State stops health insurance provider from selling plans

By ANDI ATWATER, aatwater@news-press.com
Fort Myers News-Press
5-15-02

Florida's Department of Insurance has shut down another insurance company after an anonymous tip alerted officials that it was illegally conducting business here.

The New York-based Vanguarde Asset Group is accused of selling illegal insurance plans underwritten by companies not licensed or guaranteed to operate in Florida.

It is the sixth insurer ordered to cease operations in Florida in the past 15 months, Commissioner Tom Gallagher said.

The insurance department began receiving complaints about the company this week, but spokeswoman Nina Bottcher said they began investigating after an anonymous letter alerted them about the company in March.

A final order to cease operations was issued on Friday.

“We think they were operating pretty widely,” Bottcher said. “But it looks like we were able to get to this one early because very few complaints have come in — so far.” She didn't know how many Florida residents are affected by the shutdown, but said companies who are unlicensed often end up not paying claims.

Unlicensed insurers also do not participate in a state guaranty fund that covers unpaid claims in the event the insurer goes bankrupt.

The order requires Vanguarde to give notice in writing to every one of its policyholders in Florida that they need to get new health insurance coverage. Agents who sold residents their plans are required to offer them comparable plans from a Florida-licensed insurer.

The order also requires the company to continue paying claims.

“This is definitely upsetting to me and to patients who are paying their premiums only to find out it wasn't legal,” said Kerri Gantt, a billing administrator and member of the Lee County-based Health Management Association. “I'm glad to hear at least the insurance carrier is being held accountable to some extent.”

Six of the individuals tied with the Vanguarde company include one man who was barred for life last year from selling insurance.

Dwayne Samuels of New York pleaded guilty to health care fraud in connection with the embezzlement of $8 million from a health fund.

Gallagher said Samuels was directly involved with the operation of “a sham health plan for a sham union that operated under fake collective bargaining agreements to circumvent state insurance licensure requirements,” according to the order.