About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

17 Loy. L. A. L. Rev. 809 (1984)
Life Insurance Agent Fraud in California: Rebating and Related Misconduct

handle is hein.journals/lla17 and id is 825 raw text is: LIFE INSURANCE AGENT FRAUD IN CALIFORNIA: REBATING AND RELATED MISCONDUCT Douglas Hallett* I. INTRODUCTION In its September 1, 1975 issue, Forbes magazine reported the following: In April 1974 Aetna Life & Casualty fired its top salesman, Bert Kreisberg, who had written over $100 million in new policies in 1973 alone (roughly 5% of Aetna's new business that year). Kreisberg was selling multimillion-dollar face- amount policies with high first-year cash value and then offer- ing to pay the premiums on that policy himself in exchange for the cash-value rights. By borrowing on the cash value and then adding in his commissions and expenses, Kreisberg wound up with 140% of the first-year premium. To be sure, he would have netted more than 40% by simply writing those policies in the ordinary manner, but the market for life insur- ance policies of such size is exceedingly thin. (Unless, of course, they're free like Kreisberg's.)1 Kreisberg's practices constitute a misdemeanor offense by the agent2 and, potentially, the policyholder in California.' As in the other forty-nine states, California law prohibits rebating-that is, providing an inducement to a prospective insured other than that which is stated in the policy.4 Kreisberg himself eventually pleaded nolo contendere * Partner, Adams, Duque & Hazeltine, Los Angeles. B.A., 1971, Yale University; J.D., 1975, Harvard University. Member, California and District of Columbia Bars. 1. A Salesman Who Was Too Successful, FORBES, Sept. 1, 1975, at 79. 2. CAL. INS. CODE § 761 (Deering 1976) provides that: Any insurer, insurance agent, broker, solicitor, or life agent and any officer or employee of an insurer, insurance agent, broker, or life agent that makes or receives an unlawful rebate is guilty of a misdemeanor. 3. CAL. INS. CODE § 752 (Deering 1976) provides that: Any person named as the in- sured in any policy or named as the principal, or obligee, in any surety policy or the agent or representative of any such person who, directly or indirectly, knowingly accepts or receives any unlawful rebate is guilty of a misdemeanor. 4. CAL. INS. CODE § 750 (Deering 1976) provides that: An insurer, insurance agent, broker, or solicitor, personally or by any other party, shall not offer or pay, directly or indirectly, as an inducement to insurance on any subject-matter in this State, any rebate of the whole or part of the premium paya-

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most