Post 4721

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Paul B. Kumar appealed a final agency decision of Commissioner of the Department of Banking and Insurance (Commissioner or Department) revoking his insurance producer license and imposing $60,774.25 in civil penalties, surcharge, attorney’s fees and costs of investigation, for violations of the New Jersey Insurance Producer Licensing Act of 2001 and the New Jersey Insurance Fraud Prevention Act (Fraud Act).

In Marlene Caride, Commissioner, New Jersey Department Of Banking And Insurance v.  Paul B. Kumar, No. A-2627-21, Superior Court of New Jersey, Appellate Division (December 29, 2023) the Appellate Division spent dozens of pages to resolve appeal.


On August 3, 2015, Kumar entered into an employment contract with Combined Insurance Company (Combined) as an insurance agent. For any insurance policy to be written, Combined required: the producer to meet, face to face, with the insurance applicant; the applicant to sign the application; and the producer to witness the applicant’s signature on the application.

Kumar submitted multiple insurance applications to Combined where the proposed insureds never met Kumar, never applied for insurance with Combined and never signed the applications in Kumar’s presence.


The Department issued a two-count Order to Show Cause (OSC) to Kumar concerning the insurance applications. In the first count, the Department alleged violations of the Producer’s Act and violations of the Fraud Act because Kumar “submitted . . . insurance policy applications to Combined . . . for the purpose of obtaining an insurance policy, knowing that each of these applications contained a forged signature of the prospective insured, and other false or misleading information concerning any fact or thing material to the application or contract …. ”

The OSC was tried before an Administrative Law Judge (ALJ) who found the testimony of Kumar was not credible. The ALJ concluded Kumar demonstrated throughout the proceedings that his inconsistent, evasive and confusing testimony, could not be believed.

The ALJ concluded, the Department met its burden by demonstrating that Kumar submitted eight fraudulent applications for insurance and concluded that Kumar’s actions warranted revocation of his producer license; the imposition of statutory monetary penalties; reimbursement of investigation costs; and attorney’s fees.

The Commissioner adopted the ALJ’s finding that the Department established Kumar violated the Fraud Act, because he knowingly failed to disclose that the proposed insureds did not sign their applications and because he submitted insurance applications that he knew contained false or misleading information regarding material facts.


The language of the regulation empowers the insurer to control the requirements for insurance applications. The Commissioner determined that Kumar submitted six applications for three separate individuals without the applicants’ knowledge or consent.

The Commissioner adopted the ALJ’s determination that the Department proved  the violations.

The Commissioner determined that Kumar violated the Fraud Act. After detailing her duty to protect the public welfare and to instill public confidence in both insurance producers and the industry as a whole, the Commissioner found the record was more than sufficient to support license revocation.

The statute specifically authorizes the Commissioner to revoke the insurance producer’s license.  The appellate court concluded that Commissioner’s decision is entitled to deference and will not be disturbed.

Insurance companies rely on the honesty of those who represent them to the public and expect the state to protect them from representatives who fail to fulfill the obligations imposed on the insurance agent’s license. Mr. Kumar, for several years, attempted to profit from submitting multiple fraudulent applications for insurance never ordered by the persons who allegedly signed the applications. It took seven years from the first fraud to the OSC, the proceedings before an ALJ and an appeal to take away the license and obtain a monetary judgment against the fraudulent agent. It is time to improve the process.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.

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