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Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services has jurisdiction over your, DAVID FRANKLIN ALBERO's, insurance license(s) and appointments.
Section 624.401, Florida Statutes, provides that no person shall act as an insurer, and no insurer or its agents, attorneys, subscribers, or representatives shall directly or indirectly transact insurance in this state except as authorized by a subsisting Certificate of Authority issued to the insurer by the Florida Office of Insurance Regulation (" the OFFICE").
Section 624.03, Florida Statutes, defines "insurer" to include every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity.
Section 624.04, Florida Statutes, defines "person" and includes "company", "corporation", and "every legal entity" in the definition.
Section 624.09, Florida Statutes, provides that an "unauthorized insurer" is an insurer which is not duly authorized by a subsisting certificate of authority issued by the OFFICE to transact insurance in this state.
Section 624.10, Florida Statues, provides that transacting insurance includes any of the following: 1) solicitation or inducement; 2) preliminary negotiations; 3) effectuation of a contract of insurance; and 4) transaction of matters subsequent to effectuation of a contract of insurance and arising out of it.
On August 26, 2009, the OFFICE issued an Immediate Final Order ("IFO") In the
Matter of: Peck & Peck, Inc., Green Cross Managed Health System and Depawix Health
Resources, Inc., Case No. 106257-09. The IFO provides that, as a result of its investigation, the Office finds:
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As a result of an OFFICE investigation it has been determined that PECK & PECK, GREEN CROSS and DEPAWIX are engaged in the unauthorized business of marketing, sale, and distribution of health insurance. These companies market group and individual health insurance plans to small businesses and individuals, both directly and through licensed and unlicensed insurance agents under the guise of selling an employment opportunity with DEPAWIX that provides medical benefits. Groups and Individuals who wish to participate in the GREEN CROSS program are, in addition to any existing employment with a Florida business, required to be "dually employed" by DEPAWIX. [Exhibit B] [Paragraph 10 of the IFO.]
During its investigation, the OFFICE determined that PECK & PECK, GREEN CROSS and DEPAWIX are marketing its Sirus Program to small and medium sized businesses desiring insurance coverage for its employees. As part of the Sirus Program, the business seeking insurance coverage is required to "sponsor" its employees into the Green Cross Managed Health System and pay an agreed upon monthly contribution on behalf of each employee. Additionally, each insured employee must pay a portion of the monthly premium directly to PECK & PECK for coverage. Each insured employee "sponsored" by the small business is required to enter into a dual employment arrangement whereby the employee continues working for his or her existing employer, but is required to become a part time employee with DEPAWIX. The employee must accept this part time employment with DEPAWIX as a tester of the GREEN CROSS system of health care and agree to complete the duties as further describe in the DEPAWIX job description and employee implementation agreement to qualify for coverage. In return, the small businesses' employees will receive medical coverage for themselves and their covered dependents tluough his part-time
employment with DEPAWIX. [Composite Exhibit CJ [Paragraph 11 of the IFO.]
GREEN CROSS also provides individual coverage tluough its Genesis Program in a similar manner that requires part-time employment with DEPAWIX. [Paragraph 12 of the IFO.]
These health benefit plans include the Green Cross Genesis program for individuals, the Green Cross Sirus program for small to medium-sized business[es], and a Plan B for employers with employees who have known or predicted medical conditions, including Plan B/Class 1 and Class 3 designations. It appears that the Class 3 participants are those individuals that currently have or are predicted to have more than $1,500.00 in medical expenses during a given month. The Genesis, Sirus and Plan B/Class 1' plans are self-insured and rely on pooled financial contributions from multiple employers and individuals, whereas the Plan B/Class 3 plan is fully insured by a Georgia based insurer. [Paragraph 13 of the IFO.]
As a part-time employee ofDepawix participating in the Genesis, Sirus or Plan B/Class 1, each insured agrees to work 15 hours a month at a rate of $7.50 an
hour for a total of $112.50 each month. However, approximately 87% or $97.50 is retained by DEPAWIX to pay for health insurance coverage. As a Plan B/Class 3 full-time employee of DEPAWIX, the insured must work 30 hours per week and meet the job requirements ofa Class I employee as well as any additional job requirements of a Class 3 employee, however the Class 3 employee will not receive any additional compensation for the additional hours worked. The thirty hours per week part-time job with DEPAWIX would be in addition to working full time at the insureds existing employment. [Composite Exhibit D] [Paragraph 14 of the IFO.]
As part of the employee implementation agreement that each insured is required to sign, the part-time insured participating in the Genesis, Sirus or Plan B/Class I agrees that if they or one of their covered dependents incurs an emergency medical situation the insured "will be offered full time employment retroactive to the beginning of that month." The insured must accept the job, and understands that their salary will remain the same and they will be required to become a full-time employee working thirty hours a week. Becoming a full time employee entitles the insured to coverage under the fully insured plan at a time when the insured is most likely to incur high dollar claims. Such retroactive employment is in all likelihood a violation the fully insured group policy issued by the Georgia based insurer and compels the insured to participate in potential fraudulent activity. [See Exhibit C, Employee Implementation Agreement, paragraph 3] [Paragraph 15 of the IFO.]
The work performed by the part-time employees is minimal at best and amounts to nothing more than studying the interaction between the insured and the patient advocate by requiring the insured to participate in annual health assessments, establishing a health management plan, agreeing to work with a patient advocate when utilizing health care and providing copies of medical bills to the patient advocate when treatment is complete. [Composite Exhibit C] [Paragraph 16 of the IFO.]
Regardless of the insureds placement as a part-time employee with DEPAWIX and the illusion of dual employment, the main goal of PECK & PECK, GREEN CROSS and DEPAWIX is to market and sell health insurance coverage. The product being promoted by GREEN CROSS is sold and marketed to Florida citizens as individual or group health insurance. Florida citizens enter into this agreement as a way to obtain low cost health insurance for their employees, families or themselves. None are specifically looking for a part-time job. The dual employment scheme utilized by PECK & PECK, GREEN CROSS and DEPAWIX is a subterfuge to avoid regulation as a legitimate health insurance company in the State of Florida. [Paragraph 17 of the IFO.]
Records maintained by the Florida Department of Financial Services, Office of Consumer Services reflect that PECK & PECK, GREEN CROSS and DEPAWIX Health Resources have been actively recruiting agents and brokers.
More importantly, these companies either directly or through insurance agents engaged in marketing activities to induce Florida consumers to purchase health insurance .... [Composite Exhibit E, agent/broker recruiting materials and June, 2009 GREEN CROSS underwriting guidelines, website home page and frequently asked questions] [Paragraph 18 of the IFO.]
G) OFFICE records reveal that none of the above referenced entities [PECK & PECK, GREEN CROSS and DEPAWIX] currently hold or have ever been granted a license or Certificate of Authority by the OFFICE authorizing the entity or individual to transact business as a health insurer, business or insurance business in any capacity, nor are the following entities registered as eligible surplus lines insurance carriers: PECK & PECK, GREEN CROSS and DEPAWIX. [Certificates of Non-Authority are attached as Composite Exhibit G] [Paragraph 20 of the IFO.]
Despite the absence of any Certificate of Authority or any other authorization to transact insurance business in Florida, PECK & PECK, GREEN CROSS and DEPAWIX are currently engaging in the unlicensed, unauthorized, transaction of insurance covering consumers located in Florida, in violation of the Florida Code including, Sections 624.401 and 626.901, Florida Statutes. [Paragraph 21 of the IFO.]
In State v. Knott, 166 So. 835 (Fla. 1936), the Florida Supreme Court found that "the business of insurance so directly affects the public that it is generally considered to be affected with a public interest, and, being so, is subject to regulation and control by the Legislature, which includes the power to license and regulate the agents through whom such business is conducted." Id. at 837. The court further states that "It would be difficult to find a business that more vitally affects the public interest.. .." Id. In Natelson v. Department of Insurance,
454 So. 2d 31 (Fla. Ist DCA 1984), the court stated that the business of insurance
is "greatly affected by the public trust." Id. at 31. [Paragraph 25 of the IFO.]
(m) As a result of the foregoing, the OFFICE ["OIR"] finds that the continued transaction of insurance without proper licensure by PECK & PECK, GREEN CROSS and DEPAWIX, and their agents and representative who solicit and/or enroll employers and employees into unauthorized health insurance plans in violation of the Florida Insurance Code, poses an immediate danger to the public welfare. [Paragraph 26 of the IFO.]
On October 7, 2009, the aforementioned IFO was appealed by PECK & PECK, INC. and DEPAWIX HEALTH RESOURCES, INC.(" Depawix"), to the District Court of Appeal First District, State of Florida. The Court dismissed the appeal on March 25, 2010.
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The above general allegations numbered one (1) through ten (I 0) are hereby re- alleged and fully incorporated herein by reference.
On or about June 16, 2009, you, DAVID FRANKLIN ALBERO, directly or indirectly, solicited and induced Jerry Clint McNally of Lakeland, Florida, to purchase the unauthorized Depawix health insurance plan. He agreed, and Mr. McNally and his wife, Mary McNally, were issued Depawix health insurance plan identification cards with an effective date of July 1, 2009.
You, DAYID FRANKLIN ALBERO, directly or indirectly, represented or aided Depawix, an unauthorized insurer, and you have otherwise demonstrated a lack of fitness or trustworthiness to engage in the business of insurance when you caused Mr. McNally to purchase health insurance from an unauthorized insurer.
