STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND )

TREASURER, )

)

)

Petitioner, )

)

vs. ) CASE NO. 89-5272

)

MARK ALAN GABLE, )

)

)

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a formal hearing in this case on November 13, 1990, in St. Petersburg, Florida.

APPEARANCES

For Petitioner: James A. Bossart, Esquire

Division of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

For Respondent: Martin Errol Rice, Esquire

696 First Avenue North Post Office Box 205

St. Petersburg, Florida 33731 STATEMENT OF THE ISSUES

Whether or not Respondent's insurance agent license and eligibility for licensure should be disciplined for the alleged violations set forth in the Second Amended Administrative Complaint filed herein.

PRELIMINARY STATEMENT

By its six count Second Amended Administrative Complaint, Petitioner, Department of Insurance and Treasurer (herein Department), charged Respondent, Mark Alan Gable, with violations of various provisions of Chapter 626, Florida Statutes and seeks to impose disciplinary sanctions against Respondent's licenses and eligibility for licensure. Counts I and III of the Second Amended Administrative Complaint were voluntarily dismissed by the Department at the hearing. The gravamen of the remaining charges are that Respondent misrepresented to consumers the terms and conditions of insurance policies solicited and sold by him and submitted an automatic bank draft authorization

form to an insurer without that insured's authorization. Respondent timely requested a formal administrative hearing pursuant to Section 120.57(1), Florida Statutes, and this matter was heard as scheduled on November 13, 1990.

At the final hearing, Petitioner presented the testimony of William J. O'Connor, Mabel Bowmaster, Alice V. Bowling, Martha L. Roche and Rosa Mae Ferrell. The testimony of Fred Lively was introduced via deposition.

Respondent testified on his behalf. At the hearing, Petitioner introduced Exhibits 1-18 which were received in evidence and Respondent offered Exhibits 1-

19 which were received in evidence at the hearing. On January 8, 1991, the parties filed proposed recommended orders which were considered in preparation of this Recommended Order. Proposed findings of fact which are not incorporated herein are the subject of specific rulings in an Appendix.

Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compiled herein, I hereby make the following relevant factual findings:

FINDINGS OF FACT

1. Respondent, Mark Alan Gable, is currently eligible for licensure and is licensed in Florida as a life and health insurance agent and was so licensed at all times relevant to these proceedings.

   
   

2. Respondent at all times relevant to these proceedings was licensed in this state to solicit health insurance on behalf of National States Insurance Company (herein National).

   
   

3. On or about September 28, 1988, Respondent visited the home of Mabel Bowmaster of Sarasota, Florida, for the purpose of soliciting health insurance. At the time, Ms. Bowmaster was insured under the provisions of a protective life medicare supplement insurance policy. Ms. Bowmaster was interested in purchasing a policy that offered custodial nursing care benefits as her protective life policy did not offer such coverage. Respondent was not a stranger to Ms. Bowmaster as he had sold her a medicare supplement policy in 1987 and had processed claims for Ms. Bowmaster during 1987, although she did not remember him. Although Ms. Bowmaster was interested in purchasing custodial care, when Respondent explained to her the cost of the coverage versus the benefits that she could receive, she was convinced that the premiums for a custodial care policy was too expensive and she declined to purchase the coverage. In fact, Respondent tendered a certification to Ms. Bowmaster which acknowledged that she had been explained the benefits, that she understood them and there is, in that medicare supplement policy, a specific exclusion of custodial care. (Respondent's Exhibit 18 and 3.)

   
   

4. During August 1989, Ms. Bowmaster was visited by another insurance agent, a Chris Morrison, who was also soliciting insurance.

   
   

5. At agent Morrison's urging, Ms. Bowmaster cancelled the medicare supplement policy that Respondent had sold her after he showed her a copy of a St. Petersburg Times article which was critical of Respondent and after Morrison suggested that Respondent was in trouble with the Petitioner.

