Washington Insurance Commissioner Issued Numerous Fines, Disciplinary Actions

Washington Insurance Commissioner Mike Kreidler took disciplinary action in July, August and September against insurance companies, agents and brokers for violating state insurance regulations.

A summary of cases of interest to Washington consumers is below.

Insurance companies

Dental Health Services, Seattle; two cases (Fined $100,000; Fined $20,000)

Kreidler imposed part of a suspended fine for failure to comply with the compliance plan it agreed to in November 2018. Kreidler’s office found that the insurer’s individual and small-group rate filings were incorrect and the insurer didn’t comply with the terms of the compliance plan.

Kreidler fined the dental insurer for filing an inaccurate and late financial statement for 2017 and for failing to maintain records to support its financial filings.

Loyal American Life Insurance Co., Cincinnati, Ohio; fined $100,000

The company gave no commission to producers who sold Medicare supplement plans to people over 80 years old, which had the effect of being discriminatory against consumers of that age. The company implemented a commission schedule that was different from the schedule filed in its rate filings.

Symetra Life Insurance Co., West Des Moines, Iowa; fined $80,000

The insurance company offered employer groups a rebate on stop-loss premiums. The stop-loss policies protected employers from large insurance claims and the refunds went directly to the employer. The company did not file the rebate plan with Kreidler’s office for approval and therefore is considered an illegal inducement under state law. From 2015 to 2018, the company paid 41 refunds totaling nearly $1.6 million.

Producers Agriculture Insurance Co., Amarillo, Texas; fined $50,000

Kreidler fined the company for charging rates that were not reviewed or approved by his office. It charged incorrect rates on 1,227 crop-hail policies that resulted in 996 underpayments and 186 overpayments; 45 policies were not affected. The company reimbursed $17,727 in overpayments plus 8% interest. Kreidler suspended $15,000 of the fine as long as the company commits no additional violations for two years.

Florists Mutual Insurance Co., Edwardsville, Ill.; fined $50,000

During a market conduct analysis, Kreidler’s staff found several violations of state law:

The company didn’t use its legal name and domicile on all forms of advertising.

The company advertised its AM Best rating on its website without providing an explanation of the AM Best rating scale.

The company allowed an insurance producer to conduct business in Washington state while their appointment was lapsed. The company also allowed a producer and insurance agency to process 178 insurance transactions in Washington state without being appointed. These transactions totaled $642,240 in premiums and occurred during 2016 and 2017.

98point6, Seattle; fined $30,000

The company was operating as an unlicensed health care service contractor by selling plans to individuals and businesses. The company modified its structure to a fee-for-service model to comply with state law.

Commerce West Insurance Co.; San Ramon, Calif.; fined $30,000

Commerce West charged a $15 late fee on its homeowner policies from 2103 to 2018 without approval from Kreidler’s office as part of its rate and form review. The company charged the fee to 4,520 policyholders, totaling $92,190 in late fees. The company has received approval from Kreidler’s office to begin charging the late fee. The company has agreed to refund the unauthorized late fees plus 8% interest.

Liberty Mutual Fire Insurance Co., Wausau, Wisc.; fined $30,000

The company issued checks from January 2017 through June 2018 using a name other than its legal name. The company was unable to determine how many checks had the incorrect name, but corrected the error in October 2018.

Transamerica Life Insurance Co., Cedar Rapids, Iowa; fined $15,000

The company issued insurance policies that were not approved by Kreidler’s office to 41 Washington consumers totaling $129,716 in premiums. The company also allowed insurance producers who were not affiliated or appointed to sell products to Washington consumers.

Boston Mutual Life Insurance Co., Canton, Mass.; fined $14,500

The company issued 92 unauthorized certificates totaling $29,626 in premiums to Washington consumers through associations.

Austin Mutual Insurance Co., Maple Grove, Minn.; fined $4,000

Kreidler’s examiners found the company overcharged 18 commercial policyholders $770 and undercharged four policyholders $992. The company agreed to correct its system that resulted in mischarges and to refund the overcharged policyholders plus 8% interest.

Capitol Indemnity Corp., Middleton, Wisc.; fined $4,000

Kreidler’s examiners found that the company made errors that resulted in charging some policyholders incorrect rates. The company audited two years’ worth of policies to make sure it charged policyholders the correct premiums.

North River Insurance Co., Morristown, NJ; fined $2,000

The company issued six commercial policies that did not include the mandatory form related to terrorism exclusions.

