STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND )

TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 93-5080

)

MARGARET ANN EDWARDS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell held a formal hearing in this case on April 15, 1994, in St. Petersburg, Florida.

APPEARANCES

For Petitioner: James A. Bossart, Esquire

Department of Insurance Division of Legal Services 612 Larson Building

Tallahassee, Florida 32399-0333

For Respondent: John E. Maloney, Esquire

5335 66th Street North, Suite 4 Saint Petersburg, Florida 33710

STATEMENT OF THE ISSUES

Whether Respondent failed to remit premiums or submit applications for insurance; misappropriated and converted funds for her own use and benefit or unlawfully withheld monies belonging to insureds as set forth in the Administrative Complaint filed herein signed August 2, 1993.

PRELIMINARY STATEMENT

By its Administrative Complaint filed herein and signed August 2, 1993, Respondent is charged with violating the Florida Insurance Code by not paying over fiduciary funds to Life & Health Insurance Company of America (LHCA); for failing to forward applications to LHCA; and by unlawfully withholding monies belonging to insureds in violation of various provisions of Chapter 626, Florida Statutes. Respondent requested a formal hearing, and this hearing ensued.

At the final hearing, Petitioner presented the testimony of Jonathan A. Miller, the Vice President for LHCA. Respondent testified on her own behalf and presented the testimony of Michael G. Moskowitz, Michael Doroshenko, and Robert

1. Gosford. Petitioner introduced ten (10) exhibits which were received in evidence at the hearing. Additionally, the parties submitted a factual stipulation which is incorporated in this Recommended Order.

   Following the hearing, the parties filed proposed recommended orders which were considered in preparation of this recommended order. Proposed findings of fact which are not incorporated herein are the subject of specific rulings in an Appendix. Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I make the following relevant:

   
   

   FINDINGS OF FACT

   
   

   1. Respondent, Margaret Ann Edwards, is currently eligible for licensure and is licensed in Florida as a health insurance agent, and was so licensed at all times relevant to these proceedings. During times material, Respondent served as a general agent for LHCA. Respondent operated through a corporate entity known as Chartered Financial Advisors, Inc., which served as a clearing house for insurance agents. Insurance agents who operate as general agents are well versed in operating an insurance agency.

      
      

   2. On or about March 4, 1991, LHCA and Respondent entered into an agency agreement whereby Respondent agreed to solicit insurance products on behalf of LHCA. The agreement provided in relevant part:

      
      

      (2) ACCOUNTING

      All monies received for the Company by the General Agent for premiums, by reason of this Agreement, shall belong to the Company and shall be received and held by the General Agent in a fiduciary capacity only. The initial premiums shall be forthwith paid and delivered

      to Chartered Financial Advisors, Inc. All other premiums shall be forthwith paid and delivered to the Company.

      (5) INDEBTEDNESS

      If the Company, for any reason, refunds the premium on any Authorized Policy solicited by the General Agent, Representatives or employees, the General Agent shall refund to the Company any monies received by the General Agent, Representatives or employees by reason of the payment of such premiums. To the extent not refunded, said amount shall constitute an

      indebtedness by the General Agent to the Company.

      
      

   3. Prior to its agreement with LHCA, Respondent had been involved in the insurance business for an extended period of time and was familiar with the duties and obligations of a general agent. General agents who have good credit histories are granted "netting" authority. Netting authority is a procedure whereby the agent is given the authority to receive gross premiums from applicants for insurance and to withhold their net "commissions" from the gross premiums and remit the balance, or net premiums, to the company (LHCA).

      
      

   4. Respondent maintained a business bank account with Barnett Bank, and she was the sole signator on that account. The account was used to conduct her insurance business and to implement the netting authority arrangement that she had with LHCA. During August, 1992, LHCA became increasingly concerned about Respondent's failure to timely remit premiums due to LHCA on policies issued by

      the company, as well as premium refunds not being made by the Respondent to insurance consumers. LHCA made Respondent aware of these concerns by telephonic messages and by written communiques.

