FILED FEB 21 2001 TREASUicn AND 3 SSIONER | THE TREASURER OF THE STATE OF FLORIDA mo AN DEPARTMENT OF INSURANCE co a Tom GALLAGHER es ‘ IN THE MATTER OF: i LAWRENCE JOSEPH TAYLOR, SR. Ol- 08 PL ADMINISTRATIVE COMPLAINT TO: LAWRENCE JOSEPH TAYLOR, SR. Sensible Financial Future 3189 SW Solitaire Palm Dr. Palm City, Florida 34990-6308 LAWRENCE JOSEPH TAYLOR, SR. 2662 SW Egret Pond Circle Palm City, Florida 34990-2537 You, LAWRENCE JOSEPH TAYLOR, SR.. are hereby notified that the Insurance Commissioner of the State of Florida has caused to be made an investigation of your activities while licensed as an insurance agent in this state, as a result of which it is alleged: GENERAL ALLEGATIONS 1. Pursuant to Chapter 626, Florida Statutes. you. LAWRENCE JOSEPH TAYLOR, SR., are currently licensed in this state as a life and life and variable annuity agent. 2. At all times pertinent to the dates and occurrence referred to herein, you, LAWRENCE JOSEPH TAYLOR, SR., were licensed in this state as an insurance agent. Your license number is A261266. 3. Pursuant to Chapter 626, Florida Statutes. the Florida Department of Insurance has jurisdiction over your insurance licenses and appointments. COUNT I 4. The above General Allegations are hereby realleged and fully incorporated herein by reference. 5. In or about July 1998. you, LAWRENCE JOSEPH TAYLOR, SR., contacted Joseph and Barbara Svenson for an appointment to discuss financial planning. 6. On or about July 16. 1998, you. LAWRENCE JOSEPH TAYLOR, SR., met with the Svensons and asked about their life insurance. investments. and financial goals and objectives. 7. You, LAWRENCE JOSEPH TAYLOR, SR.. took the Svenson’s two policies with you and scheduled a second appointment. 8. At the second appointment, on or about July 21, 1999, you, LAWRENCE JOSEPH TAYLOR, SR., told the Svenson’s that a better financial plan would be to purchase term insurance rather than whole life insurance and invest the saved premium monies. 9. You, LAWRENCE JOSEPH TAYLOR, SR., reviewed the Svenson’s two New York Life insurance policies (#6270110 and #62750041), purchased in 1995, for which they were paying $250 a month in premiums, and said the polices were whole life policies and that they were “garbage.” 10. You, LAWRENCE JOSEPH TAYLOR, SR., showed the couple negative newspaper articles about insurance companies and told the couple that “some were only out to make money.” 11. By making misleading remarks about the Svenson’s policies and insurance companies in general in order to persuade the Svenson’s to replace their old insurance policies with your products, you. LAWRENCE JOSEPH TAYLOR, SR.., are guilty of the ethical and statutory violation of “twisting.” IT IS THEREFORE CHARGED that you, LAWRENCE JOSEPH TAYLOR. SR., have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Insurance which constitute grounds for the suspension or revocation of your licenses and appointments as a life and health insurance agent: (a) 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 permit. [Section 626.621(2), Florida Statutes]; (b) Violation of any lawful order or rule of the department. [Section 626.621(3), Florida Statutes]; (c) Violation of the provision against twisting, as defined in Section 626.9541(1)(1). {Section 626.621(5), Florida Statutes)]; (d) Ifa life agent, violation of the code of ethics found in Rule 4-215, Florida Administrative Code. [Section 626.621(9), Florida Statutes]. The pertinent section of the Code of Ethics is as follows: 1) Twisting is declared to be unethical. No person shall make any misleading representations or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, or convert any insurance policy, or to take out a policy of insurance in another insurer. [Florida Administrative Code § 4- 215.215]; (e) Knowingly making any misleading representations or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce. any person to lapse, forfeit. surrender, terminate, retain, pledge, assign. borrow on, or convert any insurance policy or to take out a policy of insurance of another insurer. [Section 626.9541(1)(1), Florida Statutes]; COUNT II 12. The above allegations are hereby realleged and fully incorporated herein by reference. 13. You, LAWRENCE JOSEPH TAYLOR. SR.. said you could increase the Svenson’s death benefits with a different type of insurance and start an investment plan without paying any additional money per month. 14. You, LAWRENCE JOSEPH TAYLOR. SR., had the couple sign a form requesting a loan on the existing New York Life insurance policies. Telling the Svenson’s that if they cancelled the policies, it would take too iong, possible up to six months, to get their money. 15. You, LAWRENCE JOSEPH TAYLOR. SR.., had prepared application forms for life insurance with Ohio State Life Insurance Company. Based upon your advice, on or about July 21, 1998, the Svenson’s signed the insurance application forms. 