STATE OF WASHINGTON OFFICE OF THE INSURANCE …

STATE OF WASHINGTON

OFFICE OF THE INSURANCE COMMISSIONER

..

In the Matter of

Order No. 19-0463

AGENTRA, LLC

WAOICNo. 785935 NPN/FEIN 27-3046543

Licensee.

CONSENT ORDER LEVYING A FINE

This Consent Order Levying a Fine ("Order") ?is entered into by the Insurance ./

Commissioner of the state of Washington ("Insurance Commissioner"), acting pursuant to the authority set forth in RCW 48.02.060, RCW 48.15.020, RCW 48.15.023, RCW 48.17.063, RCW 48.17.530, and RCW 48.17.560 and Agentra, LLC. This Order is a public record and will be disseminated pursuant to Title 48 RCW and the Insurance Commissioner's policies and procedures.

BASIS: 1. Agentra, LLC ("Agentra" or the Respondent") is a nonresident insurance producer

licensed to do business in the state ofWashington and has been licensed in Washington State since April 23, 2013.

2. David Lindsey (''Lindsey") (WAOIC No 719727) is a nonresident insurance producer licensed to do business in the state of Washington on February 26, 2008. Lindsey is the Designated Responsible Licensed Person ("DRLP") for Agentra, and is Agentra's only affiliated insurance producer.

3. The Insurance Commissioner's investigation revealed that Agentra, through an independent agent contracted with Agentra, sold a Washington consumer three (3) insurance products that were not authorized for sale in Washington State.. The consumer was sold hospital indemnity coverage underwritten by Transamerica Life Insurance Company (''TLIC"), critical illness coverage underwritten by Boston Mutual Life Insurance Company ("BML"), and

CONSENT ORDER LEVYING A FINE ORDER NO. 19-0463

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State of Washington

Office of the Insurance Commissioner

POBox40255

Olympia, WA 98504-0255

EXHIBIT B

Page 1 of 8

prescription coverage underwritten by Magna Insurance Company ("MIC"). The TLIC and BML

coverages had not been approved for use in Washington State and were issued under a group policy

owned by an out-of-state association. MIC, which is not admitted.in Washington State, denied all

involvement and said that it did not underwrite the prescription coverage.

4. During the period of November 1, 2016, through November 1, 2018, Agentra,

through its contracted individual producers, sold products using forms that were not approved for

use in Washington State. The following coverage was sold to Washington consumers under a

group policy owned by an out-of-state association:

? 539 insurance products underwritten by Colonial Life & Accident Insurance Company ("Colonial").

? 96 insurance products underwritten by BML. ? 13 insurance products underwritten byTLIC.

5. During the period of November 1, 2016, through November 1, 2018, Agentra,

through its contracted individual producers, sold the following insurance products to Washington

consumers that were underwritten by insurers who were not authorized to transact the business of

insurance in Washington State:

? 451 insurance products to Washington consumers that were underwritten by First Continental Life and Accident Insurance Company ("FCL"). FCL has been revoked in Washington State since 2003.

? 216 Rx Valet health care discount plans. Rx Valet is not licensed as a healthcare discount plan organization ("HDPO") or authorized as an insurer in Washington. Licensure as a HDPO allows an exemption from the requirement to be authorized as an insurer. Without proper licensure as a HDPO, it appears that Rx Valet is acting as an unauthorized insurer.

? 168 insurance products were underwritten by an unauthorized entity. The entity was originally identified by Agentra as MIC. However, based on information obtained during the investigation, it appears that Alliance for Consumers USA ("ACUSA") Data Rx Plan is the entity that is currently obligated under the contracts sold to Washington consumers. Neither MIC nor ACUSA are authorized as insurers in Washington. Additionally, Agentra could not provide a solid answer as to the identity of the insurer which raises recordkeeping concerns.

