Fred Meyer Fined $100,000 for SellingUnlawfully, Selling, Insurancein Washington

Fred Meyer Stores faces a $100,000 fine for selling unlicensed insurance plans in Washington state from 2016 to 2022. The company sold GUARD Protection Plans without proper state authorization, violating insurance regulations.

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Dil Bar Irshad
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Fred Meyer Fined $100,000 for SellingUnlawfully, Selling, Insurancein Washington

Fred Meyer Fined $100,000 for SellingUnlawfully, Selling, Insurancein Washington

Fred Meyer Stores, Inc. faces a $100,000 fine from the Washington State Insurance Commissioner's office for selling unlicensed insurance plans in the state from June 2016 to November 2022. The company sold GUARD Protection Plans, issued by Mack Camera & Video Service, to consumers without proper state authorization.

Why this matters: This case highlights the importance of regulatory oversight in the insurance industry, ensuring that companies comply with state laws and regulations to protect consumers. Failure to do so can result in significant financial consequences for companies and erosion of trust in the industry.

According to the Insurance Commissioner's office, Fred Meyer received $40 per contract sold from Mack Camera & Video Service, despite not being licensed to sell insurance in Washington state. The issue came to light when a consumer filed a complaint with the Office of the Insurance Commissioner (OIC) about the service contract, alleging claim delay and misrepresentation.

Upon investigation, the OIC determined that the GUARD plan constitutes a service contract and insurance. The OIC stated, "Service contract providers must register with the Insurance Commissioner's office to do business in Washington state."

Fred Meyer has 90 days, until July 30, 2024, to request a hearing regarding the fine. If no hearing is requested, the $100,000 fine will be due within 30 days. The Kroger Co., Fred Meyer's parent company, declined to provide the total number of GUARD products sold to Washington consumers, the amount Fred Meyer received from GUARD sales, or what service contractor would be providing service contracts after its contract with Mack ended.

The Insurance Commissioner's office has been actively enforcing state insurance laws and regulations. In April, the office issued $22,000 in fines to several companies, including American Guarantee & Liability Insurance Company, Olga Radutskiy of Pronto Insurance Agency, Kaiser Foundation Health Plan of the Northwest, Esurance Insurance Company, and Forethought Life Insurance Company for various violations.

Since 2001, the Insurance Commissioner's office has assessed more than $41 million in fines, which are directed to the state's general fund to pay for state services. The office publishes disciplinary orders against companies, agents, and brokers, and consumers can look up complaints against insurance companies.

Consumers with insurance questions or complaints can seek assistance from the Insurance Commissioner's consumer advocates, who can be contacted online or by phone at 800-562-6900. The Fred Meyer case highlights the importance for consumers to be vigilant when purchasing insurance or service contracts and to verify that the provider is properly licensed in their state.

The investigation into Fred Meyer's unlicensed insurance sales is now concluded, with the company facing a $100,000 fine. The case highlights the importance of regulatory oversight in the insurance industry and the potential consequences for companies that fail to comply with state laws and regulations. Fred Meyer has until July 30, 2024, to request a hearing or pay the fine within 30 days if no hearing is requested.

Key Takeaways

  • Fred Meyer faces $100,000 fine for selling unlicensed insurance plans in Washington state.
  • The company sold GUARD Protection Plans without proper state authorization from 2016 to 2022.
  • Fred Meyer received $40 per contract sold, despite not being licensed to sell insurance.
  • The Insurance Commissioner's office has assessed over $41 million in fines since 2001.
  • Consumers should verify that insurance providers are properly licensed in their state.