The Division of Insurance releases the results of its enforcement actions for the first Quarter of 2015
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 11 different cases which resulted in the Enforcement Division assessing fines totaling $3,250. This amount is far less than what the Division assessed during each of the four quarters of 2014.
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 $750. This amount was imposed separately on two non-resident producers. The first fine was for failure to report an administrative action while the second fine was for a misrepresentation on a license application.
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 6 non-resident producers and 5 producers. Here’s a summary of the results of those enforcement actions:
- As stated above, there were 11 different cases that were investigated in the first quarter of 2015 or during the months of January through March;
- The total amount of fines assessed in FQ1 were $3,250 as compared to $14,650 in the last quarter of 2014;
- In this quarter there were four cases involving non-resident producers who were fined for Late Notice of Administrative Action and one case involving a Failure to Report Administrative Action. Fines for both of these type of offenses ranged from a simple settlement agreement and permanent license revocation to a settlement agreement and a $750 Fine.
- This quarter there was also one case in which the primary allegation involved trustworthiness. Unlike previous cases which resulted in a heavy fine, this case was determined by a Settlement Agreement; License Revocation and a Cease and Desist from all insurance activity notice.
- Only one case this quarter involved allegations of misrepresentation on license applications. The disposition of the case included a Settlement Agreement and a $750 fine along with a Cease & Desist from Violations.
- One Massachusetts producer was investigated for the claim of Unfair Trade Practices. The Settlement Agreement for this case involved the permanent revocation of the producer’s license along with a Cease & Desist from all insurance activity notice.
- A producer agency was fined $500 for Placing or Renewing Policies while unlicensed. In addition to the fine the agency was issued a Cease & Desist Violation.
- Another producer was investigated for Failure to Remit Premium. The Settlement Agreement made with the producer included a Permanent Licensed revocation and a Cease & Desist from all insurance activity.
- The final case involved a Massachusetts producer whose licensed was suspended for Continuing Education Non-Compliance. As we have reported in various articles, the Continuing Education requirements for agents have changed over the last couple of years.
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”.