The Fourth Quarter includes actions during the months of October, November, and December
Each quarter, the Division of Insurance publishes a list of the enforcement actions it has taken against licensed Resident and Non-Resident Producers. The total fines assessed often vary depending upon the circumstances and actions alleged.
The following is a review of the Fourth Quarter of 2016, which includes special investigations and enforcement hearings during the months of October, November, and December.
How do fines in the 4th quarter compare to the 1st, 2nd & 3rd quarters?
While the Fourth Quarter of 2016 involved just over over double the amount of Administration Actions as compared to the Third Quarter of 2016, the total amount of fines were less. According to the Division of Insurance documents, the Division’s Special Investigations Unit was involved in a total of 23 different Administrative Actions during the last three months of 2016.
The total fines for this quarter, however, were $10,900. In order to gain some perspective, the total fines for the Third Quarter totaled $16,500 while fines in the Second Quarter were $29,015. The First Quarter of 2016 more closely mirrored the Third Quarter with $15,900 dollars in fines levied. [pullquote]The DOI Special Investigations Unit was involved with 23 investigations during the Fourth Quarter of 2016[/pullquote]
The largest fine imposed this quarter were two separate fines for $2,500
The largest single fines assessed this quarter were against two Resident Producers for $2,500 each. While no formal decision was issued in either case, letters were forwarded to both of the Resident Producers outlining the allegations as well as the terms of the Settlement Agreement. The first fine was against an insurance agency for allegations of Trustworthiness and a Violation of Insurance Laws. The second fine involved a company for Failure to Notify the Division of the Dissolution of the Company as well as a Violation of Insurance Laws.
None of the fines this quarter, however involved public hearings
Surprisingly, of the 23 Administrative Actions administered by the Division this quarter, none of them involved official public hearings on the matter. Rather, all of the actions were resolved via settlement agreements, with ten actions, or just under half of the total 23, resulting in no fines whatsoever.
Now, a look at the individual cases…
The following a list of the Administrative Actions this quarter includes:
- Licensee & Type of Case: A Non-Resident Producer Insurance Agency
- Date: 12/28/2016
- Allegations: Unlicensed Activity
- Disposition: Settlement Agreement: $100 Fine; Cease & Desist
- Licensee & Type of Case: Non-Resident Producer (Agent)
- Date: 12/21/2016
- Allegations: Misrepresentation on License Application; Trustworthiness
- Disposition: Settlement Agreement: $500 Fine; Cease & Desist
- Licensee & Type of Case: Non-Resident Producer (Agent)
- Date: 12/1/2016
- Allegations: Failure to Report Administrative Actions
- Disposition: Settlement Agreement: Cease & Desist
- Licensee & Type of Case: Resident Producer (Agent)
- Licensee & Type of Case: Resident Producer Insurance Agency
- Date: 12/19/2016
- Allegations: Paying Commissions to Unlicensed Entity
- Disposition: Settlement Agreement: $500 Fine; Cease & Desist
- Licensee & Type of Case: Resident Producer Insurance Agency
- Date: 11/20/2016
- Allegations: Unlicensed Activity
- Disposition: Settlement Agreement: $500 Fine; Cease & Desist
- Licensee & Type of Case: Resident Producer (Agent)
- Date: 10/28/2016
- Allegations: Failure to Pay Licensing Fee
- Disposition: Hearing Officer Decision: License Revocation
- Licensee & Type of Case: Non-Resident Producer (Agent)
- Date: 12/19/2016
- Allegations: Failure to Report Administrative Action
- Disposition: Settlement Agreement: Revocation; Cease & Desist
- Licensee & Type of Case: Resident Insurance Producer ( Insurance Adjusters)
- Date: 12/19/2016
- Allegations: Unlicensed Activity
- Disposition: Settlement Agreement: $250 Fine; Cease & Desist
- Licensee & Type of Case: Resident Producer (Agent)
- Date: 10/28/2016
- Allegations: Failure to Pay Licensing Fee
- Disposition: Hearing Officer Decision: License Revocation
- Licensee & Type of Case: Non-Resident Producer (Agent)
- Date: 10/27/2016
- Allegations: Untrustworthiness; Unfair Trade Practice of Fraud; Misappropriation of Funds; Felony Conviction
- Disposition: Settlement Agreement: Permanent License Revocation; Cease & Desist From All Insurance Activity in Massachusetts
- Licensee & Type of Case: Non-Resident Producer (Agent)
- Date: 12/19/2016
- Allegations: Misrepresentation on License Application; Trustworthiness
- Disposition: Settlement Agreement: $500 Fine; Cease and Desist
- Licensee & Type of Case: Non-Resident Producer (Agent)
- Date: 12/1/2016
- Allegations: Failure to Disclose Criminal Conviction; Failure to Report Administrative Actions
- Disposition: Settlement Agreement: Revocation; Cease & Desist
- Licensee & Type of Case: Resident Producer (Agent)
- Date: 11/20/2016
- Allegations: Unlicensed Activity
- Disposition: Settlement Agreement: $1,050 Fine; Cease & Desist
- Licensee & Type of Case: Non-Resident Producer (Insurance Group)
- Date: 12/13/2016
- Allegations: Unlicensed Activity
- Disposition: Settlement Agreement: $250 Fine; Cease & Desist
- Licensee & Type of Case: Resident Producer (Insurance Agency)
- Date: 12/8/2016
- Allegations: Trustworthiness; Violation of Insurance Laws
- Disposition: Settlement Agreement: $2,500 Fine; Cease & Desist
- Licensee & Type of Case: Resident Producer (Insurance Agency)
- Date: 12/22/2016
- Allegations: Failure to Notify the Division of Dissolution of Company; Violation of Insurance Laws
- Disposition: Settlement Agreement: $2,500 Fine; Cease & Desist
- Licensee & Type of Case: Insurance Adjuster
- Date: 11/24/2016
- Allegations: Unlicensed Activity
- Disposition: Settlement Agreement: $1,000 Fine; Cease & Desist
- Licensee & Type of Case: Non-Resident Producer (Brokerage)
- Date: 12/3/2016
- Allegations: Failure to Report Administrative Actions
- Disposition: Settlement Agreement: $250 Fine; Cease & Desist
- Licensee & Type of Case: Non-Resident Producer (Agent)
- Date: 12/8/2016
- Allegations: Felony Conviction; Failure to Report Felony Conviction; No Home State License
- Disposition: Settlement Agreement: Revocation; Cease & Desist
- Licensee & Type of Case: Non-Resident Producer (Agent)
- Licensee & Type of Case: Non-Resident Producer (Agent)
- Date: 12/22/2016
- Allegations: Violation of Other States Insurance Laws; Felony Conviction; Trustworthiness; Insurance Producer License Revoked by Another State; Failure to Report Criminal Conviction; Failure to Report Administrative Action
- Disposition: Settlement Agreement: Revocation; Cease & Desist
- Licensee & Type of Case: Non-Resident Producer (Agent)
- Date: 10/7/2016
- Allegations: Misrepresentation on License Application; Failure to Report Administrative Action Within 30 Days
- Disposition: Settlement Agreement: $1000 Fine; Cease & Desist
The Division’s Special Investigation Unit is in charge of investigating producers
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 more egregious cases, a licensee’s conduct may warrant the sanctioning of that producer’s license including revocation or suspension along with restitution.
To learn more about avoiding enforcement issues, you may be interested in Agency Checklists’ article “One Way to Avoid Large Fines for You & Your Agency.”
