The Division of Insurance releases the results of its enforcement actions for the fourth Quarter of 2014
On a quarterly basis, the Division of Insurance publishes a list of the enforcement actions it has taken against licensed producers. The total fines assessed vary widely depending upon the action taken against a producer. In the most recent report for this quarter, the DOI Special Investigations Unit were involved in 15 different cases which resulted in the Enforcement Division assessing fines totaling $14, 650. This amount is less than half of what the Division assessed in the third quarter of 2014, when it fined producers a total of $33,550.
The Division’s Special Investigation Unit is in charge of investigating allegations involving licensed insurance producers
The largest single fine assessed this quarter was for $6000 against the non-resident producer, Earl O’Garro. While we normally do not publish the names of producers fined, we previously reported on the 31 year-old entrepreneur whose insurance license has been revoked by multiple states.
In 2010, Mr. O’Garro stated a specialized excess and surplus brokerage company, Hybrid Insurance Agency, LLC in Connecticut which spectacularly collapsed amid claims of fraud and corruption. Read more about the rise and fall of the Hybrid Insurance Agency, LLC here.
What the DOI fined Mass. agents for during this quarter
The following is a summary of the fines assessed during this quarter. Overall the Division conducted investigations and conducted enforcement actions against 5 non-resident producers and 10 producers. Here’s a summary of the results of those enforcement actions:
- As stated above, there were 15 different cases that were investigated in the fourth quarter of 2014 or during the months of October – December;
- The total amount of fines assessed in SQ2 were $14,650;
- In this quarter there were six cases involving producers and non-resident producers who placed policies while unlicensed. Fines for these offenses ranged from a simple settlement agreement and a $250 fine to a settlement agreement and a $2000 Fine.
- This quarter also saw four cases in which the primary allegation involved trustworthiness. One involved a felony conviction. The disposition of these four cases resulted in settlement agreements with a license revocation and an order to cease and desist from all insurance activity. In two of these cases additional fines of $2000 and $6000 were levied by the Division.
- Three cases this quarter involved allegations of misrepresentation on license applications. The disposition of each of these cases included a settlement agreement, a cease and desist order from further violations and fines of $250, $500, and $1000 respectively.
- One case involved a non-resident producer whose license was permanently revoked. The revocation resulted from his failure to report a prior administrative action and his home state license having been revoked.
- The final case involves a Massachusetts producer who was fined $1000 for failure to remit premium.
Each quarter the Division of Insurance publishes a list enforcement actions taken against licensees
While the primary mission of the Division of Insurance is “…to monitor the solvency of its licensees in order to promote a healthy, responsive and willing marketplace for consumers who purchase insurance products” a major part of that mission involves insurance enforcement. The DOI engages in a variety of administrative actions throughout the year in order to ensure that the insurance industry and its representatives maintain a just and healthy marketplace.
That said, during the course of regulating the Massachusetts insurance industry, the Division’s Special Investigation Unit will pursue allegations of misconduct against any persons licensed by the DOI including insurance producers, insurance advisers, public adjusters, reinsurance intermediaries, viatical loan brokers and providers, viatical settlement brokers and providers, insurance companies, health maintenance organizations and self-insurance groups. As part of its investigation into a case, the Enforcement Division may interview witness, question licensees, demand and review documentary evidence supporting allegations of unfair methods of competition or unfair trade practices or any other violation of the insurance law.
If a specific investigation warrants further action, an investigation may result in a referral to the Attorney General’s office in egregious cases or in less serious cases the Division independently may negotiate settlements or request the commissioner or his deputies to initiate an administrative proceeding before a hearing officer, agree to assist in cease and desist order and a written compliance programs. In cases where licensees conduct warranted the license sanctioned could include revocation or suspension along with restitution. See Agency Checklists’ article “One Way to Avoid Large Fines for You & Your Agency”.