vs. ) CASE NO. 82-296
Respondent. )
Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on June 24, June 25, August 24 and August 25, 1982, in the Pinellas County Judicial Building, St. Petersburg, Florida. The issue for determination in this proceeding is whether the respondent's license as an ordinary life, including disability, insurance agent should be revoked, suspended or otherwise disciplined for the reasons set forth in the Amended Administrative Complaint dated April 29, 1982.
For Petitioner: Daniel Y. Sumner
Curtis A. Billingsley and Franz Dorn
For Respondent: Larry D. Goldstein
St. Petersburg, Florida 33707 INTRODUCTION
By a six-count Amended Administrative Complaint respondent Jules Maxwell Hanken is charged with various violations of the Florida Insurance Code for which disciplinary action is sought. The factual allegations of Counts I and VI of the Complaint as amended, are related primarily to the American Benevolent Society, Inc. It is alleged that respondent, as President of Gulf Health/Life, Inc., directed and required his agents and employees to advise customers that the purchase of membership in the American Benevolent Society, Inc. (ABS) would enable the customer to purchase insurance at a lower group rate premium when such was not the case. Count VI alleges that the ABS was maintained as an association or franchise primarily for the purpose of obtaining insurance and that memberships were sold as a requisite for purchasing insurance before the ABS had been in existence for at least one year. Count I also charges that respondent instructed his agents and employees to represent to customers that
they were not insurance salesmen and also instructed them to make misleading statements as to the organization and control of the ABS. Count II of the Complaint alleges that a "light box" was maintained on the premises of Gulf Health/Life, Inc. and was utilized by respondent's agents and employees, under his supervision, direction or control, for the purpose of tracing or improperly affixing insureds' signatures on insurance documents. Count III alleges that respondent, as a technique of selling insurance, instructed his agents to make misrepresentations, falsehoods or other deceptive statements to members of the public to induce the sale of insurance. Count IV alleges that respondent directed or permitted unlicensed employees to solicit health and disability insurance outside the premises of the offices of Gulf Health/Life, Inc. and, Count V alleges that the splitting of commissions between licensed and nonlicensed personnel was directed or condoned by the respondent.
At the hearing, petitioner presented the testimony of seventeen witnesses.
These included officers from three other insurance companies, three customers who purchased insurance and membership in the ABS from the respondent's agents, and eleven former employees or agents of Gulf Health/Life, Inc. Petitioner's Exhibits 1 through 20 and 28 were received into evidence. The respondent testified in his own behalf and presented the testimony of a field insurance representative for the petitioner, one customer and nine former and present agents or employees of Gulf Health/Life, Inc. (now known as Florida Cooperative Insurance Services). Respondent's Exhibits A through II were received into evidence.
Subsequent to the hearing, counsel for the parties filed proposed findings of fact and proposed conclusions of law. To the extent that the parties' proposed findings of fact are not incorporated in this Recommended Order, they are rejected as being either not supported by competent substantial evidence adduced at the hearing, irrelevant or immaterial to the issues in dispute, or as constituting conclusions of law as opposed to findings of fact.
Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found:
At all times pertinent to this proceeding, the respondent Jules Maxwell Hanken was licensed as an ordinary life, including disability, agent in Florida, and was the President of Gulf Health/Life, Inc. in St. Petersburg, Florida. Though some administrative and supervisory duties were delegated to other individuals, respondent was the ultimate supervisor of insurance agents and employees at Gulf Health/Life. Respondent assumed the primary and major responsibility for training, directing and instructing employees to work as insurance salesmen within the agency.
