A Division of Insurance hearing officer entered an order under General Laws Chapter 175, § 166B against De’Borah S. Dunbar of Henderson, Nevada revoking and ordering the return of any and all producer licenses, to cease transacting any insurance business in Massachusetts, and to dispose of any interests in Massachusetts as a proprietor, partner, stockholder, officer, or employee of any licensed insurance producer. The Division also fined Ms. Dunbar $8,000 pursuant to General Laws Chapter 176D § 7, on April 27, 2016.
Call center employee’s gets nonresident licenses in multiple states
Ms. Dunbar worked for Amica Insurance’s National Sales Center – West, located where she lived, in Henderson, Nevada. The National Sales Center – West in Henderson had only opened in 2009, but already had grown from seven employees to 72 employees. During the center’s expansion, Ms. Dunbar began working at Amica’s National Sales Center, apparently in the latter half of 2012.
As is customary with call center employees selling insurance, the employee must first obtain a producer’s license in their home state. In Ms. Dunbar’s case this meant obtaining a Nevada resident producer license. The company they work then typically has a call center employee licensed as nonresident producers for the states where the employee will sell insurance.
In Ms. Dunbar’s case, during the course of her employment she obtained nonresident licenses in the following states: California, Kansas, Maine, Minnesota, New York, North Dakota, South Dakota, Virginia, Wisconsin, and, of course, Massachusetts.
Irregularities in applications and one application with “false and/or inaccurate information”
Ms. Dunbar’s career as an insurance sales agent with Amica apparently ended soon after it began. She had been licensed as a nonresident producer by the South Dakota Division of Insurance on November 27, 2012.
Sometime before February 11, 2013, the South Dakota Division of Insurance received notice that Amica had terminated Ms. Dunbar for “misconduct.” A Compliance Agent for the Division followed up with Amica and received information that:
[Ms.] Dunbar’s appointment to Amica was involuntarily terminated for misconduct. Dunbar was not honest with the manager during the investigation regarding her misconduct and the company also found that she was entering false and/or inaccurate information during the application process with respect to at least one California consumer.
In a letter dated February 11, 2013, Amica’s Employee Relations Manager advised the South Dakota Division of Insurance that Ms. Dunbar’s involuntary termination was based on the following:
There were insurance applications processed by the employee with respect to California consumers which contained irregularities. When questioned about these issues, the employee provided responses we could not verify. Ultimately, we concluded the employee was not honest with the manager during the investigation. We also found that she was entering false and/or inaccurate information during the application process with respect to at least one California consumer.”
Failure to respond leads to a series of revocations for failing to report license termination
The South Dakota Division sent Ms. Dunbar a letter requesting she provide the Division, among other things, “an explanation in her own words as to the facts and circumstances surrounding the termination.” She was given twenty days upon receipt to respond.
When she did not respond to a second letter the South Dakota Division scheduled a hearing to decide:
Whether the Non-Resident Insurance Producer License of De’Borah Dunbar should be revoked due to her failure to respond in a timely manner to the South Dakota Division of Insurance inquiries dated February 19, 2013 and March 19, 2013
Not surprisingly, the Division’s hearing officer recommended that Ms. Dunbar’s nonresident producer license be revoked for violating the South Dakota statutes regarding responding to inquiries from the Division. On April 9, 2014, the hearing officer’s recommendation was accepted and Ms. Dunbar’s license as a nonresident producer in South Dakota was revoked.
All the other states listed above, except California and Nevada, followed with their own terminations. In each instance, the termination was based on notices from the NAIC’s Regulatory Information Retrieval System that the State of South Dakota had taken administrative action against Ms. Dunbar.
Most of these states had in-force statutes or rules, similar to Massachusetts law, that allows the insurance commissioner to revoke or suspend a license if “a producer [fails to report] …to the commissioner any administrative action taken against the producer in another jurisdiction …within 30 days of the final disposition of the matter.”
Massachusetts waits until October 2015 to take action
Massachusetts did not commence any proceeding against Ms. Dunbar until October 22, 2015. She had been originally licensed in Massachusetts on February 8, 2014, as a nonresident producer.
On October 22, 2015, the Division of Insurance filed its order to show cause against Ms. Dunbar arising out of her failure to report to the Division of Insurance the administrative actions against her nonresident producer licenses and then their subsequent revocations in South Dakota, New York, Minnesota, Maine, Virginia, South Dakota, North Dakota, Kansas, and Wisconsin.
The Division of Insurance also alleged that Ms. Dunbar’s failure to make these reports constituted “fraudulent, coercive or dishonest practices and demonstrated untrustworthiness in the conduct of business.”
