Plaintiff stated a viable unfair competition law claim by alleging that the insurer paid almost 5% of his Medicare gap insurance premiums to the American Association of Retired People as a disguised commission even though it was not a licensed California insurance agent. A plaintiff who bought Medicare gap insurance through the AARP Insurance Plan, partnered by AARP with UnitedHealth Care Insurance Co., properly alleged a UCL claim against AARP for unlawful and fraudulent business practices. He alleged that almost 5% of all premiums paid for the insurance were paid by UnitedHealth to AARP and that AARP solicited its members and others to buy the insurance—even though AARP was not a licensed insurance agent in California. This was sufficient to allege a violation of Insurance Code 1633 and thus an unlawful business practice. The practice was also sufficiently alleged to be fraudulent because AARP called the payments it received a “royalty” to cover AARP’s expenses in connection with the insurance program whereas in fact it is a disguised commission and more than just expense reimbursement. Whether the filed rate doctrine provides a defense is left for the district court to sort out on remand.
Ninth Circuit Court of Appeals (Parker, J., sitting by designation); May 3, 2017; 2017 WL 1657553