For Immediate Release - December 20, 2007

Division of Insurance Calls on Insurers to Issue Payment Notifications to Protect Consumers

Division of Insurance Calls on Insurers to Issue Payment Notifications to Protect Consumers

Insurance Commissioner Nonnie S. Burnes today issued a bulletin calling on insurance companies to send written notification to consumers when a settlement payment in any third-party liability claim is made to the consumer's attorney or other representative. The new guidelines will help ensure claimants receive their full settlements and prevent egregious cases similar to the ones involving former Cape Cod attorney Anthony Bott who cashed more than $390,000 in insurance checks without his clients' knowledge or consent.

"It is critically important that consumers be made aware of the fact that a settlement check has been put in the mail and that their claim has been resolved," said Burnes. "These new guidelines will go a long way toward giving consumers the greater protections they deserve and will help increase their overall confidence in the integrity of the claims process."

Specifically, the bulletin directs insurers to provide written notice to consumers when a payment of $5,000 or more is made to the claimant's attorney or other representative. Notification issues when payment is made and includes the following information: the amount of the check and the party to whom the check was mailed; the address of the party to whom the check was mailed; if payment is made by a draft or check, a copy of the draft or check; or if payment is made by the electronic transfer of funds, the amount, date and recipient of the transfer.

"Through the efforts of the Massachusetts Bar Association and the Worcester Co. Bar Association, as well as the Berkshire Bar Assoc., the Boston Bar Assoc., Dukes Co. Bar Assoc., Mass. Chapt. of the Federal Bar Assoc., the Women's Bar Assoc., and the Mass. Chapt. of the Nat'l Academy of Elder Law Attorneys, this loss prevention tool will now exist in Massachusetts as it does in 11 other states. Consumers will be better protected from the harm caused by a very small number of lawyers," said Karen D. O'Toole, counsel to the Clients' Security Board.

The Clients' Security Board paid more than $390,000 to 8 former clients of Anthony Bott from Orleans in 2006 and 2007. Bott forged his clients' signatures and cashed checks for settlements in personal injury cases. He used the stolen funds for his own business or personal benefit. In addition to losing his license to practice law, Bott was convicted of larceny and forgery and sentenced to the house of correction in 2006.