Health Insurance Innovations Fair Fund

The purpose of the Plan Notice is to inform you that you may be eligible to share in the proceeds of the Health Insurance Innovations Fair Fund. To be potentially eligible to share in the Health Insurance Innovations Fair Fund, you must file a Claim Form in accordance with the steps set forth in the Plan Notice and in the Plan of Distribution (the “Plan”) approved by the Securities and Exchange Commission (“SEC” or “Commission”).

A copy of the Notice can be found here.

On July 20, 2022, the Commission issued the Order instituting and simultaneously settling cease-and-desist proceedings against the Respondents. In the Order, the Commission found that from March 2017 through March 2020, HII, a technology platform, billing administrator and distributor of short-term and limited health insurance products, and its CEO Southwell made a series of false and misleading statements to investors, which concealed extensive consumer complaints about products being sold through misrepresentations. HII and Southwell falsely told investors that HII held its insurance distributors to its high compliance standards, which prohibited insurance agents from making misrepresentations to consumers. HII and Southwell falsely stated that HII had 99.99% consumer satisfaction and misleadingly stated that state departments of insurance received very few consumer complaints regarding HII. HII and Southwell understated the amount of business that had been generated by its most productive distributor, Simple Health Plans LLC (“Simple Health”), which amassed the most consumer complaints. HII and Southwell misrepresented that HII had terminated its relationship with a different distributor in 2016 for compliance failures, when in fact, HII re-hired this distributor despite continuing compliance problems. These statements were made in reports filed with the Commission, press releases, earnings calls and other communications with investors. Southwell also disseminated misleading information about HII’s compliance to research analysts and a subscription news service, which included the information in research reports and a news article that were distributed to investors. In total, the Commission ordered the Respondents to pay $320,000 in disgorgement, $41,511 in prejudgment interest, and $11,750,000 in civil money penalties, for a collective total of $12,111,511, to the Commission. The Commission also created the Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties paid, along with the disgorgement and interest paid, can be distributed to harmed investors.

To qualify for a payment from the Health Insurance Innovations Fair Fund, you must satisfy certain eligibility criteria that are described in detail in the Plan. The Plan can be found under the Important Documents page or on the Commission’s public website at www.sec.gov. You can also request a copy of the Plan by calling the Fund Administrator at 1-877-676-3395 or by emailing info@HealthInsuranceInnovationsFairFund.com. The eligibility criteria include the following:

• You must have purchased and/or acquired HII common stock during the period of time from March 2, 2017, through March 12, 2019, inclusive (“Relevant Period”);
• Your approved transactions must calculate to a Recognized Loss as calculated under the Plan and your Distribution Payment must equal or exceed $10.00.

PLEASE NOTE: RECEIPT OF THE NOTICE DOES NOT MEAN THAT YOU ARE AN ELIGIBLE CLAIMANT AS THAT TERM IS DEFINED IN THE PLAN.

1. The Respondents;
2. Present or former officers or directors of Respondents or any assigns, creditors, heirs, distributees, spouses, parents, dependent children or controlled entities of any of the foregoing Persons or entities;
3. Any employee or former employee of the Respondents or any of its affiliates who has been terminated for cause or has otherwise resigned, in connection with the conduct described in the Order;
4. Any Person who, as of the Claims Bar Date, has been the subject of criminal charges related to the conduct described in the Order or any related Commission action;
5. Any firm, trust, corporation, officer, or other entity in which Respondents has or had a controlling interest;
6. The Fund Administrator, its employees, and those Persons assisting the Fund Administrator in its role as the Fund Administrator; or
7. Any purchaser or assignee of another Person’s right to obtain a recovery from the Fair Fund for value; provided, however, that this provision shall not be construed to exclude those Persons who obtained such a right by gift, inheritance or devise.

The Claim Form will require claimants to certify that they are not an Excluded Party. All Excluded Parties will be deemed ineligible to participate in the Fair Fund.

On September 18, 2023, the Commission appointed Epiq Class Action & Claims Solutions, Inc. (“Epiq”) as the Fund Administrator.

