Hal Katz loses license after state investigation turns up fraudulent practices

BALTIMORE - His commercials are outrageous, but it's Hal Katz's conduct behind closed doors that may make him notorious.  The longtime pitchman, who made his living selling insurance to thousands of high risk drivers around Baltimore, is now at risk himself.  Katz's three businesses, which finance, sell and provide insurance, are at the center of a Maryland Insurance Administration investigation.

In August, ABC2 News has learned, Katz's license to sell insurance was suspended and revoked, after the MIA discovered he was letting unlicensed agents sell policies.  But that's just the beginning.  MIA investigators also did some digging into financial practices within Katz's operations and turned up some shocking findings.  Court filings show Katz, "knowingly committed fraudulent or dishonest practices in the insurance business; knowingly failed to or refused to pay over on demand money that belongs to an insurer; showed a lack of trustworthiness or competence to act as an insurance producer."

According to state records, Katz is involved in three businesses.  He is the owner of the Katz Insurance Agency, a Reisterstown-based company, which sells policies.  He also oversees Insurance Payment Plan, Inc., which provides financing for those who can't afford insurance.  In addition, Katz is part owner of the Interstate Auto Insurance Company, Inc., which provides insurance.  He owned the entire company until June 2012 when 50% of his stock was sold to another company, The Woodlands Financial Group.

The Maryland Insurance Administration, while investigating the Katz Insurance Agency, discovered $795,098 in premium payments made to the agency that had never made its way to Interstate.  As a result, the insurance company was left in "hazardous conditions" with only just $70,000 to its name. 

But that's not the only Katz company soured in this operation.  Records show Insurance Payment Plan, Inc., which provided loans to insurance customers, was fronted in large part by creditors.  Those creditors, records show, are owed more than $8.5 million by IPP.  A group of those angry investors have filed a civil lawsuit in Baltimore County against Katz, claiming he "orchestrated an ongoing fraudulent scheme to divert monies from IPP for the benefit of himself and/or other entities he controls by concealing and assigning IPP's assets to the detriment of its creditors."

Records show Katz Insurance Agency is not allowed to conduct insurance business in Maryland at the moment, although the company and Interstate have been handed over to a third party as part of a state receivership agreement.  As part of that agreement, some locations are open legitimately.

Hal Katz refused comment for our story, telling ABC2 pending litigation keeps him from speaking about this situation.  A public relations firm working for Katz sent us the following statement, "Katz Insurance and Interstate Auto are in a Receivership of Rehabilitation and a receiver is being appointed to run the companies.  We want all our policy holders to know that all policies are in effect and all claims are being paid and this has never affected our policy holders in any way. All monies collected have gone directly to paying policies.  The receivership has to do with administrative functions of the agency under the limits of the Md. Insurance commission."

Thousands of people in Maryland have insurance coverage that may be tied in some way to Hal Katz.  MIA has provided contact information for anyone with questions.  If you are insured by MAIF, you can call the Policy Services Department at 1-800-445-1117 or email PolicyServices@emaif.com for assistance.  If you are insured by Interstate Auto Insurance Co. and received a notice of cancellation or non-renewal of you auto insurance, call 410-358-1905.

If you are covered by another insurer, call 410-484-8841 or 1-800-736-8841 to determine if another Katz location is open and can assist you.  For additional assistance or to file a complaint about your insurance, call the Maryland Insurance Administration at The correct numbers are 410-468-2340 or 1-800-492-6116, option #3.

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