The agent is fined $1,000.00 and has her producer license revoked for misappropriating premiums
On June 10, 2013, the Division of Insurance entered an order revoking the producer’s license of Hope Allen, of Forestdale, Massachusetts. In addition to the revocation of her producer license, the DOI also assessed a civil penalty against her in the amount of $1,000.
Ms. Allen producer’s license was first issued in 2003 and since that time she had held agency appointments with over 12 life and health insurance companies operating in Massachusetts.
On May 12, 2012, the Division of Insurance became involved with Ms. Allen when it was notified by Banker’s Life that it had terminated Ms. Allen’s agency contract “for cause”. The cause alleged in the company’s notice was that Ms. Allen had converted an insured’s premiums due to the company in the amount $1,520.06. The company acted after verifying that Ms. Allen had had an insured make her the payee of a premium payment, which she then proceeded to deposit in her own bank account thereby converting the funds for her own personal use.
The Division of Insurance takes action against Ms. Allen
Upon learning of these actions, the Division of Insurance commenced an administrative proceedings against Ms. Allen by sending her a “Notice of Action” on March 19, 2012. In the meantime, the Orleans District Court, itself, had issued a criminal complaint against Ms. Allen under G.L. c. 266, §30 for larceny over $250. In Massachusetts, such a charge is a felony under Massachusetts law.
Upon receiving these notices from both the DOI and Orleans District Court, Ms. Allen chose to admit sufficient facts to the criminal complaint in October 2012, and was subsequently placed on probation by the court. She did not, however, ever answer or contest the Division’s administrative complaint.
As such, on June 10, 2013, the Administrative Hearing Officer for the Division, Jean Farrington, granted the DOI’s request for default and entered an order revoking all Ms. Allen’s license under G.L. c. 175 § 162R(a). That provision provides for license revocations and civil penalties for any producer, “improperly withholding, misappropriating or converting any monies or properties received in the course of doing insurance business.” Ms. Farrington also cited G.L. c. 175, §162R(2)(a)(8) in her decision against Ms. Allen which provides for similar penalties for any producer, “using fraudulent, coercive or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in Massachusetts.” Ultimately, the civil penalty assessed under G.L. c. 176D, § 7, was $1,000.
The Hearing Officer also ordered Ms. Allen to dispose of any interest she may have in any insurance business and prohibited her from transacting any insurance business directly or indirectly in Massachusetts.
While depending on the final disposition of a case involving a licensed producer, in this case, Ms. Allen’s admission to sufficient facts to the Orleans 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. For more information on that statute and how it applies see Agency Checklists August 8, 2011 article on the topic: “Agency Employees & Past Criminal Convictions.”