TOM GALLAGHER CHIEF FINANCIAL OFFICER IN THE MATTER OF: CASE NO.: ELIZABETH DORIS OTTS ADMINISTRATIVE COMPLAINT TO: ELIZABETH DORIS OTTS 960 Summer Lakes Drive Orlando, FL 32835-5124 You, ELIZABETH DORIS OTTS, license I.D. #4197918, are hereby notified that the Chief Financial Officer of the State of Florida has caused to be made an investigation of your activities while licensed as an insurance agent in this state, as a result of which it is alleged: GENERAL ALLEGATIONS 1. Pursuant to Chapter 626, Florida Statutes, you, ELIZABETH DORIS OTTS, are currently licensed in this state as a Life & Variable Annuity agent (2-14), and a Viatical Settlement Broker (Individual) (2-66). 2. At all times pertinent to the dates and occurrences referred to herein, you, ELIZABETH DORIS OTTS, were licensed as a Life & Variable Annuity agent (2-14), and a Viatical Settlement Broker (Individual) (2-66). 3. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services has jurisdiction over your insurance licenses and appointments. 4. At all times pertinent to the dates and occurrences referred to herein, “ TLC Funding, a Viatical Settlement Broker, Inc”, a viatical settlement broker, (hereinafter referred to as “TLC”) was a Florida corporation. You, ELIZABETH DORIS OTTS, were an officer and director of the corporation. 5. At all times pertinent to the dates and occurrences referred to herein, you, ELIZABETH DORIS OTTS, were licensed in this state as a resident life insurance and variable annuity agent (2-14). At all times pertinent to the dates and occurrences referred to herein, you, ELIZABETH DORIS OTTS, were licensed in this state as a resident viatical settlement broker (2-66). COUNT I 6. The above general allegations are hereby realleged and fully incorporated herein by reference. 7. Files obtained from Future First Financial Group, Inc. (FFFG), a revoked viatical settlement provider, show that: a. Onor about August 4, 1998, a G.S. submitted a written application for a $90,000 life insurance policy to Ameritas. b. On said application, Mr. S. specifically stated that he had not been diagnosed by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aid Related Complex (ARC), or any AIDS related condition. c. Onor about August 28, 1998, in apparent reliance on that application and the representations therein, Ameritas issued policy #2103062698, insuring Mr. S. d. Onor about September 17, 1998, you, ELIZABETH DORIS OTTS and TLC received a physician’s questionnaire showing Mr. S. to have been HIV positive since 1992, having been tested for CD4 levels in February, June, and August of 1998, as well as being on medicaticn. e. Onor about November 2, 1998, despite the contradiction between Mr. Smith’s Ameritas application and his TLC physician questionnaire, TLC brokered on behalf of G.S. a viatical settlement contract with Future First Financial Group for the sale of policy #2103062698. 8. You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by G.S. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. IT IS THEREFORE CHARGED that you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) Failure to report knowledge or belief of the commission of a fraudulent insurance act or any other act which, upon conviction, constitutes a felony or misdemeanor under the Insurance Code or Section 817.234, F.S. [Section 626.99275(1)(a), F.S.J (b) Has engaged in fraudulent or dishonest practices, or otherwise has been shown to be untrustworthy or incompetent to act as a viatical settlement broker. [Section 626.991 7(1)(b), F.S.] (c) Has violated any provision of the insurance code or of this act. {Section 626.9917(1\e), F.S.] COUNT II 9. The above general allegations are hereby realleged and fully incorporated herein by reference. 10. Files obtained from FFFG show that: On or about January 12, 1998, J.B. submitted a written application for a $250,000 life insurance policy to Farmers New World Life. . Onsaid application, Mr. B. specifically stated that he had not been diagnosed by amember of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aid Related Complex (ARC), or tested positive for the HIV virus. On or about January 20, 1998, in apparent reliance on that application and the representations therein, Farmers New World Life issued policy #006091184U, insuring Mr. B. _ Onor about August 11, 1998, FFFG stamped an interoffice form concerning Mtr. B. with the word “AIDS”. This form also lists TLC as the broker, shows CD4 and viral loads on and after June, 1997, and identifies the time Mr. B. was first diagnosed HIV positive as June, 1994. On or about September 1, 1998, TLC brokered on behalf of Mr. B. with a viatical settlement contract for the sale of policy #006091184U. You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by J.B. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count I above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) [Section 626.99275(1)(a), F.S.] (b) [Section 626.9917(1)(b), F.S.] (c) [Section 626.9917(1)(e), F.S.] COUNT 12. The above general allegations are hereby realleged and fully incorporated herein by reference. 13. Files obtained from FFFG show that: a. On or about September 10, 1998, T.D. submitted a written application for a $50,000 life insurance policy to Liberty Life Assurance Company of Boston (Liberty Life). On said application, Mr. D. specifically stated that he had not been diagnosed by a member of the medical profession as having tested positive for the HIV virus. On or about October 1, 1998, in apparent reliance on that application and the representations therein, Liberty Life issues policy #NT3-1005264, insuring Mr. D. On or about September 14, 1998, T.D. submitted a written application for a $99,999 life insurance policy to Liberty National. On said application, Mr. D. specifically stated that he had not been diagnosed by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aid Related Complex (ARC), or tested positive for the HIV virus. On or about October 1, 1998, in apparent reliance on that application and the representations therein, Liberty National issued policy #A5316093, insuring Mr. D. On or about October 1, 1998, TLC received an application from Mr. D. divulging that he has been diagnosed as having the HIV virus. On or about June 6, 1998, despite the discrepancies between Mr. D’s insurance applications to Liberty National and Liberty Life and his application to TLC, TLC brokered on behalf of Mr. Smith a viatical contract for the sale of policies #NT3-1005264 and #A5316093. 14. You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by T.D. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count I above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) [Section 626.99275(1)(a), F.S.] (b) [Section 626.9917(1)(b), F.S.] (c) [Section 626.9917(1)(e), F.S.] COUNT IV 15. The above general allegations are hereby realleged and fully incorporated herein by reference. 16. Files obtained from TLC show that: a. Onor about June 6, 1998, W.C. submitted a written application for a $50,000 life insurance policy to Liberty National. b. On said application, Mr. C. specifically stated that he had not been diagnosed by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aid Related Complex (ARC), or tested positive for the HIV virus. c. Onor about July 1, 1998, in apparent reliance on that application and the representations therein, Liberty National issued policy #33461779, insuring Mr. C. d. On or about June 6, 1998, Mr. C. submitted a written application for a $50,000 life insurance policy to Auto-Owners. e. Onsaid application, Mr. C. specifically stated that he had not been diagnosed by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aid Related Complex (ARC), or tested positive for the HIV virus. £ Onor about July 17, 1998, in apparent reliance on that application and the representations therein, Auto-Owners issued policy #020-269864-0, insuring Mr. C. g. Onor about July 20, 1998, Mr. C. submitted an application to TLC which identifies Liberty National policy #33461779 and shows Mr. C. to be HIV positive with an undetectable viral toad. h. On or about July 22, 1998, TLC received a physician’s questionnaire showing Mr. C. to have been HIV positive since 1997, having been tested for CD4 levels in March, April and May of 1998. 17. You, ELIZABETH DORIS OTTS, knew or should have known. that the information contained in the insurance application submitted by W.C. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count L above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) [Section 626.99275(1)(a), F.S.] (b) [Section 626.9917(1)(b), F.S.] (c) [Section 626.9917(1)(e), F.S.] COUNT V 18. The above general allegations are hereby realleged and fully incorporated herein by reference. 