For Immediate Release - March 13, 2013

Transamerica to Pay $1.3 Million to Settle Claims of Selling Unauthorized Health Insurance to Massachusetts Consumers

Company Failed to Cover Mandated Health Benefits

BOSTON – An insurance company has agreed to pay $1.3 million to settle allegations that it sold and marketed unauthorized health insurance products to Massachusetts consumers and failed to cover mandated benefits required by state law, Attorney General Martha Coakley announced today.

According to the complaint, filed with a consent judgment in Suffolk Superior Court on March 5, Transamerica Life Insurance Company (Transamerica) based in Iowa, sold health insurance policies to Massachusetts consumers that were not authorized for sale. The complaint also alleges that Transamerica violated the state’s Consumer Protection Act by failing to cover health services required by Massachusetts law, including mental health, “pap” test screening, mammography, and preventive care for children up to age six.

“Massachusetts consumers should be confident that the health insurance they purchase complies fully with the law,” AG Coakley said. “Our office will continue to vigorously pursue health insurers that sell unauthorized insurance or fail to pay benefits mandated by law.”

Under the terms of the consent judgment, approved by the Court on Friday, Transamerica must pay $1,330,000 to the state and to consumers. This includes $750,000 in consumer relief for Massachusetts consumers who were sold the unauthorized plans or were unlawfully denied insurance coverage for certain mandated benefits, and $580,000 to the state composed of $250,000 for civil penalties, $300,000 for the Local Consumer Aid Fund and $30,000 for the costs of the investigation.    

Consumers concerned about illegal health insurance practices in Massachusetts are urged to call the Attorney General’s Health Care Hotline at (888) 830-6277. Consumers who wish to purchase health insurance can find a number of available options at Guidance on how to choose a health plan is also available on the Attorney General’s website.

This matter was handled by Assistant Attorney General Emiliano Mazlen of Attorney General Coakley’s Health Care Division with assistance from Division Chief Thomas O’Brien also of the Health Care Division and from William Mackay of the AG’s Civil Investigations Division.


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