The Issue The issue is whether Petitioner's application for licensure as a life and health insurance agent should be approved.
Findings Of Fact In 1948, Petitioner became a licensed life and health insurance agent and a general agent and broker in the State of New York. He became a chartered life underwriter in 1957. He founded the first 4-year college of insurance in the City of New York in 1964. In 1979, Petitioner moved to Florida and became licensed as an insurance agent in the State of Florida. He became a brokerage supervisor for Provident Mutual Life and subsequently opened his own consulting office in Miami Beach and in Boca Raton. For three years, Petitioner was the sole countersignature agent in the State of Florida for American Druggists Insurance Company, handling the professional liability insurance for essentially all chiropractors in the State of Florida. In December of 1984, American Druggists attempted to withdraw from insuring chiropractors in the State of Florida. Respondent prevented American Druggists from withdrawing insurance coverage until January 31, 1985, when Pacific Insurance Company took over that block of coverage. For eight months Petitioner was Pacific Insurance Company's Florida representative handling the professional liability needs for chiropractors in the State of Florida. Hundreds of chiropractors received professional liability insurance coverage during that 8-month period. Many of those same chiropractors also purchased life insurance and major medical policies during that same time period from Petitioner through companies other than Pacific Insurance Company. Disagreement arose between Petitioner and Pacific Insurance Company regarding the forwarding of premium payments by Petitioner to Pacific Insurance Company and regarding the payment of commissions by Pacific Insurance Company to Petitioner. As a result of that disagreement, a Probable Cause Affidavit was issued against Petitioner, and he was arrested on June 24, 1986 in Broward County. A criminal information was filed against him in the Circuit Court of the Seventeenth Judicial Circuit, in and for Broward County, Florida, charging him with 22 counts of organized fraud, grand theft in the first degree, and grand theft. The criminal information involves allegations that Petitioner, in essence, collected premiums for malpractice insurance from a number of chiropractors, failed to remit those premium payments to Pacific Insurance Company, and failed to refund the premiums or issue policies to the chiropractors. Prior to the trial of those criminal charges, the prosecuting attorney advised the presiding judge that the State was unable to present the testimony of the chiropractors allegedly damaged as a result of Petitioner's activities and that the chiropractors on whom the prosecuting attorney was relying had advised him that they had either been issued the malpractice insurance policies they had purchased or they had received refunds of their premium payments. At that same hearing, Petitioner entered a plea of guilty to one count of grand theft in the first degree and the Court withheld adjudication of guilt. That single count involves the allegation that Petitioner withheld monies which belonged to Pacific Insurance Company from that Company. The remainder of the charges filed against Petitioner were voluntarily dismissed by the State. On April 8, 1987, Petitioner was placed on probation for a period of five years and ordered to make restitution, assumedly to Pacific Insurance Company, in an amount to be later determined but with a cap set for a maximum payment of approximately $60,000.00. The amount for restitution was subsequently determined to be $20,000.00, of which Petitioner still owes approximately $14,000.00. Pursuant to a subsequent agreement, Petitioner's probation period was shortened, and by the time of the final hearing in this cause the agreed probation termination date was set for September 11, 1990. On April 29, 1986, Respondent issued an Administrative Complaint against Petitioner and his insurance licensure, resulting from his activities on behalf of Pacific Insurance Company. Three different addresses for Petitioner were listed on that Administrative Complaint. Pursuant to the affidavit of one of Respondent's investigators stating that he was unable to locate Petitioner for personal service of the Administrative Complaint, a Notice of Administrative Complaint was published in the Boca Raton News and News of DelRay Beach. Upon Petitioner's failure to respond to the Administrative Complaint, a Final Order of Revocation of Petitioner's insurance licenses was entered on October 29, 1986. A copy of that Final Order of Revocation was mailed to Petitioner at an address different from the three addresses listed in the Administrative Complaint. Also in 1986, Respondent certified Petitioner as a state instructor for the 40-hour State of