STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE ) AND TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 95-5919

)

JAMES PATRICK SHORES, )

)

Respondent. )

)

RECOMMENDED ORDER

On July 15, 1996, a formal administrative hearing was held in this case in Tallahassee, Florida, before J. Lawrence Johnston, Hearing Officer, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Lisa S. Santucci, Esquire

John R. Dunphy, Esquire

Department of Insurance and Treasurer 612 Larson Building

Tallahassee, Florida 32399-0333

For Respondent: James Patrick Shores, pro se

622 Ivy Chase Lane Norcross, Georgia 30092

STATEMENT OF THE ISSUE

The issue in this case is whether the Department of Insurance should discipline the Respondent for alleged violations of provisions of the Insurance Code governing agents.

PRELIMINARY STATEMENT

On or about August 6, 1993, the Department of Insurance filed an Administrative Complaint against the Respondent, James Patrick Shores, in Department Case No. 93-L-476RES. The Respondent requested formal administrative proceedings under Section 120.57(1), Fla. Stat. (1993), but also requested that the matter be held in abeyance pending the resolution of related civil proceedings pending in federal district court.

On or about December 5, 1995, the Department referred the matter to the Division of Administrative Hearings (DOAH) for assignment of a hearing officer. Initially, final hearing was scheduled for March 25, 1996. But on March 13, 1996, the Department filed a Motion for Continuance, and final hearing was

continued. On May 1, 1996, the parties reported that the case was ready to be rescheduled for final hearing after July 1, and final hearing was rescheduled for July 15, 1996, in Tallahassee.

At final hearing, the Department called one witness and had Petitioner's Exhibits 1 through 16 admitted in evidence (Petitioner's Exhibit 12 being the transcript of the deposition of the Department's complaining witness.) The Respondent testified in his own behalf and had Respondent's Exhibits 1 through 3 admitted in evidence.

After presentation of the evidence, the Department ordered the preparation of a transcript of the final hearing, and the parties were given ten days from the filing of the transcript in which to file proposed recommended orders.

The transcript was filed on August 5, 1996. Only the Department timely filed a proposed recommended order. The Respondent's was not filed until September 3, 1996, and it clearly inappropriately responds to the Department's timely proposed recommended order. For those reasons, the Department's Motion to Strike Respondent's Proposed Recommended Order is granted.

Explicit rulings on the proposed findings of fact contained in the Department's proposed recommended order may be found in the Appendix to Recommended Order, Case No. 95-5919. While no explicit rulings are made on the Respondent's stricken proposed findings of fact, the subject of each of them is appropriately addressed in this Recommended Order.

FINDINGS OF FACT

1. The Respondent, James Patrick Shores, is licensed in the State of Florida as a non-resident life and health insurance agent. He resides in the State of Georgia. In 1990, he was the president and responsible agent for The Shores Group, Inc. Neither the Respondent nor his company, The Shores Group, Inc., were authorized insurers in the State of Florida or in any other state.

   
   

2. In 1990, the Respondent sold The Shores Group Health Plan (the Respondent's Plan) to companies that sold their products through franchise distributors and dealers. Under the Respondent's Plan, the Respondent's company (The Shores Group, Inc.) did the necessary underwriting; the buyer of the plan paid to The Shores Group, Inc., a reduced premium and self-insured the first part of the health insurance risks of its franchise distributors or dealers and their employees. The Shores Group, Inc., then obtained "stop loss" coverage (also known as "excess" coverage) for losses incurred in excess of a deductible established by The Shores Group, Inc., for the policy year. The Shores Group, Inc., administered the plan and supervised the operation of the plan. Claims adjustments were subcontracted to another company to avoid a conflict of interest; after being adjusted, claims were presented to The Shores Group, Inc., for payment.

   
   

3. Tom's Distributors and Glass Dealers were among the companies that bought the Respondent's Plan in 1990. For the plans Tom's and Glass Dealers bought, The Shores Group, Inc., set the deductible at $40,000 and obtained "stop loss" coverage through CIGNA for losses above $40,000.

