Insurance Commissioner Doug Ommen.

An insurance brokerage based in Burlington recently agreed to pay a group of Iowa cities, counties and school districts more than a million dollars to cover what the state insurance commissioner has described as “deceptive” fees.

Some local officials say they’re getting just a fraction of what they should be paid and they’d like to sue to get the rest. Two Rivers has agreed to pay restitution to Winnebago County, for example, but Winnebago County Supervisor Mike Stensrud of Forest City says the county actually overpaid far, far more.

“I can definitively say that I will not go along with accepting the $5,700 settlement,” Stensrud says. “I believe that we can prove that we were bilked out of $85,000.”

Stensrud is urging his fellow county supervisors to sue.

“I believe that we should go after the loss that we incurred,” Stensrud says.

Hancock County Supervisor Jerry Tlach of Garner says Hancock County paid the company more than $250,000 in brokerage fees that were disguised as premium costs, but Two Rivers has agreed to cut the county a check for just a quarter of that amount.

“We haven’t signed anything to say we’ll accept it yet or not,” Tlach says. “…This is the best deal the Iowa Insurance Division thought they could come up with.”

Two River Insurance sold Wellmark Blue Cross Blue Shield health insurance policies to local Iowa governments for more than 10,000 employees statewide. In 2014, Wellmark informed regulators it had discovered Two Rivers was adding fees to what was described to customers as the cost of insurance premiums. Two Rivers denies wrongdoing, but last month the company agreed to pay the local governments $1.3 million. The president of Two Rivers told The Des Moines Register that the brokerage still believes “our past practices were appropriate at the time,” but agreed to offer to pay restitution to end “what would be an extremely costly and burdensome legal process.”

The settlement involves 15 counties, 12 Iowa cities and four school districts as well as the public library and public water utility in Council Bluffs. These local governments formed a consortium to buy policies for a larger group. Some local officials say they’ll accept the Two Rivers payments, as they believe they saved significantly by obtaining less expensive group insurance. The 33 local governments have until July 22 to accept or reject the proposed restitution.

The settlement involves the cities of Clive, Council Bluffs, Fairfield, Grinnell, Harlan, Keokuk, Pella, Perry, Spencer, Waukee, Waverly, Webster City. It involves the counties of Chickasaw, Clay, Clayton, Dubuque, Emmet, Grundy, Guthrie, Hancock, Henry, Humboldt, Jefferson, Monona, Pottawattamie, Union and Winnebago. The school districts of Keokuk, Seymour, Spencer and Central Lee are also involved in the case. Here is a link to the insurance commissioner’s ruling and “Exhibit A” spells out how much Two Rivers is to pay to each of the local governments listed above.

(Reporting by A.J. Taylor, KIOW, Forest City; additional reporting by Radio Iowa’s O. Kay Henderson)