FLORIDA DEPARTMENT OF FINANCIAL SERVICES FILED TOM GALLAGHER AUG 18 2004 CHIEF FINANCIAL OFFICER My © STATE OF FLORIDA , Ay, Ps, as . ™ NShywi, Fg Dockated by’, COG. “g FA Sy) t . IN THE MATTER OF: Pees CASE NO.: 75848-04-AG MICHAEL HARRIS LAIT Ot{ 2 70PL ADMINISTRATIVE COMPLAINT TO: MICHAEL HARRIS LAIT 11449 Lake Butler Boulevard Windermere, Florida 34786 MICHAEL HARRIS LAIT Post Office Box 2536 Windermere, Florida 34786 You, MICHAEL HARRIS LAIT, are hereby notified that the Chief Financial Officer of the State of Florida has caused to be made an investigation of your activities while licensed as an insurance agent in this state and as a result of which it is alleged: GENERAL ALLEGATIONS 1. Pursuant to Chapter 626, Florida Statutes, you, MICHAEL HARRIS LAIT, currently are licensed in this state as a Life (2-16), Life and Health (2-18), and Health (2-40) agent, and were so licensed at all times relevant to the dates and occurrences referenced herein. Your license identification number is A148003. 2. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services (hereinafter referred to as the “Department”) has jurisdiction over your licenses and appointments. 3. At all times relevant to the dates and occurrences referenced herein you, MICHAEL HARRIS LAIT, were employed or affiliated with Michael H. Lait, P.A. 4. At all times relevant to the dates and occurrences referenced herein you, MICHAEL HARRIS LAIT, were an officer, director, or stockholder of Michael H. Lait, P.A. 5. At all times relevant to the dates and occurrences referenced herein you, MICHAEL HARRIS LAIT, were the designated primary agent of Michael H. Lait, P.A. COUNT I 6. The above General Allegations are hereby realleged and fully incorporated herein by reference. 7. On or about January 29, 1996, you, MICHAEL HARRIS LAIT, completed a life insurance policy application for Carolyn Isbell. From this application, policy #594847 was issued by TMG Life, subsequently known as Clarica Life Insurance Company, now known as Midland National Life. 8. You, MICHAEL HARRIS LAIT, represented to Isbell that the policy premium would be ten thousand dollars ($10,000.00) per year for five (5) years, at which point the policy would be paid up and no more premium payments would be required for the life of the policy. You, MICHAEL HARRIS LAIT, also represented to Isbell that the policy, once paid up, would remain in force for the duration of Isbell’s life. 9. Your representations to Isbell were false, deceptive and misleading. RE Se IT IS THEREFORE CHARGED that you, MICHAEL HARRIS LAIT, have violated or are accountable under one or more of the following provisions of the Florida Insurance Code, which constitutes grounds for the suspension or revocation of your licenses as an insurance agent in this state: (a) No person shall transact insurance in this state, or relative to a subject of insurance resident, located, or to be performed in this state, without complying with the applicable provisions of this code. [Section 624.11(1), Florida Statutes]. (b) If the license or appointment is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code. [Section 626.611(4), Florida Statutes]. (c) 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. [Section 626.611(5), Florida Statutes]. (d) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance, [Section 626.611(7), Florida Statutes]. (e) Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment. [Section 626.611(8), Florida Statutes}. (f) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]. (g) Willful failure to comply with, or willful violation of, any proper order or rule of the department, commission, or office or willful violation of any provision of this code. [Section 626.611(13), Florida Statutes]. (h) ‘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. [Section 626.621(2), Florida Statutes]. @ Violation of any lawful order or rule of the department, commission, or office. [Section 626.621(3), Florida Statutes]. @) 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 IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public or detrimental to the public interest. [Section 626.621(6), Florida Statutes]. (k) If a life agent, violation of the code of ethics. [Section 626.621(9), 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 that misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9541(1)(a)1., Florida Statutes]. (m) 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 in any way 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)4., Florida Statutes]. (n) 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, A RN ee ean 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. [Rule 69B-21 5.230(2), Florida Administrative Code]. COUNT I 10. The above General Allegations are hereby realleged and fully incorporated herein by reference. 