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Press Release

Insurer Ordered To Cease Use Of Misleading Letter
Friday, September 12, 2003
Contact Info:

Bob Lotane 850/ 413-2515 850/ 528-2868​

News from the Florida Office of Insurance Regulation


Tallahassee (9/12/2003) – The Florida Office of Insurance Regulation (OIR) is alerting policyholders of a misleading letter issued by an insurance company and has ordered the company to cease using the letter and correct any harm to policyholders. The Life and Health Insurance Company of America (Life and Health) is sending the letter to its long-term care insurance policyholders in Florida.


The letter appears to be an attempt to convince policyholders the company is in financial trouble and rates are likely to rise dramatically, in an effort to prompt policyholders to withhold their premium payments, thus resulting in cancellation of their policies. The letter seeks to accomplish this by claiming that policy rates will rise and that the company may be in danger of going out of business if it cannot get rid of these policies, which, by law, must be renewed.


"This letter misstates facts in an attempt to shed a line of business the company must continue to cover," said Office of Insurance Regulation Director Kevin McCarty. "This is clearly an unfair trade practice and something this office will not allow."


The company was legally required to notify policyholders of the 25 percent rate increase. However, the letter goes further and states that the company will seek additional rate increases because of the company's high expenses and deteriorating financial position. The sworn financial statement filed by Life and Health with the Commonwealth of Pennsylvania, where it is domiciled, states that Life and Health had a policyholder surplus of $2.1 million.


The OIR has determined the Life and Health letter is deceptive and misleading and is intended to induce policyholders to effectively forfeit, surrender or cancel their policies. The OIR is ordering the company to immediately send an approved, follow-up letter to policyholders clarifying that the original letter was not a cancellation. Life and Health must also offer reinstatement to policyholders whose coverage lapses or is forfeited in response to this tactic.



Life and Health policyholders with questions about this matter should contact the Department of Financial Service's Office of Consumer Affairs at 1(800) 342-2762.

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Contact Info:

Bob Lotane 850/ 413-2515 850/ 528-2868​

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