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Forty-three insurance agents and brokers in New York have been fined a total of $42,650 for accepting kickbacks, or failing to supervise staff who accepted kickbacks, to steer customers to certain auto glass repair shops, Insurance Superintendent James Wrynn announced.
The agents and brokers, who work at more than two dozen different insurance agencies in Western and Central New York, are accused of accepting gift cards in return for recommending two specific glass shops to claimants.
State law prohibits insurance agents and brokers from accepting payments to steer their customers to specific auto repair shops, according to the Department of Insurance (DOI).
The fines ranging in amounts from $250 to $5,000 followed an investigation by Warren Lester of the DOI’s Consumer Services Bureau. Lester said the DOI was tipped off by Bison Glass, which contacted the DOI and said it was no longer offering incentives to insurers because it could no longer afford to make the payments. A second glass repairer, Pat’s Glass Inc., which had operated in Wyoming County, provided additional information after it went out of business.
While it’s unlawful for insurance agents or brokers to accept payments in return for steering business, it’s not unlawful for a business, such as a glass repairer, to offer incentives to attract business.
The investigation found that the agents and brokers received gift cards for department and grocery stores when they steered their customers to the two glass shops. The gift cards typically ranged in value from $35 to $60. Some of the payments added up to over $1,000 in value.
Two of the agents, John B. Conaway and Debra Dillenburg, were each ordered to pay $5,000, the largest fines imposed. Another agent, Kurt Silvestro, was fined $4,000.
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