   
   

6. When Ms. Bowmaster cancelled her insurance policy that she purchased from Respondent, she wrote a letter to National States Insurance Company asking them not to honor the bank draft authorization that she had signed for the year 1989. Notwithstanding the letter Ms. Bowmaster sent to National, the bank draft

   was honored. As a result, Ms. Bowmaster filed an insurance consumer service complaint with Petitioner stating the reason for cancelling the policy was that she had duplicative coverage as a result of her purchase of the same coverage from Mr. Morrison and she therefore requested a refund of the National policy in light of her request that the bank draft be terminated. In none of Bowmaster's correspondence to National during August and November 1989, was there any reference of any misrepresentation of coverage by Respondent for custodial care coverage.

   
   

7. On or about February 11, 1988, Respondent visited the home of Alice V. Bowling of Bradenton for the purpose of soliciting health insurance. Ms. Bowling is an 82 year-old widow whose primary source of income is social security. At the time, Ms. Bowling was insured under the provisions of a Prudential Insurance AARP (American's Association of Retired Persons) medicare supplement insurance policy and an Old Southern medicare supplement insurance policy.

   
   

8. Respondent discussed with Ms. Bowling her existing insurance coverages. Ms. Bowling was interested in obtaining an insurance policy that would pay benefits for hearing aids, eyeglasses and dental care. Neither of her existing policies offered such benefits.

   
   

9. Respondent's purpose in visiting Ms. Bowling during February of 1988 was to follow-up on a lapse of a National States Medical/Surgical policy. During the interview with Ms. Bowling, she informed Respondent that she had in effect a policy with AARP and the National policy that was soon to lapse. She did not tell him that she had a policy with Old Southern. While Ms. Bowling testified that she showed Respondent a copy of the Old Southern policy, the evidence adduced at hearing indicates otherwise. It was noted that when Respondent purchased the National States policy during 1987, she did not tell that agent about the existence of the Old Southern policy. (Respondent's Exhibit 7.) Additionally, when Ms. Bowling signed the notice to applicant regarding replacement of accident and sickness insurance form, she indicated that she was replacing a Prudential policy. The application for insurance also indicates her replacement for the Prudential policy.

   
   

10. After Respondent reviewed with Ms. Bowling her AARP policy and the National States policy, he advised her that he could process some claims for her under the lapsed National States policy. As a result, Respondent submitted claims for Ms. Bowling and she was reimbursed for medical bills for which she had not previously sought payment. (Respondent's Composite Exhibit 8.)

    
    

11. Respondent and Ms. Bowling discussed eyeglass and hearing aid coverage to determine if she should purchase it. However, based on Ms. Bowling's desire to hold the cost of insurance down, and after Respondent explained to her that under the eyeglass-hearing aid rider, it would cost her approximately $340 in premiums to get $500 in coverage, she declined such coverage. By way of example, Respondent explained that the premium for the rider was $125, deductible of $75 pays 80% with a maximum coverage of $500; so on a $700 bill, it would pay $500, indicating that the insurance payment of $340 was for $500 worth of benefits. Evidence of Ms. Bowling's rejection was noted in the outline of coverage which specifically excludes eye glasses and hearing aids. (Respondent's Exhibit 10.) Ms. Bowling acknowledged that the benefits of the policy was clearly explained to her.

12. After Respondent's initial visit, Ms. Bowling decided to cancel the policy. Upon receiving notice of cancellation, Respondent called upon Ms. Bowling to determine her reason for cancelling the policy. Respondent again explained the coverage to Ms. Bowling in the presence of her son. Ms. Bowling acknowledges that Respondent explained to her at the second visit that eye glasses, dentures and hearing aids were not covered by the policy, that the rider would be required to provide that coverage; and she then again elected not to purchase the rider coverage but kept the policy in force. Evidence of this continuation of coverage is in Ms. Bowling's handwriting which reflects "After talking to my agent Mark Gable, I have decided to keep the UMS 1060437 in force."

