FLORIDA : * DEPARTMENT OF ' FILED FINANCIAL SERVICES OC: 25 2005 L TOM GALLAGHER CHIEF FINANCIAL OFFICER oO STATE OF FLORIDA ; Bosketed by- { 23. IN THE MATTER OF: OS - 435 TPL : JONATHAN D. RAUSCH CASE NO.: 82114-05-A! / ADMINISTRATIVE COMPLAINT é TO: JONATHAN D. RAUSCH JONATHAN D. RAUSCH 4 6942 Finamore Circle Love Madison, Inc./Alexander Insurance Lake Worth, Florida 33467 6828 West Atlantic Blvd. Margate, Florida 33063 You, JONATHAN D. RAUSCH, 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, JONATHAN D. RAUSCH, are currently licensed in this state as a resident Life & Health (2-1 8), General Lines, Property and Casualty (2-20), and Health (2-40) agent, Your license I.D. number is A215553. 2, -At all times pertinent to the dates and occurrences referred to herein, you, JONATHAN D. RAUSCH, were licensed in this state as an insurance agent. 3. Pursuant to Chapter 626, Florida Statutes, the Florida Department (hereinafter referred to as “Department”) has jurisdiction over your insurance license and appointments. 4. At all times relevant to the dates and occurrences referred to herein you, JONATHAN D. RAUSCH, were the sole officer and sole director of Love Madison, Inc., d/b/a Alexander Insurance and Alexander Insurance and Financial Services (“Alexander Insurance”). 5. At all times relevant to the dates and occurrences referred to herein, all funds received by you, JONATHAN D. RAUSCH, from consumers or on behalf of consumers representing premiums for insurance policies, were trust funds pursuant to Section 626.561(1), Florida Statutes, and were received in a fiduciary capacity and were to be accounted for and paid over to the insurer, insured or other persons entitled thereto in the regular course of business. 6. You, JONATHAN D. RAUSCH, have converted, misappropriated, or wrongfully withheld fiduciary funds belonging to customers, including but not limited to, L.C. of Hollywood, Florida, J.8. of Fort Lauderdale, Florida, and K.R. of F ort Lauderdale, Florida. COUNT I 7. The above general allegations are hereby realleged and fully incorporated herein by reference. 8. On May 29, 2003, L.C. visited Alexander Insurance. 9. You, JONATHAN D. RAUSCH, waited on L.C, 10. L.C. bought a homeowners policy and a wind policy (collectively referred to as “Policies”) from Citizens Property Insurance Corporation (“Citizens Insurance”). ll. You, JONATHAN D. RAUSCH, told L.C. that the Policies would cost $700.00. 12. L.C. gave you, JONATHAN D. RAUSCH, $700.00. 13. The $700.00 represented trust funds received by you, JONATHAN D. RAUSCH, in a fiduciary capacity for both the insured and an insurance company. 14, You, JONATHAN D. RAUSCH, overcharged L.C. 15. The actual cost of the Policies was $471.00. 16. You, JONATHAN D, RAUSCH, sent Citizens Insurance $660.00. 17. You, JONATHAN D. RAUSCH, kept the difference of $40.00. 18. On July 23, 2003, Citizens Insurance refunded $189.00 to you, JONATHAN D. RAUSCH, due to overpayment of the Wind Policy. 19. The $189.00 refund Tepresented trust funds received by you, JONATHAN D. RAUSCH, in a fiduciary capacity for both the insured and an insurance company, 20. WhenL.c. Tequested that you refund her the $229.00 she was due, you, JONATHAN D. RAUSCH, told L.C. that she was only entitled to a $29.00 refund, 21, On February 3, 2004, you, JONATHAN D. RAUSCH, issued two refund checks to L.C.; one in the amount of $40.00, and the other in the amount of $189.00. 22. You, JONATHAN D. RAUSCH, have converted, misappropriated, or wrongfully withheld fiduciary fimds belonging to L.C. IT IS THEREFORE CHARGED that you, JONATHAN D. RAUSCH, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department which constitute grounds for the suspension or revocation of your license and appointments: (a) All premiums, return premiums, or other funds belonging to insurers or others received by an agent, customer Tepresentative, or adjuster in transactions under his or her license are trust funds received by the licensee in a fiduciary capacity; and the licensee in the applicable tegular course of business shall account for and pay the same to the insurer, insured, or other person entitled thereto. [Section 626.561(1) Florida Statutes]; (b) Demonstrated lack of fitness or trustworthiness to engage in the business of ‘insurance. [Section 626.611(7), Florida Statutes]; (c) 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. [Section 626.611(10), Florida Statutes. ]; (d) Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment. [Section 626.611(8), Florida Statutes]; (e) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (f) 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 appointment. [Section 626.621(2), Florida Statutes]; (g) Inthe 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 IX of Chapter 626, Florida Statutes, or having otherwise shown himself or herself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes]. COUNT I 23. The above general allegations are hereby realleged and fully incorporated herein by reference. 24, On or around August 15, 2003, ETI Financial Corp. sent Alexander Insurance a . check in the amount of $776.36. 25. On or around August 26, 2003, the check was deposited into Alexander Insurance’s bank account at Bank of America, N.A. 26. A portion of the proceeds of the check, $363.45, represented a refund of premium related to Alexander Insurance’s transaction with J.S. 27. J.S. was entitled to the $363.45, 28. You, JONATHAN D. RAUSCH, failed to forward the $363.45 to J.S. 29. J.8. was never informed that the premium refund could be applied to the purchase of a new policy. 30. You, JONATHAN D. RAUSCH, have converted, misappropriated, or wrongfully withheld fiduciary funds belonging to L.C. IT IS THEREFORE CHARGED that you, JONATHAN D. RAUSCH, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department which constitute grounds for the suspension or revocation of your license and appointments: (a) All premiums, return premiums, or other funds belonging to insurers or others received by an agent, customer representative, or adjuster in transactions under his or her license are trust funds 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. [Section 626.561(1) Florida Statutes]; (b) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (c) 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. [Section 626.611(10), Florida Statutes. ]; (d) Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment. [Section 626.611(8), Florida Statutes]; (ec) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.61 1(9), Florida Statutes]; ({) 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 IX of Chapter 626, Florida Statutes, or having otherwise shown himself or herself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes]. COUNT I 31. The above general allegations are hereby realleged and fully incorporated herein by reference. 32. Tracey Wesley began working for Alexander Insurance in July of 2003. 33. | Wesley was hired as a customer representative. 34. Atall times material hereto, Tracey was licensed as a customer representative (4-40). Her license identification number is E059737. 35. Atall times material hereto, Tracey was not appointed as a customer representative. 36. Atall times material hereto, Tracey: 1) took insurance applications; 2) gave quotes; 3) interpreted policies; 4) explained procedures; 5) gave insurance advice; 6) solicited new customers at the agent's office or by telephone from that office; and/or 7) bound new or additional coverages. 37. Rule 69B-213.060(2), Fla. Admin. Code, states that “[nJo customer representative may perform customer representative duties until an appointment is in effect.” 38. Tracey was performing customer representative duties, pursuant to Rule 69B- 213.110(1) and (2) and Rule 69B-213.130(1), Fla. Admin. Code, without having an appointment in effect; a violation of Rule 69B-213.060(2), Fla. Admin. Code. , 39. You, JONATHAN D. RAUSCH, knew that Tracey was performing customer representative duties without having an appointment in effect, IT IS THEREFORE CHARGED that you, JONATHAN D. RAUSCH, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department which constitute grounds for the suspension or revocation of your license and appointments: (a) Violation of any lawful order or rule of the Department. [Section 626.621(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 reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment. [Section 626.611(8), Florida Statutes]; and (d) Knowingly aiding, assisting, procuring, advising, or abetting any person in the violation of or to violate a provision of the insurance code or any order or rule of the department. [Section 626.621(12), Florida Statutes]. COUNT IV 40. The above general allegations are hereby realleged and fully incorporated herein by reference. 41. Neffer Mariana Lavilla began working for Alexander Insurance in July or August of 2003. 42. Lavilla was hired as a customer representative. 43. Atall times material hereto, Lavilla was licensed as a customer representative (4-40). Her license identification number is E082456. 44. Atall times material hereto, Lavilla was not appointed as a customer representative. 45. Atall times material hereto, Lavilla: 1) took insurance applications; 2) gave quotes; 3) interpreted policies; 4) explained procedures; 5) gave insurance advice; 6) solicited new customers at the agent's office or by telephone from that office; and/or 7) bound new or additional coverages. 46. Rule 69B-213.060(2), Fla. Admin. Code, states that “[nJo customer representative may perform customer representative duties until an appointment is in effect.” 47. Lavilla was performing customer representative duties, pursuant to Rule 69B- 213.110(1) and (2) and Rule 69B-213.130(1), Fla. Admin. Code, without having an appointment in effect; a violation of Rule 69B-213.060(2), Fla. Admin. Code. 48. You, JONATHAN D. RAUSCH, knew that Lavilla was performing customer representative duties without having an appointment in effect. IT IS THEREFORE CHARGED that you, JONATHAN D. RAUSCH, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department which constitute grounds for the suspension or revocation of your license and appointments: (a) Violation of any lawful order or rule of the Department. [Section 626.621(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 reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment. [Section 626.611(8), Florida Statutes]; and (d) Knowingly aiding, assisting, procuring, advising, or abetting any person in the violation of or to violate a provision of the insurance code or any order or rule of the department. [Section 626.621(12), Florida Statutes]. WHEREFORE, you, JONATHAN D. RAUSCH, 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 626.6 11, 626.621, 626.681, 626.691, and 626.9541, 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. ‘Ifyou 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. If a hearing of any type is requested, you have the tight 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. 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. h DATED and SIGNED this 95t day of October , 2005. Deputy Chief Financial Officer ll. CERTIFICATE OF SERVICE THEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING have been furnished to JONATHAN D. RAUSCH, at the addresses identified in the Service List by restricted U.S. Certified Mail this Th day of er, 2005. Robert Alan Fox Division of Legal Services 200 East Gaines St. 612 Larson Building Tallahassee, Florida 32399-0333 (850) 413-4106 Service List: JONATHAN D. RAUSCH JONATHAN D. RAUSCH 6942 Finamore Circle Love Madison, Inc./Alexander Insurance Lake Worth, Florida 33467 6828 West Atlantic Blvd. Margate, Florida 33063

Docket for Case No: 05-004357PL