      
      

   5. LHCA's concerns about Respondent were not resolved and during January, 1993, LHCA terminated its agency agreement with Respondent.

      
      

   6. After termination of the agency agreement, LHCA was contacted by insurance consumers, Austin Jenkins, Bernice Caldwell, Mrs. Robert Bolling, and Robert Stopford about either policies that they had applied for and had never received or about policies which they were desirous of cancelling and/or obtaining a refund.

      
      

   7. LHCA demanded an explanation from Respondent about the complaints from the referenced consumers. Respondent thereafter sent a check to LHCA in the amount of $9,841.02 which Respondent represented as being owed to LHCA for the premium payments for insurance applications previously solicited and sold to the consumers.

      
      

   8. Respondent's check, which represented the refund of net premiums which was due and owing to LHCA, did not clear the bank and was returned for insufficient funds. Jonathan Miller of LHCA contacted the Respondent and attempted to amicably resolve the matter. Respondent advised Miller to redeposit the check as the funds were now in her account. Miller followed Respondent's directive and the check failed to clear the bank the second time due to insufficient funds. Miller did not authorize Respondent to cover refunds by using net commissions which were owed to LHCA.

      
      

   9. During this period, LHCA began receiving numerous inquiries from additional insurance consumers about the status of health insurance policies purchased through Respondent or her subagents, but for which the company had no record and had received no net premiums. The number of policies involved was approximately twelve. LHCA conducted an investigation and instructed the inquiring consumers to provide, among other things, proof of payment and other pertinent evidence to substantiate their claims. As a result, LHCA refunded premium payments to each individual consumer, including consumers Jenkins, Caldwell, Bolling, and Stopford.

      
      

   10. Austin Jenkins made application for insurance to be issued by LHCA through a subagent of Respondent and tendered a check in the amount of $3,868.00 made payable to LHCA. This check was deposited into Respondent's business account maintained at Barnett Bank.

       
       

   11. Bernice Caldwell, another consumer, also made application for insurance to be issued by LHCA through a subagent under contract with Respondent, and tendered a check in the amount of $7,072.00 made payable to LHCA. The check was deposited into Respondent's business account with Barnett Bank.

       
       

   12. Robert Bolling made application for insurance to be issued by LHCA of America, through a subagent under contract with Respondent, and tendered two checks in the amounts of $3,195.68 and $2,525.20, respectively, made payable to LHCA. These two checks were deposited into Respondent's business bank account maintained at Barnett Bank.

   13. Robert Stopford made application for insurance to be issued by LHCA through a subagent under contract with Respondent, and tendered a check in the amount of $3,996.20 made payable to LHCA. This check was also deposited into the business bank account maintained by Respondent at Barnett Bank.

       
       

   14. All of the above mentioned checks were negotiated and cleared their respective banks. The funds were thereafter transferred and credited to Respondent's business bank account maintained at Barnett. Insurance consumers Jenkins, Caldwell, Bolling, and Stopford intended their checks to be the initial premium for insurance policies which they applied for with LHCA.

       
       

   15. LHCA never received any applications for insurance or premium payments from Respondent on behalf of the above named consumers.

       
       

   16. The premium refunds made by LHCA to insurance consumers, Jenkins, Caldwell, Bolling, and Stopford were reflected on Respondent's account current statements with LHCA.

       
       

   17. As of December 31, 1993, Respondent owed LHCA the sum of $53,227.65. This sum represented premiums received by Respondent for insurance policies, but which remained unremitted to LHCA.

       
       

   18. LHCA has demanded payment from Respondent for the above refunds without success.

       
       

   19. In an attempt to recover its funds paid on behalf of Respondent, LHCA filed a civil suit in Sarasota County Circuit Court, Case No. 93-003262-CI-018. On March 9, 1994, a Summary Final Judgement was entered in the circuit court case filed against Respondent in the amount of $53,225.43.

       
       

   20. As of the date of hearing, the judgment remains unsatisfied.

       
       

   21. Respondent was involved in an automobile accident during April, 1992. The accident was the source of injuries to Respondent and limited her ability to actively engage in the operation of her agency.

