vs. ) CASE NO. 89-3805
Respondent. )
This case was heard pursuant to notice on December 14, 1989, in DeFuniak Springs, Florida, by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings.
For Petitioner: Clyde W. Galloway, Jr., Esq.
For Respondent: Mr. John Matt Early, pro se
Whether Respondent committed the acts alleged in the Administrative Complaint in violation of Chapter 626, Florida Statutes.
The final hearing in this case was held on December 12, 1989. The Petitioner presented the testimony of a witness to the transaction which gave rise to the complaint, an executive with the insurance company which was involved, and the survivor of the insured. The Respondent testified in his own behalf.
The transcript was filed on January 31, 1990, and the Petitioner's proposed findings of fact were filed as a Proposed Recommended Order on February 9, 1990. The Respondent did not file proposed findings; however, he did file a letter with the Department on February 20, 1990 suggesting that he did not receive a fair hearing because "the man conducting the hearing had made up his mind before I (Early) got there." The transcript was reviewed in detail and there is no suggestion in the record that Mr. Early was treated with anything other than
fairness and respect. The Respondent's Proposed Recommended Order was read, considered, and substantially adopted, except for Paragraph 15, which was rejected as irrelevant.
At all times pertinent to the dates and occurrences referred to or alleged in these proceedings, Respondent was licensed and eligible for licensure as a nonresident life and health insurance agent in this state.
During the period from January 22, 1987 to April 1, 1988, Respondent was licensed as a nonresident life and health insurance agent with United American Insurance Company.
On March 19, 1987, Respondent completed and filled out an application for medicare supplement insurance with United American on behalf of Aldon D. Cosson, who could not read and write. Mr. Cosson resided in DeFuniak Springs, Florida, where Respondent completed the application.
Said application, referred to in paragraph 3 above, contained, as question 11, the following: "Within the past year, have you had, or been treated for, internal cancer?"
At the time that Respondent was completing the application, Mr. Cosson and Ms. Rose Heiter, who was present and witnessed the events, responded' to the question regarding internal cancer by telling Respondent that Mr. Cosson had inoperable lung cancer.
At the time of the taking of said application, Respondent completed and filled in a "no" response to question 11.
The response to question 11, completed and filled in by Respondent, was in direct conflict with the responses given by Mr. Cosson and Ms. Heiter.
On April 1, 1987, United American Insurance Company issued its policy, numbered 4997216, to Aldon D. Cosson, based upon the information provided to it in said application.
United American Insurance Company would not have issued the above- mentioned policy, nor any other medicare supplement product, if the answer to question 11 regarding internal cancer had been answered "yes".
Said application contained, as question 4, a request for a listing of Mr. Cosson's existing medicare supplement insurance policies.
Said application indicated that Mr. Cosson has existing medicare supplement insurance in the form of a policy, numbered 1026302, with Associated Doctors Health and Life Insurance Company.
At the time of said application to United American Insurance Company, Mr. Cosson's existing coverage with Associated Doctors Health and Life Insurance Company was paying his medicare supplement claims.
The policy for which Mr. Cosson applied was to replace the existing medicare supplement coverage which Mr. Cosson had with Associated Doctors Health and Life Insurance Company. The policy from Associated Doctors was cancelled; however, United American did not pay any benefits, electing to return all
premiums tendered by Mr. Cosson. This left Mr. Cosson without insurance coverage, and his estate suffered the expenses of his last illness.
Cancellation of a medicare supplement insurance policy, which is not subject to the exclusions for preexisting conditions of adverse health, is not in the best interest of a potential applicant who has those preexisting conditions of adverse health.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and parties to this proceeding, pursuant to Section 120.57, Florida Statutes.
The administrative complaint alleges that Respondent violated 13 provisions of the Florida Statutes: Sections 626.611(4), 626.611(5), 626.611(7), 626.611(8), 626.611(9), 626.621(2), 626.621(3), 626.621(6), 626.9541(1)(a)1., 626.9541(1)(a)6., 626.9541(1)(e)1., 626.9541(1)(k)1., and 626.9541(1)(l). These provisions read, in pertinent part, as follows:
626.611: The department shall deny, suspend, revoke, or refuse to renew or continue the license of any agent solicitor, or adjuster or the permit of any service representative, supervising or managing general agent, or claims investigator, and it shall suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the applicant, licensee, or permittee any one or more of the following applicable grounds exist: 626.611(4): If the license or permit is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code.
626.611(5): 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.
626.611(7): Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.
626.611(8): Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or permit.
626.611(9): Fraudulent or dishonest practices in the conduct of business under the license or permit.
626.621(2): Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the
license or permit.
626.621(3): Violation of any lawful order or rule of the department.
