STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA AUTOMOBILE UNDERWRITERS ) ASSOCIATION, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 94-5599RP

)

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Respondent. )

) PERRY & CO., PURITAN BUDGET ) PLAN, INC., and GIBRALTAR BUDGET ) PLAN, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 94-5602RP

)

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Respondent. )

) EQUITY PREMIUM, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 94-6389RP

)

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Respondent. )

)

FINAL 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 December 20, 1994, in Tallahassee, Florida.

APPEARANCES

For Petitioners: Thomas J. Maida Florida Austin B. Neal

Automobile McConnaughhay, Roland, Maida & Cherr, P.A. Underwriters Post Office Drawer 229

Association, Inc. Tallahassee, Florida 32302-0229

Perry & Co., Steven M. Malono Puritan Wendy Russell Wiener Budget Plan, Inc. MANG, RETT & MINNICK

and Gibraltar 660 East Jefferson Street Budget Plan, Inc. Post Office Box 11127

Tallahassee, Florida 32302-3127

Equity Premium, Carlos Lidsky Inc. Leo Bueno

145 East 49th Street Hialeah, Florida 33013

For Respondent: Thomas D. Valentine

Senior Attorney Stephen C. Fredrickson Senior Attorney

Office of Legal Affairs 645A Larson Building

200 East Gaines Street Tallahassee, Florida 32399-0307

STATEMENT OF THE ISSUES

The central issues in these cases are the Petitioners' challenges to proposed rules of the Department of Insurance (Department).

PRELIMINARY STATEMENT

The Department initially published notice of its proposed rules or amendments to rules on September 16, 1994, in volume 20, number 37, pp. 6686-93, Florida Administrative Weekly. In response, Petitioner, Florida Automobile Underwriters' Association, Inc. (FAUA) timely challenged several of the proposed amended rules pursuant to Section 120.54(4), Florida Statutes.

More specifically, FAUA initially challenged proposed amended rules 4- 196.001, 4-196.002, 4-196.003, 4-196.028, and 4-196.030. Through negotiations with the Department, most of the disputed matters were resolved. The changes negotiated were reflected in the notices of change published by the Department in volume 20, number 46; volume 20, number 51; and volume 21, number 3, Florida Administrative Weekly. As a result of the changes, and in reliance thereon, FAUA stipulated on December 15, 1994, to the dismissal of its challenges to all proposed rules or amendments except proposed Rule 4-196.030(3), Florida Administrative Code, which defines the term "gross amount available."

At the hearing, FAUA presented the testimony of Ed Torgas, president of one of FAUA's member companies. Its exhibit, marked for identification as FAUA Ex. 1, was admitted into evidence.

Petitioners, Perry & Co., Puritan Budget Plan, Inc., and Gibraltar Budget Plan, Inc. (Perry), also timely challenged the Department's proposed rules.

After negotiations, unresolved at hearing were the provisions found in proposed Rules 4-196.001, 4-196.002, 4-196.003, 4-196.006, 4-196.007, 4-196.009, 4-

196.010, 4-196.028, 4-196.030, 4-196.035, 4-196.038, and 4-196.040, Florida

Administrative Code. Perry requested, and official recognition has been taken, of Chapter 63-16, Section 1, Laws of Florida, and Chapter 82-243, Section 601, Laws of Florida.

Perry presented the testimony of two witnesses, Mary Russo, a financial examiner/analyst employed by the Department; and Alex Campos, president of Perry & Co. Its exhibits numbered 1 through 6 were admitted into evidence. Perry's exhibit 7 was withdrawn.

The Department stipulated that all Petitioners are substantially affected by the proposed rules in dispute. At the hearing, the Department presented the testimony of Mary Russo. Its composite exhibit 1 was admitted. Petitioner, Equity Premium, Inc., presented no evidence.

