OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler issued fines in March and April totaling $176,600 against insurance companies, agents, brokers and others who violated state insurance regulations.
The actions are linked to the disciplinary order that contains more information about each action.
Insurance companies
01 Dental Plan, LLC, Issaquah; order to cease and desist
The company was licensed to sell discount plans until its license expired in June 2014. A discount plan gives a discount on health care services to people who pay a membership fee. The company filed its annual report late, let its license expire and didn’t use its legal name on its website. The company’s owner moved to California and failed to respond to the Insurance Commissioner’s request to file a plan to close down its business operations in Washington. The Insurance Commissioner ordered the company to cease and desist from doing business in Washington.
Coordinated Care Corp., Seattle; fined $25,000
Coordinated Care is a Washington-based health maintenance organization. Starting in July 2013, it used provider agreements for vision care that it didn’t file with the Insurance Commissioner, as required by state law.
Farmers Insurance Co. of Washington, Mercer Island; fined $100,000
Farmers Insurance sells property and casualty insurance in Washington. In October 2014, it reported to the Insurance Commissioner that it had been charging certain consumers the wrong rates since June 2012. The company identified the issue in October 2012. Farmers refunded overpayments plus interest to more than 38,000 customers totaling $643,087 in July and August 2014. The average refund was $17. Farmers agreed to pay the fine and additional interest to equal 8 percent annual interest to consumers who were overcharged.
Life of the South Insurance Co., Jacksonville, Fla.; fined $20,000
Life of the South, a Georgia insurer, was selling an unapproved accidental death and dismemberment policy to Washington consumers in 2012 and 2013, totaling more than $66,000 in premiums. It paid $35,000 in claims to Washington consumers during that time.
Moda Health Plan, Inc., Portland, Ore.; fined $10,000
Moda provided health insurance to the Lake Stevens School District. It reported to the Insurance Commissioner that it had filed the wrong rates for 2013 plans, filing six sets of rates instead of the 12 sets of rates it was using. The result was that it was charging consumers rates that had not been approved by the Insurance Commissioner, as required by state law. Moda later filed the correct rates for 2013 health plans.
Regence BlueShield, Seattle; order to cease and desist
The Insurance Commissioner found that health insurer Regence BlueShield routinely did not offer consumers a review by a certified independent review organization (IRO) for claims denials as part of its consumer grievance process. A consumer filed a complaint with the Insurance Commissioner after Regence BlueShield denied a medical procedure, stating the procedure was specifically excluded by the insurance contract. Regence BlueShield told the consumer there were no appeal rights available and failed to notify the consumer about the option to an IRO review of the appeal.
State law requires health insurers to provide consumers the opportunity to appeal claims denials to an IRO, a service provided by an independent third party, after consumers have exhausted the insurance company’s appeals process. The Insurance Commissioner’s order to cease and desist notifies the company it must comply with state laws that provide consumers an IRO appeal.
Transamerica Casualty Insurance Co., Baltimore; order to cease and desist
Travelex Insurance Services, Omaha, Neb.; order to cease and desist
Transamerica sells travel insurance through Travelex Insurance Services. Travelex told consumers who purchased five different policies that they have 180 days to report a death or accident, when in fact the policies state they have 365 days to report either event. The Insurance Commissioner is ordering both companies to provide accurate information to consumers.
United Home Life Insurance Co., Indianapolis; fined $1,000
Insurers are required to sell products only through appointed agents. United Home allowed an agent who was not appointed to sell three policies with premiums totaling more than $5,400 in July and August 2012. This information was discovered during a routine market conduct examination conducted by the Insurance Commissioner’s office.
Agents, brokers and other licensees
Cynthia Barrows, Mount Vernon; license revoked
Barrows was charged with five counts of first-degree theft, all felonies, and failed to report it to the Insurance Commissioner in a timely manner. The Skagit County Sheriff’s Office notified the Insurance Commissioner about the charges, which stemmed from allegations that Barrows stole $295,000 from self-funded health insurance plan accounts. Barrows admitted that she stole the money.
Thomas J. Foreman, Pasco; fined $4,000 and license suspended for six months
Foreman recommended that a client replace a life insurance policy worth $925,000 with a $1 million policy from another company. The old policy had a $22,000 penalty for surrendering it; its cash value when the agent closed it was approximately $7,400. Foreman should have disclosed the surrender penalty on the form his client signed. Additionally, another agent in Foreman’s office signed the form as the producer of record, even though the client had never met him. In a separate transaction with the same client, Foreman liquidated an annuity, but processed the transaction using the wrong forms. As a result, the client paid nearly $16,000 in taxes when the tax obligation should have been $5,400. The annuity company refunded the client almost $8,000, leaving the remaining $8,000 the client’s responsibility.
