August 11, 2016
OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler issued fines in July totaling $169,950 against insurance companies, agents and other professionals who violated state insurance regulations. The biggest fine of $150,000 was levied against American Pet Insurance, which sold policies under the name Trupanion.
For more information, search the order number on the Commissioner’s website.
American Pet Insurance Co., Inc, New York, NY; fined $150,000, order 16-0127
American Pet (APIC) offers pet insurance policies in all 50 states that are sold by its parent company, Trupanion. During an examination of the company, Kriedler’s office identified numerous violations of state insurance regulations:
- It violated state law that regulates insurance rates more than 600 times. Most of the violations were related to charging rates that the Insurance Commissioner did not approve, as required by law.
- The company didn’t cancel policies in a timely manner after pets’ deaths, after a consumer no longer owned a pet, and when a consumer canceled a policy.
- The company had no audit policies or procedures in place.
- APIC failed to use its legal name on communications with policyholders. In other words, consumers thought the insurance company they were buying pet insurance from was Trupanion, when in fact the company was APIC. State law requires companies to disclose their names accurately to consumers on their policies.
- The company did not consistently apply refund policies to all consumers. Companies are required to tell consumers under which conditions they will provide a refund. In practice, they would provide refunds based on other factors that were not documented. The company also would not sell insurance to people without an email address, which is discriminatory under state law.
- The company did not adequately track all consumer complaints and failed to respond to some complaints.
The company’s marketing and sales information contained false, deceptive and misleading information about its products. In addition, it gave discounts to consumers in a discriminatory manner.
- None of the employees who sold insurance to Washington consumers were licensed insurance producers. Anyone who sells insurance in Washington state must be a licensed producer.
It violated state law that regulates insurance forms more than 1,600 times.
- The company failed to give more than 9,000 policyholders their initial and annual privacy notices.
- The company failed to give a copy of the policy to new policyholders in a timely manner 196 times.
- The company didn’t clearly explain to some consumers the reason it canceled or did not renew their policies.
Kreidler suspended an additional $100,000 fine, which APIC will pay if it commits the same violations in two years or if it doesn’t complete a compliance plan to remedy the violations identified.
Mitsui Sumitomo Insurance Co. of America and Mitsui Sumitomo Insurance USA, New York, NY; fined $4,000, order 16-0122
The Insurance Commissioner reviewed all 36 policies the company issued from December 2013 through November 2014 and identified violations of insurance regulations:
- It charged the wrong rates to 17 policyholders. The company refunded with interest the one consumer who was overcharged.
- It used the wrong insurance forms 98 times.
- The Insurance Commissioner must approve all rates and forms that are used by companies.
Regence Blueshield, Seattle; fined $500, order 16-0124
Regence is licensed as a continuing education provider for people who work in the insurance industry. The company did not give certificates of completion to 816 course attendees from September 2014 through January 2016, which violates state law.
Infinity Insurance Co., Indianapolis; fined $4,800, order 16-0135
Infinity allowed 31 insurance producers whose appointments had lapsed to conduct 134 transactions totaling more than $42,000. In addition, it allowed 22 insurance producers who were never licensed to conduct 1,034 transactions totaling more than $333,000 in insurance 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.
Washington Casualty Co, Maple Valley, Wash., fined $1,000, order 16-0136
The company filed its annual special liability insurance report 48 days late to the Insurance Commissioner.
American General Life Insurance Co., Houston; fined $3,000, order 16-0139
Insurance companies are required to use the Insurance Commissioner’s online complaint system when responding to consumer complaints that come from the Commissioner. American General Life failed to use the system on six out of nine consumer complaints in the first half of 2015.
Other insurance professionals
A Speedy Bail Bond, Inc. and Jose E. Campos, Yakima; fined $500, order 16-0134
A Speedy Bail Bond and Campos failed to pay insurance premiums for two bonds to an insurer in a timely manner. The company complained to the Insurance Commissioner, who found that Campos and his company were in the wrong. Campos paid the premiums.
Northwest Public Adjusting LLC, Meridian, Idaho; fined $500, order 16-0146
Northwest Public Adjusting was operating without an adjuster license from 2014 until January 2016. Its owner, Rhonda Sheets, was licensed as an adjuster but didn’t realize her agency also needed a license. Sheets licensed her agency in January 2016.
Proschools Inc., Hunt Valley, Md.; fined $400, order 16-0153
Proschools provides continuing education for licensed insurance producers. It filed 30 attendance rosters up to 104 days late with the Insurance Commissioner. State law requires continuing education providers to submit rosters within 10 days of course completion.
Derrel L. Clark, Lakewood; license revoked, order 16-0154
Farmers Insurance notified the Insurance Commissioner that it terminated Clark’s employment for withholding three consumers’ insurance premiums from the company totaling nearly $1,400 and for borrowing $1,400 from three of his clients. Clark has refused to respond to inquiries from the Insurance Commissioner’s investigators.
Walla Walla Title Co., Walla Walla; fined $5,000, order 16-0160
The company was giving its title insurance customers earnest money agreement forms free of charge to its clients. Title companies are not allowed to give items of value to clients free of charge. In addition, the forms listed the title company’s name incorrectly. Its legal name registered with the Insurance Commissioner is Walla Walla Title Co, but it was using the name Walla Walla County Title.
Leslie A. Abbott, Snohomish; fined $250, order 16-0167
Abbott applied for an insurance producer’s license in June 2016, indicating on the application that she was never convicted of a crime. However, a background check revealed a 2015 conviction for misdemeanor disorderly conduct.
Audit Allies, Greeneville, SC; order to cease and desist, order 16-0197
Audit Allies marketed a warranty insurance product in Washington state without having an insurance producer license, as required by state law. The Insurance Commissioner advised the company to stop marketing insurance in Washington state, but it did not comply. The Insurance Commissioner ordered the company to stop advertising warranties to Washington state consumers.
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 $20.4 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.
# # #