“Relevant Period” means the period of time from March 2, 2017, through March 12, 2019, inclusive. This is the period over which HII’s stock price was inflated by the company’s false and misleading statements, as could be measured by Commission staff.

In total, the Commission ordered the Respondents to pay $320,000 in disgorgement, $41,511 in prejudgment interest, and $11,750,000 in civil money penalties, for a collective total of $12,111,511, to the Commission. The Commission also created the Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties paid, along with the disgorgement and interest paid, can be distributed to harmed investors.

To participate in the Fair Fund, you must timely submit a completed and signed Claim Form with supporting documents to:

Health Insurance Innovations Fair Fund
c/o Fund Administrator
P.O. Box 4349
Portland, OR 97208-4349

A Claim Form was included with the Plan Notice and is available for download here. If you do not complete and timely submit a Claim Form, you will not be considered for eligibility to receive a Distribution Payment under the Plan.

The completed and signed Claim Form, with supporting documentation, must be postmarked, or if not sent by U.S. Mail, received at the above address by March 28, 2024. Claims postmarked or, if not sent by U.S. Mail, received after March 28, 2024, will not be eligible to participate in the distribution of the Health Insurance Innovations Fair Fund.

Please note that filing a Claim Form does not assure that you will share in the proceeds of the Fair Fund created in this matter. A Potential Claimant’s eligibility for a Distribution Payment under the Plan will be determined by the Fund Administrator in accordance with the Plan.

You must document each transaction that you include on your Claim Form. Acceptable forms of supporting documentation include, but are not limited to:

1. Trade confirmation slips from brokerage firms that list the security name, the name of the beneficial owner, the type of transaction, the date of the transaction, the number of shares, and the total amount of the transaction; or
2. Monthly statements from brokerage firms that detail all activity within a month.

Acceptable documentation must include the name of the owners of the account for which you are filing a claim, the name of the broker through whom the security was traded, trade date, number of shares purchased, acquired and/or sold, and price paid (excluding brokers’ commissions, taxes, and fees).

Acceptable documentation includes contract notes, brokers’ confirmation slips, account activity pages from brokers’ computer print outs (including the front page), or account activity pages from brokers’ monthly statements (including the front page), if those statements contain the required information. Letters from your broker are acceptable only if they are on the brokers’ letterhead and contain the required information listed above. Your own records or certificates DO NOT constitute acceptable documentation. We cannot pre-approve any documentation as acceptable without seeing it first.

Depending on how you acquired your shares of HII, you can generally obtain the necessary supporting documentation to submit with a Claim Form from:

1. Your broker;
2. Your tax advisor; and/or
3. The person/party from whom you purchased, or through whom you sold, the security.

Acceptable supporting documentation must be included with your completed Claim Form, or your claim may be rejected.

The deadline to submit a completed Claim Form with the necessary documentation is March 28, 2024. The Claim Form must be postmarked, or, if not sent by U.S. mail, received by the Fund Administrator (Epiq) by this date.

Yes, if your Claim Form is deficient, you will receive a Deficiency Notice setting forth the reason why the claim is deficient and advising you of the opportunity to cure such deficiency.

Until all claims have been fully processed, it is not possible to determine the amount of any individual payment because the amount will depend on a variety of factors, including the number of valid claims processed and the details of your specific investment(s). In order for a claim to be paid, the Distribution Payment must equal or exceed $10.00.

As a long-established firm, Epiq’s electronic systems, software applications, and employees and operational protocols are all designed to protect and secure the case information provided to us. Further, Epiq is obligated to fulfill the security requirements mandated by the various court jurisdictions and governmental entities that oversee the various types of cases it administers.

You may contact the Fund Administrator by calling toll-free 1-877-676-3395, sending an email to info@HealthInsuranceInnovationsFairFund.com or by writing to P.O. Box 4349, Portland, OR 97208-4349 for more information.

The CUSIP for HIIQ during the Relevant Period was 42225K106. The ticker symbol from March 2, 2017, through March 12, 2019, inclusive, was HIIQ.