Holland cracks whip on unlicensed insurance products, enhances risk

From CapitolBeatOK Staff Report

National Home Protection, Inc., failed to respond to an Emergency Cease and Desist Order issued against the company for attempting to solicit insurance products in Oklahoma without a license, Insurance Commissioner Kim Holland said last week.

Holland ordered the service warranty company to stop selling its products in the state and gave them 30 days to request a hearing. The company has failed to respond and is now subject to a $25,000 fine for each violation of the order.

“Our licensing procedures are in place to protect consumers from a loss due to insurer insolvency, fraud or illegal activity,” said Holland. “Before a company can be licensed in Oklahoma, the Insurance Department conducts a thorough background check of owners and officers.  We also perform an extensive financial review to ensure there are adequate resources to meet statutory requirements and pay policyholder claims.

“When Oklahomans purchase an insurance product they are entitled to feel confident it is from a reputable company that is able to meet its obligations and pay claims. I will not tolerate companies attempting to skirt our consumer protection laws and endanger our citizens.”

Holland recently took action against two other service warranty companies: Interstate Administrative Services, Inc. and Automotive Warranty Solutions, LLC. After a review of Interstate Administrative Services’ financial statements, the Oklahoma Insurance Department found the company to be statutorily insolvent. Holland has ordered the company to continue to pay claims but has prohibited it from collecting new premiums or soliciting new business.

Like National Home Protection, Inc., Automotive Warranty Solutions was selling insurance products in the state without a license. Holland issued a similar Cease and Desist Order against the company and has given them 30 days to comply.

The Oklahoma Insurance Department encourages all consumers to call and confirm that any company offering insurance or insurance-like products is properly licensed to do business in Oklahoma.  The Oklahoma Insurance Department consumer hotline is (800) 522-0071.

In other news from the state Department of Insurance, Holland announced late last week that the lifetime maximum benefit available to members of the Oklahoma Health Insurance High Risk Pool has increased from $500,000 to $1 million.

“Increasing the available lifetime benefit will prevent Pool member’s coverage being dropped when medical care may be most critical,” said Holland. “Our High Risk Pool is a guarantee for those who are unable to obtain health insurance in the individual marketplace to have access to care – especially for those with pre-existing conditions.”

Holland said the increase was mandated by the passage of Senate Bill 2119 during the 2008 legislative session. The bill, sponsored by Sen. John Sparks and former Rep. Ron Peterson, went into effect July 1.

“While the cost of medical treatment continues to climb every year, the High Risk Pool lifetime maximum benefit has remained the same for the past 13 years,” said Holland. “This important change extends access to care for those in need of today’s more advanced and, unfortunately, more costly medical treatments.”   

Members of the High Risk Pool who had previously lost their coverage due to reaching the $500,000 lifetime maximum can now reapply to the pool. For a limited time, the High Risk Pool Board is waiving the normally required waiting period on pre-existing conditions for those individuals who qualify.

The High Risk Pool is a not-for-profit organization established by the Oklahoma Legislature to provide health coverage to Oklahomans who are unable to obtain health insurance due to serious medical conditions. Members of the Pool pay monthly premiums based on their plan choice and other information.

The High Risk Pool is supervised by a board of directors appointed by Insurance Commissioner Kim Holland. More than 2,000 Oklahomans are currently enrolled in the Pool and 35 states across the country operate high risk pools similar to Oklahoma’s.

For more information about the Oklahoma Health Insurance High Risk Pool or how to apply call (877) 793-6477 or visit the Web site at www.okhrp.org.