Judges: JAMES E. BRADWELL
Agency: Department of Financial Services
Latest Update: Mar. 20, 1987
Summary: The issue presented for decision herein is whether or not the Respondent has engaged in unlawful conduct, set forth herein- after in detail, as is more particularly alleged in the Administrative Complaint filed herein dated June 25, 1986.Respondent found guilty of unlawful conduct as an Insurance Agent. Recommen- ded revoking all licenses & qualifications for licensure of Res. in Florida.
86-2646.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF INSURANCE AND ) TREASURER, )
)
Petitioner, )
)
vs. ) CASE NO. 86-2646
)
KENNETH EVERETT WHITE, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a public hearing in this case on December 10 and 11, 1986, in Pompano Beach, Florida. Pursuant to leave, the parties were allowed through February 9, 1987, to submit memoranda supportive of their respective positions. The parties submitted memoranda which were considered by me in preparation of this Recommended Order. Proposed Findings of Fact which are not incorporated herein are the subject of specific rulings in an Appendix to this Recommended Order.
APPEARANCES
For Petitioner: Richard E. Turner, Esquire
Office of Legal Services
Department of Insurance and Treasurer 413-B Larson Building
Tallahassee, Florida 32399-03000
For Respondent: Kenneth Everett White, Pro se
Post Office Box 6249
Pompano Beach, Florida 33060 ISSUED PRESENTED
The issue presented for decision herein is whether or not the Respondent has engaged in unlawful conduct, set forth herein- after in detail, as is more particularly alleged in the Administrative Complaint filed herein dated June 25, 1986.
INTRODUCTION AND BACKGROUND
Complaint against Kenneth Everett White (herein sometimes called Respondent) alleging various violations of the Insurance Code. In response to the complaint, Respondent, requested a formal hearing. On July 21, 1986, the matter was referred to the Division of Administrative Hearings. On October 9, 1986, a Notice of Hearing was filed by the undersigned Hearing Officer scheduling the hearing for December 10, 1986. The hearing was held as noticed on December 10 and 11, 1986.
The Department alleges, specifically, that Respondent misappropriated, converted and unlawfully withheld monies belonging to others received in the conduct of business under his license. Petitioner contends that those funds received for the purpose of obtaining insurance, represented trust funds received in a fiduciary capacity for the consumers, insurers, or others entitled thereto. Petitioner alleges further that Respondent failed to properly account for funds received in a fiduciary capacity. Petitioner also alleges that Respondent collected funds from consumers or others for the exclusive purpose of obtaining insurance and failed to provide the paid-for coverage.
Petitioner called as its witnesses, Irwin Lonschein, John Weichel, Loretta Mock, Freddie Washington, Edward Lustigman, Kevin Florence and James Babb.
Respondent testified on his own behalf and called one witness, his wife, Frances White.
At the hearing, Petitioner voluntarily dismissed Counts four (4) and five
of the Administrative Complaint.
The Respondent's Position
Respondent takes the position herein that he, as an agent, is not required to prove his actions or lack of action regarding any insurance premium transaction after three years; that he is not responsible for refunds of insurance premiums to a premium finance company; that he was not a licensee at the location involved in the subject complaint; that there was no evidence since no consumers testified as to his being a "source of injury or loss to the public" as alleged; that the premium finance agreement is a contract between the insured and the premium finance company and does not require the licensed agent to do anything; that he had no contracts, oral or written, with any of the insurance companies, managing general agents, Premium Finance Companies involved herein; and finally, in summary fashion, that he has not violated any law as alleged in the subject administrative complaint.
FINDINGS OF FACTS
Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record filed herein, I hereby make the following relevant factual findings:
During times material, Respondent was licensed and/or qualified for licensure as a General lines (2-20), Ordinary Life, and Health Insurance (2-18) Agent in Florida (Petitioner's Exhibit 1).
During times material to the allegations herein, 1/ Respondent was an officer and director of White Insurance Agency, Inc. (White Insurance). (Petitioner's Exhibit 2).
On June 20, representatives of Great Wall Chinese Restaurant (Great Wall) entered into a premium finance agreement with Crown Premium Finance, Inc., (Crown), through White Insurance, which indicated the insurance coverage for Great Wall would be provided and issued through Service Insurance Company and Corporate Group Services. (Petitioner's Exhibit 3, sub. "a").
On June 20, Respondent signed the premium finance agreement as broker- agent. (Petitioner's Exhibit 3, sub "a").
On June 22, pursuant to the premium finance agreement, Crown issued a check made payable to White Insurance in the amount of eight hundred ninety-four dollars ($894.00) which was subsequently deposited into Respondent's bank account. (Petitioner's 3, sub B).
On July 13, a representative of Service Insurance Company notified Crown that they had not received the full annual premium for Great Wall and a binder charge of $81.00 was sent to White Insurance. (Petitioner's Exhibit 3 sub C).
