Every now and then, the unbelieveable happens. It recently happened to me. I had a meeting with an insurance agent who wanted to sell his agency...right away. We had the usual conversation about why he wanted to sell ("to help a needy relative"), the size of his book, and his sale price (he "didn't want a lot because he knew he needed to move fast and didn't want to be greedy"). I remember he fidgeted as he spoke. We shook hands in the lobby with tentative plans for a second meeting. I never heard from him again. No returned calls, no returned emails.
About a month later, I was shocked as I read the headline, "Insurance Brokers Jailed for Allegedly Pocketing Clients' Premiums." The article named this agent and his partner. "The men surrendered to outstanding arrest warrants on Monday, charged with 24 felonies including grand theft, conspiracy to defraud, theft of insurance premiums by a fiduciary and forgery," prosecutors said. "These licensed insurance brokers allegedly abused the responsibilities they owe their clients," the district attorney said in a statement. "Their victims thought they had policies covering potential losses, but the premiums they were paying were being pocketed."
It was only a few weeks ago that NDOI agents voted "Industry Image" as one of the biggest challenges in the insurance industry...and here we are, another very public industry slap in the face.
But let's not miss the warning in this for all of us...these guys didn't just wake up one morning and say, "Let's rip off people who trust us." No, their downfall was likely a process of gradualism. Fueled by greed and a fundamental disregard for integrity and ethics, these insurance agents started by telling a few lies, forging a signature to save time, lying on an application, perhaps even thinking they would help a client (who would likely never have a claim) pay less for insurance by faking an endorsement and charging less than the carrier would have. It's a slippery slope.
In the lethal game of Russian Roulette, a player places a single bullet in a revolver, spins the cylinder, places the muzzle against their head, and pulls the trigger. Insurance Roulette works similarly, a player chooses to conduct an unethical act and waits to see what happens. The process is repeated until it blows up and they land in jail.
Note to Self: Protect yourself, your family, and our industry. Never, ever, play Insurance Roulette.
Lynne Wallace is the CEO and president of VANTREO Insurance Brokerage and co-founder of NDOI, the National Directory of Insurance.
