Edwin Larson Building Fourth Floor (Room 428A) Tallahassee, Florida 32304
For Respondent: Morris W. Milton, Esquire
Post Office Box 13517 1327 Ninth Street South
St. Petersburg, Florida 33733
By Administrative Complaint dated 12 October 1978 the State of Florida, Office of Treasurer and Insurance Commissioner, Petitioner, seeks to revoke, suspend or otherwise discipline the license of John Henry Hopkins, Jr. as a general lines agent. As ground therefor it is alleged in Count I that Respondent collected premiums from Harry Williams which he unlawfully withheld; and in Count II that Respondent took payment of premiums for an automobile policy application by George Moore and failed to remit the application or premium to the carrier on whom the application was written until several months later and after Moore had been involved in an automobile accident. The Complaint further alleges that because of the delay in submitting the application, insurance was denied to Moore.
At the commencement of the hearing, Respondent, who was not present, by and through his attorney, requested a continuance of the hearing. As grounds therefor the attorney stated he had had inadequate consultation with his client and produced a letter allegedly found on his office door 17 January 1979 written by Respondent in which Respondent stated he was sick and was also required to appear at the State Attorney's office this same date.
Petitioner, by and through its counsel, stated that on Friday, 12 January 1979, upon being contacted respecting the allegations of conflicting subpoenas, he had telephoned the State Attorney's office in St. Petersburg and was advised that office had no knowledge of such a subpoena having been issued. Similar information was received from the State Attorney's offices in Clearwater and Tampa.
The record reflects that Notice of Hearing was issued on December 27, 1978 for the January 17, 1979 hearing. It was received by the attorney representing Respondent. Accordingly, the Motion for Continuance was denied.
Petitioner then stated that the complaining witness on Count I could not be located by the Sheriff's Department to serve a subpoena ad testificandum and voluntarily dismissed Count I. Thereafter, two witnesses were called by Petitioner and three exhibits were admitted into evidence. After Respondent had rested his case without submitting any evidence, Exhibit 4, an Order of the Commissioner of Insurance dated 18 January 1973 finding Respondent guilty of violations of the insurance laws in accepting payments for policies and failing to remit to the underwriter was admitted into evidence.
FINDINGS OF FACT
At all times here involved Respondent was licensed by the Florida Insurance Department as a general lines agent to represent Cotton Belt Insurance Company, Inc. and Industrial Fire and Casualty Insurance Co. (Exhibit l).
In November, 1977 George Moore, Jr. contacted agent Hopkins to obtain a full coverage policy for his automobile. His previous policy had been cancelled (or would soon be cancelled). The application was filled out by Hopkins and on November 15, 1977 Moore executed the application (Exhibit 2) and gave Hopkins a check as down payment on the premium in the amount of $199.80. This check was negotiated by Hopkins on December 18, 1977.
Several weeks later Moore had not received his policy and he asked Hopkins about the delay. Hopkins replied that he (Moore) should have his policy in another two or three weeks.
At no time prior to Moore's January 9 automobile accident did Hopkins tell Moore that his application did not include collision coverage or that the application had never been submitted to the carrier.
On January 9, 1978 Moore was involved in an automobile accident in which he was the responsible party. Upon informing Hopkins of the accident the latter advised Moore that he was covered. Hopkins later told Moore that he was not covered for collision but he came and took Moore's car to be repaired, stating that the repairs would not have to be paid for by Moore. When Moore contacted Insurance Company of North America (INA) he learned they had no policy covering him. He subsequently had to pay $300 for the repairs to his car.
On February 2, 1978 INA received Moore's application from Hopkins with a check for down payment on the premium signed by Hopkins. Because rules of the Florida Joint Underwriters Association require applications be promptly submitted, INA denied Moore's application and so advised Hopkins.
In the summer of 1978, Hopkins refunded to Moore the $199.80 payment Moore had made on November 15, 1977.
By Order entered 18 January 1973 (Exhibit 4), Respondent was found guilty of six counts involving failure to remit collected premiums to the insurer, and failure to submit applications with premium payments received from clients. As a result thereof he was placed on probation for a period of two years and ordered to make restitution to all parties suffering loss from his unlawful acts.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this hearing. Respondent was given adequate notice of the hearing and presented no credible evidence to justify his failure to attend the hearing.
Section 626.561 Florida Statutes provides:
All premiums, return premiums or other funds belonging to insurers or others received by an agent, solicitor or adjuster in transactions under his license shall be trust funds so received by the licensee in a fiduciary capacity, and the licensee in the applicable regular course of business shall account for and pay the same to the insurer, insured or other person entitled thereto.
Any agent, solicitor or adjuster who, not being lawfully entitled thereto, diverts or appropriates such funds or any portion thereof to his own use, shall upon conviction be guilty of larceny by embezzlement and shall be punished as provided by law.
Grounds for compulsory suspension of license or permit are contained in Section 626.611 which include:
(7) For demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
Fraudulent or dishonest practices in the conduct of business under the license or permit.
Misappropriation, conversion or unlawful withholding of moneys belonging to insurers or insured 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.
Similar grounds for discretionary suspension or revocation of license are contained in Section 626.621 Florida Statutes.
The evidence was uncontradicted that Respondent accepted payment from Moore as a down payment on an automobile insurance policy, assured Moore that he
was fully covered as of the date Moore laid him the premium, and thereafter failed to forward this application to the carrier until some two-and-a-half months later and after Moore had been involved in an accident.
Respondent's argument, that the application for which Moore paid the part premium did not include collision coverage; therefore, if Hopkins had forwarded the application promptly, Moore would have suffered the same financial loss, although ingenious, in no wise exonerates Respondent from his violations of the above quoted statutes.
Furthermore, the evidence was unrebutted that Moore specifically asked for full coverage which he had always carried, and Respondent told him that the application, which was filled out by Respondent, provided the full coverage requested. While a reading of the application shows no premium was assessed for comprehensive coverage (which includes collision) this is no help to an agent who tells the client the application complies with the client's wishes respecting coverage. This constitutes a fraudulent and dishonest practice which is prescribed by Section 626.611(9) Florida Statutes above quoted.
The fact that Respondent refunded the payment he had received from Moore some six months after Moore learned his cars were not covered by insurance, in no wise detracts from the fact that Moore paid Hopkins for insurance he did not get and Moore could have suffered a substantially higher financial loss than he did suffer as a result of Hopkins' deceptive acts.
Insurance agents, like many other fiduciaries are required to adhere to a high standard of care in providing the insurance protection for which the clients pay to them the funds to provide this coverage. People take out insurance to protect themselves against losses they cannot otherwise afford. Failure to provide coverage to one who has remitted the premiums and believes himself protected from the loss he cannot otherwise afford has such severe consequences that even inadvertence or inattention cannot be tolerated. Gunter
v. Armstrong, R.O., DOAH Case No. 78-1075, 24 October 1978. Willful or intentional failure to forward premiums and thereby leave an applicant without coverage degrades the profession and has unlimited potential for harm to the public.
From the foregoing it is concluded that Respondent, John Henry Hopkins, is guilty of violating Sections 626.561, 626.611 (7)(9)(10)(13) , 626.621 (2) and (6) , and (10) Florida Statutes as alleged. It is therefore
RECOMMENDED that the license of John Henry Hopkins, Jr., a general lines agent, be revoked.
DONE and ENTERED this 5th day of February, 1979.
