STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
GREAT NORTHERN INSURED ANNUITY ) CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 92-4332RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
) FIRST UNION MORTGAGE CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 92-4333RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
) FLORIDA BANKERS ASSOCIATION, )
)
Petitioner, )
)
vs. ) CASE NO. 92-4334RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
) ASSOCIATION OF BANKS IN INSURANCE, ) INC., )
)
Petitioner, )
)
vs. ) CASE NO. 92-4335RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
)
FLORIDA ASSOCIATION OF LIFE UNDERWRITERS, | ) ) | ||
) | |||
Petitioner, | ) | ||
) | |||
vs. | ) CASE | NO. | 92-4336RP |
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
) JAMES MITCHELL & COMPANY and ) JMC INSURANCE SERVICES CORPORATION,)
)
Petitioners, )
)
vs. ) CASE NO. 92-4347RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
) FLORIDA CENTRAL CREDIT UNION, ) RAILROAD and INDUSTRIAL FEDERAL ) CREDIT UNION, GTE FEDERAL CREDIT ) UNION and CREDIT UNION SERVICES, ) INC. )
)
Petitioners, )
)
vs. ) CASE NO. 92-4351RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
) FLORIDA ASSOCIATION OF INSURANCE ) AGENTS, )
)
Petitioner, )
)
vs. ) CASE NO. 92-4352RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
) FLORIDA ASSOCIATION OF LIFE )
UNDERWRITERS, )
)
Petitioner, )
)
vs. ) CASE NO. 92-6735RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
)
BARNETT BANKS TRUST COMPANY, N.A., ) BARNETT BANKS INSURANCE, INC. AND ) BTI SERVICES, INC., )
)
Petitioners, )
)
vs. ) CASE NO. 92-6736RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
) FIRST NATIONWIDE BANK, A FEDERAL ) SAVINGS BANK, )
)
Petitioner, )
)
vs. ) CASE NO. 92-6737RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
) MARKETING ONE, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 92-6760RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
) LIBERTY SECURITIES CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 92-6762RP
)
DEPARTMENT OF INSURANCE AND )
TREASURER, )
)
Respondent. )
)
FINAL ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Mary Clark, held a formal hearing in the above- styled cases on December 14-22, 1992, in Tallahassee, Florida.
APPEARANCES
For Department David J. Busch, Esquire of Insurance: Department of Insurance
Office of Legal Affairs 645A Larson Building
Tallahassee, Florida 32399-0300
For Great Robert L. Shevin, Esquire
Northern Jeff C. Schneider, Esquire Insured Annuity Michael Basile, Esquire
& First Robert W. Turken, Esquire Nationwide Bank: 3300 Southeast Financial Center
200 S. Biscayne Blvd. Miami, Florida 33131-2385
For First Union Mortgage Corp.
and Florida Bankers Association,
California Federal J. Thomas Cardwell, Esquire Bank, and Financial Virginia B. Townes, Esquire Institutions Post Office Box 231 Insurance Association: Orlando, Florida 32802
For Association Chrys D. Lemon, Esquire
of Banks in James T. McIntyre, Esquire
Insurance: Madison Office Building, Suite 400 1155 15th Street Northwest Washington, D.C. 20005
For Florida J. Robert McClure, Jr., Esquire Association of F. Townsend Hawkes, Esquire Life Post Office Drawer 190
Underwriters: Tallahassee, Florida 32302
For James Mitchell & Robert S. Cohen, Esquire Co. and JMC Insurance Bruce Culpepper, Esquire Service Corp.: Post Office Box 10095
Tallahassee, Florida 32302-1877
For Florida Central Credit Union, Railroad & Industrial Federal
Credit Union, GTE F. Perry Odom, Esquire
Federal Credit Union, Melissa Fletcher Allaman, Esquire and Credit Union Post Office Drawer 1170
Services, Inc.: Tallahassee, Florida 32302
For Florida Association Kenneth R. Hart, Esquire of Insurance Agents: Steven P. Seymoe, Esquire
Ausley, McMullen, McGehee, Carothers & Proctor
Post Office Box 391 Tallahassee, Florida 32302
For Barnett Banks Trust Company, N.A.
Barnett Banks Robert J. Winicke, Esquire
Insurance, Inc. Post Office Box 4099
& BTI Services, Inc.: Jacksonville, Florida 32201
For First Brian J. Evans, Esquire Nationwide Bank: 135 Main Street, 9th Floor
San Francisco, California 94105
For Marketing One,
Inc., Liberty David A. Yon, Esquire
Securities Daniel C. Brown, Esquire
Corporation, & Post Office Box 1877
Compu-Life: Tallahassee, Florida 32302-1877
For Department Bill Reeves, Esquire
of Banking & Albert T. Gimbel, Esquire
Finance: Jeffrey Jones, Esquire Office of the Comptroller The Capital, Suite 1302
Tallahassee, Florida 32399-0350 STATEMENT OF THE ISSUES
The basic issue for determination is whether proposed Rules 4-223.001 -
.011, as promulgated June 26, 1992 and amended October 16, 1992, and thereafter, constitute an invalid exercise of delegated legislative authority.
PRELIMINARY STATEMENT
On June 26, 1992, the Department of Insurance published a new rule chapter implementing the provisions of section 626.988, Florida Statutes, and other statutes. Petitions challenging the rules were timely filed by Great Northern Insured Annuity Corporation (DOAH Case No. 92-4332RP), First Union Mortgage Corporation (DOAH Case No. 92-4333RP), Florida Bankers Association (DOAH Case No. 4334RP), Association of Banks in Insurance (DOAH Case No. 92-4335RP), Florida Association of Life Underwriters (DOAH Case No. 92-4336RP), James Mitchell & Company and JMC Insurance Services Corporation (DOAH Case No. 92- 4347RP), The Minnesota Mutual Life Insurance Company (DOAH Case No. 92-4350RP), Florida Central Credit Union and Credit Union Services, Inc. (DOAH Case No. 92- 4351RP) and Florida Association of Insurance Agents (DOAH Case No. 92-4352RP). The cases were consolidated by Order of the Hearing Officer.
On October 6, 1992, the Department published a Notice of Change which materially altered the rule chapter. Subsequently, Florida Association of Life Underwriters filed a new petition (DOAH Case No. 92-6735RP). Barnett Banks Trust Company, N.A., Barnett Banks Insurance, Inc., and BTI Services, Inc. (DOAH Case No. 92-6736RP), First Nationwide Bank (DOAH Case No. 92-6737RP), American Bankers Insurance Co. and American Bankers Life Assurance Co. (DOAH Case No. 92- 6738RP), Marketing One, Inc. (DOAH Case No. 92-6760RP), Florida League of Financial Institutions (DOAH Case No. 92-6761RP), and Liberty Securities Corporation, (DOAH Case No. 92-6762RP) filed petitions to challenge the rules.
In addition, California Federal Bank, Financial Institutions Insurance Association, Compulife, Inc., and the Florida Department of Banking and Finance were granted leave to intervene. All proceedings were consolidated.
The Department filed a Motion for Partial Summary Final Order that subsection (8) of section 626.988, F.S. had not been triggered. Great Northern Insured Annuity Corporation and James Mitchell and Company filed cross motions for Partial Summary Final Order that the subsection had been triggered and that state banks are thereby authorized to sell annuities in the state. The Department's motion was denied and the Petitioners' motions were granted, in an order entered on December 4, 1992.
The formal hearing was conducted from December 14 through December 22, 1992, with an opportunity for all parties to present exhibits and witnesses. Prior to and during the hearing, stipulations and changes in the rules resolved the issues raised in the petitions of Minnesota Mutual, (DOAH Case No. 92- 4350RP), American Bankers Insurance Co. and American Bankers Life Assurance Co. (DOAH Case No. 92-6738RP) and Florida League of Financial Institutions, Inc. (DOAH Case No. 92-6761). Those cases were voluntarily dismissed.
The transcript was filed on March 8, 1993. Proposed final orders were filed on April 7, 1993.
FINDINGS OF FACT
Parties
Respondent, Department of Insurance (DOI) and Intervenor, Department of Banking and Finance (DBF) are state agencies charged with the regulation of insurance and banking activities, respectively.
Great Northern Insured Annuity Corporation (GNA) is an insurance company and agency operating in Florida and elsewhere in space leased in financial institution lobbies, customer service areas and atriums. From its approximately eighty-four locations in Florida it markets annuities, securities and whole life insurance products.
Approximately one-third of its 1992 sales of $130 million was in annuities. GNA's principal profits in Florida are derived from its sale of annuities, which it directly underwrites and services.
First Nationwide Bank (FNB) leases space in its lobbies and other common areas to insurance agencies and companies, including Vista Financial Group, (Vista). In 1992 Vista sold approximately $13.5 million in annuities from the locations it leases from FNB.
First Union Mortgage Corporation (FUMC) is a financial institution with "grandfathered" insurance activities pursuant to section 626.988(5), F.S. It has also been granted a certificate of authority by DOI as a Third Party Administrator pursuant to section 626.88, F.S.
Florida Bankers Association (FBA) is a trade association of the banking industry in Florida. It represents its financial institution members.
The Association of Banks in Insurance Inc. (ABI) is a trade association of financial institutions and insurance companies.
The Florida Association of Life Underwriters (FALU) is a professional association of life, health and direct writer multi-line insurance agents with approximately 8,900 members.
James Mitchell and Co. and its subsidiary, JMC Insurance Services Corporation (JMC) are California corporations involved in marketing financial products, including annuities in Florida.
Florida Central Credit Union, Railroad and Industrial Federal Credit Union and GTE Federal Credit Union are state or federally chartered credit unions authorized to do business in Florida. Credit Union Services, Inc., a wholly owned subsidiary of GTE Federal Credit Union, sells insurance to credit union members.
The Florida Association of Insurance Agents (FAIA) is a trade association representing independent insurance agents in Florida.
Barnett Banks Trust Company, N.A. is a trustee for annuities issued by James Mitchell and Company. Barnett Banks Insurance, Inc. is a Florida licensed insurance company providing credit insurance of various types for credit extended by Barnett Banks throughout Florida. BTI Services, Inc. a subsidiary of Barnett, provides records administration services for insurers.
Marketing One, Inc., Liberty Securities Corporation and Compulife, Inc. market annuities to existing and prospective customers of financial institutions. Those marketing activities are conducted from lobbies, atriums or other central areas of the premises of the financial institutions.
The Financial Institutions Insurance Association is a California non- profit association of financial institutions and insurance companies with members in Florida who lease space to insurance agency tenants.
California Federal Bank is a federal savings bank operating branches in the State of Florida and leasing space to a company selling insurance in that space in bank branch offices.
The Statute
Although other sections of statutes are cited as "law implemented" in proposed Chapter 4-223, its undeniable focus is section 626.988, F.S., as described in the first rule of the proposed chapter:
4-223.001 Purpose. The purpose of these rules
is to implement the provisions of Section 626.988, Florida Statutes, and to ensure that customers of financial institutions conduct their business in an atmosphere free from direct or indirect coercion, unfair competition, and unfair or deceptive trade practices, and to implement those statutory provisions which prohibit insurance agents and solicitors who are directly or indirectly associated with, under contract with, or controlled by a financial institution from engaging in insurance agency activities as an employee agent, principal, or agent of a financial institution agency. These rules establish procedures and standards for insurance companies, agencies, agents and solicitors in their relationships and business arrangements with financial institutions.
Embodied in Florida's insurance code, a code described as more lengthy than the New Testament, Section 626.988 F.S. enacted in 1974, ". . . generally
prohibits banking institutions from engaging in insurance agency activities. . .
." Florida Association of Insurance Agents, Inc. v. Board of Governors, 591 F.2d 334 (U.S. 5th Cir. 1979).
The prohibition is accomplished indirectly by forbidding licensed insurance agents or solicitors from engaging in insurance agency activities under certain relationships with financial institutions. There are exceptions to the blanket prohibition, including an amendment in 1990 to permit state chartered banks to sell annuities in the event that federal law permits federal banks to sell annuities.
After almost twenty years of attempted enforcement, DOI has described section 626.988, F.S. as "a vague statute with imprecise standards". (Notice of proposed rule, Florida Administrative Weekly, June 26, 1992)
The Rules
DOI's experience with interpretation and enforcement of Section 626.988, F.S. commenced in earnest in the early 1980's, when insurance companies began to market annuities in the lobbies or public access areas of financial institutions. Many of these companies consulted with the department and obtained guidance as to the applicability of the law to their varied circumstances.
In 1985, American Pioneer Life Insurance Company, through its counsel, Edward Kutter, Esquire, inquired of Commissioner Gunter concerning the effect of the law on its operations. American Pioneer Life Insurance Company was a wholly owned subsidiary of American Pioneer Savings Bank.
Donald Dowdell, General Counsel of the department, responded by letter dated November 18, 1985. He analyzed the relationships among the insurer, the financial institution, and the insurance agents and determined that there was no significant probability of the financial institution exercising control over the agents:
. . . In view of the fact that American Pioneer Savings Bank is the ultimate parent of American Pioneer Life Insurance Company, the specific issue which must be resolved in responding to your inquiry is whether an independent agent appointed by American Pioneer Life is directly or indirectly associated with, or retained, controlled, or employed by American Pioneer Savings Bank. Absent such a relationship, Section 626.988 does not prevent American Pioneer Life and its agents from marketing insurance in this state.
