WE REPRESENTING = * ° ae / ALEX SINK => ” Booketed: E CHIEF FINANCIAL OFFICER STATE OF FLORIDA (04-0613 AL IN THE MATTER OF: TIMOTHY ALAN COONRADT CASE NO: 90138-08-AG / ; ADMINISTRATIVE COMPLAINT TO: TIMOTHY ALAN COONRADT 4021 Camino Real Sarasota, Florida 34231-3503 You, TIMOTHY ALAN COONRADT, license ID. #4054123, 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, TIMOTHY ALAN COONRADT, are currently licensed in this state as a 2-15 Life Including Variable Annuity and Health Agent and a 2-18 Life and Health Agent. 2. At all times pertinent to the dates and occurrences referred to herein, you, TIMOTHY ALAN COONRADT, were licensed in this state as an insurance agent, license number A054123. 3. At all times material hereto, you, TIMOTHY ALAN COONRADT, were the Director/Manager and Registered Agent of Senior Planners & Associates, Inc. and Senior Planners & Associates, LLC, both located at 4021 Camino Real, Sarasota, Florida 34231-3503 (“Senior Planners”), 4. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services (“Department”) has jurisdiction over your insurance licenses and appointments. 5. 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-215.210, Florida Administrative Code]. COUNT I 6. The above General Allegations are realleged and incorporated herein by reference. 7. On or about November 5, 2003, you, TIMOTHY ALAN COONRADT, sold Allianz Life Insurance Company of North America (“Allianz”) annuity policies #70028342 and #70028349 (the “Allianz Annuities”) to D.W., age 78, of Sarasota, Florida. The policies were structured to allow for monthly payments for five years, beginning five years from the date of purchase. 8. D.W. died on October 6, 2004, leaving the Allianz Annuities in part to her sister, CF., of Sarasota, Florida. 9. On October 11, 2004, Allianz alerted C.F. that she could choose to annuitize the contracts in accordance with the original policy or receive lump sum distributions. 10. Upon learning that C.F. would inherit the policies, you, TIMOTHY ALAN COONRADT, began calling C.F. and visiting her home uninvited between October 2004 and January 2005, urging her to take a lump. sum distribution from the Allianz Annuities and reinvest the money through you, TIMOTHY ALAN COONRADT. 1 1. C.F. made it clear to you, TIMOTHY ALAN COONRADT, that both she and her husband were in poor health and would need access to the full amount of the investment in five years due to their increasing medical expenses. 12. In furtherance of your goal to convince her to reinvest, you, TIMOTHY ALAN COONRADT, told C.F. that she would double her money ina new annuity, the transaction would not be taxed by the federal government, there would be no penalties associated with a lump sum payout, and she could access the full amount of the annuity in five years. 13. On October 21, 2004, C.F. completed two annuity claim forms, indicating she wished to receive monthly payouts from the Allianz Annuities over a five-year period. 14. On November 15, 2004, C.F. completed two new annuity claim forms, indicating she wished to receive a single lump sum payout from Allianz. 15. On December 2, 2004, Allianz sent C.F. two payout checks. Surrender penalties totaling $23,426.24 were assessed against the two policies. 16, On December 15, 2004, C.F. returned the checks to Albanz, along with a letter stating she again wanted to receive the payout over five years. The letter indicated that she was misinformed about the penalties associated with lump sum payments. 17. When C.F, inquired about the discrepancy between the “annuitization value” and lump sum amounts, you, TIMOTHY ALAN COONRADT, told her that the difference of $23,426.24 was not a surrender charge, but rather that Allianz had deducted the unearned interest that would have accrued over the life of the annuity. 18. During a visit to C.F.’s home on our about January 6, 2005, C.F. told you, TIMOTHY ALAN COONRADT, that she was not feeling well and did not want to talk about reinvesting the Allianz Annuities, 19. Despite her reluctance, you, TIMOTHY ALAN COONRADT, told C.F. that you wanted to write the policy “now” and “would not take ‘no’ for an answer.” Eventually, you, TIMOTHY ALAN COONRADT, convinced C.F. to cash in the Allianz Annuities and reinvest one of them in a new annuity. 20. On January 6, 2005, as a result of your representations, on your advice, and believing you to be acting in her best interest, C.F. wrote to Allianz and again requested the lump sum distribution. Two checks totaling $174,380.32 were sent to C.F. on January 12, 2005. 21. The total value of the Allianz Annuities, if they had been held past the surrender period, would have been $197,806.56. 22. In addition to the $23,426.24 surrender penalty, C.F. incurred tax penalties of approximately $16,500.00 as a result of the lump sum distribution, 23. On January 31, 2005, you, TIMOTHY ALAN COONRADT, prepared an application for annuity for C.F. through National Western Life Insurance Company (“National Western”). 