16. On page two of the Ohio State Life Insurance Company application. you, LAWRENCE JOSEPH TAYLOR, SR., marked NO to the question asking if the New York Life policies were to be replaced. 17. The Ohio State Life policies are almost identical to the New York Life policies the Svenson’s replaced. The New York Life policies are referred to as Adjustable Life Insurance policies. They were not whole life policies as you. LAWRENCE JOSEPH TAYLOR. SR., explained to the Svensons. The Ohio State policies are referred to as Flexible Premium Adjustable Life policies. They are not term insurance policies as you explained to the Svensons. Both have the same basic features of being able to change the premium and coverage amounts as needed. These types of insurance are referred to as “Universal Life Contracts.” 18. At this meeting you, LAWRENCE JOSEPH TAYLOR, SR., suggested that the Svenson’s obtain wills. 19. | Onor about October 10, 1998, you. LAWRENCE JOSEPH TAYLOR. SR.. visited the Svensons for a third time. At this meeting you delivered the Svenson’s their Ohio State insurance policies. 20. On or about October 10, 1998, the Svenson’s submitted a check (check #2605 drawn on Riverside National Bank of Florida) for $1.785.00 to pay for the first year premium on two policies with Ohio State Life Insurance Company. 21. On or about October 10, 1998, you, LAWRENCE JOSEPH TAYLOR, SR., had the Svenson’s sign the Notice to Applicant Regarding Replacement of Life Insurance form. 22. The insurance replacement form required by Rule 4-151, Florida Administrative Code, used to protect the insured by assuring the insured has received adequate information to make a decision in his/her best interests, was not timely presented and signed by the Svensons. This form must be with or a part of the application for life insurance. The Svenson’s signed the Ohio State Life application on or about July 21, 1998. 23. You, LAWRENCE JOSEPH TAYLOR, SR.., did not explain to Robert M. Svenson, Sr. that if he continued to pay your recommended premium, based on the guaranteed values as illustrated by you on or about July 23. 1998, his Ohio State Life policies would lapse in approximately five years. 24, You, LAWRENCE JOSEPH TAYLOR, SR.. advised the Svenson’s to establish an emergency fund in Franklin Money Fund, that would earn four per cent per annum. 25. Onor about October 22, 1998, based upon your. LAWRENCE JOSEPH TAYLOR, SR.’s, advice, the Svenson’s submitted a check for $200.00 to open an emergency fund account and investment in Franklin Templeton Funds. 26. The money for these two transactions came from the money borrowed from the two New York Life insurance policies. 27. After receiving and depositing the loan money from the New York Life policies, on or about October 30, 1998, the Svenson’s cancelled their New York Life policies in full, paying surrender charges of $3,979.00. 28. There is no evidence that the Svenson’s needed additional life insurance. 29. You, LAWRENCE JOSEPH TAYLOR, SR., never explained to the Svenson’s that they could have simply adjusted their premium on the New York policies and invested the savings in mutual funds and not have incurred the sizable surrender charges. 30. You, LAWRENCE JOSEPH TAYLOR, SR., were paid commissions of $1,100 for policy #T1256863 and $685 for policy 471256839. 31. On or about January 6, 1999, you, LAWRENCE JOSEPH TAYLOR, SR., met with the Svensons for a forth time to discuss college funding for their children. 32. You, LAWRENCE JOSEPH TAYLOR, SR., were told that when Brittani was an infant, the Svenson’s had established a First Union Florida Prepaid College Fund for this their oldest daughter. They had been paying into the fund for approximately three years. 6 33. Atthis meeting you also told the Svensons that after researching their prepaid college fund. it was not appropriate for them. You told them that if their daughter didn’t go to college, they could get all their money back. but with little interest. You advised them to cancel that plan and instead invest in a Franklin Templeton Mutual Shares Funds for their daughter’s future college costs. 34. Based upon your. LAWRENCE JOSEPH TAYLOR, SR’s. advice. in or about January 1999, the Svenson’s cancelled their prepaid college plan. receiving over $1,500 in surrendered value. They then deposited $500 through you, into the Franklin Templeton Growth Fund. 35. Determining that your. LAWRENCE JOSEPH TAYLOR, SR’s, advice was inaccurate. the Svenson’s returned to their former Pre-Paid College Fund at an additional cost of $20.00 per month. 