Petitioner: DEPARTMENT OF FINANCIAL SERVICES
Respondent: ADAM RUTSTEIN
Judges: LISA SHEARER NELSON
Agency: Department of Financial Services
Locations: Jacksonville, Florida
Filed: Feb. 23, 2009
Status: Closed
Settled and/or Dismissed prior to entry of RO/FO on Thursday, July 9, 2009.
Latest Update: Dec. 23, 2024
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FILED
JAN 28 2009
Dookated by. SS _
REPRESENTING
ALEX SINK
CHIEF FINANCIAL OFPICER
STATE OF FLORIDA
IN THE MATTER OF:
- ADAM RUTSTEIN CASE NO: 99210-08-AG
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ADMINISTRATIVE COMPLAINT
TO: ADAM RUTSTEIN ADAM RUTSTEIN
Bankers Life and Casualty 3525 Twisted Tree Lane
4811 Beach Boulevard Suite 404 Jacksonville, Florida 32216
Jacksonville, Florida 32207
You, ADAM RUTSTEI, license 1D. #E061829, 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, ADAM RUTSTEI, are currently
licensed in this state as a 2-15 Life Including Variable Annuity and Health Agent.
2. At all times pertinent to the dates and occurrences referred to herein, you, ADAM
RUTSTEIN, were licensed in this state as an insurance agent, license number E061 829.
3. At all times material hereto, you, ADAM RUTSTEIN, held an appointment from
Bankers Life and Casualty Company (“Bankers Life”),
4, Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial
Services (“Department”) has jurisdiction over your insurance licenses and appointments.
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5. The Business of Life Insurance is hereby declared to be a public trust in which
service all agents of all companies have a common obligation to work together in serving the
best interests of the insuring public, by understanding and observing the laws governing Life
Insurance in letter and in spirit by presenting accurately and completely every fact essential to a
client’s decision, and by being fair in all relations with colleagues and competitors always
placing the policyholder’s interests first. [Rule 69B-215.210, Florida Administrative Code].
COUNTI
6. The above General Allegations are realleged and incorporated herein by
reference,
7. On or about April 4, 2006, you, ADAM RUTSTEIN, accompanied another
Bankers Life agent to the home of R.G., age 81, of Jacksonville, Florida, who had requested a
meeting to discuss a possible claim on a long-term care policy he held with Bankers Life.
8. At the time of the meeting, R.G. held an IRA with Prudential Financial, Inc.
(“Prudential”) worth approximately $70,000.00.
9. During that meeting, you, ADAM RUTSTEIN, urged R.G. to purchase an annuity
from Bankers Life,
10. R.G. indicated to you, ADAM RUTSTEIN, that he was not interested in
purchasing an annuity until it was fully explained to him and until he had an opportunity to
think it over,
11. Though he was not interested in purchasing an annuity at that time, R.G. agreed to
allow you, ADAM RUTSTEIN, to obtain information about his Prudential IRA.
12. You, ADAM RUTSTEIN, presented R.G. with paperwork for his signature,
which, to his understanding, was necessary for you to obtain additional information about his
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Prudential IRA.
13. Unbeknownst to R.G., the paperwork he signed was actually an application for a
Bankers Life 18-year single premium deferred annuity, allowing Bankers Life to access to the
money in his Prudential IRA and use it as a premium payment for a Bankers Life product.
14. Upon receipt of the application, you, ADAM RUTSTEIN, enrolled R.G. in
Bankers Life Annuity Policy 7841067 using $69,663.91 from his Prudential IRA as the
principal.
15. You, ADAM RUTSTEIN, failed to explain to R.G. that the paperwork he signed
was an application for an annuity, and thereby failed to cxplain to him any of the particulars of
the Bankers Life Annuity, including the 18-year life of the annuity, surrender penalties as high
as 10%, a variable interest rate guaranteed at 6.5% for the first year only, linkage to the
Standard & Poor’s 500 Index average to determine return rates, and a variable participation rate
guaranteed at 80% for the first year only, after which point it may drop as low as 10%.
16. Furthermore, you. ADAM RUTSTEIN, never asked about or attempted to
ascertain R.G,’s financial goals or financial status in order to determine whether the annuity was
suitable.
17. In an effort to convince R.G. to invest in an annuity, you, ADAM RUTSTEIN,
presented him with a flyer indicating that your program was protected by the “Florida
Department of Insurance” [sic] up to $300,000.00.
18, Although R.G. never wanted to purchase the annuity and currently does not want
to own it, it remains in effect due to the high surrender costs and will not reach maturity until
R.G. is 99 years of age.
19. You, ADAM RUTSTEIN, knew, or should have known, that R.G, had no
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intention of applying for or purchasing an annuity on April 4, 2006, that he thought he was only
signing documents to get more information about annuities, that he did not have enough
information to make such a purchase, even if he wanted to do so, and that such a purchase was
not in his best interests.
20, As a result of the annuity sale to R.G., you, ADAM RUTSTEIN, and your
colleague collected commissions.