COUNTS I and VI
The American Benevolent Society, Inc. was formed by the respondent and others in mid-1978, and was incorporated on November 22, 1978. The organization was described as "a society devoted to the welfare and benefit of independent Americans." Among its stated purposes was the provision of information and referral services dealing with medical, legal, benevolent, financial and recreational matters. The ABS also provided a newsletter and discounts to its members from numerous area businesses and dining establishments, as well as travel discounts and information. The membership fee was $15.00 for an individual and $25.00 for a family. New members were advised that one of the
functions of the ABS was to solve the problem of high medical costs, and that members having difficulties with insurance claims could receive aid from the ABS. The offices of the ABS were located in the same building as Gulf Health/Life, Inc., but a separate telephone number and listing was maintained for the ABS. Employees of Gulf Health/Life, Inc. who answered the ABS telephone were instructed to not let callers know that the ABS office was in the Gulf Health office and to inform ABS callers that their insurance agent was not located at that office.
In the sale of accident and health insurance, which was a major portion of the insurance sold at Gulf Health/Life, Inc., efforts were made by the respondent to offer insurance which would provide a discount in premium to members of the ABS. Apparently, respondent attempted to have the ABS endorse various insurance companies in return for members of the ABS receiving a "group" or "association" premium which would be less than the premium for an individual purchasing the same insurance. CNA did provide such a plan on one of its policies for individual members of the ABS, as well as for other associations, whereby the premiums for ABS members were slightly lower (approximately $10.00 per individual) than for members of the general public purchasing the same insurance. Neither Massachusetts Indemnity and Life Insurance Co. nor Founders Life Assurance Co. offered any group rate or reduction in insurance premiums to members of the ABS.
Insurance salesmen employed at Gulf Health/Life, Inc. were instructed and directed by the respondent to also sell membership in the ABS. They received a commission for each membership sold and most sales were made at the same time as sales of insurance policies were made. It is estimated that approximately ninety-five percent (95 percent) of the ABS members also had insurance with a company represented by Gulf Health/Life, Inc. Respondent's insurance salesmen were directed in writing to always explain to the customer the difference between the ABS and the insurance company, to always collect separate checks and give separate receipts for the ABS membership fee and the insurance premium, and to require new ABS members to sign a form whenever they purchased insurance expressly acknowledging that the ABS was not the insurance company and that the endorsement and recommendation of insurance by the ABS did not imply or guarantee any discount in insurance premium. The respondent's agents were also required to place their signature on this form. In addition, the printed application form for membership in the ABS stated, in relevant part, as follows:
I . . . am not joining as a prerequisite to obtaining insurance . . . and I realize that the A.B.A. insurance endorsement in no way implies or guarantees any discount or deviation from the ordinary premium established for the policies included. It is understood that the Society is not the insurance company."
Respondent's salesmen were directed to obtain from each new ABS member the names of other persons who might be interested in ABS membership, and the amount of the salesman's commission for each ABS sale was dependent upon the number of referrals contained in each application. For example, an individual application for ABS membership with no referrals earned the salesperson a commission of
$4.50, while an application with three referrals merited a commission of $7.50. Membership agents for the ABS, who were also licensed insurance agents, were required to sign a document acknowledging their understanding that monies
collected for ABS were to be maintained separately from insurance premiums, that no preferential recommendations were to be made for insurance plans endorsed by the ABS over other plans which the agent was licensed to represent and
"that solicitation of ABS members is in no way connected to or reliant upon
insurance plans, programs, or policies, as no person's ability to obtain any insurance is helped or hindered by ABS membership; however, membership must
be established prior to insurance solicita- tion through the American Benevolent Society.
In contrast to the above-discussed specific written instructions and disclaimer forms requiring the signatures of agents and new customers, several agents employed by the respondent were of the opinion that those written forms and instructions were not consistent with what agents were verbally directed by respondent to use as a sales presentation. These agents believed that respondent, during the training sessions, was instructing them to blur together the presentations for sales of insurance and ABS membership so that the customer would believe that they could obtain better insurance (either in terms of coverage or lower premiums) through membership in the ABS. The agents were instructed in a sales technique which would begin with an explanation to the customer as to how difficult it is, because of the customer's age and/or physical condition, to obtain proper insurance coverage and then to explain that the ABS was formed for the purpose of solving those problems, could help its members in obtaining better and lower cost insurance, and could ultimately help them in their claims with the various companies. These agents admitted that they were instructed to avoid the term "group insurance," but stated that they were to use other terminology to suggest an association or group. Several former agents and employees testified that they received a "negative commission," or a reduction in their usual insurance commission, if they sold insurance to a customer without simultaneously selling that customer a membership in the ABS. No documentary evidence was offered to substantiate this testimony. Some of the respondent's insurance agents did tell customers that they had to be a member of the ABS before they could obtain certain insurance. These agents did, however, sell insurance without ABS membership and did sell ABS membership without insurance. They also sold ABS memberships simultaneously with the sale of insurance policies with companies which offered no benefits for ABS members.
