Agent’s License Revoked for Senior Fraud, faces nearly $50,000 in fines
- April 29, 2019
SAN DIEGO, CA -- The Department of Insurance has revoked the license of insurance agent Alan Lucien Cerf, 69, who faces more than $49,600 in fines for defrauding seniors. Officials allege Cerf repeatedly convinced clients to surrender existing annuity policies and purchase new ones—a practice known as “churning”—which earned him additional commissions but cost his clients huge surrender fees. These fees consumed much of the new annuity’s principal.
“Agents have a fiduciary responsibility to their clients, and a moral obligation to help those who come to them for assistance, not take advantage of them,” said Insurance Commissioner Ricardo Lara. “It’s always a good idea for clients to check the status of their agent’s license and look out for any warning signs that their agent may not be acting in their best financial interest.”
Each new annuity issued to Cerf’s clients had a lower value than the previous one. This practice also extended the maturity date of the annuities, sometimes past the client’s life expectancy. Additionally, each time Cerf’s clients surrendered their prior annuities and purchased new ones, Cerf would earn a sizeable commission.
An Administrative Law Judge found that Cerf violated the California Insurance Code by recommending that at least three of his clients, who were all over 65 years of age, purchase unnecessary replacement annuities in nine separate transactions. The department also revoked Cerf’s license due to his unlawful actions.