Kentucky health insurers are not unlike other health insurers
across the nation: They have dramatically raised their premiums in the
last year. The result? A plague of unlicensed health insurers has swept
the state, promising lower premiums but actually preying on consumers'
pocketbooks and saddling them with unpaid claims. (See How to spot an unlicensed insurer.)
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In
November 2001, the Franklin County Circuit Court issued an injunction
against TRG Administration LLC and TRG Marketing LLC, companies that
had been marketing an unlicensed form of health insurance in Kentucky,
as well as in Hawaii, Indiana, and Louisiana. Additionally, state
regulators issued consumer advisories or legal orders against Employers
Mutual LLC and affiliated companies for allegedly offering unauthorized
insurance.
Nationwide, more than 22,000 customers
of Employers Mutual LLC have racked up an estimated $4.5 million in
unpaid health insurance claims. While the unsuspecting customers
visited their doctors, the principals of the unlicensed health insurer
and its affiliated associations diverted more than $6 million of the
health plan's assets into their own personal bank accounts.
Kentucky Insurance Commissioner Janie
Miller credits insurance agents for tipping off state regulators about
questionable marketing practices in which TRG began promoting plans to
insurance agents as a type of self-funded insurance plan that employers
could offer to employees at greatly discounted premiums with benefits
resembling standard health insurance and provider networks.
"These agents had concerns that
consumers were being misled and that sales and marketing practices were
forbidden by law," Miller says.
Consumers can find a list of properly authorized insurers in Kentucky by visiting the Kentucky Insurance Department's Web site.
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