CDI Seeks to Revoke Sacramento-Area Broker’s License
California Insurance Commissioner Harry W. Low announced the filing of a formal legal complaint by the California Department of Insurance against Abraham and Associates Insurance Services Inc. and its owner, Mark Roland Abraham.
Abraham and Associates is a large volume, Sacramento-area auto insurance broker that advertises heavily on television. After a lengthy CDI investigation, the complaint against Abraham and Associate alleges numerous unethical practices involving the improper charging of broker fees. The complaint also alleges false advertising, in violation of a 1997 Cease and Desist Order issued by CDI. The C&D Order also resulted in a $25,000 fine. Abraham and Associates may request a hearing on the allegations contained within the Accusation by filing a Notice of Defense with CDI within 15 days of being served.
The complaint seeks to revoke the license of Abraham and Associates; fully refund broker fees collected in violation of law; enforce a monetary penalty of $5,450,000; prohibit any further participation in the insurance industry by agency or owner; and reimburse the CDI of investigative costs totaling $55,000. A major portion of the CDI complaint accuses Abraham and Associates of deceiving clients into paying between $90 and $200 for a supplemental insurance policy that, on average, paid out less than $10 in claims.
The enforcement action against Abraham and Associates is one of several the CDI is planning to initiate against auto insurance brokers. Legislation in 1999, authored by State Senator Jackie Speier, provided increased funding to CDI to investigate and prosecute such cases of alleged illegal activities.