       
       

   22. Under the subagency agreement Respondent utilized to hire subagents, Respondent kept approximately fifty-three percent (53 percent) of the net commission and she paid her agents amounts ranging from forty-seven percent (47 percent) up to, and in some cases, sixty percent (60 percent) of the net commissions that she received. When policies were cancelled and the subagents refused to return the premiums which they had been advanced, Respondent found herself financially unable to remit the payments either to the insureds or to LHCA as demanded. Respondent contends that Miller advised her to pay refunds from other net commissions due LHCA. As noted, Miller denies making any agreement with Respondent to use LHCA's net funds.

       
       

   23. Respondent's contention that she was told by LHCA's representative, Jonathan Miller, to deduct company net premiums from other policies to pay for refunds that were due to other consumers is not credible. In this regard, the agency agreement between Respondent and LHCA provides the procedure whereby LHCA was entitled to a refund from any premiums advanced on behalf of any authorized policies solicited by any general agent, as Respondent, or Respondent's representatives or employees. This procedure is set forth in subparagraph 5 of the agency agreement in effect between Respondent and LHCA. Additionally, the accounting procedures section of the agreement between Respondent and LHCA clearly states that all monies received for the company, as LHCA, by the general

       agent (Respondent) for premiums, by reason of their agreement, belong to LHCA and shall be received and held by the general agent in a fiduciary capacity only. Given these clear provisos in the agreement between the parties, Respondent's contention that she had entered into other oral agreements with LHCA for return of the premiums does not withstand scrutiny and is not credible.

       
       

       CONCLUSIONS OF LAW

       
       

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

       
       

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

       
       

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

       
       

   27. Section 626.561, Florida Statutes, provides in pertinent part:

       
       

       1. All premiums, return premiums, or other funds belonging to insurers or others received

          by an agent, solicitor, or adjuster in transactions under his license shall be trust funds so received by the licensee in a fiduciary capacity; and the

          licensee in the applicable regular course of business shall account for and pay the same to the insurer, insured, or other person entitled thereto.

          
          

   28. Section 626.611, Florida Statutes, provides in pertinent part:

       
       

       The department shall deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster or the permit of

       any service representative, supervising or managing general agent, or claims investigator, and it shall suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the applicant, licensee, or permittee any one

       or more of the following applicable grounds exist:

       * * *

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

       * * *

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

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

       * * *

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

   29. Section 626.621, Florida Statutes, provides, in pertinent part:

       
       

       The department may, in its discretion, deny an application for, suspend, revoke, or refuse to renew or continue the license of any applicant,

       agent, solicitor, adjuster, customer representative, service representative, supervising or managing general agent, or claims investigator, and it may suspend or revoke the eligibility to hold a license or appointment of any such person, if it finds that as to the applicant, licensee, or appointee any one of more of the following applicable grounds exist

       under circumstances for which such denial, suspension, revocation or refusal is not mandatory under s.

       626.611:

       (2) Violation of any provision of this code or

       any other law applicable to the business of insurance in the course of dealing under the license or permit.

       (4) Failure or refusal, upon demand, to pay over to any insurer he represents or has represented any money coming into his hands belonging to the insurer.

       (6) In the conduct of business under the license or permit, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part X of this chapter, or having otherwise shown himself to be a source of injury

       or loss to the public or detrimental to the public interest.

       
       

   30. Respondent admits that she received monies belonging to LHCA which were not remitted, but maintains that she has no legal responsibility to account for such funds. Based on the evidence presented, Petitioner has established, by clear and convincing evidence, that Respondent willfully withheld funds belonging to LHCA in violation of the agency agreement in effect between the parties. Petitioner also established, by clear and convincing evidence, that Respondent failed to remit premiums due to LHCA in violation of s. 626.561; 626.611(10); and 626.621(4), Florida Statutes. As Respondent had dominion and control over the funds, she was obliged to account for her principal's funds, and the funds are no longer in her custody in violation of s. 626.561, Florida Statutes. Based thereon, Respondent engaged in a derivative violation of s. 626.611(13), Florida Statutes. Additionally, Respondent's contention that she disposed of the funds pursuant to her authority is without merit. As Respondent continued to exercise dominion and control over LHCA's funds, after a demand was made by LHCA to return such funds, she engaged in a conversion of property belonging to LHCA. See Filner v. Shapiro, 633 F.2d 139 at 141-142, (2nd Cir. 1980).