. . . These corporate relationships in and of themselves do not create a prohibited relationship between American Pioneer Savings Bank and independent insurance agents appointed by
American Pioneer Life.
. . . It is recognized that as the corporate parent, American Pioneer Savings Bank may influence or control various corporate activities of its subsidiaries which would
not entail control of the solicitation, effectuation and servicing of coverage by insurance agents. If, in fact, American Pioneer Savings Bank does not directly or indirectly control the conduct of insurance activities by American Pioneer Life agents but, instead, the agents sell insurance free of influence from the financial institution, the prohibitions of the statute are inapplicable.
(GNA Exhibit No. 8) (emphasis added)
Thus, in 1985, the department limited the prohibitions of section 626.988, F.S. to the financial institution's control of, and authority over, an agent's insurance activities.
By 1986, other aspects of an association became a concern of the department. Letters responding to inquiries outlined requirements that leased space and insurance sales literature be physically or visually separated from the functions of the financial institution. (GNA Exhibits No. 10, 13 and 16)
As a result of the body of opinions being circulated in the form of incipient policy, the department proposed rules implementing section 626.988. These proposed rules were later withdrawn before adoption, but the department continued to use them as guidelines.
During this period, DOI received a handful of complaints, mostly from agents. Douglas Shropshire, director of Agent and Agency Services during the relevant period, testified that he could not recall a single consumer complaint with respect to financial institutions engaging in the distribution of insurance products. Gail Connell, identified by Mr. Shropshire as "the Department's person most intimately familiar with field investigation of .988 issues" (Tr. at 760), agreed. (FUMC Exhibit No. 35, at 184-85 See also. FUMC Exhibit No. 36 at 347-50, 353)
In 1991, in anticipation of the rule-making mandate of section 120.535, the department reviewed its guidelines. As a part of that review, representatives of the agents' associations, FALU, FAIA and others, were consulted as to the desirability of the rules.
In January, 1992, DOI published proposed rules that were substantially similar to the guidelines.
Donald Dowdell stated that the proposed rules published at that time represented the department's determination of a reasonable interpretation of the statute, adding, "[T]he line was drawn with the realization of what was happening in the real world today. We could have -- I think the statute prohibits an association, and as I indicated yesterday, if we had wanted to be Draconian about it and make life easier on ourselves, we could have attempted to prohibit any kind of association and see how that would have flown." (FUMC Exhibit No.
36 at 260-261)
The rules published in January of 1992 were withdrawn in order to permit the department to correct some perceived inadequacies in the economic impact statement.
The rules were presented at a workshop and were republished in June, 1992. The rules were virtually the same as those published in January. A public hearing was held July 12, 1992.
On October 6, 1992, DOI published a Notice of Change which materially altered Rules 4-223.003, .004, and .005. According to the Notice of Change, the change was in response to comments received at the public hearing held July 12. More specifically, the amendments were the result of the department's adoption of FALU's position in its petition challenging the June version of the rules. The amendments most significantly provided a definition of "associated" or "associate" and forbade insurance agents from occupying space virtually anywhere within the confines of a financial institution.
Mr. Shropshire drafted the amendment to Rules 4-223.003-.005. His source for the definition of "associate" was Webster's Dictionary.
Mr. Shropshire testified that the modified proposal resulted from "explosive changes" in the number of banks involved in insurance in this state (Tr. at 793) and information which had come to his knowledge which indicated a need for a more restrictive rule. The two sources of information regarding insurance activities in Florida identified by Mr. Shropshire were the report prepared by investigator Ernest Ulrich in support of the economic impact statement and an ongoing investigation and prosecution of JMC for its marketing of annuities. Both sources predate or were contemporaneous to the June publication of the rules.
Mr. Shropshire's reason for the October change was the anticipated difficulty DOI faced in enforcing its rules as originally published. He stated, "So it was getting plain to us that we were going to have to very vigorously and closely and labor-intensively enforce the rule, if it was passed as it was promulgated in June of '92." (tr. at 808)
As described by Mr. Shropshire and others, the agency was concerned that insurance activities in financial institutions were not being conducted behind partitions, or even behind planters or other visual separations; and that bank agents were making referrals, taking telephone messages, and setting appointments for insurance agents who covered multiple bank branches on a "circuit-rider" system. Banks leasing space to agents also commonly paid bank employees a bonus for making appointments and referrals of customers to the agents.
DOI determined that these leasing arrangements established a strong connection between the bank and the agent, in effect wrapping the insurance program in the bank's colors and presenting it as another bank product. This, to DOI, justified the previously characterized "Draconian" measures.
The banks' and other witnesses freely described the economic advantage to a financial institution of having insurance services available at the same location for its customers.
Additional amendments to the proposed rules were published in December 1992. Those amendments acknowledge or track the statutory exceptions to the section 626.988(2), F.S. prohibitions. The rules therefore do not apply to mortgage insurance business, credit unions, banks located in cities having a population of less than 5,000, and the sale of annuities when national banks have been authorized to sell such annuities.
During the course of the formal hearing, the agency proposed a final change to the rules at issue, clarifying that Chapter 4-223 does not apply to credit life and disability insurance and credit unemployment insurance. (American Banking Insurance Co. Exhibit No. 1)
The Economic Impact
Dr. Tim Lynch, Director for the Center for Economic Policy Analysis for Florida State University, conducted surveys, collected data and analyzed the economic impact of the June 1992 version of the proposed rules. He prepared the economic impact statement for DOI.
Dr. Lynch was consulted by the department about the October changes to the proposed rules and did additional analysis on the impact of the proposed changes. The economic impact statement prepared for the June publication was not amended, but Dr. Lynch's observations are found in his notes, or what he terms a "work in progress". He discussed those observations with department staff and considers the economic impact of prohibiting leases to be at least in the $ millions.
The agency did not republish an economic impact statement after the October changes, but plainly considered the impact of those changes as articulated by its consultant, Dr. Lynch.
Prohibiting the sale of annuities on bank premises would have a devastating effect on companies engaged in that activity. Banks, also, would be affected, as they recognize a substantial benefit of providing their customers the convenience of an in-house service.
Although annuities are defined in Florida law as "life insurance" (See Section 364.602(1), F.S.) they are generally considered investments for future security rather than a cushion against loss.
On March 20, 1990, the Office of the Comptroller of the Currency (OCC) issued a formal approval letter stating, among other things, that under controlling Federal banking law, annuities are primarily financial investment instruments that national banks are permitted and authorized to sell. (GNA Exhibit No. 41) A follow-up letter to J. Thomas Caldwell as representative of the Florida Bankers Association specifically concluded that federally chartered banks in Florida were authorized to sell annuities. (GNA Exhibit No. 42)
The OCC conclusion with regard to the authority of national banks was upheld in the Variable Annuity Life Insurance Co. v. Robert Clarke, et. al., (VALIC) on November 22, 1991, by the U.S. District Court for the Southern District of Texas, Civil Action No. H-91-1016, 786 F. Supp. 639. The case is pending on appeal before the U.S. Court of Appeals for the Fifth Circuit. (Variable Annuity Life Insurance Company v. Clarke, Case No. 92-2010) In the meantime, the OCC continues to issue opinion letters consistent with its earlier opinion. (See 5/10/93 letter filed as supplemental authority on 6/18/93)
National banks are presently selling annuities, and the impact of the October 1992 absolute prohibitions is nullified as to annuity products by the December 1992 amendments addressed in paragraph 30, above.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction in this proceeding pursuant to sections 120.54(4) and 120.57(1), F.S.
As acknowledged by Respondent, the standing of all parties has been established by stipulation. (Respondent's proposed final order, p. 12, paragraph 2.)
Subsection 120.54(4)(a), F.S. provides:
Any substantially affected person may seek an administrative determination of the invalidity of any proposed rule on the ground that the proposed rule is an invalid exercise of delegated legislative authority.
"Invalid exercise of delegated legislative authority" is defined in Section 120.52(8), F.S. as
...action which goes beyond the powers, functions, and duties delegated by the Legislature. A proposed or existing rule is an invalid exercise of delegated legislative
authority if any one or more of the following apply:
The agency has materially failed to follow the applicable rulemaking procedures set
forth in s. 120.54;
The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(7);
The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(7);
The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency; or
The rule is arbitrary or capricious.
Petitioners have the burden of demonstrating by a preponderance of the evidence that the proposed rules constitute an invalid exercise of delegated legislative authority. Adam Smith Enterprises, Inc. v. Florida Department of Environmental Regulation, 553 So.2d 1260 (Fla. 1st DCA 1989).
In Florida League of Cities v. Department of Environmental Regulation, 603 So.2d 1363, 1370 (Fla. 1st DCA 1992), the First District Court clarified and simplified the standard of review a hearing officer applies to determine if a proposed rule policing the public interest constitutes an invalid delegation of legislative authority. The rules must be sustained as long as they are
"...appropriate to the ends specified in the enabling legislation and that the requirements proposed therein [are] reasonably related to the purpose of the enabling legislation." Id.
Florida League discusses the evolution of common law and statutory criteria defining an invalid exercise of delegated legislative authority and
makes clear that these criteria, with the exception of the material failure to follow rulemaking procedures, are grounded in the rational basis test. The court, reviewing a proposed rule challenge generally based on an invalid exercise of delegated legislative authority, states:
Although the only explicitly stated ground under section 120.54(4)(a) for challenging a proposed rule is that the proposed rule constitutes an invalid exercise of delegated legislative authority, case law, beginning notably with Agrico Chemical Co. v. Department of Environmental Regulation, 365 So.2d 759, 763 (Fla. 1st DCA 1978), cert. denied sub nom., Askew v. Agrico Chemical Co., 376 So.2d
74 (Fla. 1979), has engrafted specific criteria that must be applied in determining whether
the rule or proposed rule complies with the enabling statute. The challenger, among other things, is required to show that the requirements of the rule are inappropriate
to the ends specified in the legislative act, or that the requirements proposed are not reasonably related to the purpose of the enabling legislation, or that the proposed rule is arbitrary and capricious.
[citations omitted] These criteria have since been codified by the 1987 legislature, amending section 120.52 by adding subsection
(8) thereto, defining the term "invalid exercise of delegated legislative authority."
Id. at 1367 (emphasis added). Thus, the court treats the amended section as simply a codification of existing common law reasonableness factors.
The court noted the similarity between these common law factors in rule challenges at the administrative trial level and equal protection challenges in which the rational basis standard is applicable, stating that the "same factors" are used in both in Florida. Id. at 1367-68. The court cites language relied upon in Agrico that
"[w]hen a commission promulgates a legislative regulation in the exercise of the police power designated to it by the legislature, it is subject to the same reasonableness and the basic facts justifying . . . the regulation
as a statute." Id. at 1368.
The test for statutes in equal protection challenges where the rational basis standard applies is that
"the constitutional requirement of equal protection does not inhibit the legislative power in securing the health, safety, morals, and general welfare of the public, and a classification enacted by the legislature for such purposes will not be annulled by the courts unless it is wholly without a
reasonable or practical basis, and therefore purely arbitrary." Id. (emphasis added).
The court further analogized these constitutional principles to the long-applied rule challenge principles in Florida. The court states:
Indeed, the principle applied in rule challenge proceedings that an agency's interpretation
of a statute need not be the sole possible interpretation, or even the most desirable one but need only be within the range of possible interpretations, [citations omitted] is merely a logical corollary of the rule often applied to determine the constitutional validity of the statute challenged on the ground that it offends the equal protection clause: that a statutory classification will not be invalidated under the rational basis test simply because it is not the best possible method, or the least burdensome for achieving the legislative purpose, or because there are other means available to obtain
legitimate objectives. Id. at 1369 (emphasis added)
This most recent description of the appropriate standard in Florida League controls this proposed rule challenge proceeding. The legislature has determined that regulation of the insurance industry is necessary for the protection of the public welfare, and has granted DOI the authority to promulgate rules necessary to effectuate the statutes. Specifically, the department's authority is authorized in Section 624.308, Florida Statutes:
The department may adopt reasonable
rules necessary to effect any of the statutory duties of the department. Such rules shall not extend, modify, or conflict with any law of this state or the reasonable implications of such laws.
The court in Department of Insurance v. Insurance Services Office, 434 So.2d 908, 910 (Fla. 1st DCA 1983), rev. denied, 444 So.2d 416 (Fla. 1984), classified this authority:
Section 624.308(1) . . . is simply a general grant of authority to the Department to adopt reasonable rules necessary for the implemen- tation of the Insurance Code with the further proviso that such rules as are promulgated
by the Department may not extend, modify, or conflict with any law of this state or reasonable implications thereof. . . .
[T]his is nothing more than a statement of
what has always been the common law of the state. (Emphasis added.)
The legislature did not create a special standard for DOI rules and under Florida League, the reasonable basis standard would apply. This "highly deferential reasonable basis standard" requires the challenger to prove that the
proposed rules are inappropriate to the ends specified in the enabling legislation and that the requirements therein are not reasonably related to the purpose of the enabling legislation. See Department of Corrections v. Hargrove, 615 So.2d 199, 201 (Fla. 1st DCA 1993) (reversing the invalidation of a proposed rule when the rule was reasonably related to the purpose of statute, and it was inappropriate for court or hearing officer to second-guess the agency).
Under the above-described standard some of the proposed rules are sustained; others must fail.