36. You, LAWRENCE JOSEPH TAYLOR, SR.., are guilty of misrepresenting the type, operation. and function of the Svenson’s replaced New York Life policies as well as the replacing Ohio State Life policies, in order to gain a commission. You, LAWRENCE JOSEPH TAYLOR, SR.. failed to have the Svensons timely sign a required insurance replacement form so that the Svensons could obtain their money faster by loan. IT IS THEREFORE CHARGED that you, LAWRENCE JOSEPH TAYLOR, SR., have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Insurance which constitute grounds for the suspension or revocation of your licenses and appointments as a life and health insurance agent: (a) 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 cr advertising. [Section 626.611(5), Florida Statutes]; (b) ,Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (c) Fraudulent or dishonest practices in the conduct of business under the license or permit. [Section 626.61 1(9), Florida Statutes]: (d) 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. [Section 626.611(13), Florida Statutes]; (e) 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 permit. [Section 626.621(2), Florida Statutes]; (f) Violation of any lawful order or rule of the department. [Section 626.621(3), Florida Statutes]; (g) Violation of the provision against twisting, as defined in Section 626.9541(1)(1). [Section 626.621(5), Florida Statutes)]; (h) In the conduct of business under the license or permit, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter, or having otherwise shown himself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes]; (i) Ifa life agent. violation of the code of ethics found in Rule 4-215, Florida Administrative Code. [Section 626.621(9), Florida Statutes]. The pertinent sections of the Code of Ethics are as follows: 1) Twisting is declared to be unethical. No person shall make any misleading representations or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing. or tending to induce, any person to lapse, forfeit, surrender, terminate. retain, or convert any insurance policy, or to take out a policy of insurance in another insurer. [Florida Administrative Code § 4- 215.215}; : 2) Misrepresentations are declared to be unethical. No person shail make, issue. circulate, or cause to be made, issued, or circulated, any estimate, circular, or statement misrepresenting the terms of any policy issued or to be issued or the benefits or advantages promised thereby or the dividends or share of the surplus to be received thereon, or make any false or misleading statement as to the dividends or share of surplus previously paid on similar policies, or make any misleading representation or any misrepresentation as to the financial condition of any insurer, or as to the legal reserve system upon which any life insurer operates, or use any name or title of any policy or class of policies misrepresenting the true nature thereof. [Florida Administrative Code § 4-215.230 (1)}; and 3) No person shall make, publish. disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated. circulated, or placed before the public. in a newspaper, magazine. or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, any advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which is untrue, deceptive or misleading. Florida Administrative Code §§ 4-215.230 (2). (j) No person shall engage in this state in any trade practice which is defined in this part as, or determined pursuant to s. 626.951 or s. 626.9561 to be. an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance. Any person who violates any provision of this part shall be subject to a fine in an amount not greater than $2,500 for each non-willful violation and not greater than $20,000 for each willful violation. Fines under this subsection may not exceed an aggregate amount of $10,000 for all non-willful 9 violations arising of the same action or an aggregate amount of $100.000 for all willful violations arising out of the same action. The fines authorized by this subsection may be imposed in addition to any other applicable penalty. [Section 626.9521. Florida Statutes]; (k) Knowingly making. issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular. statement, sales presentation, omission, or comparison which misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9541(1)(a)1., Florida Statutes]; (1) Knowingly making, issuing, circulating, or causing to be made, issued. or circulated, any estimate. illustration. circular. statement, sales presentation. omission, or comparison which is a misrepresentation for the purpose of inducing, or tending to induce, the lapse, forfeiture, exchange, conversion. or surrender of any insurance policy. [Section 626.9541(1)(a)6., Florida Statutes]; (m) Knowingly making. issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular. statement, sales presentation, omission, or comparison which is a misrepresentation for the purpose of effecting a pledge or assignment of, or effecting a loan against. any insurance policy. [Section 626.9541(1)(a)7., Florida Statutes]; (n) Knowingly making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public: 1. In a newspaper, magazine, or other publication, 2. In the form of a notice, circular, pamphlet, letter, or poster, 3. Over any radio or television station, or 4. In any other way, 10 an advertisement, announcement. or statement containing any assertion. representation. or statement