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7. Fraud results in prison sentence for former underwriter

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7. Fraud results in prison sentence for former underwriter

A health care liability underwriter’s scheme to pocket premiums on policies sold to hospitals, which unraveled last year, resulted in a prison sentence in 2019. 

David Ballard, a former vice president of CNA Financial Corp. in Chicago, was charged with fraud in 2018 when federal prosecutors accused him of fraudulently obtaining more than $13.5 million in premium payments not authorized by CNA. 

According to the charges, Mr. Ballard had collected premiums for more than 10 years on matching deductible insurance policies, where the policy limit matched the deductible and would only pay out if the policyholder became insolvent. 

Using phony binders and a shell company to divert the premiums, Mr. Ballard used the money to buy real estate and fund expensive dinners and trips, prosecutors charged. 

He pleaded guilty to wire fraud in October 2018 and asked for other cases to be taken into consideration, bringing the total he owed in restitution to $16.1 million. 

The story from October 2019 detailing his prison sentence of four years and two months was the seventh most read risk management-related article on Business Insurance’s website this year.