Friday, August 31, 2012

Medical worker sentenced to year in jail, $472k in insurance fraud case

Here's a press release we issued a few minutes ago:

A medical worker who pretended to be a doctor and submitted millions of dollars in bogus bills to insurance companies has been sentenced to a year in jail and $472,458 in restitution.

Kenneth R. Welling, 45, of Lake Forest Park, was sentenced Aug. 24 in King County Superior Court. He pleaded guilty to seven felony counts of theft in June.

“We found numerous cases in which Welling billed for surgeries that never happened,” said state Insurance Commissioner Mike Kreidler. Kreidler’s office was tipped off to the scam when a patient complained, saying that Welling had tried to bill her insurer $89,000 for six surgeries that never took place.

Welling is a registered surgical technologist and sole proprietor of Shoreline, Wash.-based Alpine Surgical Services. His license allows him to perform tasks like preparing supplies and instruments, passing them to the surgeon and preparing basic sterile packs and trays. But after patients had procedures done, he would often submit large bills with codes listing himself as a doctor or physician’s assistant. He is neither. Sometimes he would include post-operative reports, listing himself as the surgeon.

No evidence was found to indicate that Welling was playing an improper role in actual medical care. The fraud involved billing.

“As far as we could tell, the only time he pretended to be a doctor was when he submitted bills,” said Kreidler.

In one woman’s case, Welling billed $140,323 as assisting surgeon for nine surgeries that never took place. Over a five-year period, he billed another woman’s insurer 107 times for 51 different surgeries, listing himself as the primary doctor. Hospital records show she’d only had surgery twice.

From 2004 through 2011, according to medical records obtained by Kreidler’s Special Investigations Unit, Welling billed five insurance companies at least $4.1 million for services he did not provide. He was paid $461,000.

“Part of the reason he got away with this for so long is that he’d rarely challenge an insurer who paid little or nothing,” said Kreidler. “He’d just send them the bills and hope they’d pay.”

Interesting story about how the Apollo 11 astronauts got life insurance

NPR has posted an interesting story about how the Apollo 11 astronauts sort of self-insured their lives when they headed for the moon.

Rather than try to get conventional life insurance, the three astronauts spent their spare moments during their month of pre-launch quarantine signing autographed envelopes, according to NPR's Chana Joffe-Walt. That way, if they died on their lunar adventure, their families could sell the autographs, which today command up to $30,000 at auction.

To make the autographs more valuable, each was on an envelope that a friend would have postmarked on key days, like the launch date and the date they landed on the moon. Writes Joffe-Walt:
It was life insurance in the form of autographs.
"If they did not return from the moon, their families could sell them — to not just fund their day-to-day lives, but also fund their kids' college education and other life needs," (space historian Robert) Pearlman said.
The life insurance autographs were not needed. Armstrong and Aldrin walked on the moon and came home safely. They signed probably tens of thousands more autographs for free.

Wednesday, August 29, 2012

Sept. 13 hearing set re: Sagicor Life's acquisition of PEMCO Life

Insurance Commissioner Mike Kreidler has scheduled a hearing for Sept. 13 at 10 a.m. at his Tumwater, Wash. office to consider approval of Sagicor Life Insurance Company's request to acquire Washington-based PEMCO Life Insurance Company.

Sagicor Life is proposing to acquire all outstanding stock of PEMCO Life Insurance Company, and is also proposing to merge PEMCO Life with and into Sagicor Life at a later date after receiving approval of the acquisition.

PEMCO Life Insurance Company, which has been a Washington-based insurer since 1963, provides life and disability products to approximately 15 thousand Washington individual and group policyholders, and is wholly owned by its parent company, PEMCO Mutual Insurance Company. PEMCO Mutual Insurance Company is a mutual property and casualty insurer located in Seattle, WA and is licensed in Idaho, Oregon, and Washington.

Sagicor Life is a Texas-based insurer licensed in Texas to offer accident, health and life insurance and has been authorized to conduct life and disability insurance in Washington since 1961. Sagicor Life operates primarily in the US and is wholly-owned by Sagicor Financial Corporation. Sagicor Financial Corp. is a Barbados corporation which operates internationally in various European and Caribbean countries, and is publicly traded on the Barbados, Trinidad and Tobago, and London Stock Exchanges. Sagicor Financial Corp. had $142.6 million in US revenue in 2011, $1.35 billion in total revenue (both US and international) and 632,123 individual life policies in-force overall. As of December 31, 2011, Sagicor Financial Corp.’s consolidated stockholders’ equity was $797.5 million.

