Insurers Fined More Than $580,000 in Washington

January 19, 2011

Washington Insurance Commissioner Mike Kreidler fined insurers more than $580,000 in 2010 for violations including illegal telephone solicitation and overcharging customers. Kreidler also revoked the licenses of more than a dozen insurance agents last year.

The Office of the Insurance Commissioner reported than in 2010, Kreidler’s office levied $583,750 in fines. Fines totaled $407,600 in 2009 and more than $1.2 million in 2008. (These figures do not include suspended fines.)

“It’s important that insurance companies, agents and brokers follow the rules,” he said. “Ensuring that they do this helps protect consumers and preserves a fair marketplace.”

Fines collected by the state insurance commissioner’s office do not go to the agency. The money is deposited in the state’s general fund to pay for other state services.

Fines imposed in the second half of 2010 totaled $190,200. They included:

  • The Doctor’s Company, of Napa, Calif., was fined $104,200 with $50,000 suspended for failing to file insurance rates prior to use.
  • Liberty Mutual Fire Insurance Co. was fined $35,000 for issuing policies that weren’t in accordance with its filed rates.
  • Cornhusker Casualty Co., of Omaha, Neb., was fined $65,000 with $30,000 suspended for a variety of documentation and billing errors, some of which required refunds to Washington residents.
  • Metropolitan Casualty Insurance Co., of Warwick, R.I., and several related entities were fined $45,000 with $20,000 suspended after an examination found numerous problems with insurance documentation, including claim checks that didn’t include the correct name of the insurer, and failure to document homeowner’s ages, resulting in $190,704 in overcharges to senior citizens. (The companies also refunded the money to the affected policyholders.) The $20,000 is suspended so long as the companies don’t commit further violations for two years.
  • Virginia Surety Company Inc. of Chicago, Ill., was fined $12,000 for a telephone solicitation that violated Washington state insurance law.
  • OHIC Insurance Co., of Columbus, Ohio, was fined $10,000 for late filing of documents.
  • Chicago Insurance Co., of Chicago was fined $7,500 for charging rates that were different from what had been approved by the insurance commissioner’s office.
  • UNUM Life Insurance Co. of America, based in Portland, Maine., was fined $7,000 for violations including failing to verify that all of its agents had completed required training before selling long term care policies.
  • Union Bankers Insurance Co. was fined $2,250 for failing to file reports on time.
  • Continental Western Insurance Co., of Urbandale, Iowa, was fined $1,000 for filing a required report late.
  • Fidelity National Title Company of Washington, of Santa Barbara, Calif., was fined $750 for sending out a promotional email that violated title insurance law.
  • Rainier Title, LLC, of Everett, was fined $500 for advertising that violated title insurance law.
  • Consumer Direct Warranty Services Inc; Warranty Administration Services Inc.; and SafeData Management Services Inc., all of Redding, Calif., and several individuals were ordered to stop selling unauthorized insurance in Washington state
  • Doctors and Surgeon’s Benefit Association; Doctors Liability Captive Insurance Co.; Midwest Tax Link and several other individuals and associated companies were ordered to stop selling unauthorized insurance in Washington state. The Doctors companies are based in the West Indies; Midwest Tax Link is based in Kentucky.
  • MS Glass Outlet and M.S. Glass Outlet, LLC, of Lynnwood, Wash. and Portland, Ore., and two company officials were ordered to stop improperly offering windshield-replacement rebates or other incentives, depending on a person’s insurance deductible.
  • MN Home Warranty Corp, doing business as Capital Home Shield and CapitalHomeShield.com, of North Miami Beach, Fla., was ordered to stop selling unauthorized insurance in Washington state.
  • Vern Fonk Insurance Services Inc., of Everett, was ordered to stop allowing employees without insurance producer licenses to solicit, sell and negotiate insurance.
  • CHW Group Inc., doing business as Choice Home Warranty and www.ChoiceHomeWarranty.com, as well as several individuals, of Edison, N.J., were ordered to stop the unauthorized sale and solicitation of insurance in Washington state.
  • Shieldstar LLC, doing business as Shieldstar Home Warranty, ShieldStar and www.shieldstar.com, was ordered to stop selling unauthorized insurance in Washington state.
  • Distinct Advantage Administrative Services LLC, of Federal Way, and two individuals were ordered to stop selling unauthorized insurance in Washington state.

In addition, the following agents or brokers were disciplined. To see the documentation about the cases, visit http://www.insurance.wa.gov/orders/enforcement.asp.

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