11. Onor about January 11, 1996, you, MICHAEL HARRIS LAIT, completed a life insurance policy application for Carolyn Isbell. From this application, policy #593991 was issued by TMG Life, subsequently known as Clarica Life Insurance Company, now known as Midland National Life. 12. You, MICHAEL HARRIS LAIT, represented to Isbell that the policy premium would be ten thousand dollars ($10,000.00) per year for five (5) years, at which point the policy would be paid up and no more premium payments would be required for the life of the policy. You, MICHAEL HARRIS LAIT, also represented to Isbell that the policy, once paid up, would remain in force for the duration of Isbell’s life. 13. Your representations to Isbell were false, deceptive and misleading. IT IS THEREFORE CHARGED that you, MICHAEL HARRIS LAIT, have violated or are accountable under one or more of the following provisions of the Florida Insurance Code, which constitutes grounds for the suspension or revocation of your licenses as an insurance agent in this state: (a) Sections 624.11(1), 626.611(4), 626.611(5), 626.611(7), 626.611(8), 626.611(9), 626,611(13), 626.621(2), 626.621(3), 626.621(6), 626.621(9), 626.9541(1)(a)1., 626.9541(1)(b)4-, Florida Statutes, and Rule 69B-215.230(2), Florida Administrative Code, which are more fully set forth in Count I above and fully incorporated herein by reference. COUNT III 14. The above General Allegations are hereby realleged and fully incorporated herein by reference. 15. In or about March through May, 1999, you, MICHAEL HARRIS LAIT, persuaded, advised and convinced Charles Strube, individually or in his capacity as Trustee of the Charles W. Strube Revocable Trust, to surrender or “cash in” five existing annuity contracts and to replace them with five other annuity contracts with a different insurer. These transactions resulted in Strube suffering disadvantageous surrender penalties. The replacement contracts provided for surrender penalties over a period of fifteen (15) years. Strube was 73 years of age at the time of these transactions. The replacement contracts were disadvantageous to the interests of Strube. IT IS THEREFORE CHARGED that you, MICHAEL HARRIS LAIT, have violated or are accountable under one or more of the following provisions of the Florida Insurance Code, which constitutes grounds for the suspension or revocation of your licenses as an insurance agent in this state: (a) Sections 624.11(1), 626.611(4), 626.611(5), 626.611(7), 626.611(8), 626.611(9), 626.611(13), 626.621(2), 626.621(3), 626.621(6), 626.621(9), 626.9541(1)(a)1., 626.9541(1)(b)4., Florida Statutes, and Rule 69B-215.230(2), Florida Administrative Code, which are more fully set forth in Count I above and fully incorporated herein by reference. (b) | 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 in another insurer. [Section 626.9541(1)(1), Florida Statutes]. COUNT IV 16. The above General Allegations are hereby realleged and fully incorporated herein by reference. 17. In or about August, 1998, you, MICHAEL HARRIS LAIT, sold TMG Life policy #609673 to the Donald K. Strube Irrevocable Trust. This purchase was contrary to the instructions of Donald K. Strube. Subsequently, upon Strube’s discovery that this purchase had been made, he instructed you to “rollover” the surrender value of this policy into another policy. You assured Strube that this “rollover” was effectuated in January, 1999. In fact, the “rollover” was not effectuated unti! November, 1999, and, as a result, Strube suffered a disadvantageous reduction in the value of this policy of approximately fifty-five thousand dollars ($55,000.00). This delay also resulted in your earning a commission that otherwise you would not have earned. IT IS THEREFORE CHARGED that you, MICHAEL HARRIS LAIT, have violated or are accountable under one or more of the following provisions of the Florida Insurance Code, which constitutes grounds for the suspension or revocation of your licenses as an insurance agent in this state: (a) Sections 624.11(1), 626.611(4), 626.611(5), 626.611(7), 626.611(8), 626.611(9), 626.611(13), 626.621(2), 626.621(3), 626.621(6), 626.621(9), 626.9541(1){a)1., 626.9541 (1)(b)4., Florida Statutes, and Rule 69B-215.230(2), Florida Administrative Code, which are more fully set forth in Count I above and fully incorporated herein by reference. (b) | 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 in another insurer. [Section 626.9541(1)(1), Florida Statutes]. COUNT V 18. The above General Allegations are hereby realleged and fully incorporated herein by reference. 