The legislature has made a public policy determination that separation of insurance activities and financial institutions is necessary for the protection of the public welfare. Section 629.988, Florida Statutes, reflects this intent. Section 626.988(2) provides:
No insurance agent or solicitor licensed by the Department of Insurance under the provisions of this chapter who is associated with, under contract with, retained by,
owned or controlled by, to any degree, directly or indirectly, or employed by, a financial institution shall engage in insurance agency activities as an employee, officer, director, agent, of associate of a financial institution agency. (Emphasis added.)
This statute was recently unsuccessfully challenged on vagueness, equal protection, due process, unlawful delegation of legislative authority, and federal preemption grounds in Glendale Federal Savings & Loan Association v. Department of Insurance, 587 So.2d 534 (Fla. 1st DCA 1991), rev. denied, 599 So.2d 656 (Fla. 1992). In upholding the constitutionality of the statute, the court in Glendale identified the "legitimate state goals" behind the statute as being
"[c]oncerns regarding financial institutions' entry into insurance activities, including the prevention of coercion, unfair trade practices, and undue concentration of resources." Id. at
536 n. 1 (emphasis added).
These are the goals that DOI seeks to achieve through its proposed rules.
Section 626.988, F.S., is not the only relevant law; other statutes form a crucial basis for the rules as well. The other statutory provisions that serve as a basis are summarized as follows:
Section 624.425, Florida Statutes, imposes certain resident agent and countersignature requirements for property, casualty, and surety insurance.
Section 624.428, Florida Statutes, provides that no life insurer may issue or deliver life and health insurance in this state unless the application is taken through and delivered by a licensed agent of Florida,
but that this requirement does not apply to endorsements that do not involve a change in premium or payment of a commission.
Section 626.753, Florida Statutes, provides requirements for the sharing of commissions between licensed insurance agents and specifically prohibits the sharing of commissions between licensed agents and
any corporation unless the corporation is an insurance agency.
Section 626.794, Florida Statutes, generally prohibits the sharing of commissions "directly or indirectly" between licensed life agents
or life insurers and those who are not licensed agents.
Section 626.838, Florida Statutes, imposes restrictions on commission sharing by health insurance agents.
Section 626.9521, Florida Statutes, prohibits unfair methods of competition or deceptive acts or practices and references the penalties for both willful and non-willful violations.
Section 626.9541, Florida Statutes, defines unfair methods of competition and unfair or deceptive acts or practices. Some of the unfair methods specifically included are misrepresentations and false advertising of insurance policies; false information and advertising in general (including knowingly directly or indirectly placing such infor- mation before the public); and boycotting, coercion, and intimidation that result in an unreasonable restraint or monopoly in the business of insurance.
Section 626.9551, Florida Statutes, entitled "Favored agent or insurer; coercion of debtors" states that no person may be required to negotiate an insurance policy through a particular insurance agent or broker as a condition to receiving a loan or the extension
of credit. Also, the lender may not unreasonably disapprove an insurance policy, require a separate charge for the handling of substitution of an insurance policy, or disclose or use information of an insurance requirement for
real property to the detriment of the borrow and to the advantage of the lender.
Section 627.5515, Florida Statutes, establishes certain requirements for group life insurance policies issued or delivered outside the state, with certain exceptions.
Section 627.6515, Florida Statutes, establishes certain requirements for group, blanket, and franchise health insurance policies issued or delivered outside the state.
Rules' Purpose
The above statutory provisions, in perhaps a lesser degree than section 626.988, F.S., still relate to the prevention of coercion, unfair trade practices, and the undue concentration of resources. As cited in paragraph No.
15 above, rule 4-223.001 states the purpose of the proposed rules.
These are the goals identified by the court in Glendale as legitimate state goals underlying Section 626.988. Since these same goals form the common theme of other statutory provisions implemented, rule 4-223.001 is rationally related to the enabling legislation.
Rules' Scope
Proposed rule 4-223.002 provides the scope of the rules, establishing procedures and standards for "all insurance companies, agencies, agents and solicitors licensed or authorized to do business in Florida or doing business in Florida" that have any relationships with any financial institutions regarding the providing, offering, selling, marketing, or making available of insurance to, or otherwise affecting, the customers of the financial institution.
The scope necessarily and reasonably encompasses the regulation of agents, solicitors, insurance companies, and insurance agencies in order for the agency to effectively implement the purposes of the enabling legislation. Section 626.988, F.S. specifically mentions "agents" and "solicitors". However, section 626.988 regulates the relationship between financial institutions and the agents and solicitors. This prohibited relationship encompasses more than solicitors and agents, because it focuses on financial institutions' entry into insurance activities. As stated in Glendale, the legislature was guarding against the dangers of financial institutions becoming involved in the business of insurance: the prevention of coercion, unfair trade practices, and undue concentration of resources.
Limiting the scope to agents and solicitors ignores the nature and definition of insurance agencies; if insurance agents are regulated by the rule, the agencies will be regulated as well. Section 626.094, Florida Statutes, defines an insurance agency as a
"business location at which an individual, firm, partnership, corporation, association, or other entity . . . engages in any activity
which by law may be performed only by a licensed insurance agent or solicitor."
Similarly, insurance companies operate through agents and solicitors, so they too are affected by statutory regulation of the agents and solicitors. Although section 626.988 may be one of the principal statutes implemented, it is
only part of the scheme of statutes, as summarized above, prohibiting coercion, unfair trade practices, and undue concentration of resources potentially caused by the financial institutions' entry into insurance activities. Section 626.9521 prohibits "any person" from engaging in deceptive practices.
Therefore, section 626.9521 and the other provisions provide a broad base for the regulation of all the entities listed in the rules.
As stated in finding of fact No. 30, above, the scope of the rules was amended to clarify statutory exemptions. This language was added to proposed rule 4-223.002 after the December 4, 1992 order on motions for summary judgement:
. . .
Notwithstanding the foregoing, Chapter 4-223 shall not apply to mortgage insurance business contemplated, expressly or by reasonable implication, by Chapter 627, Part XXI, Florida Statutes. To the extent required by Section 626.988(8), Florida Statutes Rule Chapter
4-223 applies to the sale of annuities by agents in association with financial institutions, only if no national bank has been authorized to sell one or more types of annuities other than as authorized by
12 U.S.C. 92, or having been authorized to sell such annuities, such authorization is revoked, repealed, rescinded, or otherwise terminated.
This language strikes at the heart of the issues raised by the various parties involved in the sale of annuities. Based on the prevailing authority and evidence presented by those parties, this language effectively removes the sale of annuities from the scope of the rules and therefore from the rules' proscriptions.
Definitions
Proposed Rule 4-223.003 contains the definitions for terms contained in the rules. The rule includes this significant definition of "associated" and "associate":
For purposes of this entire rule chapter and enforcement of Section 626.988, Florida Statutes, the Department interprets the terms "associated" and "associate" as those terms are used in Section 626.988, as meaning: united in a relationship, or connected or joined together, or connected in mind or imagination. Therefore, instances of prohibited associated include, but are not limited to, situations wherein an agent or
solicitor, themselves or through their employer:
is in law or fact related or connected to the Financial Institution, as by formal or informal arrangement, contract, etc; or
is or may reasonably be expected to be connected with the Financial Institution in
the mind or imagination of the general public using the Financial Institution's facilities, as a result of the agent or solicitor's presence or activities on Financial Institution premises, or other conduct or activities by
the agent or solicitor or done with their consent. (Emphasis added.)
Aside from idiosyncratic grammer and the ambiguous use of an open- ended "etc.", this definition offends any rational interpretation of section 626.988, F.S. and is thoroughly useless as a standard for the agency's enforcement of that and other relevant statutes. It is vague and incomprehensible, like beauty, an "association" lies in the eyes (or mind) of the beholder. The definition relegates to the mind or imagination of the general public the determination of what relationships are prohibited. This is a fragile basis for enforcement, as should be apparent to the agency by the fact that so few complaints have come from the general public. That such definition is unenforceable is obvious from the agency's pained attempts to craft its earlier guidelines and from its intelligent and highly regarded attorneys' inability to argiculate how it should be applied. (see generally, testimony of Dowdell and Shropshire) Proposed rule 4-223.003 violates section 120.52(8)(d), F.S.
The remainder of proposed rule 4-223.003, including that portion added in the December amendments simply reflects and refers to statutory definitions, and is appropriate.
Catalogue of Prohibited Associations
In contrast with the cosmic scope of the definition of "associate", the proscriptions of proposed rules 4-223.004 and .005 are specific, direct and unambiguous:
4-223.004 Prohibited Arrangements. No insur- ance agent or solicitor while in any Financial Institution atrium, Financial Institution office, Financial Institution lobby, Financial Institution foyer, Financial Institution board room, Financial Institution conference room, Financial Institution meeting room, Financial Institution customer service area, or other work area routinely utilized by Financial Institution staff and which is part of a Financial Institution's premises, or any location access to which will routinely have the agent's or solicitor's client passing through any of the preceding areas (except where such passage is to or from a common elevator lobby as in and for the purpose stated in example 1 in rule 4-223.005 shall:
Rent, lease, or otherwise occupy space for transacting insurance, or
Meet with any persons or persons and in such meetings advise, counsel, provide information about, take applications, or assist in executing applications, regarding
any aspect of insurance or any insurance produce, [sic] or
Transact insurance business, or
Advertise.
Proposed rule 4-223.005 contains allowable but restricted arrangements. Essentially, a financial institution may rent the upper floors to insurance agency and may be next door to an insurance agency as long as the two do not connect. If an insurance agency does rent space from a financial institution, the lease must be fixed and cannot be based on a percentage of income or otherwise tied to the transaction of insurance. There can be no common employees. The lease and all signs and sales literature must reflect the independence of the financial institution and agency according to specific requirements in the rule. In addition, the financial institution staff shall not answer the phone for or make appointments for the tenant agent. The financial institution may not perform administrative services or other functions customarily performed by an insurance agency in dealing with its customers. A lease in violation of this rule is deemed unlawful commission sharing and/or an unlawful association. The tenant insurance agency may sell insurance to the financial institution, however, in an arms-length transaction.
These provisions are a reasonable interpretation of the prohibitions of 626.988(2), F.S., which literally read, addresses insurance agency activities by an agent or solicitor acting as an employee, officer, director, agent, or associate of a financial institution agency. Section 626.988(2), F.S. does not, as suggested by some testimony in this proceeding, forbid any and all associations between an agent and financial institution, but rather only those associations which promote or further the insurance agency activity. It does not, for example, forbid an agent from maintaining an account in a bank or selling a policy to a bank. But neither does it merely forbid those relationships comprising control by the financial institution.
Courts other than Glendale have addressed challenges to the statutory prohibitions of "associations" in myriad other contexts and have devised a reasonable meaning of the term:
"In the absence of a statutory definition of 'association' the cases have adopted a common sense reading of the term that focuses on the business of the enterprise and the relationship of the defendant to that business."
United States v. Yonan, 800 F 2nd 164 (7th Cir. 1986) cert. den., 479 US 1055 (1987), (construing "associated with" under federal criminal RICO statutes).
Factual predicate for these rules is found in the enforcement experience of the agency and the Petitioners' candid testimony that the current common practices described in findings of fact No. 28 and No. 29, above, significantly benefit both the agent and host bank; the relationship is symbiotic.
In the existence of a factual predicate, the rules at issue here are distinguished from the rules found unconstitutional in the supplemental authority supplied by Petitioners, Edenfield v. Fane, 113 S.Ct. 1792 (1993).
The U.S. Supreme Court in Edenfield struck as violating free speech guarantees of the First and Fourteenth Amendments Florida's Board of Accountancy rule prohibiting direct, in-person, uninvited solicitation by CPAs.
The rules here, as in Edenfield, affect commercial speech, which speech enjoys a measure of constitutional protection.
"... laws [and rules] restricting commercial speech, unlike laws burdening other forms of protected expression, need only be tailored in a reasonable manner to serve a substantial state interest in order to survive First Amendment scrutiny." Id., at 4432
(citations omitted)
The substantial state interest was described and upheld in Glendale, supra. The agency has demonstrated that the rules here further that substantial state interest. The agency's catalogue of activities proscribed by Section 626.988(2), F.S., is within its universe of available choices.
Petitioners argue that the above proposed rules impair existing contracts in violation of Article I, Section 10, Florida Constitution. This issue may be properly raised in the context of an enforcement action but these rules do not, on their face, impair existing contracts. A hypothetical determination that future enforcement might be unconstitutional is beyond the scope of this proceeding. GTE Florida, Inc. v. Dept. of Transportation, 12 FALR 1515, 1527-28 (DOAH order entered 3/8/90).
With a few exceptions, addressed below, the remainder of the proposed rules, 4-223.006 through 4-223.011, are unchallenged except through the broad challenge to the agency's interpretation of "associate" or "associated". Nothing presented here justifies a wholesale invalidation of the entire rule chapter when that definition falls.
