch out for advertising that boasts cheap prices and bashes the people that kept this program operating. Mr. Cossio’s program management skills are unproven at this time.

I agree with Mr. Sturgeon. It is rare, and almost impossible to get an insurance company to write paintball fields. We have both non admitted and admitted carriers. I did not know that my management skills were an issue, but since I have been in business since 1984 I might be doing a few things correctly.

BE AWARE OF FALLING RATES AHEAD !!!!!

This is an interesting ending to his statement, as his “agents” are promising huge discounts for renewal.

Bottom line is this, the paintball industry is profit driven, a lower cost insurance policy is a God send for field owners, especially without all these dues and fees.

This letter by Mr. Sturgeon is caused due to the potential loss of A LOT of money. Lets do the math:

MIC is one of the brokerage houses that underwrites all accounts for Apl and Nsera,  MIC is the one that has the actual association liability policy that the paintball industry uses. So of course MIC charges $150 association dues for access to that policy. So understand that every paintball field insured with Nsera or Apl that MIC issues, MIC gets $150. The accident medical policy has a $100 “administration fee” tacked also on by MIC.  So for each policy MIC gets $250.  About 700 fields are insured times $250 = $175,000 in fee income, not to count the commission……   Yeah they are pissed.

Now understand that both Apl and Nsera claim that this is THEIR program and that you have to pay the association dues to access it.  But you can go direct to MIC and purchase the same association program that MIC sells to these guys but without the Apl and Nsera dues….. So everyone is paying double dues.     Only in paintball….  Probably not legal either.

Ok, let’s look at the next level of fees you are paying. We will use estimated numbers since no body has ever received a bill from any association for just association dues. Who knows how much you are being charged!

Now lets assume that Apl and Nsera are charging from $300-400 association dues.  Apl only has about 50 fields at $300 which is $50,000 in association dues income, but at least he has filed the Apl as a corporation and it actually exists.  Now Nsera, does not exist with the Secretary of State in SC, hmmm.  Ok now they say they insure 800 fields, so let’s just do the discounted amount of 700-50=650 fields that they insure.  That is 600 X $300 (lower amount) which equals $195,000 in so called association dues income for an association that does not exist.  Sounds like a class action suit to me just waiting.  Yeah they are pissed.

Bottom line, each field owner is paying an estimated minimum of $550 in association dues and fees, and they ask what they get for that money. Sorry, there are no answers you want to hear about this subject that does not hurt the pocketbooks of field owners.

My name is Larry Cossio and I approve of this message.

Documents supporting Cossio's allegations can be found HERE