Insurance salesperson from Seattle accused of making false claims, ordered to pay $100M in compensation
Assurance IQ, a Seattle-based insurance marketing company, has agreed to pay $100 million to settle charges of deceptive sales tactics primarily involving the misrepresentation of short-term medical (STM) and limited benefit indemnity (LBI) health plans.
The Federal Trade Commission (FTC) alleged that Assurance IQ's telemarketers used scripted calls to falsely claim these plans provided comprehensive coverage, including coverage for preexisting conditions, no caps on benefits, and access to wide provider networks—none of which were true. They also misled consumers into believing that supplemental products such as telemedicine, prescription discount, and vision and dental plans were included when these were separate and came with additional fees. Additionally, the company was accused of enrolling consumers and charging them without their clear, informed consent, violating the FTC Act and Telemarketing Sales Rule (TSR).
Founded in 2016 by Michael Rowell and Michael Paulus, Assurance IQ grew quietly to unicorn status and was acquired by Prudential Financial in 2019 for $2.35 billion. However, the company faced missed financial targets and government scrutiny, leading to its eventual shutdown by Prudential in May 2024, just five years after the acquisition.
The FTC’s complaint alleges that deceptive telemarketing led consumers into purchasing plans that left them exposed to high out-of-pocket medical expenses due to coverage restrictions and benefit limits, which were not properly disclosed.
To settle the allegations, Assurance IQ agreed to a $100 million judgment to refund affected consumers and to abide by court orders banning misrepresentations about health plan costs and features, as well as prohibiting billing without prior informed consent. This settlement was part of a broader $145 million FTC action that also involved MediaAlpha, another company accused of misleading health insurance marketing.
Consumers who believe they may be owed a refund can visit FTC.gov/redress to learn about the process. The settlement does not admit or deny the FTC allegations.
[1] FTC Press Release: Assurance IQ to Pay $100 Million to Settle FTC Charges of Deceptive Tactics in Selling Health Care Plans, https://www.ftc.gov/news-events/press-releases/2023/03/assurance-iq-pay-100-million-settle-ftc-charges-deceptive
[2] FTC Complaint: Assurance IQ, LLC, https://www.ftc.gov/system/files/documents/cases/assurance-iq-llc-complaint.pdf
[3] FTC Press Release: FTC Settles with MediaAlpha Over Deceptive Health Insurance Marketing, https://www.ftc.gov/news-events/press-releases/2023/03/ftc-settles-mediaalpha-over-deceptive-health-insurance
[4] FTC Press Release: FTC Sues Assurance IQ Over Deceptive Tactics in Selling Health Care Plans, https://www.ftc.gov/news-events/press-releases/2022/09/ftc-sues-assurance-iq-over-deceptive-tactics-selling
[5] FTC Press Release: FTC Sues Assurance IQ Over Deceptive Tactics in Selling Health Care Plans, https://www.ftc.gov/news-events/press-releases/2022/09/ftc-sues-assurance-iq-over-deceptive-tactics-selling
- The government agency, the Federal Trade Commission (FTC), has announced that Seattle-based insurance marketing company Assurance IQ, known for its deceptive sales tactics, will pay $100 million to settle charges relating to business practices involving health care plans, including short-term medical and limited benefit indemnity plans.
- As a result of this settlement, Assurance IQ is required to issue refunds to affected consumers and abide by court orders that prohibit the company from making misrepresentations about health plan costs and features, as well as from billing without prior informed consent.
- According to the FTC, the deceptive practices of Assurance IQ led consumers to purchase health care plans with benefit limits and coverage restrictions that were not properly disclosed, adversely affecting their lifestyles and personal health care needs.
