(Salem) -- The Oregon Department of Consumer and Business Services today filed a lawsuit in Marion County Circuit Court to recover $3 million in cash for insurance company Zoom Health Plan Inc. Zoom Management Inc. (ZMI), an affiliated company, was supposed to pay the money in late 2016 in exchange for a surplus note, but never did.
Zoom Health Plan (ZHP) is in receivership and working with the state to wind down its insurance business.
"This funding is critical for Zoom Health Plan to meet its obligations to policyholders," said Patrick Allen, director of DCBS.
The state filed the lawsuit in its capacity as receiver of the insurance company. The state filed and was granted approval to take Zoom Health Plan into receivership on April 21. DCBS had been working with the company to facilitate an orderly exit from the insurance business. However, the department discovered that a $3 million surplus note included in the financial statement as a receivable from ZMI had not been funded. The department took the company in receivership to preserve assets and ensure policyholders are protected.
In its annual financial statement submitted to DCBS, ZHP reported capital and surplus of $2,873,168 as of Dec. 31, 2016. But without the cash from the $3 million surplus note, its actual capital and surplus was negative $126,832 at the end of 2016, making it insolvent.
Although Zoom Health Plan has received about $2 million in capital since it filed its financial statement, the $3 million is critical to Zoom's ability to pay claims.
"Our goal through the receivership is for those with Zoom Health Plan policies to be able to stay on those plans and access the health services they need through the end of the year," Allen said.
Zoom Health Plan currently serves fewer than 2,000 members. Zoom+ Care is a health provider that started offering insurance plans -- through a separately created company -- in the Portland area in 2016. ZMI acts as a business manager for the health plan and the clinics.
All current Zoom Health Plan individual policies will be canceled effective Dec. 31, 2017. Group policies will expire at different times, depending on their renewal dates.
The department is continuing to evaluate Zoom Health Plan's financial condition as well as investigating the misleading information in Zoom Health Plan's financial statement and whether it warrants further action.
For more information, visit http://dfr.oregon.gov/business/resources/Pages/zoom-faqs.aspx. Consumers with questions can call the DCBS Division of Financial Regulation at 888-877-4894 (toll-free) or email [email protected].
April 26, 2017
