vs.
Respondent.
) Case No. 03-0415
A final hearing was conducted in this matter before the Honorable Daniel M. Kilbride, Administrative Law Judge of the Division of Administrative Hearings, on July 10, 2003, in Tallahassee, Florida.
For Petitioner: Michael H. Davidson, Esquire
For Respondent: Thomas J. Maida, Esquire
N. Wes Strickland, Esquire Foley & Lardner
Whether Respondent, The Medical Escrow Society, Inc., violated Section 626.989(6), Florida Statutes, as alleged in the
twenty-six counts of the Administrative Complaint issued by Petitioner, Department of Financial Services, on January 6, 2003; and
If Respondent is found to have violated any of the twenty- six counts of the Administrative Complaint, whether any such violations were committed willfully or non-willfully.
On January 6, 2003, Petitioner issued a twenty-six-count Administrative Complaint charging Respondent with multiple violations of the Florida Insurance Code. Respondent timely filed a Petition for Administrative Proceeding Involving Disputed Issues of Fact (Petition) in the above-styled matter on January 27, 2003, substantially denying the allegations. On February 5, 2003, Petitioner referred the Petition to the Division of Administrative Hearings, where it was assigned to the undersigned Administrative Law Judge and discovery ensued. The case was abated at the request of the parties and then re- set for hearing.
The parties submitted a Joint Pre-hearing Stipulation, dated July 3, 2003. The Joint Pre-hearing Stipulation incorporated by reference an attached Stipulation which was executed by the parties on June 9 and 10, 2003. Pursuant to those stipulations, the parties jointly agreed to narrow the issues to be determined by the Administrative Law Judge to those
stated above. The alleged violations of Section 626.9917, Florida Statutes, are not retained in the Joint Pre-hearing Stipulation as issues to be determined by the Administrative Law Judge. In addition, the parties have already stipulated to the penalty to be imposed against Respondent in the event the undersigned Administrative law Judge determines that Respondent in fact violated Section 626.989(6), Florida Statutes, depending upon whether any such violations are found to have been committed willfully or non-willfully.
At the final hearing, Petitioner offered the testimony of Janice S. Davis, a financial specialist employed by Petitioner. Eight exhibits were offered into evidence, all of which were admitted without objection by Respondent. The exhibits included the deposition testimony of Karla Pius, employee of Petitioner; Janice J. Davis, financial specialist with Petitioner; Kathy Odine, former viatical supervisor, Processing Department for Respondent; Judy Barbara, former viatical processor for Respondent; and Chris Love, former executive vice president and current president and owner of Respondent. One composite exhibit was admitted which contained twenty-six tabs.
Respondent offered no evidence.
The Transcript of the final hearing was filed on August 1, 2003. Following an order granting an extension of time to file proposed recommended orders, the parties each filed their
proposals on September 5, 2003. Each party's proposal has been given careful consideration in the preparation of this Recommended Order. All citations are to Florida Statutes (1999), unless otherwise indicated.
Petitioner, the successor agency to the Department of Insurance, regulates the viatical industry operating in Florida pursuant to the section of the Insurance Code referred to as the Viatical Settlement Act, Part X, Chapter 626. Prior to enactment of the Viatical Settlement Act in 1996, Petitioner did not have jurisdiction to regulate viatical settlement transactions.
Respondent is a Florida corporation which was and is licensed as a viatical settlement broker in Florida, as well as a number of other states. Respondent, on behalf of a viator and for a fee, commission, or other valuable consideration, offers or attempts to negotiate viatical settlement contracts between a viator resident, in this state or other states, and one or more viatical settlement providers, and did so at all times material hereto. Respondent is currently owned by Christopher Lane (Lane), who purchased the company from the prior owner in a transaction which was approved by Petitioner on November 6, 2001. Lane is the current president of Respondent. At all
times material to the allegations of the Administrative Complaint, Lane neither owned nor controlled Respondent. At all times material to the allegations of the Administrative Complaint, Lane was an employee of Respondent, as a vice president who handled marketing and new client relations.