On July 13, representatives of Service Insurance Company notified Respondent that coverage was bound for Great Wall's risk for only 33 days and a charge of $81.00 was sent to White Insurance. (Petitioner's Exhibit 3, sub D).
On July 13, representatives of Service Insurance Company mailed a cancellation notice to Great Wall and Crown indicating an $81.00 charge as due and owing. (Petitioner's Exhibit 3, sub)
On September 14, Crown sent a standard cancellation notice to both Corporate Group Services and Service Insurance Company. (Petitioner's Exhibit 3, sub H & I).
On November 8, representatives of Corporate Group Services notified Crown that an application for insurance was received but was rejected and returned to the agent's (Respondent) office. (Petitioner's Exhibit 3, sub F).
Neither Service Insurance Company nor Corporate Group Services issued a policy for the consumer, Great Wall.
Respondent refuses to return the premium monies received for the Great Wall coverage to Crown. Respondent owes Crown for the premium monies submitted by Crown.
COUNT II
On July 8, representatives of Chateau Madrid, Inc., a restaurant, entered into a premium finance agreement with Crown, through Respondent, which indicated the insurance coverage would be issued through Casualty Indemnity Exchange. (Petitioner's Exhibit 4, sub A).
On July 8, Respondent signed the premium finance agreement as broker/agent.
On July 25, pursuant to the premium finance agreement, Crown issued a check made payable to Respondent in the amount of three thousand five hundred eight dollars (3,508.00). The check was deposited into White Insurance's bank account. (Petitioner's Exhibit 4, sub b).
On August 30, Crown sent a standard cancellation notice to both Chateau Madrid and Casualty Indemnity Exchange and their managing general agents, Program Underwriters. (Petitioner's Exhibit 4, sub D).
As a result of the standard cancellation notice, the policy was reduced to a short-term policy which was effective July 15 and expired September 13, 1983.
On March 13, 1984, Program Underwriters notified Crown that they had not received a premium payment concerning this particular policy and that neither Respondent nor White Insurance was an authorized agent for Casualty Indemnity Exchange. (Petitioner's Exhibit 4, sub e).
Respondent never returned the premium monies he received to Crown. Respondent owes Crown for the premium monies he received from Crown.
COUNT III
On September 16, a representative of Tennis Trainer, Inc. requested that Respondent secure a multi-peril insurance policy for Tennis Trainer. Respondent secured a binder for Tennis Trainer indicating the insurance would be issued through Service Insurance Company.
On September 16, Respondent signed the binder as an authorized representative. (Petitioner's Exhibit 13, sub b).
On September 16, Respondent was not authorized to represent Service Insurance Company. (Petitioner's Exhibits 12 and 13, sub a and b).
On September 15, Jeffrey Rider, Vice President of Tennis Trainer issued a check in the amount of three hundred five dollars ($305.00) to White Insurance representing the downpayment necessary to secure the agreed business insurance coverage. Thereafter, Respondent, took no measures to secure insurance for Tennis Trainer other than issuing the binder.
Respondent has failed to submit the premium to secure the agreed upon insurance coverage on behalf of Tennis Trainer. Additionally, Respondent refused to return the premium payments to Tennis Trainer despite its demand (from Respondent) to do so. Tennis Trainer has directly forwarded the remainder of the premium to Service Insurance to secure the multi-peril coverage.
Service Insurance Company is owed a balance due of approximately
$305.00 from Respondent. COUNT VI
On May 5, Donald Powers entered into a premium finance agreement with Crown, through White Insurance. Pursuant to the agreement, the insurance coverage would be provided through Progressive American Insurance (Progressive).
On May 9, Crown issued a check made payable to White Insurance in the amount of two hundred ninety-nine dollars ($299.00) which was subsequently deposited into Respondent's bank account.
On October 1, the consumer, Donald Powers, requested that the policy be cancelled.
On October 25, Crown sent a standard cancellation notice to both the consumer and Progressive.
On October 19, Progressive notified both Crown and White Insurance that the gross unearned premium of two hundred twenty-six dollars ($226.00) was applied to the Agent's (White Insurance) monthly statement and Crown must therefore collect this amount from the Agent.
Progressive American never received any premium payments from Respondent concerning the subject policy.
On November 25, 1986, Progressive notified Petitioner that the policy was originally accepted on May 7, 1983 at an annual premium of four hundred sixty dollars ($460.00) and was cancelled on October 1, 1983, with Two Hundred twenty-six Dollars ($226.00) credited to Respondent's statement. Progressive never received any premium payment for this policy.
Respondent has failed to return to Crown the returned premium credit received on behalf of the Donald Powers' policy.
COUNT VII
On November 28, Russell Lung entered into a premium finance agreement with Crown through White Insurance. The insurance coverage for Lung was to be provided and issued through Interstate Underwriters.