As noted above, CNA did offer a slight discount in premium on one of its policies to members of the ABS. The only three customers called as witnesses by the petitioner in this proceeding did join the ABS in order to acquire what they believed to a be a cheaper, group rate for their CNA policies, and to obtain discounts on other products. These customers did receive the discount provided to ABS members on at least one of the CNA policies purchased through respondent's agents. The agent did not explain the exact amount of the discount to them as compared with the ABS membership fee, nor did the agent compare the premiums with individual, as opposed to group, premiums. No other members of the ABS (which at one time had a membership of 700 or 800 persons) or the general public were called by the petitioner to testify in this proceeding. 1/ The only other member of the ABS who testified was called by the respondent, and he testified that he purchased a membership in the ABS after he bought insurance from one of the respondent's agents. He was told membership in the ABS would bring him certain services, benefits and discounts, but was not told he would receive a discount or reduction in his insurance premium. This witness
was named in the Administrative Complaint as being one of the victims of the deceptive sales practices directed or authorized by the respondent.
Insurance agents at Gulf Health/Life used various titles on their business cards and in reference to themselves. Some utilized the word "counselor," while others were referred to as "Regional Group Director." The purpose of utilizing the term "counselor" was not to disguise the fact that an agent was an insurance salesman, but rather to avoid the often poor public image associated with an insurance salesman. Upon inquiry to the State Insurance Commissioner's Office, the respondent's office was informed by letter dated January 21, 1980, that there was no statutory prohibition against use of the term "counselor" by insurance agents. An Insurance Department rule was referenced which prohibits the representation by an agent that he is a "counselor, advisor or similar designation" for any group or association of medicare eligible individuals, which representation does not reflect the true role of the agent in the solicitation of insurance. Salesmen were encouraged by respondent to avoid discussions with customers regarding the commission they may make on a potential sale. This was emphasized in training sessions for the purpose of illustrating what the proper attitude of an insurance salesman should be; to wit: to sell customers what they need and not what the salesman desires in terms of a commission. Respondent's employees and agents were not instructed to inform customers that they were not insurance salesmen or that they did not receive remuneration by way of commission.
COUNT II
Some thirty years ago, Earl Jacobs, a professional photographer prior to joining respondent's insurance company, constructed what he calls a "safe light." This is a wooden box which has a lightbulb in it and a glass filter across the face. The light can be openly used in a darkroom while working with light-sensitive photography paper. For some period of time, this device was kept on the premises of Gulf Health/Life, Inc. because the agency was putting together a brochure with each agent's picture. The restroom area was considered to be an ideal darkroom facility for the processing of prints.
The "safe light" is referred to as a "light box" in the Administrative Complaint. Former employees and agents observed this device either in the closet of the woman's restroom or under the desk of Lynda C. Rushing, Vice President of Gulf Health/Life, Inc. Five witnesses observed the device in use by Lynda Rushing while either kneeling on the floor near her desk or while in another room. While it appeared to these witnesses that Ms. Rushing was using the device to trace customers' signatures onto insurance documents, no such documents were produced, no insured's name was given, nor did any customer or member of the general public present testimony as to a signature which was not genuine. 2/ Respondent ordered the device removed immediately after he was informed by a secretary that an irate customer had been in the office complaining that a signature on an insurance policy was not his signature.
