Insurance 'training' a study in cheating state law

An instructor who had insurance agents log 15 hours of required class work in 59 minutes had his license suspended by the state last month.

A group of insurance agents gathered at a Lakeville Holiday Inn last October for some continuing education, a routine part of the trade. But there was nothing routine about this class.

The instructor told them to cheat and copy each others' work, according to an undercover investigator. The pupils falsified attendance sheets. Then they paid $90 each and picked up the certificates that are essential to keeping their licenses.

Getting credit for 15 hours of continuing education had taken 59 minutes. Unfortunately for the instructor, Robert W. Huge, one of the students was an undercover investigator for the Minnesota Department of Commerce.

"It wasn't bending the rules, it was blowing them away," Huge told commerce investigators, according to their report. "How can I do it? Or why did I do it? 'Cause I didn't know you were in the room."

Last month, the department suspended the licenses of Huge and two Aflac agents who allegedly helped organize the class through Excel Training Inc. Since 2007, Huge conducted bogus classes for more than 300 insurance agents working for such big-name firms as Aflac, Allstate, UBS, R.W. Baird, Wells Fargo and Lincoln Financial, according to the Commerce Department.

The state also barred Excel Training owner Donald L. Knutson from conducting state-mandated training programs for insurance professionals. Huge, Knutson and Aflac agents Darin Pavlish and Vickie Lynn Roiger have been asked to explain why they shouldn't be disciplined at a July 20 hearing. Huge faces up to $90,000 in state fines.

Continuing education is mandatory for many licensed professions, including doctors and lawyers. This year, the 30-hour training requirement for insurance producers, formerly a regulation, was given the force of law, said Rochelle Barnhart, a commerce spokeswoman.

"The continuing education industry needs to understand that we expect course offerings to be meaningful, helpful and substantial," Commerce Commissioner Glenn Wilson said Friday.

For insurance professionals, continuing education ensures that they stay abreast of constantly changing laws, regulations and practices, said Ken Ohl, president of Minnesota Independent Insurance Agents & Brokers.

"The intent of the continuing ed is that you don't get the guy sitting behind his desk in some little office ... for 40 years and don't have any update ever on what's going on in the system," said Ohl, who owns an insurance company in Spicer, Minn.

In Huge's classes, agents usually earned a 15-hour credit in two to four hours, according to the commerce department. Some classes were held at Perkin's restaurants. One was at a country club, and the instructor made sure it ended before tee time. One agent got 15 hours credit with a 10-minute phone call.

Ohl said the majority of insurance professionals would never engage in the activities uncovered by the commerce department. "I've been in the business for 31 years now, I have never seen anything or heard about anything even resembling that," Ohl said.

Calls left at the homes of Huge, Roiger and Pavlish were not returned Friday. Knutson could not be reached. The website for Excel Training of Hastings has been taken down, but a cached version indicates Excel started offering insurance classes in 1984.

"Our commitment to our clients has always been to develop topical and interesting continuing education subjects and to assist you with the timely renewal of your group's professional licenses," the website said. "We can become your 'In-House' compliance professionals without the 'In-House' costs."

Huge told commerce investigators he started teaching in the mid-1990s and was a registered instructor for Excel Training Inc.

Tipped off by an anonymous letter, commerce investigator Martin Fleischhacker attended Huge's October 2009 seminar at the Lakeville hotel. The class was arranged by Pavlish, a "State Sales Coordinator" for Aflac, at the direction of Roiger, according to the commerce department's enforcement report.

Class began at 9:11 a.m. There was no syllabus or similar materials, a state requirement. Roiger, Pavlish and Huge guided the class through signing the forms that were supposed to ensure their attendance over 15 hours of instruction.

"Print your name and sign it three times after the three breaks that we aren't going to take," Huge reportedly told the class, which burst into laughter, according to the commerce report.

After a half hour, the group took a 13-minute break. They reconvened and 29 minutes later, the class was over. That's when Fleischhacker confronted Huge.

Huge typically kept $25 to $35 of each participant's fee and sent the rest to Knutson. In interviews with commerce, Knutson distanced himself from Huge. But state officials faulted Knutson for failing to properly supervise his instructor and prevent the "fraudulent scheme," according to the enforcement report.

The state suspended the licenses of Pavlish and Roiger for falsely claiming 30 hours credit for Huge's abbreviated courses, as well as for their roles in helping organize the October session.

"Aflac expects all of its independent agents to comply with all licensing requirements and does not condone the behavior described" in the commerce report, said Laura Kane, a spokeswoman for the Columbus, Ga.-based insurance giant.

Barnhart, the commerce spokeswoman, would not comment about whether her agency would take action against the agents who got phony continuing education credits.

"The law's pretty clear," she said. "If they don't have the appropriate continuing education credits, their license is not valid."

Staff researcher Jane Friedmann contributed to this report. James Eli Shiffer • 612 673-4271

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