Washington state Insurance Commissioner Mike Kreidler issued fines in January totaling $186,250 and otherwise disciplined insurance companies, agents and brokers who violated state insurance regulations, including a prominent health insurer.
Insurance companies
Regence BlueShield, Seattle; fined $40,000, order 15-0233
Regence was denying health insurance coverage to Washington consumers who indicated they were eligible for Medicaid coverage or who had previously been enrolled in Medicaid. Medicaid is called Apple Health in Washington state and is administered by the state Health Care Authority. The Insurance Commissioner became aware of the issue after a consumer complained. The Commissioner’s investigation revealed that 65 Washington consumers were denied coverage in the previous two years. The affected consumers will be given the opportunity to re-apply for health insurance from Regence, even though open enrollment is no longer available until November 2016.
American Family Mutual Insurance Co., Madison, Wisc.; fined $15,000, order 15-0305
American Family Insurance Co., owned by parent company American Family Mutual Insurance Co., was undercharging Washington consumers based on rates that were not filed with or approved by the Insurance Commissioner. The undercharges were applied to 113 policies for a total of more than $27,000. State law does not allow insurance companies to charge rates that were not approved by the Insurance Commissioner.
Stillwater Insurance Co., Santa Barbara, Calif.; fined $125,000, order 15-0307
A Washington consumer complained to the Insurance Commissioner that Stillwater sent a notice of a homeowner’s insurance rate increase that did not clearly explain the reason for the increase or what the consumer could do to mitigate the increase. Stillwater later reported to the Insurance Commissioner that it sent similar notices to more than 3,500 Washington consumers from December 2013 to December 2015. State law requires insurance companies to use clear and simple language when they report adverse action to insurance consumers.
Agents and brokers
Brian E. Berghout, Mattawa; fined $500, order 15-0277
Berghout and another licensed insurance producer went to a consumer’s home to discuss health insurance. The consumer reported that Berghout used intimidation to sign her up for a new Medicare supplement policy that she didn’t want and accessed information about her annuity against her wishes. The consumer called Berghout the next day and said she wanted to rescind the new policy she signed, and reported that Berghout and the other producer returned, treated her rudely, and tried to get her to sign more forms she didn’t want to sign. The other producer had a separate enforcement action against him, order 15-0276.
Hussein Y. Fouad, Ridgefield, Wash.; rescinding license revocation and fined $500, order 15-0299
The Insurance Commissioner revoked Fouad’s license in October 2015 after he gave a false answer on his application for a resident producer license, stating that he had never been involved in an administrative proceeding regarding a professional license. Fouad contacted the Insurance Commissioner in December 2015, seeking to have his license reinstated. He agreed to a $500 fine and to a probationary license until his license renewal date.
William Hunter, Mount Vernon; fined $500, order 15-0293
The Insurance Commissioner’s examination vendor caught Hunter cheating while taking an exam to obtain a license to sell property and casualty insurance.
Hannah Kreminski, Kennewick; fined $1,000; order 15-0275
Kreminksi forged signatures of three Washington consumers on four insurance documents.
Dean R. Paulsen, Edgewood; fined $2,750, order 15-0301
Paulsen misstated a consumer’s financial information when he applied for a replacement annuity and forged the consumer’s initials on documents to save himself a long drive to the consumer’s home. The consumer complained to the Insurance Commissioner.
Craig L. Robinson, Jr. Inc., Mill Creek; fined $1,000, order 15-0266
Robinson’s brokerage, Integrity Insurance and Financial, employed an insurance producer named Matthew E. Tyner who failed to procure commercial insurance for a child-care business, even though the business paid the premium in full. Integrity Insurance’s role in the child care not having the insurance it paid for was not submitting the premium check to the insurance company. Tyner’s role was failing to provide required documentation from the child care to the insurance company. The result of Integrity Insurance’s and Tyner’s actions was the that child care was unknowingly uninsured for three months, during which time the child care needed to make a claim, but was unable to because the insurance was never paid for and the policy had lapsed. Tyner was fined $1,000 in November 2015, under order 15-0265.
Robert P. Sorrell, Seabeck; license revoked, order 15-0189
Sorrell borrowed money from at least two of his insurance clients, which he said was for business purposes. He borrowed more than $2.5 million from the first client and $24,000 from the second client, neither of which he fully repaid.
John I. Wickert, Chehalis; license revoked, order 15-0298
Jail Sucks Bail Bonds, Chehalis, license revoked, order 15-0300
Wickert owns Jail Sucks Bail Bonds, and is accused of allowing unlicensed employees to negotiate bail bonds over the phone and in person. People who sell bail bonds are required to have a license to sell surety bonds in Washington state.
Jessica R. Young, Silverdale; issued probationary license, 16-0012
Young applied for an insurance producer license to sell property and casualty insurance. In her application, Young disclosed that she is in a 24-month diversion program after being charged with third-degree misdemeanor theft. If Young completes the program in 24 months, the charges against her will be dropped. Young’s insurance producer license will be on probationary status until she completes the diversion program.