For more information, including how to submit letters of support or objection, please see the hearing notice.

Insurance tips: What to know before renting your home/boat/etc.

We get a number of calls from folks who rent out their homes, vacation cabins, vacant lakefront sites, boats, RVs, motorcycles, etc. to others every once in a while. They want to know if that affects their insurance.

It very well could. Here's why: When property is rented, that's considered a business activity. And that can affect any existing coverage for property damage and liability protection.

There may also be coverage limitations or exclusions built into the policy that activated by your renting the property.

We recommend that you talk to your agent or the insurer before you rent, so you're not left personally responsible for property damage costs or legal costs in a lawsuit stemming from renting the property.

Monday, August 27, 2012

Do I have "minimal essential" insurance coverage?

As part of health care reform, starting in January 2014 most Americans will need to have “minimum essential” health insurance coverage or face a tax penalty.

We've gotten a number of calls from consumers wondering if their current health coverage qualifies. (In particular, a number of people who get their medical care through the Veterans Administration have called to check.)

In many cases, the answer is yes. Many existing plans qualify as minimal essential health insurance coverage. Here are some examples:
• Medicare Part A

• Health programs administered by Washington state (such as Medicaid or the Children’s Health Insurance Program)

• TriCare

• Coverage through the Veteran’s Administration

• Coverage from an employer, regardless of whether the employer is a government agency, a private-sector employer, or an Indian tribe.

• A individual plan (i.e. a plan that you buy on your own directly from a health insurance company).

Thursday, August 23, 2012

“Hole-in-Won” Golf tournament insurer charged with felonies after not paying up

OLYMPIA, Wash. _ A Connecticut businessman who specializes in insurance for golf tournament hole-in-one prizes has been charged with multiple felonies after repeatedly failing to pay up.

Kevin Kolenda, of Norwalk, Conn., was charged Wednesday in King County Superior Court with five counts of transacting insurance without a license, a class B felony. His arraignment is slated for Sept. 5.

Kolenda, 54, ignored a previous cease-and-desist order and a $125,000 fine from state Insurance Commissioner Mike Kreidler.

“We’ve been warning the public about Mr. Kolenda’s scam for years,” said Kreidler, whose Special Investigations Unit did the investigation that led to the charges. “He has a long history of selling illegal insurance, refusing to pay prize winners, and thumbing his nose at regulators.”

In some cases, charities have had to come up with the prize money. In others, the prize winners agreed to forego a prize.

Kolenda in 1995 started a business called Golf Marketing, working out of a home his parents owned in Norwalk. Since then, the business’ name has changed several times, including: Golf Marketing Worldwide LLC, Golf Marketing Inc.,, and currently Worldwide. The company also has a regional office in Rye, N.Y.

Kolenda has repeatedly failed to pay winning golfers in Washington. Among them:

• In 2003, Kolenda illegally sold insurance for a tournament in Bremerton. But when a golfer got a hole in one and tried to claim the $10,000 prize, Kolenda wouldn’t pay.
• In 2004, Kolenda sold insurance for a Vancouver tournament. Again, a golfer got a hole in one. Kolenda refused to pay the $50,000 prize. After a hearing at which Kolenda failed to appear, he was ordered in 2008 to pay a $125,000 fine. He never did.
• In 2010, Kolenda sold coverage to pay $25,000 for a hole in one during a golf tournament in Snohomish. A player got a hole in one. His golf partners signed notarized forms attesting to the hole in one. The prize remains unpaid, despite numerous calls and emails from the partners and tournament officials.
Similar allegations have been made against Mr. Kolenda and/or his business in numerous other states, including Montana, Ohio, Georgia, California, New York, Hawaii, Alabama, Massachusetts, Florida, Connecticut and North Carolina.

Wednesday, August 22, 2012

"Auto accidents have decreased. Why did my insurance rates go up?"

Q: I read that auto accidents in Washington state have decreased, as have accident-related deaths. But my insurance premium just went up 15 percent. What's going on?

