On Wednesday, the Securities Exchange Commission (SEC) announced by press release charges against Health Insurance Innovations (HII) and its former CEO Gavin Southwell for the concealment of extensive consumer complaints regarding its health insurance products.
The press release states HII and Southwell falsely claimed to investors that HII’s consumer satisfaction was near perfect in earnings calls and investor presentations; however, in reality, HII charged consumers for unauthorized products, failed to honor consumer requests to cancel insurance plans, and tracked tens of thousands of consumer complaints.
HII and Southwell are also accused of misrepresenting the high compliance standards—standards which prevent misrepresentation of health insurance products—of its insurance distributors to customers.
According to the press release, the order finds that HII’s insurance products did not qualify as health coverage under the Affordable Care Act, leaving many consumers with unpaid medical bills when they sought treatment.
Stacy Bogert, Associate Director of the SEC’s Division of Enforcement, is quoted, “Access to healthcare and consumer satisfaction are increasingly important considerations to investors. It is critical that disclosures are truthful and complete, and we will hold companies and their executives accountable for misleading investors about these factors.”
The press release concludes, stating, HII and Southwell consented to a cease and desist order without admission or denial of the SEC’s findings and allegations.