       
       

   31. Petitioner also clearly and convincingly established that Respondent engaged in fraudulent and dishonest practices in the conduct of her business within the purview of s. 626.611(9), Florida Statutes. Based on Respondent's actions herein, Petitioner clearly and convincingly established that she demonstrated a lack of fitness and trustworthiness to engage in the business of insurance and which is within the purview of s. 626.611(7), Florida Statutes.

       
       

   32. Respondent, based on her conduct as described hereinabove, has demonstrated herself to be a detriment to the insurance-buying public and the insurers of this State in violation of s. 626.621(6), Florida Statutes.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that:

Respondent's licenses and eligibility for licenses be suspended for nine

(9) months, pursuant to Rule 4-231.080, Florida Administrative Code.

It is further RECOMMENDED that:

Petitioner enter a Final Order requiring that Respondent make satisfactory restitution to Life and Health Insurance Company of America prior to any request for reinstatement of her insurance licenses as authorized pursuant to s.

626.641, Florida Statutes.

RECOMMENDED in Tallahassee, Leon County, Florida, this 18th day of October, 1994.

JAMES E. BRADWELL

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 18th day of October, 1994.

APPENDIX to RECOMMENDED ORDER IN CASE NO. 93-5080

Rulings on Petitioner's proposed findings of fact:

Paragraph 20, adopted as modified, paragraph 18, Recommended Order. Paragraph 23, adopted as relevant, paragraphs 22 and 23, Recommended Order. Paragraph 23, adopted as relevant, paragraphs 18 and 22, Recommended Order. Paragraph 24, rejected, legal argument and/or conclusionary.

Rulings on Respondent's proposed findings of fact:

Paragraph 1, adopted as relevant, paragraph 10-13, Recommended Order. Paragraph 6, adopted as modified, paragraph 3, Recommended Order.

Paragraph 9, rejected, as a restatement of testimony.

Paragraph 10, adopted as modified, paragraphs 1 and 3, Recommended Order. Paragraph 14, rejected, irrelevant and not probative.

Paragraphs 16 and 18, rejected, contrary to the greater weight of evidence, paragraphs 8 and 23, Recommended Order.

Paragraph 19, rejected, irrelevant and unnecessary.

Paragraphs 21-26, rejected, contrary to the greater weight of evidence, paragraphs 2,5,7, and 23, Recommended Order.

Paragraphs 27 and 28, adopted as relevant, paragraphs 19 and 20, Recommended Order.

COPIES FURNISHED:

James A. Bossart, Esquire Division of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

John L. Maloney, Esquire

5335 66th Street North, Suite 4 St. Petersburg, Florida 33709

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Bill O'Neil General Counsel

Department of Insurance The Capitol, PL-11

Tallahassee, Florida 32399-0300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the 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 consult with the agency that will issue the Final Order in this case concerning their rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA OFFICE OF THE TREASURER

INSURANCE COMMISSIONER AND FIRE MARSHALL

DEPARTMENT OF INSURANCE AND TREASURER,

Petitioner,

vs. CASE NO. 93-5080

MARGARET ANN EDWARDS,

Respondent.

/

FINAL ORDER

THIS CAUSE came on before the undersigned Treasurer of the State of Florida, acting in his capacity as Insurance Commissioner, for consideration and final agency action. On August 2, 1993, an Administrative Complaint was filed charging the Respondent, MARGARET ANN EDWARDS, with violations of various provisions of Chapter 626, Florida Statutes. Respondent timely filed a request for a formal proceeding pursuant to Section 120.57(1), Florida Statutes.

