Elisia Lattimer, an insurance agent, filed a formal complaint with the Ohio Department of insurance, claiming the Ohio National engaged in an illegal practice of ‘rebating’ and also that executives tried to cover it up.
This has been just one in a series of lawsuits by broker-dealers filed. Just last year, financial advisors affiliated with LPL Financial and Triad Advisors lost their complaint to reverse the insurer’s decision to stop paying annuity commissions. However, similar lawsuits filed by Veritas Independent Partners have been allowed to continue.
Ohio National Life Insurance company is headquartered in Cincinnati, Ohio. It is structured as a “mutual insurance” insurance company, which means that the owners are the policyholders. They offer a complete line of insurance and investment products and is licensed in all fifty states, DC and Puerto Rico.
The complaint alleges that the insurer’s process of a customer’s insurance premiums broke the law and that three senior executives tried to “cover-up” the activity after it was reported internally.
The complaint centers around a term called “rebating” in which an insurance company or agent pays a part of the commission to the insured. Rebating is illegal and frowned upon by the industry. Insurance agents caught “rebating” can be fined and even barred from the insurance industry. The allegation that a company or department of a company was part of the “rebating” scam
In this case, Lattimer, a licensed insurance agent that was formerly employed by Ohio National, alleges that her manager, Keith Carson offered to pay half of a customer’s monthly policy if the customer would reinstate the police.
Ms. Lattimer won a $213,000 award in court last month from Ohio National regarding a breach-of-contract.
Ms. Lattimer alleges that three senior vice presidents — Rob McPheters, Kevin Korenoski, and Christopher Calabro ignored her formal complaints and then fired her as punishment. Calabro is now the company’s chief marketing officer.
Lattimer decided to report the “rebating claim” to the Ohio insurance department and also to notify it of Ohio Nationals’ actions and danger both to the public and insurance agents. She requests that Ohio National be punished for its violation of the law and the cover-up.
Lisa Doxsee, a spokesperson for Ohio National, said the Ohio Insurance Department would do a complete investigation and take any necessary actions to resolve the issue.
Included in her complaint, Lattimer submitted evidence, including depositions by Mr. Korenoski, Mr. Calabro, and Mr. McPheters, who were interviewed during the civil litigation related to Ohio National’s breach of contract.
The three executives said in their depositions that their conduct was within the scope of the law. However, Lattimer alleges that they were lying and submitted a copy of a text message she claims was sent by Mr. Carson directly to the client soliciting a rebate offer.