19. Files obtained from TLC show that: a. Onor about March 24, 1998, A.C. submitted a written application for a $50,000 life insurance policy to Trustmark. b. On said application, Mr. C. specifically stated that he had not been diagnosed by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aid Related Complex (ARC), or tested positive for the HIV virus. c. Onor about June 1, 1998, in apparent reliance on that application and the representations therein, Trustmark issued policy ¥NY7403, insuring Mr. C. d. Onor about May 4, 1998, A.C. submitted a written application for a $500,000 life insurance policy to First Colony Life. e. On said application, Mr. C. specifically stated that he had not been diagnosed by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aid Related Complex (ARC), or tested positive for the HIV virus. f Onor about June 2, 1998, in apparent reliance on that application and the representations therein, First Colony Life issued policy #5,151,433, insuring Mr. C. g. Onor about July 22, 1998, Mr. C. submitted a written application for a $100,000 life insurance policy to Interstate Assurance. . On said application, Mr. C. specifically stated that he had not been diagnosed by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aid Related Complex (ARC), or tested positive for the HIV virus. On or about August 5, 1998, in apparent reliance on that application and the representations therein, Interstate Assurance issued policy #00402018, insuring Mr. C. On or about August 24, 1998, Mr. C. submitted a written application for a $75,000 life insurance policy to Auto-Owners. . On said application, Mr. C. specifically stated that he had not been diagnosed by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aid Related Complex (ARC), or tested positive for the HIV virus. On or about August 24, 1998, in apparent reliance on that application and the representations therein, Auto-Owners issued policy #020-272032-0, insuring Mr. C. _ On or about September 8, 1998, Mr. C. submitted a written application for a $500,000 life insurance policy to Bankers Life. . On said application, Mr. C. specifically stated that he had not been diagnosed by a member of the medical profession as having Acquired immune Deficiency Syndrome (AIDS), Aid Related Complex (ARC), or tested positive for the HIV virus. . Onor about September 9, 1998, in apparent reliance on that application and the representations therein, Bankers Life issued policy #8140279, insuring Mr. Cc. . Onor about September 22, 1998, Mr. C. submitted a written application for a $75,000 life insurance policy to Liberty Life. q. On said application, Mr. C. specifically stated that he had not been diagnosed by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aid Related Complex (ARC), or tested positive for the HIV virus. r. Onor about September 22, 1998, in apparent reliance on that application and the representations therein, Liberty Life issued policy #NN3-1006420, insuring Mr. C. s. Medical records show Mr. C. was HIV positive on or before April 9, 1996, and was tested for CD4 levels on September 17, 1996; January 28, March 5, April 3, June 3, August 19, October 14, November 12, December 9 in 1997; and January 12 and March 10 in 1998. t. Onor about May 17, 1998, TLC received an application on behalf of Mr. C. providing his physician’s contact information but with the HIV section left blank. u. Onor about December 4, 1998, TLC received a settlement notification from Liberty Life Assurance of Boston for policy #NN3-1006420. 20. You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by A.C. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count I above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: 10 (a) [Section 626.99275(1)(a), F.S.] (b) [Section 626.9917(1)(b), F.S.] (c) [Section 626.9917(1)(e), F.S.] 21. by reference. 22, COUNT VI The above general allegations are hereby realleged and fully incorporated herein Files obtained from TLC show that: a. Onor about October 31, 1997, C.D. submitted a written application for a $50,000 life insurance policy to Manhattan National. . On said application, Mr. D specifically stated that he had not been diagnosed by a member of the medical profession as having Acquired Iramune Deficiency Syndrome (AIDS) or Aid Related Complex (ARC). On or about October 31, 1997, in apparent reliance on that application and the representations therein, Manhattan National issued policy #MG9788388, insuring Mr. D. . Dated January 24, 1996, TLC had among Mr. D’s files information listing his T-Cell count to be 244 in November, 1995, 244 in March, 1996, 340 in May, 1997, and 218 in June, 1997. . Dated June 4, 1997, TLC had among Mr. D’s files a fax from Ms. ELIZABETH DORIS OTTS to Mr. Day’s physician, Dr. Richard DuBois, requesting three (3) CD4 lab reports and acknowledging that TLC has all other necessary medical records. On or about January 15, 1998, TLC accepted the viatical settlement offer brought to them by the Arden Group to purchase Mr. D’s Manhattan National life insurance policy #MG9788388. 11 23. You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by C.D. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count I above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) [Section 626.99275(1)(a), F.S.] (b) [Section 626.9917(1)(b), F.S.] (c) [Section 626.9917(1)(e), F.S.] COUNT VII 24. The above general allegations are hereby realleged and fully incorporated herein by reference. 