STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

)

DEPARTMENT OF INSURANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 89-5652

)

RICHARD SIDNEY COLE, )

)

Respondent. )

)

RECOMMENDED ORDER

On June 21, 1990, a formal administrative hearing was held in this case in St. Petersburg, Florida, before J. Lawrence Johnston, Hearing Officer, Division of Administrative Hearings.

APPEARANCES

For Petitioner: James A. Bossart, Esquire

Department of Insurance Division of Legal Services Room 412, Larson Building Tallahassee, FL 32399-0300

For Respondent: Thomas W. Stahl, Esquire

Newell & Stahl, P. A. 817 North Gadsden Street Tallahassee, FL 32303

and

Wayne O. Smith, Esquire 5420 Central Avenue

St. Petersburg, FL 33707 STATEMENT OF THE ISSUES

The issue for determination in these proceedings is whether the Petitioner, the Department of Insurance, should discipline the Respondent, Richard Sidney Cole, under charges made in a three- count Amended Administrative Complaint. 1/

Count I charges essentially that the Respondent misrepresented to Edith Kastel the terms of a National States Insurance Company (National States) Medicare supplement insurance policy by failing to disclose the six-month waiting period for preexisting conditions and misleading her into believing that she would be fully covered under the policy immediately upon its issuance, in violation of Sections 626.611(5), 626.611(7), 626.611(8), 626.611(9), 626.611(13), 626.621(2), 626.621(6),

626.9521, 626.9541(1)(a)1., and 626.9541(1)(e)1., Florida Statutes (1989).

Count II charges essentially that the Respondent (1) failed to disclose on the applications for National States medical/surgical expense coverage he completed on behalf of the Ogletrees the policies and coverages then in effect on the insured as required by the application and (2) misrepresented Jack Ogletree's physical condition by failing to disclose his heart disorder and hospitalization within five years before the application date, in violation of Sections 626.611(5), 626.611(7), 626.611(8), 626.611(9), 626.611(13), 626.621(2), 626.621(6),

626.9521, 626.9541(1)(a)6., and 626.9541(1)(e)1., 626.9541(1)(k)1.

and 626.9541(1)(l), Florida Statutes (1989).

Count III alleges essentially that the Respondent (1) sold Gunnar Sundstrom a National States Medicare supplement policy, telling him it was superior to the Old Southern Life Insurance Company (Old Southern) policy Sundstrom already had, (2) failed to disclose on the application he completed for Sundstrom the Old Southern policy Sundstrom already had, and (3) falsely stated on the application that the insurance being applied for was not intended to replace the Old Southern policy, in violation of Sections 626.611(5), 626.611(7), 626.611(8), 626.611(9),

626.611(13), 626.621(2), 626.621(6), 626.9521, 626.9541(1)(a)6.,

and 626.9541(1)(e)1., 626.9541(1)(k)1. and 626.9541(1)(l), Florida

Statutes (1989), and F.A.C. Rule 4-46.003(2).

PRELIMINARY STATEMENT

At the final hearing, the Department presented the testimony of Edith Kastel, Gunnar Sundstrom and, by deposition, the Ogletrees, and also the testimony of corporate representatives of National States and Old Southern. The Respondent testified in his own behalf. Both parties introduced exhibits in evidence, as well, and the Department ordered the preparation of a transcript of the final hearing, which was filed on July 16, 1990. By Explicit rulings on the proposed findings of fact in the proposed recommended orders filed by the parties may be found in the attached Appendix to Recommended Order, Case No. 89-5712.

FINDINGS OF FACT

1. The Respondent, Richard Sidney Cole, is currently eligible for licensure and licensed in this state as a Health Insurance Agent, and was so licensed at all times relevant to these proceedings.

   
   

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

   
   

   Count I -- Edith Kastel.

   
   

3. On or about June 24, 1988, the Respondent visited the home of Edith Kastel of St. Petersburg, Florida, for the purpose of soliciting health insurance. She had responded to a "lead card" National States had sent to her, and her request for follow- up information was referred to the Respondent.

   
   

4. Since Kastel was not yet eligible for Medicare, and could not purchase a Medicare supplement policy, the Respondent showed her the National States Limited Medical-Surgical Expense policy. This policy pays 40% of doctors' charges, outpatient hospital charges and outpatient charges for diagnostic laboratory and x- ray examinations and ambulance charges.

