STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 91-6053

)

BETTY CLAIRE FIQUETTE, )

)

Respondent. )

)

RECOMMENDED ORDER

This case was heard pursuant to notice on March 5, 1992, in Tallahassee, Florida by Stephen F. Dean, designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Joseph D. Mandt, Esquire

Department of Insurance and Treasurer

412 Larson Building Tallahassee, FL 32399-0300

For Respondent: Samuel Lewis, Esquire

1017-A Thomasville Road Tallahassee, FL 32303

ISSUE

Whether the Respondent committed the acts alleged in the Administrative Complaint?

PRELIMINARY STATEMENT

On August 23, 1991, the Department of Insurance and Treasurer, filed a five-count Administrative Complaint (Case No. 91-L-385JDM) against the insurance licenses of Respondent, Betty Claire Fiquette. The Administrative Complaint alleged that Respondent had violated various provisions of the Florida Insurance Code. On September 13, 1991, Respondent filed her answer to the Administrative Complaint. The Hearing Officer noticed the case for hearing initially for January 8, 1992 on October 14, 1991; however, the Department requested a continuance and the case was rescheduled for March 5, 1992 on December 27, 1991.

At the Final hearing, the Petitioner presented the testimony of Cindy Amadio Davis, Kelly Carroll, Thomas Schilb, Melissa Schilb, Leola Greene, and Jackie Robinson. The late filed deposition testimony of James Brewster was entered into evidence. Respondent presented the testimony of Lester L. Sellers, Johnny L. Morgan, and Ronnie D. Strickland. Respondent testified in her own

behalf. The Petitioner's exhibits numbered one through six were entered into evidence by Petitioner.

Subsequent to the hearing, the parties submitted proposed findings of fact in the form of Proposed Orders which were read and considered. Annex A states which of the proposed findings were adopted, and which were rejected and why.

FINDINGS OF FACT GENERAL FINDINGS

1. At all times relevant to the dates and occurrences set forth in the Petitioner's Administrative Complaint of August 23, 1991, Respondent, Betty Claire Fiquette, was licensed in the State of Florida as a life and health (debit) insurance agent, as a life and health insurance agent, and as a general lines - limited to industrial fire insurance agent. (Pet. No. 1)

   
   

2. At all times relative to the dates and occurrences set forth in the Petitioner's Administrative Complaint, Respondent was employed by the Independent Life and Accident Insurance Company (hereinafter referred to as "Independent") as a life insurance agent. (Pet. No. 1, T. 201).

   
   

   FINDINGS OF FACT AS TO COUNT I OF PETITIONER'S ADMINISTRATIVE COMPLAINT

   
   

3. On or about August 28, 1989, Respondent solicited and procured from Kelly Carroll of Tallahassee, an application for emergency hospitalization insurance for her son, Sean Carroll. (Pet. No. 3). This was the only hospitalization insurance which Ms. Carroll could afford at that time for her son; however, she advised the Respondent that she wanted insurance to cover doctor's visits.

   
   

4. Independent issued an emergency hospitalization insurance policy, number 1816130A, to Kelly Carroll. (Pet. No. 3)

   
   

5. On or about March 19, 1990, the Respondent called Ms. Carroll and told her that the company had a rider which would cover doctor's visits and prescription medications. (T 78,81,94). The Respondent procured from Kelly Carroll an application for an outpatient surgery rider for Independent policy number 1816130A. (T. 78, 81, 94). Said rider was issued by Independent. (Pet. No. 3).

   
   

6. Said policy rider provided for payment by Independent for expenses for two doctor visits and outpatient surgery for Sean Carroll. It did not cover prescriptions. (Pet. No. 3, T. 205)

   
   

7. Ms. Carroll subsequently had to take her son to the doctor. She had to pay for prescriptions and for doctor's visits in excess of the two covered visits. See T 78 et seq.

   
   

8. Ms. Carroll did not testify that the Respondent represented to her that the policy would pay for all doctor's visits. The Respondent did not tell Ms. Carroll how many doctor's visits were covered. The Respondent did tell Ms. Carroll that the policy rider would pay for prescriptions. However, it is clear from Ms. Carroll's testimony that coverage for the prescriptions was not material to her decision to take out the coverage.

9. No evidence was offered that Respondent intentionally misstated the prescription coverage to Ms. Carroll.

   
   

   FINDINGS OF FACT AS TO COUNT II OF PETITIONER'S ADMINISTRATIVE COMPLAINT

   
   

10. On or about January 30, 1989, Respondent sold a health insurance policy to Melissa Schilb of Tallahassee. (Pet. No. 3).

