Health Insurance Innovations (HIIQ +25.9%) is up on double normal volume in response to its disclosure that it has agreed to pay $3.4M to settle an investigation into its business practices by insurance regulators. Under the terms of the agreement, it has also agreed to:
Submit a third-party administrator license application in any jurisdiction where required and where it is not already licensed.
Improve its monitoring of sales calls via the recording and retention of all internal and external calls. This requirement will apply to external distributors as well.
Periodically submit reports to monitoring regulators.
Prepare and implement a “disclosure plan” to ensure that all customers are fully aware of policy details and fees, a “compliance plan” aimed at monitoring and improving sales practices and a “training plan” for internal and external sales personnel and related parties regarding compliance with applicable insurance laws. Monitoring regulators will approve all plans.
Failure to comply with any aspect of the above items will subject the company to further enforcement and administrative actions.
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