Rules Affecting "Grandfathered" and Third Party Administrator Status
Specific challenges to portions of the remaining rules are made by FUMC, the petitioner with "grandfathered" and Third Party Administrator status. (see finding of fact No. 4, above)
Section 626.988(5), F.S. allows financial institution agencies in operation on April 2, 1974 to continue to engage in insurance agency activities so long as they continue to function as constituted on April 2, 1974. The exemption is absolute:
Notwithstanding any provision of this section, the Department of Insurance shall permit the continued operation under the same ownership and control of all financial institution agencies which were in existence and engaged in insurance agency activities as of April 2, 1974.... (emphasis added)
DOI attempts to prohibit those grandfathered institutions from engaging in activities not prohibited by 626.988, F.S. Rule 4-223.006(2)(d) provides in pertinent part:
Only the licensed insurance agent shall solicit insurance; a financial institution which is not otherwise engaged in insurance agency activities through an affiliated agency pursuant to Section 626.988(5), Florida Statutes, may endorse an insurance product or an insurance company but shall not under any circumstances solicit insurance.
Endorsement is not an activity prohibited to any financial institution pursuant to 626.988, or the rule would be an invalid exercise of delegated legislative authority permitting activity prohibited by the statute. Since section 626.988 does not prohibit endorsement by a financial institution, no authority exists for prohibiting a grandfathered financial institution (exempt from the statute) from exercising those same rights and privileges.
Similarly, rule 4-223.006(2)(h)5.(i) imposes a restriction on grandfathered institutions not imposed on financial institutions as a whole by the statute:
(i) Financial institutions which are not otherwise engaged in insurance agency activities through an affiliated agency pursuant to Section 626.988(5), Florida Statutes, may mail out advertising literature for the agent and insurance company in connection with insurance coverages,... (emphasis added)
Here again, that which is not prohibited by statute is prohibited to grandfathered institutions, without statutory justification.
DOI has also embellished the conditions for maintaining grandfathered status. Proposed rule 4-223.011(4)(a)3. provides:
If the parent financial institution was not endorsing the insurance products solicited by the agency on April 2, 1974, or was not participating through endorsement or other-
wise in the conduct of such solicitation, the financial institution is precluded from engaging in such activities.
Section 626.988(5), after granting the grandfather exemption, further directs how the exemption shall be administered by the Department:
...To make possible such continuation, the Department of Insurance may license agents and solicitors who are otherwise qualified, as successors to those agents and solicitors who are exempt from the provisions of this section and their successors, for so long
as the specified financial institution agency continues to function as constituted on
April 2, 1974.
DOI has included operations of the parent financial institution within its area of inquiry for determining whether the constitution of the financial institution agency has changed since April 2, 1974.
"Constitute" as used in section 626.988(5), F.S. refers to the manner in which composite parts of the grandfathered financial institution were organized, owned, or interrelated as of April 2, 1974. DOI recognizes this in rule 4-223.011(3) and (4)(a)(1) and (2), which restrict changes in ownership, limit the grandfathered institution to the same number of agents with which the financial institution agency was constituted as of April 2, 1974, and require that the original or successor agents hold the exact type (kind) and class (line) of licenses to which the grandfathered agents had been appointed. In this context, the limitation of the activities of a related financial institution in 4-223.011(4)(a)3. stands out as a legal non sequitur. The rule enlarges its law implemented.
"As constituted" means that the organization and ownership of the grandfathered entity remain the same. Grandfather rights are not transferable to another organization. The grandfathered licensee or successor, however, cannot be restricted from exercising the same rights as any other person holding the same type of license. What is grandfathered is the right to hold the license in a financial institution agency that is functionally organized in substantially the same manner as it was at the time the statute was enacted.
The statute does not give DOI the right to limit the scope of the license by restricting the type of business that can be performed by the agent.
This is particularly significant in light of a definition added in the October, 1992, Notice of Change. Rule 4-223.003(3) provides this definition of "Financial Institution":
As used in this rule chapter, the phrases "Financial Institution" and "Financial Institution staff" include all entities and their staff which are members of the same holding company group as the Financial Institution is a member of [sic], or are otherwise affiliated with the Financial Institution by common ownership or control.
By defining as staff of that agency all employees of any member of a bank holding company which holds a grandfathered financial institution agency, DOI extends the prohibitions against mailing advertisements and against endorsement which DOI has imposed on grandfathered financial institution agencies (albeit without legislative authority to do so) to nongrandfathered financial institutions which DOI otherwise recognizes are not prohibited by statute from endorsing insurance products.
100. Rule 4-223.011(4)(c) provides:
A financial institution or financial institu- tion agency is prohibited from acting as a Third Party Administrator unless a financial institution agency was engaged in such activities as of April 2, 1974.
DOI cites section 626.988 and section 626.88, F.S. as statutory authority. Neither prohibits financial institutions or financial institution
agencies from acting as Third Party Administrators. DOI has expanded and modified both statutes to prohibit an activity nowhere proscribed by statute. Section 626.88 defines "administrator", in pertinent part, as:
For the purposes of this part, an administrator is any person who directly or indirectly solicits or effects coverage of, collects charges or premiums from, or adjusts or settles claims on residents of this state in connection with authorized commercial
self-insurance funds or with insure or
self-insured programs which provide life of health insurance coverage or coverage of any other expenses described in s. 624.33(1), other than any of the following persons:
* * *
an insurance company which is either authorized to transact insurance in this state or is acting as an insurer with respect to a policy lawfully issued and delivered
by such company in and pursuant to the laws of a state in which the insurer was authorized to transact an insurance business.
* * *
(e) An insurance agent licensed in this
state whose activities are limited exclusively to the sale of insurance.
* * *
(emphasis added)
Section 626.988 prohibits insurance agents or solicitors associated with financial institutions from engaging in insurance activities. It does not prohibit administrators from engaging in insurance activities as an associate of financial institution. Moreover, the definition of administrator, set forth above, distinguishes an "administrator" from an agent or insurance company.
Nothing in the Third Party Administrator statute (Chapter 626, Part VII, Florida Statutes) precludes a financial institution from being certified as a Third-Party Administrator. Nothing in section 626.988 addresses Third-Party Administrators. Notably, section 626.988 was enacted in 1974. Chapter 626, Part VII, was enacted in 1984. The legislature was aware of the purported dangers of affiliation and could have excluded financial institutions from the field of third-party administrators had it wished to do so. Instead the legislature apparently decided that a financial institution's operation as a Third-Party Administrator posed no threat of coercion, unfair competition or undue concentration of economic resources.
Single Subject Requirement
Section 120.54(8), F.S., requires that "...[e]ach rule adopted shall contain only one subject...".
In Humhosco, Inc. v. Department of Health & Rehabilitative Services,
476 So. 2d 258 (Fla. 1st DCA 1985), the court affirmed a hearing officer's determination that a rule did not violate section 120.54(8), Florida Statutes, the single subject requirement. The challenger asserted that the rule containing the general definitions also impermissibly contained a section that
clarified the relationship between the proposed rule and adopted rules. Upholding the hearing officer's determination of validity, the court stated:
The hearing officer agreed. . . that the addition of [the section] did not violate the single-subject rule since it logically falls within the general definitions and provisions set forth in the [rule]. We likewise conclude that [the section] is facially consistent with the subject matter and purpose of [the rule].
Id. at 262 (emphasis added)
Petitioners' challenge in this proceeding must also fail. The subject matter of the rules at issue here logically relates to the purpose of establishing procedures and standards for insurance companies, agencies, agents and solicitors in their relationships and business arrangements with financial institutions, as stated in proposed rule 4-223.001.
The Economic Impact Statement (EIS)
Section 120.54(2), F.S. (1992) provides in pertinent part:
* * *
(b) Prior to the adoption, amendment, or repeal of any rule not described in subsection (9), an agency may provide information on its proposed action by preparing an economic impact statement, and must prepare an economic impact statement if:
The agency determines that the proposed action would result in a substantial increase in costs or prices paid by consumers, individual industries, or state or local government agencies, or would result in significant adverse effects on competition, employment, investment, productivity, or innovation, and alternative approaches to the regulatory objective exist and are not precluded by law; or
Within 14 days after the date of publi- cation of the notice provided pursuant to paragraph (1)(c) or, if no notice of rule development is provided, within 21 days after the notice required by paragraphs (1)(a)
and (b), a written request for preparation of an economic impact statement is filed with the appropriate agency by the Governor, a body corporate and politic, at least 100 people signing a request, or an organization representing at least 100 persons, or any
domestic nonprofit corporation or association.
An agency's determination regarding preparation of an economic impact statement pursuant to subparagraph (2)(b)1, shall not be subject to challenge.
* * *
(d) No rule shall be declared invalid based on a challenge to the economic impact state- ment for the rule unless the issue is raised in an administrative proceeding within 1 year of the effective date of the rule to which the statement applies. No person shall have standing to challenge an agency rule, based upon an economic impact statement or lack thereof, unless that person requested preparation of an economic impact statement under subparagraph (2)(b)2, and provided the agency with information sufficient to make
the agency aware of specific concerns regarding the economic impact of the proposed rule, by either participation in a public workshop, public hearing, or by submission of written comments, regarding the rule. The grounds for invalidation of a rule based upon a challenge to the economic impact statement for the rule are limited to an agency's failure to adhere
to the procedure for preparation of an economic impact statement provided by this section, or an agency's failure to consider information submitted to the agency regarding specific concerns about the economic impact of a proposed rule when such failure substantially impairs the fairness of the rulemaking proceeding.
Effective July 1, 1992, an agency is no longer required to prepare an EIS for every proposed rule (Chapter 92-166, subsection 4, 12, Laws of Florida).
The agency prepared an appropriate detailed EIS when the June 1992 version of the rules was published. For the October version it did not consider that the requirements of Section 120.54(2)(b)1. F.S. were met. In addition, no EIS was requested for the October 1992 version.
In fact, the agency's consultant, Dr. Lynch, continued to compile information on the affect of the October amendments and discussed that information with agency staff. The fact that his findings are in a "work in progress" rather than a final formal EIS does not detract from the agency's proper consideration of the impact of the amendments.
The agency has not violated section 120.52(8)(a), F.S. or "materially failed to follow the applicable rulemaking procedures set forth in Section 120.54".
ORDER
Based on the foregoing, the following proposed rules are determined to be invalid: 4-223.003(2); 4-223.006(2)(d); 4-223.006(2)(h)5.(i); 4- 223.011(4)(a)3.; and 4-223.011(4)(c).
DONE AND ORDERED this 30th day of July, 1993, in Tallahassee, Florida.
MARY CLARK
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 30th day of July, 1993.
APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 92-4332RP
Pursuant to Section 120.59(2), F.S., the following constitute specific rulings on the findings of fact proposed by the parties:
Findings of Fact Proposed by GNA and FNB 1.-3. Adopted in paragraph 2.
4.-8. Rejected as irrelevant, immaterial or unnecessary. 9.-10. Adopted in paragraph 2.
11. Adopted in substance in paragraph 35.
12.-14. Rejected as irrelevant, immaterial or unnecessary. 15.-19. Adopted in summary in paragraph 34.
20. Adopted in paragraph 3.
21.-26. Rejected as irrelevant, immaterial or unnecessary.
27. Adopted in paragraph 3.
28.-31. Adopted in summary in paragraph 34.
32.-41. Adopted in part in paragraphs 19.-21, otherwise rejected as irrelevant, immaterial or unnecessary.
Adopted in paragraph 27.
Adopted in paragraph 23.
44.-45. Rejected as irrelevant, immaterial or unnecessary.
46. Adopted in paragraph 23.
47.-70. Rejected as irrelevant, immaterial or unnecessary.
71.-84. Rejected as statement of testimony or argument, rather than findings of fact.
85.-94. Rejected as irrelevant, immaterial or unnecessary. 95.-96. Adopted by implication in paragraph 24.
97.-98. Rejected as irrelevant, immaterial or unnecessary. 99.-104. Adopted in paragraphs 35.-37.
105.-107. Rejected as irrelevant, immaterial or unnecessary.
Findings of Fact Proposed by FUMC and FBA
1. Adopted in paragraph 16 and conclusions of law. 2.-3. Adopted in paragraph 18.
Adopted in paragraph 19.
Adopted in paragraph 20.
Adopted in paragraph 22.
Adopted in paragraph 23.
Adopted in paragraph 24.
9.-16. Adopted in paragraph 25.
12. Adopted in paragraph 26. 11.(misnumbered) Adopted in paragraph 26. 13.-14. Adopted in paragraph 27.
15.-16. Rejected as irrelevant, immaterial or unnecessary.
17. Adopted in paragraph 28.
18.-19. Rejected as irrelevant, immaterial or unnecessary.
Adopted in paragraph 3.
Adopted in paragraph 35. 22.-23. Adopted in paragraph 4.
24.-37. Rejected as irrelevant, immaterial or unnecessary.
38. Rejected as contrary to the weight of evidence. Some evidence to support the premises was addressed. Moreover, the basic premises are found in the statutes implemented.
Findings of Fact Proposed by FALU
Adopted in preliminary statement.
Adopted in conclusions of law.
Adopted in paragraphs 28. and 29.
4.-5. Adopted in summary in paragraphs 28. and 29.
6.-10. Rejected as irrelevant, immaterial or unnecessary.
Findings of Fact Proposed by JMC
1.-2. Adopted in paragraph 24.
Rejected as irrelevant, immaterial or unnecessary.
Adopted in paragraph 23.
Adopted in paragraph 27.
Adopted in conclusions of law.
7.-8. Rejected as irrelevant, immaterial or unnecessary. The practical effect after the December amendments is that banks may distribute certain insurance products.
9. Adopted in paragraph 27.
10.-18. Rejected as irrelevant, immaterial or unnecessary or addressed in conclusions of law.
19. Adopted in paragraph 1.
20.-66. Rejected as irrelevant, immaterial or unnecessary.
