Foresters Possible Fraud

[jwk1257]

Anybody ever hear of this? I had a client email me and was VERY upset, said they got a letter and the return of premium check for premiums paid over 21 months, and a rescention of a Final Expense policy because the client had lied on the app....Of course the medical information on the app is confidential and the client hasn't mailed me a copy of the letter yet, so I don't know all about that...The client says she doesn't have heart problems. I called the underwriter and asked him what the problem was and he told me that they did a "random" MIB check on the client and found meds that were not disclosed at the time of the app that proved she had heart problems. Foresters is a 'KNOW BEFORE YOU GO" carrier and had approved the app after checking the MIB while the client was on the phone....By the way, they did all this without notifying me that they had rescinded the policy....Two questions
1. is that legal? (I know about the 2 year contestablity clause)
2. Do I need to get in touch with the Ins Commissioner
My NMO said the underwriter was lying and that he had never heard of that before, but offered no plan to get it back in force..

 

[Rearden]

Medical Information Bureau Plan F in action.

I have an old thread from a few years ago with the same thing happening to me with 5Star.

 

[Willie B]

Medical Information Bureau Plan F in action.

I have an old thread from a few years ago with the same thing happening to me with 5Star.

Yes that is exactly why I train my team to not replace unless you are 100% certain. If you replaced her coverage, this customer would be screwed x 2.

But this isn't a Foresters scam by any means. Lot of companies do this close to the end of the 24 month conestablity period.

 

[jdeasy]

Anybody ever hear of this? I had a client email me and was VERY upset, said they got a letter and the return of premium check for premiums paid over 21 months, and a rescention of a Final Expense policy because the client had lied on the app....Of course the medical information on the app is confidential and the client hasn't mailed me a copy of the letter yet, so I don't know all about that...The client says she doesn't have heart problems. I called the underwriter and asked him what the problem was and he told me that they did a "random" MIB check on the client and found meds that were not disclosed at the time of the app that proved she had heart problems. Foresters is a 'KNOW BEFORE YOU GO" carrier and had approved the app after checking the MIB while the client was on the phone....By the way, they did all this without notifying me that they had rescinded the policy....Two questions
1. is that legal? (I know about the 2 year contestablity clause)
2. Do I need to get in touch with the Ins Commissioner
My NMO said the underwriter was lying and that he had never heard of that before, but offered no plan to get it back in force..

Your NMO should have known about this. It's called "Plan F". It's a subscription service from MIB where they will monitor the applicants for 24 months and report any irregularities to the company. Forethought was the first I knew of doing it. They got so much blowback from agents that they stopped. The it was 1 star. Same thing, they got so much blowback from agents they stopped. Americo is notorious for using it and they don't care if agents don't like it.

This is the first I've heard of it from Foresters. But it's certainly not illegal and you would be wasting your time to talk to the DOI about it.

 

[TampaHound]

Ok...two questions: Would the meds not shown on the MIB for any reason at the time of the original application?

B) What happens if the application is accepted then the meds change during the next two years? Can the client still have their policy revoked? They acted in good faith to begin with.

 

[jdeasy]

Ok...two questions: Would the meds not shown on the MIB for any reason at the time of the original application?

B) What happens if the application is accepted then the meds change during the next two years? Can the client still have their policy revoked? They acted in good faith to begin with.

In theory it's supposed to work like you described. If they started taking a med into the 2 years that would have disqualified them at the time of application, it's not supposed to count against them.

But it doesn't work like that in practice. They put the burden of proof on the insured to show they told the truth at the time of application. Most don't want to go through the trouble. They just cash the check and get coverage somewhere else.

One company that I know of doing it the most do not inform the insured or the agent in advance that there's a problem. They just send the money back with the letter to the insured. The only way the agent knows about if the chargeback unless the insured tells them.

Not all companies do it like that. I had one with RNA a couple years ago. They sent me an email alerting me that there may be a problem and asked me to check on it and report back. I did and the problem was an erroneous doctor report that I was able to get straightened out. But even if it hadn't been fixable I was told about it in advance.

 

[rousemark]

Ok...two questions: Would the meds not shown on the MIB for any reason at the time of the original application?

B) What happens if the application is accepted then the meds change during the next two years? Can the client still have their policy revoked? They acted in good faith to begin with.

Policy cannot be rescinded for events that take place after the application. There has to be a "material" misrepresentation on the application.

 

[suranceman]

The problem with the OP's story is it is all the clients version of the story. These are not real facts until verified.

 

[jdeasy]

Policy cannot be rescinded for events that take place after the application. There has to be a "material" misrepresentation on the application.

They absolutely can do it and have done it. It can be corrected if wrong. But they will do it and see what happens.

 

[Baseball7]

I'd be the 'client' did another application and info was reported to MIB that would have changed things. Medical info doesn't typically get coded to MIB unless a MIB reporting carrier adds it.