FILED OCT 29 2012 CHIEF FINANCIAL OFFICER JEFF ATWATER STATE OF FLORIDA Docketed by IN THE MATTER OF: LOTSOLUTIONS, INC. . CASE NO.: 129242-12-AG ADMINISTRATIVE COMPLAINT LOTSOLUTIONS, INC. through National Corporate Research, Ltd., its registered agent, 3675 Crestwood Parkway, Suite 350 Duluth, GA 30096 You, LOTSOLUTIONS, INC. (“LOTSolutions”), license ILD. #P003223, 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 a managing general agent, home warranty sales firm, and service warranty sales firm in this state, as a result of which it is alleged: GENERAL ALLEGATIONS 1. Pursuant to Chapters 626 and 634, Florida Statutes, you, LOTSolutions, are currently licensed in this state as non-resident managing general agent, home warranty sales 7 firm, and service warranty sales firm. 2. At all times pertinent to the dates and occurrences referred to herein, you, LOTSolutions, were licensed in this state as a non-resident managing general agent, home warranty sales firm, and service warranty sales firm. Filed December 5, 2012 3:31 PM Division of Administrative Hearings 3. Global Warranty Group, LLC (“Global”) does not hold any licenses or registrations issued under or pursuant to Chapters 624-632, 634, 635, 636, 641, 642, 648 and 651, Florida Statutes (2012) (collectively referred to as “Florida Insurance Code”). 4. At all times relevant to the dates and occurrences referred to herein, Global did not hold any licenses or registrations issued under or pursuant to the Florida Insurance Code. 5. Pursuant to Chapters 626 and 634, Florida Statutes, the Florida Department of Financial Services (“Department”) has jurisdiction over your insurance licenses and appointments. 6. On October 21, 2009, Global submitted an application to the Department for licensure as a non-resident service warranty sales firm (“2009 Application”). 7. The Department closed the 2009 Application as deficient when Global failed to furnish requested documents related to Mr. Charles Pipia’s criminal history. Pipia, one of Global’s managers, was convicted of attempted enterprise fraud in the State of New York. The crime of attempted enterprise fraud is a felony. 8. On February 25, 2011, Global submitted an application to the Department for licensure as a non-resident service warranty sales firm (“2011 Application”). 9. The 2011 Application was closed as deficient by the Department when, once again, Global failed to furnish requested documents related to Mr. Pipia’s criminal history. 10. _ Pipia’s criminal history prevents him, as well as any company that he manages or controls or is a majority owner, partner, manager, director or officer of, from obtaining a license from the Department. Section 626.207, Fla. Stat. COUNT I 11. The general allegations are hereby realleged and fully incorporated herein by reference. 12. On or around May 1, 2009, you, LOTSolutions, entered into an Administrative Services Agreement (“Agreement”) with Global. . 13. Through the Agreement, Global oversees the Wireless Protection Program on behalf of Lyndon Southern Insurance Company (“Lyndon Southern”). 14. The Wireless Protection Program covers cell phones for loss, theft, mechanical failure, malfunction, or damage for portable electronics. 15. The Wireless Protection Program is, and at all times material hereto has been, a limited lines insurance product. Section 626.321, Fla. Stat. 16. A limited lines insurance agent license is, and at all times material hereto has been, required to sell the Wireless Protection Program to the public. Section 626.321, Fla. Stat. 17. Global does not sell the Wireless Protection Program. Rather, Global contracts with other persons, such as Ensquared Holdings LLC, One Shop Wireless, Mobility Safe Inc., and Automotive Technologies Inc. (dba Wireless Zone), who in turn sell the Wireless Protection Program to the public. 18. | However, neither Ensquared Holdings LLC, One Shop Wireless, Mobility Safe Inc., nor Automotive Technologies Inc. (dba Wireless Zone) hold a limited lines insurance agent license. | 19. Limited lines insurance agents are, and at all times material hereto were, required to have a contractual relationship with a general lines agent. Section 626.321, Fla. Stat. 20. Pursuant to the Agreement, you, LOTSolutions, required Global to perform the following services, and Global did perform the following services, in relation to the insurance products/policies offered through the Wireless Protection Program (“Insurance Policies”): a. receive insurance premiums; b. receive fiduciary funds on behalf of yourself and/or Lyndon Southern; c. maintain insurance premiums in a bank account; d. maintain fiduciary funds belonging to yourself and/or Lyndon Southern in a bank account; e. produce and distribute all forms and materials to implement the Insurance Policies; f. perform all functions relating to the marketing of the Insurance Policies; g. perform all policyholder services including but not limited to recordkeeping, calls, correspondence, notices, inquiries, complaints, corrections, owner