Attorney General Martha Coakley’s office filed a lawsuit against Peabody-based Kilgore Insurance Agency.
The complaint, filed this week in Suffolk Superior Court, alleges agents Andrew W. Crowther Jr. and Kathleen J. Burke, and its owners Cyrus A. Kilgore and Jeffrey B. Kilgore billed undisclosed agency fees to customers totaling more than $3.4 million by misrepresenting those fees as insurance premiums.
The defendants’ undisclosed agency fees were often 50 percent to 100 percent or more of the actual premiums charged by insurance companies, prosecutors said, typical agent commissions on such policies are around 10 percent.
"We allege in our complaint that these defendants have repeatedly taken advantage of their customers-many of which are small, family-owned local businesses-by hiding their undisclosed and excessive agency fees," said Coakley. "Particularly in this difficult economy, we must ensure that our businesses, especially small businesses, are not taken advantage of and continue to grow and thrive."
The defendants routinely told customers that Kilgore Insurance Agency had "shopped" the insurance market on the customer’s behalf and that the insurance policy and associated "premium" figure being recommended by the defendants was the cheapest, or only, insurance policy available, according to Coakley.
At no time would the defendants inform customers that this "premium" figure included a large agency fee for the defendants, Coakley’s office said. In order to conceal these undisclosed agency fees, the defendants would routinely "white out" premium figures on actual insurance policies and replace those premium figures with inflated numbers that included the defendants’ undisclosed agency fees, the complaint asserts.
In addition to charging customers undisclosed agency fees, the defendants also allegedly forged their customers’ signatures on documents that revealed an insurance policy’s true premium, including surplus lines affidavits that were filed with the state Division of Insurance.
The attorney general’s complaint seeks restitution, disgorgement, injunctive relief, civil penalties and attorney’s fees.
