Wednesday, August 22, 2001

Hawaii HealthCare
Alliance head pays
bulk of fine

The $50,000 levy will go to
pay outstanding medical claims

By Lyn Danninger

The former president of Hawaii HealthCare Alliance has paid $40,000 of a $50,000 fine imposed by the state Insurance Division to settle outstanding insurance law violations still pending against him.

Company President Darren Larson settled three administrative cases that were pending against him for his part in operating the company illegally.

The remaining $10,000 will be paid in monthly installments of $500 until the balance is paid in full, the division said.

The money will be used to pay some of hundreds of outstanding medical claims never paid by the company, state Insurance Commissioner Wayne Metcalf said.

The company appeared to use new premium payments from customers to pay off old bills while unfairly denying payments for medical services so that it could avoid paying claims, Metcalf said.

Problems began with the company almost from its start last year. When HHA was first organized, Larson maintained that it was exempt from state oversight and regulation.

In October 2000, the division gave Larson 30 days to bring the company into compliance with state licensing and reserve requirements.

With the company unable to meet those rules, the state assumed control of HHA in November. Larson then attempted to sell the HHA block of business to another unauthorized insurance company, TRG/SAI Plus LLC.

In November, Metcalf issued a cease and desist order to prevent HHA from referring policyholders to TRG/SAI.

In January this year, a state circuit court judge ordered the liquidation of HHA.

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