_ _ AUG 20 2001 THE TREASURER OF THE STATE OF FLORIDA DEPARTMENT OF INSURANCE Treasurer and Tom GALLAGHER Insurance Commissioner - Docketed by: 7 IN THE MATTER OF: CASE NO: 34442-00-AG’ SOUTHERN UNDERWRITERS, INC. / ADMINISTRATIVE COMPLAINT TO: Southern Underwriters, Inc. c/o Orrin R. Beilly, Esquire, as Resident Agent 105 South Narcissus Avenue, Ste. 705 “West Palm Beach, FL 33401 YOU ARE HEREBY NOTIFIED that pursuant to the provisions of section 624.307(3), 624.317, and 626.601, Florida Statutes, as Treasurer and Insurance Commissioner of the State of Florida, I have caused an investigation to be made of the activities of Southern Underwriters, Inc. as an authorized Managing General Agent in this State and as a result allege: GENERAL ALLEGATIOINS 1. The Treasurer and Insurance Commissioner, as head of the Department of Insurance (hereinafter referred to as the “DEPARTMENT”), has jurisdiction over the subject matter and of the parties herein pursuant to Chapters 120, 624, 626, and 627, Florida Statutes. 2. At all times pertinent to this complaint, SOUTHERN UNDERWRITERS, INC. (hereinafter referred to as “SOUTHERN UNDERWRITERS”) was a licensed Managing General Agent (0-60) authorized to engage in the business of insurance in the State of Florida under license number A249929. 3. At all times pertinent to this complaint, SOUTHERN UNDERWRITERS was a Florida corporation having a current principal address at 324 S State Road 7, Margate, Florida 33068. 4. At all times pertinent to this complaint, SOUTHERN UNDERWRITERS was not licensed to transact business as a surplus lines agent (1-20). 5. At all times pertinent to this complaint, Florida licensed insurance agent David Platt, license number A208376, was licensed as a surplus lines agent, giving as his business address, 440 S. Federal Highway, Deerfield Beach, Florida. COUNT I 6. The General Allegations set forth above in paragraphs one through five are hereby re-alleged and incorporated herein by reference. 7. Por the period. of time between “January, 1999 and August, 1999, SOUTHERN UNDERWRITERS processed “Travel Accident Protection Plan” applications submitted by an unlicensed agent (Lamar Orrell of Panama City), collected premiums and issued insurance policy declaration pages with respect thereto which were underwritten “by Lloyds of London and countersigned by licensed surplus lines agent David Platt. 8. SOUTHERN UNDERWRITERS, for at least the time period between January, 1999 ‘and August, 1999, acted as a managing general agent licensed and also acted as a surplus lines agent without in fact holding a surplus lines license. IT IS THEREFORE CHARGED that you, SOUTHERN UNDERWRITERS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Insurance which constitute grounds for the suspension or revocation of your licenses and appointments as an insurance agent: (a) A “Managing general agent” is not defined so to apply to surplus lines insurance when written pursuant to the Surplus Law [Section 626.091(4), Florida Statutes]; (0) Any individual while licensed and appointed as a ‘managing general agent as defined in s.626.091, or who otherwise possesses all of the other qualifications of a general lines agent under this code, _and .who has a minimum of 1 year’ S _experience hana ters tnsienenc ni tabi ne working for a licensed surplus lines agent or who has successfully completed 60 class hours in Surplus: and excess Lines in a course : approved by the department, may, upon taking and and Successfully passing a written examination as to surplus lines, as given by the “alas fe department, be licensed as a surplus lines agent solely for the purpose of placing with surplus lines insurance property, marine, casualty, or surety coverages originated by general lines agents; except that no examination for a general lines agent’s license shall be required of any managing’ general agent or service representative who held a Florida surplus lines agent’s license as of January 1, 1959 [Section 626.927(2), Florida Stautes]}; (c) A managing general agent while licensed and appointed as a surplus lines agent under this part may accept and place solely such surplus lines business as is originated by a Florida-licensed general lines agent appointed and licensed as to the kinds of insurance involved and May compensate such agent therefore [Section 626.929(2)]. COUNT IT 9. The General Allegations set forth above in paragraphs one through five are hereby re-alleged and incorporated herein by reference. 10. A xreview of the Travel Accident Protection Plan applications revealed | that none of them had the diligent search portion properly “completed, showing only ‘that “Roadside” or “Roadside Motor Club” had “declined coverage” after a diligent — search. 11. Supervisory personnel of SOUTHERN UNDERWRITERS knew, ~~ or should have known, that the diligent search provisions were not conducted in accordance with the provisions of the Surplus Lines Law of the Insurance Code. IT. IS THEREFORE CHARGED that you, SOUTHERN UNDERWRITERS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Insurance which constitute grounds for the suspension or revocation of your licenses and appointments as an insurance agent: (a) When placing coverage with an eligible surplus lines insurer, the surplus lines agent must verify that a diligent effort has been made by requiring from the retail or producing agent a properly documented statement of diligent effort on form Dif-1153 (7/94), “Statement of Diligent Effort”, which is hereby adopted and incorporated by reference. Declinations must be documented on a risk~by-risk