Unlicensed entity order to stop selling insurance

Sun-Herald
The Arcadian, Port Charlotte, Daily – 4,500, May 8, 2002
5-7-02

Florida Treasurer and Insurance Commissioner Tom Gallagher has ordered American Benefit Plans, a Texas-based company that has operated in Florida under more than a dozen different organization names, to halt sales of its unlicensed health insurance products here. Some 13,000 Floridians are believed to have bought these unlicensed plans.

In an Immediate Final Order issued Thursday, the Department of Insurance charged that the Fort Worth company and its numerous affiliates improperly claimed a federal exemption from state licensure by operating "under the ruse" of various interest, trade and occupational associations. In addition to potentially being left with unpaid claims, many employers and individuals who have purchased unlicensed health plans have reported finding difficulty securing new coverage because of pre-existing conditions and subsequent lapse in continuous coverage. This is the fifth unlicensed entity since February 2001 that Gallagher has taken action against.

"These cases point to a need for consumers and agents to be on the lookout for bogus companies offering health coverage that is really just an illusion," Gallagher said. "Employers and consumers must take the time to be sure they are dealing with a licensed insurance entity."

Unlicensed entities do not participate in a state guaranty fund, which covers unpaid claims in the event a licensed insurer goes bankrupt. However, American Benefit Plans is in receivership in Texas, so creditors cannot collect for any unpaid claims from policyholders. Texas has established a website, www.texasreceiver.com, to assist policy holders and providers.

Employers and individuals shopping for health insurance coverage are urged to check with the Department of Insurance to be sure they are dealing not only with a Florida-licensed insurance company, but also with a Florida-licensed insurance agent.

The department's Consumer Helpline at 1-800-342-2762, is staffed Monday through Friday from 8 a.m. to 7 p.m. A copy of the Immediate Final Order and additional attachments can be found at www.fldoi.com under new releases.