April 21, 2016
OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler issued fines in March totaling $146,100 against insurance companies, agents and brokers who violated state insurance regulations.
For more information, search the order number on the Commissioner’s website.
Arch Insurance Co., Kansas City, Mo.; fined $1,000, order 16-0034
The company filed a required annual report 45 days after the deadline established in state law.
BITCO General Insurance Corp., Rock Island, Ill.; fined $2,100, order 16-0024
BITCO failed to renew the appointments of 21 licensed insurance producers, who completed 67 transactions in Washington state worth nearly $294,000. 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.
Delta Dental of Washington, Seattle; fined $10,000, order 16-0023
The Insurance Commissioner found the following violations during a routine market conduct examination:
- The company allowed consumers to cancel policies within 20 days of purchase. The law states that consumers have up to 10 days to cancel from the date of receipt of the policy, not the date of purchase.
- The company allowed two producers to sell 20 policies without being licensed.
- The company allowed customer service employees to back-date the effective date of 30 policies. The company's approved forms state that policies will become effective the first day of the following month.
Jackson National Life Insurance Co., Lansing, Mich.; fined $8,000, order 16-0038
Jackson purchased another company, Reassure Life American Insurance Co., and didn’t follow requirements in state law for changing its name. From January to March 2013, the company sent more than 8,000 pieces of correspondence to Washington consumers with the wrong name on them. Additionally, the company used an inaccurate fraud warning on its forms.
Jackson National Life Insurance Co., Lansing, Mich.; fined $20,000, order 16-0039
A Washington consumer who purchased an annuity in November 2014 issued by Jackson National Life Insurance Co. complained to the Insurance Commissioner because the annuity terms did not meet what the consumer asked for, which included socially responsible investments and complete access to her funds. The insurance producer who sold the annuity to the consumer allocated 20 percent of the funds to oil and gas investments and made none of the funds available to the consumer. The consumer requested a refund on the annuity, but the insurance brokerage the producer worked for, LPL Financial Corp. of North Carolina, and Jackson National Life refused to do so. The Insurance Commissioner investigated the consumer’s complaint and revoked the license of the producer, Charles C. Frackrell of North Carolina, in September 2015 (order 15-0197); and fined LPL Financial $2,000 in February 2016 (order 15-0242). Jackson National Life is ordered to refund the consumer for the annuity plus 8 percent annual interest and the company agreed to pay a $20,000 fine for violating state insurance laws.
National Casualty Co., Madison, Wisc.; fined $9,000, order 16-0032
The company canceled a consumer’s commercial vehicle insurance policy without sufficiently explaining the reason for the cancellation, which is required by state law. After a request for more information, the Insurance Commissioner found 12 cancellation notices that violated the same state law.
QBE Insurance Corp., Philadelphia; fined $20,000 with $10,000 suspended, order 16-0042
QBE charged rates that were not approved by the Insurance Commissioner to customers who had purchased commercial farm owner insurance policies. Insurance companies are required to file rates with the Insurance Commissioner; once the Commissioner approves the rates, companies are not allowed to charge rates other than what were approved. QBE violated insurance laws at least 28 times by applying incorrect fire protection classes and territorial multipliers to policies. The Insurance Commissioner levied a fine of $20,000 and suspended $10,000 as long as the company complies with the terms of the order.
AmeriPlan Corp., Texas; order to cease and desist, order 16-0071
The Insurance Commissioner ordered AmeriPlan Corp. to immediately stop selling insurance and health care discount plans in Washington state. AmeriPlan applied for an insurance producer license in 2009, which the Insurance Commissioner denied and informed the company that it was not allowed to sell insurance in Washington. Despite being denied a license, the company proceeded to sell nearly 4,000 discount health care memberships to Washington consumers from January 2010 through July 2015, and collected nearly $900,000 from those consumers.
Careington International Corp., Frisco, Texas; fined $30,000 with $15,000 suspended, order 16-0015
Careington sells discounts on dental and vision services to Washington consumers. When it renewed its license in 2014, the Insurance Commissioner found that it was selling discounted vision-correction surgery to Washington consumers through a network that was not approved by the Commissioner, which is a violation of state law. The Insurance Commissioner levied a fine of $30,000 and suspended $15,000 as long as the company complies with the terms of the order.
Chicago Title Co. of Washington, Seattle; fined $3,000, order 16-0051
Chicago Title sells title insurance to Washington consumers. The Insurance Commissioner found the company operated 21 unlicensed branch offices for several years and provided free information to title insurance producers, in violation of state insurance laws. Chicago Title has since licensed all of its branch offices and agreed to pay a $3,000 fine.
Kyung Seok Lee, Renton; license revoked, order 16-0045
Lee submitted applications for discount commercial liability insurance policies that contained false information, including the types of businesses and the volume of sales. He also forged signatures on a business’ policy cancellation request. The Insurance Commissioner revoked Lee’s insurance producer license.
Donald W. Morgan and Morgan Insurance LLC, Mukilteo; license revoked, order 15-0171
The Insurance Commissioner revoked Morgan’s license and the license for his business in July 2015 after Riverport Insurance Co. canceled his appointment for issuing four false certificates of insurance and for keeping the money the four clients paid for the insurance policies. Morgan appealed the revocation and then failed to appear at his March 2016 legal hearing. The failure to appear means the Insurance Commissioner’s revocation is upheld.
Jothanne Holloway, Chehalis; issued probationary license, order 16-0040
Holloway applied for a resident insurance producer’s license in February 2016. Holloway disclosed on her application that she has an outstanding court debt in relation to felony convictions in 2002. Holloway’s insurance producer license will be on probationary status until she pays off her court debt or for two years, whichever is longer.
National Vehicle Service Contract and Wayne Craig, Litchfield, Ariz.; order to cease and desist, order 16-0060
National Vehicle Service Contract sells auto warranties and is not licensed to do business in Washington state. However, it advertises service contracts for Washington consumers on its website and attempted to sell a contract to an employee of the Insurance Commissioner. The Insurance Commissioner ordered the company to cease and desist from selling insurance products to Washington consumers.
Northwestern University, Evanston, Ill.; fined $3,000, order 16-0016
Northwestern issued four charitable annuities to Washington residents without being authorized by the Insurance Commissioner. Northwestern collected nearly $190,000 from the four annuities.
Subaru of America, Inc., Cherry Hill, New Jersey; fined $40,000, order 16-0014
After a series of mergers, Subaru was selling service contracts to Washington consumers without being licensed to do so. The company sold nearly 2,800 new service contracts illegally.
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 $20.2 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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