Lane did not have any knowledge of the facts or circumstances giving rise to the allegations of the Administrative Complaint. Furthermore, under Lane's ownership and management, Respondent has adopted and filed with Petitioner an anti-fraud plan, pursuant to Section 626.99278, which was first enacted in 2000.
In general, the business of viatical settlements involves the sale by a policyholder to an investor or group of investors of the policyholder's life insurance policy, prior to the policyholder's death, for an amount that is less than the face value of the policy. Viatical settlement transactions typically have been used by terminally ill individuals as a means to obtain cash prior to their death, which could be used for life-sustaining treatments or to relieve financial stress during their lifetime. Recently, viatical settlement transactions have also been marketed to elderly individuals who are healthy but may no longer need life insurance and who want to obtain money during their lifetime for any number of reasons, such as paying for health care.
There are various categories of persons involved in a typical viatical settlement transaction. The policyholder who is selling a life insurance policy is referred to as a "viator." A viator is typically represented by a viatical settlement "broker" who represents the viator by obtaining quotes from potential purchasers of the viator's policy, called viatical settlement "providers." Viatical settlement providers, in turn, seek investors to fund the viatical settlement transactions. Viatical settlement brokers and providers are required to be licensed under the Viatical Settlement Act. As part of its duties under the Viatical Settlement Act, Petitioner issues licenses to viatical settlement brokers through its Bureau of Agents and Agencies.
In each of the twenty-six counts of the Administrative Complaint, Petitioner has alleged that Respondent possessed a copy of an insurance policy application form, which when compared to information submitted on Respondent's forms, demonstrates evidence of a fraudulent insurance act committed by the particular viator. In that respect, paragraph 4 of the Administrative Complaint states as follows:
Information available to the Department reflects that Medical Escrow has, from offices located in this state, offered or attempted to negotiate viatical settlement contracts between viators and one or more viatical settlement providers in the presence of circumstances whereby Medical
Escrow knew, or in the exercise of reasonable diligence should have known or been caused to believe, that the underlying insurance policy had been procured through fraud, or dishonesty, or misrepresentations made by the viator on his application to the insurance company issuing the policy in question.
Consequently, as a threshold matter Petitioner must prove that Respondent actually possessed the documents referenced in the Administrative Complaint.
Petitioner's financial specialist, Janice S. Davis (Davis), testified that she obtained copies of the documents referenced in the twenty-six counts of the Administrative Complaint from a variety of sources as follows: (1) the documents referenced in Counts One and Eight were obtained by Petitioner in 1999 from an examination of a viatical settlement provider named Mutual Benefits Corporation; (2) The documents referenced in Counts Two, Three, Four, Five, Six, and Seven were obtained by Petitioner in 2000 in response to a document production request to a viatical settlement provider named Future First Financial Group; (3) the documents reference in Count Nine were obtained by Petitioner in 2002 from an examination of a viatical settlement provider named William Page & Associates; and (4) the documents referenced in Counts Ten, Eleven, Twelve, Thirteen, Fourteen, Fifteen, Sixteen, Seventeen, Eighteen, Nineteen, Twenty, Twenty-one, Twenty-two, Twenty-
three, Twenty-four, Twenty-five, and Twenty-six were obtained by Petitioner in 2000 from files which had been obtained from Respondent by execution of a search warrant by the Offices of Statewide Prosecution and Petitioner's Division of Insurance Fraud.
