STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

WALLACE F. SHARRETT, )

)

Petitioner, )

)

vs. ) CASE NO. 88-0781

) STATE OF FLORIDA, DEPARTMENT ) OF INSURANCE AND TREASURER, )

)

Respondent. )

)

RECOMMENDED ORDER

Wallace F. Sharrett, Hallendale, Florida, pro se. David Herskovitz, Esquire, Tallahassee, Florida for Respondent.

This matter was heard on April 12, 1988, by William R. Dorsey, Jr., the Hearing Officer designated by the Division of Administrative Hearings, in Fort Lauderdale, Florida. A transcript of the proceeding was filed, and proposed findings of fact and conclusions of law were filed by May 24, 1988. Rulings on proposed findings of fact are made in the appendix to this recommended order.

ISSUE

The issue is whether the petitioner's applications for qualification and for examination as an insurance agent should be granted.

FINDINGS OF FACT

1. Wallace F. Sharrett applied on or about May 14, 1987, for qualification as a general lines agent or solicitor for insurance, and also applied for examination as a life and health insurance agent. On or about July 30, 1987, he filed another application for examination as a life and health agent. On all these applications he listed his social security number as 113- 20-3677. His social security number is actually 113-30-2677.

   
   

2. All three applications contain the same question #6, which asks:

   
   

   Have you ever held an insurance license in this or any other state?

   
   

   On all applications Mr. Sharrett answered "no."

   
   

3. All three applications also contain question #11:

   
   

   Does any insurer or general agent claim that you are indebted under any agency contract or otherwise? If so, state name of claimant, nature of claim, and your defense thereto.

   To all three questions, Mr. Sharrett checked the box labeled "no."

   
   

4. On all three applications, in response to question 14(b), asking, "What insurance experience have you had?", Mr. Sharrett answered "none."

   
   

5. Mr. Sharrett previously had sought and had been issued licenses and qualifications by the Florida Department of Insurance to represent insurance companies as follows:

   
   

   1. Security Life Insurance Company of Georgia, issued August 26, 1977.

   2. Conger Life Insurance Company, issued October 20, 1977.

   3. Security Life Insurance Company of Georgia, issued January 31, 1979.

   4. Coastal States Life Insurance Company, issued July 12, 1979.

   5. Hartford Life and Accident Insurance Company, issued June 26, 1981.

      
      

      Mr. Sharrett has held no Florida licenses or qualifications for licensure for any insurers since 1984.

      
      

   6. From October 3, 1977, through December 27, 1978, Mr. Sharrett had been employed by Conger Life Insurance Company of Miami, Florida. After his termination, an internal audit of Mr. Sharrett's accounts at Conger Life was performed. The internal audit dated January 31, 1979, showed that Mr. Sharrett owed the company $707.66. Thereafter, Mr. Sharrett made payments of $510.14, and Conger Life's records show that as of March 31, 1979, based on total payments, and additional shortages allocated to Mr. Sharrett's account, he owed Conger Life $388.74.

      
      

   7. After Mr. Sharrett's termination of employment with Conger Life, he applied to become a salesman with Security Life Insurance Company of Georgia.

      On February 7, 1979, the agency vice president for that company, J. H. Phillips, wrote to Conger Life for information about Mr. Sharrett, and said:

      
      

      We particularly would be interested in, did he leave your company without a deficiency.

      
      

   8. On February 12, 1979, Mr. Henry J. Spaman of Conger Life wrote to Mr. Phillips stating

      
      

      He was employed by [us] from 10/3/77 to 12/22/78. He left our employment with a shortage of considerable amount which we are in the process of taking legal action [sic]. We also have reported to the State Department of Insurance the shortage and have been assured that it will be investigated.

      
      

   9. Nevertheless, Mr. Sharrett thereafter was hired as a salesman by Security Life Insurance Company of Georgia. Apparently the payment which Mr.

      Sharrett made of $510.14 settled his account with Conger Life Insurance Company to the satisfaction of Security Life Insurance Company of Georgia.

