Types of Violations the Department of Insurance Investigates

People employed in the insurance industry can be subject to a variety of violations investigations that can lead to license suspension, fines, and other penalties.

Below you’ll learn more about common violations the Department of Insurance investigates so you can ensure that you are operating your business legally. We’ll also tell you how to find legal help if you find yourself being investigated for a violation.

Premium Theft

As the most common type of misconduct among insurance agents and brokers, premium theft involves stealing insurance premiums – monies that should be paid to the carrier and which are converted for self-use…Amounts can range from relatively low-dollar amounts for isolated thefts to high-dollar scams ranging well into the millions.

Elder Abuse

This type of violation occurs when insurance agents target senior citizens in order to earn a commission. They do this by replacing seniors’ current insurance policies with new, unnecessary policies that are more costly. Sometimes the new policies have few benefits, which adds to the abuse. Falsified documents, Ponzi schemes, and theft are often involved.

Health Insurance Violations

When an insurance agent deceptively sells long-term medical care insurance products, they can be accused of a health insurance violation. These acts may include scams involving medical discount cards, Medicare supplements, Medicare Advantage Plans, Medicare Prescription Drug Plans, and others.

Deceptive Sales and Marketing Practices

If an insurer fails to properly monitor their sales force, it can result in unethical marketing practices. Misrepresentation, bait and switch, and misleading titles and designations are common. Even if the agent did not personally oversee these acts, they can still be held responsible.

Trust Fund Violations

Insurance brokers and agents have a fiduciary duty over the monies they receive from client. Improper accounting practices and co-mingling of monies held for the benefit of a client in a broker’s personal or business operating account are examples of trust fund violations.

Unauthorized Insurance Companies

Unauthorized insurance company fraud is not uncommon. Examples can range from selling fake insurance cards to offshore insurance companies that sell policies they refuse to honor.

Public Adjuster Misconduct

Public adjusters, who represent insurance claimants when they are settling claims with their insurance companies, are also commonly accused of violations. If an adjuster overcharges, has a conflict of interest with a vendor, fails to account for proceeds from claims, or conducts high-pressure sales, they may be investigated.

Title Company Violations

Title companies are most often investigated for commercial bribery, kickbacks, and other anti-competitive actions they conduct to get the business of realtors.

Bail Agent Activity

Bail agents, who work on behalf of surety insurers to solicit, negotiate, and complete bail transactions, may be investigated for a variety of unethical behaviors. Some of these include refusing to return collateral, aiding and abetting unlicensed bail agents, and extorting premium payments by apprehending arrestees.

These are just some of the violations investigated by the Department of Insurance. If you find yourself the subject of an investigation, you should contact an experienced license defense lawyer immediately.

If you need help understanding your rights or your case, contact California license defense attorney Scott J Harris. Click to schedule a free, 30-minute consultation or call us at 323-794-0701 or at 877-865-6218.

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When dealing with these complex issues, you need legal representation that has a long track record of success in these types of cases. Scott Harris and the rest of our team at S J Harris Law will be ready to help you pursue any option available that allows you to keep your license and continue working, no matter what industry you are in.


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