Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case was presented on an Administrative Complaint filed by the Department of Insurance and Treasurer against the Respondent charging him with multiple violations of the laws regulating the insurance industry in Florida.
For Respondent: Jan K. Moncol
The Administrative Complaint dated May 21, 1984, charges the Respondent with violations of Sections 626.561(1), 626.611(4), 626.11(7), 626.611(8),
Florida Statutes. The issues are whether the Respondent committed the acts alleged and whether the acts were a violation of the statutes above.
Douglas Nobel purported to sell Patricia Ann Connor health insurance coverage through Union Bankers Insurance Company on January 13, 1982.
In October, 1982 Patricia Ann Connor sought to use the health insurance card given to her by Mr. Nobel. The card was refused by the hospital because it had no policy number. When Ms. Connor notified Mr. Nobel of this occurrence, he advised Ms. Connor there was no problem because he bad another card with a policy number on it. Mr. Nobel assured Ms. Connor she had insurance and was covered (T. 30). In fact, at that time Ms. Connor had been rejected by Union Bankers Insurance Company, and there was no such policy.
Approximately one month later, Ms. Connor contacted Mr. Nobel's office to see if she was covered. She spoke with Mr. Cameron, Mr. Nobel's partner. Mr. Cameron told her that she was not covered and no policy existed.
When Ms. Connor's father questioned Nobel about her coverage, Mr. Nobel stated that he was out sick and her policy was in his desk drawer (T. 32). However, Union Bankers had not issued a policy and had returned Ms. Connor's premium refund check which was deposited in Mr. Nobel's personal checking account. Mr. Nobel admitted paying some of Ms. Connor's medical expenses which would have been covered if Mr. Nobel had secured coverage for her (R. 43).
Mr. Nobel presented the testimony of his wife and brother to support his testimony that he was in the Bahamas at the time the refund check was deposited. Although this deposit may have been made to his account by mistake by persons unknown, Mr. Nobel accepted funds from Ms. Connor and did not place the insurance as he indicated he would. He did not take appropriate action when he should have been aware a problem existed.
Douglas Nobel purported to sell Tim Hardman health insurance coverage through Union Bankers Insurance Company on February 13, 1983.
Mr. Hardman gave Mr. Nobel $195.72 in premium funds. Hardman received a coverage sheet showing policy number 3962159 with Union Bankers Insurance Company; however, he did not receive a policy.
Mr. Nobel later contacted Mr. Hardman and indicated he wanted to transfer Mr. Hardman's coverage to another company. Becoming suspicious, Mr. Hardman contacted Union Bankers and was informed the policy number he was given did not exist and that he had never received coverage (T. 11 v. 2)
Mr. Hardman then took Mr. Nobel to Small Claims Court, but received a premium refund from Mr. Nobel before the case came before the court (T. 12 v. 2). Mr. Nobel could not explain to Hardman the lack of coverage and never gave Hardman any further explanation (T. 14 v. 2)
Douglas Nobel purported to sell Milfred and Mary Cleary annuity contracts through Transamerica Life Insurance and Annuity Company on January 28, 1982.
Mr. and Mrs. Cleary gave Mr. Nobel $7,000 to purchase annuity contracts with Transamerica Life Insurance and Annuity Company. Mr. Nobel delivered to Mr. and Mrs. Cleary at their home policy numbers 5978803 and 5978804 (R. 67) . These policies were entirely bogus, and Transamerica Life Insurance and Annuity Company has no record of ever receiving an application or premium on behalf of Mr. and Mrs. Cleary.
The numbers on the bogus policies were given to the Clearys by Mr. Nobel on the same day their application was taken. (T. 68, 69). In accordance with Mr. Nobel's instructions, the second premium checks were made out to Nobel, who indicated he would wire the money to the company (R. 73). The funds were never wired to Transamerica, with which Mr. Nobel had suggested he was dealing directly. There was no mention of Mr. Cameron being involved.
Nobel was questioned by Mr. Cleary regarding why he wasn't receiving any communications from Transamerica, Mr. Nobel indicated the policies were on his desk and he would bring them to Cleary (R. 77).