A: As Washington state's insurance regulator, we do our best to hold down insurance costs. But there are things other than accident rates that can affect your auto insurance premiums. Theft rates, auto glass costs, health care costs (for injuries in a crash) can all play a role. So can the fact that modern vehicles, with more airbags, high-strength steel and sophisticated safety features can be more expensive to repair.

Rates are driven by insurers' actual claim payments, administration costs and the company's cost and loss projections for the near future.

Monday, August 20, 2012

Why it's important to read "whole life" policy annual statements

Q: I just got the annual statement for my "whole life" insurance policy. Should I just toss this, or do I really need to read this thing?

A: You should read it. Here's why: With whole life insurance, the monthly cost of insurance increases as you get older. If you have a loan against your policy, or if you chose a low premium option, then at some point the current level of premiums won't be enough to keep the policy in effect, and it will end.

By reading your policy's annual statement on a regular basis, you'll be able to increase the amount you're paying in premiums so that you can prevent this from happening.

Friday, August 17, 2012

Former state insurance commissioner Dick Marquardt has died

Dick Marquardt Sr., who served as the state's insurance commissioner from 1977 to 1993, died Aug. 9th in Seattle.

Idaho-born Marquardt was the 6th of the eight people who've served as insurance commissioner since 1909. He was a University of Washington graduate, served in the Army during World War II, and worked as a longtime fuel-oil company executive.

He was appointed by then-Gov. Dan Evans to head the state's selective service system, and he also served a term as state senator representing District 45 in King County.

He served four terms as insurance commissioner, and continued to work as a consultant well into his 80s. He was an avid golfer, and loved baseball.

There's a long and touching obituary in the Seattle Times. From it:
Dick was the beloved patriarch of his large family. He was a devoted and proud husband, father, grandfather, great grandfather, and great-great grandfather.
A private service is planned at a later date.

Also from the obituary:
He leaves behind a legacy of integrity, hard work, humor, unconditional love, and pure enjoyment of the good things in life. He will be greatly missed by all who were lucky enough to know him. Dad, you were unforgettable.

Insurance claims help, donations, and other resources re: the Taylor Bridge wildfire

As fire crews work to rein in the Taylor Bridge fire, some families are being allowed back in to check on their homes, dozens of which have been lost in the first this week. Here are some tips and resources for those who lost property in the blaze.

  • Kittitas County Emergency Services is collecting information on the amount of losses in order to determine if federal disaster assistance will be available. Whether insured or not, it's important that the losses be documented. (Note: The website seems to be offline or overwhelmed; we've had a lot of difficulty opening the page this morning.)

  • According to the DOT, the contractor on the bridge project has set up a process for claims that potentially would be addressed by the contractor's insurer. The phone number provided by the contractor is 1-800-238-6225 for Travelers Insurance.

  • Insurance claims: For those with insurance, we have these tips about how homeowners and others can expedite their insurance claims. It's important to know that many standard homeowners' policies include some coverage for living expenses -- like a motel -- for folks who lose their homes. That's definitely something to check with your insurer or agent right away. And save receipts for everything, including meals and laundry, that might be relevant. If you need help or run into problems with your insurer, call us at 1-800-562-6900 or email us at and we'll do our best to help.

  • For those seeking updates or emergency shelter information, the state Emergency Management Division has information. Governor Gregoire has proclaimed a state of emergency in both Kittitas and Yakima counties to free up additional firefighting resources. 

  • If you want to make donations to the many fire victims -- including livestock that had to be evacuated -- please see this donation information from the state Emergency Management Division. It sounds like donation sites have been overwhelmed with stuff; they're now asking that people consider donating money instead. The link above includes numerous local and state organizations trying to help the fire victims.

Wednesday, August 15, 2012

Is it possible to OVER-insure my home?

Yes. If you think your home is over-insured, ask your agent or insurer when they last made a replacement cost calculation specific to your home. These are done by insurers to figure out what it would cost if they had to rebuild your home after a major covered loss. (Like your home burning down.) If the information used in the calculation is wrong, you can end up with an insured value that's too low or too high.

Your tax assessment value, by the way, is not the value used for insurance purposes. The insurer needs to use a value that reflects an actual and realistic rebuild cost.

Also, your home insurance policy should not have the value of the land included as part of the dwelling coverage. Land is not considered to be insurable property on a home policy.