With respect to the documents obtained from the first three sources-Mutual Benefits Corporation, Future First Financial Group, and William Page & Associates-Petitioner has failed to offer proof that the referenced documents were ever actually in the possession of Respondent. Although it may be reasonable to presume that the actual forms of Respondent were in the possession of Respondent at some point in connection with the referenced viatical settlement transactions, Petitioner has offered no testimony regarding how those records were maintained by the three viatical settlement providers. Moreover, Petitioner failed to offer any evidence that the insurance policy applications were ever in the possession of Respondent. Petitioner has offered no evidence upon which to make a finding that Respondent actually possessed the particular insurance policy applications which were obtained from the three viatical settlement providers. While Petitioner offered testimony from former employees of Respondent to the effect that Respondent obtained insurance policy applications from viators in general, such testimony does not establish that the particular insurance
policy applications in the possession of the three viatical settlement providers were actually obtained by Respondent. None of Respondent's application forms referenced by Petitioner in the Administrative Complaint required submission of an insurance application. Because Petitioner has failed to offer any evidence that the particular insurance policy applications referenced in Counts One, Two, Three, Four, Five, Six, Seven, Eight, and Nine were ever actually possessed by Respondent, there is no basis upon which to make a finding of fact that Respondent should have reported to Petitioner anything set forth in such insurance policy applications. Petitioner may not penalize Respondent based upon a mere assumption that Respondent possessed the insurance policies referenced in those nine counts of the Administrative Complaint.
With respect to the documents referenced by Petitioner in Counts Ten through Twenty-six, Davis testified that copies of those documents were obtained from Respondent's files which had been obtained by the Office of Statewide Prosecution and the Division of Insurance Fraud through execution of a search warrant in 2000. Although Davis had no involvement in or personal knowledge concerning the circumstances surrounding the execution of that search warrant, this evidence is sufficient to substantiate its allegations that Respondent actually possessed the insurance applications referenced by Petitioner in Counts
Ten through Twenty-six of the Administrative Complaint in its files.
In Count Ten of the Administrative Complaint, Viator Eight submitted to Philadelphia Life Insurance Company an insurance policy application, dated March 21, 1996, which represented that Viator Eight had not been treated for or diagnosed with Acquired Immune Deficiency Syndrome (AIDS) within the last ten years. Viator Eight submitted to Respondent an application form, dated July 8, 1998, which represented that Viator Eight had first been diagnosed with AIDS in 1989. The question on Respondent's application asks for the date of first diagnosis of the "current medical condition" which is described in the preceding question. While Viator Eight's description of his "current medical condition" on Respondent's application includes "AIDS," it also includes a "history of Hodgekins Lymphoma" as well as other conditions. The information on Respondent's application does not specify whether the 1989 diagnosis was for AIDS or the other disorders listed as Viator Eight's "current medical condition"; however, this information is sufficient to alert Respondent's employees that a fraudulent insurance act is being or has been committed and trigger the reporting requirement of the statute.
In Count Eleven of the Administrative Complaint, Viator Eight submitted to Manhattan Life Insurance Company an
insurance policy application, dated July 3, 1996, which represented that Viator Eight had not consulted with or been treated by any licensed physician or medical practitioner within the last five years and was in excellent health. Viator Eight submitted to Respondent an application, dated July 8, 1998, which represented that Viator Eight had first been diagnosed with AIDS in 1989 and was being attended by Dr. Ronald Wiewora. The "current medical condition" described by Viator Eight in Respondent's application form states a diagnosis in 1989 of AIDS and Hodgekins Lymphoma, and "recent difficulties with protein inhibitors . . ." This is sufficient information to require the reporting of potential fraud under the statute.
In Count Twelve of the Administrative Complaint, Viator Nine submitted to Time Insurance Company an insurance policy application, dated August 6, 1996, which represented that Viator Nine had not had a physical examination, diagnostic test, medical treatment, health impairment, or been advised to undergo any treatment within the past five years. However, the application also represented that he had not been diagnosed with AIDS or AIDS-related complex (ARC) or received treatment for it within the past ten years. Viator Nine submitted to Respondent an application, dated August 15, 1997, which stated that Viator Nine had AIDS and had first been diagnosed Human Immunodeficiency Virus (HIV) positive in February 1991. This
was sufficient information to require the reporting of potential fraud under the statute.
