43 insurance agents and brokers were charged with finds totaling to $42,650 for accepting kickbacks, for failing to manage staffs who received kickbacks to lead consumers to certain auto glass repair shops. New York State insurance superintendent James Wrynn made the announcement yesterday, reminding people engaged working in the insurance industry that it is unlawful for them to steer clients into firms which provide them with monetary incentives.
The agents and brokers work for more than two dozen of insurance firms or group of companies in Central and Western New York. They were accused of accepting gifts in exchange for steering consumers into glass repair shops. Reports alleged that they handle cases of motorists who filed claims to have their vehicles repaired. Then they refer these motorists to certain glass repairers who give them incentives for every client they recommend.
Under state law, insurance agents, brokers, and underwriters are prohibited from engaging in paid referrals. Auto insurance experts explained that it limits motorists chance of finding the most suitable companies for their vehicle repairs.
The fines imposed range from $250 and $5000. The two biggest fines were charged against John B. Conaway, who works with Metlife Auto and Home Insurance in Williamsville, and Debra Dillenburg, who is an agent with David G. Glenn Agency. They were fined with $5,000 apiece. Kurt J. Silvestero, another Williamsville, NY insurance agent, was fined $4,000 along with the company he works for.
Meanwhile, state regulators revoked the license of Andrew R. Walker, an agent from Springville, for accepting payments and steering business. Metlife has the most number of employees sanctioned, topping the list at 10.
Penalties were imposed after New York State Insurance Department completed an investigation through Warren Lester. An investigator from the department’s consumer services bureau, Lester began the investigation after a call from a glass repair shop operating throughout New York.
Bison Glass contacted the department saying that they can no longer continue giving gift card rewards because they can no longer afford it. Another glass repair company, Pat’s Glass, provided regulators more information about gift rewards after shutting down business.
Lester explained that it is not unlawful for business to offer rewards for referrals, but auto insurance agents and brokers are not allowed to accept gifts for steering business.
Gift cards typically given were from grocery and department stores, with values typically ranging from $35 to $60. According to reports, some brokers and agents accumulate up to $1,000 in gifts.