August 7, 2014
OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler issued fines in July totaling $133,250 against insurance companies, agencies, agents and brokers who violated state insurance regulations.
The names of the insurance producers are linked to the disciplinary order that contains more information about each action.
Molina Healthcare of Washington, Inc., Bothell; fined $100,000 with $50,000 suspended
Molina is a health insurance carrier in Washington state and is one of the plans offered through Washington’s Medicaid program. In 2010, Molina filed with the Office of the Insurance Commissioner (OIC) a pharmacy network agreement with CVS Caremark pharmacies. OIC rejected the agreement and discussed with Molina the reasons for the rejection. Molina did not file a new pharmacy network agreement with CVS Caremark for OIC approval, but proceeded to use the rejected CVS agreement to support its Medicaid network.
In July 2013, Molina sought to sell health insurance through Washington’s Health Benefit Exchange and submitted its network of providers to OIC. OIC did not see any retail pharmacies in the network, and Molina reported that it planned to use its Medicaid network, which OIC rejected in 2010. OIC then determined that Molina had been using the disapproved contracts with CVS for three years.
Molina and OIC agreed to a plan to bring the company into compliance with state insurance laws and rules. If Molina fails to fulfill the compliance plan or violates any insurance laws or rules in the next two years, it agrees to pay the suspended portion of the fine.
Combined Insurance Co. of America, Glenview, Ill.; fined $5,000
Combined Insurance Co. of America, a life and disability insurance company requested an 8 percent rate increase to take effect in January 2013, which OIC approved. However, the company failed to implement the rate increase, resulting in 63 Washington policyholders being undercharged more than $11,000 from January 2013 to February 2014. Undercharging policyholders can damage the company’s financial solvency, which can later harm consumers if the company can’t pay claims or goes out of business. The company altered its process for implementing rate changes to avoid this error in the future.
Fidelity & Guaranty Life Insurance Co., Des Moines, Iowa; fined $10,000
Life Insurance Co. of the Southwest, Addison, Texas; fined $17,500
Both of these insurance companies are related to disciplinary actions OIC took against two producers in 2013. Steven Minnich, a licensed Washington insurance producer, and Charles Oliver of Florida sold a series of life insurance and annuity policies to a Washington consumer who approached Minnich for help planning for retirement.
Minnich was being coached by Oliver, who was located in Florida and not licensed to sell insurance in Washington. The consumer later complained to OIC that the producers had knowingly sold her several inappropriate life insurance and annuity polices. OIC investigated and disciplined both producers in 2013:
- Oliver was not licensed to sell insurance in Washington state and violated state insurance laws in his dealings with this consumer. OIC issued a cease and desist order and fined Oliver $5,000.
- OIC fined Minnich $3,000 for violating Washington state insurance laws in his dealings with this consumer.
Fidelity & Guaranty Life Insurance Co. (F&G) issued one life insurance policy to the consumer that was sold by Oliver and Minnich. F&G violated state insurance laws by allowing Oliver to sell insurance in Washington without being licensed and for allowing him to sell the policy without being appointed an agent for the company.
Life Insurance Co. of the Southwest (LSW) issued an annuity to the consumer that was sold by Minnich and Oliver and wasn’t an approved product in Washington. It allowed Oliver to sell insurance in Washington without being licensed and without appointing him an agent for the company. It also accepted the sale of a replacement policy without following state rules for replacement policy transactions. LSW agreed to rescind the policy and refund the consumer the premiums paid to date plus interest.
The Kleman Agency LLC, Bellingham; license revoked
The agency submitted two payments for licensing fees that did not clear the bank and owed unpaid taxes to state Department of Revenue. State law gives OIC the authority to revoke a license for being financially irresponsible.
Agents and brokers
Ginger A. Bagley, Port Orchard; fined $500
Bagley works for AFLAC and was operating a separate real estate business. Bagley placed 84 policies for 36 insurance clients in her real estate business’ AFLAC employer group account. The 36 clients did not work for the real estate business, which constituted a misrepresentation on an insurance application. Bagley told AFLAC and OIC she did it as a quick way to obtain quotes for people, but she did not know how to then transfer people who purchased policies to the correct accounts. Another insurance producer reported Bagley’s actions to AFLAC in November 2013; AFLAC suspended Bagley for 60 days, demoted her from a supervisory position to a sales position, and barred her from seeking a promotion for one year.
Cindy G. Guirell, Roy; fined $250, issued a probationary license
Guirell has held a resident insurance producer’s license since 2002. In January 2014, she was convicted of two counts of malicious mischief, a felony. She failed to notify OIC of the charges within 30 days of the pre-trial date, a violation of state insurance law. OIC is allowed to place a licensee on probation, suspend or revoke a license after a felony conviction. Guirell’s license will be probationary until May 2016 as long as she receives no other convictions during that time.
Philip J. Snider, Richland; license revoked
Snider has held a resident producer license to sell life, disability, property and casualty insurance since June 2008. Snider sold Allstate Insurance through the Terry L. Johnson Inc. agency. To get a better rate on his homeowner insurance, Snider listed his wife as single on the policy, selected a $5,000 deductible and chose minimal coverage. On the morning of Feb. 18, 2013, Snider’s home experienced water damage. That evening, he added his name to the policy, listed his wife as married, lowered the deductible to $500 and added coverage to the policy, then backdated all of the changes to Feb. 13, 2013. In total, Allstate paid more than $37,000 for the claim. Allstate and the Terry L. Johnson agency both terminated Snider.
Shawn R. Stewart, Battle Ground; license revoked
Stewart harmed three consumers and failed to respond to OIC’s inquiries about these instances. The first consumer gave Stewart a down payment toward a business insurance policy that Stewart never secured; the insurer refunded the payment to Stewart to return to the consumer, but the consumer never received the refund. The company issued another refund directly to the consumer. The second consumer asked Stewart to renew his auto policy; Stewart mailed false insurance cards to the consumer and failed to renew the policy. Six months later, the insurer notified the consumer he had been without auto insurance all along. The third consumer sought homeowner, boat and auto insurance from Stewart. Stewart failed to get a policy for one of the consumer’s autos and underinsured the consumer’s boat. The consumer realized there was a problem when the credit union that had the loan on the auto notified the family their auto was uninsured.
Joaquin Delacova, Weston, Fla.; license revoked
Delacova holds a Washington nonresident producer license, which requires him to maintain a valid license in his resident state in order to retain his Washington license. Delacova’s Florida license was suspended for failure to pay a final judgment and misappropriating premium payments. OIC then revoked his Washington license.
Catherine Johnson, Milwaukee, Wisc.; license revoked
Johnson holds a Washington nonresident producer license, which requires her to maintain a valid license in her resident state in order to retain her Washington license. Johnson’s Wisconsin license was revoked for failure to pay delinquent taxes to the Wisconsin Department of Revenue. OIC then revoked her Washington license.
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.
For an insurance question or complaint, please contact the OIC’s consumer advocates at 800-562-6900 or online.