In Count Thirteen of the Administrative Complaint, Viator Nine submitted to Jackson National Life Insurance Company an insurance policy application, dated March 5, 1992, which represented that Viator Nine had not been treated by a physician or other medical practitioner, or been a patient in a clinic or medical facility, or been diagnosed or treated for AIDS or any other immunological disorder, within the past five years. Viator Nine submitted to Respondent an application, dated August 15, 1997, which represented that Viator Nine had first been diagnosed with AIDS in February 1991 and was not presently employed. This was sufficient information to require the reporting of potential fraud under the statute.
In Count Fourteen of the Administrative Complaint, Viator Nine submitted to Interstate Assurance Company an insurance policy application, date March 21, 1993, which represented that within the last ten years Viator Nine had not been diagnosed or treated by a member of the medical profession for an immune system disorder and that within the last five years he had not been hospitalized or treated by a member of the medical profession or consulted a physician or been prescribed any medication. Viator Nine submitted to Respondent an application, dated August 15, 1997, which stated that Viator
Nine had AIDS and had first been diagnosed HIV positive in February 1991. Although the insurance application did not specifically request disclosure of a diagnosis of HIV positive and did not define the term "immune system disorder" to include a diagnosis of HIV positive, Viator Nine's disclosure on Respondent's application of a diagnosis of HIV positive was sufficient to alert an employee of Respondent to report the potential for fraud under the statute and to require that this information be reported.
In Count Fifteen of the Administrative Complaint, Viator Nine submitted to Interstate Assurance Company an insurance policy application, dated March 4, 1994, which represented that, within the last ten years, Viator Nine had not been diagnosed or treated by a member of the medical profession for an immune system disorder and that within the last five years he had not been hospitalized or treated by a member of the medical profession or consulted a physician or been prescribed any medication. Viator Nine submitted to Respondent an application, dated August 15, 1997, which stated that Viator Nine had AIDS and had first been diagnosed HIV positive in February 1991 and that Dr. Leslie Diaz represented on Respondent's "Physician's Questionnaire-HIV Disease" form, dated, September 4, 1997, that Viator Nine had the HIV disease and a life expectancy of five to ten years. Although the
insurance application did not define the term "immune system disorder" to include a diagnosis of HIV positive, Viator Nine's disclosure on Respondent's application of a diagnosis of HIV positive was sufficient to alert an employee of Respondent of the need to report the potential for fraud under the statute.
In Count Sixteen of the Administrative Complaint, Viator Nine submitted to Security Mutual Life Insurance Company an insurance policy application, dated November 4, 1997, which represented that Viator Nine had not been treated for or had any known indication of AIDS, ARC, or tested positive for HIV antibodies. Viator Nine submitted to Respondent an application, dated August 15, 1997, which stated that Viator Nine had AIDS, had first been diagnosed HIV positive in February 1991, and was being treated by Dr. Leslie Diaz. This is sufficient to trigger the reporting requirement of the statute.
In Count Seventeen of the Administrative Complaint, the evidence submitted indicated that Viator Nine submitted to Columbia Universal Life Insurance Company an insurance policy application for a face amount coverage of $70,000, dated
August 28, 1998, which represented that Viator Nine had not been diagnosed with any immune deficiency disease. Viator Nine submitted to Respondent an application, dated August 15, 1997, which stated that Viator Nine had AIDS, had first been diagnosed HIV positive February 1991, and was being treated by Dr. Leslie
Diaz. On Respondent's form submitted in 1997, Viator Nine indicated that he had a preexisting life insurance policy, in the face amount of $200,000, with Columbia Universal Life issued on December 28, 1985. There is no apparent connection between Respondent's application, dated August 15, 1997, and the Columbia Universal Life application, dated August 28, 1998, that would trigger the necessity of an employee of Respondent to make a report.
In Count Eighteen of the Administrative Complaint, Viator Nine submitted to Philadelphia Life Insurance Company an insurance policy application, dated August 28, 1998, which represented that Viator Nine had not been told that he had tested positive for exposure to the HIV infection and that to the best of his knowledge, his health was not impaired in any way. Viator Nine submitted to Respondent an application, dated August 15, 1997, which stated that Viator Nine had AIDS, had first been diagnosed HIV positive in February 1991, and was being treated by Dr. Leslie Diaz. Respondent's application relates to an individual life policy issued by the Columbus Mutual Insurance Company, in the face amount of $200,000, dated December 28, 1985. There is no apparent connection between Respondent's application, dated August 15, 1997, and the Philadelphia Life Insurance Company policy application, dated August 28, 1998. Therefore, there was no obligation to report.