Findings of Fact Proposed by FAIA
1. Adopted in paragraph 25.
2.-4. Adopted in paragraph 26.
Adopted in paragraph 30.
Adopted in paragraph 10.
7.-8. Addressed in conclusions of law. 9.-12. Addressed in conclusions of law.
13. Rejected as argument or contrary to evidence. 4-223.002 does reference sale of annuities.
14.-16. Rejected as argument.
17. Addressed in conclusions of law.
18.-23. Rejected as argument or addressed in conclusions of law.
Adopted in paragraph 27.
Rejected as argument.
Adopted in part in paragraphs 20. and 21.
Rejected as irrelevant, immaterial or unnecessary.
Addressed in conclusions of law.
Rejected as contrary to the facts and law. 30.-32. Addressed in conclusions of law.
33.-35. Adopted generally in paragraphs 18.-21.
36. Adopted in paragraph 28.
37.-42. Adopted in paragraphs 28. and 29.
43.-58. Rejected as irrelevant, immaterial or unnecessary. 59.-85. Addressed in conclusions of law.
Adopted in paragraphs 24. and 31.
Adopted in paragraph 31.
Adopted in paragraph 26.
89.-91. Addressed in conclusions of law.
Findings of Fact Proposed by ABI
Adopted in paragraph 6.
Addressed in conclusions of law.
Rejected as unsupported by the evidence.
4.-12. Rejected as irrelevant, immaterial or unnecessary.
Adopted in paragraph 26.
Adopted in paragraph 27.
15.-22. Addressed in conclusions of law or rejected as irrelevant, immaterial or unnecessary.
Adopted in paragraph 28.
Rejected as irrelevant, immaterial or unnecessary.
Findings of Fact Proposed by Barnett
Rejected as irrelevant, immaterial or unnecessary.
Adopted in paragraph 16. and addressed in conclusions of law.
Adopted in paragraph 23.
Adopted generally in paragraphs 18.-22.
Adopted in paragraph 16.
Adopted in paragraphs 35. and 36.
Adopted in paragraph 24.
Adopted in paragraph 25.
Adopted in paragraphs 26. and 27.
Adopted in substance in paragraphs 25. and 26.
Addressed in preliminary statement.
Adopted in paragraph 30.
Addressed in conclusions of law.
Adopted in paragraph 23.
15.-18. Rejected as argument or irrelevant, immaterial or unnecessary. Findings of Fact Proposed by Marketing One, Liberty Securities and Compulife
1.-2. Adopted in summary in paragraph 12.
3.-10. Rejected as irrelevant, immaterial or unnecessary. 11.-12. Adopted in summary in paragraph 34.
13.-14. Adopted in summary in paragraph 23.
Adopted in summary in paragraph 27.
16.-18. Rejected as irrelevant, immaterial or unnecessary.
Adopted in paragraph 18.
Rejected as argument.
Adopted in paragraphs 35. and 36.
22.-43. Rejected as irrelevant, immaterial or unnecessary.
Findings of Fact Proposed by DBF
1.-4. Rejected as irrelevant, immaterial or unnecessary. 5.-6. Addressed in conclusions of law.
7. Adopted in summary in paragraph 34.
8.-9. Rejected as irrelevant, immaterial or unnecessary. 10.-11. Addressed in conclusions of law.
Adopted in paragraph 35.
Rejected as irrelevant, immaterial or unnecessary.
Adopted in paragraph 36.
Adopted in paragraph 37.
16.-20. Rejected as irrelevant, immaterial or unnecessary.
Findings of Fact Proposed by DOI
1.-2. Adopted in substance in paragraphs 18.-21.
Rejected as irrelevant, immaterial or unnecessary.
Adopted in paragraph 24.
5.-6. Adopted in paragraph 25.
7. Adopted in paragraph 31.
8.-9. Adopted in paragraph 26.
Addressed in preliminary statement.
Adopted in paragraph 26.
Addressed in preliminary statement.
Adopted in paragraph 25.
Adopted in substance in paragraphs 27. and 28. 15.-16. Adopted in substance in paragraph 26.
17. Addressed in preliminary statement.
18.-19. Rejected as irrelevant, immaterial or unnecessary.
20. Adopted in paragraph 30.
21.-22. Adopted in paragraph 31.
23.-24. Adopted in paragraph 32.
25.-27. Addressed in conclusions of law.
Rejected as irrelevant, immaterial or unnecessary.
Adopted in paragraph 27.
Adopted in summary in paragraph 21.
Addressed in conclusions of law.
Adopted in summary in paragraph 21.
33.-41. Adopted in substance in paragraphs 27.-29.
42. Addressed in conclusions of law.
43.-46. Rejected as irrelevant, immaterial or unnecessary.
COPIES FURNISHED:
No. 92-4332RP
and
No. 92-6737RP
Robert L. Shevin, Esquire Michael Basile, Esquire Robert W. Turken, Esquire Jeff C. Schneider, Esquire 3300 Southeast Financial Ctr.
200 S. Biscayne Blvd. Miami, Florida 33131-2385
No. 92-4333RP
and
No. 92-4334RP
J. Thomas Cardwell, Esquire Virginia B. Townes, Esquire
P.O. Box 231
Orlando, Florida 32802 No. 92-4335RP
Chrys D. Lemon, Esquire James T. McIntyre, Esquire
Madison Office Bldg., Ste. 400 1155 15th Street, N.W. Washington, D.C. 20005
No. 92-4336RP
and
No. 92-6735RP
J. Robert McClure, Jr., Esquire
P.O. Drawer 190 Tallahassee, Florida 32302
No. 92-4347RP
Robert S. Cohen, Esquire Bruce Culpepper, Esquire
P.O. Box 10095
Tallahassee, Florida 32302 No. 92-4351RP
F. Perry Odom, Esquire
Melissa Fletcher Allaman, Esquire
P.O. Drawer 1170 Tallahassee, Florida 32302
No. 92-4352RP
Kenneth R. Hart, Esquire Steven P. Seymoe, Esquire
P.O. Box 391
Tallahassee, Florida 32302 No. 92-6736RP
Robert J. Winicki, Esquire
P.O. Box 4099
Jacksonville, Florida 32201 No. 92-6737RP
Brian J. Evans, Esquire Vice President & Counsel First Nationwide Bank
135 Main Street, 9th Floor
San Francisco, California 94105
No. 92-6760RP
and
No. 92-6762RP
Daniel C. Brown, Esquire
P.O. Box 1877
Tallahassee, Florida 32302-1877
John S. Fletcher, Esquire Richard A. Pettigrew, Esquire 5300 SE Financial Center
200 S. Biscayne Blvd. Miami, Florida 33131-2339
David J. Busch, Esquire Thomas Valentine, Esquire
Dept. of Insurance & Treasurer Office of Legal Affairs
562 Fletcher Building
200 E. Gaines Street Tallahassee, Florida 32399-0300
Tom Gallagher, Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level
Tallahassee, Florida 32399-0300
Bill O'Neil, General Counsel Department of Insurance and Treasurer The Capitol, PL-11
Tallahassee, Florida 32399-0300
Carroll Webb, Executive Director Administrative Procedures Committee
120 Holland Building Tallahassee, Florida 32399-1300
Liz Cloud, Chief
Bureau of Administrative Code The Capitol, Room 1802 Tallahassee, Florida 32399-0250
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.
=================================================================
DISTRICT COURT OPINION
=================================================================
IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA
DEPARTMENT OF INSURANCE; NOT FINAL UNTIL TIME EXPIRES TO and FLORIDA ASSOCIATION FILE MOTION FOR REHEARING AND OF INSURANCE AGENTS, et al, DISPOSITION THEREOF IF FILED.
Appellants/Cross/Appellees, CASE NO. 93-2698/2740/2751
Consolidated GREAT NORTHERN INSURED DOAH CASE NO: 92-4332 ANNUITY CORPORATION, et al.,
Appellees/Cross-Appellants.
/ Opinion filed August 21, 1995.
An appeal and cross-appeal from an order of the Division of Administrative Hearings.
For Appellants/Cross-Appellees: David J. Busch and,Thomas D. Valentine, Tallahassee, for Department of Insurance; Kenneth R. Hart & Steven P. Seymoe of Macfarlane Ausley Ferguson & McMullen, Tallahassee, for Fla. Association of Insurance Agents;
J. Robert McClure, Jr. and F. Townsend Hawkes, of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tallahassee, for Florida Association of Life Underwriters.
For Appellees/Cross-Apellants: J. Thomas Cardwell and Virginia B. Townes, of Akerman, Senterfitt & Eidson, Orlando, for Florida Bankers Association and First Union Mortgage Corporation; Robert J. Winicki and Jeffrey S. York, of Mahoney Adams & Criser, P.A., Jacksonville, for Barnett Banks Trust Company, N.A.; Alan Harrison Brents and David A. Yon, of Katz, Kutter, Haigler, Alderman, Marks & Bryant, P.A., Tallahassee, for Marketing One, Inc., Liberty Securities Corporation, and Compulife; Bruce Culpepper and Robert S. Cohen, of Pennington, Haben, Wilkinson, Culpepper, Dunlap, Dunbar, Richmond & French, Tallahassee, for James Mitchell & Company; Chrys D. Lemon and James T. McIntyre, The McNair Law Firm, Washington, D. C. for Association of Banks in Insurance, Inc; Robert L. Shevin and Jeff C. Schneider, of Strook & Strook & Lavan, Miami, for Great Northern Insured Annuity Corporation.
BARFIELD, J.
In this appeal and cross-appeal of an order of the Division of Administrative Hearings (DOAH) ruling on the validity of portions of the Department of Insurance (DOI) proposed rule chapter 4-223, Florida Administrative Code, five issues have been raised. We affirm on all issues.
Appellants DOI, the Florida Association of Insurance Agents (FAIA), and the Florida Association of Life Underwriters (FALU) contend that the DOAH hearing officer erred in finding that annuities are not insurance and in concluding that the annuity exemption of section 626.988(8), Florida Statutes (1991), had been triggered so as to exempt the sale of annuities from the scope of the proposed rules. They also assert that she erred in finding proposed rule 223.011(4)(c), prohibiting financial institutions and financial institution agencies from acting as third party administrators (TPAs) unless they were engaged in such activities as of April 2, 1974, to be an invalid regulation. The cross- appellants argue that the hearing officer erred in applying the "highly deferential reasonable basis standard" and in finding that the prohibitions or restrictions of relationships and activities contained in rules 4-223.003, 4- 223.004, and 4-223.005 are rationally related to the language and/or intent of section 626.988. They contend that rules 4-223.006 through 4-223.009, which restrict advertising and endorsements of insurance products by financial institutions, violate the United States Constitution's prohibition of restrictions on commercial speech, contrary to the hearing officer's determination. Finally, they argue that rule 4- 223.009, which prohibits commission sharing or association, is not supported by any of the statutes the rule chapter was intended to implement. 1/
Section 626.988(2), Florida Statutes, prohibits licensed insurance agents or solicitors "associated with, under contract with, retained by, owned or controlled by, to any degree, directly or indirectly, or employed by, a financial institution" from engaging in "insurance agency activities" as "an employee, officer, director, agent or associate of a financial institution agency," with these terms defined in subsection 626.988(1). Subsections (5) and
(7) provide for "grandfathering" of financial institution agencies and agents and solicitors who were engaged in insurance activities controlled by the statute as of April 2, 1974. Subsection (8) provides an exception for the sale of annuities by Florida chartered financial institutions through a licensed resident agent in compliance with the Florida Insurance Code, in the event that federal law permits federal banks to sell such annuities.
In the early 1980's, insurance companies began to market annuities in the lobbies or public access areas of financial institutions. In 1986, letters from DOI in response to inquiries outlined requirements that leased space and insurance sales literature be physically or visually separated from the functions of the financial institution and that there be no common employees.
As a result of the incipient policy created by these letters, DOI proposed rules implementing section 626.988, which were withdrawn before adoption but were used thereafter as guidelines. In 1991, in anticipation of the rulemaking mandate of section 120.535, DOI reviewed its guidelines and in January 1992, published proposed rules substantially similar to the guidelines, implementing section 626.988 and other insurance statutes aimed at preventing coercion, unfair trade practices, and undue concentration of financial resources. This proposed rule chapter 4-223 was withdrawn to correct perceived inadequacies In the economic impact statement (EIS), then was presented at a workshop, and was republished in June 1992. FALU and others challenged the June 1992 version, and a public
hearing was held. In October 1992, DOI published a notice of change that materially altered rules 4-223.003, 4-223.004, and 4-223.005 to provide a definition for "associated" and "associate" and to prohibit insurance agents from occupying space virtually anywhere within the confines of a financial institution, but to allow restricted occupancy of space owned by the financial institution or in close proximity thereto.
The rule challenges by insurance companies, annuities marketing companies, financial institutions, and trade associations were consolidated; FAIA and the Department of Banking and Finance (DBF) intervened. On December 4, 1992, a partial summary final order was entered which determined that section 626.988(8) gives DOI the authority "to regulate the annuity products included in the definition of `life insurance' in section 624.602(1), F.S., and to regulate the agents who sell the products, but permits those agents a relationship with financial institutions otherwise prohibited by section 626.988(2), F.S." Additional amendments were published in December 1992, acknowledging or tracking the statutory exceptions. An extensive formal hearing was held before the DOAH hearing officer in December 1992. During the hearing, DOI proposed a final change clarifying that the rules do not apply to credit life and disability insurance and credit unemployment insurance, as a result of which some of the challengers voluntarily withdrew their petitions.
