STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LAWRENCE SHERMAN LOWE, III, )

)

Petitioner, )

)

vs. ) CASE NO. 93-2587

) DEPARTMENT OF INSURANCE ) AND TREASURER, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its designated Hearing Officer, Joyous D. Parrish, held a formal hearing in the above-styled case on July 7, 1993, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Lawrence Sherman Lowe, III, pro se

9150 Southwest 23rd Street, Apartment D Fort Lauderdale, Florida 33324

For Respondent: John R. Dunphy

Department of Insurance and Treasurer Division of Legal Services

612 Larson Building

Tallahassee, Florida 32399-0300 STATEMENT OF THE ISSUES

The central issue in this case is whether Petitioner is entitled to licensure as a life and variable annuity and health insurance agent.

PRELIMINARY STATEMENT

This case began on February 24, 1993, when the Department of Insurance and Treasurer (Department), Bureau of Agent and Agency Licensing, issued a letter notifying Petitioner that his application for license as a life and variable annuity and health insurance agent was being denied. Thereafter, Petitioner requested an informal hearing, and then later, a formal hearing to challenge that decision. The matter was forwarded to the Division of Administrative Hearings for formal proceedings on May 10, 1993.

Prior to hearing an order was entered granting the Department's request to amend its denial letter. Such amendment provided for the inclusion of the entire text of Section 626.641(2), Florida Statutes, as part of the denial of license. At the hearing, the Petitioner testified on his own behalf and presented the testimony of J. Frank Manning, Jr., an officer with Colonial Life

Insurance. The Department also presented Mr. Manning and Shirley Kerns, the bureau chief for licensing. The Department's exhibits numbered 1 through 8 were admitted into evidence.

A transcript of the proceedings has not been filed. Specific rulings on the proposed findings of fact submitted by the parties are in the appendix at the conclusion of this order.

FINDINGS OF FACT

1. On October 9, 1992 Petitioner executed a sworn application for licensure as a life and variable annuity and health insurance agent. Such application was filed with the Department on October 13, 1992.

   
   

2. At the Department's request, the Petitioner sent a second application by facsimile transmission on February 19, 1993. This second application was unexecuted, that is, unsworn but was on the same form as previously described in paragraph 1.

   
   

3. On each copy of the application, Petitioner responded "yes" to the question:

   
   

   Has your application for a license ever been declined or denied by this or any other Insurance Department or has your License or eligibility to hold a license ever been declined, denied, suspended, revoked, placed on probation or an administrative fine or penalty levied?

   
   

4. On each copy of the application, Petitioner responded "no" to the question:

   
   

   Does any insurer or general agency claim that you are indebted under any agency con- tract or otherwise? If yes, please attach a letter of explanation.

   
   

5. When the Department requested additional information regarding Petitioner's answer to the question described in paragraph 3, the Petitioner gave a response that led to the review of a final order entered by the Department on October 30, 1990.

   
   

6. As set forth in the final order and the recommended order attached thereto, the basis for the Petitioner's prior revocation, was a pattern of deceit evidenced by false statements on applications for insurance, by the forgery of names on applications for proposed insureds, and by forging names for requests for cancellation of coverage.

   
   

7. As a result of the actions described in paragraph 6, the insurer for whom Petitioner worked at the time, Colonial Life and Accident Insurance Company (Colonial), took legal action against Petitioner for damages incurred or to be incurred by the company as a result of the deceit. That civil suit was settled by the entry of a settlement judgment in which Petitioner agreed to repay Colonial damages in the amount of $60,000.

8. The amount was to be repaid pursuant to a payment schedule. At the times Petitioner filed applications with the Department (October and February), such monies had not been repaid and Petitioner was, in fact, in default on the payment schedule. Colonial is currently owed approximately $32,000 of the original settlement.

   
   

9. Additionally, when Colonial sought to enforce its judgment against Petitioner, he filed for bankruptcy to protect his assets and to restructure his debt. Thus when Petitioner answered in the negative to the question outlined in paragraph 4, such answer was incorrect and misleading.

   
   

10. On February 24, 1993, the Department notified Petitioner that his application for licensure had been denied.

    
    

11. The actions complained of, and which gave rise to Petitioner's prior revocation, were fully established in the prior proceeding. Petitioner's misstatement on the current application gives concern as to whether misleading statements or misrepresentations may recur.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

13. Section 626.611, Florida Statutes, provides, in pertinent part: Grounds for compulsory refusal, suspension,

    or revocation of agent's, solicitor's,

    adjuster's, service representative's, manag- ing general agent's, or claims investigator's license or appointment.

    
    

    The department shall deny, suspend, revoke or refuse to renew or continue the license or appointment of any agent, solicitor, ad-

    juster, service representative, managing gen- eral agent, or claims investigator, and it shall suspend or revoke the eligibility to hold a license or appointment of any such person, if it finds that as to the appli- cant, licensee, or appointee any one or more of the following applicable grounds exist:

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

       in this code.

    2. Material misstatement,misrepresentation, or fraud in obtaining the license or appoint- ment or in attempting to obtain the license

       or appointment.

       * * *

       1. Willful misrepresentation of any insur- ance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any

          form of dissemination of information or adver- tising.

