For Consumers

Kreidler disciplines, fines insurance professionals $81,200

Contact Public Affairs: 360-725-7055

October 16, 2017

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler disciplined and issued fines in August and September totaling $81,200 against insurance companies, agents and others who violated state insurance regulations.

Savings Bank Mutual Life Insurance Co. of Massachusetts, Woburn, Mass.; fined $1,500, order 17-0137
The company allowed 296 insurance producers’ appointments to lapse and six of them conducted 16 transactions totaling more than $10,169 in 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.

Hartford Insurance Co. of the Midwest, Indianapolis; fined $10,000; order 17-0158
The company allowed 47 insurance producers to sell National Flood Insurance Program policies without completing the required training. The company paid the producers $27,171 in commissions for 111 policies they sold during 2015. The company collected $165,000 in premiums on the policies. 

Farmers Insurance Exchange, Mid-Century Insurance Co., and Truck Insurance Exchange, Woodland Hills, Calif.; fined $25,000, order 17-0193
The companies charged the wrong rates for certain business auto insurance policies due to a computer error. The commissioner approved new rates for the companies in 2012 but the error caused the old rates to be used until 2014. In addition, the companies did not immediately report the errors to the insurance commissioner, but waited until they determined the cause of the errors in 2016 to report them.   

In total, the company overcharged clients 2,103 times by an average of $182 each and undercharged clients 29 times by a total of $471. The company refunded the people it overcharged plus 8 percent interest. 

AIG Assurance Co. and eight related companies; fined $25,000, order 17-0273
The companies wrote 4,113 policies for Washington state workers’ compensation insurance from 2010 until 2015 using rates not approved by the insurance commissioner. 

Karmen Lynn Ayers, Vancouver, Wash.; fined $750 and issued probationary license, order 17-0184
Ayers modified her own auto policy to get a lower rate, falsely stating that she was married. She also paid some of her clients’ insurance premiums with her own credit card and added one vehicle to a client’s policy without the client’s knowledge. Ayers is no longer employed by Farmers Insurance. The insurance commissioner fined her, gave her a probationary license for two years, appointed a mentor and is requiring her to take an ethics course. Any further law violations will result in her insurance producer license being revoked. 

Jeffrey M. Melnyk, Enumclaw, Wash.; fined $250, order 17-0121
Melnyk owns the Fenix Insurance Agency in Enumclaw. One of his clients canceled policies and switched to American Family Insurance. One of Melnyk’s employees, producer AnnMarie Sweeney (see order 17-0120), emailed the client and made a derogatory statement about American Family Insurance, a violation of state insurance law.  The client forwarded the email to the new insurance agent, who filed a complaint with the insurance commissioner. Melnyk and Sweeney were each fined $250 for the violation.

Vern Fonk Insurance Services, Inc., Everett, Wash.; fined $250, order 17-0241
A consumer filed a complaint with the insurance commissioner about a Vern Fonk radio ad that said uninsured cars would be towed under state law, which is not accurate. The misinformation in the ad violated state insurance laws and the agency stopped the ad.  

Jeffrey Johnston, Yakima; fined $250, order 17-0262
A consumer filed a complaint with the insurance commissioner when Johnston failed to add the consumer’s daughter to a short-term medical plan. Johnston acknowledged the mistake. 

Nicholas Metcalf, Tukwila, Wash.; fined $250, order 17-0287
Metcalf indicated on his insurance producer license renewal application that he completed the required continuing education. However, neither the continuing education provider nor Metcalf had a record that the requirement was met. 

Richard Johnson II, Northpoint, Wash.; fined $1,500, order 17-0242
A consumer filed a complaint with the insurance commissioner when Johnson told consumers that he is a Certified Financial Planner (CFP). The CFP designation requires training, a board exam and maintaining certification. The insurance commissioner determined Johnson never had the certification and is not registered as a CFP in Washington state. Misleading consumers is a violation of Washington state insurance laws.

Tarek Elkawlak, Camas, Wash.; fined $1,000, order 17-0261
Elkawlak bought a book of Allstate business from another producer who left to sell Safeco insurance. Elkawlak and his employees refused to cancel consumers’ policies, a violation of state law, and also provided false information to a police officer during an investigation of another insurance producer.  

