For Consumers

Kreidler fines Premera Blue Cross, Lifewise for mishandling consumer appeals

Contact Public Affairs: 360-725-7055

May 22, 2019

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler issued fines in April totaling $401,900 against insurance companies, agents and brokers who violated state insurance regulations.

Insurance companies 

Premera Blue Cross, Mountlake Terrace, Wash.; two orders:

  • Fined $50,000, order 19-0079: Premera underpaid dental providers for certain anesthesia services by $182,766 on 1,008 claims from January through June 2018. The company will reprocess all of the underpaid claims within 90 days. 
  • Fined $50,000, order 19-0138: A consumer complained to Kreidler when Premera denied a lifesaving specialty formula for a child. Kreidler’s investigation found that Premera improperly handled the appeal, which should have included a review by an independent review organization (IRO). Premera subsequently reported that it improperly handled 59 appeals from June 2016 until July 2018. 

Lifewise Health Plan of Washington, Mountlake Terrace, Wash.; fined $25,000, order 19-0139
A consumer complained to Kreidler about a claim appeal that was mishandled by Lifewise, a sister company to Premera Blue Cross. Lifewise reported that it delayed 31 appeals to be reviewed by independent review organizations (IRO) from June 2016 until July 2018.  

Delta Dental of Washington, Seattle; three orders:

  • Fined $15,000, order 19-0071: The company did not maintain dental provider directories in accordance with state law. Violations included obscuring specialty providers, accuracy of the directories, and reporting providers to Kreidler’s office.  
  • Fined $15,000, order 19-0072: The company overcharged and undercharged a total of 3,370 Washington consumers, affecting 4,624 claims. Overcharges totaled more than $13,000, which it refunded to customers. 
  • Fined $50,000, order 19-0073: The company sold unapproved policies to 6,140 Washington consumers. These policies contained language that was specifically disapproved by Kreidler’s office.  The company also misrepresented the terms of its contracts in its confirmations of treatment and cost in 6,456 instances.

Kaiser Foundation Health Plan of Washington Options, Inc., Seattle; fined $50,000, order 19-0075
The company improperly processed claims totaling nearly $213,000 for 42,036 consumers in 2017. The company’s plan stated that each policyholder’s first four visits of the year were not subject to the annual deductible. The company processed claims in the order they were received, rather than in chronological order. The result was that policyholders could be subject to higher out-of-pocket charges depending on how fast medical providers submitted claims. 

Ameritas Life Insurance Corp., Lincoln, Neb.; fined $50,000, order 19-0107
In 2015, Kreidler denied a standalone combined vision and dental policy that the company wanted to sell. In 2017, it sold 1,552 of these plans to Washington consumers, generating $95,997 in premiums. Additionally, from January through July 2017 the company allowed insurance producers to sell the policies without being properly affiliated or appointed. Kreidler suspended $30,000 of the fine under the conditions that the company certify that all of its producers are appointed and affiliated every six months and commits no further law violations for two years. 

Kreidler disciplined the following companies for violating state insurance laws:

  • Bankers Life & Casualty Co., Chicago; fined $30,000, order 19-0074
  • Omni Insurance Co., Springfield, Ill.; fined $20,000, order 18-0079
  • Principal Life Insurance Co., Des Moines, Iowa; fined $16,150, order 19-0040
  • Banner Life Insurance Co., Frederick, Md.; fined $10,000, rescinding cease and desist, order 19-0172
  • Seneca Insurance Co., New York City; fined $3,000, order 19-0175
  • Mutual of Omaha Insurance Co., Omaha, Neb., fined $3,000, order 19-0101

Agents and brokers

Kreidler fined the following insurance producers for violating state laws:

  • Trever Marshall Maestas, Kennewick, Wash.; fined $250, order 19-0173
  • Barbara Jean Otiker, Bremerton, Wash.; fined $250, order 19-0202
  • Aliyah Hunt, Middleton, Wisc.; fined $250, order 19-0008
  • Southwest Risk LP, Dallas; fined $250, order 19-0103
  • Brandon Lewandowski, Garfield Heights, Ohio; rescinded revocation and fined $500, order 19-0104
  • Sarah Miller, Denver; rescinded revocation and fined $500, order 19-0105
  • National Rural Letter Carriers Association, fined $8,500, order 19-0099
  • Landcar Agency, Sandy, Utah; fined $4,000, order 19-0053
  • Alison Page Newman, El Cajon, Calif., fined $250, order 19-0080

Kreidler revoked the licenses of the following insurance producers:

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 $27 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. 

For an insurance question or complaint, contact Kreidler’s consumer advocates online or by phone at 800-562-6900.