Health Insurance Innovations Shares Slump 16%; Disputes Third-Party Report’s Estimate on Indiana Fine

Health Insurance Innovations (HIIQ) shares fell 16% on Tuesday after the company said it is still in discussions with regulators regarding an investigation led by the Indiana Department of Insurance into conduct in several markets and that it doesn’t believe a third party report’s estimate for a potential fine has any basis in fact.

“A third-party report published yesterday referred to a potential estimated combined fine amount of $100 million, which the author based on unstated or inapplicable data points,” Health Insurance Innovations said. “This amount does not correspond to any estimates, analyses, or communications undertaken or made by the company, and the company does not believe that this number has any basis in fact.”

The company was informed about the “multistate” examination in May of 2016, according to its regular quarterly report filing with the Securities and Exchange Commission.

“In addition to the multistate examination led by Indiana, we are aware that several other states, including Florida and South Dakota are reviewing the sales practices and potential unlicensed sale of insurance by independently owned and operated licensed-agent call centers utilized by the company.,” the company said in the filing from Aug. 4.

Meanwhile, with regards to Florida’s denial in June of the firm’s application for a third-party insurance administrators (TPA) license in the state, Health Insurance Innovations said a final hearing on its appeal of that decision is on hold. Previously the hearing had been scheduled for Oct. 17-20.

The company said it is in dialogue with the Florida Office of Insurance Regulation on a potential resolution that would enable it to withdraw the appeal and either re-submit the application or engage in discussions regarding whether the OIR will require the company to hold a TPA license at all.

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