Judge: Insurer broke order, must pay $481K

A Polk County District Court judge has ordered nearly half a million dollars in penalties against the Senior Health Insurance Company of Pennsylvania, Pennsylvania's insurance commissioner and the company's court-appointed rehabilitator for violating an Iowa injunction meant to protect policyholders.

Judge Scott Beattie on Aug. 31 found the defendants in contempt of court for sending unauthorized mailings to Iowa policyholders of long-term care insurance, despite a 2023 order barring them from changing benefits or rates without approval from Iowa regulators. The court assessed $481,500 in civil penalties — $500 for pursuing an out-of-state court order, plus $500 for each of the 962 mass mailings sent to Iowa residents this spring.

Iowa Insurance Commissioner Doug Ommen sued SHIP in 2022 after the company, which is under rehabilitation proceedings in Pennsylvania, sought to implement its "Second Amended Rehabilitation Plan" in Iowa without regulatory approval. Ommen said the company's efforts to force policyholders into higher premiums and reduced coverage violated Iowa law and caused widespread confusion among elderly policyholders. "Many of these policyholders are older and many are on claim in long-term care facilities," Ommen said in a statement. "We urge any policyholders to reach out to our office with questions or concerns so they can make informed decisions."

Testimony during the contempt hearing showed the mailings alarmed families and confused policyholders, some in their 80s and 90s. The court ruled each mailing represented a separate act of contempt, noting that SHIP deliberately sought authorization from Pennsylvania courts despite explicit warnings from Iowa regulators.

The order requires SHIP and Pennsylvania officials to immediately cease any further violations and pay the penalty within 30 days. Similar litigation is ongoing in North Dakota.

Policyholders or their families with questions are urged to call Sue Wittmack at 515-654-6606.