New York State’s Department of Insurance has fined American Medical and Life Insurance Company $700,000, alleging it had misled consumers in selling a limited-benefit health plan.
The state also banned the company from selling the plans in the state and told it to stop broadcasting a national TV commercial for the plan.
The state Department of Insurance is also examining the marketing practices of all companies selling limited-benefit health products, according to a statement from the office of Gov. David A. Patterson.
AMLI misled buyers of its limited health insurance into thinking they were getting full coverage, according to the Patterson.
“If they get seriously ill, consumers who buy this product can find themselves with huge bills they are unable to pay,” the governor alleged.
According to the state insurance department, AMLI, New York, has agreed to discontinue selling limited benefit group medical policies in the state, convert terminated group policies to individual policies upon request and to resolve customer complaints. The company has also consented to retain an independent counsel to review its operations and make specific recommendations for changes and prepare a compliance monitoring plan, according to the department.