DCBS Media Release
August 1, 1997
John Alden Life Insurance pays restitution, fine for overcharging small businesses
(Salem) Oregon Insurance Commissioner Kerry Barnett has fined John Alden Life Insurance Company $20,000 and required the company to provide $267,487 in restitution to small businesses it overcharged for their health benefit plans.
Since 1993 Oregon law has limited premium rate increases health insurers can charge for small employer health benefit plans. Although insurers were informed about the new law with a bulletin issued by Oregon's insurance commissioner in April 1992, John Alden Life failed to adopt rating practices that complied with the law.
As a result, from March 1994 through October 1995 John Alden Life overcharged 407 small employers in Oregon for health benefit renewal premiums. When officials at the Oregon Insurance Division brought the discrepancy to John Alden Life's attention, the company cooperated with the division's investigation and ultimately agreed that its rating practices were in error.
"Oregon is committed to fairness in the insurance marketplace for all concerned -- consumers and industry," Commissioner Barnett said. "Insurers who do business here have a responsibility to live up to that commitment, and can expect to hear from us if they don't."
John Alden Life agreed to pay back the amount overcharged to the affected companies, with interest, plus a civil penalty. Overcharged money the company was not able to return to the appropriate employers through its restitution program -- amounting to $1,170.09 -- was paid to the Insurance Division as an additional civil penalty.
The Oregon Insurance Division is part of the state's Department of Consumer and Business Services. The division regulates the 1,600 companies and 25,000 agents licensed to sell insurance products in Oregon, investigates violations and enforces the insurance code, and serves as an advocate for insurance consumers. Consumers who need help resolving a complaint involving any insurer's company or agent practices may call the division's complaint line at 503-947-7984. More information about the division is available on its web site, at: www.cbs.state.or.us/ins or www.oregoninsurance.org.