STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 89-5248

)

ANTHONY L. BROOKS, )

)

Respondent. )

)

)

RECOMMENDED ORDER

Pursuant to notice, the final hearing in the above- styled case took place on February 19, 1990, in Orlando, Florida, before Robert E. Meale1e, Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Nancy S. Isenberg, Attorney

Division of Legal Services Department of Insurance

412 Larson Building Tallahassee, FL 32399-0300

For Respondent: none

STATEMENT OF THE ISSUES

The issue in the case is whether Respondent received an insurance premium payment from a client and failed to remit it to the insurer in order to obtain insurance for the client, in violation of Sections 626.611(4), (5), (7), (8),

(9), (10), and (13), 626.621(2) and (6), 626.9561, 626.9521, and 626.9541(1)(e)1. and (o)1.

PRELIMINARY STATEMENT

By Administrative Complaint filed September 5, 1989, Petitioner alleged that Respondent was a licensed Surplus Lines Agent, Life and Health (Debit) Agent, Life Agent, Life and Health Agent, and General Lines Agent.

Count I of the Administrative Complaint alleges that a client gave Respondent a check in the amount of $1257 in full payment for certain insurance coverage, that Respondent issued a binder, that Respondent failed to remit the payment to the insurer and converted or unlawfully withheld the funds, that Respondent later issued a second binder to the client, and that Respondent failed to submit the application to the second insurer.

The Administrative Complaint alleges that Respondent thereby transacted insurance in Florida without complying with the applicable provisions of the Insurance Code, in violation of Section 624.11(1), Florida Statutes; willfully

used a license to circumvent any of the requirements of the Insurance Code, in violation of Section 626.611(4), Florida Stautes; willfully misrepresented an insurance policy or willfully deceived as to such policy, in violation of Section 626.611(5), Florida Statutes; demonstrated lack of fitness or trustworthiness to engage in the business of insurance, in violation of Section 626.611(7), Florida Statutes; demonstrated lack of reasonably adequate knowledge or technical competence to engage in the transactions authorized by the license, in violation of Section 626.611(8), Florida Statutes; committed fraudulent or dishonest practices in the conduct of business under the license, in violation of Section 626.611(9), Florida Statutes; misappropriated, converted, or unlawfully withheld moneys belonging to insureds or insurers and received in the conduct of business under the license, in violation of Section 626.611(10), Florida Statutes; willfully failed to comply with any provision of the Insurance Code, in violation of Section 626.611(13), Florida Statutes; in the course of dealing under the license, violated any portion of the Insurance Code or other law applicable to the business of insurance, in violation of Section 626.621(2), Florida Statutes; in the conduct of business under the license, engaged in unfair methods of competition or unfair or deceptive acts or practices or otherwise showed himself to be a source of injury or loss to the public or detrimental to the public interest, in violation of Section 626.621(6), Florida Statutes; engaged in any trade practice that is defined as an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance, in violation of Section 626.9521, Florida Statutes; knowingly made a false material statement, in violation of Section 626.9541(1)(e)1., Florida Statutes; and knowingly collected any sum as a premium for insurance that is not provided, in violation of Section 626.9541(1)(o)1., Florida Statutes.

Count II of the Administrative Complaint makes similar allegations involving a different client. By Notice of Voluntary Dismissal filed March 14, 1990, Petitioner voluntarily withdrew this Count.

By Notice of Rights Response dated September 20, 1989, Respondent requested a formal hearing. However, he did not appear at the hearing or participate further in the proceeding.

A transcript was filed on March 1, 1990. Petitioner filed a proposed recommended order. All of the proposed findings are adopted or adopted in substance.

FINDINGS OF FACT

1. At all material times, Respondent has been licensed as a Surplus Lines Agent, Life and Health (debit) Agent, Life Agent, Life and Health Agent, and General Lines Insurance Agent.

   
   

2. On July 22, 1988, Charles M. Wilks visited the office of Respondent to purchase insurance on his automobile. Respondent quoted him a premium of $1257 for a one-year term commencing August 19, 1988.

   
   

3. Mr. Wilks decided to purchase the insurance at the quoted premium. Accordingly, he gave Respondent a check in the amount of $1257 payable to Respondent's insurance agency. The same day, Respondent gave Mr. Wilks an agency receipt and Temporary Binder and Receipt effective from August 19, 1988, through August 19, 1989. The temporary binder showed the insurer as Dairyland Insurance Company.