    
    

13. Thereafter, Ms. Bowling again decided to cancel the policy and in correspondence with National States, she related that after reviewing the policy with others, she concluded that she could not afford the coverage. Ms. Bowling, at the time, made no complaint about Respondent having misrepresented the existence of eyeglass or similar coverage, but simply requested a refund. After the company failed to forward a refund to Ms. Bowling, she filed a complaint with Petitioner asserting that she was entitled to a refund, but she made no reference to any claim of misrepresentation of coverage. At hearing, Ms. Bowling acknowledged that she cancelled the policy because the coverage was too expensive. Ms. Bowling made no mention of any misrepresentation by Respondent for coverage for eye glasses, dentures or hearing aids until the interviews by Petitioner's investigators.

    
    

14. On or about July 19, 1990, Respondent visited the home of Fred V. Lively of Englewood for the purpose of discussing health insurance. At the time, Mr. Lively had recently purchased an American Traveler's Long-Term care insurance policy effective as of July 13, 1990, and offered custodial nursing care insurance benefits.

    
    

15. It is alleged that Respondent sold a nursing home policy to Mr. Lively representing that the policy provided coverage for custodial care and he failed to advise Mr. Lively that the policy called for a three (3) day confinement in a hospital as a condition precedent to the payment of benefits.

    
    

16. The policy that Respondent sold to Mr. Lively did not require such a waiting period as it included a rider eliminating the waiting period. This fact was confirmed by William J. O'Connor, the manager of policy services for National States.

    
    

17. During July of 1990, Mr. Lively was running a lapse notice on the National States policy previously sold to him by Steve Daggett, a former employee of National States. Initially, Respondent showed the Livelys a Penn States policy and a Transport Life policy for nursing home care, both of which included custodial care. The premiums on both policies approached $5,000 a year and the Livelys determined that they were too expensive. As a result, they were rejected. Thereafter, Respondent explained the National States nursing care policy which provided skilled and intermediate care and the Livelys elected to purchase the nursing care policy. Prior to the Livelys purchase, Respondent reviewed the coverage provided and an outline of coverage was left with the Livelys as well as an outline prepared by Respondent. In addition, based on the pendency of administrative charges in this matter, Respondent had the Livelys acknowledge, in their own handwriting, that "all of the benefits of this outline has been explained to me in full and a signed copy of this outline has been left with me, by my agent, Agent is Mark Gable," followed by the signature of Fred Lively. (Respondent's Exhibits 15 and 16.) Additionally, the Livelys signed

    two further certifications and a customer survey report prepared by Respondent. This was done in an attempt by Respondent to avert claims generated by other agents by having new clients under certification to indicate that the coverage was explained. Shortly after the Respondent sold the insurance to the Livelys, Steve Daggett, the agent who had sold the Livelys their American Traveler's policy, arrived at the Livelys' home and convinced Mr. Lively that his policy was to have included custodial care; cited that Respondent had failed to reveal that and he (Daggett) related that Respondent had failed to reveal that he (Lively) suffered from diabetes for the purpose of suggesting that Respondent had "clean sheeted" the application which would thereafter result in a denial of coverage if a claim was made. A review of Respondent's application filed with the Lively deposition showed that Respondent revealed the existence of Mr.

    Lively's diabetes.

    
    

18. Sometimes after August 21, 1990, Respondent again visited the Livelys and requested that they reconsider their decision to cancel the policy. Following Respondent's review of the policy and the coverages, Mr. Lively signed a letter which was submitted to National States requesting that the policy be kept in force. National States received the letter and the cancellation of the Lively policies was rescinded.

    
    

19. On or about October 6, 1988, Respondent visited the home of Martha Roche for the purpose of soliciting health insurance. As a result of their discussion, Ms. Roche purchased two National States insurance policies.

    
    

20. Although Ms. Roche testified that Respondent represented himself as an insurance adjuster for the purposes of gaining entry into her home, the testimony does not comport with the documentary evidence or her practice with respect to letting insurance agents into her home. At times, Ms. Roche has had as many as three insurance agents in her home at one time.