On November 29, pursuant to the premium finance agreement with Russell Lung, Crown issued a check made payable to White Insurance in the amount of one hundred sixty-seven dollars (167.00) which was subsequently deposited into a bank account controlled by Respondent.
On February 14, 1984, Crown sent a standard cancellation notice to both the consumer and Interstate Underwriters. The policy for Russell Lung was cancelled before its normal expiration date and the unearned premium was credited to Respondent's account.
Respondent has not returned to Crown the unearned premium credit received for Lung's policy.
COUNT VIII
On December 6, representatives of Thomson's Lawn Care (Thomson) entered a premium finance agreement with Crown, through White Insurance, which indicated the insurance coverage would be provided through Northeast Insurance and Southern Underwriters as managing general agents.
On December 8, pursuant to the premium finance agreement, Crown issued a check made payable to White Insurance in the amount of one hundred fifty-one dollars ($151.00) which was subsequently deposited into a bank account controlled by Respondent.
On January 25, 1984, Crown sent a standard cancellation notice to both the consumer and Northeast Insurance Company/Southern Underwriters.
On February 8, 1984, Southern Underwriters notified Crown that they were never paid by White Insurance for Thomson's insurance.
On October 16, 1984, Crown was notified by representatives of Thomson's that immediately after making the down payment to White Insurance, Thomson notified White Insurance that the policy should be cancelled immediately since Thomson never operated as a business. (Petitioner's Exhibit 7, sub e).
Crown received the returned premium payment from Southern Underwriters even though the original payment to White Insurance by Crown was never forwarded to Southern Underwriters. Respondent refuses to return the unearned premium payment to Crown.
COUNT IX
On October 15, representatives of Comfort Inn entered a premium finance agreement with Crown, through White Insurance, which indicated the insurance coverage would be provided through Protective National Insurance Company and Interstate Fire and Casualty Company.
On November 4, pursuant to the premium finance agreement, Crown issued a check made payable to White Insurance in the amount of one thousand six hundred sixty dollars ($1,660.00) which was subsequently deposited into a bank account controlled by Respondent.
On March 1, 1984, Crown sent a standard cancellation notice to both Comfort Inn and the Insurance Companies involved.
On February 6, 1984, Comfort Inn's counsel, James W. Martin, forwarded a letter to the insurance companies involved and simultaneously notified Crown that White failed to remit funds to the insurance companies involved and as a result, the policy was cancelled and subsequently reinstated only after his client, Comfort Inn paid the premium directly to the respective insurers. (Petitioner's Exhibit 8, sub e).
On February 23, 1984, Irwin Lonschien of Crown responded to attorney Martin's letter and advised that the one thousand six hundred sixty dollars premium payment was forwarded to White Insurance pursuant to the premium finance agreement on November 4, 1983.
On July 23, 1984, William Edwards, a representative of Comfort Inn, wrote a letter to Dan Martinez of Eagle Underwriters advising that Comfort Inn had paid a premium to White Insurance and Comfort Inn no longer desired White Insurance to represent them in insurance matters.
Respondent, has not returned premiums received from Crown and is therefore indebted to Crown in the amount of one thousand six hundred sixty dollars.
COUNT X
On April 14, representatives of Royal Palm Motel entered into a premium finance agreement with Crown, through White Insurance which indicated insurance coverage would be provided through Casualty Indemnity- Exchange.
On April 18, pursuant to the premium finance agreement, Crown issued a check made payable to White Insurance in the amount of nine hundred seventy- seven dollars ($977.00) which was subsequently deposited into a bank account controlled by Respondent.
COUNT XI
On March 16, 1982, representatives of Flip's of West Broward entered a premium finance agreement with Crown, through White Insurance which indicated the insurance coverage would be provided through Service Insurance Company.
On March 19, 1982, pursuant to the premium finance agreement, Crown issued a check made payable to White in the amount of six hundred forty-eight dollars ($648.00) which was subsequently deposited in a bank account controlled by Respondent.
Sometime between March 1982 and June 20, 1982, White Insurance forwarded a premium payment for this coverage to Service Insurance Company.
On June 20, 1982, Crown sent a standard cancellation to the consumer and Service Insurance indicating the policy was to be cancelled.
By letter dated January 7, Service Insurance notified White Insurance that the policy had been cancelled and the returned premium for the policy was credited to the account of White Insurance.
Respondent, as agent/director of White Insurance has failed and refused to return to Crown the returned premiums received for Flip's of West Broward.
COUNT XII
On November 7, Paula Wilcoxon entered a premium finance agreement with Crown, through White Insurance, indicating the insurance coverage would be issued through Universal Casualty.
On November 8, pursuant to the premium finance agreement, Crown issued a check made payable to White Insurance in the amount of two hundred ninety-five dollars ($295.00) which was subsequently deposited into a bank account controlled by Respondent.