25. Files obtained from TLC show that: a. Onor about May 26, 1996, D.J. submitted a written application for a $30,000 life insurance policy to New Era Life. b. On said application, Mr. J. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS) or any AIDS related condition. c. Onor about June 5, 1996, in apparent reliance on that application and the representations therein, New Era Life issued policy #5000243198, insuring Mr. J. d. On or about March 2, 1998, D.J. submitted a written application for a $90,000 life insurance policy to Pacific Guardian. 12 26. On said application, Mr. J. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aids related complex (ARC), or any other immunilogical disorder. On or about March 11, 1998, in apparent reliance on that application and the representations therein, Pacific Guardian issued policy #0007715473, insuring Mr. J. _ Dated March 23, 1998, TLC had among its files for Mr. J. a letter to Ms. ELIZABETH DORIS OTTS from Mr. Joseph enclosing a Pacific Guardian policy and advising that he does not want to do anything “risky”. Dated July 6, 1998, TLC had among its files for Mr. J. a worksheet detailing the commission breakdown for the sale of Mr. J’s New Life Era life insurance policy #5000243198 by TLC. You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by D.J. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count I above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) [Section 626.99275(1)(a), F.S.J (b) [Section 626.9917(1)(), F.S.] (c) [Section 626.9917(1}(e), F.S.] 13 COUNT VII 27. The above general allegations are hereby realleged and fully incorporated herein by reference. 28. Files obtained from TLC show that: a. On or about July 21, 1997, J.K. submitted a written application for a $100,000 life insurance policy to Columbian Mutual. On said application, Mr. K. specifically stated that he had not received treatment or observation in a hospital, clinic, or similar institution. On or about August I, 1997, in apparent reliance on that application and the representations therein, Columbian Mutual issued policy #A010180340, insuring Mr. K. On or about September 2, 1997, J.K. submitted a written application for a $75,000 life insurance policy to Liberty Life. On said application, Mr. K. specifically stated that he had not been consulted, attended to, or examined by any doctor or any other practioner, nor had he been a patient in any hospital or similar institution. On or about October 1, 1997, in apparent reliance on that application and the representations therein, Liberty Life issued policy #NF3-974579, insuring Mr. K. On or about September 22, 1997, Ms. ELIZABETH DORIS OTTS requested medical records for Mr. K. from Dr. Steve Rucker. On or about September 22, 1997, Mr. K’s application to TLC for viatical settlement indicates on the cover page that Mr. K. had a t-cell count of 286 on August of 1997. On or about October 6, 1997, Ardan Group offers to purchase Mr. Z’s Columbian Mutual policy #A010180340. 14 On or about January 1, 1998, J. K. submitted a written application for a $10,000 life insurance policy to First United American. . On said application, Mr. K. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS) or Aids related complex (ARC). On or about March 10, 1998, in apparent reliance on that application and the representations therein, First United American issued policy #37-1768692, insuring Mr. K. . TLC had among its files for Mr. K. medical notes indicating that Mr. K. was HIV positive before January 8, 1997. . On or about September 24, 1999, TLC sent a form to Mr. K. requesting his signature on forms, medical records after 11/98, and a copy of his policy. On or about October 29, 1999, TLC application identifies Columbian Mutual policy #A01080340, discloses Mr. K. has AIDS. . Dated October 29, 1999, TLC had among its files the Individual Policy Verification form for Liberty Life policy #NF3-974579. You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by J. K. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count I above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: 15 (a) [Section 626.99275(1)(a), F.S.] (b) [Section 626.9917(1)(b), F.S.] (c) [Section 626.9917(1)(e), F.S.] COUNT IX 30. The above general allegations are hereby realleged and fully incorporated herein by reference. 31. Files obtained from TLC show that: a. On or about July 16, 1993, P.M. submitted a written application for a $50,000 life insurance policy to Security Life and Trust. On said application, Mr. M. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aids related complex (ARC), or any other immunilogical disorder. On or about August 1, 1993, in apparent reliance on that application and the representations therein, Security Life and Trust issued policy #002986937-0, insuring Mr. M. On or about September 30, 1998, TLC application identifies Security Life and Trust policy #002986937-0 and discloses that Mr. M. is HIV positive with a CD4 count of 522 in September 1998. On or about October 8, 1998, TLC physician’s questionnaire page shows that Mr. M. was diagnosed as being HIV positive in May 1987, and with AIDS in April 1992. 32. You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by P.M. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH 16 DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count I above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) [Section 626.99275(1)(a), F.S.] (b) [Section 626.9917(1)(b), F.S.] (c) [Section 626.9917(1)(e), F.S.] COUNT X 33. The above general allegations are hereby realleged and fully incorporated herein by reference. 34. Files obtained from TLC show that: a. Onor about September 2, 1997, the cover page to B. R’s application states that his t-cell count was 590 in May 1997 and 186 in September 1997. b. TLC application for viatical settlement for Mr. R. the Guardian Life Insurance Company of America policies #3112797 & 3208579, and reveals that Mr. R. was diagnosed with AIDS. c. Onor about June 24, 1998, Mr. R. submitted a written application for a $75,000 life insurance policy to Anthem Health. d. On said application, Mr. R. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aids related complex (ARC), or any other immunilogical disorder. 17 e. Onor about August I, 1998, in apparent reliance on that application and the representations therein, Anthem Health Group issued policy association plan #B00500, certificate #05561, insuring Mr. R. 35, You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by B. R. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count I above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) [Section 626.99275(1)(a), F.S.] (b) [Section 626.9917(1)(b), F.S.] (c) [Section 626.9917(1)(e), F.S.] COUNT XI 36. The above general allegations are hereby realleged and fully incorporated herein by reference. 37. Files obtained from TLC show that: a. On or about August 2, 1998, L.S. submitted a written application for a $75,000 life insurance policy to American Amicable. b. On said application, Ms. S. specifically stated that she had not been diagnosed or treated by a member of the medical profession in the past five (5) years and that she was not infected with any other diseases than the ones listed on the application. 18 In apparent reliance on that application and the representations therein, American Amiable issued a life insurance policy insuring Ms. 8. Sometime before October 1, 1998, Ms. S. submitted a written application for a $25,000 life insurance policy to Bankers Life. On said application, Ms. S. specifically stated that she had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS), Aids related complex (ARC), or any other immunilogical disorder. On or about October 1, 1998, in apparent reliance on that application and the representations therein, Bankers Life issued policy #1677580, insuring Ms. S. On or about November 12, 1998, TLC application identifying Banker’s Life insurance policy #1677580 and disclosing an HIV condition with a CD4 count of 320. . On or about December 9, 1998, TLC physician’s questionnaire shows Ms. S. as being diagnosed HIV positive in 1989, and with AIDS in 1996. Dated December 29, 1998, among TLC’s files for Ms. S. was the commission worksheet for the sale of American Amicable policy. You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by L.S. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count I above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: 19 (a) [Section 626.99275(1)(a), F.S.] (b) [Section 626.9917(1)(b), F.S.] (c) [Section 626.9917(1}e), F-S.] COUNT XI 39. The above general allegations are hereby realleged and fully incorporated herein by reference. 40. Files obtained from TLC show that: a. On or about March 4, 1997, D. S. submitted a written application for a $75,000 life insurance policy to United of Omaha. On said application, Mr. S. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS) or Aids related complex (ARC). On or about March 4, 1997, in apparent reliance on that application and the representations therein, United of Omaha issued policy #UA6980481, insuring Mr. S, On or about March 4, 1997, D. S. submitted a written application for a $50,000 life insurance policy to Liberty Life. On said application, Mr. S. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS) or Aids related complex (ARC). On or about March 4, 1997, in apparent reliance on that application and the representations therein, Liberty Life issued policy #NU3-603 19841-8, insuring Mr. S. On or about April 9, 1997, D. S. submitted a written application for a $50,000 life insurance policy to Commercial Union. 20 On said application, Mr. S. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS) or Aids related complex (ARC). On or about April 9, 1997, in apparent reliance on that application and the representations therein, Commercial Union issued policy #PT374470, insuring Mr. S. On or about April 29, 1997, D.S. submitted a written application for a $100,000 life insurance policy to AAA Life. . On said application, Mr. S. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS) or Aids related complex (ARC). On or about August 13, 1997, in apparent reliance on that application and the representations therein, AAA Life issued policy 40002365916, insuring Mr. S. . On or about July 27, 1997, D.S. submitted a written application for a $10,000 life insurance policy to Guarantee Reserve. . On said application, Mr. S. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS) or Aids related complex (ARC). . On or about September 21, 1997, in apparent reliance on that application and the representations therein, Guarantee Reserve issued policy #4635742, insuring Mr. S. . Onor about March 25, 1998, D.S. submitted a written application for a $7,600 life insurance policy to Guarantee Reserve. . On said application, Mr. S. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS) or Aids related complex (ARC). 21 On or about May 5, 1998, in apparent reliance on that application and the representations therein, Guarantee Reserve issued policy #7713031, insuring Mr. S. On or about October 20, 1998, D.S. submitted a written application for a $25,000 life insurance policy to Colonial Penn (Canseco). On said application, Mr. S. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS) or Aids related complex (ARC). . Onor about November 3, 1998, in apparent reliance on that application and the representations therein, Canseco issued policy #LC17951411, insuring Mr. S. . Dated September 26, 1995, TLC had among Mr. S’s files the Guardian Attending Physician’s Statement of Disability, which showed a diagnosis of advanced AIDS on or before July 24, 1995 and a CD4 count of 16. . Dated October 4, 1995, TLC had among Mr. S’s files the Medical Escrow Society Physician’s Questionnaire, which showed that Mr. S. was diagnosed HIV positive on or before August 30, 1995. . Dated June 29, 1998, TLC had among Mr. S’s files the Commission Worksheet for Guarantee Reserve policy #7713031. You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by D.S. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count I above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and 22 Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) [Section 626.99275(1)(a), F.S.] (b) [Section 626.9917(1)(b), F.S.] (c) [Section 626.9917(1)(e), F.S.] COUNT XII 42. The above general allegations are hereby realleged and fully incorporated herein by reference. 43. Files obtained from TLC show that: a. On or about December 10, 1996, T.T. submitted a written application for a $100,000 life insurance policy to Farmers and Traders. On said application, Mr. T. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having Acquired Immune Deficiency Syndrome (AIDS) or tested positive for the HIV virus. On or about December 10, 1996, in apparent reliance on that application and the representations therein, Farmers and Traders issued policy #0314179, insuring Mr. T. On or about May 14, 1998, T. T. submitted a written application for a $50,000 life insurance policy to Allied Life. On said application, Mr. T. specifically stated that he had not been diagnosed or treated by a member of the medical profession as having an immune deficiency disorder, such as AIDS. On or about June 2, 1998, in apparent reliance on that application and the representations therein, Allied Life issued policy #IN0276497, insuring Mr. T. 23 g. Dated January 5, 1996, TLC had among Mr. T’s files his TLC application which identified Unum Life policy #LAL124920 and disclosed a CD4 count of 261 in December 1995. h. Dated February 6, 1998, TLC had among Mr. T’s files a letter from Mr. T. to ELIZABETH DORIS OTTS, informing her that his MIB (medical information bureau) report came up “without any hits” and requesting advice on whether or not Impaired Risk Specialists and their life insurance policies for HIV positive individuals is something that Mr. T. should take advantage of. 44. You, ELIZABETH DORIS OTTS, knew or should have known that the information contained in the insurance