October 27, 2016
OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler issued fines in September totaling $13,000 against insurance companies, agents and brokers who violated state insurance regulations.
For more information, search the order number on the Commissioner’s website.
Group Health Cooperative, Seattle; fined $5,000, order 16-0164
Group Health submitted changes to its rates more than two weeks late twice in March 2016. The company had already been warned, based on previous late filings, that the insurance commissioner would take enforcement action on future late filings.
Mount Vernon Abstract & Title Co., Burlington; fined $500, order 16-0193
The title company sent a bouquet of flowers to a real estate agency, which is against state insurance regulations. Title companies are not allowed to give gifts as a way to solicit business.
Hal E. Quinby, Snohomish; fined $6,000, order 16-0198
Hal Quinby is a licensed resident insurance producer. In 2006, he sold an annuity that was not approved for sale in Washington state. The consumer Quinby sold it to paid $100,000 for an annuity that guaranteed to pay $165,818 over 30 years via monthly payments of $406. In 2015, the consumer received a notice that the company, Trust Counselors Network Inc., would no longer be making payments because of a lack of money. The consumer received a total of $48,824 from the annuity. The company is currently in receivership after action by the U.S. Securities and Exchange Commission.
Artisan Risk and Insurance Services, Inc., Pasadena, Calif.; fined $500, order 16-0171
Artisan Risk is a nonresident surplus line broker and is licensed to sell insurance in Washington state. The company’s license lapsed from November 2014 until February 2016. During the time it was unlicensed, it sold seven policies to four Washington customers with premiums of $189,620. The company discovered it was unlicensed when it was attempting to pay its premium taxes for 2015. The company contacted the Insurance Commissioner and started the process of renewing its license.
Audit Pros by Refundo, Elizabeth, NJ; ordered to cease and desist, order 16-0220
Refundo offered and tax audit insurance policies worth $2,500 to Washington consumers without being a licensed insurance producer or having an appointment with an insurer. The Insurance Commissioner contacted Refundo and asked it to remove Washington state from its website listing of states where it can legally sell insurance. The company agreed to update its website but had not yet done so at the time of the order.
Tire Factory, Portland, Ore.; ordered to cease and desist, order 16-0229
The Tire Factory sold warranties for its tires to Washington consumers without being registered as a service contract provider, as required by state law. From January 2014 to June 2016, the company sold 4,000 warranties to Washington consumers totaling $52,909. The company stopped selling the warranties at the end of June 2016.
Automotive Business Solutions, Inc., Westminster, Colo.; ordered to cease and desist, order 16-0230
Automotive Business Solutions, Inc., (ABS) administers road hazard and tire warranties that were sold at an online retailer, treaddepot.com, and through independent repair businesses that sell tires. The company was doing business in Washington without being registered as a service contract provider, as required by state law. The retailers that sell the warranties from ABS make a small percentage on each one and ABS administers claim payments. In 2014 and 2015, ABS was paid $606 for 17 road hazard plans that were sold through the online retailer and $8,909 for 330 hazard plans that were sold through independent repair facilities in Washington state. ABS agreed to stop selling plans to Washington consumers without being a registered service contract provider.
Old Republic Surety Co., Brookfield, Wisc.; fined $1,000, order 16-0231
Old Republic allowed 120 insurance producers’ appointments to lapse for 24 days in April and May 2015. During that time, 44 producers whose appointments had lapsed completed 136 transactions totaling more than $32,900 in written premiums. State law requires insurers to file a notice and pay a fee to the Insurance Commissioner for each licensed producer who will act as an agent of an insurer.
Prudential Insurance Co. of America, Newark, NJ; ordered to cease and desist, order 16-0245
In March 2016, a consumer submitted a complaint to the Insurance Commissioner about a clause in a long-term disability policy that violated state insurance regulations. The clause, called a discretionary clause, gave the insurer the sole discretion to interpret the policy terms or decide the eligibility for benefits. State insurance regulations do not allow long-term disability policies to contain discretionary clauses. In this complaint, Prudential used the discretionary clause to declare the policyholder no longer eligible for benefits. The Insurance Commissioner ordered Prudential to cease and desist from including discretionary clauses from its long-term disability policies.
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 $20.8 million in fines, which are deposited in the state's general fund to pay for other state services.
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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