|TO:||All Individuals / Corporations Licensed to Sell Health Insurance in Massachusetts|
|FROM:||Julianne M. Bowler, Commissioner of Insurance|
|DATE:||June 24, 2002|
|RE:||Solicitation and Sale of Unapproved Health Insurance in Massachusetts|
This Bulletin is to remind individuals and corporations licensed to sell health insurance in Massachusetts of the potential consequences that they face if they market and/or sell products by organizations not properly licensed to transact business in the Commonwealth of Massachusetts.
In recent months, the Division of Insurance ("Division") has become aware that certain Massachusetts licensed health insurance agents and brokers have been involved in the marketing and sale of so-called "health plans" offered by entities not licensed to conduct insurance business in Massachusetts. Among the common characteristics these organizations may share:
As you may be aware, legitimate self-funded ERISA plans offered by employers /unions are subject to United States Department of Labor provisions, and individual agents or brokers do not generally sell such plans. Massachusetts licensees must actively seek to determine the legitimacy of the health insurance plans that they offer for sale before they undertake the marketing of such plans. The marketing of unauthorized health insurance plans is currently the subject of regulatory scrutiny in Massachusetts and other states. In some cases, these unauthorized plans have left consumers with thousands of dollars worth of unpaid claims.
Massachusetts licensees have a professional and legal responsibility to ensure that the health plans they market are underwritten by properly licensed entities. The Division will exercise all available authority to hold licensees accountable for their actions in marketing and selling unapproved health plans. This includes, but is not limited to, license suspension or revocation and monetary penalties. Agents and brokers may also be held personally liable for the unpaid claims of those consumers to whom they market or sell unauthorized health plans.
Small Employer Group Requirements
Non-Group (Individual) Requirements
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