A California insurance broker has been arrested on charges of swindling truckers.
Paul Daniel Conejos, 29, did business as TATEMAS Truck Insurance Services and Royal Insurance Group Services Inc. in San Bernardino and Riverside counties. The 29-year-old Adelanto resident is scheduled for arraignment June 1 in San Bernardino County Superior Court.
He allegedly collected premium payments from long-distance trucking companies, did not remit payments to insurance companies, but issued fraudulent insurance certificates, according to the California Insurance Commission.
Conejos pleaded not guilty at his in-custody arraignment April 12 to four felony counts of grand theft, three felony counts of forgery, two felony counts of theft by false pretense and three misdemeanor theft counts, according to court records. Client losses are about $38,000 for what is sometimes called premium diversion from April 2008 to March 2010.
The commission is considering disciplinary action against Cornejo’s license to sell insurance, it said.
When buying insurance, truckers should get referrals regarding agents or brokers from truckers they trust, said Bonnie Knoedler, co-owner of Sparks Insurance of Kenosha, Wis.
Insurance buyers can verify their coverage by calling the company issuing the policy. Still, some insurance companies may take up to three weeks to process a policy, so it is possible a policy buyer may encounter a gap between paying and being able to verify coverage with the company, she said.
Another consideration is how long companies have sold truck policies, said Knoedler, who has sold truck insurance since 1968. “We try to educate customers so they can make good decisions,” she said. “Ask questions. I’m never offended over being grilled.”
Progressive spokeswoman Brittany Senary said a certificate of insurance provides consumer’s basic policy information and “is used to assure that the coverage and limits of insurance are in place to a third party.” A valid certificate should include:
- Agent or broker name and address.
- Issuing insurance company name.
- Policy number and time period of coverage.
- Coverage or limit descriptions.
- Signature of the issuing agent or company representative.
- Date the certificate was created.
Some insurance firms might issue unique and difficult-to-copy certificates, but it would be difficult for customers to determine if a certificate is fake if it contains the required information, said Frank Scafidi, public affairs director of the National Insurance Crime Bureau.
Cornejo’s alleged crime is known as premium or agent fraud and other names, but is not uncommon, said Scafidi, who is also a former owner-operator. A variation on this fraud is when an insurance company activates a policy and the customer receives a real certificate. Then the agent “cancels” that policy, but continues to receive premium payments that are not forwarded to the insurance company.
Truckers who suspect fraud should report it to the insurance commission for the state where the agent or broker is licensed, Scafidi said.
The FBI said premium diversion or embezzlement of insurance premiums is the most common type of insurance fraud. Another common premium diversion is selling insurance without a license, collecting premiums and then not paying claims.
Another scheme is when phony insurance companies collect premiums for bogus policies with no intention of paying claims, according to the National Association of Insurance Commissioners. These entities might offer policies that are significantly lower than competitors’ prices and might be difficult to reach by phone.
The Coalition Against Insurance Fraud said insurance buyers should tread slowly if the agent or company representative seems evasive or can’t answer your questions. The coalition offers other tips here.
In addition to state agencies, report suspicions of insurance fraud to: https://eapps.naic.org/ofrs/.
Consumers may also call the NICB Hotline at (800) 835-6422 or text information to TIP411, keyword “FRAUD” to remain anonymous.