Both decisions involved non-resident insurance producers
On December 4, 2019, Division of Insurance Hearing Officer, Jean A. Farrington, entered orders revoking the nonresident producer license of Lorenzo R. Ballard, of Omaha, Nebraska, and Nikia Jones of Chicago, Illinois (“Respondents”). The Division of Insurance initiated the revocation proceedings against these Respondents based on their failures to report administrative actions against them in other states as required by Massachusetts law.
In each of these cases, the hearing officer also entered orders on each Order to Show Cause:
- revoking any licenses, including their nonresident producer licenses issued to each Respondent.
- Ordering the return to the Division any license in their possession, custody, or control.
- Prohibiting the Respondents from directly or indirectly transacting any insurance business or acquiring, in any capacity whatsoever, any insurance business in Massachusetts; and
- Ordering the Respondents to comply with the provisions of M.G.L. c. 175, §166B and dispose of any and all interests in Massachusetts as proprietor, partner, stockholder, officer, or employee of any licensed insurance producer.
The hearing officer also fined each of the Respondents $250. Under orders entered by the hearing officer, the Respondents had thirty (30) days to pay the fines.
Each respondent defaulted on the Order to Show Cause filed by the Division against them. The allegations in the Division’s Order to Show Cause that the hearing officer accepted regarding each of the Respondents were the following:
Nikia Jones—Chronic nonpayment of taxes leads to home state license revocation
Massachusetts first licensed Ms. Jones as a nonresident insurance producer on June 30, 2015.
The Division’s July 23, 2019 Order to Show Cause alleged Ms. Jones failed to report to the Division administrative actions suspending her resident producer licenses in Illinois as she was obligated to do under M.G.L. c. 175, §162V (a). This statute provides:
A producer shall report to the commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency in the commonwealth within 30 days of the final disposition of the matter. This report shall include a copy of the order, consent to order, or other relevant legal documents.
On August 14, 2018, the Illinois Department of Insurance entered an order that was effective in thirty days suspending Ms. Jones’ resident producer license for failure to pay state income tax for for 2014 and 2015, and file tax returns for five years between 2005 and 2013.
In addition to failing to report the Illinois license action, The Division also alleged Ms. Jones failed to report the follow-on actions of other states against her nonresident producer licenses. The actions by other states based on the Illinois suspension included:
- On November 28, 2018, the Arkansas Insurance Department suspended Ms. Jones’s license because of the Illinois suspension.
- On December 18, 2018, the Washington Insurance Commissioner issued an order, effective January 2, 2019, revoking Jones’ license for failure to report the Illinois action to it within thirty days as required under that state’s version of G.L. c. 175, § 162V(a).
Ms. Jones did not report the administrative actions against her insurance licenses in either Illinois, Arkansas, or Washington.
After Ms. Jones failed to answer or appear on the Division’s Order to Show Cause, the hearing officer granted a summary decision at the Division’s request based on Ms. Jones’s default. Based on the default, she then entered the orders listed above.
Hearing officer denies Division’s claim on two of the three failures to report
Although Ms. Jones failed to report the administrative actions in either Illinois, Arkansas or Washington, and the Division requested fines for failure to report each of the administrative actions, the hearing office only issued a fine for the Washington revocation. She found that the Illinois and Arkansas suspensions were conditioned upon the nonpayment of taxes by Ms. Jones in her home state, Illinois. Since the trigger for a producer to report is that the administrative action has had a “final disposition,” the hearing officer refused to grant the Division’s fine request for the Illinois and Arkansas actions without evidence of license revocation.
On the Washington revocation, the hearing officer agreed with the Division that this was a final disposition that Ms. Jones did not report in violation of the statute. For this failure to report, the hearing officer imposed a $250 fine.
Lorenzo R. Ballard—Failure to respond to Indiana Division of Insurance on company representation
Mr. Ballard obtained a nonresident producer’s license in Massachusetts on March 28, 2016.
The Division’s May 30, 2019 Order to Show Cause alleged Mr. Ballard failed to report to the Division administrative actions suspending or revoking his nonresident producer licenses in Indiana, South Dakota, and Louisiana as he was obligated to do pursuant to M.G.L. c. 175, §162V (a), and thereby violated M.G.L. c. M.G.L. c.175, §162R (a)(2) and (a)(9). These two provisions follow the statutes introductory provision that: “(a) The commissioner may place on probation, suspend, revoke or refuse to issue or renew an insurance producer’s license or may levy a civil penalty in accordance with section 7 of chapter 176D [up to $1 thousand per violation] or any other applicable sections of the General Laws or any combination of actions, for any 1 or more of the following causes:—
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(2) violating any insurance laws, or violating any regulation, subpoena or order of the commissioner or of another state’s insurance commissioner.
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(9) having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory.
Mr. Ballard lived in Omaha, Nebraska and worked for Mutual of Omaha. He held a Nebraska resident producer license, and additional nonresident producer licenses for Indiana, Louisiana, and South Dakota.
He never completed his required continuing education credits for his Nebraska license and let this license expire as of the end of 2018.
Indiana, where Mr. Ballard held a nonresident producer license, has a law that “a licensed producer must furnish the Commissioner with a full and complete report listing each insurer with which the licensee has held an appointment during the preceding year, within ten (10) days of a request.”
Indiana made a request to Mr. Ballard for a list of his company appointments. After requests by email and a certified letter that went unanswered, the Indiana Department, on January 5, 2018, exercised its right under this statute to suspend Mr. Ballard’s nonresident producer license without a hearing.
On July 10, 2018, the Louisiana Division of Insurance revoked Mr. Ballard’s nonresident producer license in that state license for his failure to report the Indiana administrative action and respond to a request for information sent to him that Department.
On December 5, 2018, the South Dakota Division of Insurance also revoked Mr. Ballard’s nonresident producer license for failure to report the Indiana administrative action and to respond to an inquiry from the Division
Failure to report to Massachusetts administrative action in other states
Ms. Ballard did not report the administrative actions against his insurance licenses by Indiana, Louisiana, or South Dakota.
Mr. Ballard also failed to answer the Division’s Order to Show Cause, and when he did not communicate with the Division, or appear at the scheduled hearing, the hearing officer defaulted him and granted a summary decision at the Division’s request
However, in this case, like Ms. Jone’s case, the hearing officer refused to find a failure to report for a suspension without evidence of a subsequent revocation. The hearing officer’s specific finding was that:
The Indiana action was a suspension that was contingent upon compliance with a particular condition. The record does not indicate the final disposition of that action. I find that Ballard’s failure to report the Indiana action did not violate §162V (a).
On the South Dakota order, the hearing officer noted that Mr. Ballard’s nonresident producer license in Massachusetts expired on December 30, 2018, without any renewal. The South Dakota order entered on December 5, 2018, and the thirty-day reporting requirement under §162V (a) allowed Mr. Ballard up to January 5, 2019. Based on these dates the hearing officer ruled: “As of December 30, 2018, when Ballard’s Massachusetts license was terminated, he was no longer obligated to report the South Dakota action.”
However, concerning the July 10, 2018 revocation by the Louisiana Division of Insurance that occurred six months before his license expired in Massachusetts and that Mr. Ballard did not report in a timely manner, the hearing officer found a violation of § 162V(a), imposed a $250 fine, and entered the orders listed at the beginning of this article.