STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 90-4320

)

ROBERT SCOTT FRANCIS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on January 15, 1991, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Gordon T. Nicol, Esquire

Department of Insurance

412 Larson Building Tallahassee, Florida

32399-0300

For Respondent: Michael W. Moskowitz, Esquire

1500 N.W. 49th Street, #401 Fort Lauderdale, Florida

33309

STATEMENT OF THE ISSUE

Whether Respondent committed the offenses set forth in the Administrative Complaint and the penalties, if any, that should be imposed.

PRELIMINARY STATEMENT

Petitioner filed an Administrative Complaint on June 11, 1990, charging Respondent, a licensed insurance agent, with multiple violations of Chapter 626, Florida Statutes (The Florida Insurance Code). The Administrative Complaint set forth factual allegations relating to three separate transactions during which Respondent or his employee is alleged to have misrepresented the correct premium for automobile insurance and to have sold these customers memberships in an automobile club without their knowledge or consent. The case was referred to the Division of Administrative Hearings after Respondent denied the allegations of the Administrative Complaint and requested a formal hearing.

At the formal hearing, Petitioner presented the deposition testimony of Rebecca Brown and the live testimony of six other witnesses. Petitioner presented five documentary exhibits, four of which were accepted into evidence

and one of which was rejected. Respondent testified on his own behalf and presented five exhibits, each of which was accepted into evidence. At the request of Petitioner, official recognition was taken of Chapter 4-12, Florida Administrative Code.

A transcript of the proceedings has been filed. Rulings on the parties' proposed findings of fact may be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. At the time of the formal hearing and at all times pertinent to these proceedings, Respondent was licensed in the State of Florida by Petitioner as a life and health insurance agent and as a general lines insurance agent. At the time of the formal hearing and at all times pertinent to these proceedings, Respondent served as the general lines insurance agent of record for A-AAAce Insurance Underwriters (A-AAAce) of 2507 Sheridan Street, Hollywood, Florida.

   
   

2. Nation Motor Club is an automobile club that provides towing, rental reimbursement, accidental death, and other benefits to its members. Respondent sold memberships in Nation Motor Club and earned a commission equal to 90% of the annual fee for each membership he sold. Nation Motor Club grants a member a thirty-day period following the filing of his application to cancel his membership and to receive a full refund of his membership fee.

   
   

   ANDERSON TRANSACTION

   
   

3. On or about September 28, 1989, Edward A. Anderson went to the offices of A-AAAce to obtain insurance for his automobile. Mr. Anderson first met with Steve Harrison, an employee of A-AAAce who holds no licensure from Petitioner and for whose acts Respondent accepts responsibility. Mr. Anderson recalled that he wanted personal injury protection (PIP), property damage liability, and comprehensive and collision insurance for his automobile, but he could not specifically recall what types of coverage he requested from Mr. Harrison and he could not recall the details of what was explained to him by Mr. Harrison.

   
   

4. Mr. Anderson recalled being told by Mr. Harrison the cost of his insurance coverage, but he could not recall what Mr. Harrison told him the amount would be.

   
   

5. Following his discussion with Mr. Harrison, Mr. Anderson was presented certain documents for his execution. Respondent, who had been sitting at the adjacent desk during the conversation between Mr. Anderson and Mr. Harrison, supervised the execution of these documents by Mr. Anderson.

   
   

6. Included among those documents executed by Mr. Anderson was a membership application for the Nation Motor Club. On this application form, Mr. Anderson designated the beneficiary in the event accidental death benefits became payable as a result of his membership. This application reflects that the annual fee for membership was $200.00.

   
   

7. Neither Mr. Harrison or Respondent prevented or attempted to prevent Mr. Anderson from reading any of the forms presented to him for his execution. Mr. Anderson did not read the forms before he signed them. Instead, he relied on his discussions with Mr. Harrison and Respondent and signed what was put before him.

8. Mr. Anderson had not requested membership in the Nation Motor Club and he was not aware that he was purchasing a membership in the Nation Motor Club at the time he agreed to do so. He believed that the premiums he was being charged and the papers he was signing related to the insurance coverage he had requested, and he did not understand that he was paying $200.00 for membership in the Nation Motor Club.

