An insurance company was fined $20,000 after a man who acted as an agent on a life policy for the company misappropriated $217,471 from the cash value of three policies, according to Pennsylvania Insurance Department records.

Denver, Colo.-based Security Life of Denver Insurance Co. paid the fine in the case, where a man identified as Nicholas Vukich of Fairlawn, Ohio, submitted false documents to the carrier and took the money from the cash value built up in the three policies, records show.

In June 1990, another agent sold a life policy to a Pittsburgh man, and then later that year, the same agent sold another policy to that man and another Pittsburgh man, records show. In 1993, the carrier received a request from the policyholders to change the address for all notices to Vukich’s address in Ohio. Vukich received the annual statements and other policy information, and Dec. 6, 2006, he admitted in a deposition to submitting false documents and misappropriating the funds, records show.

After Vukich failed to pay the restitution he promised, Security Life paid $359,383.

Security Life was fined for doing business with someone it knew was not licensed in Pennsylvania.

This story originally appeared in the March 2009 print edition of Insurance & Financial Advisor.