Licenses Of Agency That Suddenly Closed After Premium Conversion Revoked
As previously reported by Agency Checklists, BL Insurance Brokerage (BL Insurance), a multi-state agency with a significant book of legal malpractice policies owned and managed by Brendan J. Lawlwer, suddenly closed its doors on March 7, 2024. The closure followed reports of the agency’s failure to remit premiums to insurers, resulting in policy cancellations and direct bills to insureds for premiums they had already paid to the agency.
In a follow-up to our March 12, 2024, article, “Insurance Brokerage Abruptly Closes Amid Allegations of Converted Premiums,” Agency Checklists submitted a public record request to the Massachusetts Division of Insurance based on a reported enforcement action against Lawler and BL Insurance.
Division of Insurance Acts on Lawler’s Pattern of Mishandling Premium Payments
According to a March 21, 2024, letter from the Division to Lawler, obtained under a public record request from the Division of Insurance, the investigation into BL Insurance and Brendan Lawler began on July 27, 2023, after the Division received a complaint from a client who had paid $24,353 in premium to the agency for a limited liability insurance policy. Despite the payment, the client received a cancellation notice from the insurer for nonpayment of premium. The client was forced to pay an additional $24,000 to maintain coverage and was not reimbursed by the agency until August 1, 2023.
Further complaints and investigation revealed a pattern of similar conduct affecting at least 30 of the agency’s customers, primarily lawyers purchasing professional liability coverage. These customers provided evidence of premiums paid to BL Insurance, followed by cancellation notices from insurers months later for nonpayment. While some customers eventually received reimbursement from the agency after filing complaints with the Division, all were forced to pay premiums a second time to maintain their coverage.
The Division’s letter stated that Brendan Lawler and BL Insurance demonstrated untrustworthiness, incompetence, and irresponsibility in conducting the business of insurance, as well as improperly withholding and misappropriating monies received in the course of doing insurance business, in violation of Massachusetts insurance laws.
The Division gave Lawler until March 28, 2024, to agree to revocation of his and BL Insurance licenses, or the Division would file a show cause order to revoke these licenses and seek $1,000 fines for each premium conversion or misappropriation.
Settlement Agreement Details License Revocations
The next day, on March 22, 2024, BL Insurance and Brendan Lawler signed a settlement agreement to resolve the alleged violations. Under the terms of the agreement, Lawler and his agency agreed to waive their right to a public hearing and cease and desist from the alleged conduct.
The settlement agreement resulted in the immediate revocation of BL Insurance’s Massachusetts business entity insurance producer license and Brendan Lawler’s individual Massachusetts insurance producer license. This revocation permanently bars Lawler and his agency from operating as insurance producers in the state.
Furthermore, the settlement prohibits Brendan Lawler from applying for any insurance license in Massachusetts and from engaging in the business of insurance in any capacity in Massachusetts. It requires him to divest himself of any interests he has directly or indirectly in any licensed insurance entity.
The agreement also prohibits Lawler from serving as a manager, officer, director, or controlling person of any insurance entity licensed under Chapter 175 of the Massachusetts General Laws.
In consideration of Lawler’s agreeing to the license revocations and the prohibitions on having any future involvement with the Massachusetts insurance industry, the Division of Insurance waived seeking fines of up to $1,000 for each instance of misappropriation of premiums by Lawler and his agency.
Three New York factoring companies sue Lawler and BL Insurance.
Since Agency Checklist’s original article, three new suits have been brought by factoring companies in New York that purchase accounts receivable. Each suit appears to arise from BL Insurance entering into agreements whereby the funding companies “agreed to purchase rights to [BL Insurance ’s] future receipts.”
Merk Funding
In the case of the lawsuit, Merk Funding, Inc.(Merk) brought in the Supreme Court of New York, BL Insurance sold to Merk on January 16, 2024, its future receipts amounting to $52,465.00.
By February 22, 2024, BL Insurance had paid Merk for the eight previous business days with checks that the bank returned for “insufficient funds.” After that, BL Insurance stopped any further payments, and Merk immediately sued BL Insurance and its guarantors, Brendan Lawler and Lisa M. Lawler.
Star Advance
On January 25, 2024, Star Advance, LLC (Star) paid BL Insurance $20,000 to purchase $29,980.00 of the agency’s future accounts receivable. Under the usual practice of receivable factoring, BL Insurance authorized Star to collect from an agreed bank account by ACH electronic debits the BL Insurance’s receivables when collected.
On February 12, 2024, BL Insurance changed bank accounts without Star’s agreement and put stop payments on Star’s debits to the prior account, and Star filed suit in the New York Supreme Court against BL Insurance.
Imerchant Funding
Imerchant Funding (Imerchant) is another company that purchases accounts receivables. On March 14, 2024, it, too, sued BL Insurance, Brendan Lawler, Lisa Lawler, and the Lamoreux Insurance Agency, Inc. in the New York Supreme Court.
When Agency Checklists last checked, the pleadings in Imerchant’s lawsuit were not available online. However, it seems likely that it, too, purchased accounts receivable from BL Insurance in January or early February 2024 and ran into the same nonpayment issues as Merk and Star.
No Massachusetts insurance agency corporation, “Lamoreux Insurance Agency, Inc.,” is listed on the Secretary of State’s database. However, an Internet search does list an agency with that name in New Bedford without much more information.
Lawler advises the Indiana Court to talk to his bankruptcy lawyer
Agency Checklists’ March 12, 2024 article had a section on the lawsuit brought against BL Insurance and Lawler in Indiana by an insurer, Attorney Protective (AttPro), a MedPro Group/Berkshire Hathaway subsidiary. AttPro seeks a judgment of at least $165,145.80 plus attorneys’ fees of $16,000 in that suit.
Neither BL Insurance Brokerage nor Brendan Lawler answered the complaint, and AttPro has filed a verified application for default judgment. The court originally scheduled a hearing on the default for March 20, 2024, but it was continued until April 5, 2024.
On March 26, 2024, Lawler emailed the Court Clerk, Daisy Harnish, stating:
Hi Daisy,
I am emailing you on how to proceed in this matter. My professional liability insurer (Utica National) has denied coverage for this claim, and I do not have any lawyer (sic) representation for this matter in Allen Superior Court. I am in the process of filing for bankruptcy and cannot afford to hire an attorney to represent me in this matter before your court. By (sic) bankruptcy attorney is xxxxxxxx. His telephone number is (508)-xxx-xxxx, and his email address is [email protected]. Please contact [my attorney] and myself on how I am to proceed in the upcoming 4/5/24 hearing. I will not be able to appear for this hearing in person.
On March 28, Lawler again pressed the court clerk to have the judge call his bankruptcy lawyer:
Hi Daisy
Please have the court call my bankruptcy attorney prior to the April 5, 2024, hearing to discuss this matter. Please let me know how to proceed from here.
Sincerely,
Brendan J Lawler
Attached to this email was a document from the Centerville law office of a bankruptcy attorney, stating, “To Whom It May Concern,” that Brendan and Lisa Lawler had retained the firm to file for bankruptcy and that it expected the filing to “occur within 90 days or so.”
Although Lawler gave the clerk his number for a call-in to the April 5 hearing, the court order entered after the April 5 hearing indicated Lawler and BL Insurance “fail to appear or telephone the Court” and “each of them, are defaulted.”
The Indiana Court deferred entering a monetary award pending AttPro providing a transactional history of the account with BL Insurance showing all debits and credits and its law firm providing a general description of each time entry for the legal service rendered.
Agency Checklists will follow this situation as it develops in the civil, and possibly criminal, arenas.