and beneficiary changes, and claims administration; h. perform all billing, collection, processing, accounting, safekeeping, and disbursement of premiums, premium refunds, commissions, fees and charges, benefits, reinsurance settlements, taxes and any other settlements with parties entitled thereto under the Insurance Policies and the Agreement; i, electronically report to you, LOTSolutions, and other appropriate parties hereunder all premium, premium refund, commission, claims, tax, banking, accounting, financial, reserve, actuarial, marketing, and service standard information; j. claims administration in accordance with the procedures mutually agreed upon by you, LOTSolutions, and Global (changed as of March 29, 2011, claims administration in accordance with the procedures established by Lyndon Southern); and k. electronically report to the taxpayers entitled thereto of all federal, state, and municipal taxation information relating to the Insurance Policies, including but not limited to income tax, 1099s, DAC tax, excise tax, premium tax, municipal tax, and state guaranty fund assessments. 21. An insurance agency is defined as “a business location at which an individual, firm, partnership, corporation, association, or other entity, other than an employee of the individual, firm, partnership, corporation, association, or other entity and other than an insurer as defined by s. 624.03 or an adjuster as defined by subsection (1), engages in any activity or employs individuals to engage in any activity which by law may be performed only by a licensed insurance agent.” Section 626.015(8), Fla. Stat. 22. The Agreement that you, LOTSolutions, entered into with Global requires Global to engage in the transaction of insurance through, including but not limited to: 1) solicitation or inducement; 2) effectuation of a contract of insurance; and 3) transaction of matters subsequent to effectuation of a contract of insurance and arising out of it. 23. The Agreement that you, LOTSolutions, entered into with Global requires Global to engage in the solicitation of insurance through, including but not limited to: 1) describing the benefits or terms of insurance coverage, including premiums or rates of return; 2) distributing invitations to contract to prospective purchasers; 3) completing orders or applications for insurance products; and/or 4) advising as to insurance matters, or interpreting policies or coverages. 24. The Agreement that you, LOTSolutions, entered into with Global requires Global to engage in the activities of a general lines agent, included but not limited to: 1) soliciting insurance or procuring applications therefor; 2) in this state, receiving or issuing a receipt for any money on account of or for any insurer, or receiving or issuing a receipt for money from other persons to be transmitted to any insurer for a policy, contract, or certificate of insurance or any renewal thereof, even though the policy, certificate, or contract is not signed by him or her as agent or representative of the insurer; 3) collecting or forwarding any insurance premium, or soliciting, negotiating, effecting, procuring, receiving, delivering, or forwarding, directly or indirectly, any insurance contract or renewal thereof or any endorsement relating to an insurance contract, or attempt to effect the same, of property or insurable business activities or interests, located in this state; and/or 4) in any way, directly or indirectly, making or causing to be made, or attempting to make or causing to be made, any contract of insurance for or on account of any insurer. 25. At least since May of 2009, Global acted as, and was, an insurance agency. 26. At least since May of 2009, Global was required to be licensed or registered as an insurance agency. 27. At least since May of 2009, Global acted as, and was, an independent insurance adjusting firm. 28. At least since May of 2009 to September 30, 2012, Global was required to be licensed as an independent insurance adjusting firm. 29. Since October 1, 2012, Global has been required to be licensed as an independent insurance adjusting firm or an all-lines adjusting firm. 31. You, LOTSolutions, knew, or should have known, that, at all times pertinent to the dates and occurrences referenced herein, Global did not hold any licenses ‘or registrations issued under or pursuant to the Florida Insurance Code. IT IS THEREFORE CHARGED that you, LOTSolutions, 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 all your licenses in this state, including but not limited to your managing general agent, home warranty sales firm, and service warranty sales firm licenses: (a) Section 626.611(7), Florida Statutes, which provides that itis a violation for any agent to demonstrate a lack of fitness or trustworthiness to engage in the business of insurance. (b) —_ Section 626.611(8), Florida Statutes, which provides that it is a violation for any agent to demonstrate a lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by license or appointment. (c) Section 626.621(2), Florida Statutes, which provides that violating any provision of the Florida Insurance Code or any law applicable to the business of insurance in the course of dealing under the licensure or appointment is, in itself, a violation of law. (d) Section 626.621(3), Florida Statutes, which provides, that a violation of any lawful order or rule of the department, commission, or office, is, in itself, a violation of law. (e) Section 626.621(12), Florida Statutes, which provides that it is a violation for any agent to knowingly aid, assist, procure, advise, or abet any person in the violation of or to violate a provision of the Florida Insurance Code or any order or rule of the department, commission, or office. (f) Section 626.9571(1), Florida Statutes, which provides that it is a violation for any person to engage in the business of insurance without being properly licensed. (g) Section 626.112(7), Florida Statutes, requires all insurance agencies to file an application for licensure or registration on or before October 1, 2006. (h) — Section 626.9581(1), Florida Statutes, which provides that it is a violation for any person to engage in the unlawful transaction of insurance. (i) Section 624.10, Florida Statues, provides that transacting insurance includes any of the following, in addition to other applicable provisions of the Florida Insurance Code: 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. (j) Section 624.11, Florida Statutes, no person shall transact insurance 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. (k) Section 626.112(1)(b), Florida Statutes, which states that a license as an insurance agent, service representative, customer representative, or limited customer representative is required in order to engage in the solicitation of insurance. For purposes of this requirement, as applicable to any of the license types described in this section, the solicitation of insurance is the attempt to persuade any person to purchase an insurance product by: 1. Describing the benefits or terms of insurance coverage, including premiums or rates of return; 2. Distributing an invitation to contract to prospective purchasers; 4. Completing orders or applications for insurance products; or 5. Comparing insurance products, advising as to insurance matters, or interpreting policies or coverages. () Section 626.7315, Florida Statutes, which states that no individual shall, unless licensed as a general lines agent: (1) Solicit insurance or procure applications therefor; (2) In this state, receive or issue a receipt for any money on account of or for any insurer, or receive or issue a receipt for money from other persons to be transmitted to any insurer for a policy, contract, or certificate of insurance or any renewal thereof, even though the policy, certificate, or contract is not signed by him or her as agent or representative of the insurer, except as provided in s, 626.0428(1); (3) Directly or indirectly represent himself or herself to be an agent of any insurer or as an agent, to collect or forward any insurance premium, or to solicit, negotiate, effect, procure, receive, deliver, or forward, directly or indirectly, any insurance contract or renewal thereof or any endorsement relating to an insurance contract, or attempt to effect the same, of property or insurable business activities or interests, located in this state; (5) In any way, directly or indirectly, make or cause to be made, or attempt to make or cause to be made, any contract of insurance for or on account of any insurer. (m) Section 626.321, Florida Statutes (2011), which states: (1) The department shall issue to a qualified individual, or a qualified individual or entity under paragraphs (c), (d), (e), and (i), a license as agent authorized to transact a limited class of business in any of the following categories: (2. A license covering only communications equipment, for the loss, theft, mechanical failure, malfunction of or damage to, communications equipment. The license may be issued only to: { a. Employees or authorized representatives of a licensed general lines agent; b. The lead business location of a retail vendor of communications equipment and its branch locations; or c. Employees, agents, or authorized representatives of a retail vendor of communications equipment. The license authorizes the sale of such policies, or certificates under a group master policy, only with respect to the sale of, or provision of communications service for, communications equipment. A general lines agent is not required to obtain a license under this subparagraph to offer or sell communications equipment property insurance or communication equipment inland marine insurance. The license also authorizes sales of service warranty agreements covering only communications equipment to the same extent as if licensed under s. 634.419 or s. 634.420. ... Licensees offering