WASHINGTON -- A pair of charismatic but controversial survivors of the National Warranty Insurance Co. debacle will resurface at the National Automobile Dealers Association convention this week with a new service contract company.
Twin sisters Susan and Sandra Marino are leading a group of insurance industry veterans who say they have the backing of deep-pocketed investors. The new service plan provider aims to fill the vacuum left by the collapse of National Warranty last year.
But the initiative is drawing skepticism even before its lavish promotional debut at the NADA convention in Las Vegas.
Agents with thousands of unpaid claims fresh in their memories are reluctant to gamble on the program because its chief marketers - the Marinos - had ties to the largest marketer of service contracts insured by National Warranty.
National Warranty, one of the largest independent service contract insurers in the country, was declared insolvent last year. More than 5,000 dealerships sold contracts backed by National Warranty, and many of them have been stuck with tens of thousands of dollars in unpaid claims.
At its peak, National Warranty sold as many as 35,000 contracts a month. The new venture aims to go after much of that business.
Details about the new service contract provider and an investment firm backing it are sketchy. The venture did not have a name 10 days before its introduction at a party scheduled for Saturday, Jan. 31, during the NADA convention.
The company intends to include insurance, administration and marketing under one roof, according to Susan Marino, who will handle marketing along with her sister. She says the company is in the process of acquiring four insurance carriers.
Marc Vivori, who ran extended warranty programs for two large insurers, American International Group Inc. of New York and ACE Limited of Philadelphia, is handling the insurance end of the venture.
Mark Anderson, an expert in captive insurance companies and former partner with Big Four accounting firm KPMG in Atlanta, will set up the programs.
Susan Marino says the venture will have $200 million in startup capital and will play it safe by setting aside a high level of reserves to pay claims.
"This is more than just a product. It is built on ethical ideals," Susan Marino says. "We want to prevent future disasters."