STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 95-1101

)

ALAN CHAPPUIS, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Clearwater, Florida on June 14, 1995, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: James A. Bossart, Esquire

Department of Insurance and Treasurer 612 Larson Building

Tallahassee, Florida 32399-0333

For Respondent: Alan Chappuis, pro se

Post Office Box 86126

Madiera Beach, Florida 33738-6126 STATEMENT OF THE ISSUES

The issue for consideration in this hearing is whether Respondent's various licences as an insurance salesman in Florida for certain lines should be disciplined because of the matters alleged in the Administrative Complaint filed herein.

PRELIMINARY MATTERS

By Administrative Complaint dated January 26, 1995, Bill Nelson, Treasurer and Insurance Commissioner of the State of Florida, charged Respondent, Alan Chappuis, with violations of Sections 626.611 and of Section 626.9541, Florida Statutes, by engaging in willful misrepresentations of an insurance policy, engaging in fraud or dishonest practices in the practice of insurance, engaging in unfair of deceptive acts or practices, and making a sales presentation which misrepresents the benefits, advantages conditions or terms of an insurance policy, and of demonstrating his unfitness or untrustworthiness to engage in the insurance business, as a result of his sale in December, 1993 and January, 1994, of two annuities to Erna Swan, at that time an 83 year old widow. Respondent filed an answer to the Administrative Complaint and requested a formal hearing, and this hearing followed.

At the hearing, Petitioner presented the testimony of Erna P. Swan, the purchaser of the annuities from Respondent; Larry H. Tipton, Mrs. Swan's stockbroker; Francis M. Wells, Mrs. Swan's family attorney and specialist in estate planning; Richard H. Krevitzky, Manager of Guarantee Trust Life Insurance Company's Government Relations and Compliance Division; and Harry James McGowan, III, Mrs. Swan's tax accountant for many years. Petitioner also introduced Petitioner's Exhibits 1 through 5.

Respondent did not testify at the hearing, but presented the testimony of Nadine Hopkins, Mrs. Swan's longtime friend and current legal guardian; Mr.

Wells; David W. Johnson, a licensed insurance agent and an independent contractor with Professional Insurance Systems, the general agency with which Respondent is associated; Scott E. Mednick, a licensed insurance agent and Respondent's partner in the transaction involving Mrs. Swan; and B. Aaron Wilds, the Department's investigator. Respondent also introduced Respondent's Exhibits A through N.

A transcript was furnished and subsequent to the hearing, at a time stipulated to by both parties, both counsel for the Department and the Respondent submitted Proposed Findings of Fact which have been ruled upon in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. At all times pertinent to the issues herein, the Department of Insurance was the government agency in Florida responsible for the licensing of insurance agents and the regulation of the practice of the insurance profession in this state. Respondent, Alan Chappuis, was licensed in Florida as a life insurance agent, health insurance agent, general lines agent, and a life, health and variable annuity contracts salesman.

   
   

2. Erna Swan, an 84 year old twice widowed lady, and the individual to whom Respondent sold the annuity policies in question, was unable, at the time of the hearing, to recall the names of either of her former husbands or when they passed away. She recalls that both husbands worked in insurance and that she has lived in the Pinellas County area for a long time, but cannot recall for how long.

   
   

3. Mrs. Swan lives alone and can cook for herself and bathe and dress herself, but does not know how much her current income is or the source of that income. She was able to recognize Respondent as her insurance agent of several years standing, but cannot recall whether she ever purchased anything from him, and she does not know what Guarantee Trust Life Insurance Company is. She does not know what an annuity is or whether she ever wanted to buy one from the Respondent. By the same token, she cannot recall if he ever tried to sell her an annuity.

   
   

4. Mrs. Swan has known Nadine Hopkins, a close friend, for about 10 years. She also recognizes Mr. Wells and Mr. Tipton, her attorney and stock broker respectively, but does not know what they do.

   
   

5. Mrs. Swan maintains a room in her condominium apartment which she uses for an office where, before she was placed under the guardianship of Ms. Hopkins, she paid her bills and kept her business records, such as they were. She recalls that she had a brokerage account with Merrill Lynch but cannot remember what it was for or what type of securities were in it. She is familiar

   with Bayridge Baptist Church, of which she is a member, and she recognizes that she has given money to the church over the years.

   
   

6. Mrs. Swan's driver's license was cancelled several years ago because, according to Ms. Hopkins, she felt she could not take the test required to renew it. Mrs. Swan does not recall this though she remembers she used to own a car. She cannot remember what kind it was.

   
   

7. Mrs. Swan's apartment is paid for. There are no mortgage payments. She claims she still writes checks for her monthly bills by herself, but also notes that Ms. Hopkins does it. More likely it is the latter. She still answers her phone, answers her mail, and reads the newspaper. She is, however, obviously incompetent to testify to the nature of an annuity, and it is quite clear that at this time she would be unable to understand the provisions of an annuity contract and the difference between an annuity contract and an investment portfolio in another product.

   
   

8. Mr. Tipton, formerly a stock broker with Merrill Lynch, first met Mrs. Swan in the early 1960's through a family member who worked at the family insurance agency. At that time Mrs. Swan and her husband had purchased the agency from his family, and in the years following the Swans stayed as friends of Mr. Tipton. Mr. Tipton became an investment advisor in 1981 to Mr. Swan who passed away sometime in either 1985 or 1986. He started buying U.S. Government bonds and thereafter moved to tax free investments. When Mr. Swan passed away, Mrs. Swan became the owner of the account.

   
   

9. During 1992 and 1993, Mr. Tipton would see Mrs. Swan once or twice a month. At that time, toward the end of 1993, it was clear to him that her memory appeared to be slipping. She would not remember things they had talked about and was unable to participate fully in the decisions made on her investments. At the end of 1993, Mrs. Swan's portfolio with Merrill Lynch was valued at approximately $360,000, plus a money market balance of $18,000. The account statement for October, 1993 reflected she had 5 municipal bonds valued at $80,000, tax free bond funds valued at $273,620, and approximately $18,000 in money market funds. Her estimated annual income from the bonds was approximately $6,631, or approximately $520.00 per month. Her tax free bond funds income returned approximately $1,200 per month, and her Nuveen Fund, approximately $50.00 per month, giving her a grand total of approximately $1,800 per month investment income in addition to her Social Security monthly payment of somewhat in excess of $650.

   
   

10. On December 20, 1993, Mr. Tipton, as a representative of Merrill Lynch, received a letter moving Mrs. Swan's account to another brokerage firm, located in Texas, but with a local representative. At that time, Mr. Tipton tried to stop the transfer by contacting his main office, but was advised that by the time he had received the letter, the transfer had been completed. Mr. Tipton wanted to stop the transfer because when he called Mrs. Swan to inquire about it, she indicated to him that she did not want her account moved.

    
    

11. Several weeks later, Mrs. Swan called Mr. Tipton to find out where her Merrill Lynch monthly account statement was. She did not recall at that time that her Merrill Lynch account had been closed and the securities therein transferred to the Texas brokerage concern. Because of this call, sometime in early January, 1994, Mr. Tipton called Mr. Wells, Mrs. Swan's attorney, and set up a meeting for the three of them. There were approximately three meetings of the three of them between January and March, 1994. The substance of their discussions was the fact that the broker to whom the Merrill Lynch account had

    been transferred had liquidated her entire account and used the proceeds thereof to pay for the annuities sold to Mrs. Swan by Mr. Chappuis and his associate, Mr. Mednick. According to Mr. Tipton, up until this time, Mrs. Swan had never indicated any dissatisfaction with the interest and income she was earning on her Merrill Lynch brokerage account. Mr. Tipton absolutely denies there was any churning of her account to garner more commissions. The only transfer was a sale at a premium in February, 1993 of bonds of the Jacksonville Electric Authority to create more capital for investment to provide greater income.

    
    

12. The brokerage account owned by Mrs. Swan was not insured against loss of principal though many of the particular funds in which much of the money was invested were, however, individually insured.

    
    

13. In 1990, Mrs. Swan's account, which had been in her name individually, was transferred to a trust account of which she was the beneficiary for life, with the provision that at her death, the funds therein would be distributed to various religious organizations and a few friends. Mrs. Swan had no family heirs. No commission was earned by Mr. Tipton on the transfer, though he did receive a commission on both the above-mentioned sale of the Jacksonville Electric bonds and the purchase of a tax free bond fund with the proceeds. Her brokerage account permitted her to write checks on the funds in the money fund.

    
    

14. Mr. Tipton claims he never engaged in a transaction regarding Mrs. Swan's account without first talking to her about it. In his opinion, whenever he did make a change she appeared alert and aware enough to participate effectively. The last major transaction was the 1990 bond sale, however.