Applications and other insurance documents were frequently returned to respondent's agents for the purpose of obtaining an omitted signature. There was no testimony or other evidence in this proceeding to indicate that respondent Hanken ever used the device known as a "light box," or that he directed other employees to use this device to trace signatures.
COUNT III
Many, if not most, of the individuals employed by the respondent as insurance agents had no prior insurance experience. Sales techniques and practices were taught them by the respondent through extensive training sessions and the use of a sales manual called Psaleschology, which was primarily authored by the respondent. Agents were instructed to learn and were tested on the concepts expressed in the sales manual. The training sessions involved role- playing between the respondent and an agent, utilizing the concepts expressed in the manual. During the early stages of an agent's training, he was required to complete a form when he did not effectuate a sale, listing which steps in the manual were not followed by the salesman. While some salesmen believed that they were expected to follow the manual "verbatim" in their sales presentation, others, including the respondent, felt that the manual and the concepts expressed therein were simply guidelines or reminders of the principles of the psychology of salesmanship. Respondent considered the manual's purpose to be one of introducing to the salesman a formal attitude about selling and a demonstrative learning instrument.
The sales manual under which the respondent's agents were trained does utilize the concepts of "MID/TIA" (Make It Difficult/Take It Away"); fear and greed, and fabrication. As explained by the respondent, these concepts of reverse psychology, motivation by relating to strong human emotion and demonstrations of risk are common techniques in salesmanship. They can as readily be described as concepts concerning the theory of supply and demand, the recognition of people's concerns and desires as motivating factors and the personalization of real events by fabrication of the characters.
During a training session, the respondent related to his salesmen that he had once used the technique of telling an insurance customer who was reluctant to speak with him that he had come there to give the customer a Maas Brothers gift certificate. This was cited as an example of a method to persuade the unreceptive customer to open the door. There was no testimony that any of the respondent's salesmen ever actually used that technique or that respondent ever actually directed his employees to use such a technique. Maas Brothers gift certificates were in fact given to customers by Gulf Life/Health employees for a period of time when the customer gave an agent referrals for other sales.
The respondent's manual does contain suggested techniques of reinstating lapsed policies by providing option or adjustment alternatives. One agent, who testified that he followed the respondent's manual literally during his early months with the company, stated that he would tell customers whose policies were about to lapse that they had a specific refund or monetary adjustment due them. This technique was utilized to gain entrance to the customer's home and to resell them insurance. This agent's technique was reported to the respondent by another agent, and respondent directed him to cease using the "refund" approach to reinstate lapsed policies.
There was no testimony from any purchaser of insurance, potential insurance customer or other member of the general public that the techniques set forth in the respondent's sales manual or emphasized in his training sessions were actually practiced to the extent that the customer was frightened, coerced or deceived into purchasing insurance from the respondent's agency. 3/
COUNT IV
Prior to becoming licensed to sell policies for Massachusetts Indemnity and Life Insurance Company, agent Edmund Shoman solicited and obtained applications for insurance with that company. Vice President Lynda Rushing, who was licensed with that company, signed these applications for him. At the time, Mr. Shoman was licensed to sell insurance with another company. There was no evidence to suggest that respondent had any knowledge that Ms. Rushing signed applications brought into the office by Mr. Shoman, or that Mr. Shoman received any commissions on these sales
Bradley Wasserman had never sold insurance prior to being employed by the respondent. After one week of training, and prior to receiving his license, according to Bradley Wasserman, he was given leads, made contacts and sold two insurance policies by himself. He signed his brother Phillip's name to the applications and, according to him, received a commission on the two sales. Bradley's brother, Phillip, was employed as a licensed insurance agent by the respondent, was one of the respondent's top producers, and was also in law school at the time. Phillip recalled that respondent gave his approval to this practice, but could not recall whether he knew in advance that Bradley would be signing his name to the applications.
