Insurance Agents Who Cheat

Fort Worth insurance lawyers will usually have a story to tell about an insurance agent they caught cheating. The Insurance Journal published a story in April 2016, that should make all insurance consumers beware. The title of the story is, Former Oklahoma Insurance Agent Pleads Guilty To $500K Scam.
A former insurance agent in Oklahoma has pleaded guilty to scamming $505,126.43 from his clients, the Oklahoma Insurance Department announced.
A joint investigation including the OID’s Anti-Fraud Unit led to the charges against Gary Edward Hibbing, 52, formerly of Grove.
The U.S. Attorney for the Northern District of Oklahoma, the IRS and the Arkansas Insurance Department, according to Oklahoma Insurance Commissioner John D. Doak.
Through the joint investigation, Oklahoma Insurance Department investigators found that Hibbing, former owner of Grand Lake Investments and Insurance, conned his victims through a scheme called “twisting.”
It is an insurance industry term that refers to the fraudulent practice by an insurance agent of convincing a client to surrender an existing annuity or policy in a disadvantageous exchange for a new one. Because there is a penalty for early termination of an annuity, the client loses money while the agent makes money on a new commission.
Hibbing admitted in court that he lied to his clients to convince them to surrender their existing annuities and immediately purchase new ones. He intentionally failed to disclose early termination penalties. He also provided false information to insurance companies to facilitate his scheme.
Investigators found twisting tied to 80 different annuity policies from Oct. 17, 2007 to March 4, 2013.
Although the Oklahoma Insurance Department revoked Hibbing’s license on March 4, 2013, he continued to sell annuities by forging another agent’s name to transact business.
Hibbing pleaded guilty to two counts of wire fraud and two counts of unlawful monetary transactions. Sentencing is scheduled on July 12. He faces imprisonment terms up to 20 years on the wire fraud counts and up to 10 years on the unlawful monetary transaction counts.
That happened in Oklahoma. In Texas, the author of this article has been in situations to catch agents doing numerous wrongs. The most frequent is pocketing premiums paid to him by his customer without forwarding the money to the insurance company. If the customer gets a notice of cancellation due to non-payment, then the agent just explains to the customer that there has been a mistake and he will get it worked out. Or he may cause an address change when there has not been an address change thus the customer never gets notice of the cancellation.
There are many other ways an agent can cheat. Fortunately, most are honest but when one does cross the line into illegality, a customer should do two things. Contact the Texas Department of Insurance and contact an experienced Insurance Law Attorney.