CONSENT ORDER LEVYING A FINE ORDER NO. 19-0463

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State of Washington

Office of the Insurance Commissioner

PO Box40255

Olympia, WA 98504-0255

EXHIBIT B

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6. The investigation found that during the period of November 1, 2016, through

November 1, 2018, 127 insurance producers represented Agentra during the sale of insurance

products to Washington consumers and none of those producers were affiliated by Agentra.

7. Agentra admitted to charging fees and failing to disclose to consumers the

commissions earned by producers including Agentra. The investigation found that between

November 1, 2016, and November 1, 2018, Agentra charged administrative and enrollment fees

at least 1,718 times that totaled $178,666. The amount of the fee was disclosed to the consumer

but the commissions payable by the insurers were not disclosed.

..

.

8. The investigation also found that Agentra, through its contracted individual

producers, sold 590 Accidental Death & Disability (AD&D) insurance products to Washington

consumers which were procured through a surplus lines broker from an unauthorized insurer. The

coverage was sold to Washington consumers under an out-of-state group policy that is owned by

Agentra. AD&D coverage can be procured from an authorized insurer and should not have been

placed in the surplus lines market. Additionally, a group fonned solely to obtain insurance and

comprised of an insurance producer's clients would most likely not be a pennissible arrangement

in Washington State.

9. RCW 48.15.020(2)(a) provides that [a] person may not, in this state, represent-an

unauthorized insurer except as provided in this chapter. This subsection does not apply to any

adjuster or attorney-at-law representing an unauthorized insurer from time to time in this state in

his or her professional capacity.

10. RCW 48.15.020(2)(b) provides that [a] person, other than a duly licensed surplus

line broker acting in good faith under his or her license, who makes a contract of insurance in this

state, directly or indirectly, on behalf of an unauthorized insurer, without complying with the

provisions of this chapter, is personally liable for the perfonnance of such contract.

11. RCW 48.15.040 provides that [i]f certain insurance coverages cannot be procured

from authorized insurers, such coverages, hereinafter designated as "surplus lines," may be

procured from unauthorized insurers subject to the following conditions:

(1) The insurance must be procured through a licensed surplus line broker under this chapter. If the insurance is property and casualty insurance, except industrial insurance under Title _Il RCW, then the insurance must be procured under the laws and rules of the insured's home state.

CONSENT ORDER LEVYING A FINE ORDER NO. 19-0463

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State of Washington

Office of the Insurance Commissioner

POBox40255

Olympia, WA 98504-0255

EXHIBIT B

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(2) The insurance must not be procurable, after diligent effort has been made to do so from among a majority of the insurers authorized to transact that kind of insurance in this state.

(3) Coverage shall not be procured from an unauthorized insurer for the purpose ofsecuring a lower premium rate than would be accepted by any authorized insurer nor to secure any other competitive advantage.

12. RCW 48.17.067(1) states [a]ny insurance producer or title insurance agent soliciting, negotiating, or procuring an application for insurance or health care services in this state must make a good faith effort to determine whether the entity that is issuing the coverage is authorized to transact insurance or health coverage in this state.

13. RCW 48.17.270(3) states [i]fthe compensation received by an insurance producer who is dealing directly with the insured includes a fee, for each policy, the insurance producer must disclose in writing to the insured:

(a) The full amount of the fee paid by the insured; (b) The full amount of any commission paid to the insurance producer by the

insurer, if one is received

14. RCW 48.17.470(l)(a)(i) states [e]very insurance producer, title insurance agent, or adjuster shall retain a record of all transactions consummated under the license. This record shall be in organized form and if an insurance producer or title insurance agent, a record of each insurance contract procured or issued, together with the names of the insurers and insureds, the amount of premium paid or to be paid, and a statement of the subject of the insurance.

15. RCW 48.18.100(1) states [n]o insurance policy fonn or application fonn where written application is required and is to be attached to the policy, or printed life or disability rider or endorsement form may be issued, delivered, or used unless it has been filed with and approved by the Insurance Commissioner.

