Louisiana Department of Insurance Crack-downs on Bogus “Medical Discount Plans” Peddled to Uninsured

August 12, 2010

Louisiana Department of Insurance Joins Federal Trade Commission, State Attorneys General, and Insurance Commissioners in Crack-down on Bogus “Medical Discount Plans” Peddled to Uninsured, Uninsurable, and Unemployed Consumers.

Operators who scammed people who did not have health insurance – the uninsured, the unemployed and the uninsurable – have been targeted by Insurance Commissioner Jim Donelon and a federal and state coalition of law enforcement agents for fraudulently marketing “medical discount plans” as health insurance plans. In addition to the Louisiana Department of Insurance, the Federal Trade Commission and law enforcement agencies in 23 other states have filed 50 lawsuits and regulatory actions to stop the scammers’ deceptive practices. “The Louisiana Department of Insurance Fraud Section is working in conjunction with the Federal Trade Commission and law enforcement authorities to protect unsuspecting citizens from falling victim to insurance scams. Consumers need to be aware that scams are out there and ensure that they know what they are buying. If in doubt, call the Louisiana Department of Insurance and confirm that the policy, agent, and company are legitimate,” said Commissioner Donelon.

Louisiana Department of Insurance Fraud Section Investigators served American Trade Association, its 13 companion companies and 14 personnel with cease and desist orders by certified or registered mail on June 7, 2010, for selling unauthorized insurance in Louisiana. Fraud Section Investigators served cease and desist orders to American Trade Association, Inc. (an Indiana corporation); American Trade Association, Inc. (a Tennessee corporation); Smart Data Solutions, LLC; Real Benefits Association; Serve America Assurance, Ltd.; Beema-Pakistan Company, Ltd.; Healthcare America; Integrated Health Plan, Inc.; National Association of Business Leadership, LLC and/or Inc.; Benefit Plan Administration; Insurance Resource Group; CEO Clubs, Inc. (and CEO Club Benefits); Star Group U.K., Ltd., aka Phoenix Insurance Company; Association for Independent Managers (AIM Health Plans, Inc.); Bart S. Posey; Angie Posey; Obed W. Kirkpatrick, Sr.; Linda Kirkpatrick; Richard H. Bachman; Kristy Wright; Colin J. Youell; David L. Clark; William M. Worthy, II; Ryan Adams; Tina Bennett; James Sean; Patrick Collins and Phillip Sylverin.

All entities and individuals mentioned above were directed to cease and desist from engaging in or transacting unauthorized insurance business, soliciting, offering, issuing, mailing or delivering any Louisiana resident a plan, policy, coverage, certificate, or any other contract which purports to provide insurance benefits or medical discounts for health benefits.

All entities and individuals issued a cease and desist order have 30 days of receipt of the C&D to furnish the Department with a complete listing of all Louisiana residents and businesses that purchased any insurance or discount plan product from them and report to the Department all premiums received in connection therewith. They are also ordered to notify any affected Louisiana customers of the C&D and issue an immediate refund of any monies or premiums held on behalf of the customers.

In addition to this case, the FTC filed 3 lawsuits targeting bogus medical discount scams, and Attorneys General and Insurance Commissioners have brought numerous enforcement actions to stop the scammers. They include lawsuits or regulatory actions addressing sham insurance, as well as illegal robocalls and fax blasting, and licensing violations.

Commissioner Donelon urges consumers who feel uneasy about any insurance related transaction to call the Department of Insurance Fraud Section at 225-342-4956 or 1-800-259-5300. If callers do not want their names used, they can request that their involvement be kept confidential.

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