New York State
James J. Wrynn Superintendent of Insurance 25 Beaver Street New York, N.Y. 10004
|ISSUED 6/22/2010||FOR IMMEDIATE RELEASE|
Cinergy, which advertised limited benefit health plans on late night television, the Internet and through telemarketers, will face a hearing where it will answer charges that it is not fit to be allowed to sell insurance in New York State, Insurance Superintendent James J. Wrynn announced today.
Limited benefit health insurance plans normally provide less than comprehensive hospital/medical coverage, but with healthcare bills being the leading cause of personal bankruptcy filings nationally, many consumers searching for affordable coverage buy limited benefit health plans as one way to insure against potential liability. Limited benefit health plans may leave consumers with large medical bills. If injury or illness occurs and an insured files a claim, they may find that they have less coverage than they thought.
“Health insurance is too important to take chances with,” Superintendent Wrynn said. “Consumers need to have confidence that the coverage they think they are paying for is the coverage they get. We will not allow anyone to take advantage of New Yorkers’ need for affordable health insurance by using misleading marketing techniques.”
At the hearing, Cinergy Health Inc., a Florida company, along with sublicensee Steven Trattner, must answer charges that they “have demonstrated untrustworthiness and/or incompetence to act as insurance producers within the meaning of section 2110(a)(4) of the Insurance Law.” The company, which generated more than $26 million in 2008 marketing limited benefit and associated health plans, and Mr. Trattner will have to show cause why they should not be fined or their licenses suspended or revoked. An unlicensed company or individual would not be able to do any insurance business in New York.
The hearing is scheduled for 10 a.m. on July 29, 2010 at the New York State Insurance Department’s New York City office, 25 Beaver Street.
Last year, the Department cracked down on companies selling limited benefit health insurance plans in ways that mislead people into believing they have full heath insurance coverage. The Department moved to protect New Yorkers by stopping one company from selling the product in New York and from advertising nationally and began an examination of the marketing practices of all companies selling this product.
Cinergy marketed the plan that led to the Department’s crackdown, and committed multiple violations of the Insurance Law while doing so, according to the citation the Department issued to Cinergy. Major charges against Cinergy include creating and using television advertisements that were false and misleading, in that the advertisements:
Cinergy’s telephone sales staff made false and misleading statements to potential enrollees regarding the nature of the coverage, the cost of the coverage and other benefits, and the identity of the entity that was actually providing the coverage, the citation says. In addition, Cinergy issued a “Member Handbook” to enrollees that contained false and misleading statements regarding the nature of the coverage, the cost of the coverage and other benefits, and the identity of the entity that was actually providing the coverage.
Cinergy was cited for numerous other violations of the Insurance Law, including compensation violations, using unapproved forms and using unlicensed agents.
Cinergy Commercial Link: http://www.ins.state.ny.us/video/cynergy_health.htm