Scammers Stealing Insurance Licensing Credentials to Buy Fraudulent Health Insurance Policies to Collect Payments and Scam Federal Government Subsidies

DES MOINES, Iowa - The Iowa Insurance Division is aware of an active, sophisticated licensing and identity theft scheme operating in multiple states. Job seekers, potential future insurance producers, and consumers should be on notice for scammers as state regulators have recently received numerous reports detailing fraudulent solicitation attempts aimed at prospective insurance producers.

How the Scheme Operates

Step 1 -Recruitment: The scammer contacts Iowans in an unsolicited manner and encourages them to apply for and obtain an Iowa resident insurance producer license. The scammers promise to handle policy administration, manage sales leads, and assist with policy sales on the newly licensed individual's behalf.

Step 2 - Credential Exploitation: Once the individual obtains their insurance producer license, the scammer acquires their National Producer Number (NPN) and personal licensing credentials to "assist" the newly licensed insurance producer as the scammer stated during their recruitment of the individual.

Step 3 - Unauthorized Policy Generation: Scammers generally operating from offshore locations then use the NPN to issue unauthorized health and life insurance policies under the names of unwitting consumers to collect commissions and federal health insurance subsidies. The consumer's information is often altered or fabricated to receive maximum payment from federal Advanced Premium Tax Credits (APTC) that provide subsidies for individuals buying insurance through the ACA marketplace.

Critical Warnings & Red Flags

For Job Seekers & Prospective Insurance Producers:
Receiving unsolicited communications urging you to obtain a resident insurance producer license-paired with promises that a third party will write or manage policies under your name-is an immediate red flag. Allowing offshore entities to use your NPN exposes you to legal liability, license revocation, and potential criminal charges for fraud.

For Consumers:
If you receive insurance documents, bills, or tax notices regarding an insurance policy you never authorized or requested, your identity may have been compromised in this scheme.

Report Suspected Activity

If you have been contacted by individuals offering this arrangement or if you discover an unauthorized insurance policy in your name, please contact the Iowa Insurance Division immediately at 515-654-6556 or online at https://ofrs.naic.org/.