What happens during the 'Keeping the Premium' fraud tactic?

During the 'Keeping the Premium' fraud tactic, the agent retains the premium and the client remains uncovered. In this scenario, an insurance agent collects premiums from clients but fails to forward those payments to the insurance company. This results in the client believing they have an insurance policy in place when, in fact, they do not have any coverage due to the agent’s actions.

This tactic exploits the trust of the client, who assumes that their agent is acting in their best interest. The agent benefits financially by keeping the premiums without fulfilling their obligation to provide coverage, which can leave the client vulnerable in the event of a claim or loss. Therefore, the core of this fraudulent tactic lies in the lack of effective communication and the manipulation of the trust relationship between the agent and client.

The other options involve scenarios where premiums are either sent to the carrier or shared with the client or where the agent aids in filing claims—none of which align with the deceptive nature of the 'Keeping the Premium' tactic. These alternatives suggest actions that uphold the integrity of the insurance process, contrasting sharply with the fraudulent intent behind this tactic.