    
    

21. Respondent was following up on a lapse notice with respect to prior National States policies which Ms. Roche had purchased from Respondent. At her front door, Respondent showed Ms. Roche his insurance license and she granted him entrance.

    
    

22. On November 3, 1988, or less than thirty (30) days after the policy was originally written by Respondent, Respondent returned to Ms. Roche's home after receiving a notice of cancellation with respect to the policy in question. After discussing the matter with her, she decided to save the policy and wrote a handwritten note asking that the coverage be continued. During the November 3, 1988 meeting with Ms. Roche, which was well after the bank draft authorization had been submitted to National States, Ms. Roche indicated that she did not wish to stay on the draft plan in the following year. Respondent explained to Ms. Roche that she should write a letter to National States and to the bank to terminate the bank plan. In addition to this advice, Respondent was aware that National States would advise Ms. Roche of her right to terminate the bank plan and the procedure for termination as the bank plan is a contract between the insured and the bank. Respondent was without authority to terminate the bank plan that Ms. Roche authorized.

    
    

23. Ms. Roche requested cancellation of the bank draft as Respondent instructed her, although the bank continued payment until she filed a complaint with Petitioner, complaining that National States insurance had failed to cancel her bank draft plan. Ms. Roche fails to allege in her complaint to Petitioner or otherwise suggest that Respondent used any false pretense to gain entry to

    her home. Ms. Roche's complaint was that National States did not refund her money after she wrote requesting a refund. Subsequently, a refund was given to Ms. Roche.

    
    

    CONCLUSIONS OF LAW

    
    

24. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this action pursuant to Section 120.57(1), Florida Statutes.

    
    

25. The parties were duly noticed pursuant to Chapter 120, Florida Statutes.

    
    

26. The authority of the Petitioner is derived from Chapter 626, Florida Statutes.

    
    

27. Petitioner has the burden of proof in these proceedings to prove the allegations in the Second Amended Administrative Complaint by clear and convincing evidence. See, Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

28. Petitioner failed to establish, by clear and convincing evidence, that Respondent willfully misrepresented to Mabel Bowmaster that the National States medicare supplement policy would pay custodial benefits. Nor was there any evidence that Respondent made misrepresentations which induced Mabel Bowmaster to let her protective life policy lapse and to purchase the Respondent's policy.

    
    

29. Petitioner failed to establish, by clear and convincing evidence, that Respondent willfully misrepresented to Alice Bowling that she could cancel and obtain premium refunds on her already in force insurance coverages, when in fact she could not. Likewise, there was no evidence that Respondent willfully misrepresented to Alice Bowling that the National States medicare supplement policy would pay eye glasses, hearing aid and dental benefits. Likewise, there was a failure by Petitioner to establish, by clear and convincing evidence, that Respondent willfully misinformed Ms. Bowling and misrepresented facts in the letter that Ms. Bowling signed wherein she indicated her desire to keep the policy.

    
    

30. Petitioner failed to establish, by clear and convincing evidence, that Respondent willfully misrepresented to Fred Lively that the National States nursing home policy would pay custodial care benefits.

    
    

31. Petitioner failed to establish, by clear and convincing evidence, that Respondent willfully misrepresented or failed to disclose to Martha Roche that she had entered into an automatic bank draft authorization agreement prior to her signing the authorization form.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that:

Petitioner enter a Final Order dismissing the Second Amended Administrative Complaint filed herein in its entirety.

DONE and ENTERED this 28th day of February, 1991, in Tallahassee, Leon County, Florida.

JAMES E. BRADWELL

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904)488-9675

Filed with the Clerk of the

Division of Administrative Hearings this 28th day of February, 1991.

COPIES FURNISHED:

James A. Bossart, Esquire Division of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

Martin Errol Rice, Esquire 696 First Avenue North Post Office Box 205

St. Petersburg, Florida 33731

Honorable Tom Gallagher State Treasurer and

Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Bill O'Neil, Esquire General Counsel Department of Insurance The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 89-005272

Orders for Case No: 89-005272