FILED APR 22 2003 ALEX SINK Cr CUISTATEOF FLORIDA Docketed by IN THE MATTER OF: CASE NO. 89299-09-AG FRANK JOHN PIZZOFERRATO / ADMINISTRATIVE COMPLAINT TO: FRANK JOHN PIZZOFERRATO 7948 Glenties Way Los Angeles, California 91040-3318 me You, FRANK JOHN PIZZOFERRATO, are hereby notified that pursuant to Chapter 626,. Florida Statutes, 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. You, FRANK JOHN PIZZOFERRATO, are currently licensed in the state as a non-resident life and variable annuity agent. 2. At no time pertinent to the dates and occurrences referred to below in this Administrative Complaint were you, FRANK JOHN PIZZOFERRATO, licensed as an insurance agent in this state. 09-336 O PY rnd - 3. Pursuant to Chapter 626, Florida Statutes, the Chief Financial Officer of the State of Florida and the Department of Financial Services has jurisdiction over your insurance licenses and your eligibility for licensure and appointment. 4. 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, 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 3. The above General Allegations numbered one through four are hereby realleged and fully incorporated herein by reference. 6. Mr. and Mrs. G. B. (hereinafter GB) of Summerfield, Florida, as of March 2004, had approximately $128,000.00 in retirement assets invested in Franklin Templeton mutual funds. Their sole retirement income consisted of social security and a monthly interest yield from the Franklin Templeton mutual funds. 7. On or about May 7, 2004, you, FRANK JOHN PIZZOFERRATO, willfully induced GB to use $95,000 of their retirement funds to purchase an Allianz Insurance equity indexed annuity (hereinafter “annuity”), in violation of Sections 626.112(1) and (2), Florida Statutes, as you were not licensed to sell insurance products in this state. Your employer, Phillip Roy Wasserman, signed the application as agent of record, though at no time was he present at the sales solicitation. 8. At no time relevant to this sale were you, FRANK PIZZOFERRATO, licensed to sell insurance products. At no time relevant to this sale did you, FRANK JOHN PIZZOFERRATO, disclose this material fact to GB. 9. In the process of inducing the sale and purchase of the annuity, you, FRANK JOHN PIZZOFERRATO, willfully misrepresented and/or omitted material information regarding the nature and sale of the annuity. The misrepresentations and omissions include, but are not limited to, the following: | (a) GB stated that they wanted to receive a regular and immediate return on their principal to supplement their income, without the return resulting in any reduction of their principal. In point of fact, GB’s annuity could not pay out a regular return on principal (referred to in the annuity as a “systemic withdrawal of credit) until after the fifth year of the policy. You, FRANK JOHN PIZZOFERRATO, failed to disclose this material fact to GB. (b) You, FRANK JOHN PIZZOFERRATO, represented to GB that the annuity would be immediately credited with a 10% bonus added to their premium. In point of fact, the “bonus” would be added to the annuitization value of the contract, i.e., what the contract is worth in the event it is “annuitized” or converted into a stream of payments at the maturity date. Thus, the premium and bonus are not available as a lump sum guaranteed payment until the tenth year of the policy. You, FRANK JOHN PIZZOFERRATO, failed to disclose this material fact to GB. (c) You, FRANK. JOHN PIZZOFERRATO, failed to disclose to GB that they could only withdraw from the annuity a sum equal to 5% of their premium after the first year of the policy once per year and cumulative withdrawals could not exceed 25% of the premium without the assessment of a surrender penalty. You, FRANK JOHN PIZZOFERRATO, failed to disclose this material fact to GB. (d) You, FRANK JOHN PIZZOFERRATO, failed to disclose to GB that they could not have full, penalty free access to their funds for nine years or until 2013, at which time Mr. GB would be age 93 and Mrs. GB age 91. The GB’s are actuarially unlikely to live to be these ages; therefore they are unlikely to receive any benefits from this annuity. -You, JOHN FRANK PIZZOFERRATO, failed to disclose this material fact to GB. 10. The ‘misrepresentations and omissions, made by you, FRANK JOHN PIZZOFERRATO, were false and material misstatements of fact. You, FRANK JOHN PIZZOFERRATO, knew or should have been aware of these misrepresentations and omissions. 11. The conduct and actions described herein constitute unfair and deceptive acts or practices in violation of Section 626.9541, Florida Statutes. 12. GB reasonably relied on the representations and information conveyed to them by you, FRANK JOHN PIZZOFERRATO, concerning the annuity. GB would not have purchased the annuity but for the above-referenced false and misleading representations. 13. The sale of the annuity to GB was not appropriate because it was not in their best interest; it was neither necessary nor appropriate for their age and financial circumstance, as they had no desire or need to restrict access to their retirement funds in such a fashion and it was without any demonstrable benefit. 14. GB has suffered financial harm. You, FRANK PIZZOFERRATO, held yourself out to GB to be an insurance agent and solicited insurance in this state without being licensed pursuant to Section 626.112, Florida Statutes. You, FRANK PIZZOFERRATO, failed to explain or disclose to GB how the purchase of the annuities would affect their retirement income and retirement assets. As a result, you, FRANK PIZZOFERRATO, have violated a fiduciary duty to GB and violated a public trust in contravention of Rule 69B-215.210, Florida Administrative Code. 4 IT IS THEREFORE CHARGED that you, FRANK JOHN PIZZOFERRATO, 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) No person may be, act as, or advertise or hold him or herself out to be an insurance agent unless he or she is currently licensed by the department and appointed by an appropriate appointing entity or person. [Section 626.112(1) (a), Florida Statutes]; (b) — 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 626.61 1(5), Florida Statutes]; (c) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (d) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.61 1(9), Florida Statutes]; (e) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of the Insurance Code. [Section 626.611(13), Florida Statutes]; (G3) In the conduct of business under the license or appointment, engaging in unfair methods of competition or unfair or deceptive acts or practices, as prohibited by part IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes]; (g) Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any statement, sales presentation, omission, or comparison which: misrepresents the 5 benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9541(1)(a)1, Florida Statutes]; (h) Knowingly making a false material statement. [Section 626.9541(1)(e)1, Florida Statutes]. COUNT II 15. The above General Allegations numbered one through four are hereby realleged and fully incorporated herein by reference. 16. Mr. and Mrs. M.G. (hereinafter MG) of Milwaukee, Wisconsin, as of March 2004, had approximately $216,000.00 in retirement assets invested in a New York Life Insurance life insurance policy. . 17. On or about April 23, 2004, you, FRANK JOHN PIZZOFERRATO, an unlicensed individual, willfully induced MG to surrender the above mentioned New York Life Insurance life insurance policy for its full value of $216,000 and purchase a Sun Life Key Index Multipoint annuity (hereinafter “annuity”), in violation of Section 626.112(1) and (2), Florida Statutes, as you were not licensed to sell insurance products in this state. Phillip Roy Wasserman signed the application for this annuity as agent of record, though at no time was he present at the sales solicitations. 18. At no time relevant to this sale were you, FRANK PIZZOFERRATO, licensed to sell insurance products in this state. At no time relevant to this sale did you, FRANK JOHN PIZZOFERRATO, disclose this material fact to MG. 19. _ In the process of inducing the sale and purchase of the annuity, you, FRANK JOHN PIZZOFERRATO, willfully misrepresented and/or omitted material information regarding the nature and sale of the annuity. The misrepresentations and omissions include, but are not limited to, the following: (a) You, FRANK JOHN PIZZOFERRATO, falsely represented that MG would receive an annual return on the annuity of no less than 6%. In point of fact, the interest credited under the annuity is directly tied to the S&P 500 average. A 6% return cannot be guaranteed. Furthermore, a 6% annual return every year is highly unlikely. You, FRANK JOHN PIZZOFERRATO, failed to disclose these material facts. (b) To receive the potential benefit of this annuity, MG would have to keep the annuity in force for a minimum of ten years or until the annuity maturity date, when Mr. MG would be age 94 and Mrs. MG would be age 92. It is actuarially unlikely that either MG would live to be that age; therefore, it is unlikely they can receive any benefit from this annuity. You, Frank John PIZZOFERRATO, failed to disclose these material facts. 