Oxendine Busts Auto Insurance Fraud Ring in Savannah

Insurance Commissioner John W. Oxendine said a fraud ring operating in Savannah, Ga., collected nearly $95,000 from six insurance companies by staging accidents and filing bogus claims.

The alleged ringleader, Joseph T. Morris Jr., 29, was arrested today and charged with three counts of insurance fraud and two counts of making false statements. According to an investigation by Oxendine’s office, 16 claims filed by Morris involved vehicles he owned or previously owned and people he was already associated with. Title histories show Morris sold vehicles to other parties who were then involved in “accidents” that he filed claims on.

The companies that were defrauded include AIG/ 21st Century, Allstate, GMAC, Mercury Insurance, SafeCo and Traveler’s.

"Fraud like this causes everyone’s premiums to go up," Oxendine said. "Thanks to my investigators, we have taken these people off the streets."

Morris was already on federal probation.

Insurance fraud is a felony with a penalty of two to 10 years in prison and/or a fine of up to $10,000.

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Oxendine Revokes Life Company's License, Fines Insurer $214,000

Insurance Commissioner John W. Oxendine announced recently that he has
revoked the certificate of authority of Trans World Assurance to operate in Georgia, and
has fined the company $214,000. In addition, the Commissioner has ordered the
company to refund monies collected from active duty members of the United States
Armed Forces related to products it has sold in Georgia since September 2007.

“Due to multiple violations of the state insurance code, I feel I have no option but
to revoke Trans World’s license to operate in the state,” Oxendine said. “What makes
these violations particularly egregious is that they targeted our men and women in
uniform.”

The Commissioner held a hearing May 5 and 6 of this year to investigate
allegations that the company sold a life insurance policy containing an illegal component
to military personnel between September 2007 and March 2008. The product, called
“Flexible Dollar Builder,” includes a provision known as an accumulation fund.
The Commissioner found that provisions of the accumulation fund violated Georgia’s
Military Sales Practices Regulation and the Unfair Trade Practices Act.

The company further violated regulations by selling life policies to service
members already covered under Service Members Group Life Insurance (SGLI) without
making the required assessment to determine whether the service member needed
additional life insurance.

Although the company may not sell new policies in Georgia, it must continue to
service existing contracts which were sold before September, 2007. The company must
also honor the contracts issued subsequent to September 1, 2007, until it has made the
refunds required by the order.