       2. If, as an adjuster, claims investigator, or agent licensed and appointed to adjust claims under this code, he has materially misrepresented to an insured or other inter- ested party the terms and coverage of an in- surance contract with intent and for the pur- pose of effecting settlement of claim for

          loss or damage or benefit under such contract on less favorable terms than those provided in and contemplated by the contract.

       3. Demonstrated lack of fitness or trust- worthiness to engage in the business of insurance.

       * * *

       (9) Fraudulent or dishonest practices in the conduct of business under the license or appointment.

       * * *

       (13) Willful failure to comply with, or will- ful violation of, any proper order or rule

       of the department or willful violation of any provision of this code.

       
       

14. Section 626.641(2), Florida Statutes, provides:

    
    

    (2) No person or appointee under any license or appointment revoked by the department, nor any person whose eligibility to hold same has been revoked by the department, shall have the right to apply for another license or appoint- ment under this code within 2 years from the effective date of such revocation or, if jud- icial review of such revocation is sought, within 2 years from the date of final court order or decree affirming the revocation.

    The department shall not, however, grant a new license or appointment or reinstate eligi- bility to hold such license or appointment

    if it finds that the circumstance or circum- stances for which the eligibility was revoked or for which the previous license or appoint- ment was revoked still exist or are likely to recur; if an individual's license as agent

    or solicitor or eligibility to hold same has been revoked upon the ground specified in

    s. 626.611(12), the department shall refuse to grant or issue any new license or appoint- ment so applied for.

    
    

15. Section 626.785(1), Florida Statutes, provides, in part: 626.785 Qualifications for license.

    
    

    1. The department shall not grant or issue a license as life agent to any individual found by it to be untrustworthy or incompetent

       * * *

16. An applicant for licensure bears the burden of proof to establish that he meets the criteria for licensure. In this case, the Department has denied licensure based upon the grounds set forth in the amended denial letter dated May 28, 1993.

    
    

17. More specifically, the Department has claimed, and the evidence in this case has demonstrated, that, during a period of prior licensure, the Petitioner submitted fraudulent insurance applications to Colonial. Moreover, as a result of the Petitioner's actions, Colonial was exposed to liabilities under such policies. In order to settle the dispute with Petitioner, Colonial, after suing Petitioner in federal court, entered into a stipulated judgment whereby Petitioner was to repay Colonial the sum of $60,000 according to a repayment plan.

    
    

18. Despite his protests to the contrary, Petitioner defaulted on that repayment plan and owes Colonial approximately $32,000. Petitioner's claim that the judgment and default are civil matters (resolved, in part, by his bankruptcy action) is without merit. Such indebtedness arose from the claim made by an insurer or general agency claim under an agency contract or otherwise. Accordingly, Petitioner should have answered the application question in the affirmative.

    
    

19. Further, Petitioner's claim that the "civil matters" did not arise as an indebtedness under an agency contract or otherwise but arose from the civil suit is also without merit. The suit was framed based upon Petitioner's actions while in the insurer's employ and while acting as the company's agent.

    
    

20. Finally, Petitioner's argument in this case, that he has learned a painful and expensive lesson, does not excuse the past actions and cannot provide a basis for licensure without additional evidence of his rehabilitation and his ability to meet the eligibility terms of the insurance code. Petitioner's past pattern of deceit demonstrated a lack of trustworthiness which his current handling of this application, and his attitude toward the Colonial indebtedness, has not altered.

RECOMMENDATION

Based on the foregoing, it is, hereby, RECOMMENDED:

That the Department of Insurance and Treasurer enter a final order that denies Petitioner's application for licensure.

DONE AND RECOMMENDED this 11th day of August, 1993, in Tallahassee, Leon County, Florida.

JOYOUS D. PARRISH

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 11th day of August, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-2587

The Petitioner submitted proposed findings in the form of a letter. Only the second and third paragraphs of that letter set forth findings of fact, the remainder of the letter is hereby rejected as argument, comment, or conclusions of law, not fact. Rulings on the proposed findings of fact submitted by Petitioner:

1. With regard to the second paragraph, it is accepted that the Department was aware of the Petitioner's indebtedness to Colonial. That Petitioner, or his agent, wrote to Mr. O'Neil is rejected as irrelevant. Further, such letter is not accepted for the truthfulness of the matters asserted in it. When confronted, Petitioner has been truthful regarding the indebtedness to Colonial; such indebtedness, however, was not accurately depicted on the application for licensure.

2. With regard to the third paragraph, it is accepted that Petitioner has repaid some of the indebtedness to Colonial; otherwise, the paragraph is rejected as not supported by the credible evidence presented in this case.

Rulings on the proposed findings of fact submitted by Respondent:

1. Paragraphs 1 through 19 are accepted.

COPIES FURNISHED:

Lawrence Sherman Lowe, III, pro se 9150 South West 23rd Street, Apt. D Fort Lauderdale, Florida 33324

John R. Dunphy Department of Insurance and Treasurer

Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0300

Tom Gallagher

State Treasurer and Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Bill O'Neil General Counsel

Department of Insurance The Capitol, PL-11

Tallahassee, Florida 32399-0300

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.

Docket for Case No: 93-002587

Orders for Case No: 93-002587