   
   

9. On November 8, 1989, Florida Insurance Commissioner Tom Gallagher accompanied Lottie Brown, one of Petitioner's investigators, in paying a surprise inspection visit to the offices of A-AAAce. That surprise visit was prompted by a complaint unrelated to this proceeding. By happenstance, Mr. Anderson was in the offices of A-AAAce during that surprise visit. On November 8, 1989, Mr. Anderson became aware for the first time that he had purchased a membership in the Nation Motor Club. On November 11, 1989, Respondent refunded to Mr. Anderson the $200.00 membership fee he had paid and he caused Mr. Anderson's membership in the Nation Motor Club to be cancelled.

   
   

10. Mr. Anderson would not have purchased the membership in Nation Motor Club had he understood that he was doing so.

    
    

    BROWN TRANSACTION

    
    

11. On February 17, 1990, Rebecca Brown went to the offices of A-AAAce to obtain insurance for her automobile. Ms. Brown talked with Respondent and asked for minimum personal injury protection (PIP) and liability coverage. Respondent discussed with Ms. Brown the insurance coverage she wanted and quoted Ms. Brown the amount of $355.00 as being the price for the "full package" of coverage she would be receiving. Respondent told Ms. Brown the coverage he was proposing included benefits for towing, rental reimbursement, and accidental death. Ms. Brown did not understand that the quoted price included membership in the Nation Motor Club or that the annual fee for that membership was $100.00. The premium for the insurance coverage alone was $255.00.

    
    

12. Ms. Brown signed an application for membership in the Nation Motor Club which reflects the sum of $100.00 as being the cost of membership. On this application, she inserted the name of the beneficiary who was to receive any accidental death benefits that may become payable as a result of her membership. Ms. Brown also signed a premium finance agreement which reflected the cost of the insurance she was purchasing. Respondent did not try to prevent Ms. Brown from reading the documents she was asked to sign. Ms. Brown did not read the documents because she was in a hurry to complete the transaction. Instead, she relied on Respondent's directions as to what and where to sign.

    
    

13. Ms. Brown first became aware that she had purchased a membership in the Nation Motor Club when she was so advised by an investigator for Petitioner on March 8, 1990. Ms. Brown thereafter contacted Respondent about this membership and Respondent promptly applied the $100.00 membership fee toward payment of the other insurance she had purchased and withdrew her application for membership in the Nation Motor Club.

    
    

14. Ms. Brown would not have purchased the membership in Nation Motor Club had she had a clear understanding that she was doing so.

    CANGIANELLA TRANSACTION

    
    

15. On February 17, 1990, John Cangianella went to the offices of A-AAAce to obtain automobile insurance for his automobile. Mr. Cangianella talked with Respondent and asked for minimum personal injury protection (PIP) and liability coverage. Respondent discussed with Mr. Cangianella various options as to coverage, including membership in Nation Motor Club. Mr. Cangianella could not specifically recall the types of coverage that had been explained to him or the costs thereof. Respondent quoted Mr. Cangianella the amount of $355.00 as being the price for the coverage. Mr. Cangianella did not understand that the quoted price included membership in the Nation Motor Club or that the annual fee for that membership was $100.00. The premium Mr. Cangianella would have paid for his insurance coverage alone was $255.00.

    
    

16. Mr. Cangianella signed an application for membership in the Nation Motor Club which reflects the cost of membership. Mr. Cangianella also signed a premium finance agreement which reflected the cost of the insurance he was purchasing. On the application, he inserted the name of the beneficiary who was to receive any accidental death benefits that may become payable as a result of his membership. Respondent did not try to prevent Mr. Cangianella from reading the documents he was asked to sign. Mr. Cangianella had been out late the night before and he did not read the documents because he was in a hurry to complete the transaction. Instead, he relied on Respondent's directions as to where to sign.

    
    

17. Mr. Cangianella first became aware that he had purchased a membership in the Nation Motor Club when he was so advised by an investigator for Petitioner in early March 1990. Mr. Cangianella thereafter contacted Respondent about this membership. Respondent refunded the $100.00 membership fee on March 9, 1990, and withdrew Mr. Cangianella's application for membership in the Nation Motor Club prior to its submission.

    
    

18. Mr. Cangianella would not have purchased the membership in Nation Motor Club had he had a clear understanding that he was doing so.

