Facts

SmartStop Asset Management, LLC operating within the state of California, offered and sold insurance to renters in the state. Most renters using SmartStop used self-storage facilities that were controlled or managed by SmartStop affiliates. The California Department of Insurance eventually fined SmartStop for various licensing violations.

PETITIONER'S CONTENTIONS: Petitioner contended that respondent did not have a license to sell insurance in the state. Respondent offered and sold insurance to renters leasing self-storage units in the state when respondent knew they were not permitted to do so. Approximately 19,500 illegal policies were sold, which yielded more than $1.8 million in operating fees for respondent.

RESPONDENT'S CONTENTIONS: Respondent agreed to pay the fine and stop operating as an insurance company in the state.

Result

The settlement agreement between the parties required respondent to pay $250,000 in monetary penalties and to stop offering insurance coverage to renters in California. Respondent was also required to terminate any policies still in effect in the state and encourage its affiliates to do the same.