Kansas orders bogus captive to stop selling

Gavin Bradshaw 01/03/2010

Serve America Assurance, described on its website as a wholly owned captive insurance subsidiary of Beema Insurance Co, has been ordered to stop selling unauthorised health insurance by the Kansas Department of Insurance.

The organisation is one of four firms to be issued with a cease and desist order for selling health insurance plans illegally in Kansas.

Real Benefits Association, Serve America Assurance, American Trade Association and Smart Data Solution were all registered outside of Kansas and have been linked with a series of scams which involved the soliciting of phoney health plans.

“We had a series of customer complaints and obtained material from other states about the selling of fraudulent health plans,” said Sandy Praeger, Kansas Insurance Commissioner. “We found that these organisations were not authorised to sell insurance in this state.”

According to Praeger, consumers were encouraged via email or fax to dial a freephone number to obtain more affordable health insurance plans. A series of complaints from policyholders followed when they discovered that claims were not being paid.

Since ordering the firms to stop selling insurance in the domicile, tracking down the perpetrators has proved difficult. Praeger said that “multi-state action may well be needed” to prevent the firms striking again.

Prior to the action of the Kansas Department of Insurance, several other states – including Ohio and Indiana – had taken action against the organisations.

In July of last year, Ohio De¬partment of Insurance issued enforcement action against Beema Insurance Co – an insurance company licensed in Pakistan and the reported parent of Serve America Assurance and Smart Data Solutions (a third-party administrator) and a partner of Real Benefits Association.