Washington Commissioner Fines GEICO $30K for Raising Premiums on People Who Froze Credit Scores

April 4, 2018

Washington Insurance Commissioner Mike Kreidler issued fines in February totaling $49,200 against insurance companies, agents and brokers who violated state insurance regulations.

The biggest fine was $30,000 against GEICO for not properly notifying consumers whose premiums it raised because they had placed a freeze on their credit scores.

Following is a list of fines the commissioner issued:

GEICO, Chevy Chase, Md.; fined $30,000

Washington Insurance Commissioner Mike Kreidler
Washington Insurance Commissioner Mike Kreidler

A consumer filed a complaint with the insurance commissioner after GEICO raised the consumer’s insurance premium after the consumer placed a freeze on a credit score. State law allows insurers to consider consumers’ credit information when setting premiums, but requires that they notify consumers and give them a reason for the increase when they raise premiums based on credit information. The company sent an adverse action notice to the consumer but didn’t give the reason for the premium increase. An inquiry from the commissioner revealed that GEICO sent adverse action notices without citing a reason to 293 consumers in the past two years. After the commissioner’s inquiry, GEICO contacted each of the consumers to address the reason for the adverse action notice and give them an opportunity to lift the freeze for a credit check.

Berkley National Insurance Co., Urbandale, Iowa; fined $10,000

The commissioner discovered during a routine market conduct examination that the company used the wrong rating factors 50 times for 22 commercial property policies. The policies were not overcharged and no consumers were harmed.

Hien Thi Luong, Lake Forest Park, Wash.; fined $500

Luong, an insurance producer, falsely stated on her license renewal that she completed the required 24 hours of continuing education. She submitted a falsified certificate of completion for a class she did not finish.

Vicki E. Burnett, Aberdeen, Wash.; fined $500

A consumer filed a complaint with the commissioner when Burnett sold him a six-month auto policy but collected 12 months’ worth of premiums from him. Burnett told the commissioner she intended to renew the policy after the first six months and held the consumer’s payment in an account as a way to help the consumer. However, insurance producers are required to either remit full premium payments to the insurer or refund the balance to the consumer. Burnett refunded the money to the consumer.

Steven Gould, Castle Rock, Wash.; license revoked

Farmers Insurance notified the commissioner that it terminated Gould’s appointment to sell insurance because he repeatedly did not remit premium payments to the company within 24 hours. He admitted to Farmers that he had occasionally used premium payments to buy office and personal items, a violation of state law. He also wrote new policies and then voided them. The commissioner revoked his license and he is no longer allowed to sell insurance in Washington.

Delia Groh, Burlington, Wash.; license revoked

Allstate Insurance notified the insurance commissioner that it terminated Groh’s appointment to sell insurance after Groh backdated an auto policy to cover collision damage that occurred while she was uninsured. The insurance commissioner revoked Groh’s license, and she is no longer allowed to sell insurance in Washington state.

Norm P. Fournier, Jr., Fall City, Wash.; fined $250

A consumer filed a complaint with the commissioner about Fournier, a licensed insurance producer. The consumer said he requested a quote, but Fournier wrote a policy and sent it to the consumer with a premium bill. The consumer canceled the policy and did not have to pay any premiums.

Stacey A. Scott Insurance Agency, Woodinville, Wash.; fined $500

The agency allowed an employee to provide insurance quotes without having a producer license, a violation of state law.

Phung Cam Wiley, Renton, Wash.; fiend $2,000

Wiley, a licensed insurance producer, added her name to three consumers’ auto insurance policies. One of the consumers is Wiley’s sister and the other two are not related to her. Wiley has no insurance interest in any of the vehicles. It is illegal for a producer to be added to a policy if they don’t have an insurable interest in the property.

Elson Son Tran, Bellevue, Wash.; fined $500 and license reinstated

The commissioner revoked Tran’s insurance producer license in January 2016 for failure to pay the licensing renewal fee and failure to respond to inquiries from the commissioner. In November 2017, Tran sought to reinstate his license; he paid the fine and the full licensing fee and agrees to comply with state insurance laws.

Tammy Lee White, Seattle; fined $500 and license reinstated

The commissioner revoked White’s insurance producer license in October 2017 for failing to pay her license renewal fee and failing to respond to the commissioner’s inquires. In December 2017, White sought to reinstate her license; she paid the fine and the full licensing fee and agrees to comply with state insurance laws.

