Insurer penalized over fraud allegation

The agent denies wrongdoing against seniors and plans to challenge the fine

STORY SUMMARY »

An Oahu woman who allegedly lied to senior citizens to sell more insurance plans is having her license suspended.

Insurance agent Estrella Ramos could also face a $10,000 fine and have her license permanently revoked for "improperly selling" health policies to at least 11 people, according to the state Department of Commerce and Consumer Affairs.

Ramos has denied accusations that she gave seniors false information about coverage benefits of Medicare Advantage plans. For some seniors, the plans sold by Ramos added hundreds of dollars to their medical bills.

The state has suspended the insurance license of an Oahu woman who allegedly gave senior citizens false information about health coverage benefits to sell them policies.

State Insurance Commissioner J.P. Schmidt yesterday ordered insurance agent Estrella M. Ramos to stop doing business immediately "for improperly selling policies" to at least 11 customers. Schmidt also issued a notice of intent to fine Ramos $10,000 and permanently revoke her license.

Ramos denied any wrongdoing and said she would seek help to contest the fine.

"I have done what was supposed to be done," she said yesterday, blaming AlohaCare, her former employer, for allowing the seniors to sign up for the insurance plans. "I followed everything that the company told me."

Messages seeking comment from AlohaCare were not immediately returned yesterday.

Customers who bought Medicare Advantage plans from Ramos lost their current Medicare coverage after she told them they could have "dual coverage" and keep their old policy, according to an investigation by the Insurance Division of the state Department of Commerce and Consumer Affairs.

Ramos also allegedly failed to inform prospective buyers that their doctors may not accept the plan being sold.

For one senior, the change in plans would have cost $770 more for a cataract surgery that was postponed for months so that her former policy could be reinstated. The bill for another customer's hospital visit jumped from $275 under the old plan to $2,715 through the new policy sold by Ramos, Schmidt said.

"It was simply to make sales, to get commission rather than to ... fully inform the client," he said. "An insurance agent can't just simply sell the policy like it's soap or magazines. They have a duty to be responsible and inform the consumer on the pluses and minuses" of the plan.

The state has received at least 11 complaints from people who bought insurance plans from Ramos between November and April, said Christine Hirasa, spokeswoman for the Commerce and Consumer Affairs department.

Ramos said she has sold policies to about 300 people. She has been selling accident, health, life and sickness insurance plans since July 2005 and her license was set to expire next month, according to state business records.

Schmidt said insurance fraud cases involving seniors has been growing as their population increases. Last year, the state revoked the licenses of four insurance agents because of similar violations, he said.

To protect consumers, lawmakers passed a bill this spring that amends the state's insurance code with a section on sales and solicitations of annuities.

It defines unfair and deceptive methods of competition as any misrepresentation or false advertising of insurance policies.