On May 6, 2014, a Division of Insurance hearing officer entered an order revoking the producer’s license of Nancy A. Hutchinson, of South Boston, Massachusetts. In addition to the revocation of her producer license, the hearing officer also assessed a civil penalty against her in the amount of $2,000.
Ms. Hutchinson was employed by the Thomas Black Insurance Agency in South Boston from October 1, 1997 through March 30, 2011, and the Kokoras Insurance Agency of Brighton from August 1, 2011, until October 12, 2011. She acquired an agent’s license in 2002 which subsequently was converted to a producer’s license in 2003.
Premium theft from the Thomas Black Insurance Agency
According to the Division, the events that ultimately led to the revocation of Ms. Hutchinson’s licenses and the imposition of a fine against her for $2000, began on April 21, 2011. It was on that date that the Thomas Black Agency advised the Boston Police that Ms. Hutchinson had stolen some $4,000 in client funds from the agency during an approximate one year period. In addition, the agency notified the Police that during the course of the theft, Ms. Hutchinson also had forged and falsely notarized an official insurance affidavit.
The theft of client funds and the forgery of insurance documents are serious violations that warrant revocation of Hutchinson’s license.
A Boston Police detective interviewed Ms. Hutchinson on April 27, 2011. As a result of Ms. Hutchinson confessing to stealing money, criminal complaints were issued on April 29, 2011 from the South Boston District Court charging Ms. Hutchinson with embezzlement or conversion of funds by a broker; making a fraudulent application for motor vehicle insurance on behalf of a Thomas Black client; and forgery of a document (a notary certification) with intent to defraud.
After being arraigned in court on May 23, 2011, Ms. Hutchinson next appeared in the South Boston District Court on June 20, 2011, where she admitted to sufficient facts with respect to each count, and was sentenced to supervised probation and ordered to make restitution to the Thomas Black Agency.
Premium theft from the Kokoras Insurance Agency
Ms. Hutchinson’s involvement with the insurance industry did not end there, however. Possibly, based upon her long-term employment with her prior agency, Ms. Hutchinson obtained employment with the Kokoras Insurance Agency in Brighton, Massachusetts on August 1, 2011. That employment lasted until October 12, 2011. On January 20, 2012, the manager of the Kokoras Agency filed a complaint with the Boston Police stating that the agency had discovered that Ms. Hutchinson had stolen client funds from them in the form of money orders given to her by customers to purchase insurance.
On February 15, 2012, new complaints were filed against Ms. Hutchinson in the Brighton Municipal Court charging here with larceny over $250; larceny over $250 by a single scheme, and uttering a false order for money. Ms. Hutchinson was arraigned on those three counts in the Brighton Division on March 13, 2012. In this case, Ms. Hutchinson made satisfactory restitution and the Commonwealth agreed to the dismissal of the cases on August 17, 2012
The Division of Insurance files against Ms. Hutchinson’s license
On May 12, 2012, while the second set of criminal complaints were still pending against Ms. Hutchinson, the DOI filed a show cause order against her seeking to revoke any insurance licenses and orders requiring her to dispose of any insurance-related interests in Massachusetts, prohibiting her from conducting any insurance business in the Commonwealth, and imposing fines for the alleged violations of G.L. c. 175, § 162R(a)(2), § 162R(a)(4), § 162R(a)(7) and § 162R(a)(8) as well as G.L. c. 175, § 162V(b).
Because Hutchinson’s acts were serious violations…I impose the maximum fine for each of those violations.”
The Division allegations were based upon the above criminal premium conversions involved in the District Court complaints in South Boston and Brighton. Although Ms. Hutchinson received notice of the show cause order, she did not answer or appear to contest the Division’s administrative complaint.
Accordingly, on May 6, 2014, the Administrative Hearing Officer, Jean Farrington, granted the DOI’s request for a summary decision under the Division’s adjudicatory rules. The hearing officer’s decision found that the records of the prosecution in the South Boston District Court fully supported the Division’s claims that Hutchinson violated Chapter 175, § 162R(a)(2), § 162R(a)(4), § 162R(a)(7) and § 162R(a)(8). However, the hearing officer found no violation of G.L. c. 175, § 162V(b), as Ms. Hutchinson license had expired on March 24, 2011, some four weeks before the first complaints were filed in the South Boston District Court. Also, the hearing officer did not make any findings on the Brighton District Court complaints since the Division did not produce any documentary evidence on the basis of the dismissal.
Hearing officer orders maximum fines, license revocation and loss of right to transact insurance business in Massachusetts
In making her decision, the hearing officer ruled that: “The theft of client funds and the forgery of insurance documents are serious violations that warrant revocation of Hutchinson’s license.” The hearing officer also found that Ms. Hutchinson, “…should be prohibited from transacting any insurance business, directly or indirectly, in Massachusetts, and should be required to dispose of any interest she may have in any insurance business in Massachusetts”.
Finally, the hearing officer exercised her power under G.L. c. 176D, § 7 to levy up to a $1,000 fine per each unfair and deceptive act or practice committed in the business of insurance. She found that the evidence warranted a finding that Ms. Hutchinson stole client funds from the Thomas Black agency on at least one occasion and falsified at least one insurance document. As such, the hearing officer decided to impose a fine for each of the two statutory violations. In doing so, she stated: “Because Hutchinson’s acts were serious violations of the laws relating to the transaction of insurance business, I impose the maximum fine for each of those violations.”
While depending on the final disposition of a case involving a licensed producer, in this case, Ms. Hutchinson’s admission to sufficient facts in the South Boston District Court and probation for a felony involving “dishonesty or breach of trust” would make her and anyone in a similar situation in Massachusetts subject to the Federal statute on insurance employment.
It is also important to note that in this case, if Ms. Hutchinson had been convicted in the South Boston Court of the crimes alleged before being hired by the second agency, that agency would have hired a person disqualified under Federal law (Title 18 USC § 1033) for such employment. Such a hiring could theoretically have caused the agency potential legal problems.
For more information on the Federal statute on hiring of convicted persons and how it applies to agencies and companies. See Agency Checklists August 8, 2011 article: “Agency Employees & Past Criminal Convictions“. The full decision in the Division of Insurance v. Hutchinson is available here: Docket No. E2013-11 Nancy A. Hutchinson.