Kreidler fines State Farm $10,000 for not notifying policyholders about flood coverage

Contact Public Affairs: 360-725-7055

Feb. 10, 2017

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler issued fines in January 2017 totaling $15,000 against insurance companies, agents and brokers who violated state insurance regulations.

State Farm Fire & Casualty Co., Bloomington, Ind.; fined $10,000, order 16-0288
State Farm failed to notify 151 farm-ranch homeowner policyholders that flood damage was not covered by their policies, as required by state law. The company also failed to notify 141,001 people who purchased homeowner, renter, condominium unit or manufactured home policies, but later provided notification when the policies renewed.

Health Alliance Northwest Health Plan, Wenatchee; fined $5,000, order 16-0305
Washington law requires health carriers to indemnify certain health care services with an insurance policy, bond, securities, or cash deposit. The company allowed the surety bond it was using to meet this requirement to lapse and did not replace it with another form of indemnity until the insurance commissioner contacted the company. It ultimately corrected the problem by depositing funds in a special trust account that met the indemnity requirement.

Walmart Stores, Inc., Bentonville, Ark.; ordered to cease and desist, order 17-0016
Walmart sold tire warranties to consumers without being a registered service contract provider. It sold 112,561 warranties worth $1.1 million to Washington consumers from June 2014 through July 2016. As of the date of this order, the company has not yet registered as a service contract provider in Washington state and has stopped selling the warranty to Washington state consumers.

Thomas C. Johnson, Tacoma; issued probationary license, order 17-0009
Thomas applied for a Washington state insurance producer’s license in October 2016 to sell life insurance. He disclosed two military offenses in 2005 on his application. The probationary license means he must be accompanied by another licensed insurance agent or broker anytime he meets with a client; he must submit a list of clients he met with quarterly to the insurance commissioner; and his license will be revoked if he violates any insurance or state laws other than minor traffic violations.

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 $21.9 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 online or by phone at 800-562-6900.

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