The Division of Insurance releases the results of its enforcement actions for the Second Quarter of 2014[pullquote]The Division’s Special Investigation Unit is in charge of investigating allegations involving licensed insurance producers[/pullquote]
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 this quarter, the DOI Special Investigations Unit were involved in 20 different cases which resulted in the Enforcement Division assessing fines totaling $33,550.
The third quarter saw the highest amounts of fines assessed so far this year amounting to almost four times the amount fined in the first quarter this year. Third Quarter 2014, however, continued to be a relatively low amount of fines assessed in comparison with past couple of years where fines have totaled almost $150,000.00 in a given quarter.
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 13 Non-Resident Producers and 7 Producers. Here’s a summary of the results of those enforcement actions:
- As stated above, there were 20 different cases that were investigated in the third quarter of 2014 or during the months of July, August and September;
- The total amount of fines assessed in SQ2 were $33,550;
- The largest single fine this quarter was against a Non-Resident Producer for $15,000 for placing policies while unlicensed.
- The second largest fined was for $8,000 also against a Non-Resident Producer for Misrepresentation on a License Application.
- In this quarter there were eight cases involving issues of Producers and Non-Resident Producers placing policies while unlicensed. Fines for this offense ranged from a simple Settlement Agreement and Cease and Desist Violation to an agreement plus a $200 fine all the way up to $15,000.
- There were seven cases involving Misrepresentation on a License Application. Fines for this violation spanned from an $8,000 fine along with a Settlement Agreement and Cease and Desist from Violation to a simple Settlement Agreement and Cease & Desist from Violation with no Fine. In the majority of cases, however, the Division generally imposed a $500 or $1000 fine for a case involving this allegation.
- The remaining five cases involved Late Notice of Administrative Actions and in one case a Failure to Report an Administrative Action. These offenses, in comparison to the ones discussed above, did not result in large fines. The range for this violation was between $200 to $1250 dollars.
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”.
