TDI Cracks Down on Sales of Bogus Health Insurance

The Texas Department of Insurance announced it has imposed stiff sanctions against a Florida man found to be recruiting and training Texas agents to sell unauthorized health insurance plans.

Texas Insurance Commissioner Jose Montemayor signed a consent order against Herbert Wayne White of Fruitland, Fla., on Oct. 25, 2004, revoking his Texas insurance license and ordering White to pay a $235,000 penalty. White, who operated a company under his own name—H. Wayne White & Associates—sold insurance for a company called National Health Plans Plus Inc. Both White and National Health Plans Plus, neither of which is licensed to operate in Texas, were ordered to cease and desist their unauthorized insurance business operations in Texas.

The fraudulent health insurance plans were marketed under the names TRG and American Benefit Plans (ABP). The plans did not pay benefits to the people who bought the policies. Policyholders with TRG and ABP were left with completely unpaid health care claims. A Travis County court appointed Commissioner Montemayor as receiver of American Benefit Plans, a Texas company. Its policyholders will receive a percentage of the amounts owed on their claims.

Among the victims of the unauthorized insurance scheme were two local Texas school districts.

TDI’s order states that the $235,000 penalty can be reduced by the amount paid in restitution to policyholders, up to $220,000.

“Of all the types of insurance fraud, unauthorized health schemes are one of the most insidious,” Montemayor said. “It not only steals people’s hard-earned premium dollars, but it leaves them holding medical bills when they’re in a time of greatest need.”