Insurance firm fined for Nevada sales

Wednesday, Nov. 26, 2003 | 8:53 a.m.

CARSON CITY -- An Indiana insurance company and its officers have been fined $180,000 for selling health insurance over the Internet in Nevada without a license, state Insurance Commissioner Alice Molasky-Arman said Tuesday.

The penalty was levied against TRG Marketing, TRG Administration and its principals,William P. Crouse and Carmello Zanfei.

In addition a $10,000 fine was imposed against USA Services, which acted as a third-party administrator without a license.

"Unauthorized insurers are notorious for a take-the-money-and-run approach to business ethics," Molasky-Arman said. "They prey on consumers trying to find affordable coverage for their families and they need to be stopped."

She said the TRG companies sold insurance to one employer whose policy covered six individuals. The insurance division received two complaints about canceled coverage or nonpayment of claims.

The division said it received a complaint from Eric and Linda Herzberg of Reno, who were insured with TRG. They were informed their coverage was canceled and they were concerned about coverage for Linda and the couple's newborn baby.

The division started an investigation and found the companies were not licensed in Nevada.

A spokeswoman for the insurance division said losses in Nevada were $18,000 to $20,000. Molasky-Arman said the companies also sold the plan nationwide and left consumers without unpaid claims.

The U.S. Department of Labor last month filed suit in U.S. District Court in Indianapolis against Crouse and Zanfei, seeking to force them to pay $17.5 million in health claims nationwide. Peggy Dehl, the spokeswoman for the division, said the two men have also been arrested in Florida on insurance violations.

The state division issued a cease-and-desist order in February 2002 to stop TRG from operating.

Molasky-Arman's order said the TRG companies and USA services "collected premiums from Nevada residents for insurance products and services that were not provided." Besides the violation of not being licensed, the company and its owners were accused of unfair trade practices.

The insurance commissioner said the fines were the result of a hearing held on July 15.

She said that before the hearing, 30-day suspensions were imposed on the managing general agents, agents and brokers who marketed or sold this unauthorized health insurance to Nevada consumers. These individuals, whose names were not disclosed in the order against TRG, were also fined $5,000.

Molasky-Arman said consumers and employers purchasing insurance can check to see where a company is licensed online at nvinsurancealert.com or by calling (888) 467-4195.