For Consumers

Kreidler fines insurer of WSU student plans $310,000 for using the wrong rates

Contact Public Affairs: 360-725-7055

October 15, 2015

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler issued fines in September totaling $365,500 against insurance companies, agents and brokers who violated state insurance regulations.

The bulk of the fines – $310,000 – were against National Union Fire Insurance Co. for two violations regarding health insurance policies for students at Washington State University (WSU).

National Union Fire Insurance Co., Harrisburg, Penn.; fined $110,000 and fined $200,000

National Union filed blanket accident and sickness health plans for students at WSU just before the start of the 2014-15 academic school year that did not comply with state insurance regulations because of the way the company figured the rates. To minimize disruption to students, the Insurance Commissioner agreed to let the students keep the plans for that school year and would disapprove the plans at the end of the term in August 2015. National Union agreed to pay a fine of $200,000 for noncompliant plans for the 2014-15 school year and to make sure 2015-16 school year plans comply with state insurance regulations.

National Union also received a $110,000 fine for raising rates 4.97 percent for the 2011-12 school year at WSU without filing a rate increase request with the Insurance Commissioner. In all, 3,462 students were charged the higher unfiled rates.

Other insurance companies

01 Dental Plan LLC, Issaquah; fined $13,000

The company failed to meet several requirements in state insurance laws and rules, including renewing its license on time, filing annual financial statements, operating under its legal name and responding to inquiries from the Insurance Commissioner.

American Family Mutual Insurance Co., Madison, Wisc.; fined $10,000

The company sent nonrenewal notices to at least 18 Washington consumers that used generic, hard-to-understand language. Insurance rules require companies to tell consumers that their policies have been canceled, denied or nonrenewed using “the true and actual reason for its action in clear and simple language.”

Agents and brokers

Cesar Emmanuel Bernal, Nadine Mendoza and Explora Travel LLC; Seattle; ordered to cease and desist

Bernal is not licensed to sell insurance in Washington state. He was advertising discount auto insurance on Facebook and charging consumers a fee to sign them up with GEICO insurance. He sold policies to three Washington consumers through the Facebook ad. He also referred consumers to Explora Travel, owned by Nadine Mendoza, to set up insurance policies and payments, which is not a licensed insurance producer in Washington state. All three parties were ordered to cease and desist from selling insurance to Washington consumers.

Nicole Bolden, Clifton Park, NY; fined $500

Bolden renewed her independent adjuster license in June 2014, but her license fee payment was rejected by the bank.  The Insurance Commissioner contacted her several times about the status of her license renewal payment, but she did not respond. In October 2014, the Insurance Commissioner revoked her license for failure to respond. In July 2015, Bolden contacted the Insurance Commissioner, seeking to renew her license. She agrees to pay a fine and her license renewal fee and to comply with Washington state insurance laws and rules.

Mitchell R. Johnson, Lake Oswego, Ore.; fined $2,000

Johnson sold two replacement annuities to one Washington consumer worth a combined $617,000 and did not disclose surrender penalties, charges and long-term adverse effects of the annuities. The consumer ultimately backed out of the annuities during the trial period based on the information that was not disclosed.  Johnson incorrectly answered questions on a second consumer’s annuity replacement form and did not provide complete annuity replacement forms to a third consumer.

MCM Insurance Services, John W. Meisenbach, Seattle; fined $30,000

MCM and Meisenbach are licensed insurance producers. The Insurance Commissioner discovered during a routine financial exam that MCM had purchased gifts including sporting event tickets, holiday wreaths, dinners and other items that exceeded the $25 per year, per client limit set out in state law between 2012 and 2015. Sporting event tickets worth more than $27,000 were given to 86 clients and nine prospective clients. Clients were given more than $1,400 worth of wreaths.

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 more than $19 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 at 800-562-6900 or online

 

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Release No. 15-45