3 DOI Enforcement Actions Published: A License Revoked for Premium Theft And 2 Agencies Fined
The Division of Insurance (DOI or Division) has published its enforcement activities so far in 2023. The report identified three administrative actions taken by the Division in 2023: a license revocation and two settlements involving fines paid by two agencies whose licenses lapsed but had continued to write insurance in violation of G.L. c. 175, § 175.
Veronica Minnie: Producer’s license revoked after convictions of premium theft from insureds
On September 23, 2022, the DOI served Veronica Minnie, (Ms. Minnie) a licensed producer since May 16, 2017, residing in Ludlow, with an order to show cause why her license should not be revoked.
Convictions for stealing premiums from insureds lead to show cause order from the DOI
The DOI’s allegations were based on documentary evidence, including court records establishing that Ms. Minnie pled guilty to the theft of insurance premiums from insurance customers. She pled guilty to a February 14, 2019, premium theft in the Westfield District Court and an April 22, 2022, premium theft in the Eastern Hampshire District Court located in Belchertown.
Also, the DOI had a letter from Ms. Minnie’s former employer stating that she was terminated for failing to apply customer cash payments to a homeowner’s and an auto insurance policy.
Ms. Minnie defaulted, and a summary decision against her was entered by the hearing officer.
The Division confirmed that the Order to Show Cause had been properly served on Ms. Minnie at her Ludlow address. After she failed to respond to the show cause order, the DOI moved for an entry of default and a summary decision against Ms. Minnie.
In the summary decision process, the Division established for the hearing officer that Ms. Minnie was guilty of misappropriation of insurance premiums on two counts and of failing to disclose these misdemeanors on her April 30, 2020, license renewal application. Moreover, Ms. Minnie failed to remit customer premiums relating to the homeowner’s policy and the auto insurance policy.
Revocation and a $5,000 fine assessed against Minnie
The hearing officer entered orders revoking Ms. Minnie’s insurance licenses based on her failure to disclose a criminal conviction on her April 30, 2020, license renewal application and misappropriation of insurance premiums.
The hearing office levied fines totaling $5,000 to be paid in thirty days to the Division by Ms. Minnie. He further ordered her to surrender all Massachusetts insurance licenses in her possession to the Division and relinquish all her interests in any insurance-related businesses in Massachusetts forthwith.
Premium Insurance Agency, LLC: 5 policies written while unlicensed
Premium Insurance Agency, LLC (PIA), a Connecticut agency, allowed its Massachusetts nonresident producer license to expire on October 9, 2021. The agency’s license remained non-renewed until March 6, 2023.
On March 14, 2023, the Division sent a letter to PIA requesting details on the total number of new policies (including renewals) issued, the amount of premium received, and commissions earned during the unlicensed period. The agency confirmed that during the unlicensed tenure, it had renewed four policies and issued one new policy in Massachusetts, generating $2,890 in commissions.
Division lays out the potential penalties for writing policies while unlicensed
On April 7, 2023, the Division notified PIA of five violations of M.G.L. c. 175, § 175 by operating as a business entity insurance producer without possessing a valid license. Each violation could have resulted in a penalty ranging up to one hundred dollars. However, the Division advised PIA that each breach of M.G.L. c. 175, § 175 also constituted a violation of M.G.L. c. 175, § 162R(a)(2), a statute that allowed a $1,000 fine for each violation M.G.L. c. 176D, § 7. The Division also advised that a violation of § 162R, put the company’s Massachusetts business entity insurance producer license at risk of probation, suspension, or revocation.
Settlement offer to pay of a $500 fine accepted by the agency
The Division offered to settle this matter if PIA agreed to waive a public hearing and pay a fine of $500. PIA accepted this offer on April 10, 2023, signed the Division’s settlement agreement, and paid the fine.
The settlement agreement was reportable administrative action that had to be included in PIA’s subsequent Massachusetts business entity producer license renewal applications and in other jurisdictions where it holds a business entity insurance producer license.
Vantage Travel Service: 750 policies written without a license
In early 2023, Vantage Travel Service, Inc. (“VTS”) of Boston received a formal notice from the Division of Insurance (“Division”) asserting the agency had been writing insurance policies in Massachusetts after its license had expired.
Per the Division’s records, VTS’s business entity producer license had expired on January 9, 2020, and was not reinstated until more than a year later, on February 26, 2021.
During this unlicensed period, VTS reportedly wrote, placed, renewed, and/or negotiated more than 750 [travel] policies. Consequently, the Division alleged that VTS committed approximately 750 violations of M.G.L. c. 175, § 175, each of which could carry a fine of up to $100. Additionally, the Division alleged it considered each of these violations as a violation of M.G.L. c. 175, § 162R(a)(2), which allowed for a fine of up to $1,000 and the suspension, probation, or revocation of VTS’ producer license.
Settlement offer to pay of a $7,500 fine accepted by the agency
The Division proposed a settlement that required VTS to waive its right to a hearing and pay a fine of $7,500. Acceptance of these terms would constitute a reportable administrative action.
Given a deadline of March 30, 2023, to respond to the Division’s offer, VTS opted to accept the settlement on March 27, 2023, and pay the fine.
