Legal: Suspension of business in the IPMI sector as IMG faces allegations of unlicensed insurance sales
A Florida-based investigation into the insurance-related activities of international private medical insurance (PMI) provider, IMG Europe's parent company, International Medical Group (IMG) and its underwriter, Sirius International, has raised concerns among PMI intermediaries in the UK.
Allegations that both Sirius International and IMG may have violated the Florida Insurance Code by underwriting and managing unapproved health insurance policies, which were then sold to residents in Florida, prompted the State's Office of Insurance Regulation (OIR) to issue notice of hearing to determine whether both firms are guilty of "unfair or deceptive acts or practice and/or engaging in the business of insurance without being properly licensed."
Although IMG is licensed by the Indiana Department of Insurance in the US, the investigation will determine whether both firms have been unlawful by operating without a license in the State of Florida.
IMG's subsidiary, IMG Europe, launched into the UK market in May.
Although a separate company authorised and regulated by the FSA, two UK intermediaries have decided to suspend all sales of IMG's products until a decision in Florida has been made.
Commenting, Paul Walker, managing director of Essential Health, said: "We are simply erring on the side of caution. If there is no case to answer to, then we will be more than happy to resume our relationship with IMG. However, we will maintain the suspension of sales and promotion of IMG policies until such time."
Carl Carter, managing director of IMG Europe, said the firm had received positive feedback since its launch but could not discuss the situation in the US.
"I cannot comment on IMG matters in the US, however I can confirm that we chose to proactively raise the subject with the FSA and are in open dialogue with them," he said.
Robin Gordon-Walker, spokesperson for the FSA, has confirmed the regulator is aware of the situation but stressed that the case in the US was entirely separate from EU law.
"As a subsidiary, IMG Europe is a separate company and subject to EU legislation. We are aware of the situation in Florida, and in cases where an outcome might be quite significant, we follow all developments as we need to be well informed," he said.
However, there are still concerns in the intermediary market in the UK should the outcome of the investigations in Florida go against IMG and Sirius.
Demands are being made for clearer guidance from the UK health insurance industry on handling such matters.
"The investigations into the activities of both Sirius and IMG are serious," said Leslie Smith, managing director at Medibroker.
"We reluctantly suspended worldwide sales of all IMG products until the outcome of the Florida investigation is determined."
Explaining the reason behind his decision, Smith added: "We are being placed in an impossible position as a 'controlled FSA function.' If no one will give us a formal view as to whether or not we should continue to sell IMG plans from either the US or IMG Europe, then what are we to do? Carry on selling despite the major regulatory action in Florida?" Both AMII and BIBA have been notified about the concerns and are closely monitoring the situation.
Commenting, Steve White, regulation and compliance manager at BIBA, said: "We take very seriously any allegations that may adversely affect our members and their customers."
Confirming the pending outcome, Clifford Taylor, senior attorney at the OIR in Florida, said a decision is imminent: "After looking through received documentation, we have determined it not necessary to have a hearing, but sufficient to render an order to determine whether there has been a violation in Florida. This is scheduled for the first two weeks in July."
