April 15, 2015
OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler issued sanctions and fines in March totaling $54,050 against insurance companies, agents and brokers who violated state insurance regulations.
The actions are linked to the disciplinary order that contains more information about the case.
Moda Health Plan, Portland, Ore.; fined $17,500
A consumer filed a complaint with the Insurance Commissioner on behalf of her husband because Moda processed an oral medication to treat cancer as a prescription benefit, which has a higher cost, rather than a medical benefit. Washington’s Oral Chemotherapy Parity Law requires that insurers cover oral chemotherapy drugs as a medical benefit rather than a prescription benefit because the cost is lower for consumers. Moda reviewed the case and agreed to cover the treatment as a medical benefit. The Insurance Commissioner then asked Moda to review all such cases dating back to January 2012; Moda identified 78 consumers with 278 claims that were processed as more expensive pharmacy claims. Moda is in the process of reprocessing those claims for the affected consumers and will notify the Insurance Commissioner of the results. The Insurance Commissioner also advised Moda on updates to its claims processing procedures to avoid this happening in the future.
State Farm Fire & Casualty Co.; Sacramento; fined $30,000
The company discovered an error in its rates in June 2014 that had been occurring for more than eight years. It was overcharging certain younger drivers who qualified for a lower rate. The insurer reviewed affected policies and determined that 1,033 Washington policyholders had overpaid more than $421,000; it refunded the premiums plus 8 percent annual interest totaling more than $120,000.
Agents and brokers
John M. Arrisola, Yakima; issued probationary license
Arrisola applied for an insurance producer license in January 2015. He reported that he owes child support and has a pending criminal charge. His license will remain in probationary status until his renewal date or until the terms of the probationary license are met, whichever happens later. Any violations of insurance laws or rules, other criminal convictions or failure to repay child support will result in his license being revoked.
Richard B. Bates, Jr., Spokane; fined $1,000
Bates sold replacement annuities to two women and filed the replacement forms incorrectly, resulting in surrender penalties of more than $17,000 for one woman and more than $20,000 for the other. The women agreed to a settlement that included rescinding the new annuities, a refund of the related premiums plus 1.5 percent interest, and the difference between the bonus that was paid and the surrender penalties on the old annuities.
Brian E. Berghout, Mattawa; fined $2,000
Berghout signed an insurance policy as if he were the person who sold the policy to the consumer, even though the consumer never met with or spoke to him. The policy the consumer signed incorrectly stated there were no penalties for surrendering the policy, which should have been disclosed to the consumer.
John S. Clayton, Yelm; fined $1,500
Clayton offered $25 gift cards to clients who referred business to him for each referral and did not document the use of gift cards. State insurance law allows agents to give prizes worth $25 to each client only once and also requires agents to document prizes, recipients and dates they were given.
Andre Davis, Lynnwood; fined $500
Davis applied for an insurance license in 2010 and renewed the license in 2015. On both applications, Davis indicated he had no criminal history. Background checks revealed that Davis had a felony conviction in 2004 and a gross misdemeanor conviction in 2005.
Theresa Gamble, Covington; license revoked
Gamble kept premium payments from consumers who had purchased bonds, resulting in the bonding company canceling 185 bonds. Gamble owes the bonding company nearly $15,000 for consumers whose premium payments she never gave to the company and for consumers who told her they wanted to cancel the policy but she never informed the company. Gamble also failed to manage the account she used to hold consumers’ premiums, called a premium trust account.
National Multiple Sclerosis Society, Denver; fined $1,000
National Multiple Sclerosis Society is a charitable organization that is registered to issue charitable gift annuities. It filed its annual reports up to two months past the deadline set in state law in 2013 and 2014.
Paul Pukis, Lynnwood; fined $250
Pukis made misleading claims on the Washington Marijuana Business Association website regarding his relationship with the Insurance Commissioner and with the state Liquor Control Board in an effort to market to entrepreneurs who were looking for commercial marijuana insurance.
Lindsey Ramirez, Kennewick; issued probationary license
Ramirez applied for an insurance producer license in January 2015, indicating that she has a felony conviction and an outstanding court debt of more than $10,000. Her license will remain probationary until her first license renewal or until her court debt is paid in full, whichever happens later.
Ira J. Sorenson, South Jordan, Utah; fined $300
Sorenson applied for a nonresident producer license in December 2014 and failed to disclose actions against his license in other states. The Idaho Department of Insurance notified the Insurance Commissioner that Utah’s Division of Securities had fined Sorenson $15,000.
Stanley Home Warranty, Englewood Cliffs, New Jersey; order to cease and desist
Stanley sold non-vehicle service contracts to Washington consumers, which it is not allowed to do without being registered to do so. A service contract often is sold with products and covers services or repairs if a product fails.
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 $18 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 at 800-562-6900 or online.
Release No. 15-14