State seeks to discipline county over fair insurance

The Office of the Montana State Auditor, Commissioner of Securities and Insurance is proposing disciplinary action against Cascade County for arranging insurance for some vendors at the Montana State Fair in 2013 and 2014 when it’s not a licensed insurance provider and misrepresenting the cost.

In at least 2013 and 2014, Montana ExpoPark, the county-owned and operated state fairgrounds, offered potential food vendors the option of obtaining insurance through Cascade County, according to Notice of Proposed Agency Action filed in June by staff of Commissioner of Securities and Insurance Monica Lindeen.

The county provided the insurance brochures to the vendors and collected money as a premium to pay for the insurance, the notice says.

The county then applied to the United State Fire Insurance Co. on behalf of those vendors.

The complaint notes that the county is not a licensed insurance producer in Montana, and that state law says a person can’t sell insurance unless they are licensed.

The vendors paid the county between $150 and $400 each for liability coverage through U.S. Fire.

The county paid U.S. Fire $75 to $105 for the insurance policies.

The office also alleges that Cascade County violated state law by misleading vendors that the cost of insurance was greater than the actual premium, and pocketing the extra amounts paid by the vendors.

The Office of the State Auditor, Commissioner of Securities and Insurance is seeking administrative fines not to exceed $25,000 per violation, pursuant to state law, and restitution to people who paid the county more in premium than the insurance actually cost.

“My understanding is those refunds were issued back when we first became aware of it being an issue,” said Carey Ann Haight, the county’s chief civil attorney, adding it was an old matter that had been resolved.

The county has yet to file a formal response to the state’s notice.

“But we are at working with their attorney, and we hope to have it resolve amicably,” Haight said.

The complaint does not say how many vendors were sold the insurance and overcharged. The Tribune reported in 2014 that four vendors purchased insurance through ExpoPark in 2013 with most vendors choosing to buy their own.

It’s the job of the Office of the Montana State Auditor, Commissioner of Securities and Insurance to protect insurance consumers.

“I’m glad, because now maybe we’ll get some answers,” Rose Stone, a food vendor, who first complained about the county’s practice in 2014, said of the state’s action.

She first purchased the insurance through the county in 2013, and the cost was $400.

The next year, in 2014, she decided to contact the insurance company directly about obtaining the insurance and the cost was $100, she said.

She complained and the county issued here a refund of $300.

“It was like I was labeled as a troublemaker because I reported something that was wrong,” she said.

Sanjay Talwani, press secretary for the Office of the Montana State Auditor, Commissioner of Securities and Insurance, said the number of violations has yet to be determined.

The case is scheduled to be heard before a hearing examiner Dec. 21 and Dec. 22, Talwani said. That’s a quasi-judicial hearing at which both sides can present their cases and call witnesses.

Some cases, he noted, get settled before the hearings.

The Tribune reported in 2014 that the issue was brought to the attention of commissioners just prior to the 2014 State Fair.

At the time, county officials said Montana ExpoPark offered to arrange for the insurance as a convenience with service fees added to the cost of the premium.

Follow Karl Puckett on Twitter @GFTrib_KPuckett