The Division of Insurance releases the results of its enforcement actions for the Second Quarter of 2014
The Division of Insurance publishes a list of the enforcement actions it has taken on a quarterly basis. The total fines assess vary widely depending upon the quarters they report. In the most recent report for the Second Quarter of 2014, the DOI Special Investigations Unit had 18 different cases with the Enforcement Division assessing fines totaling $15,700. This amount was almost double the amount of fines assessed in the first quarter this year. In any case, the while SQ2 Fines outstripped FQ1 numbers, both amounts are still relatively low in comparison with past years where total fines have in the last two years totaled almost $150,000.00 in a given quarter.
The Division’s Special Investigation Unit is in charge of investigating allegations involving licensed insurance producers
What the DOI fined Mass. agents for during this quarter
The enforcement actions overall were assessed against seven Non-Resident Producers, 10 Insurance Producers and one Property Casualty Company. The following is a summary of the Division of Insurance enforcement actions against licensed producers thus far in 2014:
- As stated above, there were 18 different cases that were investigated in the second quarter of 2014;
- The total amount of fines assessed in SQ2 were $15,700;
- The largest single fine this quarter was against a non-resident producer for $4,000 for “Failure to Report Administrative Actions”;
- There was one action involving a licensee for “Trustworthiness and Securities Fraud Conviction” which resulted in a settlement agreement without a fine but with a license revocation order and a “Cease & Desist from Violation” notice;
- There was also another action involving the allegation of “Trustworthiness” arising from a felony conviction that also ended in a settlement agreement without any fine but with an order for a permanent license revocation and a “Cease & Desist from all Insurance Activity” notice;
- There were two cases involving unlicensed companies: One was an insurance agency that was operating in Massachusetts while unlicensed. This ended with a settlement agreement, a fine of $750 and a “Cease & Desist from Violation” notice;
- The second action involved a property and casualty insurance company that was fined for conducting business in the Commonwealth while unlicensed. This action also ended in a settlement agreement and a $500 fine along with a “Cease and Desist from Violation” notice;
- In addition, there were a total of eight different licensees fined this quarter for “Placing or Renewing Policies While Unlicensed” with the individual fines for these allegations ranging from $250 to $3,600 dollars;
- The last four cases of this quarter involved the allegations of “Misrepresentation on a License Application.” Two of these actions ended with a settlement agreement and no fines. One of the cases, however, included the plural on “Misrepresentations” and so in addition to the Settlement Agreement, a “Cease & Desist from All Insurance Activity” notice accompanied this fine;
- The one case involving a “Misrepresentation on an Annuity Policy Application”, however, resulted in a settlement agreement along with a $1000 fine and a “Cease and Desist from Violation” notice;
- The last case involved both a “Misrepresentation on a License Application” and a “Late Notice of Administrative Action” allegation. These two allegations resulted in a $1000 fine along with a settlement agreement and a “Cease & Desist from Violation” notice.
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”.