In Count Nineteen of the Administrative Complaint, Viator Nine submitted to Respondent an application, dated August 15, 1997, which stated that Viator Nine had AIDS, had first been diagnosed HIV positive in February 1991, and was being treated by Dr. Leslie Diaz. Viator Nine submitted to United Home Life Insurance Company an insurance policy
application, dated April 23, 1999, which represented that within the last ten years Viator Nine had not tested positive for exposure to the HIV infection, had not tested positive for antibodies to the AIDS virus, and had not consulted a medical practitioner within the last five years. Respondent's application relates to an individual life policy issued by Columbus Mutual Insurance Company, in the face amount of
$200,000, dated December 28, 1985. There is no apparent connection between Respondent's application, dated August 15, 1997, and the United Home policy application, dated April 23, 1999. Therefore, there was no obligation to report.
In Count Twenty of the Administrative Complaint, Viator Ten submitted to Respondent an application form, dated August 15, 1997, which represented that Viator Ten had AIDS, had first been diagnosed HIV positive in February 1991, and was being treated by Dr. Leslie Diaz. Viator Ten submitted to Federal Home Life Insurance Company an insurance policy application, dated October 20, 1997, which represented that
within the last ten years Viator Ten had not tested positive for exposure to the AIDS virus, had not been treated for the AIDS virus, and had not consulted a medical practitioner within the last five years. Respondent withheld this insurance policy from sale for a period of time because Respondent knew that Viator Ten had not yet submitted the application for the policy to the life insurance company and that it contained false information. Respondent had an obligation to report these discrepancies.
In Count Twenty-one of the Administrative Complaint, Viator Eleven submitted to Manhattan Life Insurance Company an insurance policy application, dated April 25, 1996, which represented that Viator Eleven had not consulted, been examined or treated by any licensed physician or medical practitioner within the last five years. Viator Eleven submitted to Respondent an application, dated April 14, 1998, in the attachments it stated that Viator Eleven had first been diagnosed HIV positive in September 1991, and as of November 1995 had been diagnosed with AIDS and had received treatment from a physician since that time. Although the insurance application does not request any information regarding any diagnosis or treatment for AIDS or HIV, Viator Eleven stated that he did not have a family physician, had not seen a
physician in the past, and was not taking any medication. This was obviously false, and Respondent should have reported it.
In Count Twenty-two of the Administrative Complaint, Viator Twelve submitted to Southern Farm Bureau Life Insurance Company an insurance policy application, dated July 1, 1996, which represented that Viator Twelve had not been told that he had or had been treated for an immune deficiency disorder, AIDS, ARC, or had test results indicating exposure to the HIV virus. Viator Twelve submitted to Respondent an application, dated December 3, 1996, which represented that Viator Twelve had "asymptomatic HIV" and had first been diagnosed in 1991. This was sufficient to trigger the reporting requirement.
In Count Twenty-three of the Administrative Complaint, Viator Twelve submitted to Primerica Life Insurance Company an insurance policy application, dated July 30, 1996, which represented that Viator Twelve had not within the past ten years been diagnosed or treated for AIDS or any immune deficiency disorder or tested positive for exposure to the HIV virus. Viator Twelve submitted to Respondent and application, dated December 3, 1996, which represented that Viator Twelve had "asymptomatic HIV" and had first been diagnosed in 1991. This was sufficient to trigger the reporting requirement.
