(The Center Square) — In a statement issued last week, Louisiana Department of Insurance Commissioner Tim Temple expressed his disagreement with a recent ruling from the Division of Administrative Law regarding the fraud case involving Texas-based McClenny, Moseley & Associates.

The ruling determined that the agency lacked the jurisdiction to issue cease-and-desist orders or fines against McClenny, Moseley & Associates, its founding partners, and its Louisiana managing partner, which were originally imposed by former Insurance Commissioner Jim Donelon in 2023.

While Temple respected the court’s decision, he made it clear that he would continue to push for accountability.

“The agency had authority to investigate and issue administrative actions against McClenny, Moseley & Associates in 2023 for committing fraud in the insurance claim process,” said Temple. “I respect the judge, but I disagree with her ruling in this case, and I will work with and encourage the Louisiana Department of Justice to pursue McClenny, Moseley & Associates for its criminal activities.”

The case began in 2023 following an investigation by the agency’s Office of Insurance Fraud, which found that McClenny, Moseley & Associates, known now as the MMA Law Firm, had fraudulently misrepresented to multiple Louisiana insurance companies that it had been retained by over 800 policyholders to settle hurricane claims.

These misrepresentations were made despite the fact that the policyholders had no knowledge of, nor consented to the company’s involvement. According to the agency, MMA directed insurers to send correspondence to the firm via electronic transmission, falsely claiming to represent Louisiana policyholders, and even demanded payment and negotiated settlements on behalf of insureds without their knowledge.

Further investigation revealed that the company’s actions went beyond just sending unauthorized letters. According to the ruling, the firm admitted that it had settled nine claims and filed one lawsuit on behalf of insureds it did not represent.

Additionally, the company had received and deposited settlement checks made out to Louisiana policyholders, including a settlement check from Allstate that had been retained for nearly six months before being deposited. These actions formed the basis for the agency’s administrative actions.

The agency issued fines totaling $2 million to the company and its partners for engaging in unfair trade practices and insurance fraud, with each individual facing the maximum allowable fine of $500,000. The agency contended that these actions violated Louisiana’s insurance laws and put consumers at risk.

However, the court ruled that the agency did not have jurisdiction to issue the cease-and-desist orders or fines. The court concluded that the MMA Law Firm and its partners were not engaged in the business of insurance, and therefore, the agency did not have authority under Louisiana’s unfair trade practices law to take such regulatory actions.

The ruling stated that only proper law enforcement and prosecutorial agencies could investigate and prosecute criminal violations under Louisiana insurance law, effectively limiting the agency’s role to investigation rather than enforcement.

In response to the ruling, Temple emphasized that the agency would continue to pursue McClenny, Moseley & Associates for its actions, even though the court had restricted the agency’s jurisdiction.

“I respect the judge, but I disagree with her ruling in this case,” Temple said. “I will work with and encourage the Louisiana Department of Justice to pursue MMA for its criminal activities.”

He also pointed to the legislative support for the agency’s authority, referencing successful 2024 legislation that reinforces the agency’s ability to investigate and act against entities engaged in insurance fraud.

Temple also reaffirmed the agency’s commitment to investigating fraudulent activities under Louisiana’s Insurance Code.

“At my direction and under the authority granted to me by Louisiana law, our Office of Insurance Fraud will continue investigating entities that violate our Insurance Code and put Louisiana consumers at risk,” he said.

Insurance fraud continues to be a significant problem in Louisiana, contributing to higher premiums for consumers. The National Insurance Crime Bureau estimates that insurance fraud costs Americans $308.6 billion annually, including approximately $4 billion each year in Louisiana alone.