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Troubled Phila. cab insurance firm is curbed

Another insurer of taxicabs in the Philadelphia region is in financial trouble, threatening for the second time in less than a year the ability of some taxi owners to insure their cabs and of accident victims to collect for their medical bills.

Cabdrivers, such as these at 30th Street Station, may face an uncertain future with regard to their insurance as the PUC investigates a major carrier. (RON CORTES/File Photo)
Cabdrivers, such as these at 30th Street Station, may face an uncertain future with regard to their insurance as the PUC investigates a major carrier. (RON CORTES/File Photo)Read more

Another insurer of taxicabs in the Philadelphia region is in financial trouble, threatening for the second time in less than a year the ability of some taxi owners to insure their cabs and of accident victims to collect for their medical bills.

The Philadelphia Parking Authority, the regulator of taxi operations in the city, is declining to accept insurance renewals for Philadelphia cabs written by Pinelands Insurance Co. Risk Retention Group Inc., of Washington.

Last year, 272 of Philadelphia's 1,600 cabs were insured by Pinelands, PPA spokesman Martin O'Rourke said Tuesday.

"Brokers of insurance to the taxicab industry have informed policyholders of Pinelands' difficulties, and some have moved their policyholders to other insurance companies," O'Rourke said.

The Pennsylvania Public Utility Commission, which regulates taxis outside Philadelphia, is in the early stages of an investigation into Pinelands, PUC spokeswoman Robin Tilley said Tuesday.

Pinelands is having trouble meeting its financial obligations, according to regulators. It was issued a certificate of authority by the District of Columbia Department of Insurance, Securities and Banking (DISB) on Nov. 1, 2004.

That certificate authorized Pinelands to write commercial auto liability insurance in Pennsylvania and New Jersey. Pinelands is required by Washington law to maintain sufficient assets to meet all of its obligations to policyholders.

"Due to uncertainties regarding its finances, Pinelands, with the approval of DISB, voluntarily suspended writing all new and renewal business as of March 9, 2015," the Washington insurance department said in a statement Tuesday.

"As of today, Pinelands has not resumed writing business. DISB is currently reviewing information regarding Pinelands' financial condition. DISB maintains letters of credit in the amount of $1.17 million that can be used to pay policyholder claims if necessary."

This is the second recent insurance crisis for Philadelphia's taxi industry, and for those involved in taxi accidents.

Last October, the insolvency of First Keystone Risk Retention Group Inc., licensed in South Carolina and with headquarters on Aramingo Avenue, threatened to ground a quarter of Philadelphia's taxis.

Virtually all taxi owners were able to find replacement insurance before the PPA pulled any cabs out of service.

This time will be less difficult for local cab owners, a lawyer for the industry said.

Michael Henry, a Philadelphia lawyer who represents the Pennsylvania Taxicab Association, said replacement coverage is "readily available, so I don't expect that the transition to new coverage will be difficult for the small number that would be affected by this situation."

Robert Hartwig, president of the Insurance Information Institute, said taxi insurance tends to be expensive, because cabs are on the road many hours a day and accidents are inevitable. Nonetheless, he said "it's not like risk retention groups are failing right and left in the U.S. . . . There are big national insurers that write this kind of insurance."

Lawyers for some taxi accident victims said their clients have been unable to collect from Pinelands.

Peter Barnett, litigation manager for the law office of Neil Gelb in Center City, said Pinelands settled with an accident victim on March 3, but has refused to pay the $15,000 due.

An adjustor for Pinelands told Barnett "we're not paying any claims," he said.

Telephone calls to Pinelands' offices were not returned, and its adjustor in Voorhees could not be reached.

Gelb's client, who was working as a medical assistant in Broomall, was a passenger in a taxi operated by County Cab, which operates in Delaware County. She hired the cab at 69th Street Terminal and was hurt when the taxi was in a one-car accident on the West Chester Pike, Barnett said.

Her medical bills were nearly $20,000, which exceeded the $15,000 limit of the Pinelands policy, he said.

"In 40 years in this business, I've never seen a company just not pay a claim," Barnett said. "Are the authorities just going to watch this train wreck happen?"

Pinelands is registered with the Pennsylvania Department of Insurance, but the department does not regulate the company or take action on behalf of accident victims.

"Pinelands and other companies like it register with the department because they do business in Pennsylvania. However, for regulatory issues such as this, we defer to the area where the company has the most activity," insurance department spokeswoman Alison Fogarty said. In the case of Pinelands, she said, that is Washington.

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