application submitted by T.T. was false and a material misstatement of fact. Pursuant to Section 626.989(6), Florida Statutes, you, ELIZABETH DORIS OTTS, had a duty to send to the Division of Insurance Fraud of the Department a report or information pertinent to this knowledge and belief that a fraudulent act was being committed. As more particularly alleged in Count I above, you, ELIZABETH DORIS OTTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) [Section 626.99275(1)(a), F.S.] (b) [Section 626.9917(1)(b), F.S.] (c) [Section 626.9917(1)(e), F.S.] WHEREFORE, you, ELIZABETH DORIS OTTS, are hereby notified that the Chief Financial Officer 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, 629.9917, and 626.9927, Florida Statutes, and under the other referenced sections of the Florida Statutes as set out in this Administrative Complaint. 24 NOTICE OF RIGHTS You have the right to request a proceeding to contest this action by the Department pursuant to sections 120.569 and 120.57, Florida Statutes, and Rule 28-107, Florida Administrative Code. The proceeding request must be in writing, signed by you, and must be filed with the Department within twenty-one (21) days of your receipt of this notice. Completion of the attached Election of Proceeding form and/or a petition for administrative hearing will suffice as a written request. The request must be filed with the General Counsel as acting Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333. Your written response must be received by the Department no later than 5:00 p.m. on the twenty-first day after your receipt of this notice. Mailing the response on the twenty-first day will not preserve your right to a hearing. YOUR FAILURE TO RESPOND IN WRITING WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THIS NOTICE WILL CONSTITUTE A WAIVER OF YOUR RIGHT TO REQUEST A PROCEEDING ON THE MATTERS ALLEGED HEREIN AND AN ORDER OF REVOCATION WILL BE ENTERED AGAINST YOU. If you request a proceeding, you must provide information that complies with the requirements of Rule 28-107.004, Florida Administrative Code. As noted above, completion of the attached Election of Proceeding form conforms to these requirements. Specifically, your response must contain: (a) The name and address of the party making the request, for purpose of service; (b) A statement that the party is requesting a hearing involving disputed issues of material fact, or a hearing not involving disputed issues of material fact; and (c) A reference to the notice, order to show cause, administrative complaint, or other communication that the party has received from the agency. 25 Ifa hearing of any type is requested, you have the right to be represented by counsel or other qualified representative at your expense, to present evidence and argument, to call and cross-examine witnesses, and to compel the attendance of witnesses and the production of documents by subpoena. If a proceeding is requested and there is no dispute of material fact, the provisions of section 120.57(2), Florida Statutes, apply. In this regard, you may submit oral or written evidence in opposition to the action taken by the Department or a written statement challenging the grounds upon which the Department 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. However, if you dispute material facts which are the basis for the Department’s action, you must request an adversarial proceeding pursuant to sections 120.569 and 120.57(1), Florida Statutes. 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, Florida. Failure to follow the procedure outlined with regard to your response to this notice may result in the request being denied. All prior oral communication or correspondence in this matter shall be considered freeform agency action, and no such oral communication or correspondence shall operate as a valid request for an administrative proceeding. Any request for an 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. 26 Mediation of this matter pursuant to section 120.573, Florida Statutes, is not available. No Department attorney will discuss this matter with you until the response has been received by the Department of Financial Services. DATED and SIGNED this lith dayof___ July , 2003. br NN CHANDLER Deputy Chief Financial Officer 27 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished to: ELIZABETH DORIS OTTS, 960 Summer Lakes Drive, Orlando, FL 32835-5124, by Certified Mail this 11 tay of July ° , 2003. A apo “fe : . (dy C 2AZD _ Z A ett Meo i James A. Bossart ‘ : \ Division of Legal Services v 200 East Gaines St. 612 Larson Building Tallahassee, Florida 32399-033 (850) 413-4124 Florida Bar Number 0374598 28

Docket for Case No: 03-003157PL