    
    

19. Mr. Anderson, Ms. Brown, and Mr. Cangianella continue to do business with Respondent's agency.

    
    

20. Respondent's licensure has not been previously disciplined by Petitioner.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

22. Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondent. See Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Evans Packing Co. v. Department of Agriculture and Consumer Services, 550 So.2d 112 (Fla. 1st DCA 1989). Evans Packing, supra, 550 So. 2d 112, 116, fn. 5, provides the following pertinent to the clear and convincing evidence standard:

    
    

    That standard has been described as follows: [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 [sic] conviction, without hesitancy, as to the truth of the allegations sought to be established.

    Slomowitz v. Walker, 429 So.2d 797, 800 (Fla.

    4th DCA 1983).

    
    

23. The Administrative Complaint charges Respondent with violating the following provisions during the course of his dealings with Mr. Anderson, Ms. Brown, and Mr. Cangianella: Sections 626.561(1); 626.611(4),(5),(7),(8),(9),(10), and (13); 626.621(2) and (6); 626.9541(1)(a)1, (1)(k)1, and (1)(o)1, Florida Statutes.

    
    

24. Section 626.561(1), Florida Statutes, provides, in pertinent part, as follows:

    
    

    1. All premiums, return premiums, or other funds belonging to insurers or others received by an agent, solicitor, or adjuster in transactions under his license shall be trust funds so received by the licensee in a fiduciary capacity; and the licensee in the applicable regular course of business shall account for and pay the same to the insurer, insured, or other person entitled thereto.

       
       

25. Petitioner has failed to establish by clear and convincing evidence that Respondent violated the provisions of Section 626.561(1), Florida Statutes. To the contrary, the evidence is clear that Respondent refunded the annual fees paid by these three customers upon being requested to do so. The remaining alleged violations of the Administrative Complaint are bottomed on Petitioner's contention that Respondent engaged in dishonest or deceptive sales practices.

    
    

26. Section 626.611, Florida Statutes, provides, in pertinent part, as follows:

    
    

    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:

    * * *

    1. If the license or permit is willfully used, or to be used, to circumvent any of

       the requirements or prohibitions of this code.

    2. 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 of business under the license or permit.

    4. Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license.

    * * *

    (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.

    
    

27. The provisions of Section 626.621 provide, in pertinent part, as follows:

    
    

    The department may, in its discretion, 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 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 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.

28. The provisions of Section 626.9541, Florida Statutes, which are found in Part X of Chapter 626, provide, in pertinent part, as follows:

    
    

    1. The following are defined as unfair methods of competition and unfair or deceptive acts or practices:

       1. Knowingly making, issuing, circulating, or causing to be made, issued , or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison which:

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

          * * *

          (k)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.

          * * *

          (o)1. 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.

          
          

29. It is clear that Mr. Anderson did not understand that his purchase included membership in the Nation Motor Club and that he would not have purchased the membership had he understood the transaction. Mr. Anderson signed documents that reflected that he was purchasing a membership in the Nation Motor Club and the amount of the annual membership charge. Mr. Anderson's testimony as to what he discussed with Mr. Harrison and Respondent and what was explained to him was vague. In contrast, Respondent testified that the transaction was explained to Mr. Anderson, any questions were answered, and no attempt was made to prevent his reading of the documents he was signing. It is concluded that Petitioner failed to establish by clear and convincing evidence that Mr. Harrison or Respondent engaged in deceptive or dishonest acts during the course of their dealings with Mr. Anderson or that Respondent violated the provisions of Chapter 626, Florida Statutes, during the course of that transaction as alleged in the Administrative Code.

    
    

30. It is clear that Ms. Brown did not understand that her purchase included membership in the Nation Motor Club and that she would not have purchased the membership had he understood the transaction. She was in a hurry to complete her transaction, she and Respondent discussed "full package" of coverage, to include the benefits provided by Nation Motor Club, and she signed documents that reflected that she was purchasing a membership in the Nation Motor Club and the amount of the annual membership charge. Ms. Brown wanted minimum coverage, but she did not understand what that meant. Respondent testified that he reviewed the different forms of coverage with Ms. Brown, including the benefits of membership in an auto club, the transaction was explained to her, any questions were answered, and no attempt was made to prevent her reading of the documents she was signing. It is concluded that Petitioner failed to establish by clear and convincing evidence that Respondent

    engaged in deceptive or dishonest acts during the course of his dealings with Ms. Brown or that he violated the provisions of Chapter 626, Florida Statutes, during the course of that transaction as alleged in the Administrative Code.

