Insurance Agent Involved In Fraud

Insurance law attorneys can tell war stories about situations where an insurance agent has been caught stealing from customers.  This was recently highlighted in an August 29, 2016, article published by the Insurance Journal.  The article is titled “California Insurance Agent Nabbed For Fraud Scheme Involving 100-Plus Policies.”

Vicki Lee McGinley, 58, a licensed insurance agent in California, was arrested by the Kern County Sheriff’s department on seven counts of identity theft and seven counts of insurance fraud after allegedly misrepresenting policy and premium information to clients resulting in losses to her employers and increased premiums for her clients.

The California Department of Insurance Investigation Division began an investigation after receiving a complaint from McGinley’s previous employer.

The investigation revealed McGinley had allegedly misrepresented information on more than 100 homeowner and auto policies by manipulating the company database and falsifying insurance applications, unbeknownst to her clients, in order to meet sales quotas, increase clientele, and gain additional commissions.

For over seven years, McGinley applied unwarranted discounts to clients’ policies and falsified documentation to justify the discounts including forging nursing certificates in clients’ names to authorize professional discounts for their policies, according to investigators.

McGinley’s scheme resulted in an unknown loss to the insurance carriers who employed her and higher premiums for her clients, according to the CDI.

Investigators also say they discovered that after McGinley was terminated from one insurance company she started working for a different insurer and continued her scheme misrepresenting information to the company and clients.

The department has taken action to suspend McGinley’s license.  McGinley’s clients’ policies are still in place.

“As a licensed agent McGinley violated her fiduciary responsibilities and trust of those around her,” Insurance Commissioner Dave Jones said in a statement.

McGinley was booked into the Kern County Jail and bail was set at $70,000.  The Kern County District Attorney’s Office is prosecuting the case.

In Texas, pursuant to Texas Insurance Code, Section 4001.051, any harm caused to a policy holder is the responsibility of the insurance company the agent was working for.

There are clearly violations of Section 541.061 and there are numerous other sections of the Texas Insurance Code that come into play.

Also in Texas, Section 35 of the Texas Penal Code comes into play in these situations.