Jan 15 2009 16:23 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + S584o7r4ogr Jan. 15 2663 4:33PM P3 ~ FILED DEC 15 208 REPRESENTING Seereroo oy ALEX SINK CHIEF FINANCIAL OFFICER STATE OF FLORIDA IN THE MATTER OF: CASE NO.; 98402-08-AG STEVEN GLYNN SCHRAMM ADMINISTRATIVE COMPLAINT STEVEN GLYNN SCHRAMM 4370 Kings Way Valdosta, GA 31602 You, STEVEN GLYNN SCHRAMM, license LD, # E092320, 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, as a result of which it is alleged: GENERAL ALLEGATIONS 1, Pursuant to Chapter 626, Florida Statutes, you, STEVEN GLYNN SCHRAMM, are currently licensed in this state as a nonresident life, health and variable annuity agent. 2. At all times pertinent to the dates and occurrences referred to herein, you, STEVEN GLYNN SCHRAMM, were licensed in this slate as a nonresident life, health and variable annuity agent. 3. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services (“Department”) has jurisdiction over your insurance licenses and appointments. Jan 15 2009 16:23 FROM : DEPT OF FINANCIAL SERVICES FAs NO. 8564874987 Jan. 15 2689 @4:335PM P4 COUNT I 4, The above general allegations are hereby realleged and fully incorporated herein by reference, 4. On or around March 1, 2006, you, STEVEN GLYNN SCHRAMM, met with E.B. and C.B., of Lake City, Florida, 6. You, STEVEN GLYNN SCHRAMM, recommended that E.B. purchase annuities with Midland National Life Insurance Company (“Midland”) and American Equity Investment: Life Insurance Company (“American Equity”). 7, You, STEVEN GLYNN SCHRAMM, told E.B. and C.B. that the Midland annuity you recommended to E.B. had a minimum guaranteed interest rate of six percent (6%). 8. You, STEVEN GLYNN SCHRAMM, told F.B, and C.B. that the American Equity annuity you recommended to E.B. had a minimum guaranteed interest rate of six percent (6%). 9, On March 1, 2006, you, STEVEN GLYNN SCHRAMM, sold E.B. two annuily contracts with Midland, both in the amouni of $105,225.63, and one annuity contract with American Equity, in the amount of $130,000.00. 10. The Midland annuity you recommended to E.B. had a minimum guaranteed interest rate of three percent (3%). Il. The American Lquity annuity you, STEVEN GLYNN SCHRAMM, recommended to E.13. had a minimum guaranteed interest rate of three and a quarter percent (3.25%) for the first year, and a minimum guaranteed interest rate of three percent (3%) thereafter. Jan 15 2009 16:24 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jan. 15 2669 4:33PM PS 12. You, STEVEN GLYNN SCHRAMM, knew, or should have known, that the Midland annuity that you recommended to E.B. had a minimum guaranteed interest rate of three percent (3%), 13. You, STEVIUN GLYNN SCHRAMM, knew, or should have known, that the American Equity annuity that you recommended to E.B. had a minimum guaranteed interest rate of three and a quarter percent (3.25%) for the first year, and a minimum guaranteed interest rale of three percent (3%) thereatier. 14, You, STEVEN GLYNN SCHRAMM, earned a commission on the sale of the Midland and American Equity annuities to LB. 15. When E.B. received her first annual statement, she realized that the minimum guaranteed interest rates were lower than what you, STEVEN GLYNN SCHRAMM, had represented to her. 16. EB. then became dissatisfied with the Midland and American Equity annuities that you, STEVEN GLYNN SCHRAMM, sold her, and sought a way out of the annuities. 17, The Midland armuity contained a significant surrender penalty; 20% of the annuity’s value for the first and second years, decreasing incrementally thereafter for fourteen years. 18. The American Equity annuity contained a significant surrender penalty; 20% of the annuity’s value for the first year, decreasing incrementally thereafter for seventeen years. 19, Unable to absorb the surrender penalties associated with the annuities, E.B. has been forced to keep ithe annuity. Jan 15 2009 16:24 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jan. 15 2669 84:34PM Pe IT IS THEREFORE CHARGED that you, STEVEN GLYNN SCIIRAMM, have violated of are accountable under one or more of the following provisions of the Florida Statutes or Florida Administrative Code, which constitute grounds for the suspension or revocation of your licenses as a Florida insurance agent: (a) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statules]; (b) 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]; (c) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (d) 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 loss to the public. [Section 626.621(6), Florida Statutes]: (e) Misrepresentations and false advertising of insurance policics.-- Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison which: 1. Misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626,9541(1)(a)1, Florida Statutes]; (f) Misrepresentations in insurance applications.-- Knowingly making a false or fraudulent written or oral staternent or representation on, or relative to, an application or negotiation for an insurance policy for the purpose of obtaining a foc, commission, money, or Jan 15 2009 16:24 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jan. 15 2663 84:34PM Pr other benefit from any insurer, agent, broker, or individual. [Section 626.9541(1)(k)1, Florida Statutes]; (g)) Violation of any lawful order or rule of the department, [Section 626.621(3), Florida Statutes]; (h) No advertising, sales literature, or sales presentation for contracts on a variable basis shall be misleading, deceptive or inadequate in any way. [Rule 69B-162,010(3), Florida Administrative Code]; qa If a life agent, violation of the code of ethics. [Section 626.621(9), Florida Statutes |: (j) The Business of Lite Insurance is hereby declared to be a public trust in which service all agents of all companies have a common obligation to work together in serving the best interests of the insuring public, by understanding and observing the laws governing Life Insurance in letter and in spirit by presenting accurately and completely every fact essential to a client’s decision, and by being fair in all relations with colleagues and competitors always placing the policyholder’s interests first. [Rule 69B-215.210, Florida Administrative Code]; and (k) No person shall 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 (o 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, [Rule 69B-215.230(1), Florida Administrative Code]. Jan 15 2009 16:25 FROM = DEPT OF FINANCIAL SERVICES FAs NO. : 8564874987 Jan. 15 2669 4:34PM Pe COUNT IL 20. The above general allegations are hereby realleged and fully incorporated herein by reference. 