19. On or about June 2, 2000, you, MICHAEL HARRIS LAIT, without the knowledge or authorization of James and Barbara Crymes, took a thirty-five thousand dollar ($35,000.00) loan against the cash value of Clarica Life Insurance Company policy #539354. IT IS THEREFORE CHARGED that you, MICHAEL HARRIS LAIT, have violated or are accountable under one or more of the following provisions of the Florida Insurance Code, which constitutes grounds for the suspension or revocation of your licenses as an insurance agent in this state: (a) Sections 624.11(1), 626.611(4), 626.611(5), 626.611(7), 626.61 1(8), 626.611(9), 626.611(13), 626.621(2), 626.621(3), 626.621(6), Florida Statutes, which are more fully set forth in Count I above and fully incorporated herein by reference. (b) Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. [Section 626.611(10), Florida Statutes]. COUNT VI 20. | The above General Allegations are hereby realleged and fully incorporated herein by reference. 21. Onor about August 2, 2001, you, MICHAEL HARRIS LAIT, without the knowledge or authorization of James and Barbara Crymes, took a fifteen thousand dollar ($15,000.00) loan against the cash value of Clarica Life Insurance Company policy #539354. IT IS THEREFORE CHARGED that you, MICHAEL HARRIS LAIT, have violated or are accountable under one or more of the following provisions of the Florida Insurance Code, which constitutes grounds for the suspension or revocation of your licenses as an insurance agent in this state: (a) Sections 624.11(1), 626.611(4), 626.611(5), 626.61 1(7), 626.611(8), 626.611(13), 626.621(2), 626.621(3), 626.621(6), Florida Statutes, which are more fully set forth in Count J above and fully incorporated herein by reference. (b) Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. [Section 626.611(10), Florida Statutes]. COUNT VII 22. The above General Allegations are hereby realleged and fully incorporated herein by reference. 23. Onor about May 31, 2002, you, MICHAEL HARRIS LAIT, without the knowledge or authorization of James and Barbara Crymes, took an eight thousand seven hundred dollar ($8,700.00) loan against the cash value of Clarica Life Insurance Company policy #539354. IT IS THEREFORE CHARGED that you, MICHAEL HARRIS LAIT, have violated or are accountable under one or more of the following provisions of the Florida Insurance Code, which constitutes grounds for the suspension or revocation of your licenses as an insurance agent in this state: (a) Sections 624.11(1), 626.611(4), 626.61 1(5), 626.61 1(7), 626.611(8), 626.611(9), 626.611(13), 626.621(2), 626.621(3), 626.621(6), Florida Statutes, which are more fully set forth in Count I above and fully incorporated herein by reference. (b) Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. [Section 626.611(10), Florida Statutes]. COUNT VIII 24. The above General Allegations are hereby realleged and fully incorporated herein by reference. 25. On or about June 30, 1998, you, MICHAEL HARRIS LAIT, completed an application for AmerUs policy # 0028955690 that included a false and exaggerated statement of the net worth of James and Barbara Crymes. IT IS THEREFORE CHARGED that you, MICHAEL HARRIS LAIT, have violated or are accountable under one or more of the following provisions of the Florida Insurance Code, which constitutes grounds for the suspension or revocation of your licenses as an insurance agent in this state: (a) Sections 624.11(1), 626.611(4), 626.611(7), 626.611(8), 626.611(9), 626.61 1(13), 626.621(2), 626.621(3), 626.621(6), Florida Statutes, which are more fully set forth in Count I above and fully incorporated herein by reference. (b) | Knowingly making a false or fraudulent written or oral statement or representation on, or relative to, an application or negotiation for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from any insurer, agent, broker, or individual. [Section 626,9541(1)(k)1., Florida Statutes]. 10 COUNT IX 26. The above General Allegations are hereby realleged and fully incorporated herein by reference. 27. From approximately 1999 through approximately 2002, you. MICHAEL HARRIS LAIT, persuaded, encouraged, or induced James and Barbara Crymes to make donations to the West Orange Children’s Foundation (WOCF) with the understanding that these donated funds would be used to make premium payments on life insurance policies for the benefit of the Crymes. 28. You, MICHAEL HARRIS LAIT, told the Crymes that this arrangement would enable them to take deductions on their federal individual income tax returns for charitable contributions in the amount of the funds donated to the WOCF but intended to be used ultimately as insurance policy premium payments. 