    
    

11. The policy sold by Respondent to Mrs. Schilb was a fixed-rate indemnity health insurance policy with preset payment amounts for each type of covered medical procedure. (Pet. No. 4).

    
    

12. Mrs. Schilb was interested in purchasing health insurance at the time of said solicitation because she and her husband wished to have a baby. (T. 97).

    
    

13. The Respondent went over the details of the policy coverage with the Schilbs. (T-101-102,104).

    
    

14. Mr. Schilb could not afford the more expensive policy sold by his employer (T-103 and 105).

    
    

15. Having explained the coverages amounts, the Respondent represented that the coverages would be sufficient to cover most of Mrs. Schilb's childbirth related medical expenses, and that the Schilb's would only have to pay a few hundred dollars. (T. 98, 100, 106, 109).

    
    

16. The Schilbs' health insurance policy paid $800 to the hospital and

    $600-800 to the doctor for prenatal care. The Schilbs had approximately $3,000 in hospital expenses arising from the delivery of Mrs. Schilb's child and $2,000 in doctor's bills during the course of her pregnancy. (T. 102, 110).

    
    

    FINDINGS OF FACT AS TO COUNT III OF PETITIONER'S ADMINISTRATIVE COMPLAINT

    
    

17. In 1988, Independent Life issued two graded life insurance policies to Leola Greene. Ms. Greene examined these two policies at the hearing, and identified her signature on the one issued 9/6/88. She denied the signature on the policy application dated 6/8/88 was her signature.

    
    

18. On 5/22/89 Ms. Greene signed an application for a graded life insurance policy in the amount of $3,000.00. Ms. Greene identified her signature on this policy. On 6/18/90 Ms. Greene signed an application for a graded life insurance policy in the amount of $3,000.00. Ms. Greene identified her signature on this policy.

    
    

19. Leola Greene's contradictory testimony was that she never had taken out a $3,000 graded life policy, although she identified her signature on two such policies. (T 121-123).

    ^ Ms. Greene admitted that the Respondent went over the policies with her every time Ms. Greene bought a policy, and the Respondent's descriptions of the policies was accurate. (T 126, 127).

    
    

20. Ms. Greene let her policies lapse numerous times. (T 167, 217).

21. Ms. Greene was afforded the opportunity by Independent Life to purchase $5,000 of insurance, but was unable to afford the premiums.

    
    

22. Ms. Greene's $5,000 life insurance policies lapsed, and she purchased the $3,000 graded life policies.

    
    

23. The allegations regarding the Respondent and Ms. Greene are not proven.

    
    

    FINDINGS OF FACT AS TO COUNT IV OF PETITIONER'S ADMINISTRATIVE COMPLAINT

    
    

24. Jackie L. Robinson had been buying various Independent insurance products from the Respondent since the 1980's. (T 129). He testified that he thought his two children were covered under health insurance which he had purchased. Mr. Robinson's testimony is vague as to the time of the purchase and the period the children were covered. Mr. Robinson was unable to identify the policies presented to him at the hearing.

    
    

25. The Respondent admitted she had sold Mr. Robinson a health insurance policy, and a policy which covered the health of his children. However, Robinson let the policies on the children lapse. (T 131,221,222).

    
    

26. Although the policies were introduced and their dates can be determined, Mr. Robinson's testimony was not specific about the time during which the children's medical bills were not covered.

    
    

27. According to Mr. Brewster, Mr. Robinson did not make a claim against the policy on the children while it was in effect.

    
    

28. The allegations regarding Respondent and Mr. Robinson are not proven.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

30. The Department must show by clear and convincing evidence that the Respondent committed the acts alleged in the administrative complaint. Ferris

    v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

31. Each of the five counts of the Administrative Complaint filed against the Respondent alleges that she violated Sections 626.611(5),(7),(9), (13); 626.621(2),(6); 626.9521; 626.9541(1)(K)1., Florida Statutes, and Rule 4- 9.005(1), Florida Administrative Code. No evidence was presented on Count V.

    
    

32. Sections 626.621(6);626.9521 and 626.9541, supra, relate to unfair and deceptive trade practices. There was no showing that the Respondent engaged in any such practices.

    
    

33. Subsections 626.611(5),(7),(9) and (13) address respectively: willful misrepresentation, demonstrated lack of fitness or trustworthiness; fraudulent or dishonest practices, and willful violation of the law or rules. In the absence of demonstrating that the Respondent made misrepresentations, the Department fails to demonstrate any of the other violations. In doing so, the

    Department must show that the misrepresentations were willful. See Bowling v. Department of Insurance, 394 So.2d 165, (1 DCA-1981).

    
    

34. Regarding Count I, Ms. Carroll's complaint was that the policy did not cover all the child's doctor visits. Ms. Carroll's testimony was she had originally taken out emergency medical coverage for her son with the Respondent, and that subsequently the Respondent had called her and told her that "they had a policy that would pay for doctor visits and prescriptions..." Ms. Carroll's testimony stops short of saying that Ms. Fiquette represented the rider would cover all doctor's visits. See T 78. The policy did pay for doctor visits; however, it was limited to two such visits. Therefore, it is concluded that there was no misrepresentation regarding the doctor's visits.

    
    

35. Ms. Fiquette did represent to Ms. Carroll that the policy would pay for the prescriptions. Although this was not material to Ms. Carroll taking out the policy and was not the gravamen of Ms. Carroll's complaint, it was erroneous. The Department's burden went beyond showing that it was merely an erroneous statement because the Department was required to demonstrate willfulness. No evidence was introduced that Ms. Fiquette knew or should have known that this statement was in error. Ms. Fiquette's misstatement about the prescription coverage was not shown to be willful, and does not constitute a violation of Subsections 626.611(5),(7),(9),(13); 626.621(6); 626.9521; 626.9541(1)(K)1., Florida Statutes, and Rule 4-9.005(1), Florida Administrative Code.

    
    

36. Regarding Count II, Ms. Fiquette told the Schilbs exactly what the policy paid. She represented the policy would cover most of their bills. This was not a statement about the policy, but a statement about the sufficiency of the policy. There is no evidence that the Respondent knew that the policy would not cover most of the couple's bills. The evidence indicates that this representation came after the couple had taken out the policy, and after Ms. Schilb was pregnant. It was not an inducement to the Schilbs deciding to take out the policy, and it was not a misrepresentation about the policy. Although Ms. Fiquette's statement was inaccurate, no evidence was introduced that Ms. Fiquette knew that the information was inaccurate, or that she was charged with knowledge of medical expenses and was responsible for statements made about the sufficiency of coverages. Ms. Fiquette's statements were not material or willful, and did not constitute a violation of Sections 626.611(5),(7),(9), (13); 626.621(2),(6); 626.9521; 626.9541(1)(K)1., Florida Statutes, and Rule 4- 9.005(1), Florida Administrative Code.

    
    

37. No substantial competent evidence was produced that the Respondent committed any of the acts alleged in Counts III and IV. Counts III and IV were not proven.

    
    

38. Several proposed findings related to failure to deliver policies or riders. The Respondent was not charged specifically with failing to deliver a policy or rider. Therefore, these findings were rejected a irrelevant.

    
    

39. The only violation charged which arguably is applicable to the proven facts is Section 626.621(2), supra, which provides for discretionary discipline of a licensee for "Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or appointment." However, under the concept of notice pleading which has evolved in the administrative forum, the Respondent was entitled to notice of the specific facts under which the Department sought to charge her. The Administrative Complaint fails to specify such facts.

40. Count I charges, "Betty Claire Fiquette stated that said policy rider was a new type of rider issued by Independent that would fully cover the cost of doctor visits and prescription medication purchases incurred by Sean Carroll," and "In reliance in part of said false statement, Kelly Carroll purchased the aforementioned policy rider. . ." As stated above, the Respondent's representations about the payment for doctor's visits were not misrepresentations, and the sum of Ms. Carroll's testimony indicates that Ms. Fiquette's representations about the prescriptions were not willfully incorrect or material to Ms. Carroll's decision to take out the rider.

RECOMMENDATION

Based upon the consideration of the facts, and in view of the conclusions of law, it is,

RECOMMENDED:

That a Final Order be entered dismissing the charges against the Respondent.

DONE and ENTERED this 1st day of May, 1992, in Tallahassee, Florida.

STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 1st day of May, 1992.

Petitioner's Facts

ANNEX A CASE NO. 91-6053

Paragraphs 1 through 6 adopted.

Paragraph 7 rejected "all of," adopted remainder. Paragraphs 8 and 9 rejected as irrelevant.

Paragraph 10 adopted.

Paragraph 11 rejected as irrelevant. Paragraphs 12 through 16 adopted.

Paragraph 17 rejected as irrelevant.

Paragraphs 18 through 22 rejected as contrary to facts. Paragraph 23 adopted.

Paragraph 24 rejected as contrary to facts. Paragraph 25 rejected as irrelevant.

Paragraphs 26 through 28 rejected as contrary to facts. Paragraphs 29 through 31 adopted and restated.

Paragraphs 32 and 33 rejected as irrelevant. Paragraphs 34 and 35 rejected as contrary to facts. Paragraphs 36 through 39 rejected as irrelevant.

Respondent's Facts

Paragraphs 1 through 3 adopted. Paragraph 4 rejected as argument. Paragraphs 5 and 6 adopted.

Paragraph 7 rejected as irrelevant. Paragraphs 8 through 14 adopted.

Paragraph 15 rejected as irrelevant. Paragraphs 16 and 17 adopted.

Paragraph 18 rejected argument. Paragraph 19 rejected as unnecessary. Paragraph 20 rejected as unnecessary. Paragraph 21 rejected as irrelevant.

COPIES FURNISHED:

Tom Gallagher, Commissioner Department of Insurance

and Treasurer

The Capitol, Plaza Level Tallahassee, FL 32399-0300

Joseph D. Mandt, Esquire Department of Insurance

and Treasurer

412 Larson Building Tallahassee, FL 32399-0300

Samuel Lewis, Esquire 1017-A Thomasville Road Tallahassee, FL 32303

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

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

AGENCY FINAL ORDER

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

OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE

IN THE MATTER OF:

DOAH CASE NO. 91-6053

BETTY CLAIRE FIQUETTE CASE NO. 91-1-385JDM

/

FINAL ORDER

THIS CAUSE came on before the Treasurer and Insurance Commissioner for the State of Florida, Department of Insurance (hereinafter referred to as the "Department"), for consideration and final agency action. On August 23, 1991, an Administrative Complaint was filed, charging BETTY CLAIRE FIQUETTE (hereinafter referred to as the "Respondent") with violations of various provisions of the Florida Insurance Code. The Respondent timely filed a request for a formal hearing, pursuant to Section 120.57(1), Florida Statutes. The matter was heard before Stephen F. Dean, Hearing Officer, Division of Administrative Hearings (hereinafter referred to as the "Hearing Officer") on March 5, 1992 in Tallahassee, Florida. After consideration of the evidence, the argument and testimony at hearing, the Hearing Officer issued his Recommended Order on May 1, 1992 to the Treasurer and Insurance Commissioner. (Exhibit "A", attached.) The Hearing Officer recommended that a final order be issued, dismissing the Administrative Complaint in its entirety.

On May 11, 1992, both the Respondent and the Department filed Exceptions to the Recommended Order. (Exhibits "B" and "C", attached.)

RULINGS ON RESPONDENT'S EXCEPTIONS TO RECOMMENDED ORDER

1. The Respondent in her first exception excepts to the hearing officer's Finding of Fact #5, that the Respondent told Ms. Carroll that the policy covered prescriptions. The Respondent argues that the hearing officer improperly found a fact based solely on hearsay evidence, in violation of Rule 221-6.026(3),

   F.A.C. This violation, she implies, further violates the rule of Ferris v. Turlington, 510 So.2d 292 (Fla. 1987); to wit, that license revocation proceedings must be conducted under a "clear and convincing" standard of proof.

   
   

   On page 210 of the transcript, the Respondent states on direct:

   Q. Did you ever tell [Ms. Carroll the policy] would cover all prescription medication?

   
   

   A. It would have covered, I told her it would have covered prescription medication if the child had been in the hospital. The prescription would have been covered under the miscellaneous charges.

   Inasmuch as the Respondent admitted, in the record, to stating that the policy covered prescriptions, it is not necessary to determine whether the out-of-court statements of the Respondent were repeated on the record by Ms. Carroll in the form of hearsay -- that is, whether the Department's attorney was introducing the testimony of Ms. Carroll as to the Respondent's out-of-court statements to prove the truth of the assertion therein. 1/ Nor is it necessary to determine whether the out-of-court statements fall outside the definition of hearsay as, for example, admissions against financial interest or admissions of a party opponent. However, it is likely that should such determinations had been necessary, they would have been resolved in favor of the hearing officer's expertise in these matters. The Respondent's first exception is REJECTED.

   
   

2. The Respondent's second exception excepts to Finding of Fact #15, that the Respondent told the Schilbs that the policy would cover most of the costs of childbirth. The Respondent does not state with particularity the basis for this exception, but presumably wishes to rely upon grounds similar to those cited in her first exception. Here, the Respondent does specifically deny that she told the Schilbs that the policy would pay any percent of the expenses of childbirth. (See Transcript, pages 215, 216.)

However, the testimony of Mr. & Mrs. Schilb, with respect to the out-of- court statements of the Respondent, was not adduced by the Department's attorney in order to prove that the policy did or did not cover a stated percent of medical expenses. Rather, it was introduced by the Department's attorney to prove that the Respondent made that statement to the Schilbs. When an out-of- court statement is not introduced to show the truth of the matter asserted therein, it is not hearsay, and the prohibition of Rule 22I-6.026(3), F.A.C., is not applicable. The Respondent's second exception is REJECTED.

RULINGS ON THE DEPARTMENT'S EXCEPTIONS TO RECOMMENDED ORDER

1. The Department's first exception takes exception to Finding of Fact #8 of the Recommended Order, wherein the Hearing Officer finds that coverage (or lack thereof) for prescriptions was not material to Ms. Carroll's decision to purchase the policy.

   
   

   Section 120.57(1)(b)10., Florida Statutes, states that an agency, in issuing a final order, may not reject findings of fact appearing in the recommended order unless the agency first determines from a review of the complete record, and states with particularity in the order, that the findings of fact were not based upon competent and substantial evidence or that the proceedings upon which the findings were based did not comport with the essential requirements of law. Since there has been no allegation by any party that the proceedings failed to comply with the essential requirements of law, the only available ground upon which the Department could reject this finding is that it is not Supported by competent, substantial evidence. The Department's attorney, in his exception to Finding of Fact #8, invites the Department to review Ms. Carroll's testimony and such other portions of the record as are relevant to this issue, and reach a different conclusion than that reached by the hearing officer.

   
   

   However, an agency may not reject a hearing officer's finding of fact unless there is no competent, substantial evidence from which the finding could reasonably be inferred. Freeze v. Department of Business Regulation, 556 So.2d 1204, 1205-1206 (Fla. 5th DCA 1990). Ms. Carroll's testimony appears on pages

   79 through 95 of the transcript; in reviewing it, it is not possible to state that there is no competent, substantial evidence to support the hearing

   officer's finding of fact that coverage for prescriptions was not material to Ms. Carroll's decision to purchase the policy. This is certainly not the only inference the record will support, but it is the hearing officer's determination and cannot be disturbed. The Department's first exception, which excepts to the hearing officer's Finding of Fact #8, is REJECTED.

   
   

2. The Department in its second exception excepts to the hearing officer's Finding of Fact #9, which found that the Department failed to put on any evidence that the Respondent's misstatement of the policy's coverage to Ms. Carroll was intentional. According to the hearing officer, when the Department attempts to prove its case for adverse action against an individual's insurance license, the Department is required to prove not only that the licensee's statements were false, but also that the licensee knew or should have known that the statement was false. (See Conclusions of Law, Recommended Order, pages 8 and 9.) This, the Department failed to do. The Department's exception to Finding of Fact #9 can be read as an argument on the law, but it points to no evidence in the record as to the Respondent's actual knowledge of the policy terms at the time of the Respondent's solicitation of Ms. Carroll. To the extent that the hearing officer's Finding of Fact #9 stands as a determination that the Department put on no evidence of state of the Respondent's knowledge at the time of the solicitation, the Department's second exception is REJECTED.

   
   

3. The Department in its third exception excepts to the hearing officer's conclusion of law that willfulness be found as a prerequisite of concluding that Sections 626.611(5), 626.611(7), 626.611(9), 626.621(6), 626.9521, and 626.9541(1) (k)1., have been violated. This exception is rejected as to the contention that willfulness need not be found in order to conclude that Sections 626.611(5) and 626.611(9), Florida Statutes, have been violated. The exception is meritorious and is accepted as to the assertion that a specific finding of willfulness need not be made in order to conclude that Sections 626.611(7), 626.621(6), 626.9521 and 626.9541(1)(k)1., have been violated.

   
   

   The hearing officer's conclusion of law -- that an agent cannot be charged with a breach of duty to fully inform a purchaser of the terms of a policy where the agent alleges he was ignorant of those terms -- is incorrect and at variance with the Department's objective of protecting the insurance-buying public.