Florida 218 license course, and he has continued to be a certified instructor for the 218 license course through the present time. Petitioner did not know that an Administrative Complaint had been filed against him until sometime after his licenses were revoked. Petitioner has been very active in professional and civic organizations over the last 40 years. No complaints against Petitioner arising from his insurance agent activities have ever been made or filed other than the Administrative Complaint filed against Petitioner in April of 1986 arising from his activities on behalf of Pacific Insurance Company and the criminal information filed against him on June 19, 1986, also arising from his activities on behalf of that company. In 1987, Petitioner applied to Respondent for licensure, and Respondent advised Petitioner that he had to wait another two years before he could do so. In 1989, Petitioner again applied to Respondent for licensure. Respondent advised him that, in addition to his completed application for licensure, he was also required to file an application for examination, although the State of Florida does not require that a C.L.U. take an examination for licensure. Petitioner did provide to Respondent verification of his C.L.U. status. Petitioner completed some portions of the application for examination. On that application for examination, Petitioner noted that he was not required to take the examination and therefore the application and the questions on it were "not applicable." Respondent returned the application for examination to Petitioner and advised him to finish completing it. Petitioner again wrote on the application that he was not required to take the examination. Although the application for licensure was not offered in evidence, the evidence indicates that that application contains questions as to whether the applicant has ever been convicted of a felony, to which Petitioner answered in the negative. The application for examination, however, was admitted in evidence and contains a question asking whether the applicant has ever been charged with a felony. Petitioner answered that question by pointing out that it was not applicable since he was a C.L.U. and not required to take the examination or apply for it. The application for examination also requests information as to whether the applicant's licenses have ever been declined, suspended or revoked. Petitioner answered that question by saying that the question was not applicable, that he was a C.L.U. and not required to apply for the examination or to take it. While Petitioner's application for licensure which is the subject of this proceeding was pending with Respondent, Petitioner provided to the Department documentation from the court files regarding the criminal charges against him. He voluntarily produced many documents but was unable to produce proof of restitution and termination of probation since his probation had not been completed at that time and since he had not finished making restitution. By letter dated April 6, 1990, Respondent denied Petitioner's application for licensure as a life and health insurance agent for the following reasons: On or about June 19, 1986, you were charged with Count I, Organized Fraud; Count 2, Grand Theft in the First Degree; and Count III through XXII, Grand Theft (Case Number 86-8637). On or about April 19, 1987, you pled guilty to Count II, Grand Theft in the First Degree, a felony involving moral turpitude. On April 29, 1986, an Administrative Complaint was filed by the Department against you which resulted in your life, health and general lines agent licenses being revoked on October 29, 1986, Case No. 86-L-195WWA. You failed to divulge the above charges and dispositions on your application for examination. The foregoing demonstrates a lack of fitness or trustworthiness to engage in the business of insurance.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Petitioner's application for licensure as a life and health insurance agent in the State of Florida. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 13th day of November, 1990. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of November, 1990. APPENDIX TO RECOMMENDED ORDER Since the final hearing in this cause, Petitioner has filed correspondence with attachments on August 22, 1990, October 22, 1990, October 24, 1990, and October 29, 1990. The correspondence does not contain proposed findings of fact but rather consists of argument and conclusions of law. The attachments were not admitted in evidence in this proceeding and cannot be considered in this Recommended Order. Respondent's proposed findings of fact numbered 1-9 have been adopted either verbatim or in substance in this Recommended Order. COPIES FURNISHED: The Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell General Counsel The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Edward L. Berger 2862 Northwest 55th Avenue Lauderhill, Florida 33313 James A. Bossart, Esquire Office of the Treasurer Department of Insurance Division of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300