basis [Rule 4J-5.003, Florida Administrative Code]. “Diligent effort” means seeking coverage from and having been rejected by at least three authorized : insurers currently writing this type of coverage and documenting these rejections. [Section 626.914(3), Florida Statutes]; (b) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes! (c) Demonstrated lack of Feasonably adequate knowledge and “technical “Gompetence ‘to “engage in the transactions authorized by the license or permit. [Section 626.611(8), Florida Statutes]; (d) Fraudulent or dishonest practices in the conduct of business under the license ‘or permit. (Section 626.611(9), Florida Statutes]; “(e) 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. [Section 626.611(13), Florida Statutes]; (£) Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or permit. [Section 626.621(2), Florida Statutes]; (g) Violation of any lawful order or rule of the Department. [Section 626.621(3), Florida Statutes]. WHEREFORE, you, SOUTHERN UNDERWRITERS, are hereby notified that the Treasurer and Insurance Commissioner intends to enter an Order suspending or revoking your licenses and appointments as an insurance agent or to impose such penalties as may be provided under the provisions | of Sections 626.611, 626.621, 626.681, 626.691, and (626.9521, Florida Statutes, and under the other referenced sections of the Florida Statutes as set out in this Administrative Complaint. You are further notified that any order entered in this case revoking or suspending any license or eligibility for licensure held by you shall also apply to all TOPPER TRE TT CREE r seemeae eeoog meee Beet other licenses and eligibility Insurance Code. 2001. pise r 03 whi DATED and SIGNED this 20th held by you under ‘the Florida day of August 7 KENNEY SHIPLEY Deputy Insurance Commissioner NOTICE OF RIGHTS 7 Pursuant to Sections 120.569 and 120.57, Florida Statutes and Title 28, Florida Administrative Code (F.A.C.), you have the right to request a proceeding to contest this action by the Department. You may elect a proceeding by completing the attached Election of Rights form or filing a Petition. Your Petition, or Election, of a proceeding must be in writing and must be filed with the General Counsel acting as the Agency Clerk, Department of Insurance. If served by U.S. Mail the Petition or Election should be addressed to the Plorida Department of Insurance at 612 Larson Building, Tallahassee, | Florida 32399-0333. If Express Mail or hand delivery is utilized, the Petition or Election should be delivered to 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333. The Petition or Election must be received by, and filed in the Department within twenty-one (21) days of the date of your receipt of this notice. YOUR FAILURE TO RESPOND TO THIS ADMINISTRATIVE COMPLAINT NOTICE WITHIN ~: TWENTY-ONE (21) DAYS WILL CONSTITUTE A ‘WAIVER | OF YOUR RIGHT TO REQUEST A PROCEEDING ~~ ON THE MATTERS ALLEGED HEREIN AND AN ORDER “2 OF REVOCATION WILL BE ENTERED AGAINST YOU. it a proceeding is. _requested and there is no dispute of 1 SMR cine Hae RR eR SR fact the’ provisions of “Section. 120. 57(2), Florida Statutes would apply. In this regard you may submit oral or written evidence in opposition to the action taken by this agency or a written statement challenging the grounds upon which the agency has relied. While a hearing is normally not required in the absence of a dispute of fact, if you feel that a hearing is necessary one will be ‘conducted in Tallahassee, Florida or by telephonic conference call upon your request. If you dispute material facts which are the basis for this agency's action you may request a formal adversarial proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. If you request this type of proceeding, the request must comply with all of the requirements of Title 28, F.A.C. and contain a) A statement identifying with particularity the allegations of the Department which you. dispute and the nature of the dispute; b) An explanation of what relief you are seeking and believe you are entitled to; “¢) Any other information which you “contend is . nacectay se Soon a ahah ating ody boat These proceedings are held before a State administrative law judge of the Division of Administrative Hearings. Unless the “majority of witnesses are located elsewhere the Department will request that the hearing be conducted in Tallahassee. “TF yo quest a hearing, you have the represented by counsel, or other qualified representative, to _vight to be take testimony, to call and cross-examine witnesses, and to have subpoena and subpoena duces tecum issued on your behalf. You are hereby notified that mediation is not available. Failure to follow “the Procedure outlined with regard to your response to this notice May result in the request being denied. All prior correspondence in this matter shall be considered freeform agency action, and no such correspondence shall operate as a valid request for an administrative proceeding. Any request for administrative Proceeding received prior to the date of this notice shall be deemed abandoned unless timely renewed in compliance with the guidelines as set Out above. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Administrative Complaint has been furnished by U. .S. Mail to: Southern Underwriters, Inc., c/o Orrin R. Beilly, Esquire as Resident Agent, 105 South Narcissus Avenue, Ste. 705, West Palm Beach, FL 33401 this 20th day of August , 2001. — - David J. Busch, Esquire Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 (850) 413-4146

Docket for Case No: 01-003634