Tuesday, August 14, 2012

Wildfire near Cle Elum has reportedly burned 60 homes

A wildfire near Cle Elum, Wash. has reportedly burned 60 homes and 26,000 acres, with summer dryness and high winds making firefighters' jobs difficult.

The Seattle Times has posted some pretty scary photos of local homeowners and ranchers watching the wildfire approach. And the North Kittitas County Tribune is posting a running log of fire news, including a phone number for local evacuation information. The state has also activated its emergency operations center.

Our hearts go out to the victims, and we're monitoring the situation closely. Fire victims should contact their insurer or agent as soon as possible to start the claims process. Many policies include some coverage for emergency shelter, such as motels, if a home is uninhabitable. Our consumer advocacy staff (1-800-562-6900) will be available to help fire victims if they have trouble filing insurance claims.

Here are some more tips:
  • Cooperate fully with the insurer. Ask what documents forms and data you'll need to file a claim. Keep a journal of all conversations, including who you talked with and when.
  • Ask your insurer about additional living expenses if your home is destroyed. Save all relevant receipts.
  • Take photos or video of the damage.
  • If there's a disagreement about a claim, talk to the insurer. Ask the company to cite specific language in the policy. If you need help, call our office at 1-800-562-6900.
  • If the insurer's offer seems too low, be prepared to negotiate to get a fair settlement.
If you're not affected by the blaze but live in a wildfire-prone area -- and much of the eastern part of the state is very dry right now -- here's a list of tips to prepare and protect your home.

And here's a handy pdf document that will help you get started on a home inventory, which can be a big help in filing an insurance claim after a disaster. You can also use a video camera or one of several smartphone apps to do the same thing.

Monday, August 13, 2012

You bought a new car? How soon do you need to tell your insurance company?

Q: I bought a new car a week ago, but I didn't want to call my insurance company yet, since I know my premium will go up. How long can I wait?

A: Do not wait. We're not kidding about this. Some auto insurance policies limit automatic coverage for a new or replacement vehicle to 14 days after purchase. Some others allow up to 30 days.

Here's why it's not worth the risk: If you wreck your new car and your claim is denied, you'll be out a lot more money than you saved on the premium.

The upshot: immediately contact your agent or insurer to add the vehicle and update your coverage.

Thursday, August 9, 2012

Woman charged with insurance fraud after pawning ring and claiming it was lost

A Snohomish County Woman has been charged for claiming that she'd lost a diamond ring that she had actually pawned.

The Attorney General's Office has chaged Laura Anne Dunn with attempted first-degree theft and insurance fraud. Arraignment is scheduled for Aug. 23 in Snohomish County Superior Court.

In January, Dunn told her insurer, Liberty Mutual Insurance, that she'd lost her ring during a New Year's Eve stay at a casino. The ring was valued at more than $9,000.

Investigators for Liberty Mutual checked with the casino's security staff, which had no record of Dunn reporting her ring missing. They asked Dunn to provide a number of records, including all photographs taken during her stay at the casino.

The investigators also checked pawnshop records. They discovered that Dunn had actually pawned the ring back in September 2011. In fact, the ring was still at the pawnshop until she picked it up in mid-March 2012.

Two weeks after she filed the claim, Dunn sent a note to Liberty Mutual.

"I have been extremely lucky," she wrote, saying that she'd found the ring snagged in a glove. "...Thanks for your time and effort on my behalf."

The following day, the insurer's investigators visited a local pawnshop, where they found and photographed the ring that Dunn had reported missing. They closed the claim and reported the case to Insurance Commissioner Mike Kreidler's Special Investigations Unit, which specializes in insurance fraud cases.

Update: On Dec. 19, 2012, Dunn pleaded guilty to attempted first degree theft. She was sentenced to 80 hours of community service and $600 in costs.

Wednesday, August 8, 2012

"Hobo Prince Economic Project" founder fined $1 million by Oregon regulators

Back in April, we issued a cease and desist order against Shelby H. Bell, a man who runs the "Hobo Prince Economic Project."

The Clark County, Wash. man was promising people seven years' worth of weekly $900 payouts in exchange for a $25 signup fee. He maintained that each person’s contract would be financed through a complex series of transactions, including issuance of a $500,000 “reverse” insurance policy purchased with a $25,000 payment from an unnamed bank.