      
      

   10. Conger Insurance Company still maintains, however, that Mr. Sharrett is indebted to it in the amount of $388.74. No legal action to collect that amount from Mr. Sharrett has ever been taken, nor is there any evidence of a demand for payment being directed to him since his payment of $510.14 to Conger Life during the first quarter of 1979.

       
       

   11. Mr. Sharrett did not list his prior licenses to sell insurance on his recent applications because he had discussed his applications with a retired insurance agent, Mr. Morrelle, who had been an agent with Independent Life Insurance Company for 27 years, Mr. Morrelle told Mr. Sharrett that it was not necessary to list jobs with insurance companies which were more than five years old. Mr. Morrelle had not looked at the applications themselves, and did not know that the question about whether the applicant ever had been licensed in Florida or any other state has no time limit.

       
       

   12. Mr. Raines, the district sales manager for Independent Life Insurance Company, the company for which Mr. Sharrett will work if licensed, stated that he did not know that Mr. Sharrett had been employed by five different insurance companies. Independent Life's own background check of Salespeople through Equifax only goes back five years. Mr. Sharrett was employed by Independent Life from May 4, 1987, to January 22, 1988, and was a good employee.

       
       

   13. After this case began, Mr. Sharrett filed an amended application with the Department, dated February 17, 1988. In that application Mr. Sharrett listed his correct social security number, but with regard to question number 6 (concerning other insurance licenses) he listed only Conger Life Insurance Company, Security Life Insurance Company, and New England Life Insurance Company. He neglected to mention his licensure with Coastal States Life Insurance Company and Hartford Life and Accident Insurance Company. The Department has no record that Mr. Sharrett was qualified to represent New England Life Insurance Company.

       
       

   14. With respect to question number 11 (concerning whether any insurer or general agent claimed that Sharrett was indebted under any agency contract) on the amended application, he again answered "no."

       
       

   15. On question 14(b), Mr. Sharrett acknowledged 2 years experience in the insurance business in the amended application.

       
       

   16. The Hearing Officer finds no material misrepresentation with respect to question number 11 (claims of indebtedness by insurance companies) on any of the applications Mr. Sharrett filed. He had no reason to believe that Conger Life Insurance Company continued to maintain that he was indebted to it. Conger Life has never taken any action to collect the $388.74 it maintains Mr. Sharrett owes it. His payment of $514.14 during the first quarter of 1979, shortly after his termination with Conger Life settled the dispute between Conger Life and Mr. Sharrett. In making this finding, the Hearing Officer is persuaded that the dispute between Mr. Sharrett and Conger Life Insurance Company was made known to Security Life Insurance Company in February 1979, and it is more likely than not that both Security Life Insurance Company of Georgia and Mr. Sharrett were satisfied that an agreement had been reached with Conger Life about Mr. Sharrett's indebtedness to Conger Life before he would have been employed by Security Life.

   17. Mr. Sharrett did, however, make material misrepresentations in his applications for licensure. While the transposition of numbers on the portion of the application asking or a social security number would not, by itself, be sufficient proof of an intentional misrepresentation, although it would impede investigation into the applicant's background, the error in the social security number in the three original applications is highly significant in conjunction with two other facts:

       
       

       1. Mr. Sharrett did not reveal in answer to question 6 that he had been licensed to sell insurance in Florida before. Even crediting Mr. Morrelle's testimony that he told Mr. Sharrett it was not necessary to list insurance licenses more than five years old, a plain reading of the form would show that question 6 has no time limit on it, whereas question 10 asks for a record of employment "for the past five years" and is time limited. Minimal attention to the questions asked on the form would have put Mr. Sharrett on notice that he was required to disclose all past insurance licenses. This would have brought to light Mr. Sharrett's dispute with his prior employer, Conger Life, which he would be required to explain.

          
          

       2. Mr. Sharrett stated that he had no insurance experience in answer to question number 14(b). All these answers were simply untrue.

