Illinois Agent Accused of Fraud, Diverting Funds

September 18, 2009

The Illinois Department of Insurance has issued an Order against producer licensee Earl D. Bertsche and Bertsche and Berry Inc., for failing to remit premium money from Illinois consumers to insurance companies and for engaging in improper insurance-related activity.

The Department’s investigation revealed that since 2007, Bertsche and his agency, Bertsche and Berry, Inc., of Pontiac, withheld thousands of dollars in insurance premiums due to insurers or other licensees, issued fraudulent certificates of insurance and defaulted on a promissory note to an insurer that represented a premium of more than $334,000. As a result, the Department issued an Order on Sept. 10, 2009, revoking insurance licenses from both Bertsche and Bertsche and Berry, Inc., and imposing a civil penalty of $100,000.

“The Department’s investigation indicated immediate action was necessary to protect Illinois consumers. Our core mission is consumer protection, and the Order against Mr. Bertsche further emphasizes that producer misconduct will not be tolerated,” said Michael T. McRaith, Director of the Illinois Department of Insurance.

The Department investigation found that in 2007, Bertsche and Bertsche and Berry, Inc., led an Illinois consumer to believe that their insurance premiums, amounting to nearly $75,000, were placed through two separate insurers for the 2007 and 2008 policy years. Neither insurer, though, ever received payments on behalf of the consumer because, as Bertsche later admitted, he failed to deliver those funds to provide coverage. In 2008, Bertsche and Bertsche and Berry, Inc., brokered a policy worth more than $114,000 in premiums but failed to pay more than $61,000 of premiums due to another producer.

The Department also discovered through its investigation that Bertsche and Bertsche and Berry, Inc., issued four fraudulent certificates purporting to represent commercial property insurance for three Illinois consumers, the cost of which allegedly totaled nearly $115,000. However, none of the certificates are valid because Bertsche failed to provide the premium funds to the insurer.

In another instance, Bertsche and Bertsche and Berry, Inc., again due to a failure to deliver premium funds paid by a consumer, entered a into promissory note with that insurer to pay more than $334,000 for the unpaid premium, $155,000 of which remains outstanding.

Bertsche and Bertsche and Berry, Inc., can request a hearing to rebut the allegations stemming from the Department’s investigation.

Source: Illinois Department of Insurance

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