   
   

4. By late in 1990, the Respondent learned that certain "regulatory authorities" were taking action against plans like the ones he sold to Tom's and Glass Dealers because, under the plans, health insurance was being provided by entities that were not authorized insurers. He understood by then (if not

   before) that his Plan was illegal in states like Florida and that, to be legal, insurance had to be provided by an authorized insurer from dollar one. He began to take steps to come into compliance with the laws of those states.

   
   

5. The Respondent first discussed the situation with Philip Hottel, CIGNA's general manager in Atlanta, Georgia, and inquired whether CIGNA would be able to provide full insurance coverage for the Respondent's Plan from dollar one. Hottel inquired within CIGNA and advised the Respondent that CIGNA was not interested in providing full insurance coverage.

   
   

6. The Respondent next entered into discussions with a group negotiating to buy an insurance company. The discussions resulted in an agreement, contingent on the completion of the purchase, for the insurance company to provide full insurance coverage from dollar one for The Shores Group, Inc.'s book of business.

   
   

7. By letter dated January 30, 1991, the Respondent confirmed earlier advice to Hottel that the Respondent and his company were moving to "fully insure" his Plan and, in light of CIGNA's unwillingness, would have seek "full insurance" elsewhere.

   
   

8. By mid-February, 1991, the Respondent learned that the contingency for the provision of full insurance for The Shores Group, Inc.'s book of health business would not occur--the group with which he had negotiated was unable to complete the insurance company purchase.

   
   

9. Finding himself left with no insurance coverage at all for his Plan, the Respondent re-contacted Hottel. According to the Respondent, Hottel told the Respondent that he luckily had not yet forwarded the Respondent's January 30 notice of cancellation to CIGNA for processing and that he would simply reinstate CIGNA's stop loss coverage. Meanwhile, the two began discussing the possibility of having CIGNA "reinsure" the Respondent's Plan. The Respondent's theory was that "full reinsurance" should be as good as "full insurance" as far as the Department and the other state regulatory agencies were concerned. 1/

   
   

10. By letter dated February 21, 1991, Hottel confirmed their discussions and that "CIGNA is willing to fully reinsure your entire book of health business effective March 1, 1991." Hottel closed the letter: "I am extremely excited about the opportunity to work with you and your firm and look forward to our further negotiations on this matter."

    
    

11. Unfortunately, since Hottel did not testify, it is not clear what Hottel meant by CIGNA's willingness to "fully reinsure" the Respondent's business or by the "further negotiations" he contemplated. The Respondent testified that he thought "fully reinsure" meant essentially the same thing as "fully insure." If so, his thinking revealed a fundamental misunderstanding of the concepts of full insurance and reinsurance.

    
    

12. Hottel also wrote in his February 21, 1991, letter to the Respondent: "In addition, CIGNA recognizes and has appointed J. Patrick Shores as a licensed Agent to write business for CIGNA." Hottel agreed to provide the Respondent with "the appropriate non-resident licensing forms required to do business in the applicable state." It is not clear what kind of insurance Hottel was intending to authorize the Respondent to write for CIGNA--the stop loss insurance he had been writing, or the new reinsurance mentioned previously in the letter.

13. At some point in time, 2/ Hottel inquired of CIGNA's stop loss underwriters concerning the Respondent's request for reinsurance. The underwriter referred Hottel to CIGNA's reinsurance division. Since neither Hottel nor anyone from CIGNA's reinsurance division testified, it is not clear whether Hottel contacted the reinsurance division or, if he did, when the contact took place or how CIGNA reinsurance responded. But, contrary to what is stated in Hottel's February 21, 1991, letter to the Respondent, CIGNA reinsurance would not have agreed to provide insurance coverage from dollar one; that would have been contrary to the very nature of reinsurance. Nor would CIGNA reinsurance have agreed to reinsure an entity like The Shores Group, Inc., which was not an authorized insurer. Assuming that Hottel obtained this information from CIGNA reinsurance, he apparently did not relay it to the Respondent until later in March, 1991. See Finding 24, infra.

    
    

14. At approximately the same time period during which the Respondent was communicating with Hottel about CIGNA reinsurance, he was telephoned by Robert Madio, as the representative of Florida insurance brokers doing business as The Madio Group, concerning health insurance coverage sought by two physician associations--Sarasota County Medical Services, Inc. (SCMS), and Sarasota County Medical Association (SCMA). 3/ These associations consisted of a total of approximately 200 physicians and their 200 separate medical practices, which had a total of approximately 500 employees among them. The associations were seeking a single health insurance plan that could be utilized by their members to the benefit of the physicians and their employees.

    
    

15. At the time of Madio's telephone call, the associations were under a Department Amended Consent Order intended to resolve agency administrative action against them for operating an unauthorized health insurance plan. Under the Amended Consent Order, the associations were required to place the participants in its unauthorized plan "into an arrangement which is fully insured by an insurer authorized in this state" by March 31, 1991. Madio knew of this requirement and informed the Respondent initially that the associations wanted full insurance. There was no evidence that Madio initially explained to the Respondent the contents of the Amended Consent Order.

    
    

16. The Respondent explained The Shores Group Health Plan to Madio, and Madio seemed interested on behalf of the associations. On February 27, 1991, the Respondent faxed a proposal to The Madio Group, together with copies of necessary forms, for coverage effective March 1, 1991. The proposal was subject to general underwriting of the group. In order for the necessary underwriting to take place, the proposal required that all employer participation forms and employee enrollment forms be submitted by March 15, 1991. Meanwhile, the estimated March, 1991, premium was to be paid by March 5, 1991.

    
    

17. The Respondent also faxed Madio a letter dated February 27, 1991, to confirm that, effective March 1, 1991, the plan was "fully reinsured by CIGNA" and "not a partially self funded plan" but a "fully insured plan." The Respondent based these representations on his understanding of the reinsurance he understood CIGNA would be providing in accordance with Hottel's February 21, 1991, letter. But it is not clear that the reinsurance referred to in the letter would be in effect as of March 1, 1991; according to the terms of the letter itself, the reinsurance was subject to "further negotiations." See Finding 10, supra. In addition, as previously stated, reinsurance is not primary insurance coverage from dollar one; it implies a "front company" providing the primary insurance.

18. When the proposal was received, Madio noticed that the employer participation form included a statement to the effect that the Plan was similar to self-insurance. In view of the requirement in the Amended Consent Order, Madio was concerned and inquired of the Respondent. The Respondent told Madio: that it was a general form; that the reference to self-insurance did not apply to the Shores Group Health Plan being proposed, which he said was fully insured; and that the reference to self-insurance could be ignored or deleted. Madio requested that the Respondent send written confirmation of his representations. At this point in time, Madio explained to the Respondent the terms of the Amended Consent Order and why the associations needed full insurance. On February 28, 1991, the Respondent sent Madio a letter stating that as of March 1, 1991:

    
    

    The health plan is fully insured.

    The health plan is fully insured from dollar one. Cigna insures the plan from dollar one.

    
    

    In reliance on the Respondent's representations, Madio presented the Respondent's proposal to the associations, and they accepted the proposal.

    
    

19. What happened next is confused. Madio testified that one association (SCMA) delivered its $50,000 estimated premium check and forms to him on or about March 1, 1991, and that he mailed them to the Respondent. He testified that the Respondent gave the other association (SCMS) an extension of time to complete the conditions in the February 27, 1991, proposal and that SCMS dealt with the Respondent's company directly after that. He testified that he does not know the details of SCMS's dealings with the Respondent.

    
    

20. Although it is possible that Madio's testimony confused the two associations, the check he said he handled (the only one introduced in evidence) was not written until March 12, 1991. Meanwhile, the Respondent claimed that Madio went on an extended vacation during the first part of March, 1991, and that The Shores Group, Inc., received no further contact from either The Madio Group or either of the associations until Madio returned from vacation around March 12, 13 or 14, 1991. Then, according to the Respondent, Madio hurriedly traveled to Atlanta to hand-deliver two $50,000 checks (one for each association) and forms for both associations on or about March 15, 1991. (None of the forms were introduced in evidence.) It is found that the Respondent's testimony is more accurate as to how and when the delivery of the checks and forms took place.

    
    

21. The Respondent negotiated the $50,000 check that was introduced in evidence and deposited the money in The Shores Group, Inc., business account. It is not clear from the evidence what happened to the other $50,000 check.