   
   

5. During the application process, Kastel disclosed to the Respondent that she had suffered from diverticulitis in the past. The Respondent took this opportunity to explain to Kastel that the policy would not pay on preexisting conditions (i.e., according to the policy, loss "which results from sickness or disease for which treatment was advised or received, or medical advice given by a doctor, during the 180 day period just before the Policy Date") until after the expiration of a six-month waiting period. Kastel fully understood this provision of the policy.

   
   

6. Kastel did not disclose to the Respondent during the application process any other preexisting conditions to which the waiting period would apply. She did tell him that she had an eye examination appointment that she had just scheduled for July 6, 1988, but she gave no indication that she knew there was something wrong with her eyes or that the appointment was for anything other than a routine vision check. She continued to maintain at the hearing that she did not know, at the time she applied for coverage through the Respondent, that she had cataracts. She did vaguely ask whether she would be covered if the examination revealed that something was wrong with her eyes, and the Respondent assured her that she would be covered and that she should submit any bills she might get with a claim on the policy.

7. Kastel bought the policy, effective July 1, 1988.

   
   

8. At her eye examination on July 6, 1988, Kastel was diagnosed with cataracts and was advised that elective cataract surgery would be beneficial. Kastel scheduled the surgery and had it performed in October, 1988. When she submitted her bills with a claim on the policy, National States rejected the claim as a preexisting condition for which claim was made within the policy's six_month waiting period.

   
   

9. When the claim was rejected, Kastel complained to the Respondent, who made a written request to National States that the claim be paid. He reasoned that the claim should be covered because Kastel maintained that she did not know of the condition at the time she applied for coverage. Kastel and the Respondent were not able to change National States' position, and the claim still has not been paid.

   
   

10. It was not proven that the Respondent misrepresented to Kastel that the policy paid 40% of all charges (as opposed to 40% of only doctors' charges, outpatient hospital charges and outpatient charges for diagnostic laboratory and x-ray examinations and ambulance charges) or that Kastel would not have purchased the policy if the Respondent had communicated to her exactly what kinds of charges it covered. Up to the time of the hearing, there is no indication that Kastel had any complaint against National States or the Respondent except that her cataract surgery claim was rejected as a preexisting condition. 2/ (All other claims Kastel has made under the policy have been paid.) Kastel's testimony elicited at the hearing, that the Respondent told her only that the policy covered 40% of all expenses, was not persuasive.

    Count II -- The Ogletrees.

    
    

11. Like Kastel, Jack and Margaret Ogletree of Palm Bay, Florida, responded to National States advertising by sending in a "lead card" that was referred to the Respondent. The Respondent visited the Ogletrees on or about August 11, 1988.

    
    

12. Margaret Ogletree was not yet eligible for Medicare, and the Respondent sold both her and her husband a National States Limited Medical-Surgical Expense Policy. These were not Medicare supplement policies, and the policies themselves state in bold print: "THIS POLICY IS NOT A MEDICARE SUPPLEMENT POLICY." The Respondent explained that the policy was totally unrelated to Medicare and would pay under its terms regardless of Medicare coverage. The evidence did not prove that the Respondent said or did anything to lead the Ogletrees to believe that they were

    buying a Medicare supplement policy, except perhaps to say that the policy would pay for some things that Medicare would not pay for.

    
    

13. It was not proven that Jack Ogletree had a Medicare supplement policy in force at the time or whether he planned to, or did, replace a Medicare supplement policy with the policy the Respondent sold him. It was not proven that the Respondent was required to submit a replacement form or indicate on the application that the policy was "intended to replace any accident or sickness insurance, health service or health maintenance contract."

    
    

14. The evidence proved that the Ogletrees told the Respondent during the application process that Jack Ogletree had successful open heart surgery for an aortic valve replacement in April, 1984, and remained on medication for his heart condition. The Respondent led the Ogletrees to believe that losses resulting from the heart condition would be covered after the six-month waiting period for preexisting conditions. In completing Jack Ogletree's application, the Respondent wrote "no" in answer to: question 6.c., asking whether he had or ever had "high or low blood pressure, varicose veins or disorder of the heart or circulatory system; question 7.a., asking whether he had consulted or been treated by any physician or practitioner in the last five years; and question 7.b., asking whether he had been confined in a hospital in the last five years.

