Iowa Insurance Division finds agent compensation was not fully disclosed to public entities.
The Iowa Insurance Division issued consent orders with Mutual Med Insurance Services, LLC (Mutual Med), Todd C. Vershaw of Long Grove, Iowa, and Kevin J. Carr of Burlington, Iowa that will return $165,000 to 33 public entities in Iowa. The investigation centered on public entities that have been associated with the Iowa Governmental Health Care Plan (IGHCP). Mutual Med, Vershaw, and Carr denied the findings of facts and conclusions of law contained in the consent orders.
The controversy arose from the Iowa Insurance Division’s allegation that, beginning in 2005, Two Rivers Insurance Company, Inc., which was Mutual Med’s subagent, used the actual premium amount from the insurance company and then recalculated a “premium,” which also included additional Two Rivers’ compensation and failed to disclose to the IGHCP members the amount of this added compensation. Mutual Med took no affirmative steps to ensure that the added compensation was disclosed to the IGHCP members.
“Mutual Med was responsible for overseeing the activities of their subagent. Companies cannot turn a blind eye to the acts of those for whom they are responsible and we will continue to hold all parties accountable for their action or inaction,” Iowa Insurance Commissioner Doug Ommen said. “In Iowa, premium is determined by insurance companies and reported to this office. Any compensation apart from premium, any partial self-funding charges or any other producer or administrator fees or charges must be clearly disclosed so that these amounts and their purpose can be understood by insurance purchasers.”
The $165,000 will be distributed equally among the IGHCP government entities that choose to participate.
In addition, the consent orders address other violations of insurance law unrelated to IGHCP.
Vershaw and Carr each had their insurance producer license suspended for 30 days and were assessed a monetary penalty of $7,500 each.
The Iowa Insurance Division is the state regulator which supervises all insurance business transacted in the state of Iowa. The Iowa Insurance Division oversees companies and individuals in the sale of insurance in Iowa and has general control over all aspects of their business.