STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 82-162

)

DENNIS VICTOR DANIELS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on June 17, 1982, in the Pinellas County Judicial Building, St. Petersburg, Florida. The issue for determination in this proceeding is whether respondent's license as an Ordinary Life including Disability Agent should be revoked, suspended or otherwise disciplined for the reasons set forth in the First Amended Administrative Complaint filed on April 29, 1982.

APPEARANCES

For Petitioner: Curtis A. Billingsley and Franz Dorn

413-B Larson Building Tallahassee, Florida 32301

For Respondent: William A. Patterson

Masterson, Rogers, Patterson and Masterson, P.A.

447 Third Avenue North

St. Petersburg, Florida 33701 INTRODUCTION

Respondent Dennis Victor Daniels has been charged with various violations of the Insurance Code by a three count First Amended Administrative Complaint. The factual allegations of the first two counts are similar. In summary form, it is alleged that respondent represented to Julie L. Marzec and to Mr. and Mrs. John W. Valentine that they could purchase health insurance coverage at a group rate through membership in the American Benevolent Society, Inc. (ABS) when in fact the insurance coverage sold to these people was not sold at a group premium and membership in the ABS did not entitle them to group rate premiums for the insurance they purchased. It is alleged that such statements and representations were false, misleading and deceptive and violated some fifteen sections of the Insurance Code, Chapter 626, Florida Statutes. Count III of the Complaint, as amended, factually alleges, in summary form, that respondent utilized a "light box" on the premises of Gulf Health Life, Inc. to trace, sign or cause to be signed the unauthorized signature of a proposed insured without his knowledge or consent. It is alleged that such action violates some ten provisions of the Insurance Code set forth in Chapter 626, Florida Statutes.

At the hearing, the Department of Insurance presented the testimony of Julie L. Stratton (formerly Julie L. Marzec), John Valentine, and Jean Ann Watkins, a former executive secretary to the vice president of Gulf Health/Life, Inc. The testimony of Dale Sink, Manager of Individual Health Products with Continental Casualty Company and Continental Insurance (CNA), was presented by way of deposition. Petitioner's Exhibits 1 through 5 were received into evidence. Respondent presented no witnesses or documentary evidence at the hearing.

At the conclusion of the hearing, the parties submitted proposed recommended orders. To the extent that the proposed findings of fact are not contained in this Recommended Order, they are rejected as either being not supported by competent substantial evidence adduced at the hearing, irrelevant or immaterial to the issues presented for determination or as constituting conclusions of law as opposed to findings of fact. The petitioner's Motion for Official Recognition, submitted after the evidentiary hearing was closed, is denied.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found:

1. At all times pertinent to the allegations of the First Amended Administrative Complaint, respondent Dennis Victor Daniels was licensed as an Ordinary Life including Disability Agent in Florida and was employed by Gulf Health/Life, Inc. in St. Petersburg, Florida.

   
   

2. On or about January 14, 1980, Julie Stratton (then Julie Marzec) contacted respondent at the offices of Gulf Health/Life, Inc. for the purpose of purchasing health insurance. She and respondent discussed different insurance policies, and respondent informed her that if she joined the American Benevolent Society (ABS) she could obtain a lower rate for her policy and obtain the best policy for her money. Mrs. Stratton could not remember if respondent informed her of the exact amount of money she would save on her insurance if she joined the ABS. She was informed that other benefits and discounts from area businesses would be available to her as a member of the ABS. Mrs. Stratton joined the ABS in order to obtain less expensive insurance. She wrote two checks -- one in the amount of $15.00 payable to the ABS and the other in the amount of $54.26 payable to CNA Insurance Company. She obtained two insurance policies. The form numbers on these policies were 51831 and 52176.

   
   

3. Based upon a referral from an agent with Allstate Insurance Company, John Valentine and his wife went to the offices of Gulf Health/Life in order to obtain hospitalization and surgical insurance coverage. Before moving to Florida, Mr. Valentine was covered by a group policy through his place of employment. Respondent informed Mr. Valentine that members of the ABS could obtain a policy at group rates which entailed a lesser premium than individual rates. Mr. Valentine wrote two checks -- one in the amount of $178.73 payable to CNA Insurance Company and the other in the amount of $25.00 payable to the ASS. Mr. Valentine received two policies from CNA -- one bearing form number 51831 and the other bearing form number 52176. He also received a brochure listing the places of business from which he could receive discounts as a member of the ABS.

4. Gulf Health/Life, Inc. was a general agent for CNA. During the relevant time periods involved in this proceeding, CNA had different policies for health insurance. Policies with a form number of 51831 required the policyholder to be a member of an organization endorsing CNA in order to purchase that policy. Form 51831 policyholders paid a lesser premium for their policies. The difference in premiums between the group or organization policy and an individual policy with the same coverage is approximately $10.00. To obtain the policy bearing form number 52176, there is no requirement that the policyholder be a member of a group or an organization.

