Insurer fined $20M for lax practices

HealthMarkets Inc. faces up to $10 million in additional penalties if it doesn’t meet disclosure and oversight standards.
JUL 24, 2008
By  Bloomberg
State insurance regulators have fined HealthMarkets Inc. $20 million following a market conduct exam that found fault with consumer disclosure and agent oversight. HealthMarkets’ affiliates, The Chesapeake Life Insurance Co. of Oklahoma City, and The Mega Life and Health Insurance Co. and Mid-West National Life Insurance Company of Tennessee, both of North Richland Hills, Texas, have also been named in the settlement, the National Association of Insurance Commissioners of Kansas City, Mo., said in a statement. The three-year examination involved 29 states and was led by Washington state’s insurance commissioner, Mike Kreidler, and Alaska’s insurance director, Linda Hall. The companies targeted sales to self-employed individuals and sold health plans through associations. Often, the agent or company didn’t adequately explain the health benefits. Under the settlement, HealthMarkets, also of North Richland Hills, must now send notices to holders who had their policies issued before Aug. 1, 2005, including contact information for clients who have questions about their coverage. HealthMarkets must also ensure that each method of communication is handled by someone who can give detailed information on policyholders’ coverage. The company must have a website with a “frequently asked questions” section. Finally, HealthMarkets must also report its progress on meeting improvement standards to the regulators twice a year through Dec. 31, 2009. The company faces up to $10 million in additional penalties if it doesn’t meet those standards.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave