STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GEORGE JESSE BAILEY, )

)

Petitioner, )

)

vs. ) CASE NO. 86-3723

) DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Respondent. )

)

RECOMMENDED ORDER

A final hearing was held in the above styled case on November 19, 1986 before Donald D. Conn, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented as follows:

Petitioner: George J. Bailey, pro use

5505 Pine Forest Court, #101

Tampa, Florida 33615

Respondent: David G. Poucher, Esquire

413-B Larson Building Tallahassee, Florida 32399

At the hearing, Petitioner testified on his own behalf, and called one other witness. Respondent called two witnesses to testify. One exhibit was introduced by Petitioner and three by Respondent. A transcript of the hearing was filed on November 26, 1986 and a ruling on proposed findings of fact filed by the parties is included in the Appendix to this recommended Order.

ISSUE

The issue in this case is whether Petitioner should be allowed to take the examination for licensure as a life and health insurance agent in the state of Florida despite the fact that Petitioner conducted business in this state as a life and health agent under a nonresident license when in fact he was a resident of Florida, and after his Virginia resident license had been canceled.

FINDINGS OF FACT

1. Petitioner filed an application with Respondent for examination and licensure as an ordinary life and health insurance agent on or about February 24, 1986. His application indicates he is a resident of Florida, and had been a resident for one year and three months at the time he filed his application. In response to a question about licensure in other states, the application states, "License in Virginia 1976 to present."

   
   

2. From November, 1984 until April 25, 1986, Petitioner conducted business as an ordinary life and health insurance agent in the State of Florida under a

   nonresident license issued to him in November, 1984. During this time, he sold one hundred and twenty-five insurance policies in the State of Florida on a full- time basis, and there is no evidence he sold any policies in Virginia. On his application for nonresident licensure in October, 1984, Petitioner indicated he was licensed in Virginia, and would be active in the insurance business in Florida for two months per year.

   
   

3. Petitioner was licensed as a life and health insurance agent in Virginia from April 13, 1979 to July 9, 1985, at which time his license was canceled without prejudice for nonpayment of required annual renewal fees.

   
   

4. Since November, 1984 Petitioner has resided permanently in the Tampa area, although when he initially arrived in Florida he did not know if he would remain permanently.

   
   

5. At all times material hereto, Petitioner has worked as an insurance agent for Mutual of Omaha Insurance Company. From November 24, 1984, he worked out of the company's Tampa office, and prior to that time he worked out of their office in Roanoke, Virginia. Mutual of Omaha transferred company records regarding Petitioner to Tampa on November 24, 1984. According to Petitioner, it was his understanding that the Roanoke office of Mutual of Omaha would take care of paying his annual license renewal fees in Virginia. Ken Boulden, Assistant Vice President for Licensing at Mutual of Omaha, confirmed that some of the company's local offices pay their agents' license fees, but this is not a general company policy, and he could not confirm whether this was the policy of the Roanoke office.

   
   

6. It does not appear that Petitioner intentionally falsified his application of February 24, 1986 regarding his license status in Virginia. He first learned of the cancellation of his Virginia license on April 25, 1986, and up to that time assumed that Mutual of Omaha's Roanoke office was taking care of the payment of his annual renewal fees.

   
   

7. Petitioner correctly completed his February 24, 1986 application by indicating he had been a resident of Florida for one year and three months. In view of this, however, Petitioner did not timely file his application for examination and licensure since he worked exclusively, and on a full-time basis, in Florida from November, 1984 to April 25, 1986 under a nonresident license.

   He has not conducted insurance business in Florida since April 25, 1986, pending the determination of this case.

   
   

8. On or about August 5, 1986, Respondent notified Petitioner of its intent to deny his application for examination and licensure based upon the facts set forth above, and Petitioner timely filed his request for a hearing.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this case. Section 120.57(1), Florida Statutes.

   
   

10. Respondent is authorized to issue nonresident licenses to persons who are not residents of this state but who are licensed in another state. Nonresident licensure is conditioned upon the licensee not having a place of business in Florida, not being a resident in Florida, and maintaining a currently valid license in another state. Sections 626.792, 626.835, Florida Statutes.

11. The facts in this case establish that Petitioner did have a place of business in Florida from November, 1984 to April 25, 1986, from which he conducted insurance business and sold one hundred and twenty-five policies, and that he did not maintain a currently valid license in Virginia after July 9, 1985. He also resided permanently in Florida and worked exclusively in the Tampa area from and after November 24, 1984. It therefore has been established that Petitioner was in violation of Sections 626.792 and 626.835, Florida Statutes.

