Types of Violations

The theft of insurance premiums is the most prevalent type of misconduct in the agent/broker arena. Illegal conduct ranging from single thefts to multi-million dollar scams victimizes consumers, the insurance industry and competitive businesses.

Certain segments of the insurance industry target their marketing efforts toward senior citizens. Unscrupulous agents abuse elderly customers by unnecessarily replacing existing life and annuity policies to earn greater commissions. Initial sales or replacement policies may be wholly unsuitable products further victimizing seniors. The misconduct may involve criminal activities including theft, unregistered securities, falsifying documents, Ponzi schemes and confidence games.

This type of fraud encompasses the deceptive sale of long term care products; Medicare supplements, Medicare Advantage Plans – Part C, Medicare Prescription Drug Plans – Part D; medical discount card scams and "mini-med" plans; as well as other health insurance schemes and violations of the Affordable Care Act/Covered California program perpetrated by licensees.

The failure of some insurers to properly monitor and control their sales force can lead to licensed and unlicensed agents/brokers engaging in unethical and misleading marketing practices such as bait and switch schemes, misrepresentation, and the use of misleading titles and designations.

This type of fraud includes everything from faulty underwriting practices, failure to pay claims resulting in significant financial losses for consumers and offshore insurance companies issuing policies they have no intention of honoring.

Public adjusters represent insurance claimants in the settlement of claims with their insurance companies. Misconduct in this area includes high-pressure sales tactics, overcharging, conflicts of interest with vendors, failure to disperse and/or account for claims proceeds and illegal solicitation practices.

Kick-backs, personal financial incentives and commercial bribery are among the anti-competitive practices used by Title Insurers and the sales representatives to gain business from realtors, mortgage brokers and others operating in the residential real estate industry.

A bail agent is a person permitted to solicit, negotiate, and transact undertakings of bail on behalf of a surety insurer. Some unscrupulous bail agents illegally solicit consumers, fail to return collateral, aid and abet unlicensed bail agents, or apprehend arrestees with the intent to extort premium payments.