During his first two weeks of employment with the respondent, Bradley Wasserman entered into and signed a "Training Agreement," acknowledging that during his training program he would be given a training allowance for his presence with a licensed instructor during a sale. The specific oral agreement was that Wasserman was to receive $25.00 for each presentation of two or more hours which he observed. Between February 20 and March 6, 1981, three checks were made payable to Bradley Wasserman in the amounts of $150.00, $150.00, and
$100.00. Each check bore the words "training remuneration" or "training allowance." These amounts do not correspondent with the amounts claimed by Bradley Wasserman as his commission on the two sales of insurance.
COUNT V
Howard Cunix, at a time when he was not a licensed life agent, referred a life insurance customer, Mr. Miller, to Phillip Wasserman. Phillip Wasserman, who was licensed to sell life insurance, made the sale, but received only one-half of the commission for that sale. What happened to the remainder of the commission was not known by Mr. Wasserman and was not otherwise established. At that time, Mr. Cunix was a salaried employee and received the same amount of remuneration each week. He did receive one-half a production or referral credit on a board maintained at Gulf Health/Life to illustrate the production level of the various agents.
CONCLUSIONS OF LAW
In this proceeding, respondent is charged with numerous violations of the Insurance Code with regard to his supervision, direction and control over insurance agents employed by him. In general terms, he is charged with causing material misrepresentations and deceptions to be made with regard to the purchase of insurance in connection with the sale of memberships in the American Benevolent Society, Inc.; authorizing the use of a "lightbox" to improperly affix signatures on insurance documents; instructing his agents to make false or deceptive statements in order to induce the sale of insurance; directing and permitting the solicitation of insurance by unlicensed persons; and directing and condoning the splitting of commissions between licensed and non-licensed
personnel. Based on these factual allegations, respondent is charged with violating the provisions of Florida Statutes, Section 626.611 (containing grounds for compulsory suspension or revocation of a license), Section 626.621 (containing grounds for discretionary suspension or revocation), Sections 626.9521 and 626.9541 (containing definitions of and prohibiting unfair methods of competition and unfair or deceptive acts or practices); Sections 626.041 and
626.112 (prohibiting the solicitation or sale of insurance by unlicensed persons); Section 626.794 (prohibiting the payment of commissions to unlicensed persons) and Sections 627.654 and 627.663 (pertaining to the issuance of disability insurance to an association or franchise).
The burden of proof in this proceeding is upon the Department of Insurance. This burden may only be met by the presentation of evidence which is both competent and substantial. In a matter as grave as a license revocation proceeding where one's business or professional license is placed in jeopardy, the term "substantial competent evidence" takes on vigorous implications and the "prosecutor's proof [must] be as serious-minded as the intended penalty is serious." Bowling v. Department of Insurance, 394 So.2d 165, at 172 (Fla. 1st DCA, 1981).
Here, the respondent was not charged with directly making deceptive statements or misrepresentations to consumers or customers with regard to the ABS or the purchase or sale of insurance. Indeed, there was no allegation or evidence to illustrate that respondent himself ever made an insurance or an ABS sale at all. Rather, respondent is charged with directing and requiring other insurance agents in his employ to represent to customers that the purchase of ABS membership would enable them to purchase insurance at a group rate different than the rate offered to the general public, when such was not the case. This charge has simply not been proven by the evidence adduced in this proceeding.
Agents formerly employed by the respondent testified that they were instructed by the respondent to present the sale of ABS membership in terms which suggested, implied or directly stated that ABS members could receive a group or discount rate on insurance policies endorsed by the ABS. In direct and striking contrast and contradiction to such testimony are the many written forms, disclaimers, and instructions signed and acknowledged by these same agents, as well as the customers, such forms having been promulgated and required by the respondent. The glaring discrepancy between these agents' testimony regarding the sales presentation purportedly required by the respondent and their acknowledgement of written instructions to the contrary has not been diffused by any competent evidence adduced by the petitioner in this cause. The three customers presented by the petitioner bought and received insurance policies with CNA, which did indeed offer a slight discount in premium to a member of the ABS. The other customers named in the Administrative Complaint, allegedly the victims of misrepresentations and deceptive statements, were not called upon by the petitioner to give testimony in this proceeding, nor was any other member of the ABS or the consumer public at large called upon. In fact, one of the customers named in the Complaint was called as a witness by the respondent himself. Many of the agents testifying on behalf of the petitioner admitted that they sold ABS memberships without selling insurance and that they sold insurance without selling ABS membership. The testimony is clear that members of the ABS received benefits in addition to lower premiums on CNA insurance. They received a newsletter, discounts from area businesses and dining establishments, travel information and discounts and an assurance of help with their insurance claims. Thus, the fact that their membership fee may have been the same or more than the savings realized on their CNA policy is
irrelevant to the charge that respondent made or caused to be made false, misleading or deceptive statements with respect to the purchase of insurance.