    
    

31. It is clear that Mr. Cangianella did not understand that his purchase included membership in the Nation Motor Club and that he would not have purchased the membership had he understood the transaction. Mr. Cangianella was upset when he discovered that he had purchased the membership in Nation Motor Club. However, Mr. Cangianella signed documents that reflected that he was purchasing a membership in the Nation Motor Club and the amount of the annual membership charge. Respondent testified that the transaction was explained to Mr. Cangianella, any questions were answered, and no attempt was made to prevent his reading of the documents he was signing. It is concluded that Petitioner failed to establish by clear and convincing evidence that Respondent engaged in deceptive or dishonest acts during the course of his dealings with Mr. Cangianella or that he violated the provisions of Chapter 626, Florida Statutes, during the course of that transaction as alleged in the Administrative Code.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered which dismisses the

Administrative Complaint filed against Respondent.

DONE AND ORDERED this 1st day of April, 1991, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

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 1st day of April, 1991.

APPENDIX TO THE RECOMMENDED ORDER

The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner.

1. The proposed findings of fact in paragraphs 1-3, 5, 10, 13-15, 17, 19, 21- 22, and 25-27 are adopted in material part by the Recommended Order.

2. The proposed findings of fact in paragraph 4 are rejected as being legal conclusions.

3. The proposed findings of fact in paragraphs 6-9 are rejected as being unsubstantiated by the evidence. These dealings were between Mr. Anderson and Mr. Harrison. While it has been concluded that Respondent was responsible for Mr. Harrison's acts, the proposed findings, as written, are unsubstantiated.

4. The proposed findings of fact in paragraph 11 are rejected as being unsubstantiated by the evidence. The record does not clearly reflect the amount of the premium.

5. The proposed findings of fact in paragraphs 12, 18, and 20 are rejected as being, in part, unsubstantiated by the evidence and, in part as being contrary to the findings made and to the conclusions reached.

6. The proposed findings of fact in paragraphs 16 and 24 are rejected as being unnecessary to the conclusions reached.

7. The proposed findings of fact in paragraph 23 are rejected as being unsubstantiated by the evidence.

8. The proposed findings of fact in paragraph 28 are adopted in part by the Recommended Order, are rejected in part as being recitation of testimony, and are rejected in part as being unsubstantiated by the evidence.

The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent.

1. The proposed findings of fact in paragraphs 1-7, 9-14, 16, and 18 of Part I are adopted in material part by the Recommended Order.

2. The proposed findings of fact in paragraph 8 of Part I are rejected as being unsubstantiated by the evidence. Respondent's Exhibit 3 is not clear as to the dates of the insurance being financed.

3. The proposed findings of fact in paragraph 15 of Part I are rejected as being unnecessary to the conclusions reached.

4. The proposed findings of fact in paragraph 17 of Part I are rejected as being unsubstantiated by the evidence.

5. The proposed findings of fact in paragraphs 1-8, 10-20, and 22 of Part II are adopted in material part by the Recommended Order.

6. The proposed findings of fact in paragraphs 6 and 21 of Part II are rejected as being unsubstantiated by the evidence.

7. The proposed findings of fact in paragraph 9 of Part II are rejected as being unnecessary to the conclusions reached.

8. The proposed findings of fact in paragraphs 1-17, and 19 of Part III are adopted in material part by the Recommended Order.

9. The proposed findings of fact in paragraph 18 are rejected as being unsubstantiated by the evidence.

COPIES FURNISHED:

Michael W. Moskowitz, Esquire 1500 N.W. 49th Street, #401 Fort Lauderdale, Florida 33309

Gordon T. Nicol, Esquire Department of Insurance

412 Larson Building

Tallahassee, Florida 32399-0300

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Bill O'Neill General Counsel

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.

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

AGENCY FINAL ORDER

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

OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE

IN THE MATTER OF: DOAH CASE NO. 90-4320

RALPH SCOTT FRANCIS CASE NO. 9O-L-44GTN

/

FINAL ORDER

THIS CAUSE came on before the undersigned Treasurer of the State of Florida acting in his capacity as Insurance Commissioner, for consideration and final agency action. On June 11, 1990, an Administrative Complaint was filed charging Respondent with various violations of the Insurance Code. The Respondent timely filed a request for a formal proceeding pursuant to Section 120.57(1), Florida Statutes. Pursuant to notice, the matter was heard before Claude B. Arrington, Hearing Officer for the Division of Administrative Hearings, on January 15, 1991 in Fort Lauderdale, Florida.

