State Says Irvine Firm Failed to Pay Claims : Texas Temporarily Bars Rubell Helm Insurance

The state of Texas has temporarily barred Rubell Helm Insurance Services Inc. in Irvine from conducting business in the state, charging that the company failed to pay claims on insurance policies it sold.

The Texas attorney general’s office, which issued a temporary restraining order Thursday, also said the firm, which administers health benefits plans, had not been licensed to do business in Texas.

Attorney general’s office spokesman Ron Dusek said the firm signed up 60 employers under health and life plans but had not paid some of the claims under the policies. He said the state hopes to permanently bar Rubell Helm from marketing its products in the state.

James B. Helm, a principal in the firm, said claims were paid, and he questioned the state’s authority to regulate his firm.

Firm Employs 60

Helm, president of the agency that employs about 60 people, has said his company’s products are not marketed as fully insured plans. Rather, he said they are self-financed trusts and do not fall under the state’s control.

“Instead of buying coverage with the premiums we received, we established trust funds out of which claims are paid, up until a certain amount,” he said. “Amounts in excess are paid by obtaining coverage from a re-insurer.”

Texas is the third state this year to accuse Rubell Helm of not paying claims. In March, the California Insurance Department accused the firm of failing to buy health and life policies for 10,000 customers and allowing at least $4.3 million of claims to go unpaid.

Helm, who said his firm acted responsibly in California, criticized state investigators, accusing them of lying about the facts and not understanding the situation.

He said Florida’s insurance regulators also filed suit against the Rubell Helm in March and ordered the company out of that state. Helm said that the suit was recently settled and that his firm has agreed to set up a trust to pay unpaid claims.