The undersigned has not been directed to, and the respondent has not been charged with violating, any statutory or other regulatory prohibition against the sale of another commodity by an insurance salesman. The fact that the two sales are made during the same visit does not, in itself and without more, establish a violation of the Insurance Code. Here, no more was established by the petitioner. The forms, waivers and instructions mandated by the respondent with regard to the distinction between the sale of insurance and the sale of ABS membership (which were acknowledged by all the agents who testified in this proceeding) coupled with the lack of evidence from consumers that they were deceived or that misrepresentations were made to them, refutes the allegations of the Complaint with regard to the utilization of ABS sales and misrepresentations to induce the purchase of insurance by consumers.
The evidence regarding the "light box" is also deficient in establishing that respondent maintained, utilized or directed the use of such a device for the purpose of tracing or improperly affixing signatures onto insurance documents. No documentary evidence was offered to prove that signatures were traced or improperly affixed to insurance papers. No customer testified concerning an improper signature. No individual's name was connected to any allegedly traced signature. There was no evidence that respondent had any knowledge whatsoever concerning the use of a "light box" to trace signatures on the premises of Gulf Health/Life. The only evidence directly connecting the respondent with the "light box" was the testimony of a secretary describing an incident over an irate customer whereupon the respondent told another employee to immediately remove the device from the premises. Without evidence of some negligence, intentional wrong-doing or lack of diligence on respondent's part, he cannot be found guilty of the allegations in the Complaint relating to the "light box."
The third count of the complaint charges that the respondent instructed his agents, as a technique of selling insurance, to make misrepresentations, state falsehoods, or other deceptive statements or acts to proposed insureds in order to induce the sale of insurance. Inasmuch as Count I contains similar charges with regard to the sale of ABS membership in connection with the sale of insurance, it must be assumed from the evidence adduced by the petitioner that this separate charge relates to the concepts of salesmanship emphasized by the respondent at his training sessions and in his sales manual. The evidence establishes that the manual was used as a training tool for new agents. Some salesmen used it to a greater extent than others, and some did not use it at all. No testimony whatsoever was adduced to connect the allegedly offensive principles of the manual with the actual sale of insurance to any innocent purchaser. There was no evidence that any member of the public was actually deceived or misled by respondent's sales techniques. While one agent was wrongfully offering a promise of a refund to a customer whose policy had lapsed, it has been established that that agent was immediately reprimanded and directed by the respondent to stop using that technique.
The words utilized in the sales manual, while perhaps literally offensive, can readily be substituted by other words which are widely recognized in the areas of sales and psychology; for example; "supply and demand" or "reverse psychology" in lieu of "Make It Difficult/Take It Away," and "concern and desire" in lieu of "fear and greed." Respondent should not be penalized for choosing words different than the petitioner would choose absent a demonstration
that the public is being misled or deceived by the sales training techniques utilized by the respondent.
The testimony concerning the solicitation and sale of insurance by unlicensed persons is again insufficient to illustrate that respondent directed, authorized or condoned such activity. If Mr. Shoman did indeed solicit and sell insurance through a company for which he held no license to represent, and if Ms. Rushing did sign the application as the licensed agent, there was absolutely no evidence to demonstrate that respondent had knowledge of such an event.
