STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 94-4189

)

THOMAS KEITH McOWEN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its assigned Hearing Officer, Donald R. Alexander, on February 21, 1995, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Lisa S. Santucci, Esquire

612 Larson Building

Tallahassee, Florida 32399-0333 For Respondent: No appearance

STATEMENT OF THE ISSUE

The issue is whether respondent's license as a life and health insurance agent should be disciplined for the reasons stated in the administrative complaint.

PRELIMINARY STATEMENT

In a single-count administrative complaint filed on April 27, 1994, petitioner, Department of Insurance and Treasurer, charged that respondent, Thomas Keith McOwen, licensed as a life and health insurance agent, had violated various provisions within Chapter 626, Florida Statutes. More specifically, the complaint alleged that respondent, while licensed as an agent for Western and Southern Life Insurance Company, accepted premium checks from a customer in 1993 but did not remit $312.00 to his principal. Petitioner alleges that the foregoing conduct constituted a violation of Subsections 626.561(1), 626.611(4), (7), (8), (9), (10), and (13), and 626.621(2), Florida Statutes.

Respondent disputed these allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes. The matter was referred by petitioner to the Division of Administrative Hearings on July 27, 1994, with a request that a hearing officer be assigned to conduct a formal hearing. After efforts to settle the case were unsuccessful, by notice of hearing dated December 12, 1994, a final hearing was scheduled on February 21, 1995, in Tallahassee, Florida.

At final hearing, petitioner offered petitioner's exhibits 1 and 2. Both exhibits were received in evidence. Exhibit 1 is the complete investigative file pertaining to this matter. Respondent did not appear at hearing. However, he was represented by counsel during a part of this proceeding, and counsel has represented to the undersigned that respondent was furnished with a copy of the notice of hearing.

There is no transcript of hearing. Proposed findings of fact and conclusions of law were filed by petitioner on March 3, 1995. A ruling on each proposed finding has been made in the Appendix attached to this Recommended Order.

FINDINGS OF FACT

Based upon all of the evidence, the following findings of fact are determined:

1. At all times relevant hereto, respondent, Thomas Keith McOwen, was licensed and eligible for licensure as a life and health insurance agent by petitioner, Department of Insurance and Treasurer (Department). When the events herein occurred, respondent was a sales representative for Western and Southern Life Insurance Company (WSLIC), an insurance firm having headquarters in Cincinnati, Ohio.

   
   

2. Respondent's contractual agreement with WSLIC began on April 18, 1988. Under the agreement, respondent was required to account for and remit all premiums collected and received on behalf of WSLIC. On March 3, 1993, WSLIC terminated respondent's appointment as a sales representative, thereby cancelling his agent's contract.

   
   

3. In August 1988, Ruth Houston, a/k/a Tracy Houston, purchased a WSLIC life insurance policy from respondent. In 1991, respondent collected around

   $440.00 in cash from Houston as premium payments but remitted only $128.00 to WSLIC. In an affidavit given to petitioner's investigator, respondent acknowledged that he failed to account for the remaining $312.00 and had converted it to his own personal use.

   
   

   CONCLUSIONS OF LAW

   
   

4. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties hereto pursuant to Subsection 120.57(1), Florida Statutes.

   
   

5. Since respondent's life insurance licenses are at risk, the Department is obliged to establish by clear and convincing evidence that the charges in the administrative complaint are true. See, e. g., Pascale and Chandler v. Dept. of Insurance, 525 So.2d 992 (Fla. 3rd DCA 1988).

   
   

6. The administrative complaint alleges that respondent violated numerous statutes by his conduct in connection with the Houston account. First, he is charged with having violated Subsection 626.561(1), Florida Statutes, which provides in relevant part as follows:

   
   

   1. All premiums . . . belonging to insurers or others received by an agent . . . in transactions under his license shall be trust

      funds so received by the licensee in a fiduciary capacity; and the licensee in the applicable regular course of business shall account for

      and pay the same to the insurer.

      
      

      Respondent is also charged with violating Section 626.611, Florida Statutes, in six respects. Those violations, if true, would subject respondent to compulsory suspension or revocation of his licenses or eligibility to hold such licenses.

      The alleged statutory violations are as follows:

      
      

      The department shall deny, suspend, revoke or refuse to renew or continue the license of any agent . . . and it shall suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the . . . licensee . . . any one or more of the following applicable grounds exist:

      * * *

      (4) If the license or permit is willfully used,

      or to be used, to circumvent any of the requirements or prohibitions of this code.

      * * *

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

      2. Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or permit.

      3. Fraudulent or dishonest practices in the conduct of business under the license or permit.

      4. Misappropriation, conversion, or unlawful withholding of monies belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license.

      * * *

      (13) Willful failure to comply with, or willful violation of any provision of this code.

      
      

      Finally, respondent is charged with violating Subsection 626.621(2), Florida Statutes, which makes it unlawful for a licensee to violate any provision within the insurance code.

      
      

7. By clear and convincing evidence, the Department has established that respondent failed to remit $312.00 in premiums to the insurance company. By doing so, respondent violated all of the foregoing statutes except Subsection 626.611(8), Florida Statutes. As to this latter statute, there is no evidence to show that respondent lacks "reasonably adequate knowledge and technical competence to engage in the transactions" authorized by his licenses.

   
   

8. In its proposed order, petitioner recommends that respondent's licenses and eligibility for licensure be revoked. Given respondent's fiduciary relationship with his client and the insurance company, Natelson v. Department of Insurance, 454 So.2d 31 (Fla. 1st DCA 1984), and his violation of that fiduciary relationship, this penalty is deemed to be appropriate.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating Subsections

626.561(1), 626.611(4), (7), (9), (10) and (13), and 626.621(2), Florida

Statutes, and that his licenses and eligibility for licensure be revoked. The charge as to Subsection 626.611(8), Florida Statutes, should be dismissed.

DONE AND ENTERED this 13th day of March, 1995, in Tallahassee, Florida.

DONALD R. ALEXANDER

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 13th day of March, 1995.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-4189

Petitioner:

1-4. Partially accepted in finding of fact 1.

5. Partially accepted in finding of fact 2. 6-8. Partially accepted in finding of fact 3.

NOTE: Where a finding has been partially adopted, the remainder has been rejected as being irrelevant, unnecessary, cumulative, subordinate, not supported by the evidence, or a conclusion of law.

COPIES FURNISHED:

Honorable Bill Nelson Insurance Commissioner The Capitol, Plaza Level

Tallahassee, FL 32399-0300

Lisa S. Santucci, Esquire Department of Insurance 612 Larson Building

Tallahassee, FL 32399-0300

Daniel Y. Sumner, Esquire General Counsel Department of Insurance The Capitol, Plaza Level

Tallahassee, FL 32399-0300

Mr. Thomas Keith McOwen 2913 Langley Ave., #107

Pensacola, FL 32504

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit to the agency written exceptions to this Recommended Order. All agencies allow each party at least ten 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: 94-004189

Orders for Case No: 94-004189