Don’t Fall For This Insurance Scam Targeting Iowans

The Iowa Insurance Division sent out a press release on Tuesday detailing a dangerous scam that is targeting the people of Iowa.

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What Iowans Are Being Targeted?

The release said job seekers, potential future insurance producers, and consumers all should be in the know of this new scam going around as state regulators have recently received numerous reports detailing fraudulent solicitation attempts aimed at prospective insurance producers.

How Does The Insurance Scam Work?

In the first phase, the scammer will try to recruit Iowans in an unsolicited manner, and encourage them to apply for and obtain an Iowa resident insurance producer license. The scammers will tell the target they will handle the policy administration, manage sales leads, and assist with policy sales on the newly licensed individual's behalf.

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Then, it's exploitation of those credentials. Once the target obtains their insurance producer license, the scammer acquires their National Producer Number (NPN) and personal licensing credentials to "help" the newly licensed insurance producer, as the scammer stated during their recruitment.

Unauthorized Policy Generation is the third stage. The scammer, who is typically operating offshore, use the credentials to issue unauthorized health and life insurance policies under the names of unknowing consumers to collect commissions and federal health insurance subsidies. The consumer's information is often fabricated to receive maximum payment from federal Advanced Premium Tax Credits that provide subsidies for individuals buying insurance through the ACA marketplace.

How Do I Keep From Being A Victim?

The Iowa Insurance Division says if you receive something unsolicited, wanting you to become a resident insurance producer license and they'll manage everything - that's the biggest red flag. Allowing offshore entities to use your NPN exposes you to legal liability, license revocation, and potential criminal charges for fraud.

They also said for the typical Iowan, that if you receive insurance documents, bills, or tax notices regarding an insurance policy you never authorized or requested, your identity may have been compromised in this scheme.