    
    

22. Accepting the Respondent's testimony on the delivery of the checks and forms, the Respondent's company received the checks and forms after the deadlines in the February 27, 1991, proposal. 4/ The Respondent also testified that his company only received approximately 100 employer participation forms and approximately 265 employee enrollment forms. According to the Respondent, some of the information required in the forms was incomplete, and the Respondent pressed Madio to have the associations send him corrected forms. 5/ The Respondent testified that, despite the best efforts of The Shores Group, Inc., to facilitate the process, it was impossible to underwrite the plan participants, finalize the premiums and allocate the March premium checks to the participants enrolled in the plan before the end of the month.

23. The Respondent testified that the underwriting difficulties were resolved by April, 1991. However, the evidence was not clear as to whether the associations made any additional premium payments for April or whether The Shores Group, Inc., agreed to extend coverage to the associations in April, 1991. Claims were submitted by members of the association, and a dispute arose as to whether the associations had coverage effective March 1, 1991, under the Respondent's February 27-28, 1991, proposal.

    
    

24. CIGNA soon became aware of the Respondent's representations to The Madio Group and to the two associations (and also to others) as to the nature of The Shores Group Health Plan. On April 2, 1991, Hottel wrote the Respondent a letter confirming a telephone conversation they had about a March 18, 1991, letter the Respondent addressed to "All Insured Clients of The Shores Group, Inc." 6/ Hottel wrote:

    
    

    [Y]our letter does not accurately represent CIGNA's intent of reinsuring your Plan. In fact, it is not CIGNA's intent to "reinsure to dollar one" as your letter indicates.

    This language is creating a great deal of confusion in the marketplace, resulting in numerous inquiries from brokers, consultants, prospects, attorneys and most recently several State Insurance Commissioners.

    
    

    CIGNA's intent is to reinsure your book on an "Excess" basis, i.e., a Specific Deductible per insured. The amounts and provisions of the agreement have not been determined as we have not received the appropriate data from you to provide you with a quotation. The intent is also to reinsure the "front company", once it is in place, so the Plan would be fully insured by

    the appropriate life [sic] insurance company. It was never CIGNA's intent to fully insure your Plan or reinsure a self-funded Plan.

    I sincerely hope the "front company" will be placed very soon.

    
    

25. On or about March 31, 1991, CIGNA's stop loss policies for Tom's and Glass Dealers were cancelled. It is not clear whether they were cancelled as a result of information CIGNA received as to misrepresentations by the Respondent, or as a result of a subsequent notice of cancellation.

    
    

26. The Respondent testified that some of the money received from SCMA and SCMS was paid to CIGNA to attempt to bind coverage for them. However, CIGNA never issued any policies covering either SCMS or SCMA. It is not clear from the evidence what happened to the money the Respondent sent CIGNA after CIGNA declined to provide coverage.

    
    

27. By June, 1991, the Respondent secured insurance coverage from dollar one from Provident Indemnity for the entire book of business of The Shores Group, Inc., including SCMS and SCMA, and transferred its business with these companies to Provident Indemnity. Under the new arrangement, neither the Respondent nor The Shores Group, Inc., retained any role in providing the insurance coverage, other than as agent for Provident Indemnity.

28. It is not clear from the evidence what happened to the $100,000 paid to The Shores Group, Inc., in March, 1991. The Madio Group later sued the Respondent and his company, as well as CIGNA, in federal court on behalf of SCMS and SCMA. The Respondent and his company filed for bankruptcy, and the action was stayed as to them. The evidence was not clear as to the status of the lawsuit.

    
    

29. When the Respondent applied for non-resident licensure in 1986, he swore in writing that he would familiarize himself with the insurance laws of the State of Florida and the code of ethics approved by the Department. However, he testified that he has never read the Florida Insurance Code but instead relied on his attorneys to advise him on it as necessary.

    
    

    CONCLUSIONS OF LAW

    
    

30. In disciplinary proceedings such as this, the burden is on the agency to prove the allegations in the Administrative Complaint by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

31. Section 626.561(1), Fla. Stat. (1991), provided:

    
    

    All premiums, return premiums, or other funds belonging to insurers or others received by an agent, solicitor, or adjuster 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, insured, or other person entitled thereto.

