Michigan Charges Detroit Agency, Producer with Fraud

Michigan officials are warning Detroit-area drivers that they may have unknowingly purchased fraudulent automobile insurance certificates from an entity claiming to be a Michigan-licensed insurance agency named Ethos Insurance.

A state insurance department investigation found that Ethos and Don Diamond, a licensed insurance agent, were selling bogus policies purporting to have coverage through legitimate insurance companies.

i said that Ethos was selling auto insurance before March 10, 2010, and continued until recently even though Diamond did not have a valid non-resident producer license until January 2011 and Ethos did not have a valid personal lines carrier appointment until January 18, 2011. Progressive Michigan cancelled that appointment on May 8. 2011, according to the Office of Insurance and Financial Regulation. The state says Ethos had no other carrier appointments. I

State investigators also said Ethos told customers that policies were written by Progressive Michigan when it did not have an appointment and by two other insurers for which it had no appointment, Dairyland County Mutual and Farm Bureau Insurance of Michigan. Dairyland County Mutual is not licensed in the state.

OFIR alleges that Diamond, through Ethos, enticed Detroit drivers into buying low-cost, bogus auto policies at numerous locations around the city. Among the locations was Monaco Motors in Detroit, according to documents.

Officials said that Detroit consumers who purchased insurance through Ethos notified OFIR after Ethos failed to produce documents related to their auto policy.

OFIR has ordered Diamond, Ethos Insurance-Michigan, Ethos Insurance Group and Ethos Mutual Insurance Co. to stop conducting unlicensed and fraudulent insurance activity.

“Detroit drivers who purchased auto policies from Ethos or Don Diamond need to buy legitimate coverage immediately,” OFIR Commissioner Kevin Clinton said. “Right now they’re driving without insurance.”

Those charged have 30 days to request an OFIR hearing. OFIR said it has handed the results of its investigation over to the proper law enforcement agencies.

Topics Fraud Michigan