Florida Makes Selling Unlicensed Coverage Felony
Florida-licensed insurance agents who sell unlicensed insurance could face a felony charge and lose their license under a new law pushed by Treasurer and Insurance Commissioner Tom Gallagher during the 2002 legislative session.
The new law, which became effective Oct. 1, increases the violation of selling unauthorized insurance from a second-degree misdemeanor to a third-degree felony, punishable by up to five years in prison and a $5,000 fine per count.
Insurance department spokespeople said in interviews with National Underwriter that such activity has long been treated as a felony, but prosecuting alleged criminals is not always a priority for District Attorneys offices.
They also agree it is a difficult situation to quantify, because regulators generally dont discover the criminal activity until someone contacts them complaining of not having coverage.
Nanci Kramer, deputy press secretary, California Insurance Department, says this type of fraud tends to increase when there is an economic downturn.
“People have a hard time, then they cross the lines and become criminal,” she says.
Although the department is “as aggressive as we can possibly be” in apprehending agents who sell fraudulent policies, many cases are pleaded down to misdemeanors, Kramer says.
“Most people are focused on violent crime and people say with white collar crime who gets hurt? And thats what were fighting,” she says.
“We work with the District Attorneys whenever a case like this comes up and try to make this a priority and try to make them understand what an economic loss this is.”