Claims Examiner Sentenced for Stealing From Progressive, Mercury Insurance

A judge sentenced a New York insurance claims examiner, who formerly worked at Progressive Insurance Co. and Mercury Insurance Co., to three to nine years in prison for stealing $474,000 from her employers by forging and writing claims checks over a 10-year period.

Lisa Kline, 42, also was ordered to pay restitution after pleading guilty to second degree grand larceny. Kline, arrested in July, worked for Progressive between 2000 and 2006 and later for Mercury Insurance.

New York Insurance Department investigator Phil D'Angelo said the investigation began last December, after a bank teller noticed Kline depositing an unusual number of checks bearing other people's signatures into her personal account. D'Angelo said when Kline was employed, she was in charge of ongoing personal injury claims and cases where ongoing claims payments were sent out periodically.

"She took the liberty to have checks issued payable to insureds and cashed (them) herself," D'Angelo said. The investigation found Kline created fake claims numbers to issue supplemental payments to people with claims. She would then forge claimants' signatures and countersign the checks.

Kline stole some $122,000 from Progressive and $352,000 from Mercury, D'Angelo said. Cases also are pending against two of Kline's associates, April Martin, 37, of Colonie, and Harry Mercado, 36, of Albany, who received checks and cashed them for Kline, D'Angelo said.

Progressive is the fourth-largest writer of private passenger automobile in the United States, with a 7.6% market share in 2009, according to BestLink, which provides online access to A.M. Best's Global Insurance & Banking Database. Along with Progressive, the leading U.S. writers of private passenger auto were State Farm Group, with 18.13% market share; Allstate Insurance Group, with 10.69%; Berkshire Hathaway Insurance Group, with 8.36%; and Farmers Insurance Group, with 6.47%, according to BestLink.

Most Progressive companies currently have a Best's Financial Strength Rating of A+ (Superior). Mercury Insurance Co. also has a Best's Financial Strength Rating of A+ (Superior).

Shares of Progressive Corp. (NYSE: PGR) were at $20.83 in afternoon trading Oct. 1, down 0.24% from the previous close.