policies under this subparagraph must receive initial training from, and have a contractual relationship with, a general lines agent. For the purposes of this subparagraph, the term “communications equipment” means handsets, pagers, personal digital assistants, portable computers, automatic answering devices, and other devices or accessories used to originate or receive communications signals or service, and includes services related to the use of such devices, such as consumer access to a wireless network .... A branch location of a retail vendor of communications equipment licensed pursuant to paragraph (2)(b) may, in lieu of obtaining an appointment from an insurer or warranty association as provided in paragraph (2)(c), obtain a single appointment from the associated lead business 10 location licensee licensed under paragraph (2)(a) and pay the prescribed appointment fee under s. 624.501 provided the lead business location has a single appointment from each insurer or warranty association represented and such appointment provides that it applies to the lead business location and all of its branch locations. .. . Branch location appointments shall be renewed on the first annual anniversary of licensure of the lead business location occurring more than 24 months after the initial appointment date and every 24 months thereafter. . . . (2) Anentity applying for a license under this section is required to: (a) Submit only one application for a license under s. 626.171. The requirements of s. 626.171(4) shall only apply to the officers and directors of the entity submitting the application. (c) Pay the applicable fees for a license as prescribed in s. 624.501, be appointed under s. 626.112, and pay the prescribed appointment fee under s. 624.501. A licensed and appointed entity shall be directly responsible and accountable for all acts of the licensee’s employees. (4) Except as otherwise expressly provided, a person applying for or holding a limited license shall be subject to the same applicable requirements and responsibilities as apply to general lines agents in general, if licensed as to... communications equipment property insurance or communications equipment inland marine insurance. . . . (n) Section 626.321, Florida Statutes (2012), which states: (1) The department shall issue to a qualified applicant a license as agent authorized to transact a limited class of business in any of the following categories of limited lines insurance: (h) _- Portable electronics insurance.— License for property insurance or inland marine insurance that covers only loss, theft, mechanical failure, malfunction, or damage for portable electronics. 1. The license may be issued only to: 11 a. Employees or authorized representatives of a licensed general lines agent; or b. The lead business location of a retail vendor that sells portable electronics insurance. The lead business location must have a contractual relationship with a general lines agent. 2. Employees or authorized representatives of a licensee under subparagraph 1. may sell or offer for sale portable electronics coverage without being subject to licensure as an insurance agent if: a. Such insurance is sold or offered for sale at a licensed location or at one of the licensee’s branch locations if the branch location is appointed by the licensed lead business location or its appointing insurers; b. The insurer issuing the insurance directly supervises or appoints a general lines agent to supervise the sale of such insurance, including the development of a training program for the employees and authorized representatives of vendors that are directly engaged in the activity of selling or offering the insurance; and c. At each location where the insurance is offered, brochures or other written materials that provide the information required by this subparagraph are made available to all prospective customers. The brochures or written materials may include information regarding portable electronics insurance, service warranty agreements, or other incidental services or benefits offered by a licensee. 3. Individuals not licensed to sell portable electronics insurance may not be paid commissions based on the sale of such coverage. However, a licensee who uses a compensation plan for employees and authorized representatives which includes supplemental compensation for the sale of noninsurance products, in addition to a regular salary or hourly wages, may 12 include incidental compensation for the sale of portable electronics insurance as a component of the overall compensation plan. 5. A licensed and appointed general lines agent is not required to obtain a portable electronics insurance license to offer or sell portable electronics insurance at locations already licensed as an insurance agency, but may apply for a portable electronics insurance license for branch locations not otherwise licensed to sell insurance. 