California Department of Insurance Issues Cease and Desist Order for Benefits Firm.
California Department of Insurance Issues Cease and Desist Order for Benefits Firm
The California Department of Insurance issued a Cease and Desist Order to NexGen Insurance Services Inc., Riverstone Capital LLC (dba Riverstone Capital Insurance Services LLC) and its owner/operators Travis O. Bugli, James C. Kelly and Robert M. Clarke.
The move follows a joint investigation by CDI and the U.S. Department of Labor, which reportedly revealed that NexGen and Riverstone have been operating as an unauthorized MEWA (Multiple Employer Welfare Association), an arrangement that offers or provides health and welfare benefits to employers and their employees.
The Cease and Desist Order alleges that NexGen and Riverstone were marketing, soliciting, and selling purported self-insured health plan arrangements to employers, not health insurance, in violation of California law.
NexGen and Riverstone allegedly failed to pay medical provider claims totaling $24 million. Investigators say NexGen's and Riverstone's business practice was to pool and commingle contributions received from its employer clientele into its own corporate accounts.
"This company and its owners misrepresented their ability to pay medical claims, putting employers and their employees in immediate danger," Insurance Commissioner Ricardo Lara said in a statement.
Under the CDI's Cease and Desist Order, NexGen and Riverstone are to immediately stop operating any MEWA directly or indirectly or acting as an insurance agent, producer, insurer, or any other capacity in the California for which they do not hold a valid license, permit, or Certificate of Authority to do so.
The companies are to immediately cease and desist from receiving any money, commission, fee, rebate, payment, remuneration or any other valuable consideration whatsoever, directly or indirectly, in connection with any MEWA transactions.
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|Article Type:||Brief article|
|Date:||Mar 4, 2019|
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