Anthony C. Gaynes, Seattle; license revoked
Gaynes sold one insurance policy and three annuities from two companies without having an affiliation with them. Gaynes had other agents falsely submit the documents for these transactions to the insurers so it appeared they had sold the policies. State law requires insurance agents and brokers to be appointed by an insurance company before they can sell a company’s products and to truthfully disclose the name of the agent who conducted the sale.
Dana D. Gregory, Vancouver; issued probationary license
Gregory applied for a resident producer’s license in January 2015. She disclosed a misdemeanor conviction in 2004, for which she owes a court approximately $800. Gregory will have a probationary insurance producer license until her court fees are paid in full or when her first license renewal is due, whichever comes later.
Leavitt Group Agency Association, LLC, Cedar City, Utah; fined $500
The Leavitt Group is an insurance brokerage and let one of its employees sell a surplus lines insurance policy to a Washington consumer without being properly affiliated.
Northwest Title, LLC, Bellevue; fined $5,000
Northwest Title, LLC, doing business as NexTitle, is a licensed title insurance agent. Starting in January 2014, NexTitle sent real estate information to some 750 real estate agents weekly or monthly, free of charge, in Snohomish, King, Pierce, Thurston and Clark counties. NexTitle paid Altos Research $245 per month for the information, which includes median prices, supply and demand reports, and median home profiles. State law prohibits title companies from providing this information free of charge.
PetPartners, Inc., Raleigh, N.C.; order to cease and desist
PetPartners, Inc., Raleigh, N.C.; $10,000 fine
PetPartners sells pet insurance throughout the United States. Until recently, PetPartners’ employees did not have a license to sell insurance to Washington consumers. Those employees sold 183 pet insurance policies to Washington consumers on behalf of American Pet Insurance Co., Inc., exceeding $116,570 in premiums. The Insurance Commissioner ordered PetPartners to cease and desist from letting unlicensed agents sell insurance to Washington consumers. In a separate action, PetPartners agreed to pay a $10,000 fine and will pay another $10,000 fine if it violates insurance laws or rules again within the next two years.
Rachel Poppie, Waterville; issued probationary license
Poppie applied for an insurance producer’s license in February 2015. She disclosed a misdemeanor theft conviction in 2014 and remains on probation until April 2016. Poppie works for an insurance company that has assigned a more senior employee to supervise and mentor her. Poppie will have a probationary insurance producer license until the terms of her probationary license are met or when her first license renewal is due, whichever comes later.
Fariborz Rahrovi, Renton; license revoked
Rahrovi, a former insurance adjuster for Nationwide Insurance, was convicted of two counts of theft, criminal conspiracy and money laundering for his role in defrauding an accident victim of part of a $525,000 accident settlement. He was sentenced in January 2015 to pay the victim $165,000 in restitution and ordered to serve 12 months of work release. The Insurance Commissioner is revoking his license as a result of his felony conviction.
Daniel Rodriguez, Iowa City, Iowa; fined $350
The Insurance Commissioner was notified by the Iowa Department of Insurance in October 2014 that it had taken administrative action against Rodriguez. The Insurance Commissioner contacted Rodriguez twice for more information, but he did not respond. The Insurance Commissioner revoked his license in December 2014. In January 2015, Rodriguez contacted the Insurance Commissioner to reinstate his license. He agreed to pay a $350 fine, at which time the revocation order was rescinded and his license returned to active status.
Todd D. Tilley, Mobile, Ala.; fined $500
The Insurance Commissioner rescinded Tilley’s insurance adjuster license in July 2013 for failing to pay the $50 license renewal fee. In March 2015, Tilley contacted the Insurance Commissioner, seeking to rescind the revocation and get his license in good standing. His license will be reinstated when he pays the $50 licensing fee the $500 fine.
Chrissy L. Wilkison, Lake Forest, Calif.; fined $250
Wilkison applied for an independent insurance adjuster license in November 2014 and failed to report an administrative action taken against her by the state of California. Wilkison’s employer notified the Insurance Commissioner of the action.
About the Office
Kreidler’s office oversees Washington’s insurance industry to ensure that companies, agents and brokers follow state laws. Since 2001, Kreidler's office has assessed more than $18 million in fines, which are deposited in the state's general fund to pay for other state services.
The Office of the Insurance Commissioner posts disciplinary orders against companies, agents and brokers. Consumers can also look up complaints against insurance companies.
For an insurance question or complaint, contact the Insurance Commissioner’s consumer advocates at 800-562-6900 or online.
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