    
    

15. The evidence is that, under National States' underwriting policies, a successful aortic valve replacement performed over four years before an application would not mean automatic rejection of the application. Had questions 6.c., 7.a. and 7.b. on Jack Ogletree's application been answered correctly, National States typically would have investigated and may or may not have rejected the application, depending on the results of the investigation.

    
    

16. Likewise, it is not clear from the evidence whether National States would consider the misrepresentation on the Jack Ogletree application to be a material misrepresentation that would require rejection if Jack Ogletree were to make a claim based on his heart disorder. To the date of the hearing, no such claim had been made. (Claims that have been made have been paid.)

    
    

    Count III -- Gunnar Sundstrom.

    
    

17. Like Edith Kastel and the Ogletrees, Gunnar Sundstrom sent in a "lead card" that was referred to the Respondent. The Respondent visited Sundstrom on or about December 9, 1987.

18. At the time, Sundstrom had in force an Old Southern Life Insurance Company (Old Southern) Medicare supplement policy.

    
    

19. Sundstrom wanted to replace the Old Southern policy with a National States policy which the Respondent sold him. He wanted a minimum of overlap between the effective date of the new National States policy and the lapse of the Old Southern policy, but he also wanted to be sure that there would be no gap in coverage of any preexisting conditions. He and the Respondent discussed this thoroughly, but the Respondent could not answer all of Sundstrom's questions because he was not sure at the time whether National States was going to increase the waiting period for preexisting conditions from three to six months. It was decided that Sundstrom would apply for the policy, review it upon receipt, and cancel it and ask for a full refund within 30 days, as he had a right to do under the policy, if the waiting period for preexisting conditions turned out to be six months.

    
    

20. On the Sundstrom application, the Respondent answered "no" to the question whether the National States policy for which Sundstrom was applying was "intended to replace any accident or sickness insurance, health service or health maintenance contract."

    
    

21. The Respondent did not submit any replacement forms as required by F.A.C. Rule 4-51.007 when a Medicare supplement policy is being replaced. 3/

    
    

22. The Respondent explained that he thought the "no" answer on the Sundstrom application was appropriate and that no replacement form was necessary because Sundstrom was not cancelling the Old Southern policy, only perhaps allowing it to lapse. He now concedes that perhaps he was wrong.

    
    

23. All claims Sundstrom made under the National States policy through the date of the hearing were paid.

    
    

    CONCLUSIONS OF LAW

    
    

24. The Petitioner, the Department of Insurance, has the burden of proof in these proceedings to prove the allegations in the Amended Administrative Complaint by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). The standard of clear and convincing evidence to be used in administrative licensing cases was outlined by the First District Court of Appeal in Evans Packing Company v. Department of Agriculture and Consumer Services, 550 So. 2d 112 (Fla. 1st DCA 1989):

    [C]lear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the evidence must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact the firm belief of conviction, without hesitancy, as to be the truth of the allegations sought to be established. 550 So. 2d at 116, n.5

    
    

25. Count I of the Amended Administrative Complaint alleges that the Respondent violated one or more of the following sections of the Insurance Code: 626.611(5), 626.611(7), 626.611(8), 626.611(9), 626.611(13), 626.621(2), 626.621(6), 626.9521, 626.9541(1)(a)1., and 626.9541(1)(e)1., Florida Statutes (1989). These provisions provide as follows.

    
    

    626.611 Grounds for compulsory refusal, suspension, or revocation of agent's solicitor's, or adjuster's license or . . . permit.--The department shall deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster . . . 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 of the following applicable grounds exist:

    
    

    (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.

    
    

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

    2. Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or permit.

    3. Fraudulent or dishonest practices in the conduct or business under the license or permit.

    
    

    (13) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code.

    626.621 Grounds for discretionary refusal, suspension, or revocation of agent's, solicitor's, or adjuster's license or service representative's supervising or managing general agent's or claims investigator's permit.--The department may, in its discretion, deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster . . . and it may 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 under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under s.

    626.611:

    
    

    (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.

    
    

    (6) In the conduct of business under the license or permit, engaging in unfair methods of competition or in unfair and 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.

    
    

    626.9521 Unfair methods of competition and unfair or deceptive acts or practices prohibited.--No person shall engage in this state in any trade practice which is defined in this part as, or determined pursuant to

    s. 626.9561 to be, an unfair method of competition or an unfair deceptive act or practice involving the business of insurance. Any person who violates any provision of this part shall be subject to the penalties provided in s. 627.381.

