Insurance Fraud: Beware of Misappropriation of Premiums
James K. Sokolis, 56, of Spokane, Washington, pleaded guilty March 22, 2012 in United States District Court in Coeur d’Alene, Idaho to three counts of insurance fraud. According to the plea agreement, Sokolis, an ex-insurance agent who previously owned and operated Rockwood Insurance in Coeur d’Alene, sold his book of business in August 2010, and a new company hired Sokolis to work the book of business he sold to them until late January 2011.
During this time, Sokolis misappropriated clients’ premium payments by failing to purchase the policies paid for or failing to remit the entire premium entrusted to him to the insurance carrier. He stole a total of $356,629.46.
This case demonstrates the importance of going beyond merely trusting your insurance agent with your premium payments, but taking the time to verify for yourself that the insurance company issuing you the policy has actually received the entire premium and that your policy is active. Failure to do so could result in you being held responsible for damages when your insurance company refuses to pay claims because they never received those payments and therefore never issued or renewed your insurance policy.
- Confirm the credentials of your insurance agent. When you get a new insurance agent, check his record at your state’s Department of Insurance website. Be sure he/she has a valid license and no disciplinary actions against him/her.
- Confirm the existence of your policy directly with your insurance company a week or so after paying your insurance agent for the premium, to ensure your policy has been paid and is active.
- Make your payment payable to the insurance company, not the agent.
Insurance buyer: beware!
_________________________________
Barry Zalma, Esq., CFE, is a California attorney, insurance consultant and expert witness specializing in insurance issues including fraud. Mr. Zalma has also written a number of books and writes a free newsletter on insurance fraud. See his new program on insurance fraud, “Who Got Caught?” online at www.WRIN.tv.
You may also enjoy reading
-
Insurance Fraud: Verify Insurance Policies Directly with Your Insurance Company
Katherine Webb pled guilty to two counts of Theft by Failure to Make Required Disposition of Funds Received in Erie County, Pennsylvania. Webb owned an insurance agency which sold and managed insurance policies for transportation companies. Webb entered into an agreement with two wholesale insurance producers who assisted Webb in placing her transportation customers with insurance carriers. ... Continue Reading
-
Insurance Fraud: Unverified Insurance Coverage Can Be Unhealthy For Your Wallet
From January 2003 through May 2004, David E. Groppi operated a fraudulent-insurance scheme. Groppi represented himself as an insurance agent for United Health Insurance Plans (“United”), a company not licensed to sell insurance in Ohio, and collected premiums from individuals and small businesses for nonexistent health-care plans. ... Continue Reading
-
Insurance Fraud: Insurance Payments at an Unwarranted Premium
Will Honaker and his wife, Tiffany, who own Smithfield Insurance; Heather Richardson, who owns Clayton Insurance; and Holly Cooper, who owns Selma Insurance and Affordable Choice Insurance & Tax Service in Wendell, North Carolina with her husband, Arthur “Brad” Cooper settled with the State Department of Insurance by agreeing to pay fines and pay back customers who were overcharged. ... Continue Reading
-
Insurance Fraud: Make Sure Your Agent IS an Agent
Everything involving the workers compensation policy looked real. But the coverage was fake and so was the agent, Florida’s Department of Financial Services says. National Employment Services (NES) paid $2.7 million for what it thought was legit comp coverage through a North Carolina agent named David Walters of Southeast Services, Inc. “Walters” even issued a realistic certificate of coverage. But the named carrier has no agent named David Walters, and never received premiums on behalf of NES. The address used by Southeast Services was a private mail box owned by one Carl Delmas Fuller. ... Continue Reading
-
Insurance and Investment Fraud: Do You Really Have that Policy or Investment?
Michael A. Cox, of Powell, Ohio committed theft when he continued to accept insurance premiums from past clients after his license was revoked by the Department of Insurance on July 23, 2009. His clients believed that they had insurance coverage since they were making payments to Cox, but there was no actual policy in place. Cox used the funds for his personal use. ... Continue Reading
