New York State
Insurance Department

ISSUED 5/09/2007


Department Launches Education Program for Seniors with Office for Aging

        The New York State Insurance Department has fined a Warren County insurance company $25,000 for targeting the elderly with misleading Medicare supplemental (Medigap) sales practices and warned that the Department will go after others that engage in similar activities.

        “This Department will act aggressively against those who victimize the elderly with high-pressure Medicare supplemental and Medicare Advantage sales tactics,” Insurance Superintendent Eric R. Dinallo said. “We will keep working to educate seniors and other consumers so they know what to do when they see this activity.” .

        Worlco Management Services Inc. of Queensbury, was fined after the company’s president, Leo E. Boyle Jr., admitted “cold lead advertising” in the sale of Medicare supplemental insurance..

        Cold lead advertising occurs when an insurance agent calls on a customer but does not disclose that the call is to sell insurance or that he or she is working for an insurance company. State insurance regulations prohibit the practice..

        Under an agreement with the Insurance Department, Worlco agreed to waive a hearing on the charge that it engaged in cold lead advertising between August 2004 and July 2005. The company promised not to engage in the practice in the future..

        Since 2000, the Department has received approximately 300 complaints about Medicare supplemental or Medicare Advantage sales practices, mostly from areas in Western and Central New York..

        “These complaints usually involved seniors feeling pressured into buying a policy only to discover it was not what was described,” Dinallo said. “In some cases, seniors thought they were welcoming Medicare into their homes only to realize the agent was there just to make a sale, and we have heard of agents selling costlier policies with the same, or fewer benefits than existing coverage.”.

        Medicare supplemental policies – also know as Medigap policies – are designed to pay expenses not covered by standard Medicare insurance. Medicare Advantage plans are health plan options that are part of the Medicare program. Both kinds of policies are sold by private insurance companies..

        Last year, American Progressive Life and Health Insurance Company of New York, was fined $300,000 for cold lead advertising and “failing to adequately implement procedures to assure that excessive Medicare supplement insurance was not sold.”.

        One of American Progressive’s agents, Randy Pickering of Greenwich, NY, was fined $5,000 for engaging in high-pressure sales tactics and having a senior unnecessarily switch policies while soliciting business on behalf of Worlco and American Progressive..

        The Insurance Department is now working with the New York State Office for Aging (NYSOFA) on an educational effort to get information to seniors, so they can make sound health insurance decisions. Under the program, the Department will provide guidance to counselors for the Health Insurance Information Counseling and Assistance Program (HIICAP), an agency supervised by NYSOFA..

        The counselors will receive instruction on senior-related insurance policies and how those policies may be legitimately offered by insurance agents, so they may communicate that information to senior citizens..

        “We are pleased to be launching a new collaboration with the Insurance Department to protect seniors from the illegal marketing practices and the high-pressure sales tactics of some agents trying to capitalize on the Medicare market,” said NYSOFA Director Michael Burgess..

        The Insurance Department’s Consumer Services Bureau has already conducted informational outreach sessions at several downstate areas. These have included presentations by bureau staff to senior citizen and church groups..

        Seniors who believe they have been subjected to illegal sales practices should contact the Insurance Department (212-480-6400; toll-free at 800-342-3736;, the state Office for Aging (; HIICAP (, or their local offices of these agencies.