Shurwest (IMO) Files Bankruptcy and MN Life Sues Quantum Alleging Fraud

By: Roccy DeFrancesco, JD, CAPP, CMP

Click here to read the lawsuit MN Life filed against Shurwest/Quantum/Ron Shurts.

This fact pattern is EVERYTHING that is wrong with the insurance industry (greed, ignorance, greed, and more ignorance).

This is why I felt compelled to START an IMO advisors can TRUST (“trust” is a word I don’t throw around lightly).  If you want to learn about our IMO AdvisorShare (one where advisors can become equitable owners in the IMO), click on the following link:

Summary of the events:

1) Scott Kohn came up with a scheme to help sell IUL. The scheme ended up being a Ponzi scheme that defrauded clients of hundreds of millions of dollars.

2) This scheme was pitched to IMOs to help them increase IUL sales.

3) Shurwest put this scheme out to insurance agents who sold 274 policies.

4) The scheme was discovered and the lawsuits started flying. Consumers sued MN Life, Shurwest, Live Abundant (Doug Andrew’s firm), many insurance agents, and some RIAs. Many of these suits are ongoing. To read the lawsuits filed by consumers against MN Life, Shurwest, and Live Abundant, click here.

5) MN Life sued Shurwest, Quantum, and Ron Shurts.

FYI, an IMO asked me to review this scheme before it hit the market. It took me only a few hours to find Kohn’s criminal history and determine the scheme had significant safeguard protection issues. I told the IMO they’d have to have a screw loose to use this scheme. They took a pass but the greed and/or ignorance of Shurwest and other IMOs has gotten them and their agents into lawsuits and headaches that will end many careers.

The MN Life lawsuit against Shurwest /Quantum and Shurwest’s bankruptcy

Who is Quantum? It’s alleged that Quantum is the new IMO Ron Shurts, one of the founders of Shurwest, started to replace Shurwest.

Shurwest has apparently filed bankruptcy. That would mean that the policyholders who sued Shurwest, and MN Life who sued Shurwest to recoup past commission paid from this scheme, will probably get NOTHING.

So, MN Life also sued Quantum which they allege is the alter ego of Shurwest (using the same office space, same employees, and in email correspondence to MN Life Shurts referred to “Shurwest/Quantum”).

You can’t make this stuff up!

It’s time to face reality when it comes to IMOs

My intent with these kinds of newsletters is to help keep advisors out of trouble. The bi-product of how I do things is that I many times make insurance companies, products, IMOs, RIAs, B/Ds look bad or certainly look like they are incompetent and/or could care less about the consumer.  Sometimes that offends a few readers, but such is life…

Let me be as blunt as I’ve ever been:

-Most advisors are using IMOs that don’t care about advisors or the clients.

-Most advisors are using IMOs with internal marketers that are incompetent.

-Most advisors are using IMOs that peddle products that make the IMO the most overrides and bonuses regardless if those products are best for consumers.

-Advisors should be MUCH LESS TRUSTING of the IMOs they work with.

-Advisors need to learn the products they are selling better so they don’t have to trust IMOs.

What can be learned from this newsletter?

1) You should not blindly trust any IMO’s recommendations.

2) Be very careful when it comes to sales schemes (including en vogue conservation easements, deferred sales trusts, IRA rescue using IUL, and others).

3) Don’t trust insurance companies who approve of or tacitly approve of sales schemes.

4) Don’t be lazy. The reason so many insurance agents sold this IUL sales scheme is because they are lazy. It was easier just to take the word of an IMO that the scheme was legitimate. Either do your own research, hire someone to do the research, or contact me. I love researching products, sales schemes, etc., to determine if they are any good. That’s how I learn about many of them for my newsletters.

Finally, if this newsletter sounds preachy, I’m sorry, but this industry never seems to learn, and until it does, and until these types of stories no longer exist, I’ll keep warning readers and trying to motivate them to strive to work with a better class of IMO, RIA, CPA, attorney, B/D, etc.