IT IS THEREFORE CHARGED that you, ADAM RUTSTEIN, have violated or are
accountable under one or more of the following provisions of the Florida Statutes or Florida
Administrative Code, which constitute grounds for the suspension or revocation of your licenses
as a Florida insurance agent:
(a) Engaged in willful misrepresentation of an insurance policy or willful deception
with regard to the policy. [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) Demonstrated lack of reasonably adequate knowledge and technical competence
to engage in the transactions authorized by the license or appointment. [Section 626.611(&),
Florida Statutes];
(d) ‘In the conduct of business under the appointment, cngaged in unfair methods of
competition or in unfair or deceptive acts or practices, as prohibited under part TX of this
chapter, or otherwise showed yourself to be a source of injury or loss to the public. [Section
626,621(6), Florida Statutes];
(ec) Violation of the life insurance agents’ code of ethics. [Section 626.797(3),
Florida Statutes];
(f) Knowingly making a false or fraudulent written or oral statement or
representation on, or relative to, an application or negotiation for an insurance policy for the
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purposes of obtaining a fee, commission, money, or other benefit from any insurer, agent,
broker, or individual. [Section 626.9541(1)(k), Florida Statutes);
(g) Before executing a purchase or exchange of an annuity resulting from a
recommendation to a senior consumer, an insurance agent, or an insurer if no insurance agent is
invalved, shall make reasonable efforts to obtain information concerning the senior consumer’s
financial status, tax status, and investment objectives and such other information used or
considered to be reasonable by the insurance agent, or the insurer if no agent is involved, in
making the recommendation. [Section 627.4554(4)(b), Florida Statutes);
(h) No person shall make, publish, disseminate, circulate, or place before the public,
or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before
the public, in any newspaper, magazine, or any other publication, or in the form of a notice,
circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other
way, any advertisement, announcement, or statement which uses the existence of the Insurance
Guaranty Association of this state for the purpose of sales, solicitation, or inducement to
purchase any form of insurance covered by the Florida Life and Health Insurance Guaranty
Association Act. [Section 631,735, Florida Statutes].
COUNT il
21, The above General Allegations are realleged and incorporated herein by
reference,
22, On April 24, 2006, youn, ADAM RUTSTEIN, accompanied another Bankers Life
agent to the home of J.D., age 73, of Jacksonville, Florida, to discuss an in-home care health
insurance policy.
23, During that meeting, you, ADAM RUTSTEIN, urged J.D. to purchase an annuity
from Bankers Life.
24, At the time of the meeting, J.D. held a savings account with Harris Bank totaling
approximately $25,000.00.
25. J.D. made it clear to you, ADAM RUTSTEIN, that she did not want to purchase
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an annuity, that her husband’s health was failing and she was worried about her income after he
died, and that she wanted to use the money in her savings account to pay off her mortgage.
26. You, ADAM RUTSTEIN, convinced J.D, that an annuity would offset the
mortgage’s 6.5% interest rate by providing an equal 6.5% annual interest rate.
27, Additionally, you, ADAM RUTSTEI, told J.D. that she could take money out of
the annuity at any time.
28. The sales tactics utilized by you, ADAM RUTSTEIN, were so forceful that J.D.
believed you, ADAM RUTSTEIN, would not leave her home unless she agreed to purchase the
annuity.
29, Eventually, J.D. purchased a modified single premium deferred annuity policy
through Bankers Life (policy 7841318), using the $25,000.00 from her savings account.
30. The annuity ILD. purchased would not begin to provide her with monthly income
until the tenth year after purchase, at which point J.D. would be 83 years of age.
31. The annuity would not reach full value for an additional ten years after the
payouts began, making J.D. 93 years of age at its maturity.
32. In spite of the representation made by you, ADAM RUTSTEIN, that the annuity
would earn 6.5% interest, that rate was only guaranteed for the first year, after which the rate
could drop as low as 2.5% for years 2-10 and as low as 3% for years 1] and afler,
33. You, ADAM RUTSTEIN, failed to explain to J.D. any of the particulars of the
annuity, including surrender charges as high as 8% and the varying interest rate.
34. At the time you, ADAM RUTSTEIN, delivered the annuity contract, J.D. was
under extreme stress, as her husband’s health was failing and her mother was receiving hospice
services, Therefore, J.D. had no time to review the contract at the time of delivery.
35. After several months, J.D. discovered that the annuity was, in fact, not as you,
ADAM RUTSTEIN, had represented it.
36. When JD. questioned why the policy did not reflect your descriptions at the time
of purchase, you, ADAM RUTSTEIN, instructed her not to read the contract and instead listen
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only to your explanations of the annuity.
37, J.D. surrendered the policy on November 13, 2006, incurring a penalty of
$1,871.90,
38. After several months of complaints by J.D. and her relatives, Bankers Life
refunded the surrender penalty on January 31,2007.
39, Asa result of the annuity sale to J.D., you, ADAM RUTSTEIN, and your
colleague collected commissions.
