For Consumers

Kreidler fines Farmers Insurance $300,000 for four years of mischarging consumers

Contact Public Affairs: 360-725-7055

February 8, 2016

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler issued fines in November and December 2015 totaling $309,500 against insurance companies, agents and brokers who violated state insurance regulations.

For more information on each action, search the order number on the Commissioner’s online consumer tools.

Insurance companies

Farmers Insurance Co., Seattle; fined $300,000, order 15-0248

Farmers implemented new rates for some auto insurance customers in February 2010. An error was made with implementing some of the rates from 2010-2015. As a result, more than 223,000 consumers were overcharged more than $11 million and more than 30,000 consumers were undercharged more than $1.5 million. Farmers started refunding the customers who were overcharged plus 8 percent interest in June 2015. The company is not seeking repayment from consumers who were undercharged.

State law does not allow insurance companies to charge consumers rates that differ from the rates approved by the Insurance Commissioner.

The Insurance Commissioner levied a fine of $500,000 and suspended $200,000 as long as Farmers complies with the terms of the order.

Safeco Insurance Co., Seattle; fined $1,500, order 15-0219

A consumer complained to the Insurance Commissioner after being overcharged by Safeco when a car was added to an insurance policy, which Safeco determined was caused by a computer error. The Insurance Commissioner asked Safeco to check its records for other consumers who were overcharged due to the error. Safeco reported that 21 Washington consumers were overcharged more than $3,700, which it repaid plus 8 percent interest.

Insurance producers

Total Dollar Management Effort Ltd., Everett; fined $500, order 15-0246

The company’s insurance producer license was revoked in October 2015 for failing to report that the state of Virginia revoked its surplus line broker license and for failing to respond to an inquiry from the Insurance Commissioner. The company then contacted the Insurance Commissioner to get its license back into good standing and agreed to pay a $500 fine.

Integrity Health Essentials, Inc., Huntington Beach, Calif.; order to cease and desist, order 15-0273

The Insurance Commissioner ordered the company to cease and desist from selling health insurance in Washington state without an insurance producer license. Its website lists the health insurance plans it sells and accepts consumers’ payment information, which is illegal to do without a license.

Hung Vo, Vancouver, Wash., license revoked, order 15-0247

Farmers Insurance reported to the Insurance Commissioner that it canceled Vo’s appointment to sell insurance when an investigation revealed that he manipulated information on 315 policies between 2008 and 2014 to save the policyholders nearly $60,000 on their insurance premiums. The investigation found that Vo changed the ZIP code for about one-third of his clients’ policies to get a lower rate for them. He also manipulated rates on his own auto policies to pay lower premiums.

Shawni Henderson, Pasco, fined $1,500, order 15-0256

Two Washington consumers sought retirement investments from Henderson, who advertised her services as financial advising. Henderson sold the consumers life insurance policies while minimizing the life insurance component of the products. Henderson violated Washington state law when she mischaracterized the life insurance policies as retirement investments and by identifying herself to others as a financial advisor, when her compensation primarily comes from commissions on insurance products.

Matthew E. Tyner, Marysville, fined $1,000, order 15-0265

Tyner failed to renew an insurance policy for a child care business, leaving it uninsured for three months. Tyner didn’t provide the premium payment or all the necessary documentation from the child care business to the insurance company in a timely manner. During the time the business was uninsured, an incident occurred where a claim needed to be made against the policy; the insurance company denied the claim and refused to renew the policy with backdated coverage. The owner of the child care complained to the Insurance Commissioner when the lapsed policy was discovered.

Ticor Title Co., Seattle, fined $5,000, order 15-0267

Ticor Title is licensed to sell title insurance in Washington state. In May 2015, it sponsored a meeting at a wine shop and spent $143 on wine, food and supplies for 16 title insurance producers who attended. In June 2015, it provided free information to property owners in exchange for the owners using Ticor Title as the escrow business. In other words, it induced business for itself. Both of these events violated state insurance law.

Heidi Batie, Enumclaw, license revoked, order 15-0287

The Insurance Commissioner received a complaint from Batie’s employer, an insurance agent, that she was stealing cash from the agency’s premium accounts, causing them to be overdrawn on multiple occasions. The employer said that his calculations show Batie took more than $6,700 from the accounts and incurred $394 in overdraft fees, and that Batie had admitted to it in writing. State Farm confirmed the missing money and overdraft fees when it conducted its own investigation and referred the findings to the Insurance Commissioner. Stealing consumers’ premiums is a violation of state insurance 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's office has assessed nearly $20 million in fines, which are deposited in the state's general fund to pay for other state services.

The Office of the Insurance Commissioner posts disciplinary orders against companies, agents and brokers. Consumers can also look up complaints against insurance companies.

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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