Since he wasn't licensed to transact insurance at all in Washington, Insurance Commissioner Mike Kreidler ordered Bell to stop trying to sign people up for this highly dubious offer. (We subsequently received numerous calls from people across the country who'd signed up for the plan and blamed us for dashing their hopes of a big payout.)

Yesterday, the Oregon Department of Consumer and Business Services fined Bell $1 million, saying that none of Bell's investors have apparently made any money.

"Bell in less than a year attracted more than $187,000 from at least 7,480 people in multiple states and U.S. territories," the department said in a press release, accusing Bell of "offering false hope to thousands of people."

"Bell claimed to be worth billions with backing from the U.S. Treasury through an International Bill of Exchange, which actually has no value," Oregon regulators continued. "Also, investigators determined that Bell used investors’ money to pay for food, movie tickets, a vehicle, and other personal expenses."

Here's a link to Oregon's order.

What's the "Washington Fair Plan?"

Q: My home (or business) insurance has been canceled, and the cancellation notice refers to the Washington Fair Plan. What is that?

A: The Washington Fair Plan was established in 1968 to provide basic property insurance to consumers who could not obtain property insurance in the voluntary, or standard insurance market. Although many years have passed and the home insurance market of today offers many options for home insurance, the Fair Plan still exists and functions under the rules and regulations of our office.

Participation in this program is mandatory for all property insurers in Washington. All companies writing property insurance are members of the Fair Plan. Every insurance agent or broker who is licensed to write property insurance in Washington is required to know about and help consumers if they want the services of the Fair Plan.

The Fair Plan application may only be completed by a licensed insurance agent, and must be signed by the agent and the applicant. Basic fire insurance coverage may be provided for dwelling and commercial risks.

Although you will need to have a licensed insurance agent file an application on your behalf, you may still get coverage information directly from the FAIR Plan.

Monday, August 6, 2012

How long can an insurance company take to investigate an auto claim?

Q: Another driver hit my car last weekend, and I haven't been paid yet. How long does an insurer have to investigate and pay my claim?

A: Generally, when a claim is uncompliated (no injuries, not a large number of witnesses, no specialized reports needed), 30 days is considered to be a reasonable time frame to investigate and make coverage decisions.

This is true whether you've made the claim against your own insurer or someone else's. Many claims are investigated and paid within 30 days.

Sometimes -- particularly in complex property damage or injury claims -- it can take longer to agree on a settlement. But you should expect reasonable promptness getting answers to your questions during the process.

You can help expedite things by providing requested information, giving statements and answering questions promptly. And if things drag on too long and you live in Washington state, you can file a complaint with our office. (We're the state agency that regulates the insurance industry in Washington.)

Friday, August 3, 2012

Auto insurance and diminished value

Scenario: Your car is struck by another driver, who is at fault. His insurer pays for the repairs, but you believe that your vehicle -- since it has been in a wreck -- is worth less than it was before the crash.

Can you demand that the insurer compensates you for that diminished value?

Yes, but it can be difficult to prove. Diminished value can be part of a claim, but it is up to the claimant -- that's you, in the scenario above -- to prove that the value of the vehicle is diminished after the repairs have been completed.

Doing that may mean getting dealer testimony or an appraisal showing the value of the vehicle before the accident and after the repairs.

Our office, unfortunately, cannot force insurers to pay diminished value claims. You may need to seek legal advice to negotiate a settlement.

Wednesday, August 1, 2012

What does personal injury protection cover?

Here in Washington state, auto insurance policies commonly offer personal injury protection, widely known as PIP. You can opt to add it your auto coverage. If you're in an auto accident, it will help pay for certain costs, up to certain limits.

Like what? It helps pay for:
  • Medical expenses
  • Lost wages
  • Lost services
  • and funeral expenses.

But there are some things that it won't cover. For example, PIP coverage doesn't cover injuries caused when using:
  • Farm equipment
  • Off-road vehicles
  • Mopeds
  • Injuries sustained while racing
  • Or injuries sustained while committing a felony.

Also -- and this is important -- PIP coverage does not cover services that your insurer decides:
  • Are not reasonable
  • Are not necessary
  • Are not related to the accident
  • or are not incurred within three years of the accident.