Couple settles with insurance producer for unauthorized policies

legal image, gavel resting on judge's bench in a courtroom

A gavel rests on the bench inside a courtroom. (AP Photo/Brennan Linsley, File)

Scott Lauck//April 22, 2024//

Listen to this article

A Kansas couple reached a $325,000 settlement with a Kansas City-area licensed insurance producer that allegedly signed them up unwittingly for insurance policies, according to their attorney.

Richard Fisk of Beam-Ward, Kruse, Wilson & Fletes said the plaintiffs, a husband and wife, alleged in a lawsuit in Jackson County that the defendant submitted numerous insurance applications using the plaintiffs as the applicants and/or listing their financial information without their authorization. Consequently, the plaintiffs were paying for insurance policies without their knowledge or consent, Fisk said.

Some policies had no relation or connection to the plaintiffs other than their banking information was submitted with the application, and thus they were paying the premiums even though they were not listed as owners or beneficiaries on the policies. The plaintiffs alleged that the defendant was responsible for submitting the applications and that the defendant benefitted from each issued policy by earning commissions.

According to Fisk, the litigation also uncovered evidence that the defendant was “churning” or “twisting” policies, in which a producer replaces a client’s existing policy either with similar or worse benefits from the same or a different carrier. The producer benefits by receiving a commission for selling a new policy, while the consumer is exposed to a number of costs and the loss of any policy benefits obtained through the passage of time.

The suit brought claims of negligence, negligence per se, breach of fiduciary duty and violations of Kansas and Missouri consumer protection laws. The plaintiffs alleged special damages for the money taken from their accounts to pay the premiums, plus frustration, stress, humiliation, embarrassment and anxiety, as well as damages pursuant to the Kansas Consumer Protection Act and the Missouri Merchandising Practices Act.