Colo. Division of Insurance Tells Unauthorized Entities to Stop Selling Bad Insurance

The Colorado Division of Insurance has issued cease and desist orders that require 47 individuals and 35 unlicensed entities to stop selling unauthorized insurance products immediately and continue to pay all claims in Colorado.

Unauthorized entities market a wide variety of health benefits, including direct payment of coverage for medical, surgical, chiropractic, physical therapy, mental health, dental, hospital, pharmaceutical or optometric expenses. They also market other lines of insurance, including medical malpractice, automobile, and commercial liability.

“Consumers who buy unauthorized insurance may experience a severe financial impact,” Acting Insurance Commissioner M. Michael Cooke said. “When they attempt to have claims paid, consumers discover that there may be no payment of their claims.”

The Division of Insurance may take action against known producers to pay consumer claims. Under Colorado insurance law, licensed producers who sell illegal policies may be subject to disciplinary action, including revocation of their licenses, and could face criminal charges and be liable for payment of claims. If an unlicensed insurer fails to pay claims, insurance producers may be held responsible for unpaid claims.

Furthermore, if the Division determines that there is a violation of the cease and desist order, the Commissioner may impose a civil penalty of $25,000.

Topics Colorado