    
    

12. Respondent contends that since Petitioner operated in Florida under a nonresident license while in fact he was a resident, he must be denied examination and licensure as an ordinary life and health agent. Respondent cites the following provisions in support of its position:

    
    

    Section 626.792(3), Florida Statutes -- No such applicant or licensee shall have a place of business in this State. . .

    
    

    Section 626.611, Florida Statutes --

    The department shall deny. . . the license of any agent . . . if it finds that as to the applicant. . . any one or more of the following applicable grounds exist:

    1. Lack of one or more of the qualifications for the license or permit as specified in

       this code.

    2. Material misstatement, misrepresentation, or fraud in obtaining the license or permit

       or in attempting to obtain the license or permit.

       (4) If the license or permit is willfully used, or to be used, to circumvent any of

       the requirements or prohibitions of this code.

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

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

       
       

       Additionally, Section 626.621, Florida Statutes, allows Respondent to, in its discretion, deny the license of any applicant who has violated a statutory provision of Chapter 626, Florida Statutes, or any lawful rule or order of Respondent, when that violation does not meet the criteria for mandatory denial as set forth in Section 626.611, above.

       
       

13. While the facts of this case establish that a violation occurred, it does not appear that the violation was willful, or fraudulent, or that Petitioner lacks fitness or trustworthiness to engage in the business of insurance. He offered a reasonable explanation for his failure to pay his required renewal fees in Virginia, and Mutual of Omaha's Vice President for Licensing confirmed Petitioner's testimony that some of their local offices do take care of license renewals for their agents. It is apparent that Petitioner inadvertently allowed his license in Virginia to be canceled for nonpayment of renewal fees. Although he did in fact permanently reside in the Tampa area from November, 1984, to the time of his application, and did work exclusively in

    Florida, he did not know if he would remain permanently when he initially arrived. He clearly did not act in a timely manner in this regard, but he honestly completed his application for licensure in February, 1986 by indicating he had been a resident of Florida for a year and three months at that time.

    Petitioner did not attempt to misstate or misrepresent the facts on his application.

    
    

14. Petitioner's violations were not fraudulent, intentional or willful, and thus the mandatory denial of his application is not required under Section 626.611. Due to the fact that Petitioner has already been denied the ability to conduct insurance business in this state since April 25, 1986 while this matter has been under review, and since Respondent has the authority to exercise discretion in the application of the provisions of Section 626.621, Florida Statutes, it is recommended that Respondent exercise that discretion and approve Petitioner's application for examination and licensure. Bowling v. Dept. of Insurance, 394 So.2d 165 (Fla. 1st DCA 1981).

RECOMMENDATION

Based upon the foregoing, it is recommended that Respondent enter a Final Order approving Petition's application for examination and licensure filed on or about February 24, 1986.

DONE AND ENTERED this 11th day of December, 1986 in Tallahassee, Florida.

DONALD D. CONN

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32381

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 11th day of December, 1986.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 86-3723

Rulings on Respondent's Findings of Fact:

1,2. Adopted in Finding of Fact 2.

1. Rejected as irrelevant and unnecessary, and outweighed by other competent substantial evidence.

2. Adopted in Findings of Fact 2,4,5.

COPIES FURNISHED:

George Jesse Bailey

5505 Pine Forest Ct. #101

Tampa, Florida 33615

David G. Poucher, Esquire Department of Insurance

and Treasurer

1. Larson Building Tallahassee, Florida 32301

   
   

   Honorable William Gunter State Treasurer and Insurance Commissioner

   The Capitol, Plaza Level Tallahassee, Florida 32301

   
   

   Don Dowdell, Esquire General Counsel

   The Capitol, Plaza Level Tallahassee, Florida 32301

   
   

   =================================================================

   AGENCY FINAL ORDER

   =================================================================

   
   

   OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE

   
   

   
   

   IN THE MATTER OF

   CASE NO. 87-L-28RET

   GEORGE JESSE BAILEY DOAH CASE NO. 86-3723

   
   

   License Denial

   
   

   Ordinary Life, including Health Agent

   /

   
   

   FINAL ORDER

   
   