In her final order, the hearing officer found that the October 1992 proposed rule amendments arose from DOI's determination that current leasing arrangements "established a strong connection between the bank and the agent, in effect wrapping the insurance program in the bank's colors and presenting it as another bank product" and from DOI's anticipation of difficulty in enforcing its rules as originally published. She found that prohibiting the sale of annuities on bank premises "would have a devastating effect on companies engaged in that activity" and that banks would also be affected, "as they recognize a substantial benefit of providing their customers the convenience of an in-house service." She found that while annuities are defined in section 364.602(1) as life insurance, they "are generally considered investments for future security rather than a cushion against loss," and that this fact was recognized by the Office of the Comptroller of the Currency (OCC) in a March 1990 letter stating that national banks are authorized to sell annuities, a conclusion upheld by the
U.S. District Court's opinion in VALIC, 2/ which she noted was at that time pending on appeal before the U.S. Court of Appeals for the Fifth Circuit.
The hearing officer applied the "highly deferential reasonable basis standard" of Florida League of Cities, Inc. v. Department of Environmental Regulation, 603 So.2d 1363 (Fla. 1st DCA 1992), and section 120.52(8) in determining whether the proposed rules constitute an invalid exercise of delegated legislative authority, also citing Department of Corrections v. Hargrove, 615 So.2d 199 (Fla. 1st DCA 1993). She noted that section 626.988 "was recently unsuccessfully challenged on vagueness, equal protection, due process, unlawful delegation of legislative authority, and federal preemption grounds" in Glendale Federal Savings & Loan Association v. Department of Insurance, 587 So.2d 534 (Fla. 1st DCA 1991), rev. den., 599 So.2d 656 (Fla. 1992), which identified the legitimate state goals behind the statute as being "[c]oncerns regarding financial institutions' entry into insurance activities, including the prevention of coercion, unfair trade practices, and undue concentration of resources." She found that these are the goals that DOI seeks to achieve through its proposed rules and that other statutes, including parts of chapters 624, 626, and 627 relating to the same goals, "form a crucial basis for the rules as well." She concluded that rule 4-223.001 is rationally related to the enabling legislation, and that the clarifying amendment to rule 4-223.002
"effectively removes the sale of annuities from the scope of the rules and therefore from the rules' proscriptions." She concluded that the definition of "associated" and "associate" in rule 4-223.003(2) "is vague and incomprehensible" and that it "offends any rational interpretation of section 626.988, F.S. and is thoroughly useless as a standard for the agency's enforcement of that and other relevant statutes," but that "[n]othing presented here justifies a wholesale invalidation of the entire rule chapter when that definition falls" and that the remainder of rule 4-223.003 "simply reflects and refers to statutory definitions, and is appropriate."
As to the catalogue of prohibited or restricted associations in rules 4-
223.004 and 4-223.005, the hearing officer found those proscriptions to be "specific, direct and unambiguous" and "a reasonable interpretation of the prohibitions of 626.988(2), F.S., which literally read, addresses insurance agency activities by an agent or solicitor acting as an employee, officer, director, agent, or associate of a financial institution agency." She concluded that although these rules affect commercial speech, which "enjoys a measure of constitutional protection," they "need only be tailored in a reasonable manner to serve a substantial state interest in order to survive First Amendment scrutiny," citing Edenfield v. Fane, 113 S.Ct. 1792, 123 L. Ed.2d 543 (1993). She found that DOI had demonstrated that these rules further the substantial state interests described and upheld in Glendale. She determined that the statute does not forbid "any and all associations between an agent and financial institution, but rather only those associations which promote or further the insurance agency activity" and noted the federal construction of the term "associated with" in the RICO statute. 3/ She found that, unlike the rules found unconstitutional in Edenfield, "[f]actual predicate for these rules is found in the enforcement experience of the agency and the Petitioners' candid testimony that the current common practices . . . significantly benefit both the agent and host bank; the relationship is symbiotic." She concluded that the proposed DOI rules "do not, on their face, impair existing contracts" and that while such a challenge may be properly raised in the context of an enforcement action, "[a] hypothetical determination that future enforcement might be unconstitutional is beyond the scope of this proceeding," citing GTE Florida, Inc. v. Department of Transportation, 12 F.A.L.R. 1515 (DOAH 1990).
The hearing officer found that rules 4-223.006(2)(d) and 4-223.006 (2)(h)5(i) improperly imposed restrictions on endorsements and mailing advertisements not imposed by section 626.988(5). She determined that rule 4- 223.011(4)(a) 3 embellishes the conditions for maintaining "grandfather status" and that the statute "does not give DOI the right to limit the scope of the license by restricting the type of business that can be performed by the agent," particularly in light of the October 1992 definition of "financial institution." She found that rule 4-223.011(4)(c), which prohibited financial institutions and financial institution agencies from acting as TPAs if they were not engaged in such activities before April 2, 1974, improperly expanded and modified sections 626.988 and 626.88 "to prohibit an activity nowhere proscribed by statute." She noted that in enacting the 1984 TPA statute (chapter 626, part VII), "the legislature apparently decided that a financial institution's operation as a Third-Party Administrator posed no threat of coercion, unfair competition or undue concentration of economic resources." She rejected the "single subject" challenge, finding that "[t]he subject matter of the rules at issue here logically relates to the purpose of establishing procedures and standards for insurance companies, agencies, agents and solicitors in their relationships and business arrangements with financial institutions, as stated in proposed rule 4- 223.001." She concluded that DOI had prepared "an appropriate detailed EIS" for the June 1992 version of the rules and had properly considered the economic
impact of the October 1992 amendments, and that it had not violated section 120.52(8)(a), nor "materially failed to follow the applicable rulemaking procedures set forth in Section 120.54."
The hearing officer's findings, that annuities are commonly viewed as investment products rather than insurance, and that national banks are authorized to sell annuities pursuant to federal law, are supported by competent substantial evidence. These findings support her conclusion that the annuity exemption of section 626.988(8), Florida Statutes, was triggered so as to exempt the sale of annuities from the scope of the proposed rules, see VALIC. She also properly determined that proposed rule 223.011(4)(c), prohibiting financial institutions and financial institution agencies from acting as TPAs unless they were engaged in such activities as of April 2, 1974, is an invalid regulation.
According to the appellees, a third-party administrator `his an organization that performs administrative services on behalf of insurance companies (rather than agents or agencies) under direct contracts with those companies. It is a kind of back office operation which frees the insurance company resources and personnel from the performance of those administrative tasks." We find this explanation to be somewhat disingenuous. On the other hand, DOI argues that appellees are seeking a determination from this court that financial institutions may directly sell insurance to the public, albeit under the guise of TPAs, even though such sales are in clear violation of the language of section 626.988 and would allow them to solicit the public without the inconvenience of subjecting their agents to the licensure requirements imposed by the Florida Legislature upon those who solicit insurance, in violation of the legislature's intent regarding the involvement of financial institutions in selling insurance and the licensing requirements of insurance agents. This argument is also somewhat misleading.
The 1984 Third Party Administrators' Act (sections 626.88-626.899) was intended to regulate the growing field of TPAs, defining the nature and scope of their authorization and providing for certification and continuing regulation by DOI. Section 626.88(1) defines "administrator" for purposes of the act as "any person who directly or indirectly solicits or effects coverage of, collects charges or premiums from, or adjusts or settles claims on residents of this state in connection with authorized commercial self-insurance funds or with insured or self-insured programs which provide life or health insurance coverage
. . .,"(emphasis supplied). The definition continues by listing exceptions, including licensed insurance agents whose activities are limited exclusively to sale of insurance and financial institutions that administer mortgage loan payments. Third party administrators must be authorized by certificate from DOI and are limited in their service to administering commercial self-insurance funds or life and health programs, or both, as specified in the certificate. s 626.8805(6), Fla. Stat. (1991). The terms "self-insurance funds" and "insured or self-insured programs" are not defined in Part VII of the Code, but derive their meaning elsewhere. See s 624.031, 627.551, and 627.651, Fla. Stat. (1991).
With respect to such funds or programs, commonly referred to as group insurance, the third party administrator is authorized to perform some functions akin to those of a licensed insurance agent, i.e., to solicit or effect coverage. To this extent, the administrator's functions are more expansive than suggested by the appellees. However, the solicitation and coverage effectuation, as well as general administrative functions, are limited by the provisions of sections 626.88-626.899. Among those limitations are the requirements that all terms of the agreement between the insurer and the
administrator be in writing and be subject to inspection and approval by DOI, that all records be maintained for five years beyond the term of the agreement and be subject to inspection and audit by DOI, and that all contact between the administrator and the insured be in a manner and by means approved in writing by the insurer. DOI may suspend or revoke the certificate for a myriad of reasons, prominent among which is that the practices of the administrator are hazardous or injurious to insured persons or to the public.
Had the Florida Legislature chosen to classify third party administrators as agents, it could have done so. It did not. s 626.031, Fla. Stat. (1991). Neither did it prohibit financial institutions from functioning as third party administrators, either in Part VII or in Part X of the Code. The hearing officer was correct in her conclusion that rule 4-233.011(4)(c) improperly expanded and modified sections 626.988 and 626.88 "to prohibit an activity nowhere proscribed by statute."
The hearing officer did not err in applying the "highly deferential reasonable basis standard" in determining that proposed rules 4-223.003, 4- 223.004, 4-223.005, and 4-223.009 do not constitute an invalid exercise of delegated legislative authority, see Florida League of Cities. We reject the appellees' argument that the term "associated" in section 626.988 should be strictly interpreted as limited to "owned or controlled" and affirm the hearing officer's findings that "the proscriptions of proposed rules 4-223.004 and .005 are specific, direct and unambiguous" and that they are valid exercises of delegated legislative authority, reasonably related to the purposes of section 626.988. She also properly determined that rules 4-223.006 through 4-223.009, which restrict advertising and endorsements of insurance products by financial institutions, do not violate the United States Constitution's prohibition of restrictions on commercial speech.
AFFIRMED.
KAHN, J. and SHIVERS, Senior Judge, CONCUR.
ENDNOTES
1/ This does not appear to be a separate issue, but instead an additional argument under the first issue on cross-appeal.
2/ Variable Annuity Life Insurance Company v. Clarke, 786 F. Supp. 639 (S.D. Tex. 1991), ruled that national banks are authorized to sell annuities by the National Bank Act. That decision was reversed in Variable Annuity Life Insurance Comany v. Clarke, 998 F.2d 1295 (5th Cir. 1993), which concluded that annuities are insurance. That decision was in turn reversed in Nations Bank of North Carolina, N.A. v. Variable Annuity Life Insurance Company, 115 S.Ct. 810,
130 L.Ed.2d 740 (1995), the Supreme Court finding that the OCC's determination that national banks may serve as agents in the sale of annuities is a reasonable construction of the National Bank Act and therefore warrants judicial deference.
3/ U.S. v. Yonan, 800 F.2d 164 (7th Cir. 1986), cert. den., Yonan v. U.S.,479 U.S. 1055, 107 S.Ct. 930, 93 L.Ed.2d 981 (1987).
MANDATE
DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT
To the Honorable, Mary Clark, Hearing Officer, Division of Administrative Hearings
WHEREAS, in that certain cause filed in this Court styled: GREAT NORTHERN INSURED ANNUITY CORPORATION
vs.
DEPARTMENT OF INSURANCE AND TREASURER
FIRST UNION MORTGAGE CORPORATION Case No. 93-2740
vs. Your Case No. 92-4332RP
92-4333RP DEPARTMENT OF INSURANCE AND TREASURER 92-4334RP, 92-4335RP FLORIDA BANKERS ASSOCIATION 92-4336RP, 92-4347RP 92-4351RP, 92-4352RP
vs. 92-6735RP, 92-6736RP
92-6737RP, 92-6760RP
DEPARTMENT OF INSURANCE, ET AL. 92-6762RP
The attached opinion was rendered on August 21, 1995.
YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.
WITNESS the Honorable E. Earle Zehmer
Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 6th day of September, 1995.
