insurance license is truly a license to steal, and done well, almost
without risk of detection or punishment. There is little in the
way of hard statistics nationally, so actual knowledge of the incidence
is poor to nonexistent. In addition, the wheels of insurance regulatory
departments grind very slowly indeed, such that guilty agents sometimes
continue with suspected thefts for years, and face mild discipline
at worst upon conviction. It is generally felt that the opportunities
for independent agents to steal are somewhat greater, as the captive
agents are more closely controlled by their carriers. The very large
commercial brokers are not immune, some having been charged with
stealing tens of millions in client premiums.
the web has exploded opportunities for premium theft. Internet-based
fraud doesn't even require so much as a license. If you are inclined
to pay premium to a site without verifying its real-world existence,
your entrepreneurial days are surely numbered.
with the internet explosion, inexpensive printing technology has
enabled anyone with a PC & very basic graphics editing ability
to produce pretty much any document they want.
most common scenarios involve agents who collect money & simply
never place insurance policies. This is highly lucrative, but carries
with it the decided risk that claims may occur and that the theft
will be exposed. While it is almost certainly the most common scheme,
there are far less risky methods. Agents also victimize premium
finance companies by fabricating premium loan applications on nonexistent
insurance, keeping the money. Agents can also create fictitious
clients and applications to obtain commissions from unsuspecting
recently-arrested California broker reportedly has issued more than
2,700 - yes that's 2700 - fake policies to various entertainment,
special events and sports clients since early 2001. He reportedly
pocketed more than $3.8 Million in the first two years.
would never occur to some policyholders to simply look at the actual
policy to see whether the amount they paid in premium matches the
policy, or whether any erasures or alterations have been made to
the premium figures. (Other policyholders probably don't even so
much as follow through to be certain an actual insurance policy
is supplied by the agent.) While certain fees, taxes or other charges
may be legitimately billed in addition to the policy premium, the
amount listed as pure premium on your policy should always match
the premium amount listed on your invoice. Anything billed in excess
of the listed premium should be separately itemized & explained.
is astonishing how often commercial insurance clients pay their
premium invoices twice.
audits, vehicle changes, deletions, and any number of other endorsement
changes may produce large credits which do not find their way back
to policyholders. In many cases, the client is unaware that such
credits even exist. An agent who withholds return premium from his
client knows that upon discovery, he merely has to make the payment
to avoid any further question, and can pass it off as an "accounting"