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Insurer Fraud Section

Common Types & Schemes

Deceptive Agent Practices

  • Agent Application Fraud: Agent forges an insurance application using information from an unsuspecting person to obtain commissions.
  • Clean sheeting: Agent conspires to acquire life insurance without disclosing life-threatening illness.
  • Conversion: Agent retains customer premiums, provides the customer with fictitious insurance documents and issues fraudulent liability insurance cards. May involve the conversion of annuity funds.
  • Churning: Agent induces customer to use cash value of existing policy to purchase a new policy, resulting in another commission for the agent.

Fraud by Company Officials

  • Submission of falsified financial statements
  • Misuse of company funds

Unauthorized Insurance

  • Insurance plans not authorized by the Texas Department of Insurance.
  • Individuals not licensed to do the business of insurance in Texas.
  • Fraudulent group/individual health plans.

Avoid Becoming a Victim When Buying Insurance

  • Never pay premiums in cash
  • Confirm that the agent or company is licensed in Texas on our Company Lookup and Agent Lookup sites.
  • Beware of unsolicited offers or offers to upgrade your current policy or annuity
  • Beware of unreasonably low premiums
  • Beware of investments that seem too good to be true
  • Make sure you receive your policy within 60 days
  • Protect your insurance policy numbers

Reporting Insurance Fraud



For more information, contact:

Last updated: 12/12/2017

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