    
    

15. Mrs. Hopkins and Mrs. Swan attend the same church. In late 1993 or early 1994, Respondent's business card was always on Mrs. Swan's refrigerator. At no time did she ever speak disparagingly of him to Mrs. Hopkins, or complain about any insurance product he sold her. Mrs. Hopkins was not Mrs. Swan's guardian at that time and Mrs. Swan was paying her own bills, however not effectively. She was late getting them out and complained it was becoming difficult for her to type out the checks. According to Mrs. Hopking, Mrs. Swan was not extravagant in her spending. She did not take cruises, go to expensive restaurants or buy a lot of clothes. Mrs. Swan, in Ms. Hopkins' opinion, lived comfortably. She was generous in the terms of her charitable contributions.

    
    

16. Since being appointed Mrs. Swan's guardian, Mrs. Hopkins had seen her financial records and she knows that Mrs. Swan donated a lot of money to various churches and religious organizations. Mrs. Swan received many requests for donations and indicated that as long as she had the money to give she would do so. In later years, however, as Mrs. Hopkins recalls, it became a physical and mental burden for Mrs. Swan to write the checks, and she frequently commented on this.

    
    

17. Mr. Wells is Mrs. Swan's attorney, specializing in estate and trust planning. He met Mrs. Swan through a friend in 1990 and began to serve as her estate planner. In the spring of 1994 Mr. Wells met with Mr. Tipton and Mrs. Swan regarding the Respondent's sale of her security portfolio and the purchase of the two annuities in issue here with the proceeds. At that time Mrs. Swan seemed to have no knowledge of the transaction. As a result, he called Guarantee Trust Life Insurance Company to get some information on what needed to be done in order to bring about a recision of the policies, but before any action was taken, the entire matter was turned over to Mr. Keirnan, another attorney, who does trial work. As a result of Keirnan's efforts, approximately two weeks before the hearing, Mr. Wells, on behalf of Mrs. Swan, received a

    check in the amount of approximately $372,000 from Guarantee Trust and Life Insurance Company as full reimbursement of the premiums paid for the two annuities in issue.

    
    

18. From the time the annuities were issued in December, 1993 and January, 1994, Mrs. Swan had only her Social Security check to live on. She also received a check from Guarantee for $5,000, at her request, at the time the policies were issued as the balance in her brokerage account over the amount required as premiums for the annuities. She received nothing from her annuities which, as set up, did not call for the payment of any monthly income. As a result, Mr. Wells felt it necessary to borrow between $15,000 and $20,000 at 8 percent for Mrs. Swan from other trusts he managed to provide funds for Mrs. Swan to live on. From the documents which Mr. Tipton and Mrs. Swan brought to him in March, 1994, Wells could determine that the two annuities were purchased for her but she, at that time, did not seem to know anything about them. Though the annuities offered several options to permit period withdrawal of principal and interest, none had been selected by Mrs. Swan and as they then existed, she would draw no income from them until she was 100 years of age.

    
    

19. When Mr. Tipton and Mrs. Swan came to Mr. Wells' office and brought the paperwork showing she had sold her securities to buy the annuities, Mr. Wells called Respondent to find out what had happened to Mrs. Swan's money. About the same time, he drafted a letter to Respondent at Mrs. Swan's request in which she requested Respondent not contact her any more. This letter was written because Mrs. Swan had said Respondent had "pestered" her at home and upset her on some occasions before the letter was written.

    
    

20. Guarantee's manager of Government Relations and Compliance, Mr. Krevitzky, identified the two policies issued to Mrs. Swan. According to Mr. Krevitzky, an annuity is a savings vehicle which holds funds over a period at interest with provision for single or periodic pay out. Interest on both annuities in issue here was guaranteed at a rate of 4.5 percent per year or higher. The first year, the policies earned only the guaranteed 4.5 percent interest, and the income was credited to the policy from January, 1994 until the policies were surrendered as a part of the litigation settlement on March 25, 1995. At that point, since it was considered that the policies were rescinded and therefore void ab initio, the interest earned was forfeited and not paid. Only the premiums paid in were refunded in total. The commission paid to the Respondent and his associate, Mr. Mednick, was paid out of company funds and not Mrs. Swan's funds.

    
    

21. The annuity contracts sold by the Respondent to Mrs. Swan had options for five different pay-outs, some of which would have returned income to her during the pendency of the contract. However, none of these was selected by Mrs. Swan and there was no evidence to indicate that Respondent ever explained any of them to her. As they existed as of the date they were cancelled, and at all time up until then, Mrs. Swan would receive no income until the annuity matured at her age 100. This is an unreasonable situation for an individual of Mrs. Swan's age and situation.

    
    

22. Mr. Krevitzky contends that the potential pay out options could have provided Mrs. Swan with a substantial income equal to or exceeding the income she was received from her securities portfolio. Most of these options would have included a partial return of principal, however, whereas the income from the prior held portfolio was interest only with her principal remaining intact. One option provided an income for a guaranteed period which, in some circumstances, could have resulted in her receiving more than the amount paid in

    for the contract. The ultimate fact remains, however, that at the time of sale, and at all times thereafter, notwithstanding the fact that Mr. Chappuis was directed to stay away from Mrs. Swan, he had failed to assist her in the selection of any income option and she was receiving no current income at all from the annuities. In each of the two years prior to the purchase, for 1992 and 1993, she had regular tax free investment income of between $26,000 and

    $27,000, in addition to the capital gains of approximately $23,000 from the sale of the bonds in 1992. It matters not that she needed little to live on or donated a great portion of her income to charity. This decision was hers to make. By the same token, it matters not that no request for income was made, during the pendency of the annuities, by or on behalf of Mrs. Swan.

    
    

23. Annuities have several benefits over other types of investments, according to Mr. Krevitzky. One is the tax deferment provision for interest earned on the annuity. Another is the fact that, subject to local law, the principal of the annuity is not subject to garnishment. A third is the guaranteed return of principal at the end of the annuity which permits older annuitants to provide for their heirs while maintaining income during their lifetimes. Many senior citizens look to the safety of their investment rather than the taxability of the interest. Therefore, in selling annuities to seniors, the agents stress these factors and the no-probate consideration.

    
    

24. David W. Johnson has been an independent contractor with Respondent's broker, Professional Systems Associates, since 1989 and is the annuity manager for the firm. Mr. Johnson indicates that there has been an increase in the annuity business with seniors in 1993 - 1994. Funds for the purchase of the annuities usually comes from bank certificates of deposit, but sometimes, like in the instant case, the funds come from a brokerage account. In his experience, seniors choose annuities over certificates of deposit and brokerage accounts.

    
    

25. According to Mr. Johnson, if Mrs. Swan had wanted to stop the transfer from her account she could have done so up until the transaction was completed, even after the securities had been liquidated and the funds sent to Guarantee. This is so, he claims even though Mrs. Swan gave authority to make the transfer in the documentation accompanying her application for the annuities. Mr. Johnson indicated it takes about two weeks after the receipt of the premium before Guarantee issues the annuity contract and at any time before issue, the transaction could be cancelled and the money returned. Even after issue, there is a "free look" period during which the contract may be cancelled without penalty. Though the contract may be cancelled and the premium returned, the former securities are still liquidated and the brokerage account closed. According to Mr. Johnson, there was nothing in the paperwork regarding these annuities which he saw which would raise any flag for consideration. He did not feel it necessary to call Mrs. Swan to see if she really wanted the policy and he never received a call from her or anybody else regarding it.

    
    

26. Mr. Chappuis' partner in this sale was Scott Mednick who has been a licensed insurance agent since 1984 and who is an independent contractor with the same agency. Mr. Mednick was solicited to accompany Mr. Chappuis to Mrs. Swan's home in December, 1994 because of his expertise in the annuity field. Respondent had described Mrs. Swan to him as a long time customer. Respondent claimed that Mrs. Swan had indicated she was concerned about her brokerage account and he wanted to show her some product, annuities, she might be interested in.

27. Mr. Mednick has known Respondent for eleven years and knows him to be a top producer. Respondent's reputation is that he is cheap and close with the dollar. Nonetheless, Mr. Mednick claims he was not surprised that Respondent was willing to share the commission on this sale in order to be sure the client got the proper product.

    
    

28. Mrs. Swan let Mr. Mednick examine her monthly statement from Merrill Lynch. It appeared to Mr. Mednick that the account had not grown over the years. This is not surprising in that the portfolio was made up solely of tax free bond funds, tax free municipal bonds and tax free money marts, the volatility of and fluctuation in price of which is minimal.

    
    

29. Mr. Mednick cannot now recall if Mrs. Swan indicated she knew about her stocks. However, he relates that he and the Respondent suggested she look into annuities as an alternative which Respondent explained to her. In addition, he claims they provided her with a lot of written material. Based on Mrs. Swan's action, words and attitudes expressed, Mr. Mednick believed she completely understood what was explained to her and wanted to make the change. It was his belief she seemed to understand she would pay no commission on the purchase; that she would have a guaranteed income that she could not outlive; that the annuity avoided the volatility of the stock market; and it was not attachable by creditors. As structured and sold to Mrs. Swan, however, she was to get no income at all from this product until she reached the age of 100/.

    
    

30. Mr. Mednick asserts that at no time did he feel that Respondent had less than the best interests of Mrs. Swan at heart and he can recall no time when Respondent lied to Mrs. Swan. All representations made by either Respondent or Mednick allegedly came from the brochures left with her. Mednick indicates that during their conversation, Mrs. Swan did not seem concerned about getting her principal out of the investment. She was most concerned about her desire to leave the principal to the church. Mednick claims that at the time of the sale, the two agents asked Mrs. Swan if she wanted her interest paid quarterly but she said to let it accrue. This representation, in light of the other evidence, is not credible. Taken together, Mednick's testimony does nothing to detract from Respondent's sale of this product, inappropriate as it was for this client, to Mrs. Swan.

    
    

31. Mr. Mednick's credentials are somewhat suspect, and his credibility poor, however. By his own admission, he has been administratively fined by the Department on two occasions based on allegations of misconduct. He denies any misconduct, however, claiming he accepted punishment only as an alternative to a prolonged contest of the allegations.

    
    

32. The allegations herein were referred to an investigator of the Department to look into. As is the custom of the Department, he did not interview the Respondent but merely sought to gather facts concerning each allegation to be sent to the Department offices in Tallahassee where the analysis and determination of misconduct is made. By the same token, he did not call or speak with Mrs. Swan, Mr. Mednick, or anyone at Professional Systems.

    He spoke with Mr. Tipton, Mr. Wells, Mrs. Hopkins and with Mr. Keirnan a couple of times.

    
    

    CONCLUSIONS OF LAW

    
    

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

34. In its Administrative Complaint, Petitioner alleges that Respondent committed various violations of the statutes governing the sale of insurance in this state in violation of Chapter 626, Florida Statutes, in that he:

    
    

    1. willfully used his license to circumvent requirements or prohibitions of the code;

    2. willfully misrepresented an annuity contract;

    3. demonstrated a lack of fitness or trustworthiness to engage in the business of insurance;

    4. demonstrated a lack of reasonably adequate knowledge or technical competence to engage in the transactions authorized by his license;

    5. engaged in fraudulent or dishonest practices under his license;

    6. willfully violated a proper order or rule of the department or willfully violated any provision of the [insurance] code;

    7. violated a provision of the code or other provision applicable to the business of insurance while dealing under the license;

    8. violated any lawful order or rule of the department;

    9. engaged in unfair or deceptive acts or practices or shown himself to be a source of injury or loss to the public;

    10. knowingly made a sales presentation which misrepresented the benefits, advantages, conditions or terms of an insurance policy; and

    11. knowingly making and delivering or causing to be delivered to any person a false statement.

        
        

35. Section 626.611 outlines the compulsory grounds for refusal, suspension or revocation of an agent's license and the provisions of subparagraphs a. through f. of the paragraph next above are defined in subsections (4), (5), (7), (8), (9) and (13) of that section. Sections 626.621 outlines the discretionary grounds for refusal, suspension or revocation of an agent's license, and subparagraphs g. through i. of the paragraph next above are defined in subsections (2), (3) and (6) of that section. Subparagraphs j. and

    k. are defined as unfair or deceptive practices and are made punishable by Section 626.99541.

    
    

36. The burden of proof in this case rests with the Petitioner to establish the allegations or misconduct contained in the Administrative Complaint by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

37. The evidence is clear that while Mrs. Swan was sold a policy which may have been appropriate to someone in a different position than she, it was not appropriate to her needs. Before Respondent and his associates sold out her investment portfolio and purchased the annuities in question, she received a healthy yearly income, for the most part free of tax, and had an estate to dispose of as she wished at or before her death. In place therefor, Mrs. Swan was left with an investment which would, as arranged, provide her no income until age 100, the appreciation in which would be taxable. To be sure, there

    are benefits to an annuity contract, as described by Mr. Johnson and Mr. Krevitzky. They do not, however, inure to Mrs. Swan's benefit in this case. Potential pay outs which begin at or near age 100 are of little value to an 84 year old widow with no remaining source of support than Social Security.