    
    

    626.9541 Unfair methods of competition and unfair or deceptive acts or practices defined.--

    1. UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS.--The following are defined as unfair methods of competition and unfair or deceptive acts or practices:

       1. Misrepresentations and false advertising of insurance policies.--Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any statement, sales presentation, omission, or comparison which:

    1. Misrepresents the benefits, advantages, conditions, or terms of any insurance policy.

    (e) False statement and entries.--

    1. Knowingly:

    1. Filing with any supervisory or other public official,

    2. Making, publishing, disseminating, circulating,

    3. Delivering to any person,

    4. Placing before the public,

    5. Causing, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public,

    
    

    any false material statement.

    
    

26. The evidence under Count I of the Amended Administrative Complaint did not prove that the Respondent violated any of the above-quoted statutory provisions in his dealings with Edith Kastel.

    
    

27. Count II of the Amended Administrative Complaint alleges that the Respondent violated one or more of the above-quoted statutory provisions and the following additional statutory provisions:

    
    

    626.9541 Unfair methods of competition and unfair or deceptive acts or practices defined.--

    1. UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS.--The following are defined as unfair methods of competition and unfair or deceptive acts or practices:

       1. Misrepresentations and false advertising of insurance policies.--Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any statement, sales presentation, omission, or comparison which:

          * * *

          6. Is a misrepresentation for the purpose of inducing or tending to induce, the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy.

          
          

          1. Misrepresenting in insurance applications.--

             1. Knowingly making false or fraudulent statements or representations 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.

          2. Twisting.--Knowingly making any misleading representations or incomplete or fraudulent comparisons . . . of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, . . . or convert any insurance policy or to take out a policy of insurance in another insurer.

          
          

28. The evidence under Count II of the Amended Administrative Complaint proves that the Respondent knowingly made a false statement on Jack Ogletree's application and, as a result, led the Ogletrees to believe that Jack Ogletree would be covered for losses resulting from his heart disorder, after a six-month waiting period. It was not proven whether the false statements on the application would have been "material" so as to result in rejection of the application, if disclosed (or, if not disclosed, later rejection of a claim after issuance of the policy). But, for purposes of Section 626.9541(1)(e)1., Florida Statutes (1989), the false statement on the application must be viewed as material. The evidence proves that the Respondent violated Sections 626.9541(1)(a)1., (e)1., and (k)1., and thereby 626.9521 and 626.621(2) or (6), Florida Statutes (1989). The evidence did not prove the other alleged violations.

    
    

29. Count III of the Amended Administrative Complaint alleges the same statutory violations as Count II, plus a violation of F.A.C. Rule 4-46.003(2), which essentially restates Section 626.9541(1)(l), Florida Statutes (1989).

    
    

30. The evidence under Count III of the Amended Administrative Complaint proved only that the Respondent falsely stated on the Sundstrom application that the National States policy being applied for was not "intended to replace any accident or sickness insurance, health service or health maintenance contract." 4/ As under Count II, the evidence proved violations of Sections 626.9541(e)1. and thereby 626.9521 and 626.621(2) and (6), Florida Statutes (1989). But the evidence did not prove the other statutory violations charged in Count III of the Amended Administrative Complaint.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Petitioner, the Department of Insurance, enter a final order suspending the license, and eligiblity for licensure, of the Respondent, Richard Sidney Cole, for four (4) months.

RECOMMENDED this 28th Tallahassee, Florida.

day of August, 1990, in

J. LAWRENCE JOHNSTON 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 August, 1990.

ENDNOTES

1/ Count IV of the Amended Administrative Complaint was withdrawn at final hearing.

2/ No other complaint is alleged in the Amended Administrative Complaint.

3/ The Amended Administrative Complaint does not charge the Respondent with a violation of F.A.C. Rule 4-51.007.

4/ The Respondent also did not submit replacement forms, as required by F.A.C. Rule 4-51.007, but the Amended Administrative Complaint did not charge this violation. See footnote 3., above.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-5652

To comply with the requirements of Section 120.59(2), Florida Statutes (1989), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

proven. It was proven that Kastel told the Respondent that she had scheduled a routine eye

appointment but not that she told him she "was having problems with her eyes."

