(Iowa Capital Dispatch) – A long-running dispute between insurance commissioners in Iowa and Pennsylvania has escalated, with Iowa regulators arguing that hundreds of elderly Iowans are now being put at risk due to a company’s willful violation of a court order. In 2022, Iowa Insurance Commissioner Douglas Ommen sought an injunction against the financially struggling Senior Health Insurance Company of Pennsylvania, or SHIP, arguing the company intended to “coerce vulnerable Iowans” into paying confiscatory rate increases of 400% or more, even while imposing “draconian” cuts to policyholders’ benefits. At the time, Ommen said SHIP, which had sold long-term care insurance policies to more than 880 Iowans, was financially insolvent with a $1.3 billion funding shortfall.

The injunction, which was later granted, barred SHIP from offering any rates, riders or policy documents to any Iowa policyholders that had not been previously authorized and approved by the Iowa insurance commissioner. In January 2025, SHIP informed the Iowa insurance commissioner the company had filed a request with the commonwealth court of Pennsylvania to begin implementing a court-approved “rehabilitation plan” for the company, allowing SHIP to contact Iowa policyholders and to offer, or in some cases force, changes to their policies. The Iowa commissioner then informed SHIP that even if the Pennsylvania court granted the request and the company followed through, it would be in clear violation of the injunction issued in Iowa. Under that scenario, the commissioner warned, he would authorize the Iowa attorney general to seek sanctions against SHIP.

According to newly filed court papers in the case, SHIP “did not back down” and now intends to “unilaterally modify all Iowa SHIP policies” between May 31 and Oct. 28. According to the Iowa commissioner, there are now 501 SHIP policyholders in Iowa who in April were the target of a mass mailing informing them of potential modifications to their policies. The Iowa commissioner alleges it never authorized SHIP to contact any Iowa policyholders and that the Iowa court has never modified its injunction barring such contact.

In pursuing a contempt-of-court finding against SHIP, the Iowa commissioner is arguing that SHIP’s conduct is “beyond the pale” and that SHIP, has “no intention of respecting the laws or court orders of any jurisdiction outside of Pennsylvania. Their contact with Iowa policyholders was not a fluke, or an accident, or a one-off violation; it was a deliberate plan months in the making, with the full knowledge that it would violate the temporary injunction.”

The Iowa commissioner not only seeks a finding of contempt, it is also requesting a civil penalty of $500 for each of 503 acts on contempt. The company has yet to file a response to that request.