Shares of Health Insurance Innovations (NASDAQ:BFYT) had soared 19.1% as of market close on Thursday. The health insurance platform company disclosed in a regulatory filing that it had reached a settlement with insurance regulators in Indiana, Florida, Kansas, Montana, and Utah related to a multistate market conduct examination (MCE) into its sales, marketing, and administration practices.
Health Insurance Innovations' settlement was favorable for the company, as evidenced by the big jump in its share price. The company denied any wrongdoing or activities that violate state insurance laws. And its cost for the settlement was minimal -- only $3.4 million to cover costs incurred related to the MCE.
In addition, Health Insurance Innovations agreed to submit a third-party administrator licensure application in relevant jurisdictions. The company will also voluntarily implement processes to improve its monitoring and retention of sales calls.
Any time a company can get out from under a dark cloud with little negative impact, as Health Insurance Innovations just did, it makes investors happy. And the company's shareholders also had another reason to smile: While the settlement was the big story of the day, Health Insurance Innovations also mentioned in the regulatory filing that its Board of Directors approved an increase in its share repurchase program from $50 million to $100 million.
The settlement isn't finalized just yet. A total of 43 states were included in the MCE. At least 25 of the states must execute the agreement. The lead states -- Indiana, Florida, Kansas, Montana, and Utah -- have already done so.
However, it seems likely that this matter will soon be settled, and that will allow Health Insurance Innovations to focus on its core business. Thanks to Trump administration changes that went into effect on Oct. 1, 2018, that allow short-term health insurance plans with durations of up to 12 months to be offered, the company's prospects look better than ever.