Hole-in-one insurer has state teed off

OLYMPIA – The state insurance regulator is going after a company that claims to offer insurance against a hole-in-one prize but refused to pay off when a golfer shot one.

Golf tournaments for charity often offer a large cash prize for any contestant who records a hole-in-one, and organizers buy insurance to pay the prize in the unlikely event that a golfer scores one.

When a Seattle-area man hit one at the First Tee of North Puget Sound Tournament in 2010, the tournament’s insurer, Kevin Kolenda of Norwalk, Conn., didn’t pay, Insurance Commissioner Mike Kreidler said.

Jeff Cornish, executive director of the tournament, said they tried for six months to get the $25,000 prize for Andrew Knapp, of Kent. For three months, Kolenda’s company asked for more information or paperwork. Then it stopped talking to them altogether and never paid.

Kolenda faces two other complaints in Washington, as well as similar complaints in several other states, Kreidler’s office said Thursday. Kolenda ignored a cease-and-desist order from the office and hasn’t paid a $125,000 fine. This week he was charged in King County Superior Court with five counts of transacting insurance without a license. He’s scheduled for an arraignment next month.

“He has a long history of selling illegal insurance, refusing to pay prize winners and thumbing his nose at regulators,” Kreidler said in a news release.

Typically, a charity sponsoring a tournament pays a few hundred dollars for a policy that will pay the prize if a contestant gets a hole-in-one, said Rich Roesler, a spokesman for the commissioner’s office.

The tournament used another company for hole-in-one insurance in previous years but never had a claim. Kolenda sent organizers an email offering a slightly cheaper rate in 2010. The offer sounded legitimate, and the paperwork looked the same as the previous policies, and the tournament went with Kolenda, Cornish said.

That year, Knapp got a hole-in-one on the seventh hole. The tournament tried for six months to get the prize before filing the complaint, he said.

Knapp has been patient about waiting for the prize money while the organization pursues the claim, Cornish added. Kolenda still sends the tournament emails advertising his insurance.

A hole-in-one at a tournament is so rare – about 7,000-to-1 by some estimates – that a claim isn’t often made, let alone rejected, so problems don’t become widely known, Cornish said.

“It’s really kind of good scam, if you’re a crook.”