Washington Fines Insurance Providers, Including T-Mobile, for Illegal Rebates

By | September 10, 2018

Washington Insurance Commissioner Mike Kreidler issued fines in July totaling $115,050 against insurance companies, agents and brokers for reported violations of state insurance regulations.

The alleged violators and their reported violations include:

Agents and brokers

T-Mobile USA Inc., Bellevue; fined $20,000

T-Mobile, a cellphone carrier, is also a licensed insurance producer in Washington. The company offered to pay off phone loans and early termination fees for Verizon customers who switched to T-Mobile and purchased its insurance in 2017 between May 31 and Aug. 2. The offer is illegal in Washington because it induces people to purchase insurance. During the promotion, 927 Washington consumers purchased the plan, which cost $15 per month.

Washington Insurance Commissioner Mike Kreidler
Washington Insurance Commissioner Mike Kreidler

Linna A. Callaham, Bainbridge Island, Wash.; license revoked

Callaham collected insurance premiums from a commercial client but failed to send them to the insurance company, causing two policies to be canceled and a commercial building to be uninsured for eight months. She never refunded the unpaid premium of more than $5,000 to the client.

APPS Insurance Services Inc., Puyallup, Wash., and James M. Shirreff, Fircrest, Wash.; fined $3,000

The insurance commissioner conducted four financial examinations that found APPS delayed sending premium refunds totaling nearly $1,500 to three commercial clients. Shirreff is an insurance producer and is responsible for APPS, an insurance agency.

Geoffrey Wayne Leininger, Plano, Texas; license revoked

A consumer filed a complaint with the insurance commissioner after Leininger placed a homeowner’s policy without the consumer’s consent. The insurer, Liberty Mutual Insurance, refunded the $649 premium payment to the consumer and canceled the unwanted policy.

GSIS, Inc., and Glenn Stebbings, Redondo Beach, Calif.; fined $2,500
Kenneth E. Kukral, Beachwood, Ohio; fined $3,500

GSIS and Stebbings were not licensed to sell surplus lines insurance policies in Washington state. To avoid becoming properly licensed, they used Kukral as a “courtesy filer” at least 49 times to obtain surplus lines policies, a violation of state insurance laws.

The following producers were penalized for failing to notify the agency of administrative actions against them:

  • Daniel Lee, New Orleans; fined $250
  • Horace Thomas Gaines, Nashville; fined $250
  • Walter A. Ringfield, Phoenix; fined $500 and revocation rescinded
  • One Resource Group Corp. and Todd Jeffrey Stewart, Roanoke, Ind.; fined $500
  • Alex Belfort, Sinking Spring, Penn.; license revoked
  • Benjamin Stutts IV, Sandy, Utah; license revoked

Insurance companies

These insurers were penalized for filing rates late or using the wrong rates:

  • Kaiser Foundation Health Plan of Washington Options, Inc., Seattle; fined $3,500
  • Kaiser Foundation Health Plan of Washington, Seattle; fined $3,500
  • Regence BlueShield, Seattle; fined $2,500
  • Crestbrook Insurance Co., Columbus, Ohio; fined $50,000

These insurers were penalized for violating other state insurance laws:

  • GEICO, Chevy Chase, Md.; fined $2,500
  • First National Insurance Co. of America, Keene, N.H.; fined $20,000
  • Pennsylvania Manufacturers Indemnity Co., Blue Bell, Penn.; fined $1,500

Others

The following organizations were penalized for violating state insurance laws:

  • Pioneer Title Co. of Walla Walla, Inc., Walla Walla, Wash.; fined $250
  • Oregon Association of Health Underwriters, Portland, Ore.; fined $800

Kreidler’s office, which oversees Washington’s insurance industry, has assessed more than $24 million in fines, which are deposited in the state’s general fund to pay for state services.

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