Press Release  AG Healey Obtains $5 Million for Affected Consumers in Judgment Against Insurance Broker

Boston — A Peabody-based insurance agency has been ordered by a Massachusetts judge to pay over $5 million in restitution to its small business customers for overcharging them for insurance products, Attorney General Maura Healey announced today. 

The final judgment, entered by Suffolk Superior Judge Robert Ullman, requires the Kilgore Insurance Agency, agent Andrew W. Crowther, Jr., and the agency’s owners, Cyrus Kilgore and Jeffrey Kilgore, to pay nearly $5.2 million in restitution for overcharging clients, primarily small business owners, by padding insurance premiums with significant hidden “agency fees.” 

“Kilgore Insurance and its owners orchestrated a scheme to charge consumers millions in undisclosed, excessive, and illegal agency fees,” AG Healey said. “We are pleased that with this action, overcharged consumers will receive restitution.”

The judgment follows a 22-day trial and a subsequent appeal. The defendants sought further review by the Supreme Judicial Court, but their request was denied.  

According to the trial court’s findings of fact, the average hidden agency fee charged by the defendants was $5,471, or 47 percent of the insurance policy premium, with some fees reaching as high as 462 percent of the premium. Standard compensation for insurance agents selling these policies is around 10 percent.

The investigation found that the company hid extra fees from clients in a variety of ways, including by “whiting out” the actual premium figure on insurance policies and typing in an inflated figure that included the undisclosed agency fee. The company also withheld from clients the last page of premium finance agreements, where the true premium, as set by the insurer, is typically disclosed. Nearly 100 clients were negatively impacted by the Kilgore agency’s schemes.

This matter was handled by Assistant Attorney General M. Claire Masinton, with assistance from Insurance and Financial Services Deputy Director Arwen Thoman, Legal Analyst Jasmine Jean-Louis, and Analyst Erica Harmon, all of the AG’s Insurance and Financial Services Division.

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