The transcript of the proceedings was filed on January 30, 1995. By stipulation, the parties agreed to file their proposed final orders on or before March 1, 1995. All parties timely filed proposed orders which have been reviewed in the preparation of this order. Specific rulings on the proposed findings of fact are included in the appendix at the conclusion of this order.

FINDINGS OF FACT

1. The Department is the state agency charged with the responsibility to promulgate and enforce rules pursuant to Chapters 624 through 651, Florida Statutes.

   
   

2. The Petitioner, FAUA, is an association of automobile insurers whose interests would be substantially affected by the proposed rules, if adopted, as the subject matter of the proposed rules is within the FAUA's general scope of interest and activities.

   
   

3. The other Petitioners are premium finance companies licensed pursuant to Chapter 627, Florida Statutes whose interests will also be substantially affected by the proposed rules, if adopted.

   
   

4. Mary Russo is a financial examiner/analyst coordinator employed by the Department whose duties involve the regulation of premium finance companies. She has been so employed for approximately six years.

   
   

5. Ms. Russo prepared or aided in the preparation of the economic impact statement and the detailed written statement of facts and circumstances drafted in connection with the proposed rules at issue in this proceeding.

   
   

6. In pertinent part, the economic impact statement provided:

   
   

   1. An estimate of the cost or the economic benefit to all persons directly affected by the proposed action.

      
      

      It is anticipated that there will be a minimal increase in cost to a few of the entities regu- lated as some of them will probably need to seek accounting advice and/or computer programming advice to insure that its operations are in compliance with the rule. However, since most entities regulated already comply with this rule, only a few should be affected.

      
      

      1. RE: Proposed Rule 4-196.002

         "Notice of Intent to Cancel to Be Mailed":

         1. Estimated cost to the agency-None.

         2. Estimated cost or economic benefit to all persons directly affected-cost will depend upon method of providing the required proof of mailing; however, as a matter of sound business practice as well as providing evidence of compliance with the requirements of Section 627.848, F.S., this should (sic) practice should already be in place. This will benefit the insured in assuring compliance with

            Florida Statutes in the cancellation of financed policies and will benefit the premium finance company in providing a defense in the event an insured brings action for wrongful cancellation of the financed policy alleging that the proper notice was not sent.

         3. Estimated impact of proposed action on competition and the open market for employment-none.

         4. Analysis of impact on small business-none.

            * * *

            1. Detailed statement of the data and methodology used in making the estimates required by this paragraph-Recent final decision reached by the Supreme Court of Florida in the case of "Insurance Company of North America, Petitioner, vs. Bobby Cooke, etc." wherein the Insurance Company was held liable for wrongfully cancelling an insured's policy. The Court held that "where an insured denies receipt of the notice of intent to cancel required by Section 627.848(1), an insurer who raises the defense of cancellation under Section 627.848 must prove that the premium finance company complied with the provisions of the statute in order to avoid liability under a contract of insurance."

               * * *

               The following rules have no cost or benefit to anyone directly affected by the rule, no negative

               impact on competition, employment, or small business, and no cost or benefit of adopting these rules other than as indicated above:

               1. Proposed Rule 4-196.001 "Standard Cancellation Notice"

               2. Proposed Rule 4-196.003 "Requirement of Net Worth of Premium Finance Companies"

               3. Proposed Rule 4-196.006 "Filing Other Acceptable Collateral in Lieu of Net Worth"

            * * *

            7. Proposed Rule 4-196.010 "Refunds"

            * * *

            1. Proposed Rule 4-196.028 "Right to Cancel for Non-payment of Premium"

            2. Proposed Rule 4-196.030 "Definitions"

            3. Proposed Rule 4-196.038 "Limit on Additional

               $20 Service Charge"

            4. Proposed Rule 4-196.040 "Assignment of Premium Finance Contracts Permitted for Existing Business or Collateral for Extension of Credit Only"

7. It is the Department's contention that the proposed rules have no economic impact (which the Department defines to mean no additional or new expenses to anyone) because the rules merely clarify and formally implement the Department's policy as it has existed for several years, at least since 1988. Therefore, the Department reasons, if someone has been complying in the past, there should be no changes in operations or new expenses for that entity.

   
   

8. Proposed Rule 4-196.001, Florida Administrative Code, seeks to specify that all copies of the standard cancellation notice be printed on pink paper. The insurer only recognizes a cancellation notice if printed on pink paper, therefore, having all copies of the notice in pink will assure that the insurer receives the correct copy. Currently, the insured and the insurer receive pink copies of the notice but the rule has not specified that the premium finance company copy must also be on pink paper. Pink cancellation notices are the industry practice and standard.

   
   

9. Proposed Rule 4-196.002, Florida Administrative Code, requires that the proof of mailing for the notice of intent to cancel must be retained in the files so that the Department may verify compliance with Section 627.848, Florida Statutes. This rule makes the retention of the proof specific whereas in the past the Department has merely suggested that the documentation be retained.

   
   

10. Proposed Rule 4-196.003, Florida Administrative Code, requires premium finance companies to meet net worth criteria such that even if the standard is met by a means other than a net worth of $35,000, that the company must also be in sound financial condition with a "positive statutory net worth." The Department seeks to assure that premium finance companies are financially sound and maintains that the criteria are necessary and reasonable to meet that goal.

    
    

11. Proposed Rule 4-196.006, Florida Administrative Code, identifies the types of collateral the Department will accept for purposes of establishing net worth.

    
    

12. Proposed Rule 4-196.009, Florida Administrative Code, seeks to establish guidelines and methods through which the Department will determine whether an entity is eligible for licensure and whether a premium finance company is in an unsound financial condition.

    
    

13. Proposed Rule 4-196.010, Florida Administrative Code, seeks to clarify the requirement that refunds must be made within the statutory time limit and that premium finance companies may not charge interest on the balance due under the contract beyond the statutory limit.

    
    

14. Proposed Rule 4-196.028, Florida Administrative Code, specifies that an insured's policy may be cancelled for the nonpayment of premium but may not be cancelled for the nonpayment of miscellaneous fees or charges owed to the premium finance company.

    
    

15. Proposed Rule 4-196.030, Florida Administrative Code, seeks to clarify the definitions of the following words: "affiliate," "gross amount available," "inducement," "rebates," and "statutory net worth."

    
    

16. Proposed Rule 4-196.038, Florida Administrative Code, limits the service charge amount which may be charged for a twelve month period to one

    $20.00 assessment. Most premium finance contracts are for a period less than twelve months. Premium finance contracts charge a "set up" fee of $20.00 for each finance contract. For purposes of this rule, the "set up" fee would be

    limited to one $20.00 assessment per customer per twelve month period. Under the proposed rule, "customer" means per individual not per contract.

    
    

17. Proposed Rule 4-196.040, Florida Administrative Code, seeks to clarify provisions allowing the assignment of premium finance contracts so that such procedure is not used to circumvent the statute prohibiting rebates to agents.

    
    

18. A public hearing on the proposed rules was conducted by the Department on October 11, 1994. The record of the public hearing is set forth in the Department's composite exhibit 1.

    
    

19. All changes in the proposed rules have been published by the Department.

20. Section 288.703, Florida Statutes, defines "small business" to be: "Small business" means an independently owned

    and operated business concern that employs 50

    or fewer permanent full-time employees and that has a net worth of not more than $1 million.

    As applicable to sole proprietorships, the $1 million net worth requirement shall include both personal and business investments.

    
    

21. Based upon the record, none of the Petitioners in this cause is a "small business."

    
    

22. Based upon the record of this case, together with the record of the public hearing conducted on October 11, 1994, the Department adhered to the procedure for preparation of the economic statement and considered information submitted to the agency regarding specific concerns about the economic impact of the proposed rules.

    
    

23. Rule 4-196.001, Florida Administrative Code, as it now exists requires that the premium finance company furnish cancellation notices to the insured and insurer in a designated format, and printed "on a color paper of a shade of pink." The Petitioners have not challenged the existing language of the rule.

    
    

24. The Department uses generally accepted accounting principles to determine whether a premium finance company has a net worth of $35,000.

    
    

25. The unearned premium serves as the collateral in the premium finance contract. Premium is earned on a pro rated basis. The amount of the premium is divided by the length of time of the term to reach the daily pro rated amount.

    
    

26. Unearned interest is refunded based upon the rule of 78s. For an eight month contract, a premium finance company earns 8/36 of the interest the first month, 7/36 of the interest the second month, and so on until all interest is paid.

    
    

27. The failure to refund monies due an insured in accordance with the statute constitutes a business practice that would be hazardous to the insurance-buying public.

    CONCLUSIONS OF LAW

    
    

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

    
    

29. Section 624.308, Florida Statutes, authorizes the Department to adopt reasonable rules necessary to effect any of the statutory duties of the Department.

    
    

30. Section 120.54(4), Florida Statutes, provides, in part:

    
    

    1. Any substantially affected person may seek an administrative determination of the invalidity of any proposed rule on the ground that the proposed rule is an invalid exercise of delegated legislative authority.

    2. The request seeking a determination under this subsection shall be in writing and must be filed with the division within 21 days after the date of publication of the notice. It must state with particularity the provisions of the rule or economic impact statement alleged to be invalid with sufficient explanation of the facts or grounds for the alleged invalidity and facts sufficient to show that the person challenging the proposed rule would be substantially affected by it.

    
    

31. Section 120.52(8), Florida Statutes, provides:

    
    

    "Invalid exercise of delegated legislative authority" means action which goes beyond the powers, functions, and duties delegated by the Legislature. A proposed or existing rule is an invalid exercise of delegated legislative authority if any one or more of the following apply:

    1. The agency has materially failed to follow the applicable rulemaking procedures set forth

       in s. 120.54;

    2. The agency has exceeded its grant of rule- making authority, citation to which is required by s. 120.54(7);

    3. The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(7);

    4. The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency; or

    5. The rule is arbitrary or capricious.

    
    

32. Section 120.54(2)(d), Florida Statutes, provides, in pertinent part:

    
    

    No person shall have standing to challenge an agency rule, based upon an economic impact statement or lack thereof, unless that person requested preparation of an economic impact statement under subparagraph (2)(b)2. and provided the agency with information sufficient

    to make the agency aware of specific concerns regarding the economic impact of the proposed rule, by participation in a public workshop, public hearing, or by submission of written comments, regarding the rule. The grounds for invalidation of a rule based upon a chal-

    lenge to the economic impact statement for the rule are limited to an agency's failure to adhere to the procedure for preparation of an economic impact statement provided by this section, or an agency's failure to consider information submitted to the agency regarding specific concerns about the economic impact of a proposed rule which such failure substantially

    impairs the fairness of the rulemaking proceeding.

    
    

33. The Petitioners have failed to establish grounds for the challenge to the economic impact statement as there has been no showing that the Department either failed to adhere to the procedure for preparation of the statement, or that it failed to consider information submitted in this cause.

    
    

34. As to the substantive challenges to the proposed rules, Section 627.848, Florida Statutes, establishes the procedure by which an insurance contract may be cancelled upon default when the premium finance agreement contains a power of attorney or other authority enabling the company to cancel the insurance. Such statute does not specify the color or number of copies which must be retained for the cancellation notice.

    
    

35. Rule 4-196.001, Florida Administrative Code, as it now exists, requires the cancellation notice furnished to the insured and insurer to be in a designated format and to be printed "on a color paper of a shade of pink." Inasmuch as the color pink has become the industry standard and is recognized for cancellation notices as such, the Department has articulated a reasonable and sound basis for requiring all copies of the multi-part form to be printed on pink paper. The format of the notice as set forth in the rule/proposed rule has not been challenged.

    
    

36. Section 627.848, Florida Statutes, further requires specific mailings to effect notice of cancellation to the insured and to the insurer. Receipt of the notice by the insurer triggers the actual cancellation of the insurance contract. The proposed amendments to Rule 4-196.002, Florida Administrative Code, require the premium finance company to retain the documentation that the mailing was completed in accordance with the statute. This proof of compliance with the statute may be accomplished by retention of a hard copy of the documents mailed, by photocopy, or by electronically stored reproduction of the actual 10-day notice sent. The record keeping mandated comports with the statute and is within the sound discretion of the Department.

37. Section 627.828, Florida Statutes, provides, in pertinent part: (1). . .Every premium finance company

    licensed under the provisions of this part shall maintain at all times a net worth of

    $35,000. However, in lieu of having a net

    worth of $35,000, a premium finance company may file a surety bond or other acceptable collateral with the department as approved by it in the amount of $35,000.

    
    

38. "Other acceptable collateral" is defined in proposed Rule 4-196.006, Florida Administrative Code, as cash, certificates of deposit in a qualified public depository, and securities.

    
    

39. Under the proposed rule, a licensed premium finance company must establish a "statutory" net worth of $35,000. As there is no definition in the applicable statute as to what "net worth" means, inclusion of the word within the proposed rule provides little assistance. "Net worth" must be interpreted in the common understanding of that term. Therefore, a premium finance company maintaining at all times a net worth of $35,000 is qualified under the statute. The rule may not expand that requirement. If the premium finance company elects to meet the financial requirement through either the bond (allowed by Section 627.828(1), Florida Statutes) or other acceptable collateral (which the Department has, and may define under the statute), no additional financial requirement not specifically noted in the statute may be imposed. While the Department has the authority to verify the financial stability of a premium finance company, such authority is limited to the provisions which the legislature has established. The Department's assessment that the proposed rule requires a premium finance company which elects to maintain a $35,000 bond must also have $1.00 additional financial support exceeds the statutory requirement of $35,000.

    
    

40. Except as noted above, the clarification to assert that a premium finance company must remain solvent supports and comports with the statutory mandate that requires the level of net worth at all times.

    
    

41. Section 627.7283, Florida Statutes, requires that if an insurance policy is cancelled, the insurer must return the unearned premium within 30 days. For purposes of computing the unearned premium, the insurer must pro rate the amount over the time.

    
    

42. Proposed Rule 4-196.010, Florida Administrative Code, requires the premium finance company to refund to the insured moneys from an insurer when the policy is cancelled. If the refund is not timely issued, the premium finance company is subject to administrative action by the Department. The rule further allows the service charge to continue until the date the unearned premium is received from the insurer, but the interest may continue to accrue on any balance outstanding.

    
    

43. Section 627.842, Florida Statutes, restricts premium finance agreements so that a default for nonpayment is only available for the nonpayment of premium. Therefore, if an insured remits the premium amount, a default for nonpayment cannot occur.

    
    

44. Under proposed Rule 4-196.028, Florida Statutes, the rule clarifies that the nonpayment of miscellaneous charges will not constitute a default of the premium finance agreement. The proposed rule further authorizes the premium finance company to demand the outstanding amounts owed and impose an outstanding late charge for the amounts unpaid.

    
    

45. Petitioners argue this provision conflicts with Section 627.848, Florida Statutes, which allows the premium finance company to cancel an

    insurance contract for default of the installment payment. The statutes must be read with the assumption that the legislature would not enact conflicting provisions. Therefore, since Section 627.842, Florida Statutes, makes it clear that the agreement may only seek cancellation for nonpayment of premium, the failure to make the installment payment means that amount identified as premium. As such, the proposed rule comports with the statute. Petitioners' issue is with Section 627.842, Florida Statutes.

    
    

46. Section 627.837, Florida Statutes, prohibits a premium finance company or employee thereof to issue rebates and inducements in the financing of an insurance policy.

    
    

47. Proposed Rule 4-196.030(8), Florida Administrative Code, defines "rebate" to mean a return by the premium finance company or any person affiliated directly or indirectly with same, or an employee thereof, of a portion of the finance charge to any person.

    
    

48. "Affiliate" is defined elsewhere [Proposed Rule 4-196.030(1)] as any entity which exercises control over or is controlled by the premium finance company, directly or indirectly, through common ownership or management or agreement.

    
    

49. The proposed inclusion of "affiliates" impermissibly modifies or expands the statutory prohibition. Rebates are impermissible by the premium finance company or employee thereof (see paragraph 51, below).

    
    

50. Pursuant to proposed Rule 4-196.030(5), Florida Administrative Code, an inducement is an incentive to motivate an insurance purchaser or insured to finance with a premium finance company. This portion of the definition comports with the statute and is not in dispute. The portion disputed is the remainder of the definition which speaks to incentives given to others (not the insured); that is, "or any compensation or consideration presented to a person based upon specific business performance whether under written agreement or otherwise."

    
    

51. In this regard, Petitioners claim that payments to a person, not the insured, are not prohibited. Petitioners claim that "payments made to any person which are unrelated to the insured's decision whether to finance an insurance premium or not have no relation to inducing the insured to finance the premium." Petitioners dispute, again, is with the statute. Section 627.837, Florida Statutes, states:

    
    

    No premium finance company, or employee thereof, shall offer to pay or allow in any manner to any person, either as an inducement to the financing of any insurance policy with the premium finance

    company or after any such policy has been financed, any rebate, or shall give or offer to give any valuable consideration or inducement of any kind directly or indirectly, other than an article of merchandise not exceeding $1 in value which has thereon the advertisement of the premium finance company. [Emphasis added.]

    
    

52. The statute makes the inducement or rebate to any person impermissible as does the proposed rule. As a result, Petitioners' challenge in this regard is rejected.

53. Section 627.848(1)(e), Florida Statutes, provides:

    
    

    Whenever an insurance contract is canceled in accordance with this section, the insurer shall promptly return the unpaid balance due under the finance contract, up to the gross amount available upon the cancellation of the policy,

    to the premium finance company and any remaining unearned premium to the agent or the insured, or both, for the benefit of the insured or insureds.

    
    

54. The proposed rule (4-196.030(3), Florida Administrative Code) defines "gross amount available" as the gross amount of unearned premium on the cancelled policy, including unearned commission.

    
    

55. According to Petitioners this definition conflicts with the industry practice of agents retaining their commissions and forwarding only the insurer's portion to the company. As a result, the insurer may only have its portion, that is, the "gross amount" less the agent's commission, to remit to the insured. To require insurers to obtain the full amount, Petitioners argue, will severely handicap agents and the traditional way insurance is procured.

    
    

56. The proposed rule does not expand the common understanding of the word "available", however, since it requires insurers to refund an amount which is available, that is, the amount retained by its agents. While not all agents are "captive" or exclusive to the insurer, agents, as the terms suggests, work for the insurer and have a relationship with and responsibility to, the company. As such, although the proposed rule may cause insurers to screen agents more carefully for financial responsibility, it complies with the statute.

    
    

57. Proposed Rule 4-196.035(9), Florida Administrative Code, requires copies of all contracts with independent contractors or third parties performing services directly or indirectly related to the premium finance business to be submitted to the Department and contain certain minimum information. Forms or records incidental to licensing are addressed by Section 627.836, Florida Statutes. That provision speaks to records that enable the Department to determine whether the licensee is complying with the provisions of law. Therefore the proposed rule clarifies, but does not expand, the statutory requirement that records must include contracts to establish that the licensee is complying with the provisions of law.

    
    

58. Section 627.840, Florida Statutes, limits the $20.00 charge to one assessment per customer per twelve month period. The proposed rule (4-196.038) models the statute and, despite industry custom, does not expand, enlarge or contravene the specific and unambiguous language of the law.

    
    

59. Proposed Rule 14-196.040, Florida Administrative Code, addresses when assignments of premium finance contracts are permitted and specifically states that the assignment may not be used to circumvent the provisions of other sections of the law. In short, the assigning company is not permitted to accept a payment of any kind, other than a reimbursement of the actual premium advanced under the contract if applicable, for the assignment. In contrast, Section 627.844, Florida Statutes, provides:

    
    

    (1) A premium finance company may purchase or otherwise acquire a premium finance agreement from another premium finance company with

    recourse against the other premium finance company on such terms and conditions as may be mutually agreed upon.

    
    

60. Based upon the foregoing, the Department has attempted to expand the statute to delve into or cure practices which it believes are used or may be used to circumvent other provisions such as rebating or inducements. Those statutes speak for themselves. The legislature has decreed assignments that are available "on such terms and conditions as may be mutually agreed upon." If the "terms and conditions" constitute a rebate or inducement, the agency has a distinct remedy elsewhere. This effort to limit assignments impermissibly expands the statutory authority cited.

ORDER

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

Proposed Rules 4-196.003, 4-196.030(1), (8), 4-196.040, Florida

Administrative Code, are hereby rejected as a invalid exercise of delegated legislative authority; the challenges to the remainder of the proposed rules are hereby denied and dismissed.

DONE AND ENTERED this 2nd day of May, 1995, in Tallahassee, Leon County, Florida.

JOYOUS D. PARRISH

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 2nd day of May, 1995.

APPENDIX TO FINAL ORDER, CASE NO. 94-5599 et al.

Rulings on the proposed findings of fact submitted by the Petitioner, Florida Automobile Underwriters' Association, Inc.:

1. Paragraphs 1 through 3, 5, 6, 7, 9 and 10 are accepted.

2. Paragraph 4 is rejected as contrary to the weight of all credible evidence submitted. The insurer is responsible for the refund, its agent may return a portion but the liability remains with the insurer.

3. Paragraph 8 is rejected as a complete statement; it is accepted that some refunds are handled in that manner but not all.

Rulings on the proposed findings of fact submitted by the Petitioners, Perry & Co., Puritan Budget Plan, Inc., Gilbraltar Budget Plan, Inc., and Equity Premium, Inc. (Equity adopted the PFO filed by Perry):

1. Paragraphs 22, 23, 73, 81, 90, 91, and 96 are rejected as irrelevant, contrary to the weight of the credible evidence, or incomplete statements which alone are contrary to the weight of the credible evidence.

2. All other paragraphs, which in part merely state the opinion of the cited witness, are accepted as accurate statements of the record.

Rulings on the proposed findings of fact submitted by the Respondent:

1. Paragraphs 14 and 15 are rejected as argument.

2. All other paragraphs are accepted.

COPIES FURNISHED:

Hon. Bill Nelson State Treasurer and

Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399

Dan Sumner

Acting General Counsel Department of Insurance The Capitol, PL-11

Tallahassee, Florida 32399-0300

Austin B. Neal

101 North Monroe Street, Suite 900 Tallahassee, Florida 32301

Douglas A. Mang Steven M. Malono

Mang, Rett & Minnick, P.A. Post Office Box 11127

Tallahassee, Florida 32302-3127

Carlos Lidsky

CARLOS LIDSKY ATTORNEY AT LAW P.A.

