07/22/96 INSURANCE ALERT: SLIPPERY PITCHES

INSURANCE ALERT: SLIPPERY PITCHES

LIFE INSURANCE SALES FOLK are taking to the Internet to flog their policies. However, state regulators, afraid of end runs by unlicensed sharpies, have put cops on the beat.
The regulators say that they have turned up a number of suspicious pitches, although at this early stage, they haven't filed any charges. In Utah, for instance, regulators are investigating an unnamed information service that claims to be using the Internet to provide premium quotes on behalf of top-drawer insurers--a service which doesn't require a license. The problem is that the company also ``takes applications and accepts premiums,'' says Dixon Larkin, Utah's deputy commissioner of insurance. That requires state licensing. Maryland is investigating two unnamed agents for selling on the Internet without obtaining a license.
Aside from possible fraud, regulators are concerned that consumers buying from an unlicensed source won't be legally protected. Dozens of insurance companies fail every year. If an insurer is unlicensed, policyholders won't be entitled to a share of the busted company's assets or be repaid from a state's guaranty fund, which is set up for assetless failures.
To better educate con- sumers, such states as Illinois, Michigan, and Col orado are developing homepagesonthe Web. These pages will provide specifics on licensing requirements for both agents and insurance companies.
EDITED BY LARRY LIGHT By Lisa Sanders