Arizona Insurance Agent Misled Older Iowans
Free Dinner Seminars, Dishonest and Untrustworthy Practices Led to Unsuitable Financial Transactions
Des Moines – The Iowa Insurance Division issued findings of fact, conclusions of law, and orders in a case surrounding Mark Diamond, a Scottsdale, Arizona insurance agent. The Iowa Insurance Division found multiple violations of Iowa law were committed by Diamond.
“Insurance agents hold a position of trust and Iowans expect them to act with integrity and in an ethical manner,” Chance McElhaney, Iowa Insurance Division Communications Director said. “Mr. Diamond violated that trust as he misled Iowa consumers, all of which were over the age of 80, into purchasing annuities that were in no way suitable for these Iowans.”
Diamond’s so-called expertise was stated as providing Medicaid “spenddown” strategies for long term support and services, however, he in fact employed a practice of using free lunch or dinner “seminars” to gain the trust of attendees in order to sell them fixed annuities. Diamond later met with the consumers where he was forceful and aggressive in persuading them to purchase annuities, disregarding many other important factors related to the consumer’s financial situation, insurance needs and financial objectives. Diamond had them sign blank documents, later completing the forms with false information.
“While free dinner seminars can be an appropriate way for a reputable financial professional to provide education and make contacts with those in their communities, caution is advised. Recommendations that would liquidate securities require a securities license and expertise,” McElhaney said. “No financial transaction must ever be decided immediately. Iowans should talk with trusted family, friends or licensed financial professionals prior to making large decisions. Iowans should always be wary of anyone using high-pressure tactics or trying to sell something that does not fit their insurance and investment needs. If it sounds too good to be true, it probably is.”
Prior to making any recommendations to purchase or replace an annuity, a licensed producer must conduct a rigorous suitability analysis specific to the client and have a reasonable basis to believe the recommended annuity addresses the financial situation, insurance needs and financial objectives of the particular consumer in light of the consumer’s suitability profile.
“Nearly all licensed agents do right by their clients every day. However, the Iowa Insurance Division has seen a trend of some unsuitable sales, such as by Gary D. Marcum and Lance P. Phillips, in recent months,” McElhaney said. “We will continue to protect Iowans by strongly enforcing these important legal obligations by insurers and producers to ensure that they comply with the suitability standards found in Iowa law.”
Conclusions of law in this case show that Diamond violated Iowa law by:
The use of unfair and deceptive acts and practices.
Providing incorrect, misleading, incomplete and materially untrue information.
Failure to report his insurance license was suspended or revoked in other states.
Using dishonest practices and demonstrating untrustworthiness.
In response to the many violations of Iowa law, Diamond was ordered by the Iowa Insurance Division to pay a total of $44,000 in civil penalties, a total of $15,347.43 in restitution to two Iowa couples and $8,633.50 to the state for costs of the investigation and prosecution.
Diamond’s insurance license in Iowa has been revoked and he may not re-apply for a license for at least 10 years.
“In this order, Iowans can see just how appalling Mr. Diamond’s actions were. It is repugnant and inexplicable how Mr. Diamond, holding a position of trust as a licensed insurance agent, could target anyone, much less, respectable, older Iowans with such a scheme,” McElhaney said. “There are thousands of licensed insurance agents able to assist Iowans in an ethical and credible way with their insurance needs. Consumers should rest assured that the Iowa Insurance Division will continue to investigate and hold accountable any individual who misuses their position in order to profit through dishonest and deceptive acts.”
