Received Event (Event Succeeded) Date: 2/24/2005 Time: 4:51 PM Pages: 17 Duration: 5 min 1 sec Sender: 8504874907 Company: v Mumbhar Qubiart- PAGE 09/17 Fa 02/24/2085 17:48 9504874987 LEGAL SERVICES Ty : _ YY FLORIDA DEPARTMENT OF FINANCIAL SERVICES |. TOM GALLAGHER FILED CHIEF FINANCIAL OFFICER STATE OF FLORIDA Bue 23 004 Bocketed a IN THE MATTER OF: CASE NO.: 75932-04-AG ANDREW MARTIN ABERN / ADMINISTRATIVE COMPLAINT — NAY TO: ANDREW MARTIN ABERN 5) O10€ fe Abern Financial ~ 1550 San Remo Avenue Suite 250 Coral Gables, FL 33146-3009 You, ANDREW MARTIN ABERN, license LD. #A000349, 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, ANDREW MARTIN ABERN, are currently licensed in this state as a Life Including Variable Annuity (2-14), Life Including Variable Annuity & Health (2-15), Life (2-16), Life & Health (2-18), Health (2-40) Agent. 2. At all times pertinent to the dates and occurrences referred to herein, you, ANDREW MARTIN ABERN, were licensed in this state as an insurance agent. 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 material herein, you, ANDREW MARTIN ABERN, engaged in willful deception, both by acts of omission and commission, through false and fraudulent Received Event (Event Succeeded) Date: Pages: Sender: Fav Number: Ty 62/24/2085 17:48 8584874987 2/24/2005 Time: 4:51 PM 17 Duration: 5 min 1 sec 8504874907 Company: Subiact- LEGAL SERVICES PAGE 18/17 ~ Ve Statements and actions, to induce persons hereinafter identified to purchase insurance products to their personal detriment and motivated only for the purpose of gaining commissions for yourself. COUNT I 5. . The above general allegations are hereby realleged and fully incorporated herein by reference. 6. On or about the late summer of 1999 you, ANDREW MARTIN ABERN, asa licensed insurance agent, consulted with LFM for the purpose of selling both he and his wife, DBM, replacement insurance policies for existing whole life insurance policies then owned by them and issued by Reliastar and General American Insurance Companies, They had maintained their existing policies for approximately ten years, with each in the total insured sum of $500,000.00, with each policy then having a cash value of approximately $27,000.00 and $21,000.00, respectively, and with each policy then commanding annual premium costs of $3,000.00 and $2,300.00, respectively, 7, You, ANDREW MARTIN ABERN, proceeded to sell the said LFM and his wife DBM variable life insurance policies to be issued by Security Life of Denver Insurance Company as replacements for their whole life insurance policies. You specifically represented premium costs for such new policies would not exceed premium costs previously paid for the whole life policies. You specifically represented that the means to effect new replacement policies would attend borrowing against the existing whole life policies in order to effect a "pourover" funding for the new policies and to then allow the old policies to lapse. You represented that such "pourover" funds would never be utilized for premium costs for the replacement policies but would otherwise be accumulated for retirement benefits. 8. You, ANDREW MARTIN ABERN, presented applications to the said LFM and DBM for the new replacement insurance policies which reflected therein payment of "pourover" sums of $27,466.00 and $19,000.00, respectively, and further reflected premium costs for the new policies to be $3,000,00 and $2,300.00, respectively, which premium sums corresponded to premium costs previously paid for theix whole life policies, 10 Received Event (Event Succeeded) Date: 2/24/2005 Time: 451 PM Pages: 7 Duration: 5 min 1 sec Sender: 8504874907 Company: ~ 24/2005 17:48 8504874987 LEGAL SERVICES PAGE 11/17 = NY wu 9. You, ANDREW MARTIN ABERN, deliberately made false and fraudulent representations to LFM and DBM in order to gain sale of the new replacement insurance policies and thus receive commissions for yourself. You falsely informed your insureds regarding actual premium costs. You falsely reflected in their applications that the new policies were not replacement policies for their old policies thereby averting notification to issuers of the existing policies being replaced and with no opportunity to compare benefits. You failed to effect the transaction under Section 1035 for benefits which should have been afforded to your insureds, You failed to deliver copies of the new policies to your insureds and presented fictitious signatures of your insureds reflecting that such policies had in fact been delivered. You, without knowledge or consent of your insureds, reflected in their applications that premium costs would in fact be increased and deducted from policy funds contrary to your express representations to them in this regard. Further, and as aforesaid, you represented that the original “pourover" contributions could not and would not be drawn upon for any increased premium costs beyond those recited in the applications, when in fact premium funds were debited from such policies’ contributions to effectively deplete intended retirement moneys, which was discovered by your insureds only after this had occurred. IT IS THEREFORE CHARGED that you, ANDREW MARTIN ABERN, 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 eligibility as an insurance agent: (a) Demonstrated lack of fituess or trustworthiness to engage in the business of insurance. [Section 626.6] 1(7), Florida Statutes}; (b) In the conduct of business under the license or appointment, 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 having shown himself or herself to be a source of injury of loss to the public interest or detrimental to the public interest. [Section 626.621.(6), Florida Statutes}; 11 Received Event (Event Succeeded) Date: 2/24/2005 Time: 4:51 PM Pages: 17 Duration: 5 min 1 sec Sender: 8504874907 Company: Fav Mumbar- Qubiant PAGE qT 02/24/2085 17:48 9584874987 LEGAL SERVICES y WV a, (c) Fraudulent or dishonest practices in the conduct of business under the license or appointment, [Section 626.611(9), Florida Statutes]; (d) Misrepresentation for purpose of inducing or tending to induce, the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy. [Section 626 9541(1)(a)6., Florida Statutes]; (e) Misrepresenting the benefits, advantages, conditions, or terms of any insurance policy. [Section 626,9541(1)(a)1., Florida Statutes]; (f) Knowingly making any misleading representations or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies for the purpose of inducing any person to lapse any insurance policy to take out a policy of insurance in another insurer. [Section 626.9541(1)(1)I., Florida Statutes]. COUNT IT 10. The above general allegations are hereby realleged and fully incorporated herein by reference. 11. You, ANDREW MARTIN ABERN, as a licensed insurance agent, consulted with R.B. and his wife J.B. during the period from June 1976 through April 1995, for purpose of selling to them a succession of life insurance policies. During such period you wrote applications for sixteen (16) life insurance policies involving three (3) different insurance companies, to wit: Policy Nos. 0758321, 1204930, CM2009166G, 1017106, 1204927, and CM2009164 through Columbus Life Insurance Company; Policy Nos. 4197843, 303362, 4255472, 4267539, 4197842, 3033862, 4255459, and 4267540 through Union Central Insurance Company, and Policy Nos. 2711359 and 2711358 through American Mutual Life Insurance Company. 12. Because of their implicit and ill-founded trust in you as their insurance agent, the said J.B. and RB. signed insurance applications in blank at your instance and you thereafter made false and fraudulent entries therein, thus falsely answering such questions as pertained to Replacement Insurance. 12 12/17 Received Event (Event Succeeded) Date: Pages: Sender: Fey Numhar- Ty 2/24/2005 Time: 4:51 PM 17 Duration: 5 min 1 sec 8504874907 Company: Subiant- 7 82/24/2805 17:48 8564874987 LEGAL SERVICES PAGE 13/ A SU I3. You, ANDREW MARTIN ABERN, confiscated cash value sums payable to the said R.B. and J.B. and deposited same to your own account without their knowledge or consent. You made false and fraudulent representations to induce the said R.B. and J.B. to purchase a succession of insurance policies which were not jn their best interests and which caused them significant monetary loss, all for the purpose of generating commissions for yourself. As illustrative of such commissions paid to you in your scheme to sell insurance policies toR.B, and JB. you received the following commissions from Union Central Insurance Company alone: $1,853.01 for Policy No. 4255472, $1,608.61 for Policy No. 4197843, $3,119.10 for Policy No. 4197842, $1,090.80 for Policy No. 4255454, $5,867.75 for Policy No. 3033683, and $2,895.80 for Policy No. 3033682. IT IS THEREFORE CHARGED that you, ANDREW MARTIN ABERN, 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 eligibility as an insurance agent: (a) Demonstrated Jack of fitness or trustworthiness to engage in the business of insurance. [Section 626,611(7), Florida Statutes]; (b) In the conduct of business under the license or appointment, 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 having shown hirnself or herself to be a source of injury of loss to the public interest or detrimental to the public interest. [Section 626.621.(6), Florida Statutes]; (c) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.61 1(9), Florida Statutes]; (d) Misrepresentation for purpose of inducing or tending to induce, the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy. [Section 626, 9541(1)(a)6., Florida Statutes]; (e) Misrepresenting the benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9541(1)(a)1., Florida Statutes]; 13 Received Event (Event Succeeded) Date: 2/24/2005 Time: 4:51 PM Pages: 17 Duration: 5 min 1 sec Sender: 8504874907 Company: Fav Numhar- Subiact- PAGE 14/17 tT 82/24/2005 17:49 8504874907 LEGAL SERVICES y (f) Knowingly making any misleading representations or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies for the purpose of inducing any person to lapse any insurance policy to take out a policy of insurance in another insurer, [Section 626.9541(1)(1)L., Florida Statutes]. WHEREFORE, you, ANDREW MARTIN ABERN, 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, 626.691, and 626.9521, Florida Statutes, and under the other referenced Sections of the Florida Statutes as set out in this Administrative Complaint. 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. 14 Received Event (Event Succeeded) ime: 4:51 PM Date: 2/24/2005 Time: 5 Pages: 17 Duration: 5 min 1 sec Sender: 8504874907 Company: Fay i) LEGAL SERVICES PAGE 15/17 @2/24/2805 17:48 85648749487 Ty : 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) Areference to the notice, order to show cause, administrative complaint, or other communication that the party has received from the agency. If a 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. Ifa 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 Tegard 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 7 15 Received Event (Event Succeeded) Date: 2/24/2005 Time: 451 PM Pages: 17 Duration: 5 min 1 sec Sender: 8504874907 Company: Fav Number: Guhiact- PAGE 16/17 @2/24/2085 17:48 8504874987 LEGAL SERVICES Ty Ne 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. 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 a3 nd _ day of Jy Ly 2004. Deputy Chief Financial Officer CERTIFICATE OF. VICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished to: ANDREW MARTIN ABERN, Abern Financial, 1550 San Remo Avenue, Suite 250, Coral Gables, FL 33146-3009; by Certified Mail this_2 3 day of THE , 2004. Dean Andrews Division of Legal Services 200 East Gaines St. 612 Larson Building Tallahassee, Florida 32399-033 (850) 413-4242 Florida Bar Number 0001959 16

Docket for Case No: 05-000708PL