DOI Special Investigations & Enforcement Actions During The Second Quarter of 2017

The Second Quarter includes actions during the months of April, May, and June of this year.

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 Second Quarter of 2017, which includes special investigations and enforcement hearings during the months of April, May, and June.

What was the total amount of actions and fines during the 1st quarter of 2017?

The Second Quarter of 2017 saw a decrease in both the number administrative actions as well as the fines imposed as compared to the First Quarter of 2017. According to the Division of Insurance documents, the Division’s Special Investigations Unit was involved in a total of 21 different administrative actions during the second three months of 2017. Seventeen of those actions involved Non-Resident Producers, with the remaining four involving Resident Producers.

As for fines, total of $15,370 dollars in fines were imposed during this period. This is approximately $81,325 dollars less than the total amount of fines imposed during the First Quarter of this year, when the total fines imposed equaled 96,695. To date, the Division has issued fines during the first two quarters of 2017, totaling $112,065 dollars. In comparison, total fines for the entire year of 2016 equaled $72,315. [pullquote]The DOI Special Investigations Unit was involved in approximately 21 investigations during the Second Quarter of 2017[/pullquote]

The largest fine imposed this quarter was for $4,695

The largest single fines assessed this quarter was against a wholesale broker and MGA for its failure to renew its producer license until April of this year, when its license had officially expired in February. As a result, during this two month period in which it was operating without a license, the company wrote and/or renewed approximately 311 policies, while unlicensed, that generated approximately $80,000 dollars in commissions and $819,988 in policy premiums.

After being contacted by the Division’s Special Investigations Unit, which opened an investigation three days after the company had renewed its license, the broker accepted a settlement offer that included an agreement to waive a public hearing, an agreement to cease and desists from further violations as well as it acceptance of a fine of $4,695 to be paid in full by May 31, 2017.

Fines involving Hearing Officer Decisions

The following are three cases that did not terminate with a Settlement Agreement this quarter, but rather involved decisions rendered by a Division of Insurance Hearing Officer. The following is an excerpt from a previous article Agency Checklists published on these cases.

On May 31, 2017, Division of Insurance hearing officer, Kristina A. Gasson, entered orders and fine on Order to Show Cause filed by the Division of Insurance against Eugene Laronzo Bazemore, of Norfolk, Virginia, Robert Allen Christian, of Sioux Falls, South Dakota and Benjamin V. Fistel, of Miami, Florida.

In each case, the hearing officer also entered orders on each Order to Show Cause:

revoking any licenses, including their nonresident producer licenses issued to the Respondents:

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 varying amounts. The hearing officer fined Mr. Bazemore $1,000, Mr. Christian $2500, and Mr. Fistel $3500. All fines were ordered paid to the Division within 30 days.

For those interested in reading our full article on these decisions, please click the link to continue to the original article: “DOI Hearing Officer Revokes Three Producers’ Licenses And Fines Licensees Total Of $6,000.“

Now, a look at the individual cases…

Here is a list of the Administrative Actions conducted and reported during this quarter:

Licensee & Type of Case: Non-Resident Producer
- Date: 6/23/2017
- Allegations: No Home State License
- Disposition: N/A
- Fine: N/A
- Licensing Action: Voluntary Surrender
Licensee & Type of Case:Non-Resident Producer
- Date: 4/11/2017
- Allegations: Unlicensed Activity
- Disposition: Settlement Agreement
- Fine: $625
- Licensing Action: Cease & Desist
Licensee & Type of Case: Eugene Bazemore, Non-Resident Producer
- Date: 5/31/2017
- Allegations: Failure to Report Administrative Action[s]; Misrepresentation on License Application
- Disposition: Hearing Officer Decision
- Fine: $1,000
- Licensing Action: Revocation; Cease & Desist
Licensee & Type of Case: Robert Christian, Non-Resident Producer
- Date: 5/31/2017
- Allegations: Failure To Report Administrative Action[s]
- Disposition: Hearing Officer Decision
- Fine: $2,500
- Licensing Action: Revocation; Cease & Desist
Licensee & Type of Case: Resident Producer
- Date: 4/27/2017
- Allegations: Unlicensed Activity
- Disposition: Settlement Agreement
- Fine: $500
- Licensing Action: Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 4/20/2017
- Allegations: Trustworthiness; Unfair Trade Practice; Failure to Report Criminal Action
- Disposition: Settlement Agreement
- Fine: N/A
- Licensing Action: Revocation; Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 6/14/2017
- Allegations: Failure to Report Administrative Action; Misrepresentation on License Application
- Disposition: Settlement Agreement
- Fine: $1,500
- Licensing Action: Cease & Desist
Licensee & Type of Case: Benjamin Fistel, Non-Resident Producer
- Date: 5/31/2017
- Allegations: Failure to Report Administrative Action[s]
- Disposition: Hearing Officer Decision
- Fine: $3,500
- Licensing Action: Revocation; Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 6/27/2017
- Allegations: Failure to Report Administrative Action; Trustworthiness
- Disposition: Settlement Agreement
- Fine: N/A
- Licensing Action: Revocation; Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 6/23/2017
- Allegations: Failure to Report Administrative Action; No Home State License
- Disposition: Settlement Agreement
- Fine: N/A
- Licensing Action: Revocation; Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 6/5/2017
- Allegations: Failure to Report Administrative Action; Failure to Report Criminal Action
- Disposition: Settlement Agreement
- Fine: $100
- Licensing Action: Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 6/5/2017
- Allegations: Unfair Insurance Trade Practice; Trustworthiness; Forging Another’s Name to an Application for Insurance
- Disposition: Settlement Agreement
- Fine: N/A
- Licensing Action: Revocation; Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 6/23/2017
- Allegations: Misrepresentation on License Application
- Disposition: Settlement Agreement
- Fine: $100
- Licensing Action: Cease & Desist
Licensee & Type of Case: Resident Producer
- Date: 6/19/2017
- Allegations: Felony Conviction
- Disposition: Settlement Agreement
- Fine: $500
- Licensing Action: Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 4/24/2017
- Allegations: Misappropriation; Felony Conviction; Admission to Committing Unfair Insurance Trade Practice; Trustworthiness
- Disposition: Settlement Agreement
- Fine: N/A
- Licensing Action: Revocation; Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 6/5/2017
- Allegations: Failure to Report Corporation Dissolution
- Disposition: Settlement Agreement
- Fine: $250
- Licensing Action: Cease & Desist
Licensee & Type of Case: Resident Producer
- Date: 5/26/2017
- Allegations: Trustworthiness; Unfair Insurance Trade Practice
- Disposition: Settlement Agreement
- Fine: N/A
- Licensing Action: Revocation; Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 5/26/2017
- Allegations: Unlicensed Activity
- Disposition: Settlement Agreement
- Fine: $4,695
- Licensing Action: Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 6/2/2017
- Allegations: Misrepresentation on License Application
- Disposition: Settlement Agreement
- Fine: $100
- Licensing Action: Cease & Desist
Licensee & Type of Case: Non-Resident Producer
- Date: 4/5/2017
- Allegations: No Valid Home State License
- Disposition: N/A
- Fine: N/A
- Licensing Action: Voluntary Surrender
Licensee & Type of Case: Resident Producer
- Date: 5/11/2017
- Allegations: Trustworthiness; Unfair Insurance Trade Practice; Sale of Unsuitable Annuities
- Disposition: Settlement Agreement
- Fine: N/A
- Licensing Action: Revocation; 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.