In a significant development within Utah’s insurance sector, Opticare Vision Services, a prominent vision insurance provider, is set to shut down after state-led rehabilitation efforts to stabilize the company’s finances failed. Utah Insurance Commissioner Jon Pike, who has overseen the company’s operations for the past month under court order, announced the decision, marking the end of Opticare’s operations.
Failed Rehabilitation Efforts
Opticare entered “Rehabilitation”—a process designed to restore financial stability and prevent liquidation—in early November. Under court supervision, all business decisions were transferred to the state’s insurance commissioner and his deputies. Despite these efforts, the state has concluded that Opticare is unable to pay its debts. In a letter addressed to Opticare’s policyholders, the state announced its intention to liquidate the company, pending court approval.
If the court agrees to the liquidation, vision insurance policies held by Opticare customers will cease at the end of December 2024.
Connection to Standard Optical Closure
The closure of Opticare follows the abrupt shutdown of its sister company, Standard Optical, earlier this year. Standard Optical, which was also led by Stephen Schubach, shuttered its operations in October, leaving many Utah residents unable to retrieve prepaid eyeglasses and contact lenses. Although Schubach assured the public that Opticare Vision Services was financially stable and functioning as a vision network, state officials’ findings indicate otherwise.
Controversy and Communication Issues
The decision to liquidate Opticare appears to have blindsided Schubach, who expressed frustration over a lack of communication from state officials. “I have been told nothing about this,” Schubach said in a statement to KSLTV. He accused the state-appointed rehabilitator of dismissing Opticare’s chief financial officer and an accountant without explanation and stated that his attempts to engage with the rehabilitator had been ignored.
Schubach described the rehabilitation process as non-collaborative, asserting, “As a shareholder and officer, I have been kept in the dark purposely and according to Utah State Law. I was led to believe this would be a collaborative venture. It has been anything but that.”
State’s Perspective
Commissioner Pike responded to Schubach’s claims, pointing out that Schubach, as Chair of the Board of Directors of Opticare of Utah, had provided written consent for the company to enter court-ordered rehabilitation on October 18, 2024. Pike emphasized that the rehabilitator had full authority to take any actions necessary to facilitate Opticare’s rehabilitation, effectively stripping company officers of their operational control.
Implications for Policyholders
The state’s decision to liquidate Opticare means that policyholders will need to seek alternative vision coverage before the year’s end. The shutdown highlights the challenges faced by companies in maintaining financial solvency and the measures regulators take to protect policyholders and the public.
As Utah residents navigate the fallout from Opticare’s closure, the situation underscores the importance of robust oversight and transparent communication in the insurance industry.