Florida Insurance Commissioner Announces Settlement With Universal Health Care Companies
TALLAHASSEE, Fla. (12/21/2007) - Florida Insurance Commissioner Kevin McCarty today announced an agreement with Universal Health Care Insurance Co. and Universal Health Care, a health maintenance organization, regarding examination reports on the companies' financial records.
The Florida Office of Insurance Regulation (Office) issued consent orders to both Tampa Bay-area companies outlining the companies' statutory violations and corrective actions each must take as a result of the examintion reports.
"The companies we regulate are required by law to submit full and complete quarterly and annual financial statements so we can ensure their fiscal strength," said Commissioner McCarty. "These two companies have agreed to the corrective action in the consent orders which, among other things, requires them to submit financial reports to the Office on a monthly basis."
Universal Health Care Insurance Co. admitted to failing to file complete quarterly financial statements with the Office and to having significantly underestimated its 2007 nationwide premiums by more than $816 million, greatly exceeding the initial premium projections of $56 million nationwide. This unanticipated 14-fold increase in premium left the company with insufficient policyholder surplus required to support the volume of business projected, placing it in a hazardous financial condition.
Universal Health Care Insurance Co. agreed to: be placed under administrative supervision of up to eight months, submit monthly financial reports to the Office, pay an administrative fine of $100,000, and pay $250,000 for the Office's legal fees and costs. The company also agreed to voluntarily dismiss all pending appeals, lawsuits, administrative petitions, and any other actions regarding matters addressed in its consent order.
Universal Health Care admitted to similar financial reporting violations and will also begin submitting monthly financial statements to the Office for the next two years. The company agreed in its consent order to pay an administrative penalty of $100,000 and will reimburse all examination fees incurred by the Office.
Earlier this month, U.S. District Court Judge Stephan P. Mickle dismissed Universal Health Care Insurance Co.'s federal lawsuit challenging the Office's jurisdiction regarding solvency matters as they relate to Medicare Advantage Plans.
About the Florida Office of Insurance Regulation
The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. Business units within the Office are organized based on regulatory expertise and include the areas of life and health, property and casualty, specialty lines and other regulated insurance entities. It is within the Office that the mission of public protection is implemented through regulatory oversight of insurance company solvency, policy forms and rates, market conduct performance and new company entrants to the Florida market.
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