145 East 49th Street Hialeah, Florida 33013

Thomas D. Valentine Senior Attorney Department of Insurance Office of Legal Affairs 645A Larson Building

200 East Gaines Street Tallahassee, Florida 32399-0307

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

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

DISTRICT COURT OPINION

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

IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA

FLORIDA AUTOMOBILE UNDERWRITERS NOT FINAL UNTIL TIME EXPIRES TO ASSOCIATION, INC., FILE MOTION FO REHEARING AND

DISPOSITION THEREOF IF FILED

Appellant,

CASE NO. 95-1840

vs. DOAH CASE NO. 94-5599RP

DEPARTMENT OF INSURANCE AND TREASURER,

Appellee.

/ Opinion filed February 26, 1996

An appeal from Order of the Division of Administrative Hearings.

Thomas J. Maida and Austin B. Neal of McConnaughhay, Roland, Maida and Cherr, P.A., Tallahassee, for Appellant.

Thomas D. Valentine, Karen Asher-Cohen and Stephen C. Fredrickson of Florida Department of Insurance, Tallahassee, for Appellee.

PER CURIAM

AFFIRMED.

BARFIELD and ALLEN, JJ., and SHIVERS, SENIOR JUDGE, CONCUR.

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable Joyous D. Parrish, Hearing Officer

Division of Administrative Hearings WHEREAS, in that certain cause filed in this Court styled:

FLORIDA AUTOMOBILE UNDERWRITERS ASSOCIATION, INC.,

CASE NO. 95-1840

vs. DOAH CASE NO. 94-5599RP

94-5602RP

DEPARTMENT OF INSURANCE 94-6389RP AND TREASURER,

PERRY & CO., PURITAN BUDGET PLAN, INC., and GILBALTER BUDGET PLAN, INC.

vs.

DEPARTMENT OF INSURANCE, ET AL,

The attached opinion was rendered on February 26, 1996.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable E. Earle Zehmer

Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 13th day of March, 1996.

(DCA SEAL)

Karen Roberts, Deputy

Clerk, District Court of Appeal of Florida, First District

================================================================= DISTRICT COURT OPINION IN CONSOLIDATED CASE NO. 94-5602RP

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

IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA

PERRY AND COMPANY, NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FO REHEARING AND

Appellant, DISPOSITION THEREOF IF FILED

vs. CASE NO. 95-1841

DOAH CASE NO. 94-5602RP DEPARTMENT OF INSURANCE (CONSOLIDATED UNDER 94-5599RP) AND TREASURER,

Appellee.

/ Opinion filed September 3, 1996.

An appeal from order of the Division of Administrative Hearings.

Douglas A. Mang, Wendy Russell Wiener and Connie Jo Pecori, of Mang, Rett and Minnick, Tallahassee, Florida for appellant.

Thomas D. Valentine, Stephen C. Fredrickson, Karen Asher-Cohen and Alan J. Leifer of Division of Legal Services, Tallahassee, Florida, for appellee.

PER CURIAM

AFFIRMED.

KAHN, DAVIS and BENTON, JJ., CONCUR.

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable Joyous D. Parrish, Hearing Officer

Division of Administrative Hearings WHEREAS, in that certain cause filed in this Court styled:

FLORIDA AUTOMOBILE UNDERWRITERS ASSOCIATION, INC.,

CASE NO. 95-1941

vs. DOAH CASE NO. 94-5599RP

94-5602RP

DEPARTMENT OF INSURANCE 94-6389RP AND TREASURER,

PERRY & CO., PURITAN BUDGET PLAN, INC., and GILBALTER BUDGET PLAN, INC.

vs.

DEPARTMENT OF INSURANCE, ET AL,

Equity Premium, Inc. vs

DEPARTMENT OF INSURANCE AND TREASURER,

The attached opinion was rendered on September 3, 1996.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable E. Earle Zehmer

Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 19th day of September, 1996.

(DCA SEAL)

Karen Roberts, Deputy

Clerk, District Court of Appeal of Florida, First District

Docket for Case No: 94-005599RP

Orders for Case No: 94-005599RP