January 3, 2024
OLYMPIA, Wash. — Commissioner Mike Kreidler has ordered Zion Health to stop selling insurance illegally in Washington state and fined the company $50,000.
Kreidler’s office issued an initial cease-and-desist order in February of 2022. The final order was signed on December 19, 2023.
Zion Health, domiciled in Salt Lake City, offered and sold insurance in Washington without being authorized to do so by the Office of the Insurance Commissioner. The company also excluded coverage for pre-existing health conditions for two years and excluded coverage for termination of pregnancy.
“My office, and our state, has established standards that protect Washington’s consumers,” Kreidler said. “Our insurance laws and regulations are in place for a reason, and our staff works hard to address the companies that fail to work within that regulatory framework.”
Zion Health markets itself as a re-imagined medical cost-sharing model and admits it isn’t a healthcare sharing ministry as defined by the Affordable Care Act. It also claimed its membership program — which reimbursed members for medical expenses in exchange for monthly payments — did not constitute insurance, though Kreidler’s office disagreed.
Zion, as of October 2021, had enrolled a total of 984 members in Washington and collected a total of $1,196,652 from those members, while paying out $568,274 in claims.
December fines and consent orders
The $50,000 Zion Health fine was part of the $78,000 total in fines Kreidler’s office issued in December for violations of state insurance laws and regulations. The other fines included:
Allstate Property and Casualty Insurance Company, Northbrook, Ill.; fined $3,000 (order 23-0204).
- Allstate didn’t use its legal underwriting name on consumer-facing documents, including payment notification emails, estimates, email signatures and other formal written correspondence.
The Evangelical Alliance Mission, Villa Park, Ill.; fined $10,000 (order 23-0213).
- The Evangelical Alliance Mission issued charitable gift annuities before obtaining a certificate of exemption from the OIC and without meeting Insurance Code requirements. The organization issued 33 annuities to 14 Washington residents before receiving an exemption.
AICC, LLC; Philadelphia, Penn.; fined $10,000 (23-0229).
- AICC sold insurance to two Washington businesses, and received commissions, without being licensed to do so by the OIC.
Michael Rawlings, Salt Lake City, Utah.; fined $5,000 (order 23-0249).
- Rawlings worked as an insurance adjuster in Washington between August 2022 and January 2023 without being licensed by the OIC to do so. In addition to the fine, he was issued a cease-and-desist order.
About the Office
Kreidler’s office oversees Washington’s insurance industry to ensure that individuals, companies, agents and brokers follow state laws. Since 2001, Kreidler has assessed more than $39 million in fines, which are directed to the state’s general fund to pay for state services.
The Office of the Insurance Commissioner publishes disciplinary orders against companies, agents and brokers. Consumers can also look up complaints against insurance companies.
For an insurance question or complaint, you may contact Kreidler’s consumer advocates online or by phone at 800-562-6900.