Driving Up the Wrong Alley

California Insurance Commissioner Harry W. Low announced the filing of a formal legal complaint by the California Department of Insurance (CDI) against Abraham and Associates Insurance Services Inc., and its owner, Mark Roland Abraham.

A large-volume, Sacramento area auto insurance broker, Abraham and Assoc. advertises heavily on television and also has offices in Pleasant Hill, Union City, Santa Clara, and Stockton.

The complaint, which follows a lengthy CDI investigation, alleges numerous unethical practices involving the improper charging of broker fees by Abraham and Assoc. Abraham and Assoc. is accused of deceiving clients into paying between $90 and $200 for a supplemental insurance policy which, on average, paid out less than $10 in claims.

The CDI is seeking the following: to revoke the license of Abraham and Assoc.; full refunds of broker fees collected in violation of the law; monetary penalty of $5,450,000; prohibition of further participation in the insurance industry by agency or owner; and reimbursement of $55,000 to cover CDI investigative costs.

The complaint also alleges false advertising, in violation of a 1997 Cease and Desist Order issued by the CDI, which resulted in a $25,000 fine.

Abraham and Assoc. may request a hearing on the allegations contained within the Accusation by filing a Notice of Defense with CDI within 15 days of being served.

According to the CDI, the enforcement action is one of several the Department is planning to initiate against auto insurance brokers. Legislation in 1999, authored by State Senator Jackie Speier, provided increased funding to the CDI to investigate and prosecute such cases of alleged illegal activities.

Topics Personal Auto