After consideration of the evidence, argument and testimony presented at hearing, and subsequent written submissions by the parties, the hearing officer issued a Recommended Order. (Attached as Exhibit A). The hearing officer recommended that a Final Order be entered dismissing the Administrative Complaint filed against Respondent. The Petitioner filed timely exceptions to the Recommended Order. The Respondent filed a Notice of No Exceptions to Recommended Order and a reply to Petitioner's exceptions.

RULINGS ON PETITIONER'S EXCEPTIONS

1. Petitioner takes exception to the hearing officer's conclusions of law, paragraph 5. The hearing officer states that "Petitioner has failed to establish by clear and convincing evidence that Respondent violated the provisions of section 626.561(1), Florida Statutes. To the contrary, the evidence is clear that Respondent refunded the annual fees paid by these three customers upon being requested to do so." This is supportable from the competent substantial evidence in the record. Accordingly, Petitioner's exception 2 is rejected.

   
   

2. Petitioner's next exception is to the hearing officer's conclusions of law, paragraph 9. The Department provided testimony of the insured, Mr. Anderson, and the hearing officer found that it was clear that the insured "did not understand that his purchase included membership in the Nation Motor Club

   and that he would not have purchased the membership had he understood the transaction". The record shows by clear and convincing evidence that the insured did not understand that he was paying $200.00 for membership in the Nation Motor Club (Findings of Fact Paragraph 8) nor would he have purchased the membership had he known (Findings of Fact, paragraph 10).

   
   

   It is clear from the evidence that Respondent and his staff did not adequately explain that there was an additional charge for the auto club membership which was not part of the of the premium for the insurance coverage requested. This customer was not told he could save money by declining the opportunity to become a member of the Nation Motor Club. Despite the language of the application, which referred to premiums and coverage, Respondent did not inform the customer that the membership was not actually life or auto insurance. This customer did not realize that he was purchasing the motor club membership as well as the requested insurance.

   
   

   Pursuant to Section 626.621, Florida Statutes, the Department may deny, suspend, revoke, or refuse to renew or continue the license of any agent if it finds that any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under Section 626.611:

   
   

   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 appointment. (Section 626.621(2), Florida Statutes)

   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. (Section 626.621(6), Florida Statutes)

   
   

   Under Section 626.9541, Florida Statutes, the following are defined as unfair methods of competition and unfair or deceptive acts or practices:

   
   

   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.

   (Section 626.9541(1)(a)1, Florida Statutes)

   
   

   The Department must prove with clear and convincing evidence the misrepresentation. The misrepresentations which the Respondent made were as to the price of the insurance coverage requested and the minimum automobile insurance required by law, which was actually in each instance approximately One Hundred Dollars or more less than the amount quoted. Respondent failed to apprise the insureds that the accidental death benefits were provided in connection with the Nation Motor Club and not under the insurance coverage requested. These facts were clearly and convincingly proven by the three witnesses who testified that they were not aware that the quoted price included the auto club membership.

   Each such act is a violation of 626.621(2) and (6) and 626.9541(1)(a)1, Florida Statutes. No after-the-fact refund of the amount paid for the auto club membership can alter the fact that in the initial sales presentation the Respondent misrepresented the terms and/or conditions of a policy or contract of insurance.

   
   

   Further, each act of collecting the requested premium without clearly identifying the non-insurance product is a violation of Section 626.9541(1)(o)1, Florida Statutes, "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." Petitioner's exception is accepted.

   
   

3. Petitioner's next exception is to Conclusions of Law, paragraph 10. The Department provided the deposition testimony of the insured, Ms. Brown, and the hearing officer found "Ms. Brown did not understand that the quoted price included membership in the Nation Motor Club or that the annual fee for that

   membership was $100.00." The record shows by clear and convincing evidence that Ms. Brown did not understand that the quoted premium included the auto club membership and would not have purchased it had she understood she was doing so (Findings of Fact, paragraphs 11 and 14). Petitioner's exception 4 is accepted for the reasons stated in 2. above.

