• Skip to main content
  • Skip to secondary menu
  • Skip to footer
  • Sign Up
  • Contact Us
  • Advertise
  • Sponsor An Email

Agency Checklists

Massachusetts-inspired Insurance News & More

  • Career
    • Announcements
    • Post An InsurJob
    • Find an InsurJob
    • Post Your Profile
  • Checklists
    • Applying For An Agency Loan
    • Deciding Whether or Not to Outsource Your Customer Service?
    • Employment Contracts & The Non-Compete Clause In Massachusetts
    • Hiring An Insurance Producer In Massachusetts
    • Insurance Agent to Agency Loans In Massachusetts
    • Moving Your Massachusetts Insurance Agency
    • Opting To Use Premium Financing In Your Massachusetts Insurance Agency
    • Purchasing An Agency
    • Remuneration Audit Checklist
    • Selling Your Massachusetts Insurance Agency
    • When The Auditor Calls
    • Why, When, & How An Agent Should Use A Business Broker
    • Starting A Massachusetts Insurance Agency
  • Data
  • Events
  • InsurShop
    • Insurance Books
      • Innovation Titles
      • Improvement
      • Leadership
      • Licensing
      • Marketing
      • Sales
    • Insurance Films
    • Insurance Glossary
  • Partners
    • How Thrifty Benefits Your Agency
You are here: Home / Fraud News / Premium Finance Companies To Repay $340k to Victims of Kilgore Insurance Agency Scheme

Premium Finance Companies To Repay $340k to Victims of Kilgore Insurance Agency Scheme

December 1, 2011 by Julia Ybarra

Two premium finance companies, Premium Assignment Corporation (PAC), a subsidiary of SunTrust Banks, Inc. and FIRST Insurance Funding Corp. (FIRST), a subsidiary of Wintrust Financial Corporation settled with the Attorney General’s Office last week over its roles in assisting Kilgore Insurance Agency of Peabody, MA to defraud its insureds by padding premiums by millions of dollars.  Kilgore had a tacit agreement with each company whereby the agency would reveal the true premium information to either PAC or FIRST, but never to the actual insured.  As a result the AG says that both companies profited greatly at the expense of Kilgore Insurance customers with PAC taking in approximately $214,000 in finance charges over a five-year period and FIRST with approximately $30,000 over a three-year period.

“We allege that PAC and FIRST took advantage of unsuspecting small businesses by aiding the Kilgore Insurance Agency in its scheme to pad insurance premiums with hidden fees,” says Attorney General Martha Coakley. “We must work to ensure that the small businesses in our communities are able to thrive and grow, rather than be strangled by unnecessary concealed costs.”

Overall, the scheme which occurred over a 10-year period, resulted in Kilgore secretly charging its clients millions of extra dollars in “agency fees,” the majority of whom were small, family owned businesses.  Kilgore hid these additional “agency fees” through a variety of means says the AG’s office “….including applying “white-out” to erase figures on premium finance contracts and insurance policies.”

Purportedly, Kilgore would recommend either PAC or FIRST to clients unable to pay their entire insurance premiums upfront.  Kilgore would then arrange a premium finance contract for its insureds authorized by PAC and FIRST, that folded so-called ‘agency fees’ into the clients’ insurance premiums.  As a result, says the AG’s office, Kilgore clients ended up paying double or triple the true cost of their insurance premiums because the fees were added in on top of the standard commissions offered to Kilgore by insurance carriers.

The settlements announced last week will require that PAC and FIRST disclose the details of all charges imposed on all of its Massachusetts premium finance contracts and to correct and rewrite their premium finance contracts to eliminate any misleading terms. In addition, the companies will be required to repay $340,000 to the AG’s office, the majority of which will be repaid to the insureds victimized in the Kilgore Premium Finance Scheme.  The 2009 lawsuit that the AG’s office filed against The Kilgore Insurance Agency including its owners and agents is still pending in the Suffolk Superior Court where the Court has largely frozen the defendant’s assets. In addition, the AG says that the Court has forbidden the agency from imposing an additional “agency fees” whatsoever which includes the defendant Andrew Crowther’s new business entity, Strategic Resource Group, LLC located in Wakefield.

 

 

Filed Under: Fraud News Tagged With: ag settlement with PAC and FIRST, Agency Checklists, agencychecklist, insurance news massachusetts, kilgore, kilgore insurance agency, kilgore insurance agency lawsuit, mass ago, mass insurance news, mass premium finances lawsuits, premium finance lawsuits, premium finance scheme, two premium finance settlements

Comments & Updates

  • Don Eaton on Massachusetts Has A Hands-Free Driving Law: Four Items Everyone Needs To Know
  • Frank Lombard CPCU ARM on CT Decision Against Crumbling Foundation Coverage—Bad News for Some Massachusetts Homeowners
  • Deborah Rose on Mass. Agent Lee Gaudette Presented With The MAIA’s Highest Honor This Year
  • Kevin Giovanucci on MAIA Announces Its New Board of Directors
  • Steve Aronson on The Massachusetts Insurance Industry Comes Out In Full Force To Celebrate Nancy Bender

Reader Interactions

Footer

About us
Contact us

14 Summer Street
Suite 104
Malden, MA 02148
617-598-3800
info@agencychecklists.com

Advertise on Agency Checklists

We offer a variety of ways to get help promote your company or product.

Announcements
Email Sponsorships
Partnerships
Custom Collaborations

*Affiliate Disclosure

Please note that any of Agency Checklists’ articles might contain one or more affiliate links. This means that any subsequent purchase resulting from these links may result in a commission for us, but at no additional cost to you. For example, as an Amazon Associate, Agency Checklists earns a commission from all qualifying purchases. By working with affiliates we can continue to keep Agency Checklists subscription free. Thank you for your support.

SEARCH OUR SITE

Explore Our Archives

Copyright © 2019 · Agency Checklists · All rights reserved.