James P. Ball, Eatonville, Wash.; fined $250

Ball applied for an insurance producer license in January 2018 but failed to disclose two misdemeanor convictions in 2004 and 2011. Ball is eligible for a producer license once he pays the fine.

FlypShield Mortgage Insurance, LLC, Bellevue, Wash.; ordered to cease and desist

The commissioner received a complaint that FlypShield sold private mortgage insurance without an insurance producer license, a violation of state law. The insurance commissioner orders the company to cease and desist from selling insurance to Washington state consumers.

Teresa Lee Leuth, Spokane, Wash.; issued probationary license

Leuth reapplied for an insurance producer license after being convicted of a felony in 2017. She has paid her court fees and fines, will serve 200 hours of community service and remains on court-ordered probation until 2021. She will remain employed at the same Spokane insurance agency where she’s been working since 2014, and her work will be monitored by the agency’s president. Her license will remain on probationary status for five years or until the terms of her sentence are complete.

Aegis Capitol Corp., Melville, New York; fined $250

Aegis failed to report an administrative action by the Financial Industry Regulatory Authority within 30 days, as required by state law.

Franklin C. Reid, Warwick, R.I.; fined $500 and license reinstated

The commissioner revoked Reid’s insurance producer and surplus line broker licenses for failure to pay surplus line premium taxes and failure to respond to the commissioner’s inquiries. In December 2017, Reid sought to reinstate his licenses; he paid the past-due taxes and the fine and agrees to comply with state insurance laws.

Kovack Securities, Inc., Fort Lauderdale, Fla.; fined $500 and license reinstated

The commissioner revoked Kovack Securities’ insurance producer license in September 2017 for failure to report an administrative action by the state of Oklahoma against its license and failure to respond to the commissioner’s inquires. In December 2017, the licensee sought to reinstate its license; it paid the fine and agrees follow Washington state insurance laws.

Curran McCoy, Colorado Springs, Colo.; fined $500 and license reinstated

The commissioner revoked McCoy’s insurance producer license in November 2017 because she failed to notify the commissioner of an administrative action against her by the state of California, and she failed to respond to the commissioner’s inquiries about the action. Later that month, McCoy sought to reinstate her license; she paid the fine and agrees to comply with state insurance laws.

Janet E. Beaver, Los Angeles; fined $250

Beaver, a licensed insurance producer, failed to report an administrative action against her by state of North Dakota within 30 days, as required by state law.

Mark D. Derrenberger, Garden City, N.Y.; fined $250,

Derrenberger, a licensed insurance producer, failed to report an administrative action against him by the state of Texas within 30 days, as required by state law.

Nationwide Member Solutions Agency, Inc., Des Moines, Iowa; fined $250

A consumer emailed the agency, a licensed insurance producer, to request that two policies be canceled. The insurer, Nationwide, told the consumer that the policies would not be canceled until he filled out a cancelation form, which is a violation of state law. Washington state law allows consumers to cancel a policy by mail, email, fax or verbally.

Quadell Spradley, Reading, Pa.; ordered to cease and desist

National Brokers of America, Inc., Reading, Pa.; ordered to cease and desist

Spradley and National Brokers of America sold a non-ACA-compliant health insurance plan to a Washington state consumer without having a producer license. Further, the policy was not the type of plan the consumer was looking for. The consumer canceled the policy and received a refund.

North Idaho Association of Health Underwriters, Coeur d’Alene, Idaho; fined $600

The company, a continuing education provider for insurance producers, advertised a class and allowed producers to enroll before the insurance commissioner authorized the class, a violation of state law.

Cozen and O’Connor, Philadelphia; fined $300,

The company, a continuing education provider for insurance producers, didn’t follow rules that require attendees to sign out in order to receive credit for the courses.

Insurance Business Consultants, Fort Myers, Fla.; fined $600

The company, a continuing education provider for insurance producers, submitted rosters to the insurance commissioner late and incomplete and issued completion certificates late to attendees.

Northwest Washington Estate Planning Council, Bellingham, Wash.; fined $200

The council, a continuing education provider for licensed insurance producers, offered a continuing education course without first getting the insurance commissioner’s approval, as required by state law.

Since 2001, Kreidler has assessed more than $23 million in fines, which are deposited in the state’s general fund to pay for other state services.

Topics Agencies Washington Training Development Berkshire Hathaway

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