    
    

    In this case, it was proven that the Respondent received two $50,000 checks from the medical associations and deposited at least one of them in the business account of The Shores Group, Inc. It is not clear from the evidence what happened to the $50,000 proven to have been deposited. The Department failed to prove this alleged violation.

    
    

32. Section 626.611, Fla. Stat. (1991), set out the grounds for compulsory refusal, suspension, or revocation of agent's, solicitor's, adjuster's, service representative's, managing 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, adjuster, service representative, managing general 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 applicant, licensee, or appointee any one or more of the following applicable grounds exist:

    * * *

    (5) Willful misrepresentation of any insurance 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 advertising.

    * * *

    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 appointment.

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

    * * *

    (13) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code.

    
    

    The evidence proved violations of all of these statutory provisions. The Respondent misrepresented to The Madio Group and the two associations the nature of The Shores Group Health Plan. The latter made known to the Respondent, through Madio, that the Amended Consent Order required that the plan be fully insured from dollar one. The Respondent told them that it was, through CIGNA. The Respondent knew or should have known that his representation was false. To the extent that the Respondent claims not to have been aware initially that The Shores Group Health Plan was illegal, or claims that there is such a thing as "full reinsurance," which supposedly is the functional equivalent of "full insurance" from dollar one, his claims prove his lack of adequate knowledge and technical competence. He admits that he never has read the insurance laws of the State of Florida, despite having sworn in 1986 that he would.

    
    

33. Section 626.621, Fla. Stat. (1991), set out the following grounds for discretionary refusal, suspension, or revocation of agent's, solicitor's, adjuster's, service representative's, managing general agent's, or claims investigator's license or appointment:

    
    

    The department may, in its discretion, deny, suspend, revoke, or refuse to renew or continue the license or appointment of any agent, solicitor, adjuster, service representative, managing general agent, or claims investigator, and it may suspend or revoke the eligibility to hold a license or appointment of any such person, if it finds that as to the applicant, licensee, or appointee any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under s. 626.611:

    * * *

    (2) Violation of any provision of this code or of any other law applicable to the

    business of insurance in the course of dealing under the license or appointment.

    * * *

    (6) In the conduct of business under the license or appointment, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part X of this chapter, or having otherwise shown himself to be a source of injury or loss to the public or detrimental to the public interest.

    
    

    The last clause of Section 626.621(6) recently has been held to be unconstitutionally vague. Whitaker v. Dept. of Ins. and Treasurer, 21 F.L.W. 1353D, 1354D (Fla. 1st DCA 1996).

    
    

34. Section 626.901(1), Fla. Stat. (1991), provided as follows:

    
    

    No person shall, from offices or by personnel or facilities located in this state, or in any other state or country, directly or indirectly act as agent for, or otherwise represent or aid on behalf of

    another, any insurer not then authorized to transact insurance in this state in:

    1. The solicitation, negotiation, procure- ment, or effectuation of insurance or annuity contracts, or renewals thereof;

    2. The dissemination of information as to coverage or rates;

    3. The forwarding of applications;

    4. The delivery of policies or contracts;

    5. The inspection of risks;

    6. The fixing of rates;

    7. The investigation or adjustment of claims or issues; or

    8. The collection or forwarding of premiums; or in any other manner represent or assist such an insurer in the transaction of insurance with respect to subjects of insurance resident, located, or to be performed in this state.

       
       

       It is clear that The Shores Group, Inc., was acting as an insurer in the State of Florida. See Sections 624.401, 624.462, 624.4621, 624.4622, and 624.464, Fla. Stat. (1991). The evidence was clear that The Shores Group, Inc., was not authorized to act as an insurer in Florida and that the Respondent was representing it. This is a violation of Section 626.901(1).

       
       

35. Section 626.9541, Fla. Stat. (1991), provided in pertinent part:

    
    

    (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS.--The following are defined as unfair methods of competition and unfair or deceptive acts or practices:

    * * *

    (e) False statements and entries.--

    1. Knowingly:

    * * *

    e. Causing, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement.