1. Accepted and incorporated.

2. Rejected as contrary to facts found and not proven.

10.-20. Accepted and incorporated. Respondent's Proposed Findings of Fact.

1.-9. Accepted and incorporated.

10.-13. Accepted and incorporated to the extent not subordinate or unnecessary.

1. In part, accepted and in part rejected; subordinate in part to facts found and in part to facts contrary to those found.

2. Accepted and incorporated to the extent not subordinate or unnecessary.

3. First sentence, rejected as contrary to the greater weight of the evidence. Second sentence, accepted and incorporated.

4. Accepted but subordinate to facts not proven. 18.-21. Accepted and incorporated to the extent not

subordinate or unnecessary.

1. Subordinate and unnecessary.

2. Accepted and subordinate to facts found.

COPIES FURNISHED:

James A. Bossart, Esquire Department of Insurance Division of Legal Services Room 412, Larson Building Tallahassee, FL 32399-0300

Thomas W. Stahl, Esquire Newell & Stahl, P. A.

817 North Gadsden Street Tallahassee, FL 32303

Wayne O. Smith, Esquire Wayne O. Smith, P. A.

5420 Central Avenue

St. Petersburg, FL 33707

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, FL 32399-0300

Don Dowdell, Esquire General Counsel

Department of Insurance and Treasurer

The Capitol, Plaza Level Tallahassee, FL 32399-0300

=================================================================

AGENCY FINAL ORDER

=================================================================

OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE

IN THE MATTER OF: CASE NO.: 89-L-712JB DOAH CASE NO.: 89-5652

RICHARD SIDNEY COLE

/

FINAL ORDER

THIS CAUSE came on before the Treasurer of the State of Florida, acting in his capacity as Insurance Commissioner, for consideration and final agency action. On March 9, 1990, the State of Florida, Department of Insurance (hereinafter referred to as "Petitioner"), filed an Amended Administrative Complaint charging Richard Sidney Cole (hereinafter referred to as "Respondent") with various violations of the insurance code. The Respondent timely filed his request for a formal hearing pursuant to section 120.57(1), Florida Statutes. Pursuant to notice, the matter was heard before J. Lawrence Johnston, Hearing Officer, Division of Administrative Hearings, in St. Petersburg, Florida of June 21,1990.

After considering the evidence, argument and testimony presented at hearing, and subsequent written submissions by the parties, the hearing officer issued his Recommended Order. (Attached as Exhibit A) on August 28, 1990. The Hearing Office recommended that the Petitioner, the Department of Insurance, enter a final order suspending the license and eligibility for licensure of the Respondent Richard Sidney Cole, for four (4) months.

On September 24, 1990, Respondent filed exceptions to the Recommended Order of the Hearing Officer. (Attached as Exhibit B). Upon careful consideration of the record, the submissions of the parties and being otherwise advised in the premises, it is

ORDERED:

1. That Respondent's first exception to the Recommended Order specifically dealing with Finding of Fact NO. 14 is rejected. It merely reiterated a position which had been repeatedly asserted before the hearing officer. Britt vs. Department of Professional Regulation, 492, So. 2d 697 (F1a.. 1st Dist. Ct. App. 1986).

   
   

   Moreover, it is a position which is patently inaccurate. Mr. Jack W. Ogletree, in a sworn deposition taken on January 20, 1990 at 1:15 p.m. and admitted into evidence, testified that Mr. Cole asked him if he had any disorders of the heart in which he replied "yes." Moreover, Mr. Cole was the person who filled out the application.

   
   

   In addition, Mrs. Margaret Ogletree corroborates Mr.

   Ogletree's testimony in her deposition taken on January 20, 1990 at 2:15 p.m. and admitted into evidence. Mrs. Ogletree testified that she was present during the time that Mr. Ogletree (her

   husband) informed Mr. Richard Sidney Cole (the Respondent) of his heart condition and previous problems.

   
   

2. That Respondent's second exception to the Recommended Order specifically dealing with Finding of Fact NO. 16 is rejected as being misleading, spurious and self-serving. Respondent's counsel asked Mr. O'Conner the hypothetical "if an applicant for one of your insurance policies had suffered a heart bypass, an aortic valve replacement three or four years ago, and then made a complete recovery, do you think the existence of that fact would preclude the issuance of a policy by your company? " The answer was "I do not." In the above hypothetical the insurance company has the opportunity to make an informed choice as to whether or not to write a policy based upon full and truthful disclosure.

