On March 29, 2019, the Division of Insurance listening to officer, Kristina A. Gasson, entered an order towards Kotera Heard (“Ms. Heard”) of Chicago, Illinois. The order revoked Ms. Heard’s nonresident insurance coverage producer license, and additional ordered her to stop transacting any insurance business in Massachusetts, and, beneath Massachusetts Common Laws Chapter (“M.G.L. c.”) 175, § 166B, to eliminate any pursuits in Massachusetts as a proprietor, companion, stockholder, officer, or worker of any licensed insurance producer. Finally, the order imposed a high quality towards her of $2,000 for 4 violations of the Massachusetts insurance coverage laws.
The license revocation and orders towards Ms. Heard resulted, partially, from her failure to report administrative actions taken towards her in other states as required by G.L. c. 175, § 162V(a).
- 1 Failure to report “administrative action” leads to fines in addition to license loss
- 2 Arrest for insurance fraud scheme results in license revocations.
- 3 Massachusetts moves for revocation and fines for Ms. Heard’s failure to report actions on her licenses
- 4 Ms. Heard’s failure to seem leads to default and a abstract choice towards her
- 5 Hearing officer finds fees warrant fines beneath the overall penalty statute
- 6 Last Orders entered and $2,000 in fines assessed by the hearing officer
Failure to report “administrative action” leads to fines in addition to license loss
M.G.L. c. § 162V(a) requires that any insurance producer licensed in the commonwealth to promote, solicit or negotiate insurance should report to the commissioner of insurance within thirty days of the final disposition of any administrative action:
- taken towards that producer in one other jurisdiction or
- taken by another governmental company in the commonwealth.
To properly make such a report the producer should ship the commissioner all the related legal paperwork together with a replica of any orders, stipulations or consents.
In most states, the revocation is the top of the matter, nevertheless, in Massachusetts, versus other states, the failure to report out-of-state administrative actions often leads to fines in addition to lack of any nonresident producer licenses.
In Ms. Heard’s case, Massachusetts fined her a complete of $2,000: $500 for every of her 4 failures to report administrative actions towards her in other states arising from license revocations or suspensions.
Ms. Heard’s issues started when she determined to assist in an id fraud scheme by accessing buyer info from her employer so one other employee might use the stolen identities to make fraudulent profit claims.
Arrest for insurance fraud scheme results in license revocations.
Ms. Heard labored as a benefits advisor at the Lincolnshire, Illinois workplace of Aon Hewitt Well being Market Insurance coverage Options. This California company doing business beneath the trade identify “Aon Retiree Health Exchange” operates a personal medical insurance trade for retirees offering plans from multiple hundred carriers nationwide relying on the state and county the place its retiree clients reside.
Aon Hewitt terminated Ms. Heard, on September 18, 2015, for cause. Aon Hewitt had discovered during an investigation of false medical reimbursement requests submitted to a different Aon company that the misappropriated customer knowledge used to make the claims had come from Aon Hewitt’s database. Further investigation discovered that Ms. Heard had accessed and misappropriated the private identification knowledge on January 27, 2015, for 5 clients that she then gave to a different agent who had used the purloined id knowledge to make the false claims for benefits.
Aon reported Ms. Heard’s termination for cause to the varied divisions of insurance the place she held nonresident producer licenses. Also, Aon Hewitt reported the fraud to the Lincolnshire police department.
After a brief investigation, the police charged Ms. Heard with ten felonies consisting of 5 counts of aggravated id theft and five counts of pc fraud in the Circuit Courtroom. After her arrest, Ms. Heard spent twelve days within the county jail before making her $1,000 money bail.
In July 2016, Ms. Heard agreed to a plea discount the place the state’s lawyer entered a nolle prosequi on the felony charge but submitted an amended indictment charging the ten counts as misdemeanor “attempts.” Ms. Heard pleaded guilty to all ten counts of the amended indictment and acquired an eighteen-month sentence of probation and the forfeiture of her money bail for courtroom costs.
Failure to report 4 states revoking or suspending her producer licenses
While Ms. Heard’s felony fees have been pending 4 states took administrative actions towards her nonresident producer licenses. Each state based mostly its choice on Aon Hewitt’s recommendation at to her termination for misappropriating buyer info.
- On January 25, 2016, the State of Maine Department of Skilled and Monetary Regulation Bureau of Insurance coverage revoked Heard’s Maine insurance coverage producer license, effective as of February 29, 2016;
- On January 26, 2016, the State of Florida Division of Financial Providers suspended Heard’s nonresident life, health, and variable annuity agent’s license;
- On February 29, 2016, the Wyoming Department of Insurance coverage revoked Heard’s nonresident producer license;
- On April 11, 2016, the Arkansas Insurance Department revoked Heard’s nonresident producer license.
Ms. Heard did not report any of the executive actions towards her insurance coverage licenses by Arkansas, Florida, Maine, or Wyoming to the Massachusetts Division of Insurance inside the thirty days allowed by statute.
Massachusetts moves for revocation and fines for Ms. Heard’s failure to report actions on her licenses
The Massachusetts Division of Insurance commenced its proceedings towards Ms. Heard on February 7, 2018, with an order to point out cause. The Division sought the revocation of her Massachusetts nonresident producer license, her ceasing to do any insurance enterprise in Massachusetts, and fines for her failure to report to the Division administrative actions taken by other states towards her as required by Massachusetts regulation.
The Division’s order to point out trigger recognized because the statutory grounds for revoking Ms. Heard’s Massachusetts license violations of:
- G.L. c.175 § 162R (a)(2)—violating any insurance coverage legal guidelines or regulation;
- G.L. c.175 § 162R (a)(8)—fraudulent, coercive or dishonest practices in insurance; and
- G.L. c.175 § 162R (a)(9)—having an insurance producer license, or its equivalent, denied, suspended or revoked.
