TDI Closes Alleged Houston-Based Scam
Texas Insurance Commissioner Jose Montemayor issued an emergency cease-and-desist order to shut down an unlicensed Houston-based entity that provides back-up coverage for questionable health plans that cover the employees of almost 900 companies in 15 states.
The order names Britannia International Life & Casualty Ltd. and Lyndal Ray Stocks, a Houston insurance agent identified by the Texas Department of Insurance as the operator of Britannia.
“We don’t want unlicensed insurance companies operating out of Texas and harming people across the country,” Montemayor said. “There are reasons why some people claiming to be insurers don’t get licensed, and none of them are good.”
According to TDI’s staff application in support of the cease-and-desist order, Britannia sold “stop-loss coverage” to employers participating in United Employers Voluntary Employees Beneficiary Association and/or American Benefit Plans, an unauthorized health plan that TDI shut down in March 2002. It has continued to provide stop-loss coverage to employers in Texas since that time.
Employer health plans buy stop-loss coverage to cap their liability for employee health claims at a specified dollar limit. Some stop-loss plans are triggered when an individual employee’s claim reaches a particular amount. Others are triggered when all claims against an employer plan reach a certain amount in the aggregate.
Britannia uses a number of addresses in Belize, but TDI investigators could find no record of Britannia’s actual existence there. Stocks represents himself as the president of Britannia and operates its U. S. business out of an office at 16151 Cairnway Drive in Houston.
Britannia and Stocks have the right to request a hearing before Montemayor and to appeal his order to the courts. Violation of an emergency cease-and-desist order may be punished by a fine of up to $25,000 per violation, plus restitution to victims.