    
    

    It is clear from the evidence that the Respondent violated this statute by falsely representing to The Madio Group and the two associations that The Shores Group Health Plan was fully insured by CIGNA from dollar one.

    
    

36. F.A.C. Rule Chapter 4-231 contains the Department's Penalty Guidelines for Insurance Representatives. While they were not adopted until 1993, it is concluded that the Department's disciplinary action in this case should conform to them.

    
    

37. Under the Department's Penalty Guidelines for Insurance Representatives, the highest penalty provided for any single count is the applicable penalty guideline. In this case, the nine month suspension provided in the guidelines for violation of Section 626.611(9) is the applicable penalty guideline. See F.A.C. Rule 4-231.080(9).

    
    

38. In addition, F.A.C. Rule 4-231.160 provides for aggravating and mitigating factors. In this case, considering the aggravating and mitigating factors, it is concluded that a one year suspension should be imposed in this case. Of most concern are the Respondent's continued beliefs, as reflected in the positions he has taken in this case: first, that selling and administering The Shores Group Health Plan did not constitute the unauthorized business of insurance under Florida law; and, second, that he should not be held responsible for misrepresentations he made to The Madio Group simply because he did not make them directly to SCMA and SCMS. In addition, to this day, the Respondent still has not read the insurance laws of the State of Florida, as he swore he would do when he applied for non-resident licensure in 1986. It is hoped that the Final Order in this case, together with the recommended one year suspension, will be enough to impress upon the Respondent the seriousness of these matters.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Insurance and Treasurer enter a final order finding the Respondent guilty of the violations charged and suspending his licenses and eligibilities for one year.

DONE and ENTERED this 6th day of September, 1996, in Tallahassee, Florida.

J. LAWRENCE JOHNSTON, 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 6th day of September, 1996.

ENDNOTES

1/ Since he did not testify, it is not clear whether Hottel concurred with the Respondent's theory at this point in time. It is clear from the evidence that, at least at a later point in time, he realized that the Respondent's theory was wrong. See Finding 24, infra.

2/ It is not clear from the evidence whether it was before or after the February 21, 1991, letter.

3/ The evidence was confusing as to the names of the two associations. The name Sarasota County Medical Society also was used for SCMS, and the name South County Medical Association also was used for SCMA.

4/ Regardless whose testimony is accepted, it is clear that the Respondent's company received at least one of the $50,000 checks after the March 5, 1991, deadline in the February 27, 1991, proposal.

5/ Madio testified that the bottom part of the forms were torn off and discarded in accordance with the Respondent's representation that they were inapplicable. See Finding 18, supra.

6/ The March 18, 1991, letter was not introduced in evidence, and there was no evidence as to how Hottel learned of it.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5919

To comply with the requirements of Section 120.59(2), Florida Statutes (1995), the following rulings are made on the Department's proposed findings of fact:

1.-13. Accepted and incorporated to the extent not subordinate or unnecessary.

14. As to the first sentence, it was not clear that all of the $50,000 was to be paid to CIGNA; otherwise, accepted and incorporated. Second sentence, accepted and incorporated. As to the third sentence, accepted and incorporated that it was expected by The Madio Group and the associations, but not by the Respondent. As to the fourth sentence, rejected as not proven that no part of the $50,000 was ever returned directly to SCMS; otherwise, accepted and incorporated.

15.-18. Accepted and incorporated to the extent not subordinate or unnecessary.

COPIES FURNISHED:

Lisa S. Santucci, Esquire John R. Dunphy, Esquire

Department of Insurance and Treasurer 612 Larson Building

Tallahassee, Florida 32399-0333

James Patrick Shores, pro se 622 Ivy Chase Lane

Norcross, Georgia 30092

Bill Nelson

State Treasurer and Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Dan Sumner

Acting General Counsel

Department of Insurance and Treasurer The Capitol, PL-11

Tallahassee, Florida 32399-0300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit to the Department of Insurance and Treasurer 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 Department of Insurance and Treasurer concerning its rules on the deadline for filing exceptions to this Recommended Order.

Docket for Case No: 95-005919

Orders for Case No: 95-005919