DOI News

For Immediate Release: Contact:
September 1, 2009 Kristin Milam
Johanna Royo
Southport Business Owner Arrested on Charges of Insurance Fraud
Department investigators see dramatic increase in complaints about lapsed insurance
RALEIGH -- Insurance Commissioner Wayne Goodwin today announced the arrest of Doranne Phillips Flynn, 53, 4136 Churchill Circle, Southport. Flynn is charged with one count of willful failure to pay group insurance, a class H felony. According to the arrest warrant, Flynn, by withholding premium payments, caused the cancellation in November 2008, of health insurance from Blue Cross Blue Shield of N.C. for her two employees. This allegedly left the employees unaware they were without insurance coverage and unpaid medical bills totaling more than $2,000.
Flynn voluntarily surrendered to the Brunswick County Sheriff's Office. She was processed and released on a $5,000 unsecured bond. The DOI-Criminal Investigations Division began investigating Flynn when one of her employees filed a complaint with the Department after receiving a denial of payment for a doctor's visit. Current law requires insurance companies to notify the administrator of a group policy when the policy has been canceled, so for example, when an employer group policy is canceled, the company's employees may receive no notice that they are no longer covered. The Department is tracking an increase in complaints from employees who discover their coverage has been terminated without their knowledge.
The Department of Insurance employs 20 sworn law enforcement officers dedicated to investigating claims of insurance fraud. So far in 2009, these criminal investigators have seen more than 174 cases successfully closed with more than $8.6 million in restitution and recoveries, 47 criminal convictions and 86 arrests and 75 cases pending in court.
An estimated 10 cents of every dollar paid in premiums goes toward the payment of fraudulent claims. To report suspected fraud, contact the Department of Insurance Investigations Division at (919) 807-6840. Callers may remain anonymous. Information is also available at the NC-DOI Web site.
-- NCDOI --