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 further ordered her to cease transacting any insurance business in Massachusetts, and, beneath Massachusetts Basic Laws Chapter (“M.G.L. c.”) 175, § 166B, to eliminate any pursuits in Massachusetts as a proprietor, companion, stockholder, officer, or employee of any licensed insurance producer. Lastly, the order imposed a high-quality towards her of $2,000 for four violations of the Massachusetts insurance legal guidelines.
The license revocation and orders towards Ms. Heard resulted, partially, from her failure to report administrative actions taken towards her in different states as required by G.L. c. 175, § 162V(a).
- 1 Failure to report “administrative motion” leads to fines along with license loss
- 2 Arrest for insurance coverage 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 determination towards her
- 5 Listening to officer finds fees warrant fines beneath the overall penalty statute
- 6 Remaining Orders entered and $2,000 in fines assessed by the listening to officer
Failure to report “administrative motion” leads to fines along with license loss
M.G.L. c. § 162V(a) requires that any insurance coverage producer licensed in the commonwealth to promote, solicit or negotiate insurance coverage must report to the commissioner of insurance coverage within thirty days of the final disposition of any administrative action:
- taken towards that producer in another jurisdiction or
- taken by one other governmental company in the commonwealth.
To properly make such a report the producer should ship the commissioner all the relevant legal documents together with a replica of any orders, stipulations or consents.
In most states, the revocation is the top of the matter, nevertheless, in Massachusetts, as opposed to different states, the failure to report out-of-state administrative actions often leads to fines in addition to loss of any nonresident producer licenses.
In Ms. Heard’s case, Massachusetts fined her a total 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 help in an id fraud scheme by accessing customer info from her employer so another worker might use the stolen identities to make fraudulent benefit claims.
Arrest for insurance coverage fraud scheme results in license revocations.
Ms. Heard worked as a advantages advisor on the Lincolnshire, Illinois workplace of Aon Hewitt Well being Market Insurance coverage Solutions. This California firm doing business beneath the commerce identify “Aon Retiree Well being Trade” operates a personal medical insurance trade for retirees providing plans from multiple hundred carriers nationwide depending on the state and county where its retiree clients reside.
Aon Hewitt terminated Ms. Heard, on September 18, 2015, for cause. Aon Hewitt had discovered throughout an investigation of false medical reimbursement requests submitted to another Aon firm that the misappropriated buyer knowledge used to make the claims had come from Aon Hewitt’s database. Additional investigation discovered that Ms. Heard had accessed and misappropriated the private identification knowledge on January 27, 2015, for five clients that she then gave to a different agent who had used the purloined id knowledge to make the false claims for advantages.
Aon reported Ms. Heard’s termination for trigger to the varied divisions of insurance coverage where she held nonresident producer licenses. Additionally, Aon Hewitt reported the fraud to the Lincolnshire police division.
After a short investigation, the police charged Ms. Heard with ten felonies consisting of five counts of aggravated id theft and five counts of pc fraud in the Circuit Courtroom. After her arrest, Ms. Heard spent twelve days in the county jail before making her $1,000 cash 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 cash bail for courtroom costs.
Failure to report four states revoking or suspending her producer licenses
Whereas Ms. Heard’s legal expenses have been pending 4 states took administrative actions towards her nonresident producer licenses. Every 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 Division of Skilled and Financial Regulation Bureau of Insurance coverage revoked Heard’s Maine insurance producer license, effective as of February 29, 2016;
- On January 26, 2016, the State of Florida Department of Monetary Providers suspended Heard’s nonresident life, well being, and variable annuity agent’s license;
- On February 29, 2016, the Wyoming Division of Insurance revoked Heard’s nonresident producer license;
- On April 11, 2016, the Arkansas Insurance coverage Division 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 back to the Division administrative actions taken by different states towards her as required by Massachusetts regulation.
The Division’s order to point out cause recognized as the statutory grounds for revoking Ms. Heard’s Massachusetts license violations of:
- G.L. c.175 § 162R (a)(2)—violating any insurance legal guidelines or regulation;
- G.L. c.175 § 162R (a)(8)—fraudulent, coercive or dishonest practices in insurance coverage; and
- G.L. c.175 § 162R (a)(9)—having an insurance coverage producer license, or its equal, denied, suspended or revoked.
Also, the Division additionally alleged that Ms. Heard had did not comply with M.G.L. c.175, §162V (a), a statute requiring a producer to report to the commissioner any administrative actions taken towards her by another jurisdiction within thirty days of the ultimate disposition of the matter.
Nevertheless, though conscious of the legal proceedings filed towards Ms. Heard in Illinois because of her becoming a member of in the scheme to defraud her employer. by the Lin
The Division’s order to point out trigger 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 determination towards her
Although the hearing officer discovered the Division had properly served Ms. Heard with the order to point out cause, Ms. Heard didn’t 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 movement and scheduling a listening to on the movement 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 symbolize her appeared on the listening to on June 15, 2018.
Based mostly on Ms. Heard’s failure to reply, the listening to officer entered a default, discovering Ms. Heard had waived her proper to an evidentiary listening to and proceed to determine the matter based mostly on the document contained within the Division’s motion for summary determination.
I’m not persuaded that it’s applicable to impose Part 7 fines
The hearing officer accepted as proof copies of the orders issued by Arkansas, Maine, and Wyoming revoking Ms. Heard’s insurance 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 the place one other jurisdiction has revoked that producer’s license), M.G.L. c. 175, §162R (a)(2) (Violating any insurance coverage laws 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 listening to officer noted in her choice the legal proceedings towards Ms. Heard referenced within the Division’s submissions. Beneath M.G.L. c. 175, §162V (b) Ms. Heard had to report back to the commissioner any felony prosecution taken towards her in any jurisdiction. Nevertheless, because the Division had not charged this violation in its order to point out trigger, she declined to take any action on Ms. Heard’s failure to report these legal fees to the commissioner as required.
Listening to officer declines to impose exemplary fines beneath M.G.L. c 176D, § 7
In its order to point out trigger, the Division additionally 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 high quality for any “unfair and misleading acts and practices within the enterprise of insurance.” The Division claimed that Ms. Heard ought to be fined $1,000 for every of 4 grounds for which the Division sought the revocation of her nonresident producer license.
Nevertheless, the hearing officer, not finding any affirmative unfair or misleading acts committed by Ms. Heard in Massachusetts, denied the Division’s request, stating:
I am not persuaded that it is applicable to impose Section 7 fines on [Ms. Heard]. Selections in administrative proceedings looking for license revocation distinguish grounds for disciplinary action that arise from the [producer’s] affirmative acts from grounds arising from administrative or judicial actions initiated by third events to revoke or suspend the [producer’s] license.”
Listening to officer finds fees warrant fines beneath the overall penalty statute
The Division order to point out trigger, in addition to requesting fines underneath M.G.L. c. 176D additionally requested the hearing 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 provides: “Whoever violates any provision of this chapter, the penalty which is not particularly offered for herein, shall be punished by a advantageous of not more than five hundred dollars.”
The listening to officer, in this case, found Ms. Heard’s failure to report these administrative actions successfully enabled her to keep away from immediate enforcement action in the commonwealth. For that cause, she determined to impose the utmost penalty of 5 hundred dollars beneath § 194, for each of Ms. Heard’s 4 failures to report an administrative motion as required by G.L. c. 175, §162V(a).
Remaining Orders entered and $2,000 in fines assessed by the listening to officer
The final determination entered by the hearing officer made the next orders:
ORDERED: That any insurance producer license issued to Kotera Heard by the Division is hereby revoked; and it’s
FURTHER ORDERED: That, inside ten (10) days of this determination, 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 coverage business or acquiring, in any capacity in any respect, any insurance coverage business in Massachusetts; and it’s
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 worker of any licensed insurance coverage producer; and it’s
FURTHER ORDERED: That Kotera Heard shall pay a high quality of Two Thousand Dollars ($2,000) to the Division inside 30 days of the date of this choice and order.