Monday, November 19, 2007

Moron or Fraud: Update and Conclusion

Last week, we discussed the curious case of the gentleman who submitted multiple applications to the same carrier, both of which contained fraudulent information. I spoke this morning with the underwriter, and then with the Department of Insurance.

The underwriter is well aware of the facts in this case, because he is the underwriter for both myself and the other agent. We had a rather lengthy conversation, wherein I reiterated that the only correct course of action was to decline both applications for material misrepresentation. He disagreed, but offered no rationale for that decision. He is going forward with the underwriting.

I told him that I had no intention of withdrawing my application, and he responded that it didn't really matter, because the applicant was providing the other agent with an Agent of Record letter. This is a means by which an insured can specify his "official" agent in these matters. At that point, I begged off the conversation before I said something regrettable.

I really had only one option at that point, which was to contact the Department of Insurance, Fraud Division, and discuss this with them. After laying out the whole story, the gentleman from the DOI explained that there really wasn't anything that they could do, and that I had done my due diligence in this matter. Since I had informed the carrier of the fraud (actually, they already knew, I simply confirmed it), there was nothing more for me to do. If the carrier was so inclined, they could notify the state, but that was entirely in their hands.

I explained to the DOI rep that in addition to selling insurance, I'm also a licensed CE provider, and even teach a course on ethics. To which he replied (correctly) that I teach agent ethics, not consumers'. That's really only half right: the course also includes carrier ethics (an oxymoron, of course), but I didn't think that bringing this up would move the ball forward.

At this point, there's really nothing more for me to do with this case. I will not withdraw the application, but I won't pursue it, either. Of course, I now have to rethink my relationship with Carrier C. I have printed out a copy of both these posts and added them to this client's file; in addition, I've sent a note to the underwriter confirming the facts of the case (a copy of which is also in that file).

There are a number of issues that follow from this, of course, and perhaps these would be worth exploring in the comments section. In the meantime, I'll consider the matter closed, and try to move on (although I'm not really sure that I can).
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