6. A portable electronics license authorizes the sale of individual policies or certificates under a group or master insurance policy. The license also authorizes the sale of service warranty agreements covering only portable electronics to the same extent as if licensed under s. 634.419 or s. 634.420. 7. A licensee may bill and collect the premium for the purchase of portable electronics insurance provided that: a. If the insurance is included with the purchase or lease of portable electronics or related services, the licensee clearly and conspicuously discloses that insurance coverage is included with the purchase. Disclosure of the stand-alone cost of the premium for same or similar insurance must be made on the customer’s bill and in any marketing materials made available at the point of sale. If the insurance is not included, the charge to the customer for the insurance must be separately itemized on the customer’s bill. b. Premiums are incidental to other fees collected, are maintained in a manner that is readily identifiable, and are accounted for and remitted to the insurer or supervising entity within 60 days of receipt. Licensees are not required to maintain such funds in a segregated account. 13 c. All funds received by a licensee from an enrolled customer for the sale of the insurance are considered funds held in trust by the licensee in a fiduciary capacity for the benefit of the insurer. Licensees may receive compensation for billing and collection services. 11. A branch location that sells portable electronics insurance may, in lieu of obtaining an appointment from an insurer or warranty association, obtain a single appointment from the associated lead business location licensee and pay the prescribed appointment fee under s. 624.501 if the lead business location has a single appointment from each insurer or warranty association represented and such appointment applies to the lead business location and all of its branch locations. Branch location appointments shall be renewed 24 months after the initial appointment date of the lead business location and every 24 months thereafter. Notwithstanding s, 624.501, the renewal fee applicable to such branch location appointments is $30 per appointment. 12. For purposes of this paragraph: a. “Branch location” means any physical location in this state at which a licensee offers its products or services for sale. b. “Portable electronics” means personal, self-contained, easily carried by an individual, battery-operated electronic communication, viewing, listening, recording, gaming, computing or global positioning devices, including cell or satellite phones, pagers, personal global positioning satellite units, portable computers, portable audio listening, video viewing or recording devices, digital cameras, video camcorders, portable gaming systems, docking stations, automatic answering devices, and other similar devices and their accessories, and service related to the use of such devices. 14 c. “Portable electronics transaction” means the sale or lease of portable electronics or a related service, including portable electronics insurance. (2) An entity applying for a license under this section is required to: (a) Submit only one application for a license under s. 626.171. The requirements of s. 626.171(4) shall only apply to the officers and directors of the entity submitting the application. (c) Pay the applicable fees for a license as prescribed in s. 624.501, be appointed under s. 626.112, and pay the prescribed appointment fee under s. 624.501. A licensed and appointed entity shall be directly responsible and accountable for all acts of the licensee’s employees. (4) Except as otherwise expressly provided, a person applying for or holding a limited license is subject to the same applicable requirements and responsibilities that apply to general lines agents in general if licensed as to. . . portable electronics insurance. . . (0) Section 626.112(4), Florida Statutes, states no person shall act as an adjuster as to any class of business for which he or she is not then licensed and appointed. (p) Section 626.8695, Florida Statutes, states: (2)(a) For purposes of this section, a “primary adjuster” is the licensed adjuster who is responsible for the hiring and supervision of all individuals within an adjusting firm location who deal with the public and who acts in the capacity of a public adjuster as defined in s. 626.854, or an independent adjuster as defined in s. 626.855. An adjuster may be designated as a primary adjuster for only one adjusting firm location. (b) For purposes of this section, an “adjusting firm” is a location where an independent or public adjuster is engaged in the business of insurance. (6) An adjusting firm location may not conduct the business of insurance unless a primary adjuster is designated. Failure of the person operating the adjusting firm to designate a 15 primary adjuster for the firm, or for each location, as applicable, on a form prescribed by the department within 30 days after inception of the