Unauthorized Insurance Plans |
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Be aware that entities are selling insurance without a license to do so. The Texas Department of Insurance (TDI) has become aware of an increase in unauthorized insurance plans and operators seeking to take advantage of Texas consumers in the health insurance marketplace. Individuals and entities who craft and market unauthorized insurance scams do not hold a license to sell insurance in Texas. They are often assisted in marketing their bogus products to Texas consumers through licensed insurance agents. Below is information about unauthorized insurance and press releases regarding unauthorized insurance plans that TDI has shut down. EVERYONE INVOLVED IN THE SALE OF UNAUTHORIZED INSURANCE IS LIABLE FOR UNPAID CLAIMS. Victims of unauthorized insurance plans should be aware of Tex. Ins. Code §§ 101.201 and 101.202. Section 101.201 provides that any "person who in any manner assisted directly or indirectly in the procurement of the [unauthorized insurance] contract is liable to the insured for the full amount of a claim or loss under the terms of the contract if the unauthorized insurer fails to pay the claim or loss." Section 101.202 provides that a plaintiff´s reasonable attorney´s fees may be awarded by a court if an unauthorized insurer or unauthorized person fails to pay under the unauthorized insurance contract within 30 days of a demand prior to filing suit. Below is a listing of some recent orders issued where the Commissioner concluded that unauthorized insurance was involved. These orders may be useful to victims who choose to bring action against those involved in selling the unauthorized insurance.
Enrollees may obtain copies of the above orders from the Department of Insurance by contacting:
Seven Criminally Charged with Unauthorized Health Insurance FraudOn June 1, 2004, the Travis County District Attorney´s office announced the indictment of seven people in connection with an insurance fraud scheme involving bogus health insurance products. Three of the defendants are former Texas insurance agents whose licenses have been revoked: Donald Smith, Rhonda Porter, and Scott Rutherford. The other defendants are based in New Jersey and Pennsylvania: Michael DeBello, Chris Ashiotes, Michael Divece, and James Doyle. The defendants utilized phony companies, associations, and unions to claim that the products were ERISA plans and therefore not subject to state regulation. A variety of company names were involved in the scheme, including Employers Mutual LLC, American Benefit Society, Privilege Care, Inc., Professional Industrial Trade Workers Union, International Union Industrial and Independent Workers, International Union of Petroleum and Industrial Workers, and International Union of Public and Industrial Workers. The indictments are the result of investigative work by the Fraud Unit of the Texas Department of Insurance and are being prosecuted by the Travis County District Attorney´s office. Unauthorized insurance is a third degree felony punishable by two to ten years in prison and a fine of up to $10,000. Cease and Desist Orders entered against Privilege Care / Professional Industrial and Tradeworkers Union (PITWU) and Southern Plan Administrators / American Heartland Health Administrators.On December 13, 2002, the Commissioner entered an Emergency Cease and Desist Order against thirty-three entities and individuals, involved in offering health insurance nationwide to employers attempting to provide health benefit plans for their employees. The Order affects all health plans offered by Privilege Care Inc., Professional Industrial and Trade Workers Union (PITWU), Southern Plan Administrators Inc. (SPA) and American Heartland Health Administrators, Inc. (AHHA). Cease and Desist Orders entered against North American Indemnity NV and Marketrends Insurance Ltd.On October 31, 2002, the Commissioner entered Emergency Cease and Desist Orders against North American Indemnity and Marketrends, unlicensed companies issuing insurance policies to Texas employers attempting to provide health benefit plans for their employees.
Cease and Desist Order entered against Britannia International Life & Casualty Ltd. and Lyndal Ray Stocks.On October 2, 2002, the Commissioner entered an Emergency Cease and Desist Order against Britannia and Stocks for operating an unlicensed insurance company out of Houston, Texas. Britannia primarily provided stop loss insurance to employers attempting to provide health benefits to their employees.
Corporate Benefit Services of America, Inc. ("CBSA") - Agreed Order Modifying Emergency Cease and Desist Order No. 02-0487On June 12, 2002, the Commissioner entered the following modification order regarding Corporate Benefit Services of America. The modification order modifies the scope of Emergency Cease and Desist Order No. 02-0487 to only prohibit that company from participating in health plans affiliated with the NGMP Health and Welfare Benefit Trust and the Solidarity Health & Welfare Benefit Trust. Commissioner´s Order No. 02-0487 OPEIU/Solidarity/NGMP Cease and Desist Order No. 02-0487Full Story Here Click here for Adobe pdf version of Order Insurance FraudFull Story Here Montemayor Shuts down Two More Health PlansTexas Insurance Commissioner Jose Montemayor has issued an emergency order directing two unlicensed health plans that catered to independent medical professionals to stop doing business in Texas. Another Health Plan Ordered Shut DownFor the fourth time in one year, Commissioner Jose Montemayor today issued a cease-and-desist order to stop an unauthorized entity from selling health insurance policies to Texas consumers. (March 27, 2002) Full Story Here Alert on Unauthorized Health Insurance ScamsCOMMISSIONER´S BULLETIN NO. B-0009-02 Full Story Here Montemayor Warns of Fraudulent Health PlansCommissioner José Montemayor today cautioned Texas employers against unlicensed health care plans that may offer bargain-basement premiums but inevitably vanish when claims start piling up. (March 15, 2002) Full Story Here Agents Warned Against Selling Bogus Health PlansCommissioner Jose Montemayor today warned Texas insurance agents that they risk license revocation, felony prosecution and personal financial liability if they sell health care plans offered by unauthorized insurers. (March 22, 2002) Full Story Here Judge Blocks Unlicensed Health PlanA state district judge appointed a receiver to manage the assets of American Benefit Plans. Consumers may contact the receiver and obtain information about this plan by calling 1-800-551-4650 or online at www.texasreceiver.com Full Story Here Good News for Consumers in Employers Mutual CaseCommissioner Jose Montemayor today issued an emergency cease-and-desist order to stop Employers Mutual, L.L.C., from selling health insurance policies or collecting premiums in Texas after learning that the company has quit paying claims. (October 4, 2001) Full Story Here SAI Plus Agrees to Leave Texas and Pay RestitutionSAI Plus, LLC, of Rockville, Maryland, agreed today to stop its unlicensed health insurance business in Texas and to pay restitution to people whose medical bills should have been - but were not -- paid by the company. (March 29, 2001) Full Story Here Also see, Danger! Unauthorized Insurance |
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