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The California Department of Insurance (CDI) has issued a cease and desist order against four entities and three individuals.

International Marine Underwriters Ltd., International Wet Marine Underwriters, Marine Specialty Management, Commercial Water Sports Operator’s Assn., Craig Reynolds, Charles O’Hara and Bruce Woods were ordered to discontinue the sale of all insurance policies in California.

According to CDI’s Criminal Investigations Branch investigators, Marine Specialty Management and its unlicensed employees O’Hara and Woods sold liability and marine insurance policies to California parasailing and boat rental business owners without being licensed by CDI as an insurance agent or broker. The policies were underwritten by International Marine Underwriters and International Wet Marine Underwriters. Neither insurer holds a Certificate of Authority from CDI authorizing them to transact insurance business in California and neither company is on the List of Eligible Surplus Line Insurers.

According to investigators, during the mid-1990s, Reynolds and O’Hara established International Marine Underwriters and International Wet Marine Underwriters, which are purportedly located in St. Vincent, West Indies. The pair then allegedly established Marine Specialty Management based in Lake Havasu City, AZ, which acted in the capacity of a managing general agent for the two insurers. Investigators said Bruce Woods is also the president of the Commercial Water Sports Operator’s Association and marketed and sold the insurance benefits to its members.

The insurance premiums quoted by Marine Specialty Management were typically 40%-60% below the standard market rate of an authorized insurance carrier writing a similar policy. Most of the policies sold in California were $1 million liability policies.