firm or change of primary adjuster designation, constitutes grounds for requiring the adjusting firm to obtain an adjusting firm license pursuant to s. 626.8696. (q) Section 626.855, Florida Statutes (2011), states an “independent adjuster” is any person who is self-employed or is associated with or employed by an independent adjusting firm or other independent adjuster, and who undertakes on behalf of an insurer to ascertain and determine the amount of any claim, loss, or damage payable under an insurance contract or undertakes to effect settlement of such claim, loss, or damage. (r) Section 626.855, Florida Statutes (2012), states an “independent adjuster” means a person licensed as an all-lines adjuster who is self-appointed or appointed and employed by an independent adjusting firm or other independent adjuster, and who undertakes on behalf of an insurer to ascertain and determine the amount of any claim, loss, or damage payable under an insurance contract or undertakes to effect settlement of such claim, loss, or damage. (s) Section 626.8548, Florida Statutes (2012), states an “all-lines adjuster” is a person who is self-employed or employed by an insurer, a wholly owned subsidiary of an insurer, or an independent adjusting firm or other independent adjuster, and who undertakes on behalf of an insurer or other insurers under common control or ownership to ascertain and determine the amount of any claim, loss, or damage payable under an insurance contract or undertakes to effect settlement of such claim, loss, or damage. The term does not apply to life insurance or annuity contracts. () Section 626.8548(1), Florida Statutes (2012), states this part does not apply to any individual who collects claims information from, or furnishes claims information to, insureds or 16 i | } { ia i | | claimants, and who conducts data entry, including entering data into an automated claims adjudication system, provided that the individual is an employee of a business entity licensed under this chapter, or its affiliate, and no more than 25 such persons are under the supervision of one licensed independent adjuster or licensed agent who is exempt from licensure pursuant to s. 626.862. (u) —_ Section 634.4320(5), Florida Statutes, which provides that it is a violation for any warranty sales representative to have demonstrated a lack of fitness or trustworthiness to engage in the business of home warranty. (v) Section 634,422(5), Florida Statutes, which provides that it is a violation for any warranty sales representative to have demonstrated a lack of fitness or trustworthiness to engage in the business of service warranty. WHEREFORE, you, LOTSolutions, are hereby notified that the Chief Financial Officer intends to enter an Order suspending or revoking all your licenses in this state, including but not limited to your managing general agent, home warranty sales firm, and service warranty sales firm licenses, or to impose such penalties as may be provided under the provisions of Sections 626.611, 626.621, 626.681, 626.691, 626.9521, 634.320, 634.3225, 634.323, 634.420, 634.425, and 634.426, 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 17 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, 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 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 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. 18 (d) A statement of when the respondent received notice of the administrative complaint. (e) A statement including the file number of 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 free form 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 ont day of ( eA ¢ y\ x 5 , 2012. j Gregory Thomas Director, Agent & Agency Services 20 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: LOTSOLUTIONS, INC., through National Corporate Research, Ltd., its registered agent, 3675 Crestwood Parkway, Suite 350, Duluth, GA 30096, by Certified Mail this 24 day of Occ ‘eer, 2012. 21 Robert Alan Fox Senior Attorney Department of Financial Services Division of Legal Services 612 Larson Building 200 East Gaines Street ; Tallahassee, Florida 32399-0333 STATE OF FLORIDA DEPARTMENT OF FINANCIAL SERVICES DIVISION OF LEGAL SERVICES IN THE MATTER OF: LOTSOLUTIONS, INC. CASE NO.: 129242-12-AG 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) ce 3.0] 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): [] 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 C] 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 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 ADMINISTRATIVE COMPLAINT. The address for filing is: Julie Jones, DFS Agency Clerk, Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390. Signature Print Name Date: Address: Date Administrative Complaint Received: If you are represented by an attorney or qualified Phone No.: representative, please attach to this election form his or her name, address, telephone and fax numbers Fax No.: 22

Docket for Case No: 12-003906