Pursuant to notice a hearing was held on April 15, 1994 in St. Petersburg, Florida before James E. Bradwell, Hearing Officer for the Division of Administrative Hearings. Both parties filed Proposed Recommended Orders.

After consideration of the evidence at hearing and Proposed Recommended Orders, the Hearing Officer issued his Recommended Order (Attached as Exhibit A). The Hearing Officer recommended that the Final Order be entered suspending all insurance licenses held by Respondent for a period of nine (9) months, and that, pursuant to Section 626.641(1), Florida Statutes, the Respondent be required to pay satisfactory restitution to Life and Health Insurance Company of America prior to any request for reinstatement or any insurance license.

Respondent filed exceptions to the Written Report and Recommended Order which have been considered and are addressed below. Petitioner did not file exceptions.

RULINGS ON RESPONDENT'S EXCEPTIONS TO FINDINGS OF FACT

1. Respondent excepts to the Hearing Officer's finding that insurance agents are well versed in operating an insurance agency. This misstates the finding. In actual fact, the finding was that insurance agents "who operate as general agents" are well versed in operating an insurance agency. This was testified to by Jonathan A. Miller, who also testified specifically on the Respondent's knowledge about the industry. The Hearing Officer's Findings of Fact are supported by competent substantial evidence in the record. For this reason, the Respondent'5 exceptions to this Finding of Fact is rejected.

2. Respondent excepts to the Hearing Officer's failure to find that when the Respondent first experienced difficulty in making refunds she was able to resolve the problem by borrowing from a friend. Testimony in this regard was offered, however, it is unclear what significance this has in this matter. The Hearing Officer correctly rejected this in his Rulings on "Respondent's proposed findings of fact, Paragraph 14" as irrelevant and not probative. It could, for example, be an aggravating circumstance in that it showed prior instances of the complained of behavior. Therefore, in light of the matter's lack of relevance, Respondent's exception is rejected.

   
   

3. Respondent excepts to the Hearing Officer's failure to find that when a policy is cancelled while the application is still in possession of the agent it is to be returned to the applicant and not to be sent to Life and Health Insurance Company of America. Both Jon Miller and Respondent testified to this. However, complaints against the respondent for failing to forward money or applications do not involve people who cancelled their policies; rather it involves those who contacted Life and Health Insurance Company of America to find out why their policies had never been received. (T 17:113-14; 21:5-6) This issue was addressed in Respondent's Proposed Recommended Order, Paragraph 19, which paragraph was properly rejected by the Hearing Officer as irrelevant and unnecessary. In light of the limited relevance of the complained of omission, this exception is rejected.

   
   

4. Respondent excepts to the Hearing Officer's failure to acknowledge a verbal communication between Jon Miller and Respondent regarding holding on to a specified check for a period before depositing it. Respondent admits in her exception that the evidence on this point was contradictory. Respondent claimed the conversation occurred; Miller denies it. There is competent substantial evidence to support the Hearing Officer's Finding of Fact. Petitioner appears to believe that the Hearing Officer was obligated to accept the Respondent's testimony as clear and convincing, notwithstanding evidence to the contrary. Respondent provides no authority for such a proposition. This exception is therefore rejected.

   
   

5. Respondent excepts to the Hearing Officer's express finding (Finding of Fact #8) that Jon Miller did not authorize Respondent to cover funds by using net commissions which were owed to Life and Health Insurance Company of America. She bases her exception on the testimony of a witness that such a conversation had occurred. It is the hearing officer's function to consider all the evidence presented, judge credibility of witnesses, draw permissible inferences from evidence and reach findings of fact based on competent substantial evidence. Heifetz v. Department of Business Regulation, 475 So.2d 1277 (Fla. 1st DCA 1985). The Hearing Officer's finding on this issue is supported by competent substantial evidence in the record. For this reason, the Respondent's exception to this Finding of Fact is rejected.