JON H. WHEELER
Clerk, District Court of Appeal of Florida, First District
| Issue Date | Proceedings |
|---|---|
| Oct. 16, 1995 | Record received from District Court 10/13/95/DOAH is returning complete file to Dept of Insurance 10/16/95. |
| Sep. 11, 1995 | Opinion and Mandate filed. |
| Aug. 22, 1995 | Opinion filed. |
| Aug. 22, 1995 | Opinion filed. |
| Mar. 01, 1995 | Letter to SLS from J. Carroll dated 2/27/95 (re: violation of agency)filed. |
| Jul. 21, 1994 | BY ORDER OF THE COURT filed. |
| Mar. 17, 1994 | BY ORDER OF THE COURT filed. |
| Jan. 26, 1994 | Third Amended Index sent out. |
| Jan. 20, 1994 | Amended Index sent out. |
| Dec. 13, 1993 | Index, Record, Certificate of Record sent out. |
| Nov. 15, 1993 | (Petitioner) Motion to Supplement Record on Appeal; Notice of Consolidation of Record on Appeal filed. |
| Nov. 09, 1993 | Payment in the amount of $230.00 for record filed. |
| Nov. 01, 1993 | Order sent out. (Re: Petitioners for Stay or Supersedes are respectfully Denied as moot) |
| Nov. 01, 1993 | BY ORDER OF THE COURT (consolidation of 93-2740, 93-2751 & 93-2698 record only) filed. |
| Oct. 25, 1993 | Department of Insurance Response to Barnett Banks Trust Company, N.A.`s Petition for Supersedes filed. |
| Oct. 22, 1993 | GNA Exhibit 18 w/cover Letter filed. |
| Oct. 21, 1993 | Reply of Marketing One, Inc., Liberty Securities Corporation, and Compulife to "Department of Insurance Response to Marketing 1 Emergency Petition for Stay" filed. |
| Oct. 21, 1993 | Order and Notice of Consolidated Argument sent out. |
| Oct. 19, 1993 | Department of Insurance Response to Marketing 1 "Emergency Petition for Stay" filed. |
| Oct. 18, 1993 | Barnett Banks Trust Company, N.A.`s Petition for Supersedes filed. |
| Oct. 18, 1993 | (Petitioner) Motion for Oral Argument and to Consolidate Oral Argument filed. |
| Oct. 14, 1993 | (Petitioner) Emergency Petition for Supersedes w/Exhibits A&B filed. |
| Oct. 14, 1993 | Dept. of Insurance Request for Hearing on GNA and Marketing 1 "Emergency Petition for Stay"; Dept of Insurance Response to GNA "Emergency Petition for Stay" w/Exhibit filed. |
| Oct. 13, 1993 | Notice sent out. (Re: Telephone hearing set for 10/26/93; 9:00am; 904/921-2530) |
| Oct. 12, 1993 | BY ORDER OF THE COURT filed. |
| Oct. 11, 1993 | Emergency Petition for Stay filed. |
| Oct. 11, 1993 | filed. |
| Oct. 11, 1993 | (Petitioners) Emergency Petition for Stay filed. |
| Oct. 07, 1993 | BY ORDER OF THE COURT (cases are consolidated) filed. |
| Sep. 10, 1993 | BY ORDER OF THE COURT; filed. |
| Sep. 03, 1993 | Notice of filing order appealed from(Marketing One, Inc.) filed. |
| Sep. 03, 1993 | BY ORDER OF THE COURT:Appellant is directed to file within 10 days from date of this order conformed copies of the order of the lower tribunal from which the appeal is being taken filed. |
| Sep. 03, 1993 | Letter to DOAH from DCA filed. DCA Case No. 1-93-2751 & 1-93-2740. |
| Sep. 02, 1993 | Notice of Dismissal of BTI Services, Inc`s cross-notice of appeal(Note that Barnett Banks Trust Company, N.A. continues to be a cross-appellant in this case) filed. |
| Aug. 31, 1993 | Letter to DOAH from DCA filed. DCA Case No. 1-93-2698. |
| Aug. 31, 1993 | Barnett Banks Trust Company, N.A.`s and BTI Service Inc`s Certificate of Notice of Cross-Appeal sent out. |
| Aug. 31, 1993 | Florida Bankers Association Certificate of Notice of Cross-Appeal sent out. |
| Aug. 30, 1993 | Notice of Administrative Appeal(from Marketing One) filed. |
| Aug. 30, 1993 | First Union Mortgage Corporation's Notice of Cross Appeal filed. |
| Aug. 30, 1993 | Barnett Banks Trust Company, N.A.'s and BTI Services, Inc's cross-Notice of Appeal filed. |
| Aug. 30, 1993 | Great Northern Insured Annuity Corporation's Notice of Cross Appeal filed. |
| Aug. 30, 1993 | Certificate of Notice of Appeal sent out. |
| Aug. 27, 1993 | Notice of Appeal filed. |
| Aug. 27, 1993 | Certificate of Amended Notice of Administrative Appeal sent out. |
| Aug. 27, 1993 | Amended Notice of Administrative Appeal filed. |
| Aug. 26, 1993 | Certificate of Notice of Administrative Appeal sent out. |
| Aug. 26, 1993 | (no enclosures) CC Letter to Jon S. Wheeler from David J. Busch (re: attaching Order to Notice of Appeal) filed. |
| Aug. 25, 1993 | Notice of Appeal filed. |
| Aug. 23, 1993 | Letter to AHP from Mary McGowan (re: request for copy of Final Order)w/check in the amount of $13.46 filed. |
| Jul. 30, 1993 | CASE CLOSED. Final Order sent out. Hearing held 12/14-22/92. |
| Jul. 14, 1993 | Barnett Banks Trust Company, N.A.`s and BTRI Services, Inc`s Notice of Supplemental Authority filed. |
| Jun. 21, 1993 | Barnett Banks Trust Company, N.A.`s And BTI Services, Inc`s Notice of Supplemental Authority (filed in case #92-6736RP) filed. |
| Jun. 18, 1993 | Notice of Filing Supplemental Authority filed. (From Virginia B. Townes) |
| May 10, 1993 | Intervenor`s Response to Respondent`s Motion to Correct Inaccuracies in Intervenor Department of Banking and Finance`s Proposed Recommended Order filed. |
| Apr. 26, 1993 | Letter to Dennis Silverman from M. Clark (RE: order to show cause filed with DOAH 3-11-93) sent out. |
| Apr. 23, 1993 | Respondent`s Motion to Correct Inaccuracies in Intervenor Department of Banking and Finance`s Proposed Recommended Order filed. |
| Apr. 21, 1993 | Order to Show Cause w/Election of Rights filed. |
| Apr. 12, 1993 | Joint Brief in Support of Recommended Order Submitted on Behalf of First Union Mortgage Corporation and Florida Bankers Association filed. |
| Apr. 09, 1993 | CC Decisions Cited in Barnett Banks Trust Company, N. A.`[s And BTI Services, Inc`s Proposed Recommended Order and Findings filed. |
| Apr. 07, 1993 | Barnett Banks Trust Company, N.A.`s and BTI Services, Inc`s Proposed Recommended Order and Findings of Fact and Conclusions of Law; Petitioners`, James Mitchell & CO. And JMC Insurance Services Corporation, Proposed Final Order; P roposed Final Order re |
| Apr. 07, 1993 | FALU'S Proposed Final Order filed. |
| Apr. 07, 1993 | State of Florida, Department of Banking and Finance's Proposed Recommended Order filed. |
| Apr. 07, 1993 | Proposed Findings of Fact and Conclusions of Law Association of Banksin Insurance, Inc.; Great Northern Insured Annuity Corporation and First Nationwide Bank`s Closing Statement; Memorandum of Law; Proposed Finding of Fact and Co nclusions of Law rec`d |
| Apr. 07, 1993 | Proposed Order Submitted by First Union Mortgage Corporation and Florida Bankers Association; Joint Brief in Support of Recommended Order filed. |
| Apr. 07, 1993 | Proposed Findings of Fact and Conclusions of Law by Marketing One, Inc., Liberty Securities Corporation and Compulife, Inc. filed. |
| Apr. 07, 1993 | Respondent's Proposed Final Order; Respondent's Brief and Closing Argument filed. |
| Apr. 07, 1993 | Memorandum of Law in Support of Respondent's Notice of Change to Proposed Rule 4-233.003 filed. |
| Mar. 08, 1993 | (13 vols) Transcript filed. |
| Feb. 02, 1993 | Order Closing Files In Case nos 92-4350RP, 92-6738RP and 92-6761RP (formerly consolidated with 92-4332RP sent out. (parties in case nos. 92-4350RP, 92-6738RP and 92-6761RP have entered notices of voluntary dismissal, and files are closed) |
| Feb. 02, 1993 | Order sent out. (respondent's motion to strike GNA's notice of filing exhibit #58 is granted) |
| Jan. 27, 1993 | Great Northern Insured Annuity Corporation`s And First Nationwide Bank`s Response to Respondent`s Motion to Strike Notice of Filing Exhibit 58 as Further Reguttal Evidence filed. |
| Jan. 22, 1993 | (Respondent) Notice of Change filed. |
| Jan. 20, 1993 | (Respondent) Amended Certificate of Service filed. |
| Jan. 15, 1993 | Respondent`s Motion to Strike GNA`S Notice of Filing Exhibit 58 filed. |
| Dec. 31, 1992 | Great Northern Insured Annuity Corporation's and First Nationwide Bank's Notice of Filing Exhibit 58 as Further Rebuttal Evidence (+ Comp. Exh A) filed. |
| Dec. 23, 1992 | (Petitioners) Notice of Voluntary Dismissal filed. |
| Dec. 22, 1992 | CASE STATUS: Hearing Held. |
| Dec. 16, 1992 | Notice of Filing Technical Change Letter filed. (From Thomas D. Valentine) |
| Dec. 14, 1992 | Notice of Voluntary Dismissal without Prejudice (filed in DOAH Case No. 92-4350RP) filed. |
| Dec. 14, 1992 | Notice of Service of Answers to James Mitchell & Co. And JMC Insurance Service Corporation`s First Set of Interrogatories to the Department of Insurance and Treasurer filed. |
| Dec. 14, 1992 | Notice of Appearance as Additional Counsel filed. |
| Dec. 11, 1992 | Memorandum of Law by Marketing One, Inc. and Liberty Securities Corporation filed. |
| Dec. 11, 1992 | Subpoena Duces Tecum & Sheriff's Return filed. (from R. Winicki) |
| Dec. 11, 1992 | Motion for Summary Final Order (for 92-6738RP) filed. |
| Dec. 10, 1992 | (2) Notice of Taking Deposition Duces Tecum filed. (from R. Cohen) |
| Dec. 10, 1992 | (Sec of State) Notice of Filing Second Notice of Change; Notice of Change filed. |
| Dec. 10, 1992 | Letter to K. Olin from S. Cravener (RE: copies of requested documents in referenced case) sent out. |
| Dec. 09, 1992 | (Compulife, Inc) Petition to Intervene in Proceeding to Determine Invalidity of Proposed Rules filed. |
| Dec. 09, 1992 | Respondent's Second Notice of Production of Documents filed. |
| Dec. 09, 1992 | (Petitioners) Amended Notice of Taking Telephonic Deposition filed. |
| Dec. 08, 1992 | (Petitioners) Amended Notice of Taking Deposition Duces Tecum filed. |
| Dec. 08, 1992 | Barnett Banks Trust Company, N.A.`s Barnett Banks Insurance, Inc`s and BTI Services, Inc`s Motion for Partial Summary Final Order filed. |
| Dec. 08, 1992 | Transcript filed. |
| Dec. 08, 1992 | (Department of Banking & Finance) Petition For Leave to Intervene filed. |
| Dec. 07, 1992 | Notice of Taking Telephonic Deposition; Notice of Taking Deposition filed. (From Daniel C. Brown) |
| Dec. 07, 1992 | Notice of Taking Telephonic Deposition w/Exhibit-A (3) filed. (From J. Thomas Cardwell) |
| Dec. 04, 1992 | (joint) Prehearing Statement filed. |
| Dec. 04, 1992 | Subpoena Ad Testificandum (3) filed. (From Virginia Townes) |
| Dec. 04, 1992 | Information for Prehearing Stipulation filed. (From Chrys D. Lemon) |
| Dec. 04, 1992 | (Petitioners) Third Amended Petition to Determine Invalidity of Proposed Rules filed. |
| Dec. 04, 1992 | (Petitioners) Notice of Taking Deposition Duces Tecum (3) filed. |
| Dec. 04, 1992 | Great Northern Insured Annuity Corporation`s and First Nationwide Bank`s Notice of Taking Deposition filed. |
| Dec. 04, 1992 | Order sent out. (Rulings on motions) |
| Dec. 04, 1992 | Great Northern Insured Annuity Corporation`s and First Nationwide Bank`s Joint Submission of Information for Prehearing Stipulation w/GNA`s and FNB`s Exhibit "A" to Joint Prehearing Stipulation Statement of Position filed. |
| Dec. 03, 1992 | Notice of Taking Deposition Duces Tecum; Notice of Taking Deposition;Request for Production of Documents filed. |
| Dec. 03, 1992 | Great Northern Insured Annuity Corporation`s and First Nationwide Bank`s Cross Notice of Taking Deposition Duces Tecum; Great Northern Insured Annuity Corporation`s and First Nationwide Bank`s First Request to Produce to Florida Association of Life Und |
| Dec. 03, 1992 | CC Letter from the Comptroller, Requested by Hearing Officer In Prehearing Stipulation (Exhibit- 23) filed. (From Robert L. Shevin) |
| Dec. 02, 1992 | Grest Northern Insured Annuity Corporation`s Notice of Filing Supplemental Authority to Motion for Partial Summary Final Order w/Exhibit-D filed. |
| Dec. 02, 1992 | Notice of voluntary dismissal(Florida League of Financial Institutions,Inc.) filed. |
| Dec. 01, 1992 | Notice of Service of FAIA'S Answers to James Mitchell & Co. and JMC Insurance Services Corporation's First Interrogatories to FAIA filed. |
| Nov. 30, 1992 | Amended Petition to Challenge Proposed Rules Numbered 4-223.001 Through 4-223.011 filed. |