The Issue The issue for consideration herein was whether the Respondent's license as a life and health agent in the State of Florida should be disciplined because of the misconduct alleged in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the allegations herein, the Respondent, Joseph Daniel Corona, was licensed and eligible for licensure, in the State of Florida as a life and health insurance agent. The Department of Insurance and Treasurer is the state agency charged with the responsibility for the regulation and licensure of insurance agents in this state. On or about August 28, 1989, Respondent, who had previously been introduced to Ms. Catherine E. Volkman of Boynton Beach, Florida by her sister, and had sold her health and accident insurance for several years, called her and told her that the cost of her policy for the coming year was going to increase considerably. When she advised him she was unable to pay the proposed increased premium, he indicated that he could get her a new policy at a substantially lower price. As a result, on August 28, 1989, she wrote and mailed him a check in the amount of $1,150.00, payable to Old Southern Life, to cover the cost of two years of premiums on that policy. Several days after she mailed it, he called her and asked her if she had sent it. She assured him she had.. Nonetheless, she did not receive a policy from the company, and toward the end of October, 1989, after numerous phone calls to the Respondent up through the early part of October, she ultimately contacted the Department of Insurance in Tallahassee, where she was advised that they would investigate. She was also advised to contact the company with whom the policy was to be written, and in October, 1989, she did so, speaking with Mr. Nathaniel Fogler, the Regional Manager in the St. Petersburg office. When Ms. Volkman called, Mr. Fogler searched the company records and found no indication that an application had ever been forwarded on her behalf. When he called the Respondent to inquire, Respondent indicated that he had not forwarded it. At this point, Fogler advised Respondent to refund Ms. Volkman's money to her, and also told him that the matter would be referred to the Department. Company instructions call for all policy applications to be forwarded to the regional office within five days of receipt by the agent, and it is Mr. Fogler's practice not to accept any applications that are not received in his office within ten days of the date it was filled out and signed. Once Mr. Fogler advised Respondent to refund Ms. Volkman's money, Mr. Corona purchased a cashier's check for $1,150.00 on the Southeast Bank in Tampa, dated October 24, 1989, which he forwarded to Ms. Volkman. This check was sent out just slightly under two months from the time Respondent received the premium payment from Ms. Volkman in August. Subsequent to receipt of this information from Ms. Volkman, and his conversation with the Respondent, Mr. Fogler terminated the agency contract which had existed between Respondent and Old Southern Life Insurance Company. The Respondent's actions in this case were the sole reason for Respondent's termination. Mr. Fogler had never spoken with Respondent previously and has no knowledge of any other misconduct on his part. No such evidence was presented.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be issued in this case suspending the Respondent, Joseph Daniel Corona's, license as a life and health insurance agent in Florida for a period of one year. RECOMMENDED this 13th day of November, 1990, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of November, 1990. COPIES FURNISHED: Willis F. Melvin, Jr., Esquire Division of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Joseph Daniel Corona 2843 North Wood Way Sarasota, Florida 34234 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, Florida 32399-0300
Findings Of Fact On approximately November 1, 1972, Sandestin, Inc., entered into a contract involving construction and improvement of realty known as the Sandestin Development, located on the north side of United States Highway No. 98, 8 miles east of Destin, Florida. On or about May 14, 1973, the Florida Department of Revenue advised the owners of Sandestin, Inc. that the contractor had not secured a dealer's certificate of registration, or posted bond for payment of sales and use taxes as required by Florida Statute, Section 212.14(5). Sandestin, Inc., subsequently submitted an application for certificate of registration to the Department. The registration was processed with an effective date of July 1, 1973. Sandestin, Inc., as principal, and Commercial Union Insurance Company as surety entered into a "contractor's