The information below was taken mostly from a news release by the Ohio Department of Insurance on Monday April 26, 2010.
Potential Life Insurance Scheme Thwarted
Insurance Director Revokes California Agent’s License
COLUMBUS – If someone offers to give you money to take out a life insurance policy on yourself for the purpose of selling it to an investor, they are probably involved in a stranger-originated life insurance (STOLI) scam, which is illegal in Ohio. Ohio Department of Insurance officials recently stopped such a scam from taking place.
On March 16, 2010, Ohio Department of Insurance Director Mary Jo Hudson revoked the insurance license of Alex Kozonshvili of California for alleged violations of Ohio insurance law, including misrepresentation and untrustworthiness.
The Department’s investigation revealed that in August 2008, Mr. Kozonashvili allegedly submitted a universal life insurance application to Prudential Insurance Company for $9 million worth of coverage for a 74 year old woman from Cleveland. In the application, he misrepresented where she lived and claimed that she had assets worth $12.5 million. The agent allegedly offered the potential victim at least $8,000 to participate. The potential victim lives on a fixed income of less than $1,000 a month. Fraud was suspected and reported to the Department.
Director Hudson is encouraging seniors to be on the lookout for these types of schemes so they don’t become victims.
“STOLI transactions involve someone betting on your life” said Director Hudson. “We want Ohioans – especially our senior citizens – to be cautious about any kind of scheme that involves someone offering you money or a low-cost loan to take out a life insurance policy on yourself. We want people to empower themselves with knowledge about insurance, which exists to protect them, not as a vehicle for fraud or financial exploitation. In this case, the good work of the underwriters and investigators at Prudential Insurance and our fraud and enforcement investigators protected someone from potential harm.”
For more information about STOLI, visit www.insurance.ohio.gov/Consumer/Pages/STOLI.aspx.
Ohioans who believe an agent is committing fraud or misconduct should call the department’s fraud hotline, 800-686-1527. Information about agent fraud and misconduct can be on the Department’s website, www.insurance.ohio.gov.