   THIS CAUSE came before the Insurance Commissioner of the State of Florida for consideration and final agency action. On February 24, 1986, th Petitioner, GEORGE JESSE BAILEY, filed with the Department of Insurance and Treasurer an application for examination and licensure as an Ordinary Life and Health insurance agent. On August 5, 1986, the Department of Insurance and Treasurer notified Petitioner that his application for examination and licensure was denied. On or about September 8, 1986, the Petitioner filed a Request for Hearing. On September 22, 1986, the matter was referred to the Division of Administrative Hearings. On October 7, 1986, a Notice of Hearing was filed by the Division of Administrative Hearings. On November 19, 1986, a formal administrative hearing was held in Tampa, Florida before the Honorable Donald D. Conn, Hearing Officer for the Division of Administrative Hearings. After consideration of the evidence and argument presented at the hearing, and after further consideration of the proposed findings of fact and conclusions of law submitted by the parties, the Hearing Officer on December 11, 1986, issued a Recommended Order (attached as Exhibit "A") to the Insurance Commissioner. The

   Hearing Officer recommended that the Department of Insurance and Treasurer enter a Final Order approving Petitioner's application for examination and licensure. On December 22, 1986, the attorney who represented the Department of Insurance at the hearing filed Exceptions to the Hearing Officer's Recommended Order.

   
   

   RULINGS ON EXCEPTIONS

   
   

   1. The Respondent's Exceptions to Recommended Order were received by the Department of Insurance on December 22, 1986, and were timely filed. The Respondent's Exceptions to Recommended Order contains nine (9) numbered paragraphs which will be specifically addressed as follows:

      
      

      1. The Respondent's first, second, third, and fourth exceptions concern a conclusion of law, i.e., the Hearing Officer's interpretation of the applicable statutes. In the Conclusions of Law section of the Recommended Order, the Hearing Officer correctly interpreted a violation of the Insurance Code as being within the purview of the discretionary provisions of Section 626.621, Florida Statutes.

         
         

         The Hearing Officer, however, erred in his interpretation that the same violation was not within the purview of the compulsory provisions of Section 626.611, Florida Statutes. The Hearing Officer cited Bowling vs. Department of Insurance, 394 So.2d 165 (Fla. 1st DCA 1981) as authority for supporting his conclusion that Section 626.611, Florida Statutes, did not apply. Further, the Hearing Officer concluded that the actions of the Petitioner did not appear fraudulent, intentional, or willful.

         
         

         The Hearing Officer erred in his interpretation of Section 626.611, Florida Statutes, for two reasons. The first reason is that Bowling addresses revocation proceedings or disciplinary action to be taken against the license.

         In the instant case, a denial of a license application was involved, not the revocation or disciplinary action to be taken against an existing license.

         
         

         The Petitioner seeking the license is the party asserting the affirmative of the issue, both before the Department in preliminary proceedings and before the hearing officer in formal proceedings. In accordance with general law, applicable in civil court proceedings, the burden of proof, apart from statute, is on the party asserting the affirmative of an issue before an administrative tribunal. Balino v. Department of Health and Rehabilitative Services, 348 So.2d

         349 (Fla. 1st DCA 1977).

         
         

         The second reason that the Hearing Officer erred in his interpretation is that those provisions cited in Bowling, i.e., Section 626.611(4), (9), (10), (13), Florida Statutes, draw their essential elements from a criminal statute (Section 626.561, Florida Statutes) combined with the fact that the disciplinary action sought by the Department (revocation) is most severe. Willfulness is either expressly stated or implied in Section 626.611(4), (9), (10), (13), Florida Statutes.

         
         

         However, the Department of Insurance does not construe, and neither did the court in Bowling, that Section 626.611(1), Florida Statutes, requires an element of fraud, intent, or willfulness.

         
         

         The Hearing Officer found in the Findings of Fact in the Recommended Order that Petitioner was clearly in violation of Section 626.792 and 626.835, Florida Statutes. Further, Petitioner from November, 1984 to April, 1986 lived in Florida and at all material times hereto worked as an insurance agent and sold

         policies out of an office located in Tampa, Florida, yet was licensed as a non- resident insurance agent.

         
         

         Based on the above, it is concluded that error was made concerning a conclusion of law and that Section 626.611(1), Florida Statutes, does apply and is applicable.

         
         

      2. Respondent's fifth exception concerns a finding of fact, i.e., whether or not the evidence and record support a finding that the violation was not willful or fraudulent. Based on the substantial competent evidence contained in the record and the fact that the Hearing Officer was present to observe the parties, witnesses, and evidence presented, it is concluded that the Hearing Officer properly interpreted the evidence and testimony presented.

