Perhaps you can also file this under "American Horror Story". Let me tell you about two cases of mine. The names have been changed because they are both still ongoing cases, but I can share enough detail to explain my point without violating any confidentiality.
In one case, the employer has been criminally charged because he put down the wrong classification code on the application and the insurance company didn't catch it for several years. By the time the insurance company got around to figuring out that they didn't think the policyholder's expertise in classifications was very good, the insured company had gone out of business and the insurer couldn't get the money they felt they were owed.
So they got their friendly neighborhood prosecutor to file criminal charges. And now, as part of the negotiations to try and avoid a criminal trial, the insurer has suggested "restitution"--that is, pay them their money and they will arrange to have the criminal prosecution dropped.
My second case involves a major property/casualty insurance company that has just billed a policyholder for audited premium in excess of $700,000--from a policy that had an original premium of only around $1,500.00. Yes, this employer bought a policy that he thought was going to cost $1,500--but the insurance company has retroactively sent a bill for more than $700,000.00 for that same policy.
And the galling thing is that this $700,000 bill is based on the insurance company ignoring the well-established rules that govern premiums in the particular state involved.
When this problem was brought to the attention to state insurance regulators, and NCCI, they all agreed it seemed to be wrong--and then collectively washed their hands and said there was nothing they could do. The policyholder should go to court, they helpfully suggested.
So, when the insurance industry feels an employer has based premium on a faulty or incorrect understanding of their arcane rules, and then can't pay what the insurance company feels is the proper premium, they get criminal charges filed.
But when an insurance company comes up with an outrageously inflated premium bill that is based on a clear and flagrant disregard for the rules that apply in a particular state, though, the insurance regulatory system shrugs and suggests the policyholder consult an attorney.
Does anyone else feel like something is wrong here?