Fraudulently Submitting Fake Application Violates Licensing Statutes
Barry Zalma
Jan 26, 2024
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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.
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ZIFL Volume 30, Number 2
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5260
Read the full article at https://lnkd.in/gzCr4jkF, see the video at https://lnkd.in/g432fs3q and at https://lnkd.in/gcNuT84h, https://zalma.com/blog, and at https://lnkd.in/gKVa6r9B.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th 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/ This issue contains the following articles about insurance fraud:
Read the full 19 page issue of ZIFL at https://zalma.com/blog/wp-content/uploads/2026/01/ZIFL-01-15-2026.pdf.
The Contents of the January 15, 2026 Issue of ZIFL Includes:
Use of the Examination Under Oath to Defeat Fraud
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In Katherine Crow Albert Guidry, Individually And On Behalf Of The Estate Of Jason Paul Guidry v. Metropolitan Life Insurance Company, et al, Civil Action No. 25-18-SDD-RLB, United States District Court, M.D. Louisiana (January 7, 2026) Guidry brought suit to recover life insurance proceeds she alleges were wrongfully withheld following her husband’s death on January 9, 2024.
FACTUAL BACKGROUND
Jason Guidry was employed by Waste Management, which provided life insurance coverage through Metropolitan Life Insurance Company (“MetLife”). Plaintiff contends that after Jason’s death, the defendants (MetLife, Waste Management, and Life Insurance Company of North America (“LINA”)) engaged in conduct intended to confuse and ultimately deny her entitlement to...
Failure to Respond to Motion to Dismiss is Agreement to the Motion
Post 5259
Read the full article at https://lnkd.in/gP52fU5s, see the video at https://lnkd.in/gR8HMUpp and at https://lnkd.in/gh7dNA99, and at https://zalma.com/blog plus more than 5250 posts.
In Mercury Casualty Company v. Haiyan Xu, et al., No. 2:23-CV-2082 JCM (EJY), United States District Court, D. Nevada (January 6, 2026) Plaintiff Mercury Casualty Company (“plaintiff”) moved to dismiss. Defendant Haiyan Xu and Victoria Harbor Investments, LLC (collectively, “defendants”) did not respond.
This case revolves around an insurance coverage dispute when the parties could not be privately resolved, litigation was initiated in the Eighth Judicial District Court of Nevada. Plaintiff subsequently filed for a declaratory judgment in this court.
On or about April 15, 2025, the state court action was dismissed with prejudice pursuant to a stipulation following mediation. Plaintiff states that the state court dismissal renders its ...
Court Must Follow Judicial Precedent
Post 5252
Read the full article at https://www.linkedin.com/pulse/sudden-opposite-gradual-barry-zalma-esq-cfe-h7qmc, see the video at and at and at https://zalma.com/blog plus more than 5250 posts.
Insurance Policy Interpretation Requires Application of the Judicial Construction Doctrine
In Montrose Chemical Corporation Of California v. The Superior Court Of Los Angeles County, Canadian Universal Insurance Company, Inc., et al., B335073, Court of Appeal, 337 Cal.Rptr.3d 222 (9/30/2025) the Court of Appeal refused to allow extrinsic evidence to interpret the word “sudden” in qualified pollution exclusions (QPEs) as including gradual but unexpected pollution. The court held that, under controlling California appellate precedent, the term “sudden” in these standard-form exclusions unambiguously includes a temporal element (abruptness) and cannot reasonably be construed to mean ...
Lack of Jurisdiction Defeats Suit for Defamation
Post 5250
Posted on December 29, 2025 by Barry Zalma
See the video at and at
He Who Represents Himself in a Lawsuit has a Fool for a Client
In Pankaj Merchia v. United Healthcare Services, Inc., Civil Action No. 24-2700 (RC), United States District Court, District of Columbia (December 22, 2025)
FACTUAL BACKGROUND
Parties & Claims:
The plaintiff, Pankaj Merchia, is a physician, scientist, engineer, and entrepreneur, proceeding pro se. Merchia sued United Healthcare Services, Inc., a Minnesota-based medical insurance company, for defamation and related claims. The core allegation is that United Healthcare falsely accused Merchia of healthcare fraud, which led to his indictment and arrest in Massachusetts, causing reputational and business harm in the District of Columbia and nationwide.
Underlying Events:
The alleged defamation occurred when United ...
Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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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/
Zalma’s Insurance Fraud Letter
Merry Christmas & Happy Hannukah
Read the following Articles from the December 15, 2025 issue:
Read the full 19 page issue of ZIFL at ...