24. A suitability questionnaire accompanying the application. and prepared by you, TIMOTHY ALAN COONRADT, states that C.F.’s investment goals included her desire to gain access to 10% of the principal, followed by a five-year accumulation period and five years of monthly payouts. 25. The National Western application failed to state that the new policy was replacing an existing insurance or annuity product. 26. In another section of the application, you, TIMOTHY ALAN COONRADT, in response to the question, “Do you have any reason to believe that replacement of existing insurance or annuity will be involved?” answered “No.” 27. On February 2, 2005, C.F. wrote a personal check for $110,000.00, which she understood was to. be used as the principal for a five-year annuity through National Western. 28. On February 11, 2005, National Western executed policy #0101111307 (‘the _ National Western annuity”). On that date, C.F. was 76 years of age. 29. Unbeknownst to C.F. at the time, the National Western annuity was a fifteen-year flexible premium deferred annuity that does not fully mature until February 11, 2028. 30. Additionally, the National Western annuity imposed surrender charges as high as 25%, restricting C.F.’s ability to have full access to her funds until she reaches age 99. The surrender charge would also apply in the event of a transfer of the policy to C.F.’s heirs upon her death. 31. Except for a once-yearly 10% penalty-free withdrawal, disbursements from the National Western annuity were subject to hefty surrender or withdrawal charges. 32. Due to her need for income, C.F. requested this 10% penalty-free withdrawal on January 14, 2006, to be applied on February 11, 2006. 33. C.F. also made partial surrender withdrawals of $5,000 and $1,000 on August 15, 2006 and October 1, 2006, respectively, again due to her need for income. 34. You, TIMOTHY ALAN COONRADT, never explained to C.F. what type of annuity she was purchasing, the amount of interest she would receive, the fifteen-year life of the policy, or the penalties associated with early withdrawals. 35. Despite your representations that the National Western annuity would generate large amounts of income, it made only $270.00 in the first year. 36. The sale of the National Western policy to C.F. generated for you, TIMOTHY ALAN COONRADT, and your agency, commissions totaling $15,400.00. 37. You, TIMOTHY ALAN COONRADT, knew, or should have known, that C.F. needed access to the full amount of the investment in five years, and that the National Western annuity did not provide for that access. IT IS THEREFORE CHARGED that you, TIMOTHY ALAN COONRADT, 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) Engaged in willful misrepresentation of an insurance policy or willful deception with regard to the policy. [Section 626.61 1(5), Florida Statutes]; (b) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.61 1(7), Florida Statutes]; (c) Violation of the provision against twisting, as defined in s. 626.9541(1)(1). [Section 626.621(5), Florida Statutes}; (d) In the conduct of business under the appointment, engaged in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter, or otherwise showed yourself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes}; . (e) Knowingly made a false or fraudulent statement or representation on an application for an insurance policy for the purpose of obtaining a fee, commission, or other benefit. [Section 626.9541(1)(k)(1), Florida Statutes]; (f) 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]; WHEREFORE, you, TIMOTHY ALAN COONRADT, 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, 626.692, and 626.9521, 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 28-106, 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 acting as 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 SUSPENSION OR REVOCATION WILL BE ENTERED AGAINST YOU. If you request a proceeding, 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 "tespondent"). ~ (b) The name, 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 are none, the petition must so indicate. (d) A statement of when the respondent received notice of the administrative complaint. (e) A statement including the file number to 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. 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 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. sh DATED and SIGNED this _| day of November 2008. woten Tammy Test 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 by Certified Mail to: yr TIMOTHY ALAN COONRADT, 4021 Camino Real, Sarasota, Florida 34231-3503 this ve) day of _Noyember_, 2008. David J. Busch Senior Attorney Department of Financial Services Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333

Docket for Case No: 09-000693PL