Bryan Cohen Sep. 2, 2014, 9:51am

BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a $1.3 million settlement on Thursday with an insurance company and its subsidiary to resolve allegations of deceptive marketing.

Guarantee Trust Life Insurance Company (GTL) and its subsidiary Vantage America Solutions Inc. (VAS) allegedly unfairly and deceptively marketed and sold a discount health plan to hundreds of Massachusetts consumers. The companies allegedly falsely represented that a discount health plan would allow Massachusetts residents to meet the state's health insurance mandate. They also allegedly misled consumers to think that the plan was health insurance.

“Companies offering discount health plans need to make clear disclosures about their products, including that they do not satisfy the state’s health insurance mandate,” Coakley said. “We will not accept companies engaging in illegal sales practices that mislead vulnerable individuals who are seeking actual health insurance. We are pleased that this settlement will result in relief for Massachusetts consumers.”

Under the terms of a consent judgment, GTL and VAS must pay a total of $1.3 million, which includes restitution and civil penalties. The companies are also prohibited from misrepresenting a discount health plan as health insurance that meets the state mandate.

Coakley's office previously reached a civil default judgment with Consumer Health Benefit Association (CHBA) and National Benefits Consultants LLC (NBC), two companies that were co-defendants in the lawsuit filed against GTL and VAS in 2009. CHBA and NBC agreed to pay $2.4 million to resolve the allegations.

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