| Nov. 30, 1992 | Great Northern Insured Annuity Corporation's Reply to Department of Insurance's Response to Motion for Partial Summary Final Order; Notice of Appearance filed. |
| Nov. 30, 1992 | Barnett Banks Trust Company, N.A.`s Barnett Banks Insurance, Inc`s Information For Prehearing Stipulation filed. |
| Nov. 30, 1992 | (Petitioner) Notice of Service of Answers to Interrogatories filed. |
| Nov. 25, 1992 | (Petitioner) Notice of Hearing filed. |
| Nov. 23, 1992 | Florida Bankers Association Information for Prehearing Stipulation filed. |
| Nov. 23, 1992 | Information for Prehearing Stipulation filed. (From Virginia B. Townes) |
| Nov. 20, 1992 | Department of Insurance 's Response to Motions for Partial Summary Final Order filed. |
| Nov. 20, 1992 | Request for Production of Documents filed. (From Virginia B. Townes) |
| Nov. 19, 1992 | (Petitioner) Notice of Filing w/Affidavit of Dwayne C. Radel; Minnesota Mutual's Motion for Summary Final Order filed. |
| Nov. 18, 1992 | (FL Association of Insurance Agents) Petition to Intervene filed. |
| Nov. 18, 1992 | Order of Consolidation And Notice Of Hearing sent out. (Consolidatedcases are: 92-4332RP, 92-4333RP, 92-4334RP, 92-4335RP, 92-4336RP, 92-4347RP, 92-4350RP, 92-4351RP, 92-4352RP, 92-6735RP, 92-6736RP, 92-6737RP, 92-6738RP, 92-6760 RP, 92-6761RP, 92-6762 |
| Nov. 18, 1992 | Case No/s 92-4332RP, 92-4333RP, 92-4334RP, 92-4335RP92-4336RP, 92-4347RP, 92-4350RP, 92-4351RP, 92-4352RP): unconsolidated. |
| Nov. 18, 1992 | Florida Association of Life Underwriters`s Notice of Service of Answers to Expert Interrogatories From First Union Mortgage Corporation filed. |
| Nov. 18, 1992 | Answers to Minnesota Mutual's First Request for Admissions to Respondent filed. |
| Nov. 17, 1992 | Notice of Prehearing Conference filed. (From David J. Busch) |
| Nov. 16, 1992 | (Petitioner) Notice of Service of Answers to Interrogatories and Objections Thereto; Great Northern Insured Annuity Corporation`s Emergency Motion to Consolidate Proceedings and Request for Oral Argument filed. |
| Nov. 13, 1992 | Notice of Appearance filed. (From Daniel C. Brown) |
| Nov. 13, 1992 | (Liberty Securities) Request for Oral Argument of Petitions to Intervene filed. |
| Nov. 12, 1992 | Second Amended Notice of Taking Deposition Duces Tecum filed. (From Virginia B. Townes) |
| Nov. 10, 1992 | CC Barnett Banks Trust Company, N.A., Barnett Banks Insurance, Inc.`sand BTI Services, Inc`s Memorandum in Support of Its Petition to Challenge Proposed Rules Numbered 4-223.001 Through 4-223.011; Barnett Banks Trust Company, N. A.`s, Barnett Banks In |
| Nov. 10, 1992 | Amended Notice of Taking Deposition Duces Tecum filed. (From Virginia B. Townes) |
| Nov. 09, 1992 | Great Northern Insured Annuity Corporation's Motion for Partial Summary Final Order; Memorandum of Law in Support; Great Northern Insured Annuity Corporation's Response to Respondent's Motion for Partial Summary Final Order w/Exhibits A&B filed. |
| Nov. 09, 1992 | James Mitchell & Co. And JMC Insurance Services Corporation's Motion for Partial Summary Final Order and Memorandum of Law in Support Thereof; Response of James Mitchell & Co. And JMC Insurance Services Corporation to Respondent's Motion for Partial Sum |
| Nov. 09, 1992 | Barnett Banks Trust Company, N.A. Barnett Banks Insurance, Inc`s and BTI Services, Inc`s Memorandum in Support of Its Petition to Challenge Proposed Rules Numbered 4-223.001 Through 4-223.011 filed. |
| Nov. 06, 1992 | Barnett Banks Trust Company, N.A`s Barnett Banks Insurance, Inc`s and BTI Services, Inc`s Motion to Intervene in Petitions Challenging Proposed Rules 4-223.001 Through 4-223.011 filed. |
| Nov. 06, 1992 | (California Federal Bank) Petition For Leave to Intervene; (FIIA, Inc. The Financial Instructions Insurance Association) Petition for Leave to Intervene filed. |
| Nov. 06, 1992 | Amended Petition to Determine Invalidity of Proposed Rules w/Exhibit A-E filed. |
| Nov. 06, 1992 | (Liberty Securities) Petition to Intervene or to Determine Invalidity of Proposed Rules filed. |
| Nov. 06, 1992 | FAIA'S Amended Petition to Determine Validity of Proposed Rules filed. |
| Nov. 06, 1992 | (Petitioner) Motion to Amend The Original Petition of Association Banks in Insurance, Inc. filed. |
| Nov. 05, 1992 | (Petitioners) Second Amended Petition to Determine Invalidity of Proposed Rules filed. |
| Nov. 05, 1992 | (Petitioner) First Amended Petition by FALU to Determine The Validity of a Proposed Rule filed. |
| Nov. 05, 1992 | First Union Mortgage Corporation's Amended Petition to Challenge Proposed Rules Numbered 4-223.001 Through 4-223.011 as Amended by Publication Dated October 16, 1992 (for 92-4332RP) filed. |
| Nov. 05, 1992 | First Union Mortgage Corporation's Notice of Service of Answers to Interrogatories From Florida Association of Insurance Agents; FAIA's First Set of Interrogatories to First Union Mortgage Corporation filed. |
| Nov. 05, 1992 | Florida Bankers Association Amended Petition to Challenge Proposed Rules Numbered 4-223.001 Through 4-223.011 as Amended by Publication Dated October 16, 1992 (for 92-4334RP) filed. |
| Nov. 05, 1992 | Florida Bankers Association's Notice of Service of Answers to Interrogatories from Florida Association of Insurance Agents; FAIA's First Set of Interrogatories to Florida Bankers Association filed. |
| Nov. 04, 1992 | Notice of Taking Deposition Duces Tecum filed. (From Virginia B. Townes) |
| Nov. 04, 1992 | Minnesota Mutual's Motion to Amend Petition; Amended Petition to Determine Invalidity of Proposed Rules (for 92-4350RP) filed. |
| Oct. 29, 1992 | (Minnesota Mutual Life Insurance Co) Notice of Appearance (92-4350RP)filed. |
| Oct. 28, 1992 | Notice of Service of Documents Produced in Response to GNA's First Request to Produce Copies of Documents filed. |
| Oct. 23, 1992 | James Mitchell & Co. And JMC Insurance Service Corporation`s First Request for Production of Documents to Florida Association of Insurance Agents; filed. |
| Oct. 23, 1992 | James Mitchell & Co. and JMC Insurance Service Corporation's First Request for Production of Documents to Department of Insurance; James Mitchell & Co. And JMC Insurance Service Corporation's First Request forProduction of Documen ts to Florida Associat |
| Oct. 23, 1992 | James Mitchell & Co. and JMC Insurance Service Corporation's Notice of Service of First Set of Interrogatories to Department of Insurance; James Mitchell & Co. And JMC Insurance Service Corporation'[s Notice of Service of First Set of Interrogatories to |
| Oct. 21, 1992 | Order sent out. (hearing will commence at 9:30am rather than 1:30pm as provided in 8-13-92 notice) |
| Oct. 19, 1992 | Motion for Enlargement of Time to File A Response in Opposition to Respondent`s Motion for Partial Summary Final Order filed. |
| Oct. 16, 1992 | Notice of Service of Interrogatories filed. (From Robert S. Cohen) |
| Oct. 09, 1992 | (Respondent) Motion for Partial Summary Final Order filed. |
| Oct. 09, 1992 | (Petitioners) Motion for Continuance or Abatement of Proceedings and Modification of Prehearing Schedule w/Exhibit-A filed. |
| Oct. 08, 1992 | Respondent's First Notice of Filing Notice of Change to 4-223 w/Notice of Change filed. |
| Sep. 11, 1992 | FAIA'S First Request for Production of Documents to Florida Central Credit Union, Railroad & Industrial Federal Credit Union, GTE Federal Credit Union & Credit Union Service, Inc. filed. |
| Sep. 11, 1992 | Notice of Service of Petitioner's, FAIA, First Interrogatories to Plaintiff, Florida Central Credit Union, Railroad & Industrial Federal Credit Union, GTE Federal Credit Union & Credit Union Service, Inc. filed. |
| Sep. 11, 1992 | FAIA'S First Request for Production of Documents to James Mitchell & CO. and JMC Insurance Service Corp.; Notice of Service of Petitioner's, FAIA, First Interrogatories to Plaintiff, The Minnesota Mutual Life Insurance CO.; FAIA'S First Request for Prod |
| Sep. 11, 1992 | Notice of Service of Petitioner's, FAIA, First Interrogatories to Plaintiff, Association of Banks in Insurance, Inc.; FAIA'S First Request for Production of Documents to Association of Banks in Insurance, Inc.; Notice of Service of Petitioner's, FAIA, F |
| Sep. 11, 1992 | FAIA'S First Request for Production of Documents to First Union Mortgage Corporation; Notice of Service of Petitioner's, FAIA, First Interrogatories to Plaintiff, Florida Bankers Association; FAIA'S First Request for Production of Documents to Florida B |
| Sep. 11, 1992 | Notice of Service of Petitioner's, FAIA, First Interrogatories to Plaintiff, Great Northern Insured Annuity Corporation; FAIA'S First Request for Production of Documents to Great Northern Insured Annuity Corporation; Notice of Service of Petitioner's, F |
| Sep. 02, 1992 | Request for Production of Documents; Notice of Service of Interrogatories w/Petitioner's First Set of Interrogatories to Department of Insurance filed. (From J. Thomas Cardwell) |
| Aug. 20, 1992 | Department's Response to GNA's Second Request to Produce filed. |
| Aug. 13, 1992 | Order And Notice of Hearings sent out. (hearing set for 12-14-92; 10:00am; Tallahassee) |
| Aug. 13, 1992 | Prehearing Order sent out. |
| Aug. 11, 1992 | (Petitioner) Second Request to Produce to Florida Department of Insurance filed. |
| Aug. 10, 1992 | Amended Notice Of Prehearing Conference sent out. (prehearing conference will be conducted by telephone 8-12-92 at 1:00pm) |
| Aug. 10, 1992 | Motion of Petitioner, Association of Banks in Insurance, Inc. For Counsel to Proceed Pro Hac Vice filed. |
| Aug. 10, 1992 | (Petitioner) Second Request to Produce to Florida Department of Insurance filed. |
| Aug. 07, 1992 | Notice of Service of Petitioner's, FAIA, Answers to First Union Mortgage Corporations Expert Interrogatories filed. |
| Aug. 07, 1992 | Notice of Prehearing Conference sent out. (set for 8/12/92; 1:00pm; Tallahassee) |
| Aug. 05, 1992 | First Union Mortgage Corporation's Notice of Service of Expert Interrogatories to Respondent, Department of Insurance filed. |
| Aug. 05, 1992 | First Union Mortgage Corporation`s Notice of Service of Expert Interrogatories to Florida Association of Insurance Agents; First Union Mortgage Corporation`s Notice of Service of Expert Interrogatories to Florida Association of Life Underwriters filed. |
| Aug. 04, 1992 | Order Of Continuance sent out. (hearing will be rescheduled at a prehearing conference to be conducted sometime the week of August 10) |
| Jul. 31, 1992 | CC Letter to David J. Busch from Jeff C. Schneider (re: Continuing hearing) filed. |
| Jul. 31, 1992 | (joint) Motion Waiving 30 Day Hearing Requirement filed. |
| Jul. 22, 1992 | (Respondent) Notice of Appearance filed. |
| Jul. 21, 1992 | Order For Accelerated Discovery And For Prehearing Statement sent out. |
| Jul. 21, 1992 | Notice of Hearing sent out. (hearing set for 8-11-92; 9:30am; Tallahassee) |
| Jul. 21, 1992 | Order of Consolidation sent out. (Consolidated cases are: 92-4332RP,92-4333RP, 92-4334RP, 92-4335RP, 92-4336RP, 92-4347RP, 92-4350RP, 92-4351RP and 92-4352RP) |
| Jul. 21, 1992 | Order of Assignment sent out. |
| Jul. 17, 1992 | Letter to Liz Cloud & Carroll Webb from Marguerite Lockard |
| Jul. 16, 1992 | Request To Produce To Florida Department of Insurance; Petitioner's Motion To Request Full Thirty Days Until Final Hearing filed. |
| Jul. 16, 1992 | Petition To Determine Invalidity of Proposed Rules filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 21, 1995 | Opinion | |
| Jul. 30, 1993 | DOAH Final Order | Definition of association as connected in mind or imagination is vague and unenforcable. Other rules are without statute basis and invalid. |
DEPARTMENT OF INSURANCE AND TREASURER vs RUTH ANNE WASHBURN, 92-004332RP (1992)
DEPARTMENT OF INSURANCE vs PETER JOSEPH DEBELLO, 92-004332RP (1992)
DEPARTMENT OF INSURANCE AND TREASURER vs PURITAN BUDGET PLAN, INC., 92-004332RP (1992)
DEPARTMENT OF FINANCIAL SERVICES vs FALCONTRUST GROUP, INC., 92-004332RP (1992)