29. You, MICHAEL HARRIS LAIT, therefore, made misrepresentations to the Crymes as to the tax deductibility of these contributions to the WOCF and, as a result, induced the Crymes to violate federal tax law. 30. Some of the funds so donated by the Crymes to the WOCEF were not forwarded, as agreed, to insurers. IT IS THEREFORE CHARGED that you, MICHAEL HARRIS LAIT, have violated or are accountable under one or more of the following provisions of the Florida Insurance Code, which constitutes grounds for the suspension or revocation of your licenses as an insurance agent in this state: (a) Sections 624.11(1), 626.61 1(4), 626.611(7), 626.61 1(8), 626.611(9), 626.611(13), 626.621 (2), 626.621(3), 626.621 (6), 626.621(9), 626.9541(1)(a)1., 626.9541(1)(b)4., Florida Statutes, and Rule 69B-215.230(2), Florida Administrative Code. (b) Knowingly collecting any sum as a premium or charge for insurance, which is not then provided, or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as permitted by this code. [Section 626.9541(1)(0)1., Florida Statutes]. (c) Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. [Section 626.61 1(10), Florida Statutes]. WHEREFORE, you, MICHAEL HARRIS LAIT, are hereby notified that the Chief Financial Officer intends to enter an Order suspending or revoking your licenses and appointments as an insurance agent or to impose such penalties as may be provided under the provisions of Sections 624.15, 626.611, 626.621, 626.681, 626.691, and 626.9521, Florida Statutes, and under the other referenced sections of the Florida Statutes as set out in this Administrative Complaint and under the provisions of Rule 4-231, Florida Administrative Code. You are further notified that any order entered in this case revoking or suspending any license or eligibility for licensure held by you shall also apply to all other licenses and eligibility held by you under the Florida Insurance Code. NOTICE OF RIGHTS You have the right to request a proceeding to contest this action by the Department pursuant to Sections 120.569 and 120.57, Florida Statutes, and Rule 28-107, Florida Administrative Code. The proceeding request must be in writing, signed by you, and must be filed with the Department within twenty-one (21) days of your receipt of this notice. Completion of the attached Election of Proceeding form and/or a petition for administrative hearing will suffice as a written request. The request must be filed with the General Counsel as acting Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333. 12 Your written response must be received by the Department no later than 5:00 p-m. on the twenty- first day after your receipt of this notice. Mailing the response on the twenty-first day will not preserve your right to a hearing. YOUR FAILURE TO RESPOND IN WRITING WITHIN TWENTY- ONE (21) DAYS OF YOUR RECEIPT OF THIS NOTICE 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 Y OU. If you request a proceeding, you must provide information that complies with the requirements of Rule 28-107.004, Florida Administrative Code. As noted above, completion of the attached Election of Proceeding form conforms to these requirements. Specifically, your response must contain: (a) The name and address of the party making the request, for purpose of service; (b) A statement that the party is requesting a hearing involving disputed issues of material fact, or a hearing not involving disputed issues of material fact; and, (c) A reference to the notice, order to show cause, administrative complaint, or other communication that the party has received from the agency. Ifa hearing of any type is requested, you have the right to be represented by counsel or other qualified representative at your expense, to present evidence and argument, to call and cross- examine witnesses, and to compel the attendance of witnesses and the production of documents by subpoena. If a proceeding is requested and there is no dispute of material fact, the provisions of Section 120.57(2), Florida Statutes, apply. In this regard, you may submit oral or written evidence in opposition to the action taken by the Department or a written statement challenging the grounds upon which the Department has relied. While a hearing is normally not required in the absence of a 13 2 Nn pee ene 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. However, if you dispute material facts which are the basis for the Department’s action, you must request an adversarial proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. 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, Florida. Failure to follow the procedure outlined with regard to your response to this notice may result in the request being denied. All prior oral communication or correspondence in this matter shall be considered freeform agency action, and no such oral communication or correspondence shall operate as a valid request for an administrative proceeding. Any request for an administrative proceeding received prior to the date of this notice shall be deemed abandoned unless timely renewed in compliance with the guidelines as set out above. Mediation of this matter pursuant to Section 120.573, Florida Statutes, is not available. No Department attorney will discuss this matter with you until the response has been received by the Department of Financial Services. DATED and SIGNED this | 4 day of August, 2004. KAREN CHANDLER Deputy Chief Financial Officer 14

Docket for Case No: 04-003370PL