Feb. 19, 2003 –– Mutual of Omaha individual health insurance policyholders in the territory are out of luck when it comes to renewing their policies, as the company has announced it will no longer write individual health insurance policies.
Carl Gotts of Gotts and Associates Insurance said the company recently sent him a notice not to write new or renew health insurance policies effective immediately.
He said that while he hasn't received official notice from the company on how to deal with existing policies, he said that historically insurance companies do not cancel current policies. Rather, they won't renew them when the policies expire.
Gotts said the problem will be particularly acute for sole proprietors who have no employees because they are usually not eligible for group plans.
He said people who can qualify for a two-person group will face higher premiums. However, their policies will be better.
Gotts said that all agencies in the territory wrote policies for Mutual of Omaha. He said the company offered the best individual health insurance policy.
"I felt more confident," he said.
He said Mutual of Omaha was rated by Weiss Ratings Inc. as A-, which is an excellent rating. Information from Weiss indicates that Mutual of Omaha is among the safest companies to consider.
He said that Mutual of Omaha's departure leaves the territory with only Clarendon, Atlantic Southern and Amidex, none of which impressed him.
"And there are no new companies on the horizon," he said.
Amidex gets a C- from Weiss, which indicates the company offers fair financial security and is currently stable. However, Weiss indicates that in an economic downturn, it may have difficulty maintaining its financial stability.
Clarendon has a D+ rating. Weiss advised people looking for insurance to try and find a policy from a safer company because it has significant financial weaknesses, which could get worse in a bad economic climate.
Atlantic Southern holds a D- rating from Weiss. This indicates the company has significant weaknesses that could negatively impact policyholders, particularly in an unfavorable economic climate.
Virgin Islands policyholders are not alone in their insurance woes. Mutual of Omaha will also stop writing individual health insurance policies in 36 states and Washington, D.C.
Efforts to find out more information from Mutual of Omaha were unsuccessful.
Deverita Sturdivant, who serves as director of banking and insurance at the Lieutenant Governor's office, said she was not aware of the Mutual of Omaha situation.
Gotts said that health insurance is no longer an attractive business to insurance companies.
"It is no longer cost effective. I'm sure it was purely a business decision," he said.
Sturdivant said that the entire nation has a health insurance crisis.
"It needs to be addressed, perhaps legislatively," she said.
However, she said that pooling arrangements that group together policyholders tend not to work in small areas like the territory because it doesn't spread the risk enough. This method is used in other locations.
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