Insurance company pays $1.5 million fine to Washington state for violations of laws and rules

Health Plan Intermediaries Holdings, LLC, doing business in Washington state as Health Insurance Innovations (HII), has paid a $1.5 million fine for more than 50,000 violations of Washington state insurance laws and rules. 

It’s the largest single penalty against an insurance producer in the state’s history.

The record fine follows a lengthy investigation by Washington Insurance Commissioner Mike Kreidler.

“This was an egregious case of flouting state laws around what types of companies are allowed to sell insurance and what products are legal to sell here,” said Kreidler. “HII had the highest number of law violations we’ve ever seen from an insurance producer in the history of our state.”

HII describes itself as a “market leading cloud-based technology platform and distributor of innovative health insurance products that are affordable and meet the consumer's needs.” The company has been the subject of investigations in other states for allowing deceptive sales practices.

HII sold 34,351 health insurance-related products to Washington consumers from Jan. 1, 2016 through Oct. 1, 2018, collecting $24.5 million in premiums.

Kreidler’s office found violations in the following areas:

• HII sold unauthorized products in Washington state, including a dental plan and several discount programs that were included with various memberships.
• HII sold products on behalf of two life insurers without being properly appointed by the companies, Unified Life Insurance Co. and Gerber Life Insurance Co.
• HII allowed 434 unaffiliated insurance producers to sell 75% of its Washington state sales, a total of nearly 26,000 transactions. Washington state requires insurance producers to be affiliated with an insurance agency in order to represent the agency.
• HII failed to register one of its “doing business as” (DBA) names, MyBenefitsKeeper, with Kreidler’s office.

HII indicated in the order that it voluntarily suspended business in Washington state in April 2019.

Kreidler also took action against six individual insurance producers who worked for HII and ultimately surrendered their licenses. He also fined Ameritas Life Insurance Co. for allowing HII to sell illegal products.

In 2018, HII settled a multistate examination into its sales, marketing and administrative practices by agreeing to pay $3.4 million and monitor its sales practices more closely. The examination was led by Indiana’s insurance commissioner and included 42 other states. Washington state opted out of the settlement.

Kreidler’s office oversees Washington’s insurance industry to ensure that companies, agents and brokers follow state laws. Since 2001, Kreidler has assessed more than $28 million in fines, which are deposited in the state's general fund to pay for state services.

The office publishes disciplinary orders against companies, agents and brokers. You can search by name or the year they took effect.

For an insurance question or complaint, contact Kreidler’s consumer advocates online or by phone at 800-562-6900.