Claims Went Unpaid: A Texas Judge Orders Insurer of Christian Groups to Stop Doing Business

A Texas judge has shut down an unlicensed insurance company that owes more than $3 million in outstanding claims to 122 churches and Christian organizations in 27 states.

In response to a suit filed by Texas Attorney General James Mattox, a district court judge issued a temporary restraining order closing down the Hurst, Texas-based Christian Organizations Medical Society, Inc., and related companies. All assets were frozen, and a temporary receiver was appointed to administer the companies.

Christian Organizations; its director, Robert E. Browning; and several related companies later filed Chapter 11 bankruptcy proceedings in federal court. Lawyers for the companies could not be reached for comment.

In California, the state insurance department is planning to prevent the companies from doing further business in that state. At the same time, the U.S. Postal Service is investigating Christian Organizations for mail fraud.

“Our investigation was initiated based on complaints of unpaid claims,” said postal inspector Michael Jones. “It started with one [claim] of $1 million from the United Pentecostal Church International in St. Louis.”

To prove mail fraud, Jones said, his office must prove that the insurance company devised a scheme to defraud its clients and then made false promises through the U.S. mail.

Sam Metcalf, president of Church Resource Ministries, based in Fullerton, California, said his company canceled its policy in February after nearly a year of trying to get payment on unpaid claims.

“We have somewhere between $30,000 and $40,000 in claims outstanding,” he said. Those unpaid claims affect the families of 20 Church Resource Ministries employees in seven states. Metcalf said his company is planning to sue the insurance company for unpaid claims.

Overseas Crusades, an interdenominational mission based in Milpitas, California, signed on with Christian Organizations Medical Society in 1984. “We started bargaining by holding back premiums because they owed us more than we owed them,” said Steve Grubb, financial manager for the mission that sponsors 125 workers in the United States and 15 foreign countries. “We haven’t suffered greatly except for the fact that our people have gotten a lot of nasty credit warning notices.” The mission canceled its policy last summer with about $8,000 in unpaid claims remaining.

The Texas attorney general’s office filed suit against Christian Organizations, its directors and trustees, and several related companies in September. The suit alleges that the companies were practicing the insurance business without authorization of the state of Texas.

The suit also claims the companies are in an “insolvent condition and that their liabilities greatly exceed their assets and they are unable to pay their debts as they become due.”

A Texas judge last month extended the temporary restraining order against Christian Organizations Medical Society. Other companies named in the court order are: Christian Organizations Medical Society Employee Benefit Trust; North American Risk Management Corporation; Browning Corporation International; Administration and Risk Consultants, Inc.; and International Religious Association, Inc.

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