FILED REPRESENTING ALEX SONE NOV 8 2009 CHIEF FINANCIAL OFFICER STATE OF FLORIDA Docketed by th -JO-0010 PL IN THE MATTER OF: CASE NO.: 106908-09-AG CHARLES LEE SAUSMAN ADMINISTRATIVE COMPLAINT TO: CHARLES LEE SAUSMAN 17108 Newport Club Drive Boca Raton, FL 33496-3009 SE OV S- NYP tnZ You, CHARLES LEE SAUSMAN, license I.D. #A232612, 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, CHARLES LEE SAUSMAN, are currently licensed in this state as a life and variable annuity (2-14), life and variable annuity and health (2-15); life (2-16), life and health (2-18), insurance agent. 2. At all times pertinent to the dates and occurrences referred to herein, you, CHARLES LEE SAUSMAN, were licensed in this state as a life and variable annuity; life and health and variable annuity; life; life and health insurance agent. 3. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services has jurisdiction over your insurance license and appointments. COUNT I 4. The above general allegations are hereby realleged and fully incorporated herein by reference. 5. Prior to September 2002, James Threlkeld and Sheree E. Thomas maintained their retirement and investment funds in an existing annuity contract with Guardian Insurance and Annuity Company, Inc., together with a stock portfolio with a combined total value of $160,000. 6. In or around September 2002 and thereafter, you, CHARLES LEE SAUSMAN, as a licensed insurance agent, and acting as financial advisor to James Threlkeld and Sheree E. Thomas, caused them to cancel their existing annuity contract with Guardian Insurance and to convert their stockholdings to cash and with these total proceeds you, CHARLES LEE SAUSMAN, then sold James Threlkeld and Sheree E. Thomas three different equity indexed annuity contracts, two with North American Company for Life and Health Insurance, being policy numbers 8000015335 and 80000015999, and another with Allianz Life Insurance Company of North America, being policy number 31317236. All such contracts required a fifteen year surrender period imposing substantial financial penalties in the event funds were needed by James Threlkeld and Sheree E. Thomas. You, CHARLES LEE SAUSMAN, received commission checks for these sales transactions in the amount of $5,589.77, $6,627.98, and $4,521.36 respectively. 7. At no time either before or at sale of these three indexed annuity policies did you, CHARLES LEE SAUSMAN, discuss the suitability of these investments with either James Threlkeld or Sheree E. Thomas, in light of their imminent retirement goals nor did you inform them of the surrender penalties. 8. Subsequent to sale by you of the three indexed annuity contracts, James Threlkeld and Sheree E. Thomas, discovered that ready access to these funds for their retirement needs was severely limited by significant withdrawal penalties, which were inconsistent with those retirement needs and in no way consistent with withdrawal penalties and a surrender period of fifteen years. They thereupon immediately undertook to cancel the three annuity contracts sold by you to them and only after some 10 months of effort and payment of excess of $10,000 in penalties were they successful in doing so. IT IS THEREFORE CHARGED that you, CHARLES LEE SAUSMAN, 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) Misrepresentation of any insurance policy or annuity contract, or deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.6215(5)(c), 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) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (e) 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 IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes]; ( Misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9641(1)(a)1., Florida Statutes]. WHEREFORE, you, CHARLES LEE SAUSMAN, 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 of Financial Services ("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 Tracey Beal, DFS Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390. 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 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 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 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. DATED and SIGNED this avd day of pV OLY, 2008. cae TAMMY TESTON Deputy Chief Financial Officer CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished to: CHARLES LEE SAUSMAN, 17108 Newport Club Drive, Boca Raton, FL 33496-3009, by Certified Mail this % dayof__ Usvewaca , 2009. Dean Andrews Division of Legal Services 200 East Gaines St. 612 Larson Building Tallahassee, Florida 32399-033 (850) 413-4242 Florida Bar Number 0001959

Docket for Case No: 10-000010PL