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Maine.gov > PFR Home > Insurance Regulation > All Press Releases > Bureau of Insurance Revokes Licenses of Insurance Producer and Agency
Augusta, Maine -
The Bureau of Insurance has revoked the insurance producer (agent) license of Thomas Osborne, as well as the license of his insurance agency, Chapman Associates, in Kennebunk. In addition to the license revocations, Mr. Osborne was required to remit a monetary penalty of $6,000 and an investigation cost reimbursement to the Bureau of $500. These actions follow an investigation and the execution of a consent agreement between Mr. Osborne, the Bureau and the Department of the Attorney General.
Under the terms of the agreement, which can be viewed on the Bureau’s website at www.state.me.us/pfr/insurance/consent_agreements/08231.htm, Mr. Osborne admitted to the allegations that he misused monies in this agency’s “premium trust fund account.” That account is intended for the sole purpose of depositing premium payments from customers with insurance policies for which they pay an agency directly. The agent is required to forward these funds to the insurance companies, to ensure that customers receive credit for these payments on their policies. The premium trust fund account should not be used for any other purpose.
The Superintendent of Insurance found that Mr. Osborne failed to conform to the standards of professional conduct for insurance producers, by withdrawing funds from this account on various occasions in order to cover business operation expenses. People could ultimately have lost their insurance, if this went on and the carriers did not receive their payment. Consumers could have been caught in the middle between Mr. Osborne, to whom they had made the payment, and the companies who did not receive the payment.
The misuse of funds that were entrusted to him by his customers, and the resulting failure to make timely payments of collected premiums to insurers, were violations of his fiduciary obligations and therefore warranted the most severe license sanction.
While in operation, Chapman Associates specialized in property and casualty insurance products. Consumers with policies through Chapman did not lose their coverage as a result of the investigation and consent agreement. The policies were valid through legitimate insurance companies.
“The vast majority Maine’s insurance professionals are honest and reputable. They seek to help consumers and they act in the best interest of Maine families and businesses. When someone deviates from this norm and violates an important trust, the Bureau can and will take strong action,” Superintendent Mila Kofman comments.
The Bureau of Insurance is part of the Department of Professional and Financial Regulation which encourages sound ethical business practices through high quality, impartial and efficient regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can reach the Bureau through its web site at www.maine.gov/insurance; by calling 800-300-5000 in state; or by writing to Bureau of Insurance, 34 State House Station, Augusta ME 04333.
Last Updated: October 28, 2009 1:27 PM
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