Mr. Nobel contends that he cashed the Cleary's $4,000 check and gave cash to his former partner, Mr. Cameron, to forward to Transamerica (T. 33 v. 2). Mr. Cameron testified he never received the $4,000 from Mr. Nobel (T. 103). Mr. Cameron's testimony is the more believable and Mr. Nobel's is rejected.
Douglas Nobel in each instance personally solicited and sold the insurance in question.
None of these individuals received insurance coverage for which they paid and which Douglas Nobel represented to them they had obtained.
Ms. Connor and Mr. Hardman were subjected to substantial medical expenses which were not covered because the insurance for which they paid was never secured by Mr. Nobel. Mr. and Mrs. Cleary's insurance was made good by Transamerica which cancelled Mr. Cameron's agency with their company.
Either Nobel's acts were dishonest and he intended to defraud the Clearys, Connor and Hardman, or Nobel was grossly negligent in the conduct of his business.
CONCLUSIONS OF LAW
This Recommended Order is entered pursuant to Section 120.57(1), Florida Statutes. The Department of Insurance is charged under Chapter 626 with regulation of insurance agents. The Administrative Complaint specifically alleges the Respondent violated Sections 626.561(1), 626.611(4), 626.11(7), 626.611(8), 626.611(9), 626.611(10), 626.611(13), 626.621(2), 626.621(4), 626.621(6), 626.9541(1)(e), 626.9541(1)(e)(1)(d), 626.9541(1)(k)(1), and 626.9541(1)(o)(1), Florida Statutes.
Section 626.561, Florida Statutes provides that insurance agents receive premiums in a fiduciary capacity for which they must keep records and accounts. Any agent who diverts funds is guilty of a violation of criminal law. Section 626.611, supra, sets forth the ground for compulsory disciplinary action by the Department. Section 626.621, supra, sets forth the grounds for discretionary disciplinary action. Section 626.9541, supra, sets forth unfair methods of competition and unfair and deceptive acts and practices. The Department did not charge the Respondent with violation of Section 626.9521, supra, which specifically makes violation of 626.9541, supra, punishable; however, a violation of 626.9541, supra, is also a violation of Section of 626.621(2), supra, with which the Respondent was charged.
By taking money as premiums and not insuring the purchaser, the Respondent violated Section 626.561 which in turn is a violation of Section 626.621(2) with regard to Ms. Connor's insurance. By saying that he had a contract for Ms. Connor when he knew this to be false, the Respondent violated Section 626.611(9), Florida Statutes.
By taking money as premiums and not insuring the purchaser, the Respondent violated Section 626.561 which is a violation of Section 626.621(2), Florida Statutes, with regard to Ms. Hardman's insurance. By saying that he had in his control Mr. Hardman's contract when he knew this to be false, the Respondent violated Section 626.611(9), Florida Statutes.
The acts committed by the Respondent regarding the annuity contract sold to the Clearys constitute violations of Section 626.621(2), and Section 626.611(10), Florida Statutes.
There is substantial competent evidence that the Respondent intended to defraud the Clearys contrary to Section 626.611(9) and (10), Florida Statutes. There is evidence that the Respondent knew or should have known that his contracts for insurance were not being placed. It is clear that he told all of the parties that they were covered when he knew or should have known that they were not covered. This was a willful misrepresentation of fact and was a dishonest practice contrary to Section 626.611(9), Florida Statutes. Alternatively the Respondent was grossly incompetent in the conduct of his business affairs which demonstrates a lack of fitness to engage in the insurance business contrary to Section 626.611(7) and (8) Florida Statutes. Violation of Section 626.611, supra, constitutes acts which require disciplinary action by the Department. The violations charged under Section 626.611 are those which are most appropriate to the facts although the acts would also constitute simultaneous violation of Section 626.9541 and thereby Section 626.621(2), Florida Statutes. The simultaneous violation of what is analogous to lesser included offenses should not be considered or punished.
Both parties submitted posthearing findings of fact, which were read and considered. Those findings not incorporated herein are found to be subordinate, cumulative, immaterial, unnecessary, or not supported by the evidence.
