The Cottingham family has agreed to pay back $675,000 in fraudulent insurance premiums collected by Diane Cottingham, who committed suicide when her scam was discovered in March.

Insurance Commissioner Jim Poolman said Dean, Jessica and Amanda Cottingham, all officers of the Underwood-based Cottingham Insurance corporation, agreed to make full restitution to 10 businesses and individuals who paid up to hundreds of thousands of dollars in premiums for bogus policies.

Poolman said restitution will be more than was found in agency bank accounts where Diane Cottingham kept the premium payments made directly to the agency.

Her scam was uncovered in March, when one of her clients tried to get a competing insurance quote and found the company purportedly insuring his business had no records of the account.

Paul Doll of Hazen, who heads a Mercer-Morton Cenex fuel-transport subsidiary that had the fake insurance, said restitution will end the matter.

He said he appreciates the Cottingham family "making us whole." He said he's mainly glad that there was no catastrophic event, like an accident with a fuel truck, or an employee injury or death during the fake coverage period.

Doll said the restitution money will be added into other revenues for the subsidiary and paid out as co-op patronage dividends.

Diane Cottingham had created the bogus policies by cutting and pasting documents off of national insurance carriers' Internet Web sites. Some of the policies dated back to 1999.

She also paid out $38,000 in claims to keep up the ruse that the insurance was legitimate. That amount has been deducted from the total the family will pay back.

Rather than turn herself into Poolman to accept an order to cease doing business when the scam came to light, Diane Cottingham, 45, killed herself on a rural road in McLean County.

Poolman said the family voluntary signed the restitution consent order June 15. He would have had the ability to close the agency otherwise, he said.

"This is a good day for the aggrieved policy holders," he said.

The agency's investigation found that no one else in the family or agency was part of the scam and that Diane Cottingham explicitly instructed employees to direct any contact by those clients to her only.

The businesses and individuals involved will be sent a letter stating they agree to accept the restitution settlement.

Once the letters are returned, Poolman said the restitution will be made quickly.

The restitution will go to Cenex group in Bismarck, Mandan and Dickinson in the amount of $325,000; Mercer-Morton Transport (a Cenex subsidiary to haul fuel) in the amount of $34,000; Cenex of Beulah in the amount of $175,000; Gordy's Inc. in the amount of $116,000; and six others in amounts ranging from $13,000 to $340.

The consent order keeps open the possibility of restitution if other bogus accounts are later discovered.

The agency has offices in Underwood, Washburn and Bismarck and carries thousands of policies.

(Reach reporter Lauren Donovan at 1-888-303-5511, or lauren@westriv.com.)