Former American Income agent surrenders license in phony life app flap

Another research report is out accusing a Globe Life subsidiary of widespread abuses.

By John Hilton

A Pennsylvania agent found to be selling fictitious life insurance policies is providing more ammunition for critics of Globe Life Insurance Co.

Jenna S. Grula, of Hanover Township, Pa., allegedly submitted 13 fraudulent life insurance applications between Nov. 14, 2018, and June 27, 2023, according to an April 29 consent order from the Pennsylvania Department of Insurance.

Three of those applications involved fictitious people, the order states. Grula, a longtime producer with American Income Life Insurance Co., a Globe Life subsidiary, voluntary surrendered her insurance license, the consent order states.

American Income is not charged with any wrongdoing in the consent order. The company fired Grula on Oct. 2, 2023 for filing the fraudulent applications, the consent order states.

"Respondent intentionally altered the applicant names, addresses, telephone phone numbers, social security numbers, dates of births, and bank information on the life insurance policy applications ... to circumvent the Insurance Company, American Income Life's internal processes, making it impossible to contact the individuals or verify the application information," the order reads.

Still, it is another incident supporting a mounting list of allegations against American Income Life and Globe Life. A pair of recent reports accuse American Income Life producers of widespread insurance fraud, including writing policies for dead and fictitious people, and an alleged kickback scheme that netted millions for senior executives.

Detailed investigations of alleged abuses

Globe Life shares plummeted after the first report from short-seller Fuzzy Panda Research in early April. On April 30, Viceroy Research, an international investigative financial research group registered in Delaware, published a second, similar report on American Income Life and its parent company.

"Viceroy have conducted a far more extensive number of background checks on AIL’s most profitable agents, which uncovered allegations of kidnapping, assault, and child grooming," the report states. "There are an extremely high number of allegations of fraud by AIL and its agents, many of which are disclosed within other cases of unfair dismissal or sexual harassment/assault. Viceroy have pulled dozens of detailed statements from plaintiffs, defendant, and witness statements to paint a fuller picture of the pervasive nature of fraud at AIL."

During its April 24 earnings call, Globe Life executives addressed some of the allegations and investigations against the company.

Frank M. Svoboda, co-CEO of Globe Life, said the company's audit committee is hiring international law firm WilmerHale to conduct an investigation of the allegations. He declined to specify a timeframe for that investigation, other than the "near term."

"When complaints are raised, including complaints alleging fraud, deceit, unethical business practices, or other misconduct, American Income has a dedicated group responsible for investigating these allegations," said co-CEO J. Matt Darden. "American Income has not hesitated to take disciplinary actions against agents and agency owners where warranted, including termination and notice to the appropriate regulatory bodies."

Despite several questions from analysts on the call, Globe Life executives mostly declined further comment on all allegations.

Arias Agencies producer

Grula's LinkedIn page indicates that she spent 12 years at American Income Life and worked for Arias Agencies, a top-selling Pittsburgh, Pa.-based agency. Many of the allegations against American Income Life can be traced to Arias.

In a 2022 federal lawsuit against Arias, American Income Life and others, former agent Renee Zinsky alleged activities such as office wrestling matches, use of date rape drugs and sexual acts carried out in front of employees.

A judge later granted a motion to compel arbitration filed by the defendants. Zinsky withdrew her claims the night before her arbitration hearing was to begin in March, Svoboda said, "without obtaining any relief or payment."

An Equal Employment Opportunity Commission investigation into sexual harassment claims against Arias remains ongoing.

During her interview with Pennsylvania regulators, Grula admitted to feeling anxious about making her sales quota.

Grula "admitted to submitting the fraudulent applications ... to meet her employer’s, Arias Organization quotas and to avoid her ranking and associated bonus compensation from being negatively impacted."

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.