FLORIDA DEPARTMENT OF FINANCIAL SERVICES TOM GALLAGHER , CHIEF FINANCIAL OFFICER i STATE OF FLORIDA IN THE MATTER OF: _ Gocketed by: PAUL FRANCIS MCCARTHY ADMINISTRATIVE COMPLAINT. TO: PAUL FRANCIS MCCARTHY 2 River Oaks Dri (g . UL 2 River Oaks Drive Olo-O0le13P You, PAUL FRANCIS MCCARTHY, 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 Ll Pursuant to Chapter 626, Florida Statutes, you, PAUL FRANCIS MCCARTHY, are currently licensed in this state as a resident Life & Variable Annuity (2-14), Life, Health and Variable Annuity Agent (2-15), Life agent (2-16), Life and Health agent (2-18), and Health agent (2-40). Your license I.D. number is A170327. 2. At all times pertinent to the dates and occurrences referred to herein, you, PAUL FRANCIS MCCARTHY, 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. During all times material to the dates and occurrences herein, you, PAUL FRANCIS MCCARTHY, were doing business as Financial Resources Group (“FRG”). 5. During all times material to the dates and occurrences herein, Colonial Counseling was a Florida business located at 6623 East Colonial Drive, Orlando, Florida 32802. COUNT I 6. Paragraphs 1-5 are realleged and incorporated herein. 7. In or around May 2002, you, PAUL FRANCIS MCCARTHY, directly or indirectly acted as an agent for, or otherwise represented or aided on behalf of Southern Plan Administrators, Inc., Financial Insurance Services, a Michigan corporation, doing business in Florida as Financial Healthcare Systems (“FHS”), Joseph Saigh, Lawrence Wells or another, MarkeTrends Insurance Lid. (“MarkeTrends”) in transacting insurance in the State of Florida, in relation to Colonial Counseling, by, including but not limited to: 1) distributing information, or having information distributed, about MarkeTrends reinsurance contracts; 2) soliciting, negotiating, procuring, or effectuating insurance contracts, or renewals; 3) disseminating information as to coverage or rates; 4) forwarding applications; and/or 5) delivering policies or contracts. 8. At no time material to the dates and occurrences herein did MarkeTrends possess a Certificate of Authority from the Florida Department of Financial Services or the Office of Insurance Regulation to engage in the business of insurance as an insurer. IT IS THEREFORE CHARGED that you, PAUL FRANCIS MCCARTHY, 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) No person shall transact in this state, or relative to a subject of insurance resident, located, or to be performed in this state, without complying with the applicable provisions of this Code. [Section 624.11, 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]; (d) Violation of any provision of this Code or any law applicable to the business of insurance in the course of dealing under the licensure or appointment. [Section 626.621(2), Florida Statutes}; and (e) No person shall, from offices or by personnel or facilities located in this state. . . directly or indirectly act as agent for, or otherwise represent or aid on behalf of another, any insurer not then authorized to transact such insurance in this state in: (1) The solicitation, negotiation, procurement, or effectuation of insurance or annuity contracts, or renewals thereof: (2) The dissemination of information as to coverage or rates; (3) The forwarding of applications; or (4) The delivery of policies or contracts; or in any other manner represent or assist such an insurer in the transaction of insurance with respect to subjects of insurance resident, located, or to be performed in this state. [Section 626.901(1), Florida Statutes]. COUNT II 9. Paragraphs 1-5 are realleged and incorporated herein. 10. In or around December 2002 or January 2003, you, PAUL FRANCIS MCCARTRY, directly or indirectly acted as an agent for, or otherwise represented or aided on behalf of Southern Plan Administrators, Inc., Financial Insurance Services, a Michigan corporation, doing business in Florida as Financial Healthcare Systems (“FHS”), Joseph Saigh, Lawrence Wells or another, CIC Insurance Company AVV (“Centennial”) in transacting insurance in the State of Florida, in relation to Colonial Counseling, by, including but not limited to: 1) distributing information, or having information distributed, about Centennial reinsurance contracts; 2) distributing information, or having information distributed, on how to move groups from MarkeTrends to Centennial; 3) soliciting, negotiating, procuring, or effectuating insurance contracts, or renewals; 4) disseminating information as to coverage or rates; 5) forwarding applications; and/or 6) delivering policies or contracts, 11. At no time material to the dates and occurrences herein did Centennial possess a Certificate of Authority from the Florida Department of Financial Services or the Office of Insurance Regulation to engage in the business of insurance as an insurer, IT IS THEREFORE CHARGED that you, PAUL FRANCIS MCCARTHY, 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) No person shall transact in this State, or relative to a subject of insurance resident, located, or to be performed in this state, without complying with the applicable provisions of this Code. [Section 624.11, 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]; (d) Violation of any provision of this Code or any law applicable to the business of insurance in the course of dealing under the licensure or appointment. [Section 626.621(2), Florida Statutes]; and (e) No person shali, from offices or by personnel or facilities located in this state. . . directly or indirectly act as agent for, or otherwise represent or aid on behalf of another, any insurer not then authorized to transact such insurance in this state in: (1) The solicitation, negotiation, procurement, or effectuation of insurance or annuity contracts, or renewals thereof; (2) The dissemination of information as to coverage or rates; (3) The forwarding of applications; or (4) The delivery of policies or contracts; or in any other manner represent or assist such an insurer in the transaction of insurance with respect to subjects of insurance resident, located, or to be performed in this state. [Section 626.901(1), Florida Statutes). WHEREFORE, you, PAUL FRANCIS MCCARTHY. , 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, 626.551, 626.681, 626.691, and 626.901, 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 28-106, 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 Rules 28-106.201 or 28-106.301, 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; (bb) 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. 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. 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 Departments 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. mH DATED and SIGNED this —)"" _ day of _{O¢Cempber 2005. Cat OB ( Py . ag, lg N CHANDLER Deputy Chief Financial Officer CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRAT COMPLAINT and ELECTION OF PROCEEDING has been furnished by Certified Mail this_.2_ day of cz f_, 2005 to PAUL FRANCIS MCCARTHY, 2 River Oaks Drive, Sebastian, Florida 32958. Robert Alan Fox Division of Legal Services 200 East Gaines St. 612 Larson Building Tallahassee, Florida 32399-0333 (850) 413-4110

Docket for Case No: 06-000673PL