Ms. Dunbar’s failure to appear results in default and a summary decision against her
True to form, Ms. Dunbar neither contacted the Division nor appeared at the hearing. The hearing officer found that she had received sufficient notice, although all four letters sent to her both by regular and certified mail were all returned with the legend from the Post Office marked “RETURN TO SENDER – NOT DELIVERABLE AS ADDRESSED — UNABLE TO FORWARD.”
The envelopes containing copies of the hearing notice that were mailed by regular and certified mail to Ms. Dunbar’s business address listed on the licensing records of the Division, however, were not returned. These letters were apparently sent to Ms. Dunbar’s former employer, Amica, at the National Sales Center – West from where Ms. Dunbar had been fired some two and one-half years before the notice was sent.
The hearing officer entered a default and proceeded to enter judgment stating:
By this default, Ms. Dunbar has waived the right to proceed further with an evidentiary hearing and I may consider the Motion [of the Division] and the merits of the matter based solely upon the [Order to Show Cause] and the exhibits attached to it.
Hearing officer rules on 25 separate counts against Ms. Dunbar
The Division’s Show Cause Order asserted 25 claims under Massachusetts law, against Ms. Dunbar, due to her failure to report administrative actions resulting from her being fired supposedly for cause by Amica.
The first group of claims were based on non-reporting of administrative actions brought by South Dakota, New York, Minnesota, Maine, Virginia, North Dakota, Kansas, and Wisconsin pursuant to §162V(a) & §162R(a)(2). Section 162V(a) requires an insurance producer to report to the Division an administrative action taken against the producer in another jurisdiction within 30 days of the final disposition of the matter. The violation of an insurance law, such as §162V(a) subjects an insurance producer to discipline pursuant to §162R(a)(2).
The second group of claims follows from the first since those proceedings resulted in administrative revocations of Ms. Dunbar’s nonresident producer license.
In this case, the revocations of Ms. Dunbar’s nonresident producer licenses issued by the same states constituted eight reporting violations that could subject Ms. Dunbar to discipline pursuant to §162R(a)(9). (“Commissioner may…levy a civil penalty in accordance with section 7 of chapter 176D…for…the following causes:”).
Hearing officer fines Ms. Dunbar $8,000 for failure to report administrative proceedings in the eight states that revoked her nonresident licenses.
The hearing officer found that:
Each one of Ms. Dunbar’s violations of §162V was a particularly serious offense because it involved insurance license revocation. Her non-reporting, therefore, unlike the reporting of less significant matters, drastically affects her eligibility and qualifications for a Massachusetts producer license. Revocation of her Massachusetts nonresident insurance producer licenses and the maximum civil penalty of $1,000 pursuant to [G.L. c. 176D, § 7], is appropriate for each one of her eight violations of § 162V(a).
The hearing officer found an “…insufficient basis for me to conclude that Ms. Dunbar in the conduct of business has used fraudulent, coercive, or dishonest practices, or has demonstrated incompetence, untrustworthiness, or financial irresponsibility.” Although the hearing officer found that the failure to report the revocations of Ms. Dunbar’s nonresident producer licenses in the same eight states constituted statutory violations, he levied no civil penalties.
Final Orders entered by hearing officer
Additionally, the hearing officer entered orders against Ms. Dunbar requiring her to return any licenses, prohibiting her from directly or indirectly transacting any insurance business or acquiring, in any capacity whatsoever, any insurance business in the Commonwealth of Massachusetts; and to dispose of any and all interests in Massachusetts as proprietor, partner, stockholder, officer or employee of any licensed insurance producer.
Finally, the hearing officer ordered:
“De’Borah S. Dunbar shall pay a fine of Eight Thousand ($8,000) to the Division within 30 days of the entry of this order.”
Massachusetts continues to fine call center employees who lose their jobs and lose licenses through neglecting to respond to regulators
This is one of a series of cases that Agency Checklists has written about involving call center employees who leave their employment, whether voluntarily or involuntarily, and subsequently receive substantial fines from Massachusetts for violating the law requiring reporting of administrative actions. In some of these cases, the record seems pretty clear that the fines resulted from these people leaving their insurance call center jobs, and then ignoring communications from insurance departments, because they were not going to work in insurance. Most states simply revoke the licenses involved. Massachusetts seems to routinely impose substantial fines upon these former insurance workers.
While Ms. Dunbar’s failure to report arose out of a revocation based on the termination of her employment by Amica, allegedly for cause, and because Amica concluded she “was not honest with the manager during the investigation.” Others fined have done less.
For example, the Division brought an action against a nonresident producer who initially failed to furnish “replacement fingerprints cards” to the State of Washington. When she failed to respond, Washington revoked her nonresident license and additional states followed when she failed to report the revocation within 30 days as required by the uniform licensing laws enacted in most states. While the other states simply revoked the license, Massachusetts elected to fine this person $4,000. See “Agency Checklists”, June 25, 2014, DOI fines agent $4000 for not reporting license revocations.