20. The misrepresentations and omissions made by you, FRANK JOHN PIZZOFERRATO, were false and material misstatements of fact. You, FRANK JOHN PIZZOFERRATO, were aware or should have been aware of these misrepresentations and omissions. 21. The conduct and actions described herein constitute unfair and deceptive acts or practices in violation of Section 626.9541, Florida Statutes. 22. | MG reasonably relied on the representations and information conveyed to them concerning the annuity. MG would not have purchased the annuity but for these false and misleading representations. 23. The sale of the annuity to MG was not appropriate because it was not in their best interest; it was neither necessary nor appropriate for their age and financial circumstance, as they 7 had no desire or need to restrict access to their retirement funds in such a fashion and it was without demonstrable benefit. 24. MG has suffered financial harm. You, FRANK PIZZOFERRATO, held yourself out to be an insurance agent and solicited insurance in this state without being licensed, pursuant to Section 626.112, Florida Statutes. You, FRANK PIZZOFERRATO, failed to explain or disclose to MG how the purchase of the annuities would affect their retirement income and retirement assets. As a result, you, FRANK PIZZOFERRATO, have violated your fiduciary duty to MG and violated a public trust in contravention of Rule 69B-215.210, Florida Administrative Code. IT IS THEREFORE CHARGED that you, FRANK JOHN PIZZOFERRATO, 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: Sections 626.112(1)(a); 626.611(5); 626.611(7); 626.611(9); 626.611(13); 626.621(6); 626.9541(1)(a)1 and 626.9541(1)(e)1, Florida Statutes as more particularly alleged in Count I above. COUNT III 25. The above General Allegations numbered one through four are hereby realleged and fully incorporated herein by reference. 26. Mr. L.HH. (hereinafter LHH) of Estero, Florida, as of February 2005, had approximately $1,220,000.00 invested in Northwestern Life life insurance policies. 27. In or about February 2005, you, FRANK JOHN PIZZOFERRATO, willfully solicited and induced LHH to surrender his Northwestern Life Insurance policies and to utilize the $1,220,000 approximate cash value to purchase two EquiTrust Insurance annuities (hereinafter 8 “annuities”), in violation of Section 626.112(1) and (2), Florida Statutes, as you were not licensed to sell insurance products in this state. Phillip Roy Wasserman signed the application for these annuities as agent of record, though at no time was he present at the sales solicitations. 28. At no time relevant to this sale were you, FRANK PIZZOFERRATO, licensed to sell insurance products. At no time relevant to this sale did you, FRANK J OHN PIZZOFERRATO, disclose this material fact to LLH. 29. In the process of inducing the sale and purchase of the annuity, you, FRANK JOHN PIZZOFERRATO, willfully misrepresented and/or omitted material information regarding the nature and sale of the annuities. The misrepresentations and omissions include, but are not limited to, the following: (a) LHH stated that he wanted to receive a regular and immediate return from the annuities of at least 5% to supplement their income, without the return resulting in any invasion or reduction of his principal. However, the annuity is a fixed account annuity and the guaranteed annual minimum interest rate is only 1.5%. You, FRANK JOHN PIZZOFERRATO, failed to disclose this material fact to LHH. (b) —_LLH indicated to you, FRANK JOHN PIZZOFERRATO, that he would need full access to his funds in one to three years for one annuity and four to six years for the second annuity. You, FRANK JOHN PIZZOFERRATO, failed to disclose that LLH could only withdraw a sum equal to 10% of his premium after the first year once per year, without assessment of a declining scale surrender penalty. You, FRANK JOHN PIZZOFERRATO, failed to disclose these material facts to LHH. (c) You, FRANK JOHN PIZZOFERRATO, failed to disclose to LHH that he could not have full penalty free access to his funds for fourteen years or until 2019, at which time Mr. LHH 9 would be age 83. You, FRANK JOHN PIZZOFERRATO, failed to disclose these material facts to LHH. 30. The misrepresentations and omissions made by you, FRANK JOHN PIZZOFERRATO, were false and material misstatements of fact. 31. The conduct and actions described herein constitute unfair and deceptive acts or practices in violation of Section 626.9541, Florida Statutes. 32. LLH reasonably relied on the representations and information conveyed to him concerning the annuity. LLH would not have purchased the annuity but for these false and misleading representations. 