Zoom Health Plan Inc. affiliate Zoom Management Inc. and two of its executives will pay $285,000 in civil penalties after reaching a settlement with the Oregon Department of Consumer and Business Services, or DCBS, in a lawsuit over a surplus note payment.
As part of the deal, Zoom Management and Zoom Health will pay $2.1 million in cash to cover member claims and company liabilities. The entities have been fined $150,000 for violating the insurance code. Zoom Health filed financial statements that included a $3 million surplus note for which it had not received the funds. The regulator also agreed not to probe the issue any further.
The regulator fined Zoom's co-founder and CEO David Sanders $100,000 and penalized co-founder Albert DiPiero $35,000 for filing financial statements late. Further, the deal mandates that Zoom Health members be allowed to retain their current health coverage until the end of the year.
"The size of these fines show that DCBS will not tolerate repeated violations of the insurance code," said Jean Straight, acting director of DCBS.