sales or use tax bond" on June 1, 1973. This statutory bond provides that Sandestin, Inc., entered into a contract with an entity called Sandestin Project on June 1, 1973. The bond further provides that the principal applied for the bond pursuant to Florida Statutes, Section 212.14(5), and that the bond is conditioned upon the principal making all reports and remitting all sales and use taxes imposed and required by Florida Statutes, Chapter 212. There is no express provision in the bond providing that the surety would not be liable for sales and use taxes accruing prior to June 1, 1973. Sandestin, Inc., subsequently defaulted in its sales and use tax obligations. Commercial Union Insurance Company paid $15,430.06 to the Respondent, which amount represents the total sales and use tax obligations, including interest, of Sandestin, Inc. Commercial Union Insurance Company paid $2,023.75 of that amount under protest. This latter figure represents the sales bond use tax obligations, including interest, which accrued prior to June 1, 1973. Commercial Union Insurance Company has maintained this action to recover that amount.
The Issue The issue is whether the licenses of Frank Joseph Brennan should be disciplined for actions of Mr. Brennan or of agents associated with Frank J. Brennan, P.A. with respect to the sale of insurance products to three (3) clients: Rebecca Fisher, Celine M. Rompre, and Mr. and Mrs. Joseph T. Nolan.
Findings Of Fact Frank Brennan Frank Joseph Brennan holds licenses as an ordinary life agent, ordinary life including health, health agent, and ordinary-variable annuity agent. Brennan is the owner and president of Frank J. Brennan, P.A., which sells life and health insurance products, including tax sheltered annuities of the National Western Life Insurance Company. The firm has several thousand tax sheltered annuity clients. Brennan had been the president and the director of Lancer Securities Corporation. On March 22, 1979, he was enjoined by the U.S. District Court for the Middle District of Florida for acting as an officer or director of any registered investment company. That injunction states that it did not constitute evidence against or an admission by Brennan, and that the injunction did not "establish or prove any of the acts alleged or asserted in any pleadings." Brennan was suspended from associating with any investment advisor for 120 days, and barred from associating thereafter with an investment advisor other than as a supervised employee in an order entered by the Securities and Exchange Commission on March 26, 1979. Brennan was barred from associating with any member of the National Association of Securities Dealers, Inc. in the capacity of a principal in an order entered by that association on October 15, 1980. Brennan was barred by the Securities and Exchange Commission in October 1980 from associating with any member in the capacity of a principal and fined $1,000. In May 1983, United Equitable Insurance Company terminated Brennan as an agent based on an adverse Equifax report. That report was not placed in evidence. (The foregoing findings 3 through 7 are based upon the Department of Insurance's Second Request for Admissions and Fifth Request for Official Recognition.) The Relationship Of Gregory Langsett And Betty Jones To The Frank J. Brennan, P.A. Frank J. Brennan, P.A., has contracts with a number of licensed insurance agents, including Gregory Langsett and Betty Jones. Langsett has a producer agreement with National Western Life Insurance Company which describes him as an independent contractor, and an agent's agreement with the Brennan firm. Under the agent's agreement Langsett has with the Brennan professional association dated December 4, 1981, Langsett is deemed an independent contractor and nothing in this agreement shall be construed to create the relationship of employer and employee. You are free to exercise your own judgement as to the persons from whom you solicit applications and the time and place of such solicitation. (Petitioner's Exhibit 28, Paragraph 1.) Brennan had been involved in training of Langsett and Jones when they first were associated with the firm. Agents such as Langsett and Jones are not listed on the employer's quarterly wage report made by the Frank J. Brennan, P.A. to the State of Florida Division of Unemployment Compensation. Agents such as Langsett and Jones pay their own estimated income tax withholding and their own social security taxes. The Brennan firm does provide agents with business cards (although Jones had her own cards printed). It also provides sales kits, telephone answering, postal services, makes available space for meeting with clients at the firm office and provides accounting services incident to the payment of commissions on business submitted to carriers through the firm, all without charge to the agents. Educational meetings are held on Fridays, which