Ticor Title Co., Kent, Wash.; fined $6,000 order 17-0104
Ticor Title gave free home warranties worth at least $260 to its clients, a violation of the state’s insurance laws. 

TRISTAR Risk Enterprise Management Inc., Cranbury, N.J.; fined $250, order 17-0227
TRISTAR, a licensed insurance producer, was disciplined by the state of New York and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

Claremont McKenna College, Claremont, Calif.; fined $2,500, order 17-0162
Claremont College is authorized in Washington to provide charitable gift annuities. The college issued 21 annuities that contained incorrect information about its rates and failed to use the forms required by the insurance commissioner. 

AD Banker & Co., Overland Park, Kan.; fined $1,200, order 17-0199
AD Banker offers education and testing for potential insurance producers. It allowed students to take less than the 20 hours of study time per course that is required by Washington insurance laws. 

Sears Holding Corp., Hoffman Estates, Ill.; ordered to cease and desist, order 17-0311
Sears was selling tire warranties to Washington consumers without being registered as a service contract provider as required by state law. From 2010 until May 2017, the company sold 53,717 warranties valued at $2.3 million. 

Dent Zone Cos. Inc., Irving, Texas; fined $2,000 (suspended), order 17-0288
Dent Zone was a registered service contract provider that sold warranties to Washington consumers until it became insolvent. The company agrees to honor its existing warranties and to stop selling new warranties until it becomes financially solvent and is authorized by the insurance commissioner to resume sales. The company agrees to pay the fine if it violates the commissioner’s order. 

Transpacific Financial Inc., Monrovia, Calif.; fined $250, order 17-0210
Transpacific, a licensed insurance producer, was disciplined by the state of New Jersey and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

Newbridge Securities Corp., Fort Lauderdale, Fla.; fined $250, order 17-0212
Newbridge, a licensed insurance producer, was disciplined by the state of Oklahoma and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

Network Adjusters, Farmingdale, N.Y.; fined $250, order 17-0213
Network Adjusters, a licensed insurance producer, was disciplined by the state of Oklahoma and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

Robert Conner, Millville, N.J.; fined $250, order 17-0215
Conner, a licensed insurance producer, was disciplined by the state of New York and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

Insurance Plus LLC, Portland, Ore.; fined $500, order 17-0224
Insurance Plus, a licensed insurance producer, was disciplined by the state of Oregon and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. The producer also failed to notify the insurance commissioner of a change of address, another law violation. 

One Resource Group Corp., Roanoke, Ind.; fined $250, order 17-0225
One Resource Group, a licensed insurance producer, was disciplined by the state of Louisiana and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

Worldwide Insurance Services LLC, King of Prussia, Penn.; fined $250, order 17-0209
Worldwide Insurance Services, a licensed insurance producer, was disciplined by the state of Nevada and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

Selman & Co., Cleveland, Ohio; fined $250, order 17-0211
Selman & Co., a licensed insurance producer, was disciplined by the state of Nevada and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

Randall J. Gabrielson, Stillwater, Minn.; fined $250, order 17-0214
Gabrielson, a licensed insurance producer, was disciplined by the state of Louisiana and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

James H. Boyd, Memphis, Tenn.; fined $250, order 17-0216
Boyd, a licensed insurance producer, was disciplined by the state of Tennessee and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

AEGIS Insurance Services, Inc., East Rutherford, N.J.; fined $250, order 17-0222
AEGIS, a licensed insurance producer, was disciplined by the state of Virginia and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

Michael E. Gray Jr., Pensacola, Fla.; fined $250, order 17-0223
Gray, a licensed insurance producer, was disciplined by the state of Louisiana and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

Sheri M. Pontolillo, Lake Havasu City, Ariz.; fined $250, order 17-0226
Pontolillo, a licensed insurance producer, was disciplined by the state of Virginia and failed to report the action to the Washington insurance commissioner within 30 days, as required by law. 

About the Office 

Kreidler’s office oversees Washington’s insurance industry to ensure that companies, agents and brokers follow state laws. Since 2001, Kreidler has assessed more than $22 million in fines, which are deposited in the state's general fund to pay for other 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, contact Kreidler’s consumer advocates online or by phone at 800-562-6900.