33. The sale of the annuity to LHH was not appropriate because it was not in his best interest, it was neither necessary nor appropriate for an individual of his age and financial circumstance, as he had no desire or need to restrict access to his retirement funds in such a fashion, and it was without demonstrable benefit. 34. LLH has suffered financial harm. You, FRANK PIZZOFERRATO, held yourself out to be an insurance agent and have solicited insurance in this state without being licensed, pursuant to Section 626.112, Florida Statutes. You, FRANK PIZZOFERRATO, failed to explain or disclose to LLH how the purchase of the annuities would affect his retirement income and retirement assets. As a result, you, FRANK PIZZOFERRATO, have violated your fiduciary duty to LLH and violated a public trust in contravention of Rule 69B-215.210, Florida Administrative Code. IT IS THEREFORE CHARGED that you, FRANK JOHN PIZZOFERRATO, 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 10 your licenses as a Florida insurance agent: 626.112(1)(a); 626.611(5); 626.611(7); 626.611(9), 626.611(13); 626.621(6); 626.9541(1)(a)1 and 626.9541(1)(e)1, Florida Statutes as more particularly alleged in Count I above. WHEREFORE, you, FRANK JOHN PIZZOFERRATO, are hereby notified that the Chief Financial Officer intends to enter an Order suspending or revoking your licenses, appointments and your eligibility for licensure as an insurance agent in this state 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. 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 of Financial Services ("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 DFS Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390. 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. 11 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 "respondent"). (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 12 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. DATED and SIGNED this 7 gne day of Kp cil , 2009. > iaioena Aezston . TAMMY TESGON Deputy Chief Financial Officer 13 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: FRANK JOHN PIZZOFERRATO, 7948 Glenties Way, Los Angeles, CA 91040-3318 on this nd 22” dayof_Apri \__, 2009. ”~ JAMES A. BOSSART, ESQUIRE . Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 (850) 413-4124 14 STATE OF FLORIDA DEPARTMENT OF FINANCIAL SERVICES DIVISION OF LEGAL SERVICES 2 IN THE MATTER OF: ; LE ay, CASE NO.: 89299-09-AG“* 27 FRANK JOHN PIZZOFERRATO ; / ELECTION OF PROCEEDING I have received and have read the Administrative Complaint filed by the Florida Department of Financial Services ("Department") against me, including the Notice of Rights contained therein, and I understand my options. J am requesting disposition of this matter as indicated below. (CHOOSE ONE) 1] I do not dispute any of the Department’s factual allegations and I do not desire a hearing. I understand that by waiving my right to a hearing, the Department may enter a final order that adopts the Administrative Complaint and imposes the sanctions sought, including suspending or revoking my licenses and appointments as may be appropriate. 2. J do not dispute any of the Department's factual allegations and I hereby elect a proceeding to be conducted in accordance with Section 120.57(2), Florida Statutes. In this regard, I desire to (CHOOSE ONE): [} Submit a written statement and documentary evidence in lieu of a hearing; or [] Personally attend a hearing conducted by a department hearing officer in Tallahassee; or [] Attend that same hearing by way of a telephone conference call. 3. [] I do dispute one or more of the Department's factual allegations. ] hereby request a hearing pursuant to Section 120.57(1), Florida Statutes, to be held before the Division of Administrative Hearings. 1 have attached to this election form the information required by Rule 28-106.2015, Florida Administrative Code, as specified in subparagraph (c) of the Notice of Rights. Specifically, I have identified the disputed issues of material fact. TO PRESERVE YOUR RIGHT TO A HEARING, YOU MUST FILE YOUR RESPONSE WITH THE DEPARTMENT OF FINANCIAL SERVICES WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THE ADMINISTRATIVE COMPLAINT. THE RESPONSE MUST BE RECEIVED BY THE DEPARTMENT NO LATER THAN 5:00 P.M. ON THE TWENTY-FIRST DAY AFTER YOUR RECEIPT OF THE ADMINISTRATIVE COMPLAINT. The address for filing is: DFS Agency Clerk, Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390. Signature Print Name Date: Address: Date Administrative Complaint Received: If you are represented by an attorney or qualified Phone No.: representative, please attach to this election form his or her name, address, telephone and fax numbers Fax No.: 15

Docket for Case No: 09-003860PL