Agents and brokers

Van Hipp, Napavine, Wash.; license revoked

A consumer filed a complaint with Kreidler’s office about Hipp’s dealings with an elderly relative. Kreidler’s investigation found that Hipp attempted to sell 22 annuities and other insurance policies to the consumer from August 2010 to October 2013, incurring $25,313 in surrender charges to the consumer. The investigation found 11 of the applications contained false information in order to meet requirements for the sale of the annuities. Hipp received $53,104 in commissions for all of the transactions.

Daniel Winger, Bonney Lake, Wash.; license revoked and fined $2,500

Primerica Life Insurance Co. reported to Kreidler’s office that it terminated Winger’s appointment to sell insurance because it determined that he misappropriated $100,000 from an elderly policyholder from 2015 to 2018. The policyholder’s son reported the missing money from his mother’s bank account, and Winger repaid all but $100 of the money in August 2018.

Leta Marie Cannon, Spanaway, Wash.; license revoked

State Farm reported to Kreidler’s investigators that Cannon had been terminated from her employment at an insurance agency. The investigation found that Cannon manipulated and falsified information on auto insurance applications to lower policyholders’ premiums.

Robert Haun, Kennewick, Wash.; license revoked

Haun, a licensed insurance producer, owns an insurance agency that is not licensed to operate in Washington state. Insurance agencies must also be licensed and it is illegal to sell through an unlicensed agency.

Travis Carlin Smith, Issaquah; license revoked

Smith applied for a Washington state insurance producer license and never paid the filing fee after repeated attempts to contact him.

Jessica Fraidenberg, Vancouver, Wash.; license revoked

Fraidenberg applied for a Washington state insurance producer license and never paid the filing fee after repeated attempts to contact her.

Xintian Huang, Seattle; license revoked

Huang applied for an insurance producer license and failed to respond to requests for information.

Agentra, LLC, Dallas; ordered to cease and desist

Agentra is a licensed insurance producer in Washington state that violated several state laws from November 2016 until November 2018:

Sold 648 policies to Washington consumers that were not approved by Kreidler’s office and therefore were sold illegally.

Sold 835 health insurance policies from insurers that are not authorized to sell in Washington state.

Allowed 127 insurance producers to sell products to Washington consumers without being legally affiliated.

Failed to disclose fees to consumers 1,718 times, totaling $178,666.

Sold 590 accidental death and disability policies to Washington consumers from an unauthorized insurer and via an out-of-state group policy that likely doesn’t comply with state law.

Richmond American Homes, of Washington Inc., Denver; ordered to cease and desist

Richmond American Homes of Washington is a homebuilder in Washington state. It offered a 3% discount on the purchase price of a new home to consumers who buy insurance through its agency, American Home Insurance Agency, Inc. The discount constitutes an inducement to buy insurance, which is illegal under Washington state law.

Healthy Paws Pet Insurance LLC, Lincolnshire, Ill.; fined $20,000

Healthy Paws committed several law violations while selling pet insurance to Washington consumers:

None of its producers were appointed to sell for the insurance companies from June to October 2016. They sold 1,283 policies totaling $125,908 in premiums and made $27,508 in commissions.

Misrepresented itself as the insurer in electronic communication and marketing.

Offered discounts to some Washington consumers but not all, which constitutes a discriminatory action.

ROK Mobile, Culver City, Calif.; fined $5,000

ROK Mobile is a cell phone carrier that sold insurance products including accidental death insurance to 55 Washington consumers. Kreidler ordered ROK to cease and desist from selling insurance illegally in March 2019 and it failed to respond or comply with the order. State law allows Kreidler to impose a fine.

Rachael Jane Glaspie and Triple Canopy Insurance Group Ltd., Liberty Lake, Wash.; fined $2,500

A consumer complained to Kreidler’s office that Glaspie, owner of Triple Canopy Insurance Group, issued MetLife homeowner and auto policies on his behalf without his knowledge. MetLife found four additional policies that the agency issued without the consumers’ knowledge. The company paid commission on all five policies, then rescinded the commissions when the premiums were not paid.

Fernando M. Ochoa, Auburn, Wash.; fined $2,000

State Farm reported to Kreidler’s office that it terminated Ochoa’s appointment for using other producers’ credentials and forging their signatures to sell 29 life insurance policies while his appointment was suspended. He also used gift cards to set up payments for policyholders.

Assurance IQ, Inc., Bellevue, Wash.; fined $2,000

The agency gave misleading information to consumers about how life insurance products were identified. Agents tell people that they “search hundreds of policies” but they only sell Lumico Life Insurance Co. policies. From April 2018 to April 2019, the agency sold 389 policies to Washington consumers with a value of $45 million, generating $403,214 in commissions. The agency has updated their call scripts to accurately reflect how life insurance products are searched.

