Ypsilanti and Owosso LA Insurance agencies suspended pending hearing
The Michigan Department of Insurance and Financial Services has suspended the licenses of three Michigan LA Insurance agencies, including two in Ypsilanti, effective immediately.
The three agencies, all owned by Jennifer and Laurence Essak, participated in the unlawful sales of insurance policies by unlicensed and unappointed insurance agents and added additional “coverages” to policies without consumers' knowledge or consent, according to the state.
Photo courtesy Dwight Burdette via Wikipedia Commons
“There were a couple innocent mistakes made, but this has it completely wrong,” he said. “Their facts and complaints are 180 degrees off base.”
The two Ypsilanti agencies named in the order are LA Insurance Agency #100 on Washtenaw Avenue and LA Insurance Agency #117 on Michigan Avenue. LA Insurance #179 in Owosso has also been suspended.
The suspension order alleges that Jennifer Essak, who is the president and designated responsible licensed producer at the three agencies, allowed an unlicensed individual to sell, solicit and negotiate insurance policies.
Other charges stem from the addition of road service to automobile insurance. In the suspension order, agents at the three LA Insurance locations are accused of selling membership to National Safe Drivers Motor Club (NSD) in order to generate a profit.
According to the order, memberships with NSD were misrepresented as part of insurance packages and some consumers were shown to have purchased multiple memberships that provided the same service.
Cox said that combining road service with automobile insurance is common among insurance agencies, including AAA.
“They’re not going after the big guys on this so I don’t know why they’re going after the LA Insurance franchises,” he said.
“ You can imagine the hardship this is for a small business like these franchises.”
According to the DIFS release, consumers who have purchased insurance through these agencies or agents should contact the insurance company named on their policy to ensure that the coverage is valid. Consumers are also recommended to review their policies to ensure that no additional coverages were added without their knowledge or consent.
Cox said that the investigation into the LA Insurance Agencies began in May and that the Essaks had cooperated fully with the investigation. He said the suspension of the agents and agencies came “completely from left field.”
According to the order, a hearing with an administrative law judge will be scheduled for the suspended agencies and agents within 20 days. According to the DIFS releas, agents at the listed agencies cannot sell insurance in Michigan until the hearing is held.
Ben Freed covers business for AnnArbor.com. You can sign up here to receive Business Review updates every week. Get in touch with Ben at 734-623-2528 or email him at firstname.lastname@example.org. Follow him on twitter @BFreedinA2