On December 15, Crown notified the consumer and Universal Casualty, by standard cancellation notice, that the policy was being cancelled.
Respondent has refused and continues to refuse to return the unearned premium to Crown.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this proceeding. Section 120.57(1), Florida Statutes.
The parties were duly noticed pursuant to the notice provisions of Chapter 120, Florida Statutes.
The authority of the Petitioner is derived from Chapter 626, Florida Statutes.
Sections 626.611 and 626.621 Florida Statutes, authorizes the Petitioner, Department of Insurance, to suspend, revoke or otherwise discipline a licensee for any of the grounds enumerated therein.
During times material, Respondent, Kenneth Everett White, was an officer and director of White Insurance Agency, Inc.
Respondent, as a general lines insurance agent who was an officer and director of White Insurance Agency, Inc. remained personally and fully liable and accountable for any wrongful acts, misconduct, or violations of any provisions of the insurance code which were committed by Respondent or by any person under his direct supervision and control while acting on behalf of White Insurance Agency, Inc. Section 626.734, Florida Statutes.
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 regular course of business, shall account for and pay the same to the insurer, insured, or other persons entitled thereto. Section 626.561, Florida Statutes.
Respondent, by accepting premium funds from consumers and others and failing to secure an insurance policy pursuant to the premium finance agreements referred to herein, held such funds as a fiduciary. Respondent, by failing to return promptly the funds received to the consumers or others entitled thereto, demonstrated a lack of fitness or trustworthiness to engage in the business of insurance within the purview of Section 626.611, Florida Statutes as is alleged in Counts I, II, III, VI, VII, VIII, IX, X, XI, and XII of the Administrative Complaint filed herein.
Respondent, by accepting premium funds from consumers and others and failing to account for such fiduciary funds received under his license and by thereafter failing to promptly notify the premium finance companies or the consumers that the insurance agreed to could not be obtained, and by failing to Statutes, and has otherwise shown himself to be both a source of injury or loss to the public and detrimental to the public interest within the purview of Section 626.621(6), Florida Statutes as is alleged in Counts I, II, III, VI, VII, VIII, IX, X, XI and XII of the Administrative Complaint.
Based on the foregoing conduct, Respondent has engaged in unfair or deceptive acts involving insurance within the purview of Subsection 626.9521, Florida Statutes as is alleged in Counts I, II, III, VI, VII, VIII, IX, X, XI and XII of the Administrative Complaint.
Respondent, by knowingly collecting a sum as a premium for insurance which was not then provided and failing to promptly return funds received by those entitled thereto, thereby engaged in proscribed conduct within the purview of Subsection 626.9524(1)(o)(1), Florida Statues as is alleged in Counts I, II, III, VI, VII, VIII, IX, X, XI and XII of the Administrative Complaint.
RECOMMENDATION
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:
That the Petitioner, Department of Insurance and Treasurer, enter a Final Order revoking all licenses and qualifications for licensure of Respondent, Kenneth Everett White, as an insurance agent in the State of Florida.
RECOMMENDED this 20th day of March, 1987, in Tallahassee, Florida.
JAMES E. BRADWELL
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 20th day of March, 1987.
ENDNOTE
1/ Unless otherwise noted, all dates are in 1983.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2646
Rulings on Petitioner's Proposed Recommended Order.
1. Paragraph 2, substantially adopted with the modifications that Respondent, Kenneth Everett White, was an officer and Director of White Insurance Agency, Inc. for the period lasting through early April, 1984 and therefore Respondent was officer and Director of White Insurance Agency, Inc. during all times material to the allegations contained in the Administrative Complaint.
2. Paragraphs 13, 14, 23, 24, 32, 33, 43, 44, 51, 52, 59, 60, 68, 69, 76,
77, 84, and 85, were rejected as repetitive and unnecessary based on the adoption of the proposed paragraphs 1 and 2, as modified.
Rulings on Respondent's Proposed Memorandum
1. Respondent's proposed statements were rejected as legal arguments and conclusions and not findings of fact based on evidence.
COPIES FURNISHED:
Richard E. Turner, Esquire Office of Legal Services Department of Insurance and Treasurer
413-B Larson Building Tallahassee, Florida 32399-03000
Kenneth Everett White Pro se Post Office Box 6249
Pompano Beach, Florida 33060
Hon. William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level
Tallahassee, Florida 32399-0300
Docket for Case No: 86-002646
Orders for Case No: 86-002646
| Issue Date |
Document |
Summary |
|
Apr. 10, 1987 |
Agency Final Order
|
|
|
Mar. 20, 1987 |
Recommended Order
|
Respondent found guilty of unlawful conduct as an Insurance Agent. Recommen- ded revoking all licenses & qualifications for licensure of Res. in Florida.
|
