Monday, February 7, 2011

Insurance Department Revokes License of Rogue Agent who targeted Senior Citizens

The Pennsylvania Insurance Department has revoked the license of an insurance agent who preyed upon senior citizens.  Jay Cohen, formerly of Bryn Mawr, was found to have duped older Pennsylvanians by offering services described in promotional materials as “non-legal, financial and estate-planning services” and claimed he was an accredited “certified senior advisor.” 

Once payment was received, Cohen failed to disclose that he collected commissions and fees from these insurance transactions, some of which were obtained even though agreements existed prohibiting the collection of such fees.
The Department also imposed a $10,000 penalty on Mr. Cohen and ordered him to pay than $13,000 in restitution for conduct unbecoming an insurance producer. 

The adjudication and order found that Mr. Cohen
·       Failed to disclose that he was receiving commissions under the guise of financial planning;
·       Operated a business entity that was not licensed with either the departments of Insurance or State;
·       Failed to comply with insurance laws;
·       Misappropriated funds belonging to his clients and inappropriately charged fees;
·       Demonstrated conduct that was fraudulent, dishonest, coercive and unfit for licensure

Acting Insurance Commissioner Michael F. Consedine stated that “An insurance producer who deliberately undermines his clients and inflicts financial harm is incapable of the trust necessary in the insurance profession,” Consedine concluded. “The department will pursue actions against anyone who uses a dubious title or accreditation to mislead consumers about their abilities or the scope of services being performed.”  [emphasis added].

The above information is drawn from a Pennsylvania Insurance Department Press Release, issued February 4, 2011.

It is notable that Acting Commissioner Consedine indicates that the Department will pursue agents who use dubious titles and accreditations to market financial products. These practices are widespread in Pennsylvania. Insurance agents may wish to reconsider whether to use designations that may be considered misleading. 

Federal Law (The Dodd-Frank Wall Street Reform and Consumer Protection Act) provides grants to states to develop initiatives designed to protect senior investors by stopping the use of misleading designations in marketing financial products.  For more information on this provision of Dodd-Frank see Attorney Robert Clofine's article New Senior Investor Protections, which appeared in the September October 2010 issue of the York Area Agency on Aging New Horizons Newsletter.     

Consumers with questions about an insurance producer or any insurance policy may call the department’s toll-free, automated consumer hotline at (877) 881-6388, or any of the department’s Bureau of Consumer Services’ regional offices: Harrisburg at (717) 787-2317; or Philadelphia at (215) 560-2630. Consumers may also verify the licensing status of an individual or a company at www.insurance.pa.gov.

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