IT IS THEREFORE CHARGED that, you, DAVID FRANKLIN ALBERO, 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:
Section 626.901(1), Florida Statutes, which provides that no person shall directly or indirectly represent or aid any insurer not then authorized to transact such insurance in this state in the solicitation, negotiation, procurement, or effectuation of insurance or annuity contracts with respect to subjects of insurance resident, located, or to be performed in this state;
Section 626.901(2), Florida Statutes, which provides that if an unauthorized insurer fails to pay in full or in part any claim or loss within the provisions of any insurance contract which is entered into in violation of this section, any person who knew or reasonably
should have known that such contract was entered into in violation of this section and who solicited, negotiated, took an application for, or effectuated such insurance contract is liable to the insured for the full amount of the claim or loss not paid;
Section 626.611(7), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to demonstrate a lack of fitness or trustworthiness to engage in the business of insurance;
Section 626.621(2), Florida Statutes, which provides that violating 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 is, in itself, a violation of law;
Section 626.621(6), Florida Statutes, provides that it is a violation for the licensee or appointee to engage in unfair or deceptive practices, as prohibited under part IX of Chapter 626, Florida Statutes, or to have otherwise shown himself or herself to be a source of injury or loss to the public.
WHEREFORE, you, DAVID FRANKLIN ALBERO, are hereby notified that the Chief Financial Officer, through his designee, 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, 626.641, 626.651, 626.681, 626.691, 626.692, Florida Statutes, Rule Chapter 69B-23 l of the Florida Administrative Code, and under the other referenced sections of the Florida Statutes as set out in this Administrative Complaint. You are further notified that any order entered in this case revoking or suspending any license or eligibility for licensure held by you shall also apply to all other licenses and eligibility held by you under the Florida Insurance Code.
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 Julie Jones, Department 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.
If you request a proceeding, you must provide information that complies with the
requirements of Rule 28-106.2015, Florida Administrative Code. For purposes of requesting a hearing in this matter, you are the "Respondent." Completion of the attached Election of Proceeding form conforms to these requirements. Specifically, your response must contain:
Your name, address, and telephone number, and facsimile number (if any).
The name, address, telephone number, facsimile number of your attorney or qualified representative (if any) upon whom service of pleadings and other papers shall be made.
A statement requesting an administrative hearing identifying those material facts that are in dispute. If there are none, the petition must so indicate.
A statement of when you received notice of the administrative complaint.
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
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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 9.JLday of J , 2011.
Director, Agent & Agency Services
CERTIFICATE OF SERVICE
£ ,,
I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING have been furnished to: DAVID FRANKLIN ALBERO, at the following address: I137 Fraser Pine Boulevard, Sarasota, Florida
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34240-1413, by restricted U.S. Certified Mail thiscxfu ,day of0 f 2011.
Douglas . Dolan, Esquire Florida Bar Number: 0011121 Division of Legal Services 200 East Gaines Street
Tallahassee, Florida 32399-0333
(850) 413-4114
Fax (850) 487-4907
Attorney for Department
STATE OF FLORIDA
DEPARTMENT OF FINANCIAL SERVICES DIVISION OF LEGAL SERVICES
IN THE MATTER OF
DAVID FRANKLIN ALBERO CASE NO.: 114572-11-AG
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ELECTION OF PROCEEDING
I have received and have read the Administrative Complaint filed by the Florida Department of Financial Services (''Department") against me, including the Notice of Rights contained therein, and I understand my options. I am requesting disposition of this matter as indicated below. (CHOOSE ONE)
[ ] I do not dispute any of the Department's factual allegations and I do not desire a hearing. I understand that by waiving my right to a hearing, the Department may enter a final order that adopts the Administrative Complaint and imposes the sanctions sought, including suspending or revoking my licenses and appointments as may be appropriate.
I do not dispute any of the Department's factual allegations and I hereby elect a proceeding to be conducted in accordance with Section 120.57(2), Florida Statutes. In this regard, I desire to (CHOOSE ONE):
[ .J Submit a written statement and documentary evidence in lieu of a hearing; or
[ ] Personally attend a hearing conducted by a department hearing officer in Tallahassee; or
{ ] Attend that same hearing by way of a telephone conference call.
{ ] I do dispute one or more of the Department's factual allegations. I hereby request a hearing pursuant to Section 120.57(1), Florida Statutes, to be held before the Division of Administrative Hearings. I have attached to this election form the information required by Rule 28 106.2015, Florida Administrative Code, as specified in subparagraph (c) of the Notice of Rights. Specifically, I have identified the disputed issues of material fact.
TO PRESERVE YOUR RIGHT TO A HEARING, YOU MUST FILE YOUR RESPONSE WITH THE DEPARTMENT OF FINANCIAL SERVICES WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THE AMENDED ADMINISTRATIVE COMPLAINT. THE RESPONSE MUST BE RECEIVED BY THE DEPARTMENT NO LATER THAN 5:00 P.M. ON THE TWENTY-FIRST DAY AFTER YOUR RECEIPT OF THE AMENDED ADMINISTRATIVE COMPLAINT.
The address for filing is: Julie Jones, Agency Clerk, Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333.
Signature
Date Administrative
Complaint Received: _
If you are represented by an attorney or qualified representative, please attach to this election form his or her name, address, telephone and fax numbers
Print Name
Address: _
Phone No.:
