The state has revoked an Edmonds insurance agent’s license on the grounds that he exploited vulnerable senior citizens through misleading sales practices, the state insurance commissioner’s office announced this week.
A Snohomish County Superior Court judge in February upheld the administrative decision to pull the license of Jack Chandler. Judge Ronald Castleberry found that some of Chandler’s activities were “untrustworthy,” and that he was not qualified to be an insurance agent under to law.
Chandler, of Senior Loan Centre of Everett, was investigated after the insurance commissioner’s office received a series of complaints in 2002. Most of them involved elderly customers, Insurance Commissioner Mike Kreidler said.
Castleberry found that Chandler interlaced various services and promotions, including a plan to reduce taxes, provide living trusts, promote reverse mortgages and offer insurance packages.
Chandler argued that what may have happened in other parts of his business should not affect his insurance license.
His lawyer, John Tollefsen of Lynnwood, also said the insurance commissioner hasn’t set rules for insurance agents to follow, and it was “pretty outrageous” to yank Chandler’s license.
“Due process means you have to have reasonable notice of what conduct violates the rules or conduct out of the norm,” Tollefsen said Thursday. “They can’t punish him if there’s not a rule that he violated.”
Among other things, Castleberry said that Chandler convinced a 75-year-old widow that she should get a reverse mortgage and then invest the proceeds in one of his investment schemes, a pay-phone deal that went bankrupt.
In a reverse mortgage, the debt continues and interest is added until the person dies. Tollefsen said the woman would have made more from the pay phone deal than the accumulating mortgage interest if the deal had not gone sour.
But in a written opinion, Castleberry said the deal went “beyond incompetence. It demonstrates a self-dealing to the detriment of the client.”
Tollefsen said his client “did nothing dishonest.” About half a dozen people lost money in the pay-phone deal, but that was somebody else’s fault, he added.
The Lynnwood lawyer said he intends to take the case to the state Court of Appeals, asking for a reversal of Castleberry’s order and for the court to require the insurance commissioner to adopt rules of conduct.
Reporter Jim Haley: 425-339-3447 or haley@heraldnet.com.
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