STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, OFFICE OF ) TREASURER AND INSURANCE )

COMMISSIONER, )

)

Petitioner, )

)

vs. ) CASE NO. 78-1078

)

CHARLES FRANKLIN CHINN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above styled case on September 22, 1978, in Orlando, Florida.

APPEARANCES

For Petitioner: Patrick F. Maroney, Esquire

428-A Larson Building Tallahassee, Florida 32304

For Respondent: Charles Franklin Chinn was not

present or represented by counsel.

By Administrative Complaint filed May 23, 1978, the State of Florida Insurance Commissioner, Petitioner, seeks to revoke, suspend or otherwise discipline the insurance licenses of Charles Franklin Chinn, Respondent. As grounds therefor, it is alleged that Respondent lapsed or caused to be lapsed numerous policies issued by Gulf Life Insurance Company and thereafter submitted false applications for new policies with the intent to wrongfully obtain a fee; and that Respondent submitted false information regarding his date of birth on his applications for filing for examination as ordinary-combination Life including Disability Agent and as a General Lines Agent Limited to Industrial Fire Insurance. These charges are contained in nine (9) counts and allege various violations of Section 626.611 and Section 626.621, Florida Statutes,

The Administrative Complaint was served on Respondent by certified mail.

On June 8, 1978, Eugene E. Rhodes, Esquire, entered an appearance as counsel for Respondent and requested a formal hearing. This case was scheduled for hearing by Notice of Hearing dated July 28, 1978. Thereafter, Respondent's counsel's Motion to Withdraw as Counsel filed September 6, 1978, was granted by Order entered September 15, 1978. No communication has been received from Respondent.

At the hearing, five (5) witnesses were called by Petitioner and 42 exhibits were admitted into evidence.

FINDINGS OF FACT

1. Respondent is currently licensed as an Ordinary-Combination Life, including Disability Insurance Agent to represent Interstate Life and Accident Insurance Company and as a General Lines Agent Limited to Industrial Fire to represent Interstate Fire Insurance Company. (Exhibit 37) During the period June 1, 1974, until October 1, 1976, Respondent was an agent for Gulf Life Insurance Company.

   
   

2. In his application for licensing by Petitioner on the application dated July 3, 1974, Respondent listed his date of birth as December 14, 1928 (Exhibit 36), on the application dated June 28, 1975, Respondent listed his date of birth as November 11, 1928 (Exhibit 35), and on his application dated October 5, 1976, Respondent listed his date of birth as November 14, 1926 (Exhibit 34). By affidavit dated January 4, 1978 (Exhibit 33), Respondent declared he was born November 14, 1926.

   
   

3. On March 15, 1974, John L. Harris was issued life insurance field policy No. 745 676 678 (Exhibit 1) and weekly premiums were paid continuously on this policy. He was also issued whole life policy No. 715 090 733 on October 18, 1971 (Exhibit 2), and weekly premiums were paid continuously on this policy.

   
   

4. Although Harris paid the premiums each week when due to the Respondent, at one period these premiums were not remitted to Gulf Life and the policies lapsed. Immediately thereafter, on May 1, 1975, an application for new policies (Exhibit 5), was submitted to Gulf Life by Respondent with the name of John Harris in the space for the signature of the proposed insured. This signature was not that of Harris and Respondent signed the application as a witness to Harris signature. Gulf Life issued a policy to Harris (Exhibit 4) based upon this application.

   
   

5. Evidence was presented that similar procedures were followed by Respondent in Gulf Life policies issued to Frances Harris, Dorcas Cohen, James Cohen, Joe Bryant, Peggy Hanie Bryant, Wilma Hanie and Brenda Bryant, whereby policies serviced by Respondent were lapsed by Gulf Life who later issued new policies on forged applications submitted by Respondent.

   
   

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this hearing.

   
   

7. Section 626.611, Florida Statutes, in listing grounds for compulsory refusal, suspension or revocation of license or permit provides in pertinent part:

   
   

   The department shall deny, suspend, revoke, or refuse to renew or continue the license of any agent . . . and it shall suspend or revoke the eligibility to hold a license

   or permit of any such person if it finds after notice and hearing thereon . . . that as to the applicant, licensee or permittee

   any one or more of the following grounds exist:

   (2) Material misstatement, misrepresenta tion or fraud in obtaining the license or permit, or in attempting to obtain the same.

   1. If the license or permit is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code.

   2. Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in

   person or by any form of dissemination of information or advertising.

   (7) For demonstrated lack of fitness or trustworthiness to engage in the business of insurance.

   1. Fraudulent or dishonest practices in the conduct of business under the license or permit.

   2. Misappropriation conversion or unlaw ful withholding of moneys belonging to insurers or insureds or beneficiaries or

   to others and received in conduct of business under the license.

   (13) Willful failure to comply with, or willful violation of, any proper order, rule or regulation of the department, or willful violation of any provision of this code.

   
   

8. In addition to the above grounds for compulsory revocation of a license, Section 626.621, Florida Statutes, provides somewhat similar grounds for discretionary refusal, suspension, or revocation of a license or permit.

   
   

9. At the time of the forged applications submitted by Respondent, Section 626.984, Florida Statutes, provided that an agent who knowingly makes false and fraudulent statements or representations in any application for insurance shall, upon conviction, be guilty of a misdemeanor of the second degree.

   
   

10. Although the evidence was clear that Respondent entered the wrong date of birth on applications for licenses this is the least serious of the charges here involved and had little significance in the recommendations submitted below.

    
    

11. From the evidence submitted, it is clear that Charles Franklin Chinn was engaged in a course of conduct designed to obtain illegal commissions from Gulf Life Insurance Company, impair the validity of innocent insured's policies, and ultimately increase the cost of Insurance to these insureds. In so doing, Chinn violated the provisions of Section 626.611, Florida Statutes, above quoted, abrogated the fiduciary duties owed by an agent to his principal, pursued a course of conduct highly inimical to the best interest of the policy holders so used, and generally demonstrated an unfitness to continue to hold a license to sell insurance.

    
    

12. From the foregoing, it is concluded that Charles Franklin Chinn is guilty of all charges as alleged, but the findings of guilt of Counts VIII and IX were not considered in submitting the recommendation below. It is, therefore,

RECOMMENDED that the license of Charles Franklin Chinn as Ordinary- Combination Life Including Disability Agent and as a General Lines Agent Limited to Industrial Fire Insurance be revoked.

DONE and ENTERED this 13th day of October, 1978, in Tallahassee, Florida.

K. N. AYERS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Patrick F. Maroney, Esquire 428-A Larson Building Tallahassee, Florida 32304

Charles F. Chinn

337 - 8th Street

Holly Hill, Florida 32017

Docket for Case No: 78-001078

Orders for Case No: 78-001078