   Clearly, an insurance agent has a duty to make himself conversant with the terms, conditions and exclusions of a health insurance policy before he solicits coverage under that policy. This duty -- to inform oneself so as to adequately inform a prospective purchaser -- is one of several fiduciary duties owed by insurance agents to the insurance-buying public. Natelson v. Department of Insurance, 454 So.2d 31 (Fla. 1st DCA 1984). It cannot be said that this duty can be breached, without liability, by the device of standing ignorant of the terms and conditions of the insurance policies an agent sells. Petitioner did not except to the hearing officer's conclusion that willfulness need be found to conclude that Rule 4-9.005(1), F.A.C. had been violated. The Department also rejects that conclusion by the hearing officer. Based upon the hearing officer's findings of fact, it is concluded that Respondent violated Sections 626.621, 626.9521, and 626.9541(1)(k)1., Florida Statutes, in her dealings with Ms. Carroll and Mr. and Mrs. Schilb. It should be noted that Section 626.621(6) is violated if an agent has been found to have "otherwise shown himself to be a source of injury or loss to the public or detrimental to the public interest." Clearly, Respondent's dealings with Ms. Carroll and Mr. and Mrs. Schilb warrant the conclusion that Section 626.621(6) has been violated.

   
   

4. The Department in its fourth exception excepts to the hearing officer's conclusion of law, that only a policy term which is proven to be material -- in

   the sense that it alone determines a prospective purchaser's decision to purchase the policy -- can, when misstated, rise to the level of "misrepresentation", as that term is used in Section 626.611(5), Florida Statutes.

   
   

   In addition to the finding, discussed above, that the prescription coverage was not "material" to Ms. Carroll's decision to purchase her policy, the hearing officer also finds the Respondent's inaccurate statement to Mr. & Mrs. Schilb -- that the policy they were considering would cover most of the costs of childbirth -- to be "immaterial". Here, the hearing officer creates a category of statements which, while potentially determinative of the purchaser's decision, are not "material" because they go to the "sufficiency" of the policy, not its coverage.

   
   

   This categorization is without merit. The Respondent sold Mr. & Mrs. Schilb a health insurance policy, knowing they were contemplating having a child, on the assertion that the policy would cover most of the costs. Although the Respondent did not conceal the fact that the policy contained exclusions and reductions of covered benefits, neither did she assist the' purchasers to understand these limitations. There is no authority for the proposition that an agent can be disciplined for misstating a benefit, but cannot be disciplined for misstating a limitation of such benefits. Rule 4-37.005(7) and (8), F.A.C., expressly states that a policy of health insurance must adequately disclose both covered benefits and limitations thereon.

   
   

   The Department's fourth exception which excepts to the hearing officer's conclusion of law that misrepresentation of a limitation of coverage is not a "misrepresentation of an insurance policy" within the meaning of Section 626.611(5), Florida Statutes, is ACCEPTED.

   
   

5. Based upon the foregoing, the Department excepted to the hearing officer's recommendation, that the Department's Administrative Complaint be dismissed. Section 120.57(1)(b)10., Florida Statutes, gives an agency the authority to reject the recommendation of a hearing officer after a review of the complete record, provided the agency states with particularity the reasons for rejection and cites to the record in justifying its action. In this instance, the Department has reviewed the complete record and has rejected the exceptions to the hearing officer's findings of fact filed by the Department. However, this Final Order has accepted exceptions filed by the Department with respect to certain conclusions of law filed by the hearing officer. The contested conclusions of law serve as the determination, by the hearing officer, that no disciplinary action will lie where the facts in evidence here have been adduced; the contested conclusions of law also serve as the Department's contention that the portions of the Administrative Complaint relating to violations of Sections 626.621(2), 626.9521, and 626.9541(1)(k)1. in Counts I and II have been proven.

   
   

   The necessary review of the complete record having been performed, the Department must also cite to the record. On pages 2 and 3 of the Administrative Complaint, the Department alleged that the Respondent misstated the terms of the policy sold to Ms. Carroll as covering all doctor visits and all prescriptions; the Department further alleged that Ms. Carroll purchased the policy in reliance on the statements, false and otherwise, made to her by the Respondent. On page

   4 of the Recommended Order, the hearing Officer's Finding of Fact No. 8 states:

   
   

   Ms. Carroll did not testify that the Respondent represented to her that the policy would pay for all

   doctor's visits. The Respondent did not tell Ms. Carroll how many doctor's visits were covered. The Respondent did tell Ms. Carroll that the policy rider would pay for prescriptions. However, it is clear from Ms. Carroll's testimony that coverage for prescriptions was not material to her decision to take out the coverage.

