June 6, 2023
OLYMPIA, Wash. — Insurance Commissioner Mike Kreidler issued fines in April and May totaling $398,500 against insurance companies that violated state insurance laws and regulations.
Insurance companies
LifeWise Health Plan of Washington, Mountlake Terrace, Wash.; fined $250,000 (order 23-0068).
- During the COVID-19 pandemic, LifeWise incorrectly processed 4,133 virtual mental health claims for 871 consumers, which resulted in $75,366 in overpayments to providers.
- LifeWise also incorrectly coded 6,591 COVID-19 testing claims in 2020 and 2021. Of those claims, 4,357 were underpaid (totaling $560,354) and 1,341 were overpaid (totaling $618,714).
- Additionally, LifeWise incorrectly processed 314 COVID-19 claims in 2022. Configuration updates and human error caused the processing issues.
- LifeWise also posted incorrect information about appeals on its website.
Premera Blue Cross, Mountlake Terrace, Wash.; fined $50,000 (order 23-0067).
- Premera’s third-party vendor incorrectly configured benefits in its claims system, which resulted in 1,420 mental health office visits being charged a deductible and a total of $89,737 in claim underpayments.
- Premera also denied 893 COVID-19 testing claims between January 1 and February 7, 2021. After reprocessing the claims, Premera issued $91,056 to providers.
- Due to human error, Premera incorrectly processed 77 claims on COVID-19 testing cost-shares between March 5, 2020, and December 14, 2021, totaling $17,207. All claims were reprocessed.
- A processing issue, due to a system configuration, prevented cost shares for COVID-19 exposure billing from being waived. The 3,964 affected claims were underpaid by $394,235 and were reprocessed.
- Additionally, two Premera publications featured incorrect information on appeal rights.
Regence BlueShield, Seattle, Wash.; fined $10,000 (order 23-0082).
- Regence was the victim of a data security breach that exposed 570 Washington consumers’ private information in 2021. Regence failed to timely notify the OIC of the breach and oversee its subcontractor.
American Digital Title Insurance Company, Denver, Co.; fined $30,000 (order 23-0081).
- American Digital Title Insurance accepted new business and paid commissions to its sole producer without appointing them as title agent. The company also failed to respond to the OIC’s inquiry in a timely manner.
New Hampshire Insurance Company, Chicago, Ill.; fined $8,000 with $4,000 suspended (order 23-0047).
- The company was fined $8,000 for sending out storage unit burglary claim denial letters with language that doesn’t appear on the Washington Certificate of Storage Insurance. Half of the fine was suspended on the condition the company doesn’t violate any statutes or regulations for the next two years.
Unauthorized insurers or companies
Airbnb, San Francisco, Calif.; fined $20,000 (order 23-0108).
- Airbnb acted as an unauthorized insurer through its Host Damage Protection program. The company was ordered to obtain a surplus lines policy through a broker authorized in Washington state.
Mack Camera & Video Service, Springfield, N.J.; fined $20,000 (order 22-0294).
- Mack Camera & Video acted as an unauthorized insurer. The company was also ordered to stop engaging in unauthorized insurance business in Washington state.
Producers, agents & brokers
Golden State Claims Adjusters, Carlsbad, Calif.; fined $5,000 (order 23-0072).
- The company used an adjuster who was not licensed in Washington state to process a claim.
Railroad Insurance Services; fined $500 (order 23-0069).
- Railroad Insurance Services acted as a surplus line broker and insurance producer without being licensed in Washington state.
Sandra Sherman, Renton, Wash.; fined $7,000 (order 23-0022).
- Sherman misrepresented life insurance policies, leading consumers to believe the policies included long-term care coverage that would exempt them from paying into the WA Cares Fund.
William H. Steenis, Snohomish, Wash.; fined $500 (order 23-0064).
Perla’s Insurance Services, Mount Vernon, Wash.; fined $500 (order 23-0078).
Tanika Stewart, Fishers, Ind.; fined $250 (order 23-0054).
Lori Ann Veccia, Sharon, Penn.; fined $250 (order 23-0100).
Shane Van Dalen, Lynden, Wash.; fined $500 (order 23-0059).
About the Office
Kreidler’s office oversees Washington’s insurance industry to ensure that individuals, companies, agents and brokers follow state laws. Since 2001, Kreidler has assessed more than $39 million in fines, which are directed to the state’s general fund to pay for state services.
The Office of the Insurance Commissioner publishes disciplinary orders (fortress.wa.gov) against companies, agents and brokers. Consumers can also look up complaints (fortress.wa.gov) against insurance companies.
For an insurance question or complaint, you may contact Kreidler’s consumer advocates online or by phone at 800-562-6900.