   
   

4. Petitioner's next exception is to Conclusions of Law, paragraph II. The Department provided testimony of the insured, Mr. Cangianella, and the hearing officer found that "Mr. Cangianella did not understand that the quoted price included membership in the Nation Motor Club or that the annual fee for

membership was $100.00". The record shows by clear and convincing evidence that Mr. Cangionella did not understand that the quoted premium included the auto club membership and would not have purchased it had he understood he was doing so (Findings of Fact, paragraphs 15 and 18). Petitioner's exception 5 is accepted for the reasons stated in 2. above.

Respondent filed a Reply to Petitioner's Exceptions in this matter.

However, there is no provision either in the Florida Statutes or the Florida Administrative Code relating to a Reply to Exceptions and as such they are not addressed here.

Upon consideration of the foregoing and the entire record, the submissions of the parties and being otherwise advised in the premises, it is

ORDERED:

1. The Findings of Fact of the hearing officer are adopted in full as the Department's Findings of Fact.

   
   

2. The Conclusions of Law of the hearing officer are adopted, except for paragraphs 9, 10, and 11.

   
   

3. The hearing officer's recommendation that the Administrative Complaint be dismissed is rejected. A penalty is required in this case, based upon the following:

   
   

   1. The record shows that three insureds went to Respondent to obtain insurance coverage. All three were sold and paid for unrequested memberships in the Nation Motor Club. Although the insureds signed the appropriate membership forms, none of them understood that they were purchasing something other than

      the insurance coverage requested, nor would they have purchased the auto club membership had they understood that it was not part of the requested coverage.

      
      

   2. "Insurance 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 the insurance company" Natelson v. Dept. of Ins., 454 So.2d 31, 32 (Fla. 1st DCA 1984). By virtue of his license as an insurance agent, Respondent has a fiduciary duty toward his clients. Clearly, the insureds in this matter placed their trust in Respondent when they requested insurance coverage and paid the premium quoted them. These insureds represent the consumer that the Florida Insurance Code is designed to protect. Respondent misrepresented (T. 25, 27-30, 37, 39, 41, 72-75, 76, 78, 85, 95-97, RB 15, 17, 18, 43, 71-72) the premium (one of the policy terms) by failing to adequately disclose that some of the funds paid were not for the insurance coverage requested. In addition, he misrepresented the benefits of the Motor Vehicle insurance policy by failing to apprise the insureds that these benefits were provided in connection with the auto club and not the insurance policy. Such misrepresentations and omissions by Respondent are violations of Sections 626.621(2) and (6) and 626.9541(1)(a)1., Florida Statutes.

      
      

   3. Agencies are afforded wide discretion in the interpretation of a statute which it administers and will not be overturned on appeal unless clearly erroneous. Natelson v. Dept. of Ins., 454 So.2d 31, 32 (Fla. 1st DCA 1984).

      
      

   4. The penalty recommended by a hearing officer may be augmented, within the penalties allowed by statute, when valid reasons appear on the record for the augmentation of the penalty. Dept. of Professional Regulation v. Bernal, 531 So.2d 967 (Fla. 1988); Florida Real Estate Commission v. Webb, 367 So.2d 201 (Fla. 1978)

The penalty shall be as follows:

That Ralph Scott Francis, a life and health insurance agent and a general lines insurance agent in this state, shall be placed on probation for a period of one (1) year, which term shall commence on the date of the rendition of this Order.

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 proceedings must be instituted by filing a petition or notice of appeal with the General Counsel, acting as the agency clerk, at 412 Larson Building, Tallahassee, Florida, and a copy of the same with the appropriate district court of appeal within thirty

(30) days of rendition of this Order.

DONE and ORDERED this 10 day of July , 1991.

Tom Gallagher Treasurer and Insurance Commissioner

COPIES FURNISHED TO: HONORABLE CLAUDE B. ARRINGTON

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

MICHAEL W. MOSKOWITZ, ESQUIRE

1500 Northwest 49th Street #401 Fort Lauderdale, FL 33309

GORDON THOMAS NICOL, ESQUIRE

Division of Legal Services

412 Larson Building Tallahassee, FL 32399-0300

Docket for Case No: 90-004320

Orders for Case No: 90-004320