There was no evidence to establish how many times such an event occurred or whether Mr. Shoman received a commission for such solicitation and sales.
Absent such evidence, knowledge of such activity cannot be imputed to the respondent.
The testimony of Bradley Wasserman that he solicited and sold insurance before he was licensed and received commissions for the sales must be weighed against the documents received into evidence and the testimony of other witnesses. First, there is the testimony from almost all the agents, including Bradley Wasserman, that respondent required extensive training of his employees. It is unlikely that a person with no previous insurance sales experience would be sent out on his own by the respondent after one week of employment. Phillip Wasserman, whose name was allegedly signed by Bradley on the applications, could not recall whether or not he or the respondent authorized such activity.
Bradley Wasserman signed a "Training Agreement" acknowledging that he would be paid a training allowance for his attendance at the sales presentations of other licensed agents. The training allowances received by him during the next three weeks were clearly designated as such and the amounts on the three checks do not correspond with the amounts claimed by him as commissions on two sales. Given such unresolved conflicts in the evidence, it must be concluded that the petitioner has failed to prove that respondent authorized or condoned the sale of insurance by unlicensed employees.
The only evidence offered to support the charge that respondent directed or condoned the splitting of commissions between licensed and unlicensed personnel was the fact that Phillip Wasserman only received one-half his commission for selling life insurance to the Millers. The mere fact that Howard Cunix referred the lead to Wasserman and received a referral credit for it does not establish that the remaining portion of the commission went to Mr. Cunix. In fact, it was established that Mr. Cunix was not a commissioned salesman at the time, but was instead paid a set salary, or draw.
Finally, the respondent is charged with violating Sections 627.654 and 627.663, Florida Statutes, with regard to the American Benevolent Society.
These statutes are found in that portion of the Insurance Code which pertains to group, blanket and franchise disability insurance policies. The issuance of such policies are generally proscribed unless the group, association or franchise meets the requirements of Section 627.654, 627.663 or other provisions of the law. A careful consideration of these statutory provisions leads the undersigned to conclude that they are not applicable to the facts established in this proceeding. Those sections pertain to insurance policies which insure more than one individual. The insurance policies involved in this proceeding were not issued to more than one individual, nor was any policy issued to the American Benevolent Society, Inc. In addition, these statutes appear to be directed toward the insurance carrier which issues such policies rather than toward the selling agent or agency.
The remaining factual allegations of the Complaint, as amended, were either not supported by competent substantial evidence adduced at the hearing or do not constitute sufficient ground, standing by themselves, for disciplinary action against the respondent.
Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the Amended Administrative Complaint dated April 29, 1982, be DISMISSED.
Respectfully submitted and entered this 8th day of February, 1983, in Tallahassee, Florida.
DIANE D. TREMOR
Filed with the Clerk of the Division of Administrative Hearings this 8th day of February, 1983.
1/ It must be noted that this entire matter regarding the ABS was the subject of an extensive investigation by the Department of Insurance. The investigation commenced in May of 1980, was terminated and then began again in November, 1981 after numerous articles appeared in the St. Petersburg Times, a newspaper of wide circulation in the Pinellas County area where insurance sales were made by Gulf Health/Life agents. These articles in the St. Petersburg Times specifically referred to the ABS, reported the charges against, and administrative hearings of, other Gulf Health/Life agents, as well as the respondent, and continued throughout the administrative hearing in the instant case.
2/ See footnote 1. The St. Petersburg Times articles also extensively referred to the existence of a "lightbox" on the premises of Gulf Health/Life, Inc.
3/ See footnote 1. The St. Petersburg Times articles quoted extensively from the respondent's sales manual.
Daniel Y. Sumner, Esquire
Curtis A. Billingsley, Esquire and Franz Dorn, Esquire
Larry D. Goldstein, Esquire Riden, Watson & Goldstein 5656 Central Avenue
St. Petersburg, Florida 33707
Hon . Bill Gunter Insurance Commissioner and Treasurer
