In a rare turn of events, a law firm has been levelled with a cease and desist from the Louisiana Department of Insurance and faces an investigation over “fraudulent” hurricane claims.
“The size and scope of McClenny, Moseley & Associates’ illegal insurance scheme is like nothing I’ve seen before,” said Louisiana Commissioner of Insurance Jim Donelon.
“It’s rare for the department to issue regulatory actions against entities we don’t regulate, but in this case, the order is necessary to protect policyholders from the firm’s fraudulent insurance activity.”
Also named on the cease-and-desist notice were McLenny, Moseley & Associates (MMA) founding partners John “Zach” Moseley and James McLenny, and MMA Louisiana managing partner William Huye.
The LDI has urged any policyholders who believe they may have been fraudulently represented by the firm to get in touch with its office of insurance fraud. An investigation is ongoing.
In the cease-and-desist order, MMA was accused by Louisiana Commissioner of Insurance Jim Donelon of having engaged in a “fraudulent scheme involving fraudulent insurance acts” involving 100s of hurricane-related claims in the state.
The firm filed more than 1,500 hurricane claim lawsuits in Louisiana in the space of three months last year, according to the LDI.
Evidence in possession of the LDI showed that MMA had “fraudulently misrepresented to multiple Louisiana insurance companies that MMA had been retained by Louisiana insureds … [relating to] hurricane insurance claims without the knowledge of the insureds that MMA purported to represent”, according to the notice.
Instead, McLenny Moseley was acting on behalf of roofing company APEX Roofing and Restoration (APEX), the notice alleged.
As per a February 1 court transcript, MMA admitted to having sent letters of representation on behalf of insureds when it did not represent them. It further admitted to having settled 11 claims and filed one lawsuit without insureds’ consent.
MMA went on to admit to 856 misrepresentations, according to the notice. In one instance, an insured couple only learned of the “fraudulent claim representation” when mortgage holder and listed payee Chase Bank endorsed and sent them a check.
MMA further admitted to having settled nine more claims in which it did not represent insureds, according to the notice.
Last year, insurance industry insiders told this publication that they and their relatives had received unsolicited messages from the firm in question encouraging them to claim.
Moseley has previously told Roofing Insights that MMA could have “around 15,000” clients in the state and it has harbored ambitions to add tens of thousands more.
“Our goal is to help 50,000 people in Louisiana – we want to help rebuild Louisiana,” he said in a 2022 video interview.
“Disturbing” claims tactics have been surging in Louisiana, Insurance Business has previously reported. In August, Independent Insurance Agents & Brokers of Louisiana CEO Jeff Albright, decried a rash of “opportunistic” approaches.
This month, Louisiana Governor John Bel Edwards signed two Bills into law as part of a bid to prop up the state’s ailing property insurance market, which has faced a stream of insurer exits after a series of hurricane hits.
Texas domiciled MMA has also set up a “free Hurricane Ian helpline”, according to its website.
Insured losses from Hurricane Ian could be as high as $74 billion, according to RMS estimates, with an Insurance Information Institute spokesperson having warned prior to a December special session that legal costs could add up to $20 billion to the bill.
MMA was taken to task over its mass settlement and advertising tactics in court in October, at which time a federal judge said he feared that the firm may seek to take advantage of the devastation left behind by deadly Hurricane Ian in Florida. He also criticized MMA for charging a 40% cut.
“My job is to administer justice, protect the bar, and protect the judicial process,” Judge James D Cain said, as per a transcript seen by Insurance Business. “So you may go try to pull this stunt in Florida because I’ve already seen y’alls advertisements.
“Shame on you. Shame on you for trying to prey on people.”
MMA has been contacted for comment.
