Autoland Fixes Six-Year Insurance License Lapse in Oregon
Credit union auto buying service Autoland Inc. said it is back in good standing after the Oregon Department of Consumer and Business Services issued an enforcement action against the firm for operating without a license in the state for more than six years.
According to the June 7, 2010, order, Autoland was not licensed in Oregon as a business entity insurance producer from Nov. 1, 2004 to March 11, 2010. The firm also sold 476 mechanical breakdown insurance policies on behalf of three insurers to persons living in the state from Nov. 3, 2004 to Nov. 17, 2009.
Oregon's insurance division assessed a $50,000 civil penalty against Autoland. The payment was due Nov. 24, 2010. The auto buying service firm chose to conclude the proceeding without a hearing and to waive all rights relative to an administrative hearing and judicial review, according to the order.
In 2007, Autoland was acquired by CU Vehicles, LLC, once a wholly-owned CUSO of $405 million Telesis Community Credit Union in Chatsworth, Calif. Founded in 1971, Autoland represents hundreds of credit unions, over eight million members, 75 locations nationwide and more than 130 employees, according the firm's website. It claims to sell over $270 million in vehicles per year.
Autoland was licensed in Oregon as a nonresident business entity insurance producer from June 15, 1999 to June 30, 2000 and as a resident business entity insurance producer from Oct. 7, 1999 to Oct. 31, 2002 and again from Nov. 8, 2002 to Oct. 31, 2004, according to the order. Since March 12, 2010, it was once again licensed as a resident business entity insurance provider. However, Autoland's corporate address is in Chatsworth, Calif.
Autoland Inc. said it discovered an administrative error in a mid-2009 operational audit that prompted it to contact the Oregon's insurance division about a license lapse.
"While Autoland had previously been licensed with Oregon's insurance division, we were unable to find either a current insurance producer license, record of renewal notice or application in the Oregon office files. We immediately notified the Department of Insurance to correct the issue," said Marcia Francisco, senior vice president, marketing/business development, in a Feb. 1 statement to Credit Union Times.
Because Autoland was not aware that the Oregon license had lapsed, Francisco said transaction volume in the region continued as usual.
Francisco said as a result of the Autoland internal audit, the firm completed a business entity application on Aug. 13, 2009. The Oregon Department of Insurance also conducted an audit of Autoland and "it was noted that Autoland fully cooperated," she added.
"The fine could have been significantly higher, but we were fined at the lesser rate due to the cooperation of the company," Francisco said. "The fine was assessed in May 2010 for the lapse in the insurance license. Autoland paid the fine, and we are fully compliant. We are duly licensed and in good standing with the Oregon Department of Insurance."
The department confirmed Autoland's standing.
"The matter is resolved. Autoland got its agent license, paid the fine by the due date and did everything else it was supposed to do," said Cheryl Martinis, a spokesperson with the Oregon Department of Consumer and Business Services Insurance Division.
Telesis has a stake in eight CUSOs including CU Vehicles, the entity that acquired Autoland. According to the NCUA's December 2010 Call Report, Telesis' value of investment in the CUSO was $3.8 million and $2.5 million was loaned to CU Vehicles. The aggregate cash outlay to the CUSO was $12.5 million.