   
   

5. Ms. Watkins, a secretary employed with Gulf Health/Life, Inc. between December of 1978 and June of 1979 observed a device known as a "light box" on the premises of Gulf Health/Life. This was a square-shaped plywood box with a slanted glass top and a high-intensity lightbulb within the box. On from a half-dozen to a dozen occasions on Fridays between January and April, 1979, Ms. Watkins observed respondent bent over the light box with a pen in his hand tracing a signature onto an insurance application. She could not produce any documents or recall any names of any insurance applicant whose signature was traced or copied by the respondent.

   
   

   CONCLUSIONS OF LAW

   
   

6. The Department of Insurance seeks to revoke, suspend or otherwise discipline respondent's license to sell insurance on the grounds that he made false, misleading and deceptive statements with regard to the purchase of insurance at a group rate to Mrs. Stratton (Marzec) and Mr. Valentine and that he utilized a "light box" to trace, sign or cause to be signed the unauthorized signature of a proposed insured without his knowledge or approval. The burden in this proceeding is upon the Department to prove by evidence which is both competent and substantial that these actions were committed by the respondent. When one's business or professional license is placed in jeopardy, the term "substantial competent evidence" takes on vigorous implications and the "prosecutor's proof [must] be as serious-minded as the intended penalty is serious." Bowling v. Department of Insurance, 394 So.2d 165. at 172 (Fla. 1st DCA, 1981).

   
   

7. In this proceeding, there was a complete lack of evidence presented by the petitioner to support the factual allegations of the First Amended Administrative Complaint. With regard to the allegations concerning the respondent's sale of insurance to Ms. Marzec and Mr. Valentine (Counts I and II), the evidence adduced by the petitioner itself clearly demonstrates that CNA, for which Gulf Health/Life was a general agent, did indeed offer a group or organization premium to members of the American Benevolent Society and that such premium was less expensive than the premium for the same insurance coverage purchased on an individual basis. Both Ms. Marzec and Mr. Valentine purchased this policy and received the group or organization discount in premium. The policyholders obtained exactly what respondent told them they would obtain-- an insurance policy at a discounted rate because the insureds were members of the ABS. The fact that the ABS membership fee may have been more than the savings in insurance premium does not prove that respondent made false, misleading or deceptive statements with regard to the purchase of insurance. The evidence presented by the petitioner demonstrates that there were benefits, other than insurance, available to members of the ABS. Whether or not Ms. Marzec and/or Mr. Valentine took advantage of such benefits is irrelevant to the charges against the respondent in this proceeding. The facts adduced by the petitioner established that respondent told the policyholders that they could receive a discount in insurance premiums through membership in the ABS, that CNA did offer

   such a reduction in premium through its policy bearing form number 51831, that Ms. Marzec and Mr. Valentine purchased that policy through the respondent, and that they did pay a premium lesser in amount than a premium for a policy purchased on an individual basis.

   
   

8. The evidence regarding respondent's alleged use of the device known as a "light box" to trace, sign or cause to be signed the unauthorized signature of a proposed insured (Count III) was likewise not sufficient to establish respondent's guilt. The only evidence offered by the petitioner with respect to Count III was the testimony of Ms. Watkins. That testimony was that she observed respondent on from six to twelve occasions bent over the "light box" with a pen in his hand tracing a signature onto an insurance application. Ms. Watkins did not know whose signature was being traced on any of those occasions, no documentary evidence was adduced and there was no evidence as to what was done with such insurance applications after the alleged tracing of signatures occurred. While Ms. Watkins did testify that an irate insurance customer came into the office on one occasion, as charged in the Complaint, such testimony constitutes hearsay evidence which was not corroborative of or corroborated by any other evidence adduced in this proceeding. There was insufficient evidence that Respondent traced, signed, or caused to be signed the unauthorized signature of a proposed insured without his knowledge or approval.

   
   

9. The remaining factual allegations of the Complaint, as amended, specifically paragraph 5 of Count II and paragraphs 2, 5, 6 and 7 of Count III, were either not supported by competent substantial evidence adduced at the hearing or, even if they had been proven, did not constitute sufficient grounds, standing by themselves, for disciplinary action against a licensee.

RECOMMENDATION

Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the First Amended Administrative Complaint filed against the respondent on April 29, 1982, be DISMISSED.

Respectfully submitted and entered this 10th day of September, 1982, in Tallahassee, Florida.

DIANE D. TREMOR

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 10th day of September, 1982.

COPIES FURNISHED:

Curtis A. Billingsley, Esquire Franz Dorn, Esquire

413-B Larson Building Tallahassee, Florida 32301

William A. Patterson, Esquire Masterson, Rogers, Patterson and Masterson, P. A.

447 Third Avenue North

St. Petersburg, Florida 33701

Honorable Bill Gunter Insurance Commissioner The Capitol

Tallahassee, Florida 32301

Docket for Case No: 82-000162

Orders for Case No: 82-000162