4. Respondent caused the check to be promptly cashed and credited to his agency's account.

   
   

5. However, Mr. Wilks never received a policy. His wife called the agency every week after the policy did not arrive promptly. But she was unsuccessful in obtaining the policy despite promises by employees of the agency that they would mail the policy to the Wilkses.

   
   

6. Upset because the automobile was no longer covered by insurance, Mr. Wilks visited Respondent at his office in November and demanded a policy. Respondent stated that Dairyland could not insure the type of car for which Mr. Wilks sought insurance because the car was a special customized model. In fact, Respondent had never submitted the application for insurance or the premium to Dairyland for issuance of a policy.

   
   

7. Respondent convinced Mr. Wilks to purchase the insurance from a different company. Refunding one-half of the previously paid premium, Respondent issued Mr. Wilks a certificate of insurance that purportedly reflects coverage for the automobile from November 7, 1988, through November 7, 1989, from Clarindon National.

   
   

8. Respondent again failed to submit the policy application to the insurer. When Mr. Wilks had still not obtained a policy by January, 1989, he went to Respondent's office, but learned that he had moved. After some effort, Mr. Wilks tracked down Respondent and demanded the return of the remaining premium payment that he had previously made.

   
   

9. Respondent finally gave Mr. Wilks a check for the balance. Taking the check immediately to the bank, Mr. Wilks received payment on it.

   
   

10. Dairyland was less fortunate with Respondent's checks. By letter dated October 19, 1988, the insurer informed Respondent that his authority to write insurance for the company was withdrawn effective December 12, 1988. As of February 14, 1990, the sum owed to Dairyland by Respondent's agency totalled

    $1049.43 in nonsufficient funds checks.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter. Section 120.57(1), Florida Statutes.

    
    

12. Petitioner is responsible for disciplining persons holding various insurance licenses for violations of applicable law. Sections 626.611 and 626.621, Florida Statutes.

13. Section 626.611, Florida Statutes, provides in relevant part: [Petitioner) shall deny, suspend, revoke, or refuse to

    renew or continue the license of any agent . . . if it

    finds that as to the . . . licensee . . . any one or more of the following applicable grounds exist:

    (5) Willful misrepresentation of any insurance policy

    . . . or willful deception with regard to any such policy or contract .

    (7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.

    1. Fraudulent or dishonest practices in the conduct of business under the license .

    2. Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insured

    . . . and received in conduct of business under the license.

14. Section 626.621(6), Florida Statutes, provides in relevant part: [Petitioner) may, in its discretion, deny, suspend,

    revoke, or refuse to renew or continue the license of any agent . . . if it finds that as to the . . licensee . . . any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under s. 626.611:

    (6) In the conduct of business under the license 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.

    
    

15. Section 626.9541(1)(o)1., which is contained in Chapter 626, Part X, Florida Statutes, provides that it is an unfair method of competition and unfair or deceptive act or practice:

    
    

    knowingly collecting any sum as a premium or charge for insurance, which is not then provided, or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as permitted by this code.

    
    

16. Petitioner must prove the relevant allegations by clear and convincing evidence. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

    
    

17. Petitioner has proven that Respondent violated each of the above-cited provisions of Sections 626.611 and 626.621, Florida Statutes. The violations of Section 626.611 require the suspension or revocation of Respondent's license. Under the circumstances, it is unnecessary to consider whether Respondent's actions and omissions violated the other provisions alleged by Petitioner.

    
    

18. Respondent's repeated failure even to try to obtain the insurance for which Mr. Wilks had paid, the risk to which Mr. Wilks was thereby subjected while Respondent kept evading his responsibilities, and Respondent's improper dealings with Dairyland warrant revocation in this case.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED that the Department of Insurance enter a Final Order revoking all of Respondent's above-described licenses.

DONE and ORDERED this 29 day of March, 1989, in Tallahassee, Florida.

ROBERT E. MEALE

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 29 day of March, 1989.

Copies to:

Hon. Tom Gallagher

State Treasurer and Insurance Commissioner The Capitol, Plaza Level

Tallahassee, FL 32399-0300

Don Dowdell General Counsel

Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300

Nancy S. Isenberg, Attorney Division of Legal Services Department of Insurance

412 Larson Building Tallahassee, FL 32399-0300

Anthony Brooks

500 E. Semoran Blvd., Suite 32 Casselberry , FL 32707

Docket for Case No: 89-005248

Orders for Case No: 89-005248