According to FINRA, Derrick Hostert was assessed a deferred fine of $5,000 and suspended for four months for falsifying an insurance claim form.
After selling a home insurance policy to two customers, the customers suffered a fire loss to a garage on their property. Hostert realized he had mistakenly failed to include the garage in the policy. He then emailed his underwriter to add coverage for the garage.
Subsequently, Hostert submitted an insurance claim form on behalf of the customers, intentionally listing the date of loss as three days after the actual fire occurred. This made it appear that the garage was covered at the time of the fire when, in fact, coverage had only been added after the loss.
The insurance company discovered the falsification and later settled with the customers.
The suspension was in effect from August 18, 2025, through December 17, 2025.
Falsifying claims documents is a serious offense that constitutes fraud. While Hostert may have been attempting to help his customers recover from a loss that occurred due to his own error in writing the policy, falsifying documents is never an acceptable solution.
For investors and insurance customers, this case highlights several important points. First, verify that your insurance policies cover all intended property, as errors in coverage can have serious consequences. Second, if a loss occurs and there are coverage questions, the appropriate response is to work through legitimate channels, not to falsify documents. Third, professionals who cut corners or engage in deceptive practices in one area may do so in others.