         
         

      3. Respondent's sixth exception concerns a finding of fact, i.e., whether or not Petitioner made a material misstatement, misrepresentation, or otherwise committed fraud in attempting to obtain a license. Based on the substantial competent evidence contained in the record and the fact that the Hearing Officer was present to observe the parties, witnesses, and evidence presented, it is concluded that the Hearing Officer properly interpreted the evidence and testimony presented.

         
         

      4. Respondent's seventh exception concerns a finding of fact, i.e., whether or not Petitioner offered a reasonable explanation for his failure to pay his required renewal fees for his insurance license in the State of Virginia. Based on the substantial competent evidence contained in the record and the fact that the Hearing Officer was present to observe the parties, witnesses, and evidence presented, it is concluded that the Hearing Officer properly interpreted the evidence and testimony presented.

         
         

      5. Respondent's eighth exception concerns a finding of fact, i.e., whether or not Petitioner attempted to misstate or misrepresent the facts on his application. Based on the substantial competent evidence contained in the record and the fact that the Hearing Officer was present to observe the parties, witnesses, and evidence presented, it is concluded that the Hearing Officer properly interpreted the evidence and testimony presented.

         
         

      6. Respondent's ninth exception concerns a conclusion of law, i.e., whether or not Petitioner's actions constituted violations of Section 626.621(2), (3), Florida Statutes. Based on the above, it is concluded that the discretionary provisions of Section 626.621(2), Florida Statutes, do apply and are applicable. The violations, Sections 626.792 and 626.835, Florida Statutes, are included within the purview of Section 626.621(2), Florida Statutes, since the statute specifically states, "Violation of any provision of the Code..." (emphasis added). However, the Department rejects Respondent's Exception based on Section 626.621(3), Florida Statutes, and concludes that Section 626.621(3), Florida Statutes, is inapplicable because that subsection refers to violations of rules and orders which did not occur in this case.

Upon the consideration of the foregoing and the record, and being otherwise fully advised in the premises, it is:

ORDERED:

1. The Hearing Officer's findings of fact are adopted as the agency's Findings of Fact with one exception. In paragraph seven (7) of his Findings of Fact, the Hearing Officer states that the "Petitioner correctly completed

   his...application..." In consideration of the foregoing analysis of the exceptions filed in this matter, together with a review of the record in this case, the word "correctly" is inaccurate and therefore must be rejected.

   
   

2. The Hearing Officer's Conclusions of Law are rejected to the extent that all subsections under Section 626.611, Florida Statutes, were found to be inapplicable.

   
   

3. The Hearing Officer's Recommendation that the Department of Insurance exercise its discretion and approve Petitioner's application for examination and licensing is rejected as inappropriate to the disposition of the case. It was unequivocally found in the Conclusions of Law that Petitioner violated one or more provisions of the Insurance Code, i.e., Sections 626.792 and 626.835, Florida Statutes. It is completely unacceptable to merely license such an individual without any Department action and completely ignore a violation of the Insurance Code.

Accordingly, the application of GEORGE JESSE BAILEY, Petitioner, for examination and licensure is DENIED.

The Petitioner shall be permitted to reapply after three (3) months of issuance of this Order, and the Department shall not deny said reapplication based upon the circumstances involved in this case.

Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Fla.R.App.P. Review proceedings must be instituted by filing a petition or notice of appeal with the General Counsel, acting as the agency clerk, at 413-B Larson Building, Tallahassee, Florida, and a copy of the same with the appropriate district court of appeal within thirty (30) days of rendition of this Order.

DONE and ORDERED this 27th day of January 1987.

BILL GUNTER

Insurance Commissioner and Treasurer

ANN WAINWRIGHT

Assistant Insurance Commissioner and Treasurer

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing FINAL ORDER has been furnished by Certified Mail to: HONORABLE DONALD D. CONN, Hearing Officer, Division of Administrative Hearings, 2009 Apalachee Parkway, Tallahassee, Florida; MR. GEORGE JESSE BAILEY, 5505 Pine Forest Court, #101, Tampa, Florida 33615; and Hand-Delivered to: DAVID G. POUCHER, ESQUIRE, Department of Insurance, 413-B Larson Building, Tallahassee, Florida this 27th day of January, 1987.

Richard E. Turner Attorney

Office of Legal Services 413-B Larson Building

Tallahassee, Florida 32399-0300

(904)488-4540

Docket for Case No: 86-003723

Orders for Case No: 86-003723