by Matt Rosenberg September 7th, 2010
OVERVIEW: The Office of the Washington State Insurance Commissioner provides an online database for consumers to check on disciplinary and administrative actions taken against insurance providers. The commissioner’s office also provides another database through which consumers can check on the financial standing of long term health insurance providers.
Related: Public Data Ferret radio segment on KOMO-AM 1000, Seattle, 9/8/10
REVIEWING DISCIPLINARY ACTIONS AGAINST INSURANCE PROVIDERS:
1. Checking a specific provider. At the 2002-2010 Disciplinary or other Actions database main page, you can enter the name of an insurance provider in the search bar and click “submit” to see what results are returned. Be aware that different insurance companies sometimes have very similar names. Results display actions taken by the state, each linked to at its own summary page, which in turn contains a link to the actual Insurance Commissioner’s Office document detailing the action and response.
DEMO – STATE FARM: For instance, if you enter “State Farm,” the results show six disciplinary actions in the 2002-2010 state database. Two of the six listed actions were relatively minor. The four others follow.
- In 2010, the company paid a $6,500 fine for accepting applications for long-term care insurance from agents who failed to comply with state requirements for continuing education (consent order).
- Another 2010 action against the company levied a $16,000 fine with $4,000 of that amount suspended, for the same reasons (consent order).
- In 2008, the company was fined $25,000, with $10,000 suspended, for overcharging 2,134 auto insurance policyholders by almost $600,000 total, by dropping their multi-vehicle discounts due to an error during a computer system upgrade. The mistakenly revoked discounts were paid back, with 5 percent interest (consent order).
- In 2008, the company also paid a $5,000 fine for issuing “adverse action” notices to 38,000 homeowners insurance applicants on the basis of poor credit scores, but failing as required under state law to explain the actions further or offer information about available corrective actions (consent order).
2. Checking a specific year: The 2010 database shows 151 different disciplinary or related actions have been taken against insurance providers in Washington State. Violations most often reported include failure to provide identifying information, failure to maintain minimum required financial reserves, failure to report prior criminal convictions, misappropriation of premiums, and deceptive marketing.
- The principal of an insurance agency operating in Longview, Wash. and Castle Rock, Wash. had her license revoked for misappropriating for her personal use 66 premium payments from customers over a six-month period. She never remitted the payments for coverage to Farmers Insurance, as promised. The company detected the fraud and credited the payments to policies for the customers (order of license revocation).
- A Bellevue, Wash. insurance agent had his license revoked after a felony conviction for pocketing his deceased mother’s Veterans Administration benefits checks for more than three years (order of license revocation).
- A Kent, Wash. insurance agent had his license revoked for misappropriating a premium payment from a commercial client, and disappearing (order of license revocation).
- A Lynnwood, Wash. insurance agent had his license revoked for failing to disclose four prior convictions for felony grand theft (order of license revocation).
- A Wilsonville, Ore. insurance company had its Washington license revoked after its Oregon license was rescinded for a series of ethical lapses including misrepresenting an uninsured client as insured, and accepting premium funds but failing to execute promised purchases of policies (order of license revocation).
- A Karachi, Pakistan company was ordered to cease and desist marketing to Washington consumers a supposed comprehensive health insurance plan which turned out to be an accident policy of extremely limited applicability, and to replace those policies sold in Washington with what was promised (order to cease and desist).
- A Warwick, Rhode Island insurance company agreed to pay a $45,000 fine with $20,000 suspended, for various violations including unauthorized coverage expansions and resulting inflation of premiums on antique auto policies; and improper withholding of discounts on certain “mature homeowners” policies for which refunds totaling $190,000 were later issued to 496 customers (consent order).
- A Phoenix insurance company was declared insolvent in Arizona courts and its license to operate in Washington was revoked (order of revocation).
- A New York based insurance company’s license was revoked for failing to maintain minimum capital of surplus of $6,000,000 as required by state law (order revoking certificate of authority).
REVIEWING FINANCIAL DATA OF HEALTH CARRIERS
Consumers can also use the Health Carrier Information Comparison tool at the Insurance Commissioner’s Web site to review the ratio of claims paid to preium payments received (medical loss ratio), administrative costs, average monthly premiums, amount of surplus, and profit margins.