Multi-Million Dollar Advocates Forum
Virginia State Bar
Maryland Flag
DC Bar
Virginia Trial Lawyers Association
Million Dollar Advocates Forum

Insurance Investment Fraud

In addition to more typical investments such as stocks, bonds, and mutual funds, investment fraud can also occur regarding the sale of insurance products such as annuities, variable annuities, and various types of life insurance.  This fraud can include selling products that are unsuitable for the customer, as well as more extreme situations involving outright theft by insurance agents of premiums and policy proceeds, and/or investments by insurance agents in ponzi schemes.  Greco & Greco’s securities fraud lawyers also represent customers defrauded by insurance companies and insurance agents.

Unfortunately, financial advisors with histories of firings and customer complaints can sometimes have their securities licenses taken away, but still maintain insurance licenses.  These advisors market themselves as financial advisors, but they are limited to selling insurance products.  These insurance products may be sold and churned just to generate commissions, and they may not be the best or most suitable investment for a customer or retiree.

One common practice is “twisting” whereby an insurance agent will sell an annuity (a long-term product), and then approach the customer a year or two later recommending the sale of the annuity to invest in a different annuity.  This practice to generate commissions for the broker will often result in the customer losing significant funds in surrender charges due to the early close out of the annuity.

Insurance agents also may sell insurance products and then recommend the early close out of those products to move the money to a ponzi scheme or the agent’s own pockets.  While the agent’s insurance company will claim they have no liability for such actions, the law on insurance agents holds otherwise.  

The law in Virginia is clear:    “A. A licensed agent shall be held to be the agent of the insurer that issued the insurance sold, solicited, or negotiated by such agent in any controversy between the insured or his beneficiary and the insurer…"  Va. Code § 38.2-1801 (Emphasis added).  Accordingly, pursuant to the statute, an agent is considered the agent of the insurer in any controversy, including claims of fraud, conversion (theft), etc.

Furthermore, the law of agency holds a principal (insurance company) liable for the acts of its agent even if it was not aware of the fraudulent conduct and did not benefit from the fraudulent conduct.  The Virginia Supreme Court case of Dudley v. Estate Life Ins. Co. of America, 220 Va. 343, 350, 257 S.E.2d 871 (1979) states: “A principal who puts a servant or other agent in a position which enables the agent, while apparently acting within his authority, to commit a fraud upon third persons is subject to liability to such third persons for the fraud… Liability is based upon the fact that the agent’s position facilitates the consummation of the fraud…”

Greco & Greco’s Virginia Securities Fraud Lawyers represent investors across the country and have extensive experience representing investors and retirees who have been sold inappropriate, unsuitable, and fraudulent insurance and annuity related investments and other products. 

We represent customers and retirees exclusively, in arbitration and Court, to attempt to recover losses caused by unsuitable and fraudulent sales of investments, including insurance, and theft of insurance related monies by trusted insurance agents.  These unsuitable sales and thefts often involve retirees who cannot afford to lose their savings.  Insurance agents in these situations may emphasize the potential benefits and income to be earned by a product without discussing the corresponding risk from the product.  If you have lost a significant amount of your savings in insurance related investments and/or fraud and would like to discuss a potential claim with an attorney, please contact our managing partner Scott Greco for a free attorney consultation.

Client Reviews
“Greco & Greco represented me several years ago in a case in which my financial planner ignored my investment guidelines in making several very risky investments in my name. This individual was employed by a very large financial services corporation which refused to return my funds. I retained Greco & Greco.This after a few months resulted in a face to face negotiation with a team from the corporate office which supported the financial planner. After several hours including many strategy breaks and rejected offers a satisfactory settlement was reached. Without the skilled representation of Greco & Greco we would not have won such a settlement. I was very pleased with all aspects of their service including their timely feedback throughout the case.” J. W.
“Very professional and compassionate representation by this firm. Communication was clear and concise. This firm has a high degree of integrity and knowledge of SEC law. Highly recommend.” C. A.
“Very good attorney - client communication. Great legal representation. Satisfying results. A. W.
“Scott Greco was very professional, and honest. I highly recommend this firm. Scott Greco explained everything in a way I could understand, and I never left the office with unanswered questions. If I ever need any other legal representation Greco & Greco, P.C will be my only choice.” Anonymous
“W. Scott Greco represented me in my attempt to recover money lost in a ponzi scheme. He kindly and skillfully guided me through the process of submitting the required documentation of loss, provided sound legal advice regarding accepting arbitration, and kept me fully informed as the case moved forward. As a result of his work on my behalf, I recovered a large portion of my lost funds. I would absolutely, without reservation, recommend this firm to others.” Anonymous