October 13, 2021
OLYMPIA, Wash. – Edward J. Chadwick, of Yakima, pleaded guilty to first degree theft in Spokane County Superior Court involving 24 insurance premium financing loans. Chadwick was ordered by the court to report to Spokane County Jail by October 1 to serve 30 days in custody. He also has to pay $ 600 in legal costs and $ 847,795 in restitution to a premium Spokane finance company.
Charges against Chadwick were laid following an investigation by the Criminal Investigations Unit (CIU) of Insurance Commissioner Mike Kreidler.
Chadwick was an insurance producer and owned an insurance agency called Kelt, mainly selling insurance to transport companies. He is accused of fraudulently obtaining 24 insurance premium finance loans totaling $ 2.8 million from April 2016 to July 2018 from Tepco, a Spokane-based premium finance company. He is accused of obtaining loans on behalf of several bogus trucking companies for commercial policies that did not exist. He also obtained loans on behalf of a real trucking company, a former client, without the client’s knowledge.
An insurance premium finance loan helps businesses pay for P&C insurance in installments rather than paying an entire year’s premium in full. The premium finance company pays the entire annual premium to the insurance company and the policyholder makes payments, including interest, to the premium finance company. The insurance producer helps the policyholder find the loan.
Tepco informed Kreidler’s office of the activity in December 2018. Chadwick repaid $ 1.9 million plus interest to Tepco. The loan balance is $ 898,662, excluding interest and fees.
Kreidler revoked Chadwick’s insurance producer license in February 2019. Chadwick contested the revocation, but Kreidler’s office prevailed and his license was formally revoked in September 2019.
Kreidler’s CIU investigates insurance fraud and works with the Washington State Patrol and state and local prosecutors on criminal matters. Insurance fraud costs the average family $ 400 to $ 700 per year in increased premiums. Insurance companies are required by law to report fraud to the commissioner.
Consumers can report suspected insurance fraud on the Insurance Commissioner’s website.