In Count Twenty-four of the Administrative Complaint, Viator Thirteen submitted to Nationwide Life Insurance Company
an insurance policy application, dated July 25, 1997, which represented that Viator Thirteen had not within the past five years been diagnosed or treated for AIDS, ARC, or any other immune deficiency syndrome and had not been examined or treated by any physician or medical practitioner, or by any hospital, clinic, or medical facility not previously mentioned on the application. Viator Thirteen submitted to Respondent an application, dated January 12, 1998, which represented that Viator Thirteen had been diagnosed HIV positive in 1992 and had been diagnosed with AIDS in 1994 and that information supplied by Viator Thirteen's physician on Respondent's "Physician's Questionnaire-HIV Disease" form confirmed those representations. Although Respondent withheld Viator Thirteen's policy from sale for a period of time, Respondent's personnel noted that Viator Thirteen had lied on the application. Respondent failed to report this fact to Petitioner.
In Count Twenty-five of the Administrative Complaint, Viator Three submitted to Respondent an application, dated April 11, 1995, which represented that Viator Three had been diagnosed HIV positive in May 1986 and had been diagnosed with AIDS in March 1995. Viator Three submitted to Allstate Life Insurance Company an insurance policy application, dated
July 31, 1995, which represented that Viator Three had never been diagnosed with or treated for AIDS, ARC, or an AIDS-related
condition. Since the application for the life insurance policy and the application to Respondent were submitted prior to the enactment of the Viatical Settlement Act, Respondent had no duty to report possible fraud in this instance, since it occurred prior to July 1, 1996, the effective date for the statute.
In Count Twenty-six of the Administrative Complaint, Viator Three submitted to Respondent an application, dated December 3, 1996, which represented that Viator Three had been diagnosed HIV positive in May 1986 and had been diagnosed with AIDS on September 4, 1996, and that on Respondent's "Physician's Questionnaire-HIV Disease" form, dated May 18, 1995, submitted by Dr. Carroll L. Cook, confirmed those representations. Viator Three submitted to Nationwide Life Insurance Company an insurance policy application, dated October 20, 1995, which represented that Viator Three had not, within the last five years, been diagnosed with or treated for AIDS, ARC, or any other immune deficiency disorder. This is sufficient to trigger the reporting requirement.
The evidence is clear and convincing, as to Counts Ten, Eleven, Twelve, Thirteen, Fourteen, Fifteen, Sixteen, Twenty, Twenty-one, Twenty-two, Twenty-three, Twenty-four, and Twenty-six of the Administrative Complaint that Respondent, in the performance of its role as a viatical settlement broker, routinely received from viators and reviewed written information
about their medical condition, particularly regarding the presence of an HIV/AIDS diagnosis, that directly and materially contradicted information supplied by that same viator on one or more written and corresponding insurance policy applications, also routinely received and reviewed by Respondent. The same viators who represented on the relevant life insurance policy applications that they did not have HIV or AIDS represented on viatical applications that they did have that condition during the same material times. This is especially true, wherein Viator Nine submitted eight applications to Respondent on the same date, August 15, 1997. In each instance, the contrast is so great that any reasonable person, especially an employee of Respondent in the viatical industry, would have to know or believe that the life insurance policy being offered for sale through Respondent had been obtained through misrepresentations made by the viator on or in support of the insurance policy application. Respondent not only failed to report those circumstances to Petitioner, but proceeded to offer many of those policies for sale to viatical settlement providers.
The evidence is clear and convincing that Respondent, during the relevant time period, had no company policy requiring or even acknowledging an obligation to report such matters to Petitioner and that the usual and prevalent custom of Respondent was to send the applications to providers without comment. Only
after 1999 did Respondent instruct its employees to direct such suspicious viatical applications to the attention of a company vice-president. Even then, no reports were filed with Petitioner.
Thus, Respondent's admitted failure to report cannot be ascribed to the negligence or inattention of a company officer or employee to his or her duty to fulfill a company policy requiring such reports, since there was no such policy. It is clear that Respondent simply ignored the reporting requirements in the statute and, in most instances, offered the tainted viatical applications/insurance policies for sale to viatical settlement providers without comment.
