In our latest look at agent indiscretions in the news, we find cases of fraudulent life insurance and Med Supp applications, rebating, identity theft and more.
It goes without saying that the vast majority of agents behave ethically and always do right by their clients, but there is always that miniscule percentage of bad-apple agents out there who can’t resist the temptation of the dark side, thinking they can reap big commissions and not get caught.
Fortunately they often do get caught, and their tales of deception and the ultimate price they pay provide a strong reminder of why it’s always better to stay on the straight and narrow.
Fraudulent applications get Georgia couple in hot water
A Georgia couple was arrested Sept. 6 on charges of insurance fraud, identity theft, forgery and exploitation of an elderly person after a lengthy investigation by the fraud division of Georgia’s Insurance and Safety Fire Commission.
According to a press release from the Georgia Department of Insurance, Amy Livingston, 34, and her husband Matthew Livingston, 48, were arrested at their home in LaGrange, Ga., on Sept. 6 following a six-month investigation. The investigation found that Amy, an active insurance agent, and Matthew, a former insurance agent, used the identities of Matthew’s former clients to create and submit fraudulent applications for life insurance without the client’s knowledge or approval.
“My fraud investigators discovered that the couple worked together to illegally obtain approximately $11,453 in commission fees by issuing fraudulent documents to insurance companies,” Insurance and Fire Safety Commissioner Ralph Hudgens said in the press release. “With additional evidence still coming in, we expect the amount stolen to increase to well over $100,000.”
The investigation is continuing, and other charges may be forthcoming. Insurance fraud is a felony with a penalty in Georgia of two to 10 years in prison and/or a fine of up to $10,000.
Idaho resident insurance agent loses license for rebating
The Idaho Department of Insurance in Boise revoked the insurance producer license of Jordan Tait, of Rexburg, Idaho, for unfair trade practices, and imposed an administrative penalty of $10,000, back on Aug. 1.
Tait admitted to paying the initial premium for a client in order to meet his quarterly production goals and stay on the agent subsidy loan program provided by his company. As an inducement for customers to purchase life insurance policies, he paid the initial premiums on 10 separate occasions. Idaho Code Title 41, Chapter 13, outlines specific trade practices, including rebating of premiums, which are prohibited.
“The Department does not tolerate misconduct by licensed agents,” said Idaho Department of Insurance Director Dean Cameron. “Agents are required to know Idaho Insurance Code and abide by it.”
Tait was ordered to pay $2,000 of the penalty; the remaining $8,000 was suspended. Tait may not reapply for an insurance producer license for five years, at which time the suspended amount must be paid in full.
Tait was an appointed producer with Farmers Insurance Company of Idaho, Farmers Insurance Exchange, Farmers New World Life, Mid Century Insurance Company, Truck Insurance Exchange, Foremost Insurance Company and Bristol West Insurance Company – which are all companies within the Farmers Insurance Group.
Farmers Insurance Group suspended all appointments between Tait and the above companies on Sept. 30, 2016. Four days later the company informed the department of Tait’s termination.
A department investigation following his firing found Tait was paying for customer premiums, and he admitted that at least once he had done so to meet his quarterly production goals.
The Post Register in Idaho Falls published the following statement from Tait, who also said he had no intention to reapply for his license in 5 years:
“As a newly licensed insurance agent, I unfortunately relied on bad advice from people I trusted and offered to waive certain fees for potential clients in order to assist them in being able to afford sought-after policies. I should have known that doing so was a violation of state regulations, but I didn’t at the time. While I regret and have learned a valuable lesson from my mistakes, I have never had any intention to be dishonest or deceptive to any of my clients, employees or employers.”
Tait declined to say who advised him to waive fees for customers.
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Agents behaving badly: 4 cases of caught in the act
2 Pennsylvania insurance agents arrested for insurance fraud
Pennsylvania Attorney General Josh Shapiro announced felony charges on Aug. 23 against two insurance agents in Allegheny and Westmoreland County for insurance fraud.
In one case, an agent stole $26,247 from eight clients, including their life insurance proceeds, auto insurance premiums and even a loan. In the other case, the agent submitted 252 phony Medicare supplement policy applications and pocketed $88,636 in fraudulent commissions.
Travis Wingrove, 29, and Jeffrey Ingram, 53, were charged with insurance fraud, theft by deception and identity theft, according to a news release from the AG’s office.
“Insurance fraud hurts consumers across our Commonwealth and causes premiums to rise for law-abiding policyholders,” Shapiro said. “In these cases, clients trusted agents to handle their policies and they betrayed that trust. We’ll prosecute anyone who breaks the law by stealing from clients or submitting phony insurance policies for their own profit.”
In Wingrove’s case, the Office of Attorney General’s Insurance Fraud unit began an investigation following a referral from the Pennsylvania Insurance Department. Investigators discovered that during Wingrove’s employment at Rosemary Skaggs’ State Farm Insurance Agency in Mount Pleasant, Pa., he stole $26,247.73 from clients between April 2013 and April 2015.
Wingrove used a variety of scams, including stealing from clients’ life insurance policies, taking their auto insurance premiums and never depositing them, and in one case, scamming a client to apply for a $2,775 loan on his life insurance policy that Wingrove stole and cashed for himself.
In another scam, Wingrove processed a life insurance policy dividend for $2,000 – $1,800 more than what the policy holder was entitled to, then had the client send Wingrove the $1,800, which was never returned to State Farm.
Several of the clients scammed by Wingrove were over 70 years old, and insurance fraud experts note that older citizens are often targeted for financial scams and insurance fraud.
Wingrove was arraigned Aug. 23 on the charges, and a preliminary hearing was ordered for Sept. 6.
In the second case, Ingram submitted 252 fake Medicare supplement policy applications between March and October 2016 – and earned $88,636 in advance commissions that he never should have received since the policy applications were all phony.
Employed as an agent with Success Financial Solutions in Greentree, Pa., Ingram submitted phony applications for Medicare supplement insurance to the Medico Insurance Company, which paid him commissions. Ingram either created personal information to fill in on the policy forms, or obtained it from sources like the phone book.
The scam was uncovered after Medico had several policies returned undeliverable by mail, with at least one notice indicating the policy applicant had died. Other customers contacted Medico to say they never applied for these policies, nor were they qualified due to their age. Banking information on these applications was also fake.
Ingram was arraigned on the insurance fraud charges Aug. 22 by District Judge William Wagner in Allegheny County, who set a preliminary hearing for September 6.
“These cases remind us that when you’re taken advantage of, it’s often by people we trust,” Shapiro said. Let us go after the scammers and protect you.”
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