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The Honolulu Advertiser

Posted on: Wednesday, July 18, 2001

Insurer to pay $50,000, give up Hawai'i license

By Glenn Scott
Advertiser Staff Writer

The operator of Hawai'i Healthcare Alliance has agreed to pay a $50,000 fine, give up his insurance license in Hawai'i and refrain from further insurance business in the state, according to a settlement disclosed yesterday.

State Insurance Commissioner Wayne Metcalf said the settlement reached Monday with Darren Larson, concludes the state's effort to take disciplinary action for violations in running a medical insurance program that became insolvent after less than a year.

Larson's wife, Linda, and his mother, Lydia Graham, also agreed to refrain from business as part of the agreement. Metcalf said the settlement does not restrict other continuing actions to conduct a court-supervised liquidation or to identify parties responsible for outstanding claims that total more than $500,000.

He said his office could have sought a larger fine, but that would have reduced Larson's capacity to cover claims from physicians, hospitals and an estimated 3,000 insurance clients, mostly small businesses and self-employed people.

"We want to make the creditors as whole as possible," Metcalf said.

Larson, of Lake Jackson, Texas, did not attend the settlement hearing Monday. His lawyer, David Gierlach, was unavailable for comment yesterday afternoon. The agreement came after two earlier postponements of license-revocation hearings against Larson

Larson formed Hawai'i Healthcare Alliance in January 2000 and marketed it through Design Benefits Insurance Services. By November, it was declared insolvent. Circuit Court Judge Sabrina McKenna in January of this year ordered Larson's business liquidated, saying it lacked the resources to meet its obligations.

Metcalf said he wants to move ahead quickly on resolving the claims. "But with litigation involved, we can't dictate the time frame."