          
          

   18. The error in the social security number, the failure to list past licenses Mr. Sharrett held in Florida on three applications, the failure to correctly list past licenses on the fourth (amended) application, and the failure to acknowledge any past insurance experience, leads the Hearing Officer to find purposeful misrepresentation of Mr. Sharrett's past. These misrepresentations raise questions about Mr. Sharrett's trustworthiness. Although the dispute Mr. Sharrett had with Conger Life in 1979 can be explained and would not, in itself, disqualify him from licensure, several of the items of misinformation on his licensure applications apparently were designed to impede the Department from learning of the settled dispute with Conger Life. This misrepresentation is disqualifying.

       
       

       CONCLUSIONS OF LAW

       
       

   19. The Division of Administrative Hearings has jurisdiction over this matter. Section 120.57(1), Florida Statutes.

       
       

   20. As an applicant for licensure, Mr. Sharrett bears the burden of proving his entitlement to licensure. See Rule 28-6.008(3), Florida Administrative Code.

       
       

   21. Under Section 626.731(1), Florida Statutes (1987); "The Department shall not grant or issue a license as general lines agent to any individual found by it to be untrustworthy...." Similarly, Section 626.611, Florida Statutes (1987) , states in part that:

The Department shall deny... the license of any agent... if it finds that as to

the applicant... any one or more of the following applicable grounds exist.

1. Lack of one or more of the qualifications for licensure or permit as specified in this code....

2. Material misstatement, misrepresentation, or fraud in obtaining

the license or permit or in attempting to obtain the license or permit. (7)

Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. "

The recent, repeated misrepresentations by Mr. Sharrett with respect to his past licensure and past experience in the insurance industry demonstrate his current lack of trustworthiness.

RECOMMENDATION

It is recommended that the applications of Mr. Sharrett for qualification and for examination as an insurance agent be denied.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 27th day of June, 1988.

WILLIAM R. DORSEY, JR.

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1050

(904) 488-9765

Filed with the Clerk of the Division of Administrative Hearings this 27th day of June, 1988.

APPENDIX

The following are my rulings on the proposed findings of fact submitted by the petitioner pursuant to Section 120.59(2), Florida Statutes (1987).

1. Covered in finding of fact 5.

2. General covered in finding 6-9, whether the indebtedness was on the payment bond or is general indebtedness is not relevant.

3. Covered in finding of fact 12.

4. [Introduction] The content of the original applications are recounted in findings of fact 1-4.

   4(a). Rejected as unnecessary.

   4(b). Sentence 1 covered in finding of fact 1, the remainder rejected for the reason stated in findings of facts 17 and 18.

   4(c). Rejected for the reason stated in finding of fact 17(a). 4(d). Accepted in finding of fact 16.

5. Rejected as unnecessary.

6. Covered in finding of fact 13.

The following are my rulings on the proposed findings of fact submitted by the respondent pursuant to Section 120.59(2), Florida Statues (1987).

1. Covered in finding of fact 5.

2. Covered in finding of fact 6.

3. Covered in finding of fact 8.

   4(a). The name used on the application is not a problem. Concerning the social security, see finding of fact 1.

   4(b). See finding of fact 1. 4(c). See finding of fact 1.

4. [Appears to be misnumbering] Rejected as unnecessary.

5. Rejected as unnecessary.

6. Covered in finding of fact 11.

7. Covered in finding of fact 12.

8. Covered in findings of facts 1, 2, 3, 4, and 5.

9. Same as previous ruling.

10. Same as previous ruling.

11. Covered in findings of facts 16, 17, and 18.

COPIES FURNISHED:

Mr. Wallace F. Sharrett

109 Southwest Third Avenue Hallendale, Florida 33009

Hon. William Gunter State Treasurer and

Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

William W. Tharpe, Jr., Esquire Office of Legal Services

413-B Larson Building Tallahassee, Florida 32399-0300

Don Dowdell General Counsel

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Docket for Case No: 88-000781

Orders for Case No: 88-000781