In Diamond v. Office of the Commissioner of Insurance, (2020AP99) the District IV Court of Appeals affirmed disciplinary action taken against an insurance intermediary for misleading consumers and recommending products that weren’t suitable for the consumer.

Facts

Diamond put on a workshops directed towards senior citizens that advertised financial advice in several areas. The advertisement said that nothing would be sold at the workshop. While nothing was sold directly at the workshop, Diamond used a form filled out there to gain clients; this is where Diamond got all  his clients. At one of these workshops was Helen and Clarence Lotzer. Diamond secured them as clients, and recommended that they transfer money from existing annuities towards a new annuity from a different company, and Diamond would receive a commission on these new annuities. This turned out to be bad advice, as the Lotzers were led to believe that the transfer wouldn’t affect the death benefit of the old annuities, when in reality they were substantially reduced. OCI held a hearing and determined that Diamond had misled consumers with his workshops and that he didn’t have reasonable grounds to believe the product he recommended was good for the Lotzers. He was ordered to pay restitution to the Lotzers as well as a forfeiture.

Discussion

On appeal, Diamond brought claims contesting his discipline, arguing that the determinations were improperly made, the restitution improperly calculated, and the forfeiture improperly imposed. The court took these each in turn, evaluating the evidence presented at the OCI hearing in depth, and determining that everything decided there was proper. The court affirmed.