Accordingly, it is found that any and all admitted failures to report the circumstances alleged in Counts Ten through Sixteen, Twenty through Twenty-four, and Twenty-six in the Administrative Complaint were willful.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties and the subject matter of these proceedings. Sections 120.569, 120.57(1), 231.262(5), and Chapter 626, Florida Statutes (2003).
This proceeding involves disciplinary action against Respondent's viatical settlement broker's license and is, therefore, penal in nature. State ex rel Vining v. Florida Real
Estate Commission, 281 So. 2d 487 (Fla. 1973). The burden of proof to establish the facts upon which Petitioner seeks to discipline Respondent's license is on Petitioner. Balino v. Dept. of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977). The standard of proof required in this matter is that the charges must be proved by Petitioner through the introduction of clear and convincing evidence. Department of Banking and Finance v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996). Petitioner has the burden of proving by clear and convincing evidence each of the allegations in the Administrative Complaint. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).
Section 626.989(6), in pertinent part, requires all department licensees and their employees to report to Petitioner knowledge or belief that a fraudulent insurance act is being or has been committed, that upon conviction would constitute a felony or misdemeanor under the insurance code or
Section 817.234. The constitutionability of this statute has been upheld in Accelerated Benefits Corporation v. Department of Insurance, 813 So. 2d 117 (Fla. 1st DCA 2002).
Section 817.234 provides felony penalties for various fraudulent insurance practices, including providing false or misleading information, or concealing material fact information, on or in support of an application for insurance.
Section 626.9917 proscribes viatical settlement brokers from engaging in fraudulent or dishonest practices, or otherwise showing that they are untrustworthy or incompetent to act as viatical settlement brokers.
The admitted and proven activities of Respondent unquestionably violated the reporting requirements imposed on every licensee by Section 626.989(6). These violations, in turn, also constitute showings of untrustworthiness to lawfully act as a viatical settlement broker, thus contravening
Section 626.9917.
Willfulness is essentially a matter of intent, and intent is usually determined by circumstantial evidence. Plantation Key Developers v. Colonial Mortg. Etc., 559 F.2d 164 (5th Cir. 1979); Florida East Coast Ry. Co. v. Thompson, 111 So.
525 (Fla. 1927); Phifer v. Steenburg, 64 So. 265, reh. den. 64 So. 265 (Fla. 1914); Heineman v. State, 327 So. 2d 898 (Fla. 3rd DCA 1976), cert. den. 336 So. 2d 1182; Gavin v. State, 259 So. 2d 274 (Fla. 3rd DCA 1968), cert. den. 221 So. 2d 746; State v.
Gantt, 217 S.E. 2d 3, at 5 (N.C. App. 1975); State v. Evans, 548
P.2d 772, at 777 (Kan. 1976). The circumstantial evidence material to the issue of willfulness here admits of no other reasonable conclusion than that the company simply ignored Section 626.989(6) and proceeded as if it did not exist. There is not even a scintilla of evidence that the company ever
intended or even tried to comply with the reporting requirement of Section 626.989(6). No profession of ignorance of the law can overcome the plainly stated duty of all department licensees to report the known or believed fraudulent insurance practices in question. As a department licensee, it was incumbent on Respondent to comply with the reporting requirement of Section 626.989(6). This it simply did not do, or even try to do. On the basis of the record evidence, it must be concluded that Respondent's reporting violations were willful. Accelerated Benefits Corporation v. Department of Insurance, supra.
RECOMMENDED that the Department of Financial Services enter a final order as follows:
the violations in question willful, and imposing an administrative fine in the amount of $30,000 and subjecting Respondent to two years of probation under the terms and conditions set forth in the seven-page stipulation, paragraph 5.
DONE AND ENTERED this 7th day of November, 2003, in Tallahassee, Leon County, Florida.
DANIEL M. KILBRIDE
Filed with the Clerk of the Division of Administrative Hearings this 7th day of November, 2003.
Michael H. Davidson, Esquire Department of Financial Services 612 Larson Building
Thomas J. Maida, Esquire
N. Wes Strickland, Esquire Foley & Lardner
Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
