NU Online News Service, March 22, 3:45 p.m. – Texas Insurance Commissioner Jose Montemayor today warned Texas insurance agents that they risk license revocation, felony prosecution and personal financial liability if they sell health care plans offered by unauthorized insurers.
Montemayor issued a bulletin spelling out the dangers of working with unauthorized insurers and describing the subterfuges commonly used by them in recruiting agents to sell their health care plans. The bulletin went to all Texas licensed insurance companies, which were told to distribute it to all agents appointed to represent them.
The Texas department has taken action against three unauthorized health plans in the past 12 months. Each plan had recruited licensed agents to market its product to unsuspecting employers, including school districts. Several more such plans are under investigation.
Montemayor’s bulletin said selling such plans “not only jeopardizes the security and health of Texas consumers but also subjects agents to disciplinary action, which can include suspension or revocation of their licenses, restitution and monetary penalties.”
Agents can verify whether insurance entities recruiting them are licensed by calling the department toll-free at 1-800-252-3439.
Montemayor’s bulletin lists some circumstances and product characteristics that should prompt agents to closely scrutinize a health plan before marketing it. These include claims that a product that operates like insurance is not actually insurance, and claims that a plan is only providing “benefits,” and not insurance.