If IS THEREFORE CHARGED that you, ADAM RUTSTEIN, have violated or are
accountable under one or more of the following provisions of the Florida Statutes or Florida
Administrative Code, which constitute grounds for the suspension or revocation of your licenses
as 4 Florida insurance agent:
(a) Engaged in willful misrepresentation of an imsurance policy or willful deception
with regard to the policy. [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) Demonstrated Jack 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) In the conduct of business under the appointment, engaged in unfair methods of
competition or in unfair or deceptive acts or practices, as prohibited under part IX of this
chapter, or otherwise showed yourself to be a source of injury or loss to the public. [Section
626.621(6), Florida Statutes];
(e) Violation of the life insurance agents’ code of ethics. [Section 626.797(3),
Florida Statutes]; .
(f) Knowingly making a false or fraudulent written or otal statement or
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representation on, or relative to, an application or negotiation for an insurance policy for the
purposes of obtaining a fee, commission, money, or other benefit from any insurer, agent,
broker, or individual. [Section 626.9541 (1 \(k0, Florida Statutes).
WHEREFORE, you, ADAM RUTSTEIN, 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, 626.692, 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 28-106, 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 acting as
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 SUSPENSION OR
REVOCATION WILL BE ENTERED AGAINST YOU,
If you request a proceeding, you must provide information that complies with the
requirements of Rule 28-106.2015, Florida Administrative Code, As noted above, completion of
the attached Election of Proceeding form conforms to these requirements. Specifically, your
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response must contain:
(a) The name, address, and telephone number, and facsimile number (if any) of the
respondent (for the purpose of requesting a hearing in this matter, you are the "respondent”). *
(b) The name, address, telephone number, facsimile number of the attorney or
qualified representative of the respondent (if any) upon whom service of pleadings and other
papers shall be made.
(c) A statement requesting an administrative hearing identifying those material facts
that are in dispute. If there are none, the petition must so indicate,
(d) A statement of when the respondent received notice of the administrative
complaint.
(e) A statement including the file number to the administrative complaint.
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.
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
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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 yo il the response has been received by
the Department.
DATED and SIGNED wis Eos. sey of
, 2009.
Tammy Testor
Deputy Chief Financial Officer
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE
COMPLAINT and ELECTION OF PROCEEDING has been furnished by Certified Mail to:
ADAM RUTSTEI, Bankers Life and Casualty, 4811 Beach Boulevard Suite 404, Jacksonville,
Florida 32207, and ADAM RUTSTEIN, 3525 Twisted Tree Lane, Jacksonville, Florida 32216
this ZS" day of _BacrvanZ 2009.
Ja
Robyn Blafik Jackson ~—
Assistant General Counsel
Department of Financial Services
Division of Legal Services
612 Larson Building :
Tatlahassec, Florida 32399-0333
Docket for Case No: 09-001014PL
Issue Date |
Proceedings |
Jul. 09, 2009 |
Order Closing File. CASE CLOSED.
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Jul. 06, 2009 |
Consent Motion to Relinquish Jurisdiction filed.
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May 15, 2009 |
Order Granting Continuance and Re-scheduling Hearing by Video Teleconference (hearing set for July 16 and 17, 2009; 9:30 a.m.; Jacksonville and Tallahassee, FL).
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May 13, 2009 |
Respondent, Adam Rutstein`s Amended Motion to Continue May 19-20, 2009 Final Hearing filed.
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May 13, 2009 |
Notice of Withdrawal of Koleos, Rosenberg & Doyle, P.A.`s Motion to Withdraw as Counsel for Respondent, Adam Rutstein filed.
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May 12, 2009 |
Respondent, Adam Rutstein`s Motion to Continue May 19-20, 2009 Final Hearing filed.
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May 12, 2009 |
Koleos, Rosenberg & Doyle, P.A.`s Motion to Withdraw as Counsel for Respondent, Adam Ruthstein filed.
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Apr. 09, 2009 |
Notice of Service of Department of Financial Services` First Set of Interrogatories filed.
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Mar. 27, 2009 |
Petitioner`s Privilege Log filed.
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Mar. 27, 2009 |
Department of Financial Services` Response to Respondent`s Request for Production filed.
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Mar. 10, 2009 |
Order of Pre-hearing Instructions.
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Mar. 10, 2009 |
Notice of Hearing by Video Teleconference (hearing set for May 19 and 20, 2009; 9:30 a.m.; Jacksonville and Tallahassee, FL).
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Mar. 04, 2009 |
Joint Response to Initial Order filed.
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Feb. 25, 2009 |
Initial Order.
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Feb. 23, 2009 |
Respondent, Adam Rutstein`s Election of Rights, Request for Formal Administrative Hearing and Answer and Statement of Disputed Facts filed.
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Feb. 23, 2009 |
Notice of Filing Respondent, Adam Rutstein`s Election of Proceeding filed.
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Feb. 23, 2009 |
Election of Proceeding filed.
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Feb. 23, 2009 |
Administrative Complaint filed.
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Feb. 23, 2009 |
Agency referral
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