Verizon Wireless, Insurers Fined for Violations in Washington

November 15, 2006

Washington Insurance Commissioner Mike Kreidler has fined Verizon Wireless Services LLC of Bedminster, N.J., $25,000 for failing to sell service contracts under its legal corporate name, a violation of state insurance law.

State law requires the company to conduct business under its legal name unless the Office of Insurance Commissioner has granted an exception to use another name. According to the Commissioner’s ofice, Verizon sold thousands of service contracts under the name “Verizon Wireless” between 2001 and 2005 despite being notified in mid-2001 of the requirement to comply with state law.

The company was notified again in 2003, but didn’t take steps to comply until 2005 when it began notifying existing customers and modifying contracts and marketing materials, the OIC said. The required use of a legal name becomes important if a customer has a problem with a contract and needs to seek legal redress, especially when a company’s corporate structure may include different affiliated companies, according to the commissioner.

In unrelated enforcement actions, the Office of the Insurance Commissioner:

* Fined National Union Fire Insurance Co. of Pittsburgh, Pa., $50,000 for using unapproved products and failing to respond to agency requests for information in a timely and complete fashion.

* Fined Three Angels Broadcasting Network Inc., (also known as ABN) of West Frankfort, Ill., $25,700 for issuing charitable gift annuities worth $1.6 million without obtaining a certificate of exemption from the agency

* Fined Group Health Cooperative and Group Health Options, of Seattle, a total of $20,000 for multiple violations discovered during a market conduct exam of the company. The violations included failure to submit records and documentation as requested, advertising violations, claims handling, use of unapproved rates and others.

* Fined KPS Health Plans of Bremerton $5,000 for using unapproved rates.

* Fined Home Warranty of America Inc., Buffalo Grove, Ill., $3,800 for issuing service contracts without a valid registration.

* Fined AIG Warrantyguard Inc., Wilmington, Del., $2,000 for failing to disclose information and keep accurate records and accounts.

* Suspended the license of John A. Black, an independent insurance agent from Wenatchee, for using unfair and deceptive practices, misrepresenting policy terms and displaying incompetency and untrustworthiness in actions with consumers. The six-month suspension, effective Sept. 23, 2006, also includes a requirement that he complete a 12-hour insurance ethics course.

* Revoked the license of Michelle R. Lewis, an independent agent from Belfair, for submitting a false application, engaging in deceptive practices and failing to pay company premiums from consumer payments.

* Revoked the license of Hussein Y. Fouad, an independent agent from Richland, for engaging in deceptive acts, overcharging for insurance, making false or misleading statements, falsifying information on insurance applications, and other violations.

* Revoked the license of Fran E. Austin, an independent agent from Spokane, for commingling funds and fraud.

* Fined Ronald M. Saul, an independent agent from Redmond, $500 for engaging in deceptive and unfair acts and misleading representation of insurance products.

* Ordered American Resources Insurance Co. and Michael Brady, of Mobile, Ala., to cease and desist transacting insurance business in Washington without a license.

* Ordered National Foundation of America, Franklin, Tenn., to cease and desist transacting insurance business in Washington without a license.

* Ordered Ultimate Warranty Corp., Rocky River, Ohio, to cease and desist issuing policies in Washington with an unauthorized insurer.

The agency also fined the following companies for failing to file specified information and documentation as required:

* American Service Insurance Co., Elk Grove Village, Ill. ($1,500)
* American Southern Insurance Co., Atlanta, Ga. ($1,000)
* Beazley Insurance Co., Farmington, Conn. ($1,250)
* Cole Vision, Corp., Wilmington, Del. ($2,000)
* Community Health Plan of Washington, Seattle, ($1,000)
* Continental Insurance Co., Omaha, Neb. ($2,250)
* Coregis Insurance Co., Chicago, Ill. ($250)
* Denterga Insurance Co., San Francisco, Calif. ($1,500)
* Electrolux Warranty Corp., Cleveland, Ohio ($2,000)
* Employers Reinsurance Corp., Overland Park, Kan. ($2,250)
* Federated Life Insurance Co., Owatonna, Minn. ($875)
* Fidelity Life Association, Oak Brook, Ill. ($1,125)
* First Health Life and Health Insurance Co., Downers Grover, Ill. ($1,625)
* Founders Insurance Co., Des Plaines, Ill. ($250)
* Gray Insurance Co., Metairie, La. ($1,375)
* HARCO National Insurance Co., Rolling Meadows, Ill. ($1,500)
* Independence Life and Annuity Co., Wellesley Hill, Mass. ($1,125)
* Investors Life Insurance Co. of North America, Austin, Texas ($1,250)
* Merastar Insurance Co., Chattanooga, Tenn. ($2,875)
* National States Insurance Co., St. Louis, Mo. ($1,000)
* Nippon Life Insurance Co. of America, New York, N.Y. ($500)
* Nipponkoa Insurance Co. of America, New York, N.Y. ($2,375)
* Quanta Indemnity Co., New York, N.Y. ($1,750)
* Peachtree Casualty Insurance Co., Smyrna, Ga. ($3,750)
* Pearle Vision, Inc., Wilmington, Del. ($2,000)
* Regence BlueCross BlueShield of Oregon, Portland, Ore. ($1,250)
* Regence Health Maintenance of Oregon, Portland, Ore. ($1,250)
* Security Financial Life Insurance Co., Lincoln, Neb. ($1,500)
* Sierra Health and Life Insurance Co., Las Vegas, Nev. ($875)
* Starmount Life Insurance Co., Baton Rouge, La. ($1,750)
* Starnet Insurance Co. Greenwich, Conn. ($1,750)
* Sun Life Assurance Co. of Canada, Wellesley Hills, Mass. ($1,125)
* Sun Life Assurance Co. of Canada US, Wellesley Hills, Mass. ($1,125)
* United Heritage Life Insurance Co., Meridian, Idaho ($1,125)
* Verizon Wireless Services, LLC, Bedminster, N.J. ($1,000)
* Western General Insurance Co., Calabasas, Calif. ($875)
* Westward Life Insurance Co., Newport Beach, Calif. ($1,625)

The University of Montana Foundation, Missoula, Mont. was fined $500 for unlawfully issuing charitable gift annuities without proper authorization.

Source: OIC

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