   
   

   On page 3 of the Recommended Order, the hearing officer's Finding of Fact No. 6 states:

   
   

   Said policy rider provided for payment by Independent for expenses for two doctor visits and outpatient surgery for Sean Carroll. It did not cover prescriptions.

   
   

   The facts of this case, then, include that: (a) the policy or rider sold to Ms. Carroll did not provide coverage for prescriptions; and (b) the Respondent falsely stated that the policy or rider did provide coverage for prescriptions when she solicited Ms. Carroll to purchase the product.

   
   

   The hearing officer concluded, as a matter of law, that the facts proven above do not suffice to carry the Department's burden under Sections 626.621(6), 626.9521 and 626.9541(1)(k)1., Florida Statutes. The hearing officer concluded that, in addition, the Department must prove that the Respondent spoke with actual knowledge (or notice) of the terms of the policy; and that the Department must prove that the policy term which was falsely stated to the insured was "material", meaning that the insured would not have purchased the policy if she had accurately understood the policy term in issue.

   
   

   As discussed above, the Department has no such additional burdens of proof.

   The Department has carried its burden of proof under Sections 626.621(6), 626.9521 and 626.9541(1)(k)1., Florida Statutes, as respects Count I of the Administrative Complaint by virtue of adducing the facts found by the hearing officer and cited above.

   
   

   With respect to the determination to be made as to Count II of the Administrative Complaint, there the Department charged that the Respondent solicited Mr. & Mrs. Schilb by stating that the policy would cover 80% of the expenses of childbirth; that such statement was false; and that Mr. & Mrs.

   Schilb purchased the policy in reliance upon this false statement. (See Administrative Complaint, paragraphs 12 and 13, pages 5 and 6.)

   
   

   In his recommended order, the hearing officer found, with respect to these statements:

   
   

   1. Having explained the overages amounts, the Respondent represented that the overages would be sufficient to cover most of Mrs. Schilb's childbirth related medical expenses, and that the Schilb's would only have to pay a few hundred dollars.

   2. The Schilbs' health insurance policy paid $800 to the hospital and $600-800 to the doctor for prenatal care. The Schilbs had approximately $3,000 in hospital

expenses arising from the delivery of Mrs. Schilb's

child and $2,000 in doctor's bills during the course of her pregnancy.

(See Recommended Order, Findings of Fact #15 and 16, page 5.)

With respect to these findings, the hearing officer concluded:

Regarding Count II, Ms. Figuette told the Schilbs exactly what the policy paid. She represented the policy would cover most of their bills. This was not a statement about the policy, but a statement about the sufficiency of the policy.

(See Recommended Order, Conclusions of Law, page 9.)

As discussed in paragraph 4 above, the hearing officer concluded that a statement regarding the limitations of policy coverage could not be violative of Sections 626.621(6), 626.9521 and 626.9541(1)(k)1., Florida Statutes. The hearing officer's attempt to distinguish between statements regarding policy benefits and statements regarding limitations on those benefits has already been rejected by the Department -- the inescapable conclusion is that insurance agents may be disciplined for misstatements of either benefits or limitations thereon. Inasmuch as the hearing officer's findings provide a legally sufficient basis for concluding that a violation of Sections 626.621(6), 626.9521 and 626.9541(1) (k)1., Florida Statutes, occurred, the Department's exception to the hearing officer's recommendation, that the Administrative Complaint be dismissed, is ACCEPTED.

ADDITIONAL RULINGS ON DEPARTMENT'S EXCEPTIONS

1. Inasmuch as the Department's exception to the hearing officer's recommendation has been accepted, it is necessary to deal with additional issues presented in the Department's Exceptions or the Recommended Order.

   
   

   Regarding Mr. and Mrs. Schilb, the hearing officer concluded:

   
   

   The evidence indicates that this representation came after the couple had taken out the policy, and after Mrs. Schilb had become pregnant. It was not an inducement to the Schilbs' taking out the policy, and it was not a misrepresentation about the policy.

   
   

   (See Recommended Order, Conclusions of Law, page 9.)