16. RCW 48.21.010(1) defines "group disability insurance" as that form of disability insurance, including stop loss insurance as defined in RCW 48.11.030, provided by a master policy issued to an employer, to a trustee appointed by an employer or employers, or to an association of employers formed for purposes other than obtaining such insurance, covering, with or without their dependents, the employees, o~ specified categories of the employees, of such employers or their subsidiaries or affiliates, or issued to a labor union, or to an association of employees formed for purposes other than obtaining such insurance, covering, with or without their dependents, the

CONSENT ORDER LEVYING A FINE ORDER NO. 19-0463

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State of Washington

Office of the Insurance Commissioner

POBox40255

Olympia, WA 98504-0255

EXHIBIT B

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members, or specified categories of the members, of the labor union or association, or issued pursuant to RCW 48.21.030. Group disability insurance includes the following groups that qualify for group life insurance:

(b) A group disability insurance coverage may not be offered under this subsection in this state by an insurer under a policy issued in another state unless the Insurance Commissioner or the insurance commissioner of another state having requirements substantially similar to those contained in this subsection has made a determination that the requirements have been met.

17. WAC 284-17-625 provides that RCW 48.17.270(5) provides that when insurance is purchased over the telephone or by electronic means for which written consent under RCW 48.17.270(3) cannot be reasonably obtained, consent documented by the insurance producer is acceptable in lieu of the signed written disclosure required by_RCW 48.17.270 (3), (4), and (5).

18. WAC 284-17-473 provides that [i]ndividual licensees that represent a business entity or act on its behalf must be affiliated with the licensed business entity. A business entity must have at least one affiliated individual licensee in order to transact insurance business. Each business entity must provide the commissioner with the names of all individual licensees authorized to represent the business entity and act on its behalf by electronic submission and pay the applicable fees.

19. RCW 48.15.020(3) provides [e]ach violation of subsection (2) of this section . constitutes a separate offense punishable by a fine of not more than twenty-five thousand dollars, and the Insurance Commissioner, at the Insurance Commissioner's discretion, may order replacement ofpolicies improperly placed with an unauthorized insurer with policies issued by an authorized insurer. Violations may result in suspension or revocation of a license.

20. RCW 48.17.530(1 )(b) allows the Insurance Commissioner to place on probation, suspend, revoke, or refuse to issue or renew an adjuster's license, an insura~ce producer's license, a title insurance agent's license, or any surplus line broker's license, or to levy a civil penalty in accordance with RCW 48.17.560 for violating any insurance laws, or violating any rule, subpoena, or order of the Insurance Commissioner or of another state's insurance commissioner.

21. RCW 48. l 7.530(l}(h) allows the Insurance Commissioner to place on probation, suspend, revoke, or refuse to issue or renew an adjuster's license, an insurance producer's license, a title insurance agent's license, or any surplus line broker's? license, or to levy a civil penalty in

CONSENT ORDER LEVYING A FINE ORDER NO. 19-0463

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State of Washington

Office of the Insurance Commissioner

PO Box 40255

.

Olympia, WA 98504-0255

EXHIBIT B

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accordance with RCW 48.17.560 for using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility in this state or elsewhere.

22. RCW 48.17.560 provides after hearing or upon stipulation by the licensee or insurance education provider, and in addition to or in lieu of the suspension, revocation, or refusal to renew any such license or insurance education provider approval, the Insurance Commissioner may levy a fine upon the licensee or insurance education provider, for each offense, in an amount not more than one thousand dollars.

