The Federal Commerce Fee reached a $100 million settlement with Assurance IQ, the now-defunct Seattle-area insurance coverage know-how startup acquired by Prudential Monetary in 2019 for $2.35 billion.
The FTC alleged that Assurance misled customers searching for medical insurance and made misleading statements about sure short-term medical and restricted profit indemnity plans, in addition to supplemental merchandise resembling telemedicine, prescription low cost, and imaginative and prescient and dental low cost plans.
In keeping with the FTC’s grievance, Assurance’s telemarketers adopted firm scripts that overstated protection, promised steep “repricing” reductions with out substantiation, and enrolled clients in supplemental merchandise with out clear disclosure or consent.
“The Defendant has deceived customers out of tons of of tens of millions of {dollars} by means of the misleading gross sales of those healthcare plans,” the FTC mentioned in its grievance.
Based in 2016 by Michael Rowell and Michael Paulus, Assurance used know-how to match customers with insurance policy bought on-line or by means of an agent. The startup flew under-the-radar within the Seattle area and by no means raised any exterior capital because it quietly reached unicorn standing as a $1 billion firm.
The corporate’s acquisition to Prudential was one of many largest insurance coverage tech exits ever.
Prudential shut down Assurance final yr after missed monetary targets and authorities inquiries. It laid off 112 staff in Seattle, in accordance with a state submitting.
Underneath a stipulated court docket order, Prudential — as Assurance’s dad or mum firm — will assure fee and compliance with the settlement phrases.
The FTC’s motion, filed this week in federal court docket in Seattle, is a part of a broader $145 million settlement that additionally consists of Los Angeles-based MediaAlpha, accused of deceptive customers by means of misleading lead era practices and robocalls.
Keep forward of the curve with NextBusiness 24. Discover extra tales, subscribe to our e-newsletter, and be part of our rising neighborhood at nextbusiness24.com
