On February 27, 2019, a Division of Insurance hearing officer entered an order against Mark Bresard-Howard of Atlanta, Georgia, revoking his nonresident insurance producer license, ordering him to cease transacting any insurance business in Massachusetts, and, under Massachusetts General Laws Chapter (“G.L. c.”) 175, § 166B, to dispose of any interests in Massachusetts as a proprietor, partner, stockholder, officer, or employee of any licensed insurance producer and fined him $4,000.
The license revocation and orders against Mr. Mark Bresard-Howard resulted, in part, from his failure to report administrative actions taken against him in other states as required by G.L. c. 175, § 162V(a).
Failure to report “administrative action” leads to fines in addition to license loss
Sections 162V (a) of the Massachusetts General Laws requires that any insurance producer licensed in the Commonwealth to sell, solicit or negotiate insurance must report to the commissioner of insurance within thirty days of the final disposition of any administrative action:
- taken against that producer in another jurisdiction or
- taken by another governmental agency in the commonwealth.
To properly make such a report the producer must send the commissioner all the relevant legal documents including a copy of any orders, stipulations or consents.
While almost all states have a similar law, since it is part of the National Association of Insurance Commissioner’s Producer Licensing Model Act, some insurance producers who become involved in relatively minor administrative actions fail to report them to all the states in which they hold licenses. As a result, they often suffer a cascading set of revocations as successive jurisdictions revoke their licenses.
In most states, the revocation is the end of the matter, however, in Massachusetts, as opposed to other states, the failure to report out-of-state administrative actions usually results in fines as well as loss of any nonresident producer licenses.
In Mr. Bresard-Howard’s case, Massachusetts fined him a total of $4,000: $500 for each of his six failures to report administrative actions against him in other states and $1,000 for providing incorrect and materially untrue information on his Uniform Application for an Insurance License in February 2016.
In Mr. Bresard-Howard’s case, his problems began but did not end, with his simply failing to renew his home state producer license on time.
Resident producer license reinstatement leads to further administrative actions.
After failing to renew his resident producer license in his home state of Georgia prior to a December 31, 2010 deadline, Mr. Bresard-Howard signed a License Reinstatement Consent Order and agreed to pay a $150 fine, on March 25, 2011. After signing the consent order and paying the fine, Mr. Bresard-Howard’s Georgia license was reinstated for 2011.
On February 3, 2016, Mr. Bresard-Howard submitted the Uniform Application for Individual Producer License to the Division and to other state insurance regulators. Background Question 2 on the Uniform Application asked whether the applicant had ever been named or involved as a party in an administrative proceeding. Mr. Bresard-Howard answered “no.”
On June 22, 2016, the North Dakota Insurance Department denied Mr. Bresard-Howard’s April 28, 2016 application for a non-resident individual insurance producer license due to his failure to disclose the March 25, 2011 Georgia administrative action. Mr. Bresard-Howard failed to respond to offers from the North Dakota Insurance Department to settle the matter.
On September 6, 2016, the State of Maine Bureau of Insurance issued an Order of Termination revoking Mr. Bresard-Howard’s nonresident insurance producer license effective October 6, 2016, for failure to report administrative action against him in another jurisdiction and for failure to respond to a Bureau of Insurance inquiry in a timely manner.
On October 12, 2016, the Indiana Commissioner of Insurance denied Mr. Bresard-Howard’s application for a nonresident insurance producer license due to Mr. Bresard-Howard’s failure to disclose prior administrative actions on his application.
The Commonwealth of Virginia issued an Order Revoking License to Mr. Bresard-Howard on November 10, 2016. The revocation of Mr. Bresard-Howard’s insurance agent license was based upon his failure to report the North Dakota administrative action within thirty days.
On November 17, 2016, the Louisiana Department of Insurance issued a Notice of Regulatory Action revoking Mr. Bresard-Howard’s insurance producer license due to his failure to disclose the North Dakota administrative action.
On November 18, 2016, the State of California Department of Insurance revoked Mr. Bresard-Howard’s nonresident insurance agent license.
Mr. Bresard-Howard did not report any of these administrative actions to the Massachusetts Division of Insurance within the statutory time period of thirty days required by G.L. c. 175, § 162V(a).
Massachusetts moves for revocation and fines for Mr. Bresard-Howard’s failure to report
Massachusetts commenced its proceedings against Mr. Bresard-Howard on February 7, 2018. The Division of Insurance sought the revocation of his Massachusetts nonresident producer license, his ceasing to do any insurance business in Massachusetts, and fines for his failure to report to the Division administrative actions taken by other states against him as required by Massachusetts law.
