FLORIDA DEPARTMENT OF FINANCIAL SERVICES TOM GALLAGHER AUG «9 2006 CHIEF FINANCIAL OFFICER STATE OF FLORIDA Dooketed by_ &CL. IN THE MATTER OF: CASE NO. 86532-06-AG WARREN ALAN MARMORSTEIN / ADMINISTRATIVE COMPLAINT TO: WARREN ALAN MARMORSTEIN O (o . for) 0 p C 564010 Arbor Club Way Boca Raton, Florida 33433 You, WARREN ALAN MARMORSTEIN, are hereby notified that pursuant to Chapter 626, Florida Statutes, 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. You, WARREN ALAN MARMORSTEIN, are currently licensed in the state as a life, and variable annuity contracts salesman, life insurance agent, life and health insurance agent and health insurance agent. 2. At all time pertinent to the dates and occurrences referred to in this Administrative Complaint you, WARREN ALAN MARMORSTEIN, were licensed as an insurance agent in this state. COUNTI 3. Paragraphs one and two are realleged and incorporated herein by reference. 4, On or about July 12, 2005, you, WARREN ALAN MARMORSTEIN. , acting asa viatical broker pursuant to Section 626.991 1(9), Florida Statutes, solicited and induced W.W. of Lauderhill, Florida to enter into a fraudulent viatical settlement contract with Universal Settlements International (hereinafter referred to USD), to purchase his Jefferson Pilot Life life insurance policy with a death benefit value of $10,000,000.00 for the gross purchase price of $4,500,000.00. 3. At no time pertinent to the dates and occurrences referred to herein was USI either licensed in this state as a viatical settlement provider pursuant to Section 626.9912, Florida Statute or was it authorized to enter-into or solicit any viatical settlement contract. However, by soliciting and entering into the viatical settlement contract refereed to above, USI was acting and doing business in this state as a viatical settlement provider as defined by Section 626.9911(12), Florida Statutes, 6. Pursuant to Section 626.992(2), Florida Statutes, you, WARREN ALAN MARMORSTEIN, may not negotiate or attempt to negotiate a viatical contract between USI and any resident of this state. You, WARREN ALAN MARMORSTEI, were aware or should have been aware of these facts but failed to disclose these facts to W.W. 7. You, WARREN ALAN MARMORSTEN, dealt in bad faith and violated your fiduciary duty to W.W. pursuant to Section 626.991 6(5), Florida Statutes by representing to W.W. that he was only to receive $2,800.000.00 under the contract. You, WARREN ALAN MARMORSTEI, failed to disclose to W.W. that you and USI had negotiated a $4,500,000.00 N "total purchase price for the life insurance policy with $1,700,000.00 of this money paid directly to you by USI as your commission or compensation and W.W. only receiving the remainder, W.W. was neither informed of this $1,700,000.00 payment nor did he give his informed consent to it. Your representations, both by omission and commission, to W.W. were false and a material misstatement of fact. 8. The failure to disclose the $1,700,000.00 commission to W.W. and to obtain his informed consent also constitutes a violation of Section 626.99181, Florida Statutes, 9. W.W. refused to go forward with the transaction with USI. As a result, you, WARREN ALAN MARMORSTEN, have filed a civil action in the Broward County Circuit Court in an attempt to compel specific performance and collect compensatory damages, notwithstanding the fact that even if W.W. had gone forward with the transaction, any viatical contract he entered into, pursuant to Section 626.9924(2), Florida Statutes, would have had an unconditional 15 day right of rescission. W.W. has incurred legal expenses as a result, IT IS THEREFORE CHARGED that you, WARREN ALAN MARMORSTEIN, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the State Chief Financial Officer which constitute grounds for the suspension or revocation of your insurance licenses and eli gibility for licensure: (a) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regards to any such policy or contract. {Section 626.611(5), Florida Statutes}; (b) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; {c) 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] (d) In transactions related to viatical settlement contracts as defined in section _ 626.9911, Florida Statutes: (a) Commission of a fraudulent or dishonest act. (b) Having received a fee, commission, or other valuable consideration for his or her services with respect to viatical settlements that involved unlicensed viatical settlement providers, (c) Dealing in bad faith with viators. [Section 626.611(17), Florida Statutes] (e) 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] (f) No person shall engage in this state in any trade practice which is defined in this part as, or determined pursuant to s. 626.951 or s. 626.9561 to be, an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance. (Section 626.9521, Florida Statutes] (g) Knowingly: a. Filing with any supervisory or other public official, b. Making, publishing, disseminating, circulating, c. Delivering to any person, d. Placing before the public, e, Causing, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement. [Section 626.9541(1)(e) 1, Florida Statutes] (h) A viatical settlement broker may not use any person to perform the functions of a viatical settlement provider as defined in this act unless such person holds a current, valid license as a viatical settlement provider. [Section 626.992(2), Florida Statutes] (i) A violation of this act is an unfair trade practice under ss. 626.9521 and 626.9541, Florida Statutes and is subject to the penalties provided for in the insurance code. Part LX of this chapter, entitled Unfair Insurance Trade Practices, applies to a licensee under this act or a transaction subject to this act as if a viatical settlement contract were an insurance policy. [Section 626.9927(1), Florida Statutes] WHEREFORE, you, WARREN ALAN MARMORSTEIN, 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, 626.9521, 626.9571, and 626.9581, 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. 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 form 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. 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 6 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. th DATED and SIGNED this 4" day of August , 2006. IN CHANDLER Deputy Chief Financial Officer iO ERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Administrative Complaint was mailed by certified mail to: WARREN ALAN MARMORSTEIN, 564010 Arbor Club Way, Boca Raton, Florida 33433 on this Ci day of Aogust , 2006. te AMES A. BOSSART, ESQUIRE ivision of Legal Services 612 Larson Building Tallahassee, FL 32399-0333 (850) 413-4124

Docket for Case No: 06-003290PL