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 health insurance and made misleading statements about sure short-term medical and restricted profit indemnity plans, in addition to supplemental merchandise equivalent to telemedicine, prescription low cost, and imaginative and prescient and dental low cost plans.
In accordance with the FTC’s grievance, Assurance’s telemarketers adopted firm scripts that overstated protection, promised steep “repricing” reductions with out substantiation, and enrolled prospects in supplemental merchandise with out clear disclosure or consent.
“The Defendant has deceived customers out of a whole lot of thousands and thousands of {dollars} via the misleading gross sales of those healthcare plans,” the FTC stated 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 via an agent. The startup flew under-the-radar within the Seattle area and by no means raised any outdoors 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 12 months after missed monetary targets and authorities inquiries. It laid off 112 employees in Seattle, based on a state submitting.
Beneath a stipulated courtroom order, Prudential — as Assurance’s mother or father firm — will assure cost and compliance with the settlement phrases.
The FTC’s motion, filed this week in federal courtroom in Seattle, is a part of a broader $145 million settlement that additionally contains Los Angeles-based MediaAlpha, accused of deceptive customers via misleading lead era practices and robocalls.
