“The dimensions and scope of McClenny, Moseley & Associates’ unlawful insurance coverage scheme is like nothing I’ve seen earlier than,” stated Louisiana Commissioner of Insurance coverage Jim Donelon.
“It’s uncommon for the division to difficulty regulatory actions in opposition to entities we don’t regulate, however on this case, the order is important to guard policyholders from the agency’s fraudulent insurance coverage exercise.”
Additionally named on the cease-and-desist discover had been McLenny, Moseley & Associates (MMA) founding companions John “Zach” Moseley and James McLenny, and MMA Louisiana managing companion William Huye.
The LDI has urged any policyholders who imagine they might have been fraudulently represented by the agency to get in contact with its workplace of insurance coverage fraud. An investigation is ongoing.
What has McLenny Moseley been accused of?
Within the cease-and-desist order, MMA was accused by Louisiana Commissioner of Insurance coverage Jim Donelon of getting engaged in a “fraudulent scheme involving fraudulent insurance coverage acts” involving 100s of hurricane-related claims within the state.
The agency filed greater than 1,500 hurricane declare lawsuits in Louisiana within the area of three months final yr, based on the LDI.
Proof in possession of the LDI confirmed that MMA had “fraudulently misrepresented to a number of Louisiana insurance coverage firms that MMA had been retained by Louisiana insureds … [relating to] hurricane insurance coverage claims with out the information of the insureds that MMA presupposed to signify”, based on the discover.
As a substitute, McLenny Moseley was performing on behalf of roofing firm APEX Roofing and Restoration (APEX), the discover alleged.
As per a February 1 courtroom transcript, MMA admitted to having despatched letters of illustration on behalf of insureds when it didn’t signify them. It additional admitted to having settled 11 claims and filed one lawsuit with out insureds’ consent.
MMA went on to confess to 856 misrepresentations, based on the discover. In a single occasion, an insured couple solely discovered of the “fraudulent declare illustration” when mortgage holder and listed payee Chase Financial institution endorsed and despatched them a test.
MMA additional admitted to having settled 9 extra claims wherein it didn’t signify insureds, based on the discover.
Final yr, insurance coverage trade insiders informed this publication that they and their relations had acquired unsolicited messages from the agency in query encouraging them to assert.
Moseley has beforehand informed Roofing Insights that MMA may have “round 15,000” purchasers within the state and it has harbored ambitions so as to add tens of 1000’s extra.
“Our objective is to assist 50,000 folks in Louisiana – we need to assist rebuild Louisiana,” he stated in a 2022 video interview.
“Disturbing” claims techniques have been surging in Louisiana, Insurance coverage Enterprise has beforehand reported. In August, Unbiased Insurance coverage Brokers & Brokers of Louisiana CEO Jeff Albright, decried a rash of “opportunistic” approaches.
This month, Louisiana Governor John Bel Edwards signed two Payments into regulation as a part of a bid to prop up the state’s ailing property insurance coverage market, which has confronted a stream of insurer exits after a sequence of hurricane hits.
MMA targets Florida in wake of Hurricane Ian
Texas domiciled MMA has additionally arrange a “free Hurricane Ian helpline”, based on its web site.
Insured losses from Hurricane Ian could possibly be as excessive as $74 billion, based on RMS estimates, with an Insurance coverage Info Institute spokesperson having warned previous to a December particular session that authorized prices may add as much as $20 billion to the invoice.
MMA was taken to process over its mass settlement and promoting techniques in courtroom in October, at which period a federal choose stated he feared that the agency might search to benefit from the devastation left behind by lethal Hurricane Ian in Florida. He additionally criticized MMA for charging a 40% reduce.
“My job is to manage justice, shield the bar, and shield the judicial course of,” Choose James D Cain stated, as per a transcript seen by Insurance coverage Enterprise. “So you might go attempt to pull this stunt in Florida as a result of I’ve already seen y’alls ads.
“Disgrace on you. Disgrace on you for making an attempt to prey on folks.”
MMA has been contacted for remark.