The Georgia Insurance Department said the policies had been purchased from Main Street Brokerage and Phoenix Brokers.

A cease-and-desist order has now been issued against these brokers and an arrest warrant has been issued for Main Street and Phoenix owners, Geoffrey Waterhouse and Robert Waterhouse, according to the department.

Georgia Insurance Commissioner John Oxendine told National Underwriter that the two have been selling fake insurance for the past two years, using as underwriter Mark Solofa Insurance Company, which happens to be a legitimate insurer based in American Samoa but was not involved in the fraud.

Commissioner Oxendine said that yesterday he sent out a letter to 155 taxi and limousine companies affected by the bogus coverage as of Dec. 2004.

The number of affected taxi and limousine companies is likely to rise as the investigation continues, he said.

"Yesterday's notice says that if you are one of these taxi and limousine companies, you do not have insurance as required by Georgia law, and that operating vehicles even just one more day without proper insurance is illegal."

Taxi firms without proper insurance can have their medallions revoked, Commissioner Oxendine said. He said his department has also provided the list of these companies to the Georgia State Police and the Georgia Department of Motor Vehicles.

According to the state's insurance regulators' at least $3 million in premium money has been collected for the bogus insurance.

Commissioner Oxendine said a court-appointed receiver is trying to marshal assets of Main Street Brokerage Inc. and Phoenix Brokers Inc. and compensate victims. But in the meantime, for some of the smaller taxi companies, coming up with additional money quickly to pay for auto premiums could prove too much and that they may simply go out of business as a result.