Louisiana Agency to Refund $1.2M for Unlawful Surety Premium Overcharges

A Louisiana insurance agency has been ordered to pay a staggering $1.2 million in premium refunds due to fraudulent overcharging on commercial surety bond policies. This significant penalty underscores the importance of ethical practices within the insurance industry.

The Louisiana Department of Insurance (LDI) has announced that Alexander Ellsworth and his agency, Ellsworth Corporation, will also face a $250,000 fine, which is the maximum amount permitted under Louisiana law. This fine is in addition to the hefty premium repayments that the agency is required to make.

Ellsworth Corporation was found to have illegally overcharged a construction company by $284,000, exceeding the quoted premiums for surety bonds. This information comes from a 2023 cease-and-desist letter issued by the LDI.

“Construction companies require commercial surety bonds before beginning construction projects and rely on licensed agents to lawfully and fairly handle their policy transactions with insurance companies,” stated Commissioner Tim Temple. This reliance on agents makes it crucial for them to adhere to legal and ethical standards.

An investigation conducted by LDI’s Office of Fraud Insurance revealed that Ellsworth unlawfully inflated the quoted premium charge from Arch Insurance Company. The agency misled the construction company into believing that the total invoice balance represented Arch’s actual quoted premium, which was a clear violation of trust.

A cease-and-desist letter was initially in the appellate process until an agreement was reached on January 28, 2026. This resolution highlights the ongoing efforts of the LDI to enforce compliance and protect consumers.

“For an agent to profit from breaking Louisiana‘s insurance laws violates that trust and will not be tolerated,” Temple emphasized, reinforcing the commitment of the LDI to uphold the integrity of the insurance market.

Topics
Louisiana

A Louisiana insurance agency has been ordered to pay a staggering $1.2 million in premium refunds due to fraudulent overcharging on commercial surety bond policies. This significant penalty underscores the importance of ethical practices within the insurance industry.

The Louisiana Department of Insurance (LDI) has announced that Alexander Ellsworth and his agency, Ellsworth Corporation, will also face a $250,000 fine, which is the maximum amount permitted under Louisiana law. This fine is in addition to the hefty premium repayments that the agency is required to make.

Ellsworth Corporation was found to have illegally overcharged a construction company by $284,000, exceeding the quoted premiums for surety bonds. This information comes from a 2023 cease-and-desist letter issued by the LDI.

“Construction companies require commercial surety bonds before beginning construction projects and rely on licensed agents to lawfully and fairly handle their policy transactions with insurance companies,” stated Commissioner Tim Temple. This reliance on agents makes it crucial for them to adhere to legal and ethical standards.

An investigation conducted by LDI’s Office of Fraud Insurance revealed that Ellsworth unlawfully inflated the quoted premium charge from Arch Insurance Company. The agency misled the construction company into believing that the total invoice balance represented Arch’s actual quoted premium, which was a clear violation of trust.

A cease-and-desist letter was initially in the appellate process until an agreement was reached on January 28, 2026. This resolution highlights the ongoing efforts of the LDI to enforce compliance and protect consumers.

“For an agent to profit from breaking Louisiana‘s insurance laws violates that trust and will not be tolerated,” Temple emphasized, reinforcing the commitment of the LDI to uphold the integrity of the insurance market.

Topics
Louisiana