Agency Ordered to Pay $5.2M Restitution for Overcharges

Tuesday, February 5, 2019 | 0

A Massachusetts insurance agency must pay $5.2 million in restitution to small-business customers for overcharging them for insurance, Massachusetts Attorney General Maura Healy announced.

Attorney General Maura Healy

Suffolk Superior Court Justice Robert Ullmann required the Kilgore Insurance Agency, agent Andrew W. Crowther Jr., and agency owners Cyrus Kilgore and Jeffrey Kilgore to repay money they overcharged through hidden “agency fees,” the Attorney General’s Office said.

Healy’s office said the Kilgore agency appealed the judge’s ruling, but the Supreme Judicial Court denied review.

The trial court found the agency charged an average hidden fee of $5,471, or 47% of the insurance policy premium, with some fees reaching as high as 462% of the premium. Standard compensation for insurance agents selling the policies is around 10%, Healy’s office said.

The investigation found that the company hid extra fees from clients in a variety of ways, including by “whiting out” the actual premium figure on insurance policies and typing in an inflated figure that included the undisclosed fee. The company also withheld from clients the last page of premium finance agreements, where the true premium, as set by the insurer, is typically disclosed. 

Nearly 100 clients were negatively impacted by the Kilgore agency’s schemes.

The Kilgore agency provided workers’ compensation to businesses, but the overcharges were not added to the policies, the Attorney General’s Office said in an email.