   
   

6. Respondent excepts to the Hearing Officer's failure to make a finding that it was the business practice of Life and Health Insurance Company of America to allow agents to use company nets for personal business reasons. The evidence on this issue was contradictory. This issue was set forth in Respondent's Proposed Recommended Order, Paragraph 24, which paragraph was rejected by the Hearing Officer as contrary to the greater weight of evidence. For this reason the Respondent's exceptions to this Finding of Fact is rejected.

   
   

7. Respondent's exception #7 is rejected for the same reasons as given for Exception #3, above.

8. Respondent takes exception to Finding of Fact #17, arguing that the

   $53,227.65 figure does not take into account agency nets, which money, she argues would offset the total. This exception is rejected, since this figure, according to the evidence, is based on premiums that had to be paid back to the policyholders in situations where Life and Health Insurance Company of America did not receive the application. As Mr. Miller testified, when the Respondent received applications and payment from the prospective policyholder, but never forwarded them to the company, the policyholder would complain to Life and Health Insurance Company of America, which would be forced to refund to the policyholder the money that had been paid by the policyholder to the Respondent, but that had never been forwarded to Life and Health Insurance Company of America. (T. 26:10-15) Respondent was not entitled to agency net in such situations.

   
   

9. Respondent excepts to the Hearing Officer's failure to acknowledge in Finding 19 (misstated as 18) that the judgment in the civil suit was for breach of contract. Finding 18 will be modified to so state.

   
   

10. Respondent's Exception 10 is rejected as being argumentative, and bearing little relationship to the accuracy of Finding of Fact #23. The Hearing Officer's Findings of Fact are supported by competent substantial evidence in the record.

    
    

11. Respondent's Exception #11, which complains that the Hearing Officer failed to rule on the credibility issue of Jon Miller, is merely a reclothing of Exception #5, and is rejected on the same grounds.

    
    

    RULINGS ON RESPONDENT'S EXCEPTIONS TO CONCLUSIONS OF LAW

    
    

12. Respondent excepts to the Conclusion of Law #30 in that it states that Respondent "maintains that she has no legal responsibility to account for such funds." That Respondent maintains she is not civilly liable for returning the money is not supported by the record. To the extent, therefore, that this Conclusion of Law states that Respondent maintains at this time, and maintained at the time of the hearing, that she has no legal responsibility to account for the funds, it is modified.

    
    

13. Respondent's Exception #13 is the same exception as set forth in her Exception #8, and is rejected on the same grounds.

    
    

14. Respondent's Exception #14 is mischaracterized as an exception to a Finding of Law. Instead, it reargues the factual conclusion underlying the Finding of Law. As stated above, it is the hearing officer's function to consider all the evidence presented and to judge the credibility of the witnesses. Heifetz v. Department of Business Regulation, 475 So.2d 1277 (Fla. 1st DCA 1985). This is what he did. For these reasons, the Respondent's exception to this Finding of Fact is rejected.

    
    

15. Respondent's Exception #15 complains of the failure of the Hearing Officer to make a specific finding that Respondent had the mental state necessary for the crime of theft. However, nowhere in the conclusions of law does the Hearing Officer address the issue of theft. Instead he writes that Respondent "willfully" withheld funds, and engaged in "conversion" of Life and Health Insurance Company of America's property. Respondent's Exception #15 is therefore rejected. The Hearing Officer's findings in this regard are supported by competent substantial evidence in the record.

16. Respondent's Exception to Conclusion of Law #16 is mislabeled, and instead, once again, merely takes issue with the Hearing Officer's express finding regarding Respondent's credibility. This exception is therefore rejected. (See, #14, above.)

