a an re vay / DEPARTMENT OF FINANCIAL SERVICES’ “9 oe, & FILED JUN 14 200 Docketed oy CASE NO.: 75602-04-AG Tom GALLAGHER CHIEF FINANCIAL OFFICER IN THE MATTER OF: DAVID ALLEN SHERMAN _ ADMINISTRATIVE COMPLAINT ADMINIS TRALIVE DAVID ALLEN SHERMAN 6080 NW 44th Street Apt 303 Lauderhill, Florida 33319-4437 0 S 7: ( \ 5 | PL DAVID ALLEN SHERMAN South Florida Financial Services 2500 N. Military Trail, Suite 465 Boca Raton , Florida 33431 -6342 You, DAVID ALLEN SHERMAN, 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 staie, as a result of which it is alleged: GENERAL ALLEGATIONS 1. Pursuant to Chapter 626, Florida Statutes, you, DAVID ALLEN SHERMAN, are currently licensed in this state as a Life Incliding Variable Annuity & Health Agent, Life Agent, Life & Health Agent, and a Health Agent, license I.D. #4240921. 2. At all times pertinent to the dates and occurrences referred to herein, you, DAVID ALLEN SHERMAN, were licensed in this state as an insurance agent. 3. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services has jurisdiction over your insurance licenses and appointments. 4. At all times material to the dates and occurrences herein, TRG was the acronym or pseudonym for a multitude of entities that engaged in the business of insurance, or operated as one or more Multiple Employer Welfare Arrangements (“MEWAs”) in Florida, including, but not limited to: (a) T.R.G. Marketing, LLC (b) T.R.G. Administration, LLC (c) The Redwood Group, LLC 5, At all times material herein, TRG was an entity unauthorized to conduct insurance business in the state of Florida. 6. At all times material herein, you, DAVID ALLEN SHERMAN, were the registered agent of the International Associatoin for Barbers and Cosmetologists (IABC), aslo known as IABS. 7. At all times material herein, you, DAVID ALLEN SHERMAN and MARCIA DE MIGUEL, were Officers and Directors of AIBC. 8. At all times material herein, MARCIA DE MIGUEL, was an employee of AIBC/AIBS. 9. At all times material herein, MARCIA DE MIGUEL, was not a licensed agent in the State of Florida. COUNT I 10. The above general allegations are hereby realleged and fully incorporated herein by reference. ll. In or around June 2000, P.C., of Delray Beach, Florida, contacted IABC to purchase health insurance to cover himself and his spouse, E.C. He spoke with MARCIA DE MIGUEL, your employee, who placed him in the Well Care Insurance Plan. 12. In or around May 2001, MARCIA DE MIGUEL sent P.C. a letter stating his premium had increased, and sent him an application for TRG. P.C. completed and delivered the forms to MARCIA DE MIGUEL. The policy was effective on or about June 2001. 13. P.C. continued to have communications with MARCIA DE MIGUEL, until she informed him, in a letter dated November 30, 2001, that the AIBC health plan through TRG had been terminated effective November 30, 2001. IT IS THEREFORE CHARGED that you, DAVID ALLEN SHERMAN, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (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) Any insurer, general agent, or agent who furnishes any...supplies... to any agent or prospective agent not appointed to represent the insurer and who accepts from or writes any insurance business for such agent...is subject to civil liability to any insured of such insurer to the same extent and in the same manner as if such agent or prospective agent had been appointed or authorized by the insurer or such agent to act in its or his or her behalf. Section 626.342(2), Florida Statutes; (c) | The primary agent in an unincorporated agency, or the primary agent in an incorporated agency in which no officer, director, or stockholder is an agent, shall be responsible and accountable for the acts of salaried employees under his or her direct supervision and control, while acting on behalf of the agency. Section 626.592(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 626.61 1(8), Florida Statutes; (f) Violation of any provision of this Code or 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; (g) 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; (h) No person shall, from offices or by personnel or facilities located in this state... directly or indirectly act as an agent for, or otherwise represent or aid on behalf of another, any insurer not then authorized to transact such insurance in this state. Section 626.901(1), Florida Statutes. COUNT II 14. The above general allegations, and paragraphs ten (10) through twelve (12), are hereby realleged and fully incorporated herein by reference. 