Is it illegal for an insurance representative ot pay youto take out a policy?
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Is it illegal for an insurance representative ot pay youto take out a policy?
If a man was paid by an insurance representative to take out a life insurance policy in order for the representative to earn a substantial bonus due to the number of clients he had, is what he did illegal? Is what the representative did illegal? What could be the penalties for this for both the representative and the man? Could it involve jail time?
Asked on March 3, 2011 under Criminal Law, Minnesota
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
There are varying forms of insurance fraud but more importantly here, there are also many strict laws in each state concerning the licensure and regulation of insurance producers and agents. The enforcing agency (whether it be the local prosecutor, or state attorney general or insurance department) must determine first the accurate facts and see exactly how the insured obtained the insurance, how he got paid and by what means. The payment of compensation to someone who is not a licensed insurance agent may be considered (dependent on the circumstances) an unfair and deceptive act. You could simply file a tip with the Department of Insurance in Minnesota and you can also look up any enforcement actions that agency has file against insurance companies. Falsifying a sale of an insurance policy to manipulate a commission could be seen as a criminal act and could also be suitable by the agency to file an administrative enforcement action against the agent.
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