with respect to the business of insurance, which is untrue. deceptive. or misleading. [Section 626.9541(1)(b), Florida Statutes]; (o) False statements and entries. - 1. Knowingly: a. Filing with any supervisory or other public official, b. Making, publishing, disseminating, circulating, c. Delivering to any person: d. Placing before the public. e. Causing, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement. [Section 626.9541(1)(e)1., Florida Statutes]; (p) Knowingly making any misleading representations or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance of another insurer. [Section 626.9541(1)(1), Florida Statutes]; (q) Each agent shall submit to the insurer with or as a part of each application for life insurance: (1) A statement signed by the applicant as to whether or not such insurance will replace existing life insurance, and (2) A signed statement as to whether or not the agent knows replacement is or may be involved in the transactions. [Rule 4-151.005, Florida Administrative Rules]. . NOTICE OF RIGHTS Pursuant to’ Sections 120.569 and 120.57. Florida Statutes and Rule Chapter 28-106, Florida Administrative Code (F.A.C.), you have the right to request a proceeding to contest this action by the Department. You may elect a proceeding by completing the attached Election of Rights form or filing a Petition. Your Petition or Election of a proceeding must be in writing and must be filed with the General Counsel acting as the Agency Clerk. Department of Insurance. If served by U.S. Mail the Petition or Election should be addressed to the Florida Department of Insurance at 612 Larson Building, Tallahassee. Florida 32399-0333. If Express Mail or hand delivery is utilized. the Petition or Election should be delivered to 612 Larson Building, 200 East Gaines Street. Tallahassee, Florida 32399-0333. The Petition or Election must be received by, and filed in the Department within twenty-one (21) days of the date of your receipt of this notice. YOUR FAILURE TO RESPOND TO THIS ADMINISTRATIVE COMPLAINT WITHIN TWENTY-ONE (21) DAYS WILL CONSTITUTE A WAIVER OF YOUR RIGHT TO REQUEST A PROCEEDING ON THE MATTERS ALLEGED HEREIN AND AN ORDER OF REVOCATION WILL BE ENTERED AGAINST YOU. If a proceeding is requested and there is no dispute of fact the provisions of Section 120.57(2), Florida Statutes would apply. In this regard you may submit oral or written evidence in Opposition to the action taken by this agency or a written statement challenging the grounds upon which the agency has relied. While a hearing is normally not required in the absence of a dispute of fact, if you feel that a hearing is necessary one will be conducted in Tallahassee, Florida or by telephonic conference call upon your request. If you dispute material facts which are the basis for this agency's action you may request a formal adversarial proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. If 12 you request this type of proceeding, the request must comply with all of the requirements of Rule Chapter 28-106, F.A.C. and contain: a) A statement identifying with particularity the allegations of the Department which you dispute and the nature of the dispute: b) An explanation of what relief you are seeking and believe you are entitled to; c) Any other information which you contend is material. These proceedings are held before a state administrative law judge of the Division of Administrative Hearings. Unless the majority of witnesses are located elsewhere the Department will request that the hearing be conducted in Tallahassee. If you request a hearing, you have the right to be represented by counsel, or other qualified representative. to take testimony, to call and cross-examine witnesses, and to have subpoena and subpoena duces tecum issued on your behalf. You are hereby notified that mediation under Section 120.573, Florida Statutes, is not available. Failure to follow the procedure outlined with regard to your response to this notice may result in the request being denied. All prior correspondence in this matter shall be considered freeform agency action. and no such correspondence shall operate as a valid request for an administrative proceeding. Any request for administrative proceeding received prior to the date of 13 this notice shall be deemed abandoned unless timely renewed in compliance with the guidelines as set out above. DATED and SIGNED this Aly day of Sobuwany. 2001 . KENNEY SHIPLEY Deputy Insurance Commissioner . aed Boe, Drea es mn EN © eee 14 CERTIFICATE OF SERVICE IT HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT has been furnished to: LAWRENCE JOSEPH TAYLOR, SR., 2662 SW Egret Pond Circle, Palm City, Florida 34990-2537: and LAWRENCE JOSEPH TAYLOR, SR., 3189 | SW Solitaire Palm Dr., Palm City, Florida 34990-6308 by U.S. Certified Mail this_2/ i day of : cz. 2001. hz Wm. Fred Whitson, Esq. Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 (850) 413-4276 15

Docket for Case No: 01-001108PL