    
    

17. Respondent takes exception to Conclusion of Law #30 in so far as it states that Respondent continued to maintain custody of the funds after Life and Health Insurance Company of America demanded them from her. She seems not to contest in this exception that conversion occurred, but only as to when it occurred, for conversion occurred both in her failure to forward to Life and Health Insurance Company of America premiums that were to accompany applications, which applications were likewise never forwarded to Life and Health Insurance Company of America, as well as in her wrongful use of company net to cover refunds. Goodrich v. Malowney, 157 So.2d 829 (2nd DCA 1963); 12 Fla Jur 2d 61-62.See, also, Sections 812.012(2)(d) and 812.014(1); It does appear, however, that when demand was made for the funds, Respondent may have already spent those funds. Though it does not affect the legal conclusion that a conversion had taken place, ("The generally accepted rule is that demand and refusal are unnecessary where the act complained of amounts to a conversion regardless of whether a demand is made. Goodrich v. Malowney, 157 So.2d 829, 832 (2nd DCA 1963)) the last sentence in Conclusion of Law #30, (the one now starting with "As Respondent...") is modified to read as follows:

    
    

    Both in her wrongful use of company net, and in her failure to forward premiums and applications to Life and Health Insurance Company of America, Respondent engaged in a

    conversion of property belonging to Life and Health Insurance Company of America. See, Sections 812.012(2)(d) and 812.014(1); Goodrich v. Malowney, 157 So.2d 829 (2nd

    DCA 1963); 12 Fla Jur 2d 61-62.

    
    

18. Respondent takes exception to Conclusion of Law #31 complaining that it fails to specify what practices Respondent committed that were fraudulent and dishonest. However, the preceding Finding, #30, sets out in detail those practices that are fraudulent and dishonest. Respondent had the opportunity to, and did in fact, contest those factual and legal issues. This exception is therefore rejected.

Upon careful consideration of the record in this matter and being otherwise advised in the premises, it is ORDERED:

1. The Findings of Fact of the Hearing Officer are adopted in full as the Department's Findings of Fact except as modified above.

   
   

2. The Conclusions of Law of the Hearing Officer are adopted in full as the Department's Conclusions of Law except as modified above.

   
   

3. The Hearing Officer's recommendation that a Final Order be entered suspending all insurance licenses held by Respondent for a period of nine (9) months, and that, pursuant to Section 626.641(1), Florida Statutes, the Respondent be required to pay satisfactory restitution to Life and Health Insurance Company of America prior to any request for reinstatement of any insurance license, is approved and accepted as being the appropriate disposition of this matter.

ACCORDINGLY, Respondent's licenses and eligibility for licensure are hereby suspended for a period of nine (9) months, such period to commence ten (10) days from the date of this Final Order. Pursuant to Section 626.641(4), Florida Statutes, the Respondent shall not engage in or attempt or profess to engage in any transaction or business for which a license or appointment is required under the Insurance Code or directly or indirectly own, control, or be employed in any manner by any insurance agent or agency during his period of suspension.

Pursuant to Section 626.641(1), Florida Statutes, Respondent's licensure shall not be reinstated except upon request for such reinstatement, and the Respondent shall not engage in the transaction of insurance until her licensure is reinstated. The Department shall not grant reinstatement if it finds that the circumstance or circumstances for which Respondent's licenses were suspended still exist or are likely to recur. Further, pursuant to Section 626.641(1), Florida Statutes, the Respondent shall be required to pay satisfactory restitution to Life and Health Insurance Company of America prior to the reinstatement of any insurance license.

Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Fla. R. App. P. Review proceedings must be instituted by filing a petition or notice of appeal with the General Counsel, acting as the agency clerk, at 612 Larson Building, Tallahassee, Florida 32399-0333, and a copy of the same and the appropriate filing fee with the appropriate District Court of Appeal within thirty (30) days of rendition of this Order.

DONE and ORDERED this 24th day of February, 1995.

BILL NELSON

Treasurer and Insurance Commissioner

COPIES FURNISHED:

JAMES E. BRADWELL, HEARING OFFICER

Diision of Administrative Hearings The DeSoto Building

130 Apalachee Parkway Tallahassee, Florida 32399-1550

JAMES L. MALONEY, ESQUIRE

335 66th Street North Suite 4

St. Petersburg, Florida 33709

JAMES BOSSART, ESQUIRE

Division of Legal Services Department of Insurance 612 Larson Building

Tallahassee, Florida 32399-0333

Docket for Case No: 93-005080

Orders for Case No: 93-005080