the agents are encouraged, but not required, to attend which discuss the various insurance products available through insurance companies the Brennan firm is associated with. Agents benefit from advertising done by the Brennan firm. Brennan occasionally provides leads to agents. For example, January 1986 Brennan provided to Betty Jones and her husband (also a licensed insurance agent) a list of approximately 100 names of employees of the Boca Raton Academy so that they could be solicited for purchase of tax sheltered annuities, and an arrangement was worked out under which Brennan and the Joneses would divide commissions from any such sales. There is no evidence that Brennan controlled the time, place or manner of these solicitations, or of any other solicitations for the purchase of insurance products. Langsett and Jones were not subject to the direct supervision and control of Brennan in their activities of soliciting insurance clients. They are not employees of the Professional Association -- they are independent contractors. This arrangement of appointing soliciting agents who are independent contractors is used by other sellers of tax sheltered annuities, and is not unique to the Brennan firm. (Tr. 496, 579). Brennan does have the authority, based on his contracts with insurance carriers, to appoint licensed agents as agents of insurance carriers. Rebecca Fisher's Dealings With Frank J. Brennan, P.A. and Frank Brennan Rebecca Fisher is an employee of the Dade County School Board. She contacted Langsett concerning tax sheltered annuities offered by the National Western Life Insurance Company, after learning of Langsett from another employee. Under Section 403(b) of the Internal Revenue Code, employees of school boards may have a portion of their wages paid into a tax sheltered annuity. They pay no income tax on the amounts deposited in the annuity through payroll deduction and the interest paid on the amounts deposited is not taxed when earned. Such annuities are long term savings plans designed to supplement the participant's retirement income. Ms. Fisher already had a tax sheltered annuity with Northern Life Insurance Company which had a face value of over $90,000. She had bought it through an insurance agent, Mr. Paul Indianer, with whom she had dealt over a number of years. Langsett met with Mrs. Fisher at her home for about 15 to 20 minutes on a Saturday in June 1985. Mrs. Fisher was not able to spend much time with Mr. Langsett that day because she had to go to a funeral at about noon. Thereafter, Mrs. Fisher attempted to call Langsett at the Brennan insurance offices. She called after 5:00 p.m. and Langsett was not there. Respondent Brennan answered the phone call. They discussed the possibility of opening a tax sheltered annuity account through National Western by rolling over into a new account money she had in her current tax sheltered annuity. Mrs. Fisher knew if the money were rolled over she would incur a surrender charge. She also discussed with Brennan whether it would be possible to borrow money from a new National Western tax sheltered annuity for home improvements. She was told money borrowed from a National Western annuity could be used for home improvements, and taxes would not have to be paid on the money borrowed from the annuity until her death. Her current annuity did not have a provision that permitted borrowing. At the hearing the provision permitting borrowing was referred to as the TEFRA provision -- so known , because it had its genesis in a portion of the Tax Equity and Fiscal Responsibility Act (TEFRA). (Tr. 45, 46, 80) Reviewing the totality of Mrs. Fisher's testimony, the Hearing Officer is not persuaded that Mrs. Fisher is able to recall with clarity the conversation which she had with Mr. Brennan. For example, the Hearing Officer does not accept the testimony that Respondent or Langsett told Fisher that National Western would pay 20 percent interest the first year and 18 percent the second year on its annuities. Those figures represented the surrender charges on the Northern Life tax sheltered annuity she already had. Neither did Brennan tell Fisher that she would get $75,000 of free life insurance in connection with a new tax sheltered annuity. One of the possibilities Brennan mentioned to Fisher was a more involved transaction in which her money would be rolled over into a new tax sheltered annuity, and a $50,000 loan would be taken against that new annuity. The $50,000 might be used to purchase a single premium life insurance policy. Interest paid on the amount placed in that policy would accumulate without any income tax being owed on the interest as it was paid. National Western Life Insurance Company would provide $75,000 of life insurance in connection with such a policy, over and above its $50,000 face amount, for a $155,000 total life insurance benefit. The single premium life insurance policy