Also, the Division additionally alleged that Ms. Heard had did not adjust to M.G.L. c.175, §162V (a), a statute requiring a producer to report back to the commissioner any administrative actions taken towards her by one other jurisdiction inside thirty days of the final disposition of the matter.
Nevertheless, though conscious of the legal proceedings filed towards Ms. Heard in Illinois because of her joining within the scheme to defraud her employer. by the Lin
The Division’s order to point out cause alleged that Ms. Heard did not report, as required, to the Massachusetts commissioner an administrative action in her residence state of Georgia and subsequent administrative actions in California, Indiana, Maine, North Dakota, Louisiana, and Virginia as required by G.L. c. 175, § 162V(a). Additionally, the Division sought fines.
Ms. Heard’s failure to seem leads to default and a abstract choice towards her
Though the listening to officer found the Division had correctly served Ms. Heard with the order to point out trigger, Ms. Heard did not file any response or contact the Division.
On Might 30, 2018, the Division filed a motion for abstract determination with the listening to officer. On June 1, 2018, the listening to officer issued an order notifying Ms. Heard to file a written response to the Division’s motion and scheduling a listening to on the motion for June 15, 2018.
Ms. Heard didn’t respond in writing to the Division’s movement for summary choice. Neither she nor any individual purporting to characterize her appeared on the listening to on June 15, 2018.
Based mostly on Ms. Heard’s failure to reply, the hearing officer entered a default, finding Ms. Heard had waived her right to an evidentiary hearing and proceed to determine the matter based mostly on the document contained in the Division’s movement for summary determination.
I’m not persuaded that it’s applicable to impose Section 7 fines
The hearing officer accepted as proof copies of the orders issued by Arkansas, Maine, and Wyoming revoking Ms. Heard’s insurance coverage producer licenses and the order from Florida suspending her license. Based mostly on these uncontested documents the hearing officer discovered the Division had proven Ms. Heard’s violations of M.G.L. c. 175, § 162R(a)(9) (Permitting the commissioner to revoke a producer’s Massachusetts licenses where one other jurisdiction has revoked that producer’s license), M.G.L. c. 175, §162R (a)(2) (Violating any insurance coverage legal guidelines or regulation, subpoena or order of the commissioner or one other state’s insurance commissioner), and G.L. c. 175, § 162V(a) (Failure to report out-of-state administrative proceedings).
The hearing officer famous in her determination the legal proceedings towards Ms. Heard referenced within the Division’s submissions. Underneath M.G.L. c. 175, §162V (b) Ms. Heard needed to report to the commissioner any legal prosecution taken towards her in any jurisdiction. Nevertheless, because the Division had not charged this violation in its order to point out cause, she declined to take any action on Ms. Heard’s failure to report these legal fees to the commissioner as required.
Hearing officer declines to impose exemplary fines underneath M.G.L. c 176D, § 7
In its order to point out trigger, the Division also requested the listening to officer to levy a civil penalty as allowed by G.L. c. 176D, §7. This section permits the commissioner to evaluate up to a $1,000 fantastic for any “unfair and deceptive acts and practices in the business of insurance.” The Division claimed that Ms. Heard must be fined $1,000 for every of 4 grounds for which the Division sought the revocation of her nonresident producer license.
Nevertheless, the listening to officer, not finding any affirmative unfair or deceptive acts dedicated by Ms. Heard in Massachusetts, denied the Division’s request, stating:
I’m not persuaded that it is applicable to impose Part 7 fines on [Ms. Heard]. Selections in administrative proceedings looking for license revocation distinguish grounds for disciplinary motion that come up from the [producer’s] affirmative acts from grounds arising from administrative or judicial actions initiated by third events to revoke or droop the [producer’s] license.”
Hearing officer finds fees warrant fines beneath the overall penalty statute
The Division order to point out trigger, apart from requesting fines beneath M.G.L. c. 176D also requested the listening to officer to impose the lesser fines allowed beneath G.L. c. 175, §194. This statute is the catch-all provision of the insurance coverage statutes that gives: “Whoever violates any provision of this chapter, the penalty which is not specifically provided for herein, shall be punished by a fine of not more than five hundred dollars.”
The hearing officer, on this case, discovered Ms. Heard’s failure to report these administrative actions successfully enabled her to avoid prompt enforcement motion in the commonwealth. For that cause, she determined to impose the utmost penalty of five hundred dollars underneath § 194, for each of Ms. Heard’s 4 failures to report an administrative action as required by G.L. c. 175, §162V(a).
Last Orders entered and $2,000 in fines assessed by the hearing officer
The final determination entered by the listening to officer made the following orders:
ORDERED: That any insurance producer license issued to Kotera Heard by the Division is hereby revoked; and it’s
FURTHER ORDERED: That, within ten (10) days of this choice, Kotera Heard shall return to the Division any license in her possession, custody or management; and it is
FURTHER ORDERED: That Kotera Heard is, from the date of this order, prohibited from immediately or indirectly transacting any insurance business or acquiring, in any capability in any respect, any insurance coverage enterprise in Massachusetts; and it is
FURTHER ORDERED: That Kotera Heard shall adjust to the provisions of M.G.L. c. 175, §166B and eliminate any and all interests in Massachusetts as proprietor, associate, stockholder, officer or employee of any licensed insurance coverage producer; and it is
FURTHER ORDERED: That Kotera Heard shall pay a superb of Two Thousand Dollars ($2,000) to the Division inside 30 days of the date of this determination and order.