21, On or around April 10, 2006, you, STEVEN GLYNN SCHRAMM, met with VJ. and N.J., of Wellborn, llorida. 22, You, STEVEN GLYNN SCHRAMM, tecommended that V.J. purchase an annuity with Midland, 23, You, STEVEN GILYNN SCHRAMM, told V.J. and N.J. that the Midland annuity you recommended to V.J. had a minimum guaranteed interest rate of eight percent (8%), 24, . On April 10, 2006, you, STEVEN GLYNN SCIIRAMM, sold V.J, an annuity contract with Midland, in the amount of $90,000,00, 25. The Midland atmuity you recommended to VJ. had a minimum guaranteed interest rate of three pereent (3%). 26. You, STEVEN GILYNN SCHRAMM, knew, or should have known, that the Midland annuity that you recommended to V.J. had a minimum guaranteed interest rate of three percent (3%). 27, You, STEVEN GLYNN SCHRAMM, carned a commission on the sale of the Midland annuity to V.J. 28, When Y.J, received his first annual statement, he realized that the minimum guaranteed interest rate was lower than what you, STEVEN GLYNN SCHRAMM, had represented to him. 29, Vil. then became dissatisfied with the Midland annuity that you, STEVEN GLYNN SCHRAMM, sold him. Jan 15 2009 16:25 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jan. 15 2669 84:35PM Pg 30. The Midland annuity contained a significant surrender penalty, 20% of the amnuity’s value for the first and second years, decreasing incrementally thereafter for fourteen years. 31. Unable to absorb the surrender penalties associated with the annuities, V.J. has been forced to keep the annuity. IT 1S THEREFORE CHARGED that you, STEVEN GLYNN SCHRAMM, have violated or arc accountable under one or more of the following provisions of the Florida Statutes or Florida Administrative Code, which constitute grounds for the suspension or revocation of your licenses as a Florida insurance agent: (a) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), llorida Statutes]; (b) 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]; (c) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (d) In the conduct of business under the license or appointment, cngaging 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 loss to the public. |Section 626,621(6), Florida Statutes]; (c) Misrepresentations and false advertising of insurance policies.-- Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison which: Jan 15 2009 16:25 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + S584o7r4ogr Jan. 15 2663 84:35PM Pla 1. Misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Scction 626.9541(1)(a)L, Florida Statutes]; (f) Misrepresentations in insurance applications.-- Knowingly making a false or fraudulent written or oral statement or representation ou, 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}; (g) Violation of any lawful order or rule of the department. [Section 626.621(3), Florida Statutes]; (h) No advertising, sales literature, or sales presentation for contracts on a variable basis shall be misleading, deceptive or inadequate in any way. [Rule 69B-162.010(3), L'lorida Administrative Code]; (i) Tf a life agent, violation of the code of ethics. [Section 626.621(9), Florida Statutes]; (j) The Business of Life Insurance is hereby declared to be a public trust in which service all agents of all companies have a common obligation to work together in serving the best interests of the insuring public, by understanding and observing the laws governing Life Insurance in Jetler and in spirit by presenting accurately and completely cvery fact essential to a client’s decision, and by being fair im all relations with colleagues and competitors always placing the policyholder’s interests first. [Rule 69B-215.210, Florida Administrative Code]; and (k) No person shall 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 Jan 15 2009 16:25 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + S584o7r4ogr Jan. 15 26689 @4:35PM Pil received thereon, or make any false or mislcading 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. [Rule 69B-215.230(1), Florida Administrative Code]. COUNT IIT 32. The above general allegations are hereby realleged and fully incorporated herein by reference. 33, On or around October 12, 2006, you, STEVEN GLYNN SCHRAMM, met with A.H. and J.H., of High Springs, Florida. 34. You, STEVEN GLYNN SCHRAMM, recommended that A.H. purchase an annuity with Allianz Life Insurance Company of North America (“Allianz”). 35, You, STEVEN GLYNN SCHRAMM, told A.H. and J.H. that the Allianz annuity you recommended to A.H. had a minimum guaranteed interest rate of seven percent (7%). 36. On October 12, 2006, you, STEVEN GLYNN SCHRAMM, sold A.H. an annuity contract with Allianz, in the amount of $64,943.80, 37. The Allianz annuity you recommended to A.H. had a minimum guaranteed interest rate of three percent (3%). 38. You, STEVEN GLYNN SCHRAMM, knew, or should have known, that the Allianz annuity that you recommended to A.H, had a minimum guaranteed interest rate of three percent (3%). 