23. By selling insurance products to Washington consumers using forms that were not approved for use in this state, selling insurance products to Washington consumers underwritten by insurers that were not authorized to transact the business of insurance in this state, failing to affiliate insurance producers who represented Agenn _when selling insurance products to Washington consumers, charging fees to Washington consumers without fully disclosing its compensation to consumers, being unable to accurately identify the underwriter of the ACUSA Data Rx Plan, selling AD&D coverage underwritten by an unauthorized insurer to Washington consumers under an out-of-state group policy owned by Agentra, and? failing to make a good faith effort to determine whether the entity that is issuing the coverage is authorized to transact insurance or health coverage in Washington State, the Licensee violated RCW 48.18.100(1), RCW 48.17.067, RCW 48.15.020(2), WAC 284-17-473, RCW 48.17.270, WAC 284-17-625, RCW 48.17.470(1)(a)(i), RCW 48.15.040, RCW 48.21.010, and RCW 48.17.067, justifying the imposition of a fine under RCW 48.15.023(3), RCW 48.17.530(l)(b), and RCW 48.17.560.

CONSENT TO ORDER: The Insurance Commissioner of the state of Washington and the Licensee agree the best

interest ofthe public will be served by entering into ~s Order. NOW, THEREFORE, the Licensee consents to the following in consideration of its desire to resolve this matter without further administrative or judicial proceedings. The Insurance Commissioner consents to settle this matter in consideration of the Licensee's payment of a fine, and upon such terms and conditions as are set forth below:

1. The Licensee acknowledges its duty to 9omply fully with the applicable laws ofthe state of Washington.

CONSENT ORDER LEVYING A FINE ORDER NO. 19-0463

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State of Washington

Office of the Insurance Commissioner

POBox40255

Olympia, WA 98504-0255

EXHIBIT B

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2. The Licensee consents to the entry ofthis Order, waives any and all hearing or other procedural rights, and further administrative or judicial challenges to this Order.

3. By agreement of the parties, the Insurance Commissioner will impose a fine of One Hundred Thousand Dollars ($100,000.00) to be paid by October 11, 2019.

4. The Licensee understands and agrees that any further failure to comply with the statutes and/or regulations that are the subject of this Order constitutes grounds for further penalties, which may be imposed in direct response to further violations.

5. This Order and the violations set forth herein constitute admissible evidence? that may be considered in any future action by the Insurance Commissioner involving the Licensee. However, the facts of this Order, and any provision, finding, or conclusion contained herein does not, and is not intended to, determine any factual or legal issue or have any preclusive or collateral estoppel effects in any lawsuit by any party other than the Insurance Commissioner.

EXECUTED this _ _ _ _ _ day of_._ _ _ _ _ _ _ _ _ _ _ _ 2019.

AGENTRA, LLC.

Signature:

Printed Name:

AGREED ORDER: Pursuant to the foregoing factual Basis and Consent to Order, the Insurance Commissioner of the state of Washington hereby Orders as follows:

1. The Licensee shall pay a fine in the amount of One Hundred Thousand Dollars ($100,000.00), receipt of which is hereby acknowledged by the Insurance Commissioner.

2. This Order and the violations set forth herein constitute admissible evidence that may be considered in any future action by the Insurance Commissioner involving the Licensee. However, the facts of this Order, and any provision, finding, or conclusion contained herein does not, and is not intended to, detennine any factual or legal issue or have any preclusive or collateral estoppel effects in any lawsuit by any party other than the Insurance Commissioner.

CONSENT ORDER LEVYING A FINE ORDER NO. 19-0463

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State of Washington

Office of the Insurance Commissioner

POBox40255

Olympia, WA 98504-0255

EXHIBIT B

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ENTERED this _ _ _ _ _ _ day of_ _ _ _ _ _ _ _ _~~ 2019.

MIKE KREIDLER Insurance Commissioner By and through his designee

DARRYL E. COLMAN Attorney Manager Legal Affairs Division

CONSENT ORDER LEVYING A FINE ORDERNO. 19-0463

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State ofWashington

Office of the Insurance Commissioner

POBox40255

Olympia, WA 98504-0255

EXHIBIT B

Page 8 of 8

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