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October 08, 2001 at 08:00 PM
NU Online News Service, Oct. 8, 8:28 a.m. – Texas Insurance Commissioner Jose Montemayor recently issued an emergency cease-and-desist order to stop Employers Mutual, L.L.C., from selling health insurance policies or collecting premiums in Texas after learning that the company has quit paying claims.
On Sept. 14, Texas Department of Insurance attorneys filed a notice of hearing with the State Office of Administrative Hearings seeking minimum fines of $1 million each and a cease-and-desist order against Employers Mutual, 18 other unlicensed entities and two unlicensed persons involved in an alleged illegal health insurance scheme.
“When the company stopped paying claims, it became apparent that we needed speedier action to prevent more Texans from falling victim to this unauthorized insurance scheme,” Sara Waitt, senior associate commissioner for Legal and Compliance, says.
Employers Mutual is a limited liability company of Carson City, Nevada. Also targeted in the insurance department’s action are William R. Kokott and Nicholas E. Angelos, who hold positions with that company; American Benefit Society of Turnersville, New Jersey; Sierra Administration Inc. of Reno, Nevada; and 16 purported trade or occupational association, according to the department.
The Texas department estimates that approximately 4,600 Texans are enrolled in the plan. Texas Department of Insurance is sending letters informing all of them that Montemayor has ordered Employers Mutual to stop collecting premiums. They also should seek other health insurance coverage as soon as possible, the department says.
