On July 15, 2015 the Division of Insurance Hearing Officer Jean F. Farrington entered an Order under General Laws Chapter 175, § 166D against Sean Green to dispose of any interests in Massachusetts as a proprietor, partner, stockholder, officer, or employee of any licensed insurance producer and fined Mr. Green $5,000.00 pursuant to General Laws Chapter 176D § 7.
A series of license revocations and fines in different states from undisclosed misdemeanor convictions
Mister Green’s case is interesting because it exemplifies what can happen when an applicant makes an application for a nonresident producer license and does not disclose, in response to the standard application, correct answers to the question that ask if the applicant has ever been convicted of a misdemeanor.
Additionally, Mr. Greens case shows once again that Massachusetts takes a very hard line on its licensed producers, whether resident or nonresident, for failing to report administrative actions involving their producer licenses in other states.
The Order entered by Hearing Officer Farrington resulted from Mr. Green’s misstatement in denying he had ever been convicted of any misdemeanor and from his failure to report the revocation of his producer licenses in California, Ohio, Virginia, and Washington in 2014 and 2015.
Virginia Corporation Commission investigates truth of statements in license application
Mister Green apparently worked for USAA in an Arizona call center selling that companies personal lines products in various states. As required by that type of telemarketing job, Mr. Green had to obtain nonresident licenses in the states where he might be advising insureds or potential insureds about coverage.
Five of the states where Mr. Green obtained nonresident licenses were California, Massachusetts, Ohio, Virginia, and Washington.
The Virginia application had a question on the application that asked: “Have you ever been convicted of a crime, had a judgment withheld or deferred, or are you currently charged with committing a crime?” Mr. Green answered, “No.”
On December 20, 2013, a senior investigator of the P&C Agent Investigation Section of the Virginia Corporation Commission wrote to Mr. Green and charged that Mr. Green had “knowingly provided untrue information” on his non-resident agent license application submitted to the Virginia Bureau of Insurance. The letter then summarized Mr. Green’s misstatements in failing to disclose three misdemeanor charges:
- On May 3, 2004, Mr. Green had pleaded guilty in the Flagstaff, Arizona Municipal Court to charges of shoplifting;
- On April 6, 2005, Green had been convicted of domestic violence in the Glendale, Arizona City Court; and,
- On October 5, 2009, Green pleaded guilty in the Scottsdale, Arizona City Court to violating Section 19.19 of the Scottsdale Municipal Code (Urinating in public).
Although the investigator requested Mr. Green give a response and that he could be fined for his actions, Mr. Green never responded.
On March 11, 2014, the Virginia Corporation Commission entered an Order revoking Mr. Green’s nonresident producer license finding that he had violated Virginia law “by providing incomplete or untrue information on his license application.”
Although, the Commission had the power, it took no other action to otherwise sanction or fine Mr. Green for this misstatements.
California, Ohio and Washington follow on Virginia’s revocation of Mr. Green’s license
Based on Virginia having acted on Mr. Green’s misstatements regarding his misdemeanor convictions to revoke his Virginia nonresident producer license, other states where Mr. Green had licenses took action.
On July 30, 2014, the California Division of Insurance revoked Mr. Green’s license on the basis of the Virginia revocation and advising that Mr. Green’s misdemeanor convictions were not disclosed on his California application for a non-resident license when filed on August 29, 2013.
The California Order did, however, state that Mr. Green had disclosed the misdemeanor convictions subsequently on October 23, 2013. But the Order did not otherwise give the circumstances of this belated disclosure.
Many states have in force statutes or rules similar to the Massachusetts statutes that require:
a producer [to report] …to the commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency in the commonwealth within 30 days of the final disposition of the matter.” G.L. c. 175, §162V(a).
On November 14, 2014, the State of Washington advised Mr. Green’s that his producer license in Washington had been revoked, “due to your failure to report an administrative action taken against you in the State of California.” The Washington insurance commissioner took no action to otherwise sanction or fine Mr. Green.
On May 18, 2015, the Ohio Superintendent of Insurance revoked Mr. Green’s nonresident producer license based on the revocation of Mr. Green’s Virginia and California insurance agent licenses and an Ohio law that allowed the Superintendent to revoke the license of an agent for having a license “denied, suspended, or revoked in any other state, province, district, or territory.” The Ohio Superintendent also took no action to otherwise sanction or fine Mr. Green
Massachusetts takes action in April 2016 on Mr. Green’s license
On April 22, 2016, the Division of Insurance filed an order to show cause against Mr. Green seeking revocation of any Massachusetts producer licenses, and seeking additional orders requiring Mr. Green to cease any insurance business activities in Massachusetts and to divest himself of any interests in Massachusetts insurance businesses. Additionally the Division sought fines, based upon Mr. Green’s misstatement as to his prior convictions on his license application, and his failure to report the administrative actions by the states of Virginia, California, Ohio and Washington.
Mr. Green, did not appear although the hearing officer found that he had received sufficient notice. She entered a default and summary judgment against him revoking his nonresident producer license and entering the requested prohibitions against Mr. Green having anything to do with Massachusetts insurance stating:
The number and the seriousness of the grounds relied on by the Division to support its disciplinary action fully warrant revocation of Green’s Massachusetts producer license. On this record, I find that, in addition to revocation of his license, Green should be prohibited from transacting any insurance business or acquiring, in any capacity whatsoever in Massachusetts, any insurance business in Massachusetts and shall dispose of any interests he may have in any insurance business in Massachusetts.
Additionally, the Hearing Officer entered an Order fining Mr. Green $5,000 for his failing to disclose his convictions and for his failing to report his licenses being revoked in Virginia, California, Ohio and Virginia stating:
- by failing to disclose his criminal record on his license application effectively circumvented a complete review of his eligibility to hold a Massachusetts producer license.
- By failing to report to the Division administrative actions revoking his producer license in four other jurisdictions …permitted him to remain licensed in Massachusetts long after the events occurred that support revocation.