626.621(6): In the conduct of business under the license or permit, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part X of this chapter, or having otherwise shown himself to be a source of injury or loss to the public or detrimental to the public interest.
626.9541(1)(a)1.: Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison which misrepresents the benefits, advantages, conditions, or terms of any insurance policy.
626.9541(1) (a)6.: Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison which is a misrepresentation for the purpose of inducing, or intending to induce, the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy.
626.9541(1)(e)1.: Knowingly: a. Filing with any supervisory or other public official, b. Making, publishing, disseminating1 circulating, c.
Delivering to any person, d. Placing before the public, e. Causing, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement.
626.9541(1)(k)1.: Made false or fraudulent statements or representation on, or relative to, an application for an insurance policy for the purpose of obtaining a fee, commission, money or other benefit from any insurer, agent, broker or individual.
626.9541(1)(l): Knowingly making any misleading representations or incomplete or fraudulent comparisons of any insurance policies or insurers for the purpose of inducing, or intending 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.
The burden of proof incumbent upon Petitioner to meet is that of establishing the alleged misconduct of Respondent by
clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).
Where statutes provide for the revocation or suspension of licenses, these provisions should be strictly construed and followed because the statute is penal rather than regulatory in nature. Rush v. Department of Professional Regulation, Board of Podiatry, 448 So.2d 26 (Fla. 1st DCA 1984). In that regard, the court in Devor v. Department of Insurance, 473 So.2d 1319 (Fla. 1st DCA 1985), held that "a penalty within the permissible range of statutory law, even if greater than the recommended penalty, is not subject to this Court's review".
By clear and convincing evidence, Petitioner demonstrated that Respondent's misconduct evidenced a lack of fitness or trustworthiness, mandating the revocation or suspension of his license, pursuant to Section 626.611(7), Florida Statutes. In Natelson v. Department of Insurance, 454 So.2d
31 (F1a. 1st DCA 1984), the court held that "[i]nsurance is a business greatly affected by the public trust, and the holder of an agent's license stands in a fiduciary relationship to both the client and insurance company".
By clear and convincing evidence, Petitioner demonstrated that Respondent's misconduct evidenced a violation of the Florida Insurance Code or laws applicable to the business of insurance in the course of dealing under his license, thereby invoking Petitioner's discretionary authority to revoke or suspend his license, pursuant to Section 626.621(2), Florida Statutes. This legislative delegation of authority was upheld in Brewer v. Insurance Commissioner and Treasurer, 392 So.2d 593 (Fla. 1st DCA 1981), wherein the court held "[h]owever, the legislature may enact a law complete in itself, which leaves some discretion in the operation and enforcement of the law with an administrative official".
By clear and convincing evidence, Petitioner demonstrated that Respondent's misconduct evidenced a violation of the Unfair Insurance Trade Practices section of the Florida Insurance Code and has shown himself to be a source of injury or loss to the public, thereby invoking Petitioner's discretionary authority to revoke or suspend his license, pursuant to Section 626.621(6), Florida Statutes.
By clear and convincing evidence, Petitioner demonstrated that Respondent's misconduct evidenced a sales presentation that knowingly misrepresented the benefits, advantages, conditions or terms of a medicare supplement insurance policy, thereby invoking Petitioner's discretionary authority to revoke or suspend his license, pursuant to Sections 626.9541(1)(a)1. and 626.621(6), Florida Statutes.
By clear and convincing evidence, Petitioner demonstrated that Respondent's misconduct evidenced a knowledgeable making of a false statement on a medicare supplement insurance application for the purpose of obtaining a fee, commission or other benefit, thereby invoking Petitioner's discretionary authority to revoke or suspend his license, pursuant to Sections 626.9541(1)(k)1. and 626.621(6), Florida Statutes.
By clear and convincing evidence, Petitioner demonstrated that Respondent's misconduct evidenced misleading representations of a medicare supplement insurance policy for the purpose of inducing the lapse, forfeiture
and surrender of existing coverage and to convert to another insurer, thereby involving Petitioner's discretionary authority to revoke or suspend his license, pursuant to Sections 626.9541(1)(l) and 626.621(6), Florida Statutes.
Petitioner failed to demonstrate that Respondent's misconduct evidenced a violation of Sections 626.611(5), 626.611(8), 626.611(9), 626.621(3), 626.9541(1)(a)6. , and 626.9541(1)(e)1, Florida Statutes.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the license of Respondent be revoked, as required by Section 626.611, Florida Statutes.
STEPHEN F. DEAN
Mr. Tom Gallagher State Treasurer and
Don Dowdell, Esq. General Counsel Department of Insurance The Capitol, Plaza Level
Clyde W. Galloway, Jr., Esq. Division of Legal Affairs
Mr. John Matt Early, pro se 8841 Lott Road