does not make a specific charge for the $75,000 additional death benefit. There is, of course, a charge for this insurance in that the interest rate paid on the $50,000 deposited in the single premium life insurance policy is reduced by the mortality charge on the $75,000 additional death benefit. Mrs. Fisher confused these two different insurance products (the tax sheltered annuity and the single premium life insurance policy), and thought that the life insurance was part of the tax sheltered annuity, which is not what Brennan discussed. Mrs. Fisher's notes of her conversation indicate that there would be a rollover penalty assessed against the face amount of her Northern Life tax sheltered annuity if she moved it to a National Western tax sheltered annuity. She had incurred penalties when she had moved money from her first annuity with Franklin Life to Standard Life the second annuity from Standard Life to Northern Life, both at the suggestion of her insurance advisor/agent, Mr. Indianer. (Tr. 57). Those notes also appear to indicate that Brennan referred to her current Northern Life tax sheltered annuity as "antiquated," and described the method by which payments are made under the annuity as "suicide" from an income tax point-of-view. In view of the complexity of these insurance matters, and Mrs. Fisher's misunderstanding of what Brennan had said on other significant portions of the conversation, the Hearing Officer is not satisfied that the evidence is clear and convincing that Brennan used those terms to describe Mrs. Fisher's current insurance products in his conversation with Mrs. Fisher. Similarly, the testimony that Brennan referred to her old Franklin Life and Standard Life annuities (which Indianer had already persuaded her to replace) as "garbage" is not accepted. Under the Internal Revenue Code, if money were borrowed from the annuity for the purpose of home improvements, no tax would be due on the amount borrowed until the annuitant's death, or the surrender of the annuity for cash or annuitization. (Tr. 624, 781). Borrowings for other purposes must be paid back in five years or they are treated as a distribution from the shelter, and require that income tax be paid on that distribution. Neither the code nor case law requires a loan to be repaid when the annuitant reaches a certain age. In short, contrary to the allegations of Count I of the Amended Administrative Complaint, the evidence is not convincing that Brennan made improper or defamatory remarks about Fisher's prior annuities or existing annuity, that he misrepresented the actual tax implications of the plans or the interest rate offered by the plans, or falsely represented that Fisher would receive $75,000 of free life insurance with a National Western annuity contract. Celine Rompre's Dealings With Betty J. Jones Betty J. Jones is an insurance agent licensed by the State of Florida. She also worked as an independent contractor through the Frank J. Brennan, P.A., selling tax sheltered annuity products of the National Western Life Insurance Company. Unlike Langsett there is no evidence that she has a written contract with the Brennan firm, but she does have a producer agreement with National Western Life Insurance Company. On or about July 23, 1985, Ms. Jones solicited Celine M. Rompre for the purpose of selling her a National Western Life Insurance Company Section 403(b) tax sheltered annuity. Rompre was an employee of the Palm Beach County School Board who already had a Section 403(b) tax sheltered annuity payroll deduction handled through Voyager Life Insurance Company; the insurance agency which had sold that annuity to her was owned by Edward Parmele. Respondent Brennan personally had nothing to do with the solicitation which Betty J. Jones made of Celine Rompre. Betty J. Jones was not acting under the direct supervision and control of Frank J. Brennan in that transaction. Betty Jones met with Celine Rompre and discussed the National Western tax sheltered annuity. Mrs. Rompre's husband also works and the Rompres do not need Mrs. Rompre's salary for living expenses. At the time she spoke with Betty Jones, Mrs. Rompre's annual salary was $5,500. She believed that it would increase to $7,200 at the beginning of the next school year, which did happen. At the time Mrs. Rompre was putting $1,040 into her Voyager Insurance Company tax sheltered annuity each year. Betty Jones discussed with Mrs. Rompre increasing her tax sheltered annuity contribution to approximately $4,000 per year. Jones told her that the maximum amount she could contribute would have to be separately calculated for each year. (Tr. 752). Mrs. Rompre was interested in this because Mrs. Rompre's daughter was then in the 8th grade, and it would be possible to borrow against that money to help with her daughter's education. Mrs. Rompre knew she would incur a substantial surrender charge on her current annuity