   
   

   First of all, it is worth noting that the Recommended Order contains no finding of fact which would support the assertion that the offending misstatement was not made by the Respondent until after the Schilbs effectuated coverage under the policy. By contrast, the hearing officer did find that the Schilbs did communicate to the Respondent, during the solicitation, that they were seeking health insurance specifically to defray the costs of childbirth as they were planning a family. (See Recommended Order, Finding of Fact #12, page 4.) If an agent proffers a particular insurance product to a prospective insured in response to that prospective insured's express desire to insure against a particular risk, the implication must be made that the agent believes the proffered product to be suitable for the particular risk under discussion. This implication must also be made in light of the fiduciary duty an agent owes to

   the insurance-buying public. Natelson v. Department of Insurance, 454 So.2d 31 (Fla. 1st DCA 1984)

   
   

2. Additionally, the hearing officer further concluded:

Although Ms. Fiquette's statement was inaccurate, no evidence was introduced that Ms. Fiquette knew that the information was inaccurate, or that she was charged with knowledge of medical expenses and was responsible for statements made about the sufficiency of averages.

(See Recommended Order, Conclusions of Law, page 9.)

The hearing officer's attempt to characterize the Respondent's statements as pertaining to prevailing medical costs, rather than limitations on benefits under the policy, is without merit. The hearing officer found that the Respondent stated that "the overages would be sufficient to cover most of Mrs. Schilb's childbirth related medical expenses..." (See Recommended Order, Finding of Fact #15, page 5.) The subject of this statement is the coverage (i.e., the terms and conditions) of an insurance policy, not the prevailing cost of medical care for childbirth.

ADDITIONAL RULINGS ON HEARING OFFICER'S CONCLUSIONS

1. The hearing officer concluded that, "Sections 626.621(6); 626.9521 and 626.9541, supra, relate to unfair and deceptive trade practices. There was no showing that the Respondent engaged in any such practices." The Department rejects that conclusion for the reasons stated in paragraph three (3) in the Rulings on the Department's Exceptions to Recommended Order above. Part X of Chapter 626, Florida Statutes, is directly applicable to Respondent's improper activities as addressed in this case.

   
   

2. The hearing officer concluded that, "Subsections 626.611(5), (7), (9) and (13) address respectively: willful misrepresentation, demonstrated lack of fitness or trustworthiness; fraudulent or dishonest practices, and willful violation of the law or rules. In the absence of demonstrating that the Respondent made misrepresentation, the Department fails to demonstrate any of the other violations." To the extent that the hearing officer concluded that there must be a misrepresentation to conclude that Sections 626.611(7) and (9) have been violated, the conclusion is rejected as such a conclusion is not supported by those statutory sections or by any case law interpreting them. Those two subsections may stand alone as the basis for discipline of an insurance agent's license.

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

ORDERED:

1. The Findings of Fact of the hearing officer are adopted in full as the Department's Findings of Fact.

   
   

2. The Conclusions of Law of the hearing officer are adopted in full as the Department's Conclusions of Law except where expressly rejected or modified above.

3. The Recommendation of the hearing officer that the charges against Respondent be dismissed is rejected. A two year probationary period imposed upon Respondent's insurance licenses would be a more appropriate disposition of this case.

ACCORDINGLY, effective upon the date of entry of this Final Order, all insurance licenses held by the Respondent, BETTY CLAIRE FIQUETTE, shall be placed on Departmental probation pursuant to Section 626.691, Florida Statutes. As a condition of said probation, Respondent shall strictly adhere to all provisions of the Florida Insurance Code and Rules of the Department of Insurance. Violations of the terms and conditions of said probation may result in administrative proceedings to suspend or revoke Respondent's licenses as an insurance agent in this state.

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, Florida Rules of Appellate Procedure. Review proceedings must be instituted by filing a petition or notice of appeal with the General Counsel, acting as the agency clerk, at 412 Larson Building, Tallahassee, Florida, 32399- 0300, and a copy of the same with the appropriate District Court of Appeal within thirty (30) days of the rendition of this Order.

DONE and ORDERED this 11th day of August , 1992.

TOM GALLAGHER

Treasurer and Insurance Commissioner

ENDNOTES

1/ Hearsay is an out-of-court statement, introduced into evidence to prove the truth of the matter therein. See Principles of Evidence, Younger and Goldsmith,

p. 417 (National Practice Institute, 1984).

COPIES FURNISHED:

STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

JOSEPH D. MANDT, ESQUIRE

Department of Insurance Division of Legal Services Room 412 Larson Building

Tallahassee, Florida 32399-0300

BETTY CLAIRE FIQUETTE, RESPONDENT

3188 Huntington Woods Boulevard Tallahassee, Florida 32303-2564

SAMUEL LEWIS, ESQUIRE

1017-A Thomasville Road Tallahassee, Florida 32303

Docket for Case No: 91-006053

Orders for Case No: 91-006053