The former filmmaker also made some scratch on the side, charging filmmakers for the use of his insurance policy. Herein lies the grey area: Mr. Porter is not an insurance agent and therefore cannot provide insurance to anyone, yet he asked for co-producer credit on all the films, cementing his "involvement" on the film or films. Dare I say, scam???
This is fraud, plain and simple. You can be sympathetic towards the filmmakers and to Mr. Porter, but Mr. Porter can't name himself co-producer on a project AND collect a fee. Most producers and filmmakers here in Los Angeles would've laughed him out of their offices and hire someone else with a license. Even if Mr. Porter did not know what he was doing was illegal, the insurance company--who knew--should have taken responsibility. The company merely informed him it was illegal (or, at least, that is what it told KRQE).
Listen, s**t happens. You're gonna need insurance on your shoots. If you drop your camera off a cliff, your main actor breaks his arm, or have your tripod or dolly stolen (my God, please steal ANYTHING!), you might want to have a little insurance to back you up. In fact, it's the law in many places. But please, buy insurance from reputable sources. Even State Farm sells insurance for filmmakers. In the unlikely event one of the above occurs, your policy will actually cover you, instead of covering some guy who knows close to diddly squat about your film.
Here is a short list provided by my alma mater (Fight on, ol' SC!) for film insurance providers: