"You have my sympathy. Your mother-in-law appears to be a handful. Discuss this with your own insurance agent. Explain what you have learned and ask whether what your mother-in-law has done is legal, because it may not be. That she is in the insurance business makes this even worse."
"That you became aware of this information during an unpleasant conversation strikes me as possible retaliation for telling her something she didn't want to hear. She may even be lying about it."
"Your insurance agent can explain what remedies can be taken to correct this if it is true. If she is a licensed broker who has done something illegal, she could lose her license."
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