WA judge: Insurer can be held liable for agent's actions

In a ruling that’s being closely watched by the insurance industry, a Thurston County, Wash. judge has affirmed that the Washington state insurance commissioner may hold an insurance company liable for the actions of the company’s appointed agent.

“If you allow someone to do business on your behalf, it only stands to reason that you can be held responsible for what they do,” said Washington state Insurance Commissioner Mike Kreidler.

In an order dated April 23, 2010, Superior Court Judge Paula Casey ruled that Chicago Title Insurance Company could be held responsible for illegal inducements offered to solicit title insurance business by one of its appointed agents, Land Title Company of Kitsap County, Inc.

The alleged violations included illegally “wining and dining” real estate agents, builders and mortgage lenders by providing them with such things as:

• hundreds of dollars in meals,
• thousands of dollars for a golf tournament,
• monthly advertising for at least one real estate agent,
• purchases at a Board of Realtors’ auction, and
• Seattle Seahawks playoffs game tickets.

Although Land Title was Chicago Title’s exclusive agent in the Washington counties at issue, Chicago Title argued that it was not responsible for Land Title’s acts. At a hearing in the matter last year, the company maintained that there was no legal basis to hold it accountable for its agent’s actions.

In a consent order last October, the company said it would appeal the agent liability issue, but agreed to pay a fine of $48,334 if it did not prevail. Chicago Title has not yet exhausted all appeals.

 More, including links to the ruling and a recent consent order.

WA plans to run its own temporary health insurance program for the uninsured

Insurance Commissioner Mike Kreidler and Gov. Chris Gregoire have notified Health and Human Services Secretary Kathleen Sebelius that Washington state intends to run its own temporary, federally-funded high risk health insurance program.


“We cannot afford to miss this opportunity to provide much needed coverage to our uninsured,” said Kreidler. “There are many details that need to be worked out, but we plan to leverage the administrative framework and experience of the Washington State Health Insurance Program (WSHIP).”

The Patient Protection and Affordable Care Act designated $5 billion in federal funds to create temporary high risk pool programs to provide health insurance to currently uninsured individuals with preexisting conditions from July 1, 2010 to Jan. 1, 2014. States could either let the federal government run the program or contract with the federal government to set up the high risk pools through state programs or private non-profit entities.

More, including a link to the letter.

Regence issues warning about unusual "vitamin coverage scams"

Regence BlueCross BlueShield has issued an unusual warning for consumers to "beware vitamin coverage scams."

Regence members in Washington, Oregon and Idaho, the company says, have reported getting notices for medical services they did not receive. The claims were allegedly filed on behalf of companies selling nutritional supplements. The claims are coded for things like consultations, lab work or x-rays, not for vitamins.

Here's a link to the consumer alert.

Insurance news: high-risk pools, insurance murder case, health insurer seized, and bill would re-up fed flood insurance for 5 years

Insurance news this morning:

USA Today: Health Insurance Risk Pools: About 200,000 people already enrolled in 35 state high-risk insurance pools "will not be allowed to enroll this summer in a new lower cost federal program for people like them because they already buy pricey state-run plans." In order to be eligible, "a person can't have had health coverage for six months. … The state pools charge high premiums — often double standard rates for healthier people in the individual market — to help cover costs." The health overhaul puts aside $5 billion for the new high-risk pools "and says federal risk pools can't charge more than standard rates. ... California and Texas are urging applicants to their state pools to consider waiting for the federal program"
USA Today: IRS lacks clout to enforce mandatory health insurance

Feinstein pushes to cancel Anthem rate hike

WA man guilty of killing 3-y/o girl for $200,000 in life insurance; preyed on single moms so he could target their kids for insurance payoffs

Judge liquidates troubled medical insurance firms: A judge has ordered the permanent shutdown and liquidation of two Tennessee companies accused of selling phony medical insurance policies. The Tennessean reports state insurance officials say Springfield-based American Trade Association and Smart Data Solutions LLC collected almost $22 million in premiums and left customers with nearly 24,000 unpaid claims.

Flooding: House passes bill to improve NFIP and reauthorize it for 5 years

--PIA applauds

Utah governor worries about the cost of high-risk pool: Utah isn't ready to dive into a temporary high-risk insurance pool created through the new health reform law until it gets some assurances the federal government will cover the costs. Gov. Gary Herbert sent a letter Wednesday to Health Secretary Kathleen Sebelius questioning the financial feasibility of the $5 billion program, which is supposed to kick in at the start of July.

WellPoint to cancel coverage only in fraud cases: Health insurer WellPoint Inc. said Tuesday it will start complying ahead of schedule with a health care reform provision that limits cases in which insurers can cancel coverage when a customer gets sick.

Seattle Times: Fine print hinders effort to cover young adults: President Barack Obama is pushing to speed up insurance coverage for young adults in their twenties - a key early benefit of his prized health care overhaul - but the law's fine print suggests some won't be able to sign up until next year.

News clips: Insurers are hiring, updates on health reform and federal flood program, and the latest on Hulk Hogan's insurance woes

In news today, a survey by an insurance jobs website, found that 74 percent of the nation's top insurers are now hiring, including several expecting to add at least 2,000 workers this year.

USA Today: Next in health care war: Applying the law: Dozens of special-interest groups that helped shape the 10-year, $938 billion health care measure over the past year — from insurance companies to patient advocates — are gearing up for a second wave of lobbying as the Obama administration prepares to implement the law.


-Is putting older kids on your health plan the best option?

-NYT: Will the homeless benefit?

Forbes: NE gov to abandon its state-run high-risk pool in favor of letting the feds do it

Overextended NFIP can’t seem to get back on track (federal flood insurance program has expired three times in just the past few months)

WA Post: Gaps in insurance policies make oral drugs too pricey for some cancer patients

And finally, the continuing saga of Hulk Hogan’s insurance woes: Wells Fargo: Hulk Hogan Rejected our Insurance Advice

Insurance, insurance agents and social media: "...Independent agents need to acknowledge that having a Web presence is non-negotiable"

Insurance Journal ran an article yesterday about the insurance industry and social media -- meaning things like Facebook, Twitter, blogs, Skype and other forms of interaction on the internet. The article's first paragraph is key:

"The insurance industry is not as quick to adapt to change as other industries," but independent insurance agents need to acknowledge that having "a Web presence is non-negotiable," said Michael LaRocco, president and CEO of Fireman's Fund Insurance Companies.

As Washington state's insurance regulator, this is a topic we've been giving a lot of thought to as we try to get our consumer-protection message out in an era of shrinking traditional media outlets. We set up this blog last summer, and then launched our Twitter feed. Despite our initial ambivalence -- who's going to read about insurance? -- both have grown at a pretty healthy clip.

In a word-of-mouth business like insurance, social media seems like a natural fit. It allows you to be in frequent contact with your customers in a way that they want. Online, we see some agents, brokers and companies trying a variety of different approaches. Some just try to keep up a constant drumbeat of "call me for a quote" or some variation on that. Others -- probably a lot more effective, frankly -- are a mix of insurance news, community news and advice. One agent that we follow on Twitter tracks flood insurance closely, others try to build rapport by serving up a lot of insurance tips.

Take a look at the Twitter feed for Mid-Columbia Insurance out of Kennewick, for an example of someone working hard to keep the site fresh. The web is littered, on the other hand, with folks who started sites and then abandoned them. (Like this one.)

Also, we're seeing insurance companies closely monitoring Twitter for people complaining about them. We've seen numerous Twitter posts from companies trying to directly contact people complaining about stalled claims or other issues.

State Farm, in particular, has a virtual open dialogue going with customers on its Twitter feed. Take a look.

More on this soon.

Insurance news: Climate change, how to curb the cost of health care, and insurer extortion case

The Seattle Times this weekend ran an op-ed by Washington state Insurance Commissioner Mike Kreidler and Seattle City Light Superintendent Jorge Carrasco. The topic: Climate change.

AP (via ABC News) talks about the "Health Care Law's Unfinished Business: Cost Curbs."

In Tennessee, a couple of companies that we're well-acquainted with are trying to convince a judge that they should be allowed to continue selling health insurance. The problem: TN regulators say the companies have more than $7 million in unpaid health claims -- but only about $2 million in the bank.

And finally, there's this unusual case: A New York Life customer (and former agent, and former manager) was unhappy with the handling of his $49,500 claim. Then it gets interesting. From ABC News:

Rather than walk away, (Anthony) Digati decided to take the dispute to another level. He created a website dedicated to New York Life's products and hired an email spam service.


Then he did something that would get him into a lot of trouble. He sent a letter and several emails advising New York Life officials that it would be in the company's best interests to pay him his money… or else.

Digati has been indicted by a federal grand jury for allegedly attempting to extort $3 million. From the article:

The case is interesting because it is not entirely clear from court documents whether Digati was – as the government claims – intent on extortion – or whether he was merely an extraordinarily frustrated and dissatisfied customer who engaged in hyperbole and exaggerated threats.