The Division’s order to show cause alleged that Mr. Bresard-Howard failed to report, as required, to the Massachusetts commissioner an administrative action in his home state of Georgia and subsequent administrative actions in California, Indiana, Maine, North Dakota, Louisiana, and Virginia as required by G.L. c. 175, § 162V(a). Additionally, the Division sought fines.
Mr. Bresard-Howard’s failure to appear results in default and a summary decision against him
The Division served its order to show cause on Mr. Bresard-Howard by certified mail and regular mail at the addresses he used in obtaining his nonresident producer license. Mr. Bresard-Howard signed the certified mail receipt for the delivery to his residential address. However, thereafter he neither contacted the Division about the order to show cause nor appeared at the scheduled hearing.
Based on Mr. Bresard-Howard’s failure to respond, the hearing officer entered a default, finding Mr. Bresard-Howard had waived his right to an evidentiary hearing and proceed to decide the matter based on the record contained in the Division’s motion for summary decision.
Hearing officer finds charges warrant fines under the general penalty statute
The hearing officer accepted as evidence copies of the orders issued by Georgia, California, Indiana, Maine, North Dakota, Louisiana, and Virginia revoking Mr. Bresard-Howard’s insurance producer licenses to prove Mr. Bresard-Howard’s violations of G.L. c. 175, § 162R(a)(9) (Allowing the Commissioner to revoke a producer’s Massachusetts licenses where another jurisdiction has revoked that producer’s license), G.L. c. 175, §162R (a)(2) (Violating any insurance laws or regulation, subpoena or order of the Commissioner or of another state’s insurance commissioner), and G.L. c. 175, § 162V(a) (Failure to report out-of-state administrative proceedings)
In its order to show cause, the Division also requested the hearing officer to levy a civil penalty as allowed by G.L. c. 176D, §7. This section allows the commissioner to assess up to a $1,000 fine for any “unfair and deceptive acts and practices in the business of insurance.” The Division claimed that Mr. Bresard-Howard should be fined $1,000 for each of the grounds for which the Division sought the revocation of his nonresident producer license.
The hearing officer declined to impose multiple fines under G.L. c. 176D. However, the hearing officer did find that in making his application to the Division of Insurance for his nonresident producer license he had falsely answered “no” to Background Question 2 of the Uniform Application for Individual License. This question asked if the applicant had ever been named or involved as a party in an administrative proceeding. The hearing officer found he had in March 2011, signed a License Reinstatement Consent Order in which he agreed to pay an “administrative fine” for failing to file for a continuation of his insurance agent license in Georgia.
Given this misstatement, the hearing officer deemed it entirely appropriate to impose a Section 7 fine on the Respondent for this unfair and deceptive business practice and imposed the maximum penalty of $1,000 for this false statement under G.L. c. 175, §162V (a)(1)
However, the Division order to show cause also allowed the hearing officer to impose the lesser fines allowed under G.L. c. 175, §194. This statute is the catch-all provision of the insurance statutes that provides: “Whoever violates any provision of this chapter, the penalty which is not specifically provided for herein, shall be punished by a fine of not more than five hundred dollars.”
The hearing officer, in this case, found Mr. Bresard-Howard’s failure to report these administrative actions effectively enabled him to avoid prompt enforcement action in the commonwealth. For that reason, she decided to impose the maximum penalty of five hundred dollars under § 194, for each of Mr. Bresard-Howard’s six failures to report an administrative action as required by G.L. c. 175, §162V(a).
Final Orders entered and $4,000 in fines assessed by the hearing officer
Based on her rulings, the hearing officer entered the following final orders against Mr. Bresard-Howard :
ORDERED: That any insurance producer license issued to Mark Bresard-Howard by the Division is hereby revoked; and it is
FURTHER ORDERED: That, within ten (10) days of this decision, Mark Bresard-Howard shall return to the Division any license in his possession, custody or control; and it is
FURTHER ORDERED: That Mark Bresard-Howard is, from the date of this order, prohibited from directly or indirectly transacting any insurance business or acquiring, in any capacity whatsoever, any insurance business in Massachusetts; and it is
FURTHER ORDERED: That Mark Bresard-Howard shall comply with the provisions of 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; and it is
FURTHER ORDERED: That Mr. Bresard-Howard shall pay a fine of Four Thousand Dollars ($4,000) to the Division within 30 days of the date of this decision and order.
