Fraudulently Submitting Fake Application Violates Licensing Statutes
Barry Zalma
Jan 26, 2024
Read the full article at https://lnkd.in/gWaRhXMa and see the full video at https://lnkd.in/gv6St2mC and at https://lnkd.in/g8Bs-ezr and at https://zalma.com/blog plus more than 4700 posts.
Paul B. Kumar appealed a final agency decision of Commissioner of the Department of Banking and Insurance (Commissioner or Department) revoking his insurance producer license and imposing $60,774.25 in civil penalties, surcharge, attorney’s fees and costs of investigation, for violations of the New Jersey Insurance Producer Licensing Act of 2001 and the New Jersey Insurance Fraud Prevention Act (Fraud Act).
In Marlene Caride, Commissioner, New Jersey Department Of Banking And Insurance v. Paul B. Kumar, No. A-2627-21, Superior Court of New Jersey, Appellate Division (December 29, 2023) the Appellate Division spent dozens of pages to resolve appeal.
FACTS
On August 3, 2015, Kumar entered into an employment contract with Combined Insurance Company (Combined) as an insurance agent. For any insurance policy to be written, Combined required: the producer to meet, face to face, with the insurance applicant; the applicant to sign the application; and the producer to witness the applicant’s signature on the application.
Kumar submitted multiple insurance applications to Combined where the proposed insureds never met Kumar, never applied for insurance with Combined and never signed the applications in Kumar’s presence.
ORDER TO SHOW CAUSE
The Department issued a two-count Order to Show Cause (OSC) to Kumar concerning the insurance applications. In the first count, the Department alleged violations of the Producer’s Act and violations of the Fraud Act because Kumar “submitted . . . insurance policy applications to Combined . . . for the purpose of obtaining an insurance policy, knowing that each of these applications contained a forged signature of the prospective insured, and other false or misleading information concerning any fact or thing material to the application or contract …. ”
The OSC was tried before an Administrative Law Judge (ALJ) who found the testimony of Kumar was not credible. The ALJ concluded Kumar demonstrated throughout the proceedings that his inconsistent, evasive and confusing testimony, could not be believed.
The ALJ concluded, the Department met its burden by demonstrating that Kumar submitted eight fraudulent applications for insurance and concluded that Kumar’s actions warranted revocation of his producer license; the imposition of statutory monetary penalties; reimbursement of investigation costs; and attorney’s fees.
The Commissioner adopted the ALJ’s finding that the Department established Kumar violated the Fraud Act, because he knowingly failed to disclose that the proposed insureds did not sign their applications and because he submitted insurance applications that he knew contained false or misleading information regarding material facts.
ANALYSIS
The language of the regulation empowers the insurer to control the requirements for insurance applications. The Commissioner determined that Kumar submitted six applications for three separate individuals without the applicants’ knowledge or consent.
The Commissioner adopted the ALJ’s determination that the Department proved the violations.
The Commissioner determined that Kumar violated the Fraud Act. After detailing her duty to protect the public welfare and to instill public confidence in both insurance producers and the industry as a whole, the Commissioner found the record was more than sufficient to support license revocation.
The statute specifically authorizes the Commissioner to revoke the insurance producer’s license. The appellate court concluded that Commissioner’s decision is entitled to deference and will not be disturbed.
ZALMA OPINION
Insurance companies rely on the honesty of those who represent them to the public and expect the state to protect them from representatives who fail to fulfill the obligations imposed on the insurance agent’s license. Mr. Kumar, for several years, attempted to profit from submitting multiple fraudulent applications for insurance never ordered by the persons who allegedly signed the applications. It took seven years from the first fraud to the OSC, the proceedings before an ALJ and an appeal to take away the license and obtain a monetary judgment against the fraudulent agent. It is time to improve the process.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://barryzalma.substack.com/publish/post/107007808
Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01
Go to X @bzalma; Go to the podcast Zalma On Insurance at
; Go to Barry Zalma aYouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://lnkd.in/gcZKhG6g
Go to X @bzalma; Go to Newsbreak.com https://lnkd.in/g8azKc34
Go to the Insurance Claims Library – https://lnkd.in/gNHv987G
Notice of Claim Later than 60 Days After Expiration is Too Late
Post 5089
Injury at Massage Causes Suit Against Therapist
Read the full article at https://lnkd.in/gziRzFV8, see the full video at https://lnkd.in/gF4aYrQ2 and at https://lnkd.in/gqShuGs9, and at https://zalma.com/blog plus more than 5050 posts.
Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.
In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.
FACTUAL BACKGROUND
Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Posted on June 2, 2025 by Barry Zalma
Post 5087
See the full video at and at
Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf
Zalma’s Insurance Fraud Letter – June 1, 2025
See the full video at https://lnkd.in/gw-Hgww9 and at https://lnkd.in/gF8QAq4d, and at https://zalma.com/blog plus more than 5050 posts.
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at ...
No Coverage if Home Vacant for More Than 60 Days
Failure to Respond To Counterclaim is an Admission of All Allegations
Post 5085
See the full video at https://lnkd.in/gbWPjHub and at https://lnkd.in/gZ9ztA-P, and at https://zalma.com/blog plus more than 5050 posts.
In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.
BACKGROUND
On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.
Plaintiff filed suit ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.
This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
