Eastern Idaho plea reminds insurance agencies to make ethical decisions

By Robb Hicken/ BBB’s chief storyteller

Two eastern Idaho insurance salesmen were found guilty of mail fraud, following an investigation by the U.S. Attorney.

Adrian Rand Robison, 67, of Rigby, pleaded guilty to mail fraud. Rand Robison was the founder and chairman of the board of The Legacy Network, an insurance brokerage agency in Rexburg. Adrian Russell Robison, 38, of Idaho Falls, pleaded guilty to one count of making and subscribing a false tax return, according to U.S. Attorney Wendy J. Olson.

Russell Robison was chief executive officer of The Legacy Network, owned a minority interest in the company, and is the son of Rand Robison. The defendants appeared before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello on June 30. They were charged in separate files on May 16, 2013, by the U.S. Attorney’s Office.

According to the plea agreement, Rand Robison, a licensed insurance agent, owned a majority interest in The Legacy Network, a company that brokered the sale of life insurance policies between the carriers that offered the policies and the independent insurance agents that marketed the policies to clients. In return for its services, The Legacy Network received a commission paid by the carriers for each policy sold. According to the plea agreement, Rand Robison admitted that he encouraged some high net-worth clients to apply for high face-value life insurance policies with the promise of rebating all or part of the first-year premiums back to the customer.

Robison further admitted that he misrepresented in agent reports and other contractual documents, that he would not rebate, or otherwise finance, the premium payments of his clients. The Legacy Network received commission payments from the insurance carriers of about 105 to 138 percent of the first-year premium. Robison admitted that with those funds, he rebated some of the premiums to some high net-worth clients and kept the rest. From 2006 to 2009, the Legacy Network received about $1,371,634 in commissions from life insurance carriers on the policies of a group of their high net-worth clients; they rebated about $923,497 to the clients and kept about $448,137. Robison agreed to pay restitution of $1,371,634.

For millions of Americans, life insurance means protection against financial need. Life insurance can give support for a family in the event of a father’s or a mother’s death, funds to meet the cost of educating children, and/or added income for retirement years since savings, social security and employ-ment pensions are not enough for most people.

Because there are so many kinds of life insurance policies with different protections and benefits, terms and conditions, the subject can seem complicated and confusing to prospective insurance buyers. The purpose of this booklet is to give you, the consumer, a basic understanding of life insurance and to offer guidance for planning your insurance program. With careful planning and the help of a qualified professional life insurance representative, you can have the insurance you need at a cost you can afford.

Life insurance is a legal contract between a buyer and an insurer. Under the terms of the contract, called the “insurance policy,” the insurer promises to pay a stated sum of money to the beneficiary (the person named by the buyer) should the buyer die.

The buyer, in turn, agrees to pay a certain sum of money to the insurer in the form of periodic payments called “premiums” to have the protection of the insurance.

Tips to remember

  • Always read your insurance contract carefully and, if necessary, ask your agent for a point-by-point explanation of the language.
  • Remember that your insurance contract is a legal document. Therefore, you should familiarize yourself with the promises bound by that contract.
  • You can contact your state insurance commissioner’s office if you have questions about an insurance company or its policies.
  • After purchasing new life insurance, you have a 10-day “free look” which entitles you to change your mind. If you do so, the company will return your premium without a penalty.
  • It is wise to give photocopies of your policy to your beneficiaries and your lawyer.
  • Keep your policy, the name of the company and policy number in a secure place, such as a safe deposit box.

1 Comment

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One response to “Eastern Idaho plea reminds insurance agencies to make ethical decisions

  1. Mark Burrows

    It is always good to see when justice prevails. I can only add to this, it only makes sense to simply stay with the larger well known insurance companies. Okay, maybe they are somewhat more costly than the rest, but in the same sense, their assets are in multi-billions of dollars that are safe guarded from taxation and government manipulation. The top insurance companies do make investments, but do not trade on the stock market, they invest in such things as properties that can be built up and sold for a profit quite quickly. They understand guaranteed return better than anyone in the world of investment. In fact, one on their goals is often buying out other successful insurance companies, never compromising the original policies.
    It is these small market no name insurance companies that jump on the band wagon and discover that they are unable to build the equity or assets to gain the interests of being bought out by the more lucrative insurance companies, they will soon be faced with bankruptcy not having the financial holdings to pay out policies. The only other option is to perpetrate illegal and criminal activity it hopes of building some equity. Otherwise, deals too good to be true.

    Mark Burrows

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