State files suit against Posey, American Trade Association, Smart Data Solutions, LLC, Serve America Assurance

March 24, 2010--Tennessee Attorney General Bob Cooper, acting on behalf of Department of Commerce & Insurance (TDCI) Commissioner Leslie A. Newman, has filed a petition in Davidson County Chancery Court against entities involved in activities that have misled consumers into believing they had bought insurance. The petition seeks to have Newman appointed receiver, as well as the liquidation of the respondents' assets.

Named in the petition as respondents are Smart Data Solutions LLC, American Trade Association Inc., American Trade Association LLC, Serve America Assurance, Bart S. Posey Sr., Angie Posey, Obed W. Kirkpatrick Sr., Linda Kirkpatrick, Richard H. Bachman, Kristy Wright, William M. Worthy II and Colin Youell. A hearing on the petition is set for 1:30 p.m., March 30, 2010.

"The respondents have failed to submit financial statements ... and are at risk for insolvency, wasteful practices and financial self-dealing," Newman said in the petition. "Their customers have been induced to purchase bogus health coverage, turning over millions of dollars of premiums, without any of the safeguards that the licensed carriers possess, and without the protections for solvency and consumer protection that accompany lawful insurance." The petition states the unlicensed, unauthorized and otherwise fraudulent, deceptive and unfair transactions constitute an immediate danger to the public health, safety or welfare of Tennessee policyholders and to the public of several other states.

As a result, the petition seeks to control and stop the full scope of the unauthorized insurer's shifting activities and assets. Newman is seeking a receivership that locks down the insurance coverage by listing the numerous respondents and requiring all the components to be liquidated through the Chancery Court. TDCI also seeks the liquidation of the entire insurance business, the insurer, its administrators and managers, and any of the assets that were paid or traceable to the funds for health coverage, however the assets have been held or appropriated. "All illegal insurance overage must cease and the duped customers should be urged to find authorized carriers in their jurisdictions, including Tennessee. This business must be permanently enjoined, and persons involved prevented from continuing similar unlawful activities under any guise," Newman said.

Any Tennesseans who have questions about their insurance policies or have had dealings with these companies should contact TDCI's Consumer Insurance Services section at 1-800-342-4029 (inside Tennessee).

The Department of Commerce and Insurance works to protect consumers while ensuring fair competition for industries and professionals who do business in Tennessee.