    
    

    38, It matters not that Mrs. Swan did not "need" the income, or that she was giving most of it away to the church or other beneficiaries. That choice was hers to make and not Respondent's. The claim that she wanted some reason not to donate to the church is not credible. The evidence is clear that though Mrs. Swan may have had some intermittent periods during which she was capable of handling her own financial affairs. It is quite clear that the "decision" to purchase these annuities as was done here was not during one of them. The actions of the Respondent left Mrs. Swan with only her monthly Social Security check to live on.

    
    

38. Mr. Mednick, an individual whose ethical credentials are somewhat suspect because of his prior disciplinary record, was called upon by the Respondent to help with this transaction. His glib protestations that in his opinion Mrs. Swan "understood completely" what was explained to her and "wanted to make the change" are preposterous. According to Mr. Tipton, several weeks after the sale of her portfolio was made, she called him to see where her monthly statement was. It was clear from her testimony at the hearing and her demeanor on the stand that Mrs. Swan was seen as an opportunity for a fast sale.

    
    

39. While Respondent and Mr. Mednick may not have lied or specifically misrepresented the specifics of the contracts sold to her, they were not frank and circumspect with her about how the purchase would affect her income and, possibly, her living standards, as it was their legal and ethical responsibility to do. This constituted a misrepresentation by omission, and is a violation of Sections 626.611(5), 626.9541(1)(a)1 and (e)1. In that regard, her broker had to borrow considerable sums from other accounts he managed to provide her with sufficient income on which to live while the attorney was attempting to rectify the situation created by Respondent's actions.

    
    

40. Taken together, Respondent's conduct demonstrates a lack of fitness and trustworthiness to engage in the insurance profession and is a violation of Section 626.611(7). It can also reasonable be classified as dishonest and a violation of Section 626.621(6).

    
    

41. Rule 4-231.030(6), F.A.C., sets out the range of penalties provided for violations of the insurance code. Rule 4.231.160 provides for the consideration of aggravating and mitigating factors in the penalty assessment process. Little if any mitigation can be seen here while the financial abuse of the elderly, as clearly demonstrated here, is of an aggravated nature. Petitioner here recommends that Respondent's license and eligibility for licensure be suspended for nine months. In light of the nature of this case and the matters shown, this is an appropriate sanction.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED that the insurance licenses and the eligibility for licensure of the Respondent herein, Alan Chappuis, be suspended for nine months.

RECOMMENDED this 22nd day of August, 1995, in Tallahassee, Florida.

ARNOLD H. POLLOCK, 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 22nd day of August, 1995.

APPENDIX TO RECOMMENDED ORDER

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.

FOR THE PETITIONER:

1. - 21. Accepted and incorporated herein.

22. & 23. Accepted and incorporated herein.

24. - 27 Accepted and incorporated herein.

FOR THE RESPONDENT:

Respondent's post hearing submittal was entitled "Respondent's Final Argument." However, because it makes specific Findings of Fact, the submittal will be treated as though it were Proposed Findings of Fact which will be ruled upon herein.

1. First sentence accepted. Balance rejected as contra to the weight of the evidence.

2. & 3. Accepted that Mr. Krevitzky testified and that there was nothing in the contract which would cause Respondent to misrepresent. The product may well be a worthy product for someone in a different financial position than Ms. Swan, and the issue is whether Respondent fully explained the implications and ramifications of the contracts to her.

1. Rejected as a misconception of the nature of the witness' testimony.

2. Rejected as contra to the weight of the evidence.

3. First sentence accepted. Second sentence rejected.

4. Irrelevant.

5. Accepted as a summary of the witness' testimony.

6. First and second sentences accepted. Balance rejected as an unwarranted conclusion drawn from the evidence.

7. Accepted but irrelevant.

COPIES FURNISHED:

James A. Bossart, Esquire Department of Insurance 612 Larson Building

Tallahassee, Florida 32399-0300

Alan Chappuis, Pro se

P. O. Box 86126

Madiera Beach, Florida 33738

The Honorable Bill Nelson State Treasurer and

Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Dan Sumner

Acting 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 consult with the agency which will issue the Final Order in this case concerning its rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency which will issue the Final Order in this case.

Docket for Case No: 95-001101

Orders for Case No: 95-001101