Released: December 23, 2009

The Louisiana Department of Insurance (Department) filed a lawsuit against Infinity Surety of Louisiana, Inc., Infinity Surety Agency, LLC, and George D. Black (collectively doing business as Infinity Surety) on December 17, 2009, in the 19th Judicial District Court, East Baton Rouge Parish, for operating as a surety insurance company without the required insurance licenses. After receiving several complaints, the Department found that Infinity Surety failed to obtain the necessary insurance licenses to operate as either an insurance company or as an insurance producer in Louisiana. A certificate of authority is mandatory for an insurer to write bid bonds, payment bonds and performance bonds for public works projects in Louisiana. Infinity Surety had been operating deceptively under the pretense of being capable of issuing these types of surety bonds.

Judge Janice Clark, hearing the case on behalf of Judge Kay Bates, issued an order for Infinity Surety and George D. Black to cease and desist from conducting the business of insurance; ordered them and all other parties to turn over all records to the Department; and authorized the Department to take control of all property, bank accounts, funds and records on behalf of those persons injured or affected as a result of Infinity Surety’s fraudulent actions.

“Infinity Surety engaged in the sale of unauthorized insurance and unfair insurance trade practices. We moved proactively against Infinity Surety in order to protect the safety of the citizens of Louisiana against possible uninsured construction and public works projects, which could result in significant financial problems for those contracting for or working on these various projects,” said Commissioner of Insurance Jim Donelon. “We are pleased that the court ruled in favor of the Department of Insurance and further that the court order protects the citizens of Louisiana by requiring a $1 million bond from Infinity Surety.”

The court agreed with the Department that Infinity Surety does not meet the requirements for writing surety bonds for public works projects in Louisiana because Infinity Surety is not listed with the U.S. Department of the Treasury Financial Management Service as an approved bonding company. It is also not domiciled in

Louisiana with at least an A- rating in the A.M. Best Key Rating Guide, which is also a requirement to
conduct this type of surety business in Louisiana. Infinity Surety falsely advertised that its surety bonds are backed by United States commercial and residential real estate with “authority” to issue surety bonds between $1 million and $50 million.

The Department found that Infinity Surety issued surety bonds that contained materially false information regarding their qualifications and authority to conduct surety bond business in Louisiana. The company had pledged property of insufficient value as backing for numerous multi-million dollar public projects in Louisiana. They were found to have fraudulently presented themselves as a surety company doing business in Louisiana. The Department alleges that Infinity Surety solicited, issued, executed, sold and/or wrote surety bonds in Louisiana and received payment for such from private contractors for various public works construction projects. This unauthorized action by Infinity Surety also deprived the state of revenue not collected on premium taxes due on these bogus surety bonds.

Those state and local governmental agencies that accepted surety bonds from Infinity Surety face serious risk of loss. The Department alleges the conduct by Infinity Surety is fraudulent, illegal, hazardous, creates an immediate danger to public safety, and is causing or can be expected to cause public injury that is incapable of being repaired or rectified. This conduct evades the insurance laws of Louisiana and could be hazardous to Louisiana businesses, governmental agencies, contractors and/or the public. Because any delay in action against Infinity Surety could endanger the interests of state and local governmental agencies, contractors, and the public, Commissioner Donelon took aggressive action to file this lawsuit and seek this injunctive order against Infinity Surety and George D. Black. Commissioner Donelon added that the Department took similar action three years ago against United Assurance, AA Communications and Gwen Moyo, which resulted in Moyo’s federal conviction.

“People should contact the Department of Insurance at 1-800-259-5300 or review the Department’s Web site to confirm that an insurance company is properly licensed by the Department to sell surety bonds in the state of Louisiana,” said Commissioner Donelon.

A hearing on this case is scheduled for January 4, 2010, in the 19th Judicial District Court. Anyone who has questions or concerns regarding this case should contact the Department’s Division of Legal Services at (225) 342-4673.