Iowa Insurance Division alleged agent compensation was not fully disclosed to public entities.
The Iowa Insurance Division issued a settlement today with Two Rivers Insurance Company, Inc. (Two Rivers) that will return $1.3 million to 33 public entities in Iowa. The investigation centered on public entities that have been associated with the Iowa Governmental Health Care Plan (IGHCP). Two Rivers denied all wrongdoing in the settlement. The controversy arose from the Iowa Insurance Division’s allegation that, beginning in 2005, Two Rivers 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 additional compensation.
“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,” Iowa Insurance Commissioner Doug Ommen said. “Our industry has been trending toward disclosure of all agent compensation to avoid even the appearance of a conflict of interest with the customer. We are pleased that Two Rivers made the decision to make changes when the issue arose and has now agreed to settle the investigation.”
The $1,314,029.10 in restitution will be made available to the 33 government entities in the amounts as described in Exhibit A of the consent order.
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.