39, You, STEVEN GLYNN SCHRAMM, expected to earn a commission on the sale of the Allianz annuity to A.H. Jan 15 2009 16:26 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + S584o7r4ogr Jan. 15 2663 84:35PM Pl2 40. A.HL. cancelled his purchase of the Allianz annuity while he could so without incurring a penalty. IT 18 THEREFORE CHARGED that you, STVEN GLYNN SCHRAMM, have violated or are accountable under one or more of the following provisions of the Florida Statutes or Florida Administrative Code, which constitute grounds for the suspension or revocation of your licenses as a Florida insurance agent: (a) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Mlorida Statutes]; (b) 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]; (c) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626,611(9), Florida Statutes]; (d) 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 loss to the public. [Section 626,621(6), Florida Statutes]; (e) Misrcpresentations and false advertising of insurance policics.-- Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison which: 1, Misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626,9541(L)(a)L, Florida Statutes]; Jan 15 2009 16:26 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jan. 15 26683 @4:36PM P13 (f) Misrepresentations in insurance applications -- 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, of other benefit from any insurer, agent, broker, or individual. |Scction 626.9541(1)(k)1, Florida Statutes]; (g) Violation of any lawful order or rule of the department. [Section 626.621 (3), Florida Statutes]; (h) No advertising, sales literature, or sales presentation for contracts on a variable basis shall be misleading, deceptive or inadequate in any way. [Rule 69B-162.010(3), Florida Administrative Code]; (68) If a life agent, violation of the code of cthics. [Section 626.621(9), Florida Statutes]; G) ‘The Business of Life Insurance is hereby declared to be a public trust in which service all agents of all companies have a common obligation to work together in serving the best interests of the insuring public, by understanding and observing the laws governing Life Insurance in letter and in spirit by presenting accurately and completely every fact essential to a client’s decision, and by being fair in all relations with colleagues and competitors always placing the policyholder’s interests first. [Rule 69B-215,21 0, Florida Administrative Code]; and (k) No person shall make, issue, circulate, or cause to be made, issued, or circulated, any estimate, circular, or statement misrepresenting the lerms of any policy issued of 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 11 Jan 15 2009 16:26 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jan. 15 2663 @4:36PM P14 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 ot class of policies tisrepresenting the true nature thereof. (Rule 69B-215.230(1), Florida Administrative Code]. WIEREFORE, you, STEVEN GLYNN SCHRAMM, 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 626,611, 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. NOTICE OF RIGIITS 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 28-106, Florida Administrative Code, The procceding 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 wtilten request, The request must be filed with the General Counsel acting as the 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 Jan 15 2009 16:27 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jan. 15 2663 4:37PM Pils SUSPENSION OR REVOCATION WILL BE ENTERED AGAINST YOU. If you request a procecding, you must provide information that complies with the requirements of Rule 28-106,2015, 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, address, and telephone number, and facsimile number (if any) of the respondent (for the purpose of requesting a hearing in this matter, you are the "respondent". (b) The namo, address, telephone number, facsimile number of the attorney or qualified representative of the respondent (if any) upon whom service of pleadings and other papers shall be made. (c) . A statement requesting an administrative hearing identifying those material facts that are in dispute. If there arc none, the petition must so indicate. (d) A statement of when the respondent reccived notice of the administrative complaint. (c) A statement including the file number of the administrative complaint. 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. Tf 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 Jan 15 2009 16:27 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jan. 15 2663 4:37PM P16 the grounds upon which the Department has telied, While a hearing is normally not required in the absence ofa dispute of fact, if you feel that a hearing is necessary, one will be conducted in Tallahassee, I‘lorida, or by telephonic conference call upon your request, Ilowever, 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 Tearings. Unless the majority of witnesses are located clsewhere, 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 frecform 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 puidclincs 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. DATED and SIGNED this _ LZ. Jed say of £2008. Deputy Chief Financial Officer Jan 15 2009 16:27 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + S584o7r4ogr Jan. 15 2663 84:37PM PL? CERTIFICATE OF SERVICE I HEREBY CERVIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished to. STEVEN GLYNN OP at a Kings Way, Valdosta, GA 31602 by Certified Mail this _LSxk day of 2008. Robert Alan Fox Senior Attorney Department of Financial Services Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 (850) 413-4106 15

Docket for Case No: 09-000235PL