Stockholder Claims Health Insurance Innovations Failed to Disclose Denied License

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Health Insurance Innovations, Inc., its former and current chief executive officers, and its chief financial officer are facing a proposed class action lawsuit alleging the defendants failed to disclose to stockholders material information concerning the company’s licenses to do business in several states. The complaint outlines several press releases posted between March 2016 and August 2017 in which the defendants allegedly projected positive financial expectations for the coming months and years. On August 4, 2017, however, the defendants reported that Florida’s Office of Insurance Regulation (OIR) had denied the company’s application for a third-party administrator license in the state of Florida, the suit notes.

About a month later, the complaint alleges, a research report disclosed to the public that the defendants had ignored OIR instructions in “its three application filings over a period of eight months” and had repeatedly requested extensions only to resubmit incomplete applications. The report also revealed the company’s appeal to challenge the OIR’s decision, the suit says, in which it reportedly admitted that a denial of its TPA license would “hamper or substantially harm” its core business and affect its ability to practice in other states.

Upon this news, the plaintiff alleges, Health Insurance Innovations stock prices fell 21.91 percent, subjecting stockholders to significant financial injury. The suit argues that the defendants intentionally omitted this information from its public filings and press releases in violation of federal securities law.