For Consumers

Kreidler fines Kaiser of Oregon for illegally charging consumers for preventive screenings

Fines against insurance industry in June total $119,750

Contact Public Affairs: 360-725-7055

July 18, 2018

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler disciplined and issued fines in June totaling $119,750 against insurance companies, producers and others who violated state insurance regulations.

Insurance companies

Kaiser Foundation Health Plan of the Northwest, Portland, Ore.; fined $10,000, order 18-0230

A consumer filed a complaint with the insurance commissioner when Kaiser, his health insurer, sent him a surprise bill for a lung cancer screening. The Affordable Care Act requires insurers to pay for lung cancer screenings as a preventive measure. The insurance commissioner asked the company to review its claims for the past two years and found 31 additional consumers in Washington state who were charged for the screening. The company repaid the consumers $6,400 that it charged them. 

American Family Mutual Insurance Co., Madison, Wisc.; fined $10,000, order 18-0084

A consumer filed a complaint with the insurance commissioner when American Family Mutual Insurance paid less for the damage to his roof than it should have, according to his policy. After filing a complaint, the consumer received an additional $5,108 to pay for the claim. 

The insurance commissioner asked the company for records in similar cases and found the company changed the coverage of nearly 400 policies midway through the policy term without giving 45 days’ notice, a violation of state insurance law. 

Other violations

The insurance commissioner fined the following companies for filing their rates late or using the wrong rates:

  • Delta Dental of Washington, Seattle; fined $3,500, order 18-0212

  • Kaiser Foundation Health Plan of the Northwest, Portland, Ore.; fined $3,500, order 18-0219
  • Premera Blue Cross, Mountlake Terrace, Wash.; fined $3,500, order 18-0223
  • Aetna Life Insurance Co., Hartford, Conn.; fined $3,500, order 18-0209
  • Cigna Health and Life Insurance Co., Bloomfield, Conn.; fined $2,500, order 18-0210
  • Health Net Health Plan of Oregon, Tigard, Ore.; fined $2,500, order 18-0211
  • VSP Vision Care, Richmond, Va.; fined $2,500, order 18-0225
  • Guardian Life Insurance Co. of America, New York City; fined $3,500, order 18-0229
  • Berkley Life and Health Insurance Co., Urbandale, Iowa; fined $3,000, order 18-0163
  • Washington National Insurance Co., Carmel, Ind.; fined $7,500, order 18-0254

The insurance commissioner fined the following companies for accepting flood insurance applications from producers who did not complete the required training from the National Flood Insurance Program:

  • American Bankers Insurance Co. of Florida, Miami; fined $10,000, order 18-0183
  • First American Property & Casualty Co., Santa Ana, Calif.; fined $10,000, order 18-0185
  • Hartford Insurance Co. of the Midwest, Indianapolis; fined $20,000, order 18-0186

The insurance commissioner fined the following company for letting its insurance producers’ appointments lapse:

  • Aetna Health and Life Insurance Co., Hartford, Conn.; fined $1,000, order 18-0153

The insurance commissioner fined the following companies for violating other state insurance laws:

  • Topa Insurance Co., Los Angeles; fined $2,500, order 18-0244
  • United HealthCare Insurance Co., Hartford, Conn.; fined $2,500, order 18-0215

Agents and brokers

Brian K. Graves, Spokane; fined $3,500, order 18-0161

A Washington state consumer asked Graves for a quote from Farmers Insurance for an auto policy that included his two sons. Graves provided the quote but excluded the sons from the quote. Graves also issued false certificates for liability to the state Department of Labor and Industries for policies for three Spokane businesses.   

Tina M. Martinez and Tina M. Martinez LLC, Yakima, Wash., fined $750, order 18-0217
Lindy Layton, Selah, Wash.; fined $250, order 18-0218

Martinez, an insurance producer, her agency, and one of its insurance producers, Lindy Layton, failed to provide the invoice of a commercial insurance policy to the consumer’s mortgage company in a timely manner. The mortgage company requested the invoice several times. As a result, the mortgage company was unable to pay the premium on the consumer’s policy, the insurer canceled the policy for nonpayment and the property was uninsured for two months. Additionally, the new policy cost twice as much as the canceled policy, which caused the consumer’s mortgage escrow account to be short. 

GC Insurance Services and John R. McDaniel Jr., Seattle; fined $2,000, order 18-0259

GC Insurance and McDaniel charged broker fees to consumers but either failed to disclose them or only partially disclosed them, instead including them in the premiums. The fees varied by consumer and by policy. State law requires insurance producers to disclose fees in writing to consumers. 

Monteith Insurance Inc., and Mark Monteith, Kennewick, Wash.; fined $1,000, order 18-0261

The agency failed to return premium refunds to consumers in a timely manner, despite being told to by the insurance commissioner’s financial examiners several times. Monteith held onto one refund totaling $3,267 for more than five months. 

Michael A. Taylor, Vancouver, Wash.; fined $1,000, order 18-0289

A consumer filed a complaint with the insurance commissioner after Taylor sold a life insurance policy and misrepresented the terms of the policy. The consumer reported that Taylor said if he canceled the policy within two years of obtaining it, Farmers would refund all of the premium payments plus 10 percent interest. The consumer asked to cancel the policy and was told he would only get back his last two premium payments, a total of $1,328. The consumer was expecting to get back nearly $5,700 in premium payments plus 10 percent interest. 

Hub International Northwest LLC, Bothell, Wash.; fined $250, order 18-0214

The licensed insurance producer collected a yearly premium payment from a consumer but didn’t remit it to the insurer due to an accounting error. The insurer issued a cancelation notice to the consumer, but Hub overnighted the payment to the insurer and the policy remained in place. 

Other violations

The insurance commissioner fined the following insurance producers for failing to notify the agency of administrative actions against them:

The insurance commissioner fined the following insurance producers for obtaining insurance on behalf of clients without their knowledge or consent:

The insurance commissioner fined the following insurance producers for violating state licensing laws:

The insurance commissioner revoked the licenses of the following insurance producers:

The insurance commissioner rescinded the revocations of the following insurance producers’ licenses:

Others

The insurance commissioner ordered the following people and organizations to cease and desist from selling insurance in Washington state without an insurance producer license:

The insurance commissioner fined title companies and an appraisal company for violating state laws:

  • Frontier Title and Escrow of Klickitat, Goldendale, Wash.; fined $250, order 18-0256
  • Kitsap Title LLC, Port Orchard, Wash.; fined $250, order 18-0257
  • Nationwide Appraisals LLC, Elgin, Ill.; fined $3,500, order 18-0199

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 $24 million in fines, which are deposited in the state's general fund to pay for 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.