When Florida consumers purchase insurance policies from insurance agents and brokers in Florida, consumers typically presume that the person they are dealing with is properly licensed. Unfortunately, many consumers are exploited by schemes involving individuals engaged in insurance fraud schemes. Sometimes these schemes are not discovered until policyholders learn that they have no coverage when they proceed to file a claim. As a Florida insurance claims attorney, I understand the devastating impact on policyholders caused by this type of fraud, so I have provided some recent examples of fraudulent practices from the Division of Agent and Agency Services.
Example 1: The insurance agent was paid to secure liability insurance for the consumer. The agent failed to forward the premiums to the insurance carrier and issued bogus certificates of insurance. An investigation by the Department of Financial Services revealed that four other consumers were also issued fraudulent certificates of insurance under similar circumstances. The agent’s license was revoked, and she was permanently barred from selling insurance in the future. She was arrested and pled guilty to the felony offense of scheme to defraud.
Example 2: The Department of Financial Services received notice from an insurance carrier that an employee of a roofing contractor who was licensed as an agent to sell life and health insurance held himself out to be a public adjuster and acted in this capacity when he negotiated a policyholder’s claim with the insured’s policyholder. The insurance agent had his license revoked and he was arrested for unlicensed activity.
Example 3: Two separate complaints were filed by consumers indicating that a general lines agent failed to remit premium payments from the policyholders to their insurance companies. In both instances, the premium payments were made through the policyholders’ escrow accounts. Nonetheless, the policies were cancelled for non-payment of premiums. One of the affected policyholders submitted a claim for damage to the insured’s home, but the claim was denied. When the policyholder complained, the agent showed up at the door of the insured with a roofer to repair damaged roof tiles. The agent attempted to persuade the homeowner to sign a release indicating that the insured would not make a claim. When this did not work, the agent then submitted an application on behalf of the homeowner to a second insurance company but failed to disclose the prior damage. The agent’s license was suspended for six months, and the agent was forced to pay restitution.
Example 4: A life and health insurance agent retained unlicensed personnel to sell Medicare products to senior citizens. The agent hired his son and several other unlicensed individuals with no type of insurance license and no knowledge or understanding of the insurance products they were selling. Because of the lack of credentials, training and expertise of the individuals selling the policies, consumers were seriously disadvantaged. The agent was fined and subjected to one year of probation.
Example 5: An insurance agency accepted premiums in full for homeowners insurance policies that were deposited into the agency’s operating account. The funds were subsequently transferred into a personal bank account that belonged to an officer of the company. E-payments were then made to the insurance company from the personal bank account. Multiple agency files were audited based on allegations the company was diverting funds belonging to the insurance company. All of the parties involved were fined, and a one year suspension was imposed on each of them. The agent also was required to make restitution to the victims.
These are just a few of the dishonest and fraudulent practices policyholders need to recognize. An insured should always confirm with the state that his or her agent is validly licensed, and the insurance company that issued your certificate of insurance is valid. Policyholders also need to contact the insurance company periodically to make sure premium payments are being properly credited if the payments are being made to an insurance agency instead of the insurance company. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.