Judge shuts down State Circuit Court Judge Sabrina McKenna yesterday granted an order to prevent dental insurer Hawaii Dental Health Plan from selling dental insurance policies in Hawaii.
isle dental insurer
A state agency is investigating
Hawaii Dental Health Plan after
receiving 37 complaintsBy Lyn Danninger
ldanninger@starbulletinThe order also allows the state Insurance Division to fine the company for not submitting to an earlier examination following complaints to the state.
McKenna gave the division the authority to pursue the company after it received 37 complaints from dentists, patients or its own policyholders. No representatives from the company were present in court.
"What we intend to do now is move forward with our examination," said State Insurance Commissioner Wayne Metcalf.
Metcalf said if the company does not produce its records, something it has failed to do so far in Hawaii, he will send investigators to Newport Beach, Calif., where the company is thought to be based. Until the books can be examined, Metcalf said, the division does not know how many customers could be affected.
While premiums or claims have been sent to a local address on Kapahulu Avenue, Metcalf said that address appears to be just a mail drop.
Telephone calls to the company yesterday were answered by a series of recorded messages.
Metcalf said his office has received complaints since October about nonpayment of services by the company. But the division was powerless to respond until state Legislature passed Act 132 this year. The law subjects dental plans like Hawaii Dental Health Plan to examination by the division.
Now with the law in force, Metcalf said he will pursue the company.
Hawaii Dental Health Plan was incorporated in Hawaii in 1986 and in 1988 was registered as a dental service organization with the Department of Commerce and Consumer Affairs, state records show.
In a 1998 filing with DCCA, the company's officers and directors were listed as Victor Lindsey, Sandra Holford, James P. Lindsey and James R. Lindsey.
James R. Lindsey, who originally started the company, was also involved with other insurance ventures, including a large California dental plan, California Dental Health Plan, which he subsequently sold to a California health maintenance association, Pacificare, in the mid-1990s, according to a person familiar with the companies.
In mid-1994, Lindsey was one of several people who provided seed capital to start the now-defunct Pacific Group Medical Association. The company, controlled by general agent Peter Wong, also gained control of Hawaii Dental Health Plan in 1995, although Lindsey and other family members remained on the dental plan board.
PGMA went bankrupt and was seized by then-Insurance Commissioner, Rey Graulty, in March 1997. PGMA's losses exceeded $20 million.
With PGMA no longer in business, in late 1996 Hawaii Dental Health Plan sent letters to its members asking that premiums and claims be sent directly to new addresses in California or Kapahulu Avenue.
Neither Wong nor James R. Lindsey could be located for comment.
Around that time, Hawaii's largest dental insurer, Hawaii Dental Service, began receiving questions from HDHP dental plan members about dental claims and where to send premiums, said Mark Fukuhara, the company's senior vice president and chief operating officer.
"People were confused about the plan," he said.
Hawaii Dental Service also experienced problems when trying to coordinate claims for members who had dual coverage with Hawaii Dental Health Plan and HDS, Fukuhara said.
"We were aware of complaints because of the dual coverage because Hawaii Dental Health Plan wasn't paying its share," he said.
HDS ended up paying those claims, he said.
Since that time, Fukuhara said he has heard very little about the company.
"We don't see them in the marketplace and it doesn't seem they have too many customers or too many participating dentists," he said.