Hub International Northwest LLC, Bothell, Wash.; fined $1,000

The insurance agency allowed an unlicensed producer to process 178 transactions in 2016 and 2017 totaling $642,240 in premiums.

Cross Ocean Insurance Agency / Hamza Harun, Fife; fined $1,000

A consumer filed a complaint with Kreidler’s office after Harun, the licensed producer, failed to add both property owners to a homeowner insurance policy, per the mortgage lender’s requirements. Additionally, the policyholder complained Harun signed them up for a premium finance policy without their knowledge and failed to collected the required policy down payment. Kreidler’s investigators found that Cross Ocean agency is not licensed to sell insurance in Washington state, a violation of state law.

Mark Hermiller, Renton, Wash.; fined $1,000

A consumer filed a complaint that Hermiller enrolled her in a Kaiser Permanente health plan when she requested a Premera plan. The consumer was out of the country during open enrollment for 2018 plans and Hermiller told her he would enroll her in her desired plan while she was gone. Upon her return, Hermiller informed her that he didn’t enroll her in any plan and proceeded to enroll her without her knowledge in a Kaiser plan effective Feb. 1, 2018, leaving her without health insurance in January 2018. The consumer canceled the Kaiser plan and enrolled herself in a Premera plan.

Vu Nguyen, Tacoma, Wash.; fined $1,000

Two Washington consumers filed complaints with Kreidler’s office stating that Nguyen applied for insurance policies on their behalf without their knowledge. Both consumers’ unwanted policies were canceled by the insurers at no cost to them.

Tara Iraheta, Graham, Wash.; fined $750

A consumer filed a complaint with Kreidler’s office after he sought an auto policy from Iraheta but was never given a policy and later had a collision that was not covered. Iraheta told the consumer he had coverage, issued him a receipt for payment and temporary insurance cards. The consumer found out after the collision that he was never covered.

Vidriana Ramos, Everett, Wash.; fined $500 and revocation rescinded

A consumer filed a complaint with Kreidler’s office after Ramos failed to remit the consumer’s homeowner insurance premiums to the company in 2017. The company canceled the policy, at which time Ramos sent the payment. Kreidler fined Ramos $500 in December 2018 and she contested the fine. She failed to appear at the February 2019 hearing, so Kreidler revoked her license. In June 2019, Ramos asked for another hearing, but agreed to pay the fine in exchange for retaining her insurance producer license.

Kyle Stewart, Bush Prairie, Wash.; fined $500 and revocation rescinded

Stewart reinstated his license after it was revoked for not paying the licensing fee.

Thomas Davis, Olympia, Wash.; fined $250

Davis failed to report an administrative action against him in the state of Florida in June 2019.

Patrick Behrens, Mill Creek, Wash.; fined $250

Kreidler fined Behrens for failing to disclose a misdemeanor conviction on his application for an insurance producer license.

Vardeges Saroyan, Lake Stevens, Wash.; fined $250

Kreidler fined Saroyan for failing to disclose criminal history on his application for an insurance producer license.

Anel Galicia Pichardo, Tacoma, Wash.; fined $250

Pichardo falsely reported to Kreidler’s office that she completed required ethics training as part of her 2019 license renewal.

Victor Thompson, Port Orchard, Wash.; fined $250

Thompson, owner of the Thompson Agency LLC, failed to ensure that a producer’s credentials were disabled and failed to ensure that three policies were signed by the correct producer.

Janette Murry, Tacoma, Wash.; license placed on probationary status

Murry applied for an insurance producer license. Her license status will remain probationary while she pays off court debt.

Title companies

Ticor Title Co., Kent, Wash.; fined $5,000

The title company, while acting as an escrow company, delayed transferring a title to the property owners for 20 months, failed to add the bank as a lienholder in accordance with the escrow instructions for loan approval, lost original documents for the title transfer and failed to respond to inquiries about the delay of the title transfer.

San Juan Title, Sequim, Wash., fined $250

The company failed to timely file its Title Insurance Agent Affiliated Business Ownership Report.

Olympic Title of Mason County LLC, Sequim, Wash., fined $250

The company failed to timely file its Title Insurance Agent Affiliated Business Ownership Report.

Olympic Title of Kitsap County LLC, Sequim, Wash., fined $250

The company failed to timely file its Title Insurance Agent Affiliated Business Ownership Report.

Since 2001, Kreidler has assessed more than $28 million in fines, which are deposited in the state’s general fund to pay for state services. The Office of the Insurance Commissioner publishes disciplinary orders against companies, agents and brokers.