15. P.C. made five (5) monthly payments, totaling approximately TWO THOUSAND SEVEN HUNDRED THITY-FIVE AND 00/100 ($2735.00) DOLLARS, to TRG/IABC from May 2001 through October 2001, to pay for health insurance through TRG/IABC. 16. Commencing on or after October 2, 2001, P.C. incurred medical claims of approximately THREE HUNDRED THIRTY FIVE AND 85/100 ($335.85) DOLLARS, while covered by TRG, and presented them to TRG for payment. TRG has failed to pay such claims. IT IS THEREFORE CHARGED that you, DAVID ALLEN SHERMAN, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (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) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance, Section 626.611(7), Florida Statutes; {c) 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; (d) Violation of any provision of this Code or 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; (e) 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; (f) No person shall, from offices or by personnel or facilities located in this state... directly or indirectly act as an agent for, or otherwise represent or aid on behalf of another, any insurer not then authorized to transact such insurance in this state. Section 626.901(1), Florida Statutes. COUNT III 17. The above general allegations are hereby realleged and fully incorporated herein by reference. 18. In or around May 2001, C.C., of West Palm Beach, Florida, contacted IABC to purchase health insurance to cover herself and her spouse, W.C. She spoke with Mike (last name unknown), employee of AIBC and you, DAVID ALLEN SHERMAN, who placed her and her spouse with the TRG Insurance Plan. The plan was effective as of August |, 2001. 19. Mike (last name unknown) informed C.C. that in order to qualify for the TRG Health Plan they had to join AIBC and pay a ONE HUNDRED AND 00/100 ($100.00) DOLLARS, membership fee. C.C. paid the fee, with check number 1129, dated July 30, 2001. 20, Six (6) monthly payments, totaling approximately TWO THOUSAND ONE HUNDRED EIGHTY-FIVE AND 00/100 ($2,185.00) DOLLARS, were made to TRG/AIBC, from July 2001 through December 2001, to pay for said health insurance. 21. In or around November 2001, C.C. called AIBC to verify her insurance coverage, and spoke to you, DAVID ALLEN SHERMAN. You, DAVID ALLEN SHERMAN, stated that she would be receiving information in the mail about her new health plan. 22. Commencing on or after October 2, 2001, C.C. and her spouse incurred medical claims of approximately ONE THOUSAND EIGHTY-NINE AND 27/100 ($1,089.27) DOLLARS, while covered by TRG, and presented them to TRG for payment. TRG has failed to pay such claims. IT 18 THEREFORE CHARGED that you, DAVID ALLEN SHERMAN, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (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 624.1 1(1), Florida Statutes, (b) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. Section 626.611(7), Florida Statutes; (c) 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; (d) Violation of any provision of this Code or 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; (e) 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; (f) No person shall, from offices or by personnel or facilities located in this state . . . directly or indirectly act as an agent for, or otherwise represent or aid on behalf of another, any insurer not then authorized to transact such insurance in this state. Section 626.901(1), Florida Statutes. WHEREFORE, you, DAVID ALLEN SHERMAN, 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 626.681, 626.691, 626.692 and 626.901, Florida Statutes, and under the other referenced sections of the Florida Statutes as set out in this Administrative Complaint. 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. 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 YOU. 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. If a 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 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 corresporidence 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 _/ pth day of , 2004. hler KAREN CHANDLER Deputy Chief Financial Officer CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished to: David Allen Sherman, 6080 NW 44th Street Apt 303, Lauderhill, Florida 33319-4437, and David Allen Sherman, South Florida Financial Services, 2500 N. Mili Trail, Suite 465, Boca Raton, Florida 33431-6342, by Certified Mail this L¥hiay of ( ane , 2004. William W. Tharpe, Jr. Florida Bar Number: 0312411 Division of Legal Services 200 East Gaines St. 612 Larson Building Tallahassee, Florida 32399-0333 (850) 413-4110 Attorney for Department 10 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished to: David Allen Sherman, 10020 Anaheim Drive, Alpharetta, Georgia 30022, by Certified Mail this 2rd day of _. aly _, 2004. “yt William W. Tharpe, Florida Bar Number: 0312411 Division of Legal Services 200 East Gaines St. 612 Larson Building Tallahassee, Florida 32399-0333 (850) 413-4110 12

Docket for Case No: 05-000157PL