September 20, 2016
OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler issued fines in August totaling $114,150 against insurance companies, agents and brokers and others who violated state insurance regulations.
For more information, search the order number on the Commissioner’s website.
PEMCO Mutual Insurance Co., Seattle; fined $75,000, order 16-0186
A consumer’s complaint to the Insurance Commissioner about an auto insurance rate increase led to the company discovering a programming error that was overcharging consumers. The company estimates more than 33,000 consumers were overcharged from 2011-2015. It refunded the consumers $4.9 million for the amount it overcharged plus 8 percent interest.
Hyong S. Gayles, Seattle; license revoked, order 16-0181
AFLAC notified the Insurance Commissioner that it terminated Gayles’ appointment in October 2015 after a consumer complained that Gayles took out a cancer-related policy without the consumer’s knowledge or consent. The consumer confirmed a forged signature on the policy. An investigation found evidence that Gayles added strangers to small-business policies without knowledge or consent and took out additional policies on existing customers without their knowledge or consent. In all, AFLAC found evidence of 19 fraudulent insurance applications, for which Gayles earned $3,095 in commissions.
GC Insurance Services, Seattle; fined $500, order 16-0195
The company did not properly disclose how much its producers earned in commissions on forms it gave to consumers. The violation was noted during an examination by the Insurance Commissioner and was still not corrected in two subsequent examinations.
David F. Gollersrud, Kirkland; fined $250, order 16-0182
Gollersrud sent an email to a prospective client that contained unclear rating information about two insurance companies, which he accompanied with a misleading statement regarding the possibility of an insurer’s bankruptcy.
Dr. C Family Dentistry, Spokane Valley; ordered to cease and desist, order 16-0206
The dental practice enrolled 488 patients in a discount dental care plan without being licensed to sell the plans, as required by state law. The plans were priced at $133 per year for an individual and $233 per year for a family. The Insurance Commissioner ordered the practice to stop selling the plans without a license.
Randolph Anthony Stolle, Gig Harbor; fined $400, order 16-0174
A consumer contacted Stolle to purchase life insurance, telling Stole he couldn’t pay a premium until the end of the month. Stolle gave the customer $61 to pay the first month’s premium. State law prohibits producers from paying customers’ premiums because it’s an inducement to buy insurance.
Colleen M. Casey, University Place; fined $1,000, order 16-0196
A client of Casey’s bought a homeowner policy on a recently purchased house, and asked her to designate it the client’s primary residence, which Casey failed to do. The client also instructed Casey to cancel the homeowner policy on the previous residence, and to place a rental property policy on it because the client was renting it out, which Casey also failed to do. More than a year later, the consumer found out about Casey’s errors and filed a complaint to the Insurance Commissioner. The mix-up in primary residences caused the consumer’s auto policy premium to increase by $120 per year. Additionally, the rental property was not adequately insured during that time – homeowner’s policies do not pay claims on rental properties.
KR Consultants LLC and Randy S. Walker, Longview; fined $250, order 16-0169
Both entities are licensed insurance producers and failed to disclose fees they charged to consumers who had policies with low premiums. The additional fees ranged from $50 to $300. In 2015, Walker charged eight consumers $2,200 in fees that he did not disclose to them.
Jefferson Insurance Co., New York City; fined $5,000, order 16-0168
Jefferson Insurance Co. allowed all of its 433 insurance producers’ appointments to lapse. Two of those producers sold 15,367 travel insurance policies to Washington consumers totaling nearly $574,000 in written premiums. State law requires insurers to file a notice and pay a fee to the Insurance Commissioner for each licensed producer who will act as an agent of an insurer.
MEDCO Containment Life Insurance Co., Harrisburg, Penn.; fined $1,000, order 16-0173
MEDCO sells Medicare Prescription Part D health insurance plans. The company allowed 335 insurance producers’ appointments to lapse for 59 days in 2014. During that time, nine producers sold nine policies worth more than $500 to Washington consumers. State law requires insurers to file a notice and pay a fee to the Insurance Commissioner for each licensed producer who will act as an agent of an insurer.
Medmarc Casualty Insurance Co., Montpelier, Vt.; fined $750, order 16-0201
The company submitted a required annual report to the Insurance Commissioner that contained data from Wisconsin instead of Washington and didn’t include all of the information required.
Pacific Star Insurance Co., Sheboygan, Wisc.; fined $10,000, order 16-0043
The Insurance Commissioner found the company was not handling consumers’ claims in a timely manner and used unfair claims-handling practices. The findings included:
- The company had not adopted and implemented standards for promptly responding to, paying, or investigating claims.
- The company did not adequately document claims information.
- Consumers’ claims went untouched for weeks or months at a time.
- The company didn’t follow the proper protocol for denying claims for vehicle towing and storage costs.
Permanent General Assurance Co., Valley View, Ohio; fined $5,000, order 16-0202
The company allowed 176 insurance producers’ appointments to lapse for 25 days during 2015. During that time, 51 of the producers sold 290 policies worth nearly $300,000 in written premiums. State law requires insurers to file a notice and pay a fee to the Insurance Commissioner for each licensed producer who will act as an agent of an insurer.
Transamerica Life Insurance Co., Cedar Rapids, Iowa; fined $5,000, order 16-0170
In 2014 and 2015, the company improperly denied policies to 10 Washington consumers who wanted to buy Medicare supplemental policies.
Zurich American Insurance Co., New York City; fined $10,000, order 16-0107
After receiving six consumer complaints in one year about claims-handling delays, the Insurance Commissioner examined the company’s claims process. The exam found that the company failed to disclose all of the pertinent policy benefits and coverage to all Washington consumers who filed claims, and also didn’t use its correct name on correspondence with consumers.
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 $20.4 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 online or by phone at 800-562-6900.
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