Health Insurance Innovations Accused of Deceiving Investors Over Denied License

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An investor has filed a proposed class action lawsuit against Health Insurance Innovations, Inc., its CEO, and its CFO over claims that the defendants failed to disclose material information to stockholders regarding the company’s application for a third-party insurance administrator license in Florida. According to the suit, the defendants admitted their application had been denied but neglected to mention that the rejection was caused by “numerous, material errors and omissions” that prompted the Office of Insurance Regulation (OIR) to conclude that the company was “not competent.”

Even further, the complaint claims the defendants hid from investors the private warning they issued to the OIR of a “disastrous domino effect” the company would experience following the denied application that would cause them to lose licenses in several other states.

The suit alleges that on September 11, 2017, SeekingAlpha.com published an article about Health Insurance Innovations that exposed the allegedly withheld information and caused stock prices to drop by 22 percent.