   
   

   Whereas in Respondent's exception, he addresses a totally different issue which is whether or not such a misrepresentation would in fact be material. Mr. O'Conner testified in response to the question "...assuming that he (Mr. Ogletree) had this condition that wasn't disclosed on the application.. and he (Mr. Ogletree) attempted to make a claim...what would have happened?" "...it might be that they (the insurance company) might decline the claim and rescind the coverage."

   
   

   These testimonies gave credence to the position that each situation is handled on a case by case basis and that the misrepresentation in question could have led to dire consequences.

   
   

3. That Respondent's third exception to the Recommended Order specifically dealing with Finding of Fact NO. 22 is rejected. Respondent conceded that he was wrong in checking "no" on the Sundstrom insurance application. Moreover, Respondent had a fiduciary duty to know for sure whether or not the National States policy was intended to "replace" the Old Southern policy.

   
   

4. That Respondent's exception to the Recommended Order specifically dealing with Conclusion of Law NO. 5 is rejected. Mr. Jack W. Ogletree in a sworn deposition taken on January 20, 1990 at 1:15 p.m. and admitted into evidence testified that Mr. Cole asked him if he had any disorders of the heart in which he replied "yes." Moreover, Mr. Cole was the person who filled out the application.

   
   

   In addition, Mrs. Margaret Ogletree corroborates Mr.

   Ogletree's testimony in her deposition taken on January 20, 1990 at 2:15 p.m. and admitted into evidence. Mrs. Ogletree testified that she was present during the time that Mr. Ogletree (her husband) informed Mr. Richard Sidney Cole (the Respondent) of his heart condition and previous problems. Furthermore, the combined testimony of the Ogletree's shows that Mr. Cole led them to

   believe that Mr. Ogletree would be covered for losses resulting from his heart disorder, after a six-month waiting period. By the totality of the circumstances it was obvious to the hearing officer and the Department that Mr. Cole knew what he was doing when he intentionally omitted the vital information from the policy application. Regarding materiality, Mr. O'Conner testified in essence that such an omission might result in declining the claim and rescinding the coverage. The hearing officer properly found this occurrence to indicate materiality.

   
   

5. Respondent's fifth exception to the Recommended Order deals specifically with the proposed sanction against him and is rejected as being without merit. The four month suspension of licensure and eligibility for licensure as recommended by the hearing officer is far less than that initially sought by the Department. The Respondent's sole supporting argument is even if argument is even if I am guilty, they are only technical violations.

   
   

   However, the law does not distinguish between the so called "technical" violations of the law and those in which Mr. Cole feels are more significant. The fact that the complaining witnesses did not suffer any financial harm goes to the issue-- of restitution, not guilt or punishment.

   
   

6. The Findings of Fact of the Hearing Officer are adopted in full as the Department's Findings of Fact.

   
   

7. The Conclusions of Law of the Hearing Officer are adopted in full as the Department's Conclusions of Fact.

   
   

8. That the Hearing Officer's recommendation that the Respondent's license as a health insurance agent and eligibility for licensure be suspended for four (4) months is approved and accepted as being the appropriate disposition of this case.

Accordingly, all licenses and eligibility for licensure held by Richard Sidney Cole are hereby suspended :~or four (4) months from the date that this final order is entered.

Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to section 120.68, Florida Statutes, and Rule 9.110, Florida Rules of Appellate Procedure. Review proceeding must be instituted by filing a Notice of Appeal with the General Counsel, acting as the agency clerk, at 412 Larson Building, Tallahassee, Florida 32399- 0300, and a copy of the same and a filing fee with the appropriate District Court of Appeal within thirty (30) days of the rendition District Court of Appeal within thirty (30) days of the rendition of this Order.

DONE, ORDERED this 8th day of November, 1990.

TOM GALLAGHER

Treasurer and Insurance Commissioner

COPIES FURNISHED TO:

J. LAWRENCE JOHNSTON, ESQUIRE Hearing Officer

RICHARD SIDNEY COLE

Respondent

THOMAS W. STAHL, ESQUIRE WAYNE O. SMITH, ESQUIRE

Respondent' s Attorneys

JAMES A. BOSSART, ESQUIRE

Department of Insurance Division of Legal Services

Docket for Case No: 89-005652

Orders for Case No: 89-005652