if she switched to National Western. She signed papers prepared by Jones to accomplish the transfer of her annuity to National Western. Rompre was not eligible to increase her Section 403(b) annuity contribution immediately because she had changed her contribution once that year and only one change in the payroll deduction can be made annually. (Tr. 751). When the paperwork went to the School Board to change the annuity from the Voyager annuity to the National Western annuity, Mrs. Rompre was contacted by Mr. Parmele about her Voyager annuity. He stated that Mrs. Rompre could not put $4,000 per year into a Section 403(b) tax sheltered annuity. This influenced Mrs. Rompre to cancel the transfer to National Western. In fact, Mrs. Rompre was in a situation where she qualified to put as much as $5,051 into a tax sheltered annuity (this amount is known as the maximum exclusion allowance) over the next year under a catch-up provision of the Internal Revenue Code because she had not been contributing to an annuity for all eight years she had been employed by the Palm Beach County School Board. (Tr. 780). There is no evidence that Ms. Rompre was contributing to any other qualified retirement plans that would have affected her maximum exclusion allowance. Betty Jones did not misrepresent to Celine Rompre the amount of her maximum exclusion allowance, the terms of the surrender charges for the Voyager life insurance policy or the National Western life insurance policy, or improperly affixed the signature of Celine Rompre to a letter to the Voyager Life Insurance Company requesting cancellation of her existing account. Dealings Of Frank J. Brennan With The Nolans In about March of 1985, Mr. and Mrs. Nolan went to Brennan for help preparing their tax return and for financial planning. Mr. Brennan had been highly recommended to them. Mr. Nolan is a loss prevention manager for Radio Shack, and Mrs. Nolan is employed by the School Board of Broward County. Mr. Nolan had recently received an inheritance of about $30,000 and was looking for a way to invest it. The Nolans emphasized that the investment vehicle be liquid so they could access the money if they needed it. They were concerned that they might need it for the care of their parents. When Mr. Nolan came to Brennan, he had whole life insurance policies with Prudential and Metropolitan Life which had some cash value. Brennan suggested those policies be cancelled so that the cash value could be invested, and this was done. Mrs. Nolan's Section 403(b) Tax Sheltered Annuity When the Nolans came to Brennan, Mrs. Nolan did not have a Section 403(b) tax sheltered annuity. Brennan suggested that she contribute to such an annuity program as a means of saving on income taxes. He also told them they could borrow against those funds, but this was of no interest to the Nolans. Mrs. Nolan purchased a tax sheltered annuity with Great American Life Insurance Company which currently paid 13.75 percent interest. One of the documents which is filled out to begin the payroll deduction with the Broward County School Board for Section 403(b) tax sheltered annuities is an amendment to the annuitant's employment contract to cause part of the salary to be paid directly into the annuity. On that form there are disclosures, including whether there is a sales charge, administration fee, or transfer fee, as well as whether there is a surrender charge. The amendment which she executed does not show any surrender charge in connection with the Great American Life Insurance Company Section 403(b) annuity she purchased. Later the Nolans received another copy of the amendment which had the surrender charge portion filled in. It stated there would be a surrender charge of one-fifth of the first year's deposits only, which is waived if all proceeds are withdrawn over 36 months or longer. When Mr. Nolan received this he immediately called Mr. Brennan to ask about the surrender charge. Brennan told him that the annuity document itself explained the surrender charge and it should have been on the amendment to the employment contract as well. Brennan negligently failed to explain the surrender charge to the Nolans when the annuity was first taken out. After receiving the altered amendment to employment contract, Mrs. Nolan instructed the School Board to stop the annuity deductions as of December She had contributed $7,234 to the annuity at that time. The Nolans then asked to cancel the annuity because they had not been made aware of the surrender charge. Mr. Brennan responded by stating that in order to get the refund, they would have to sign a release at the request of the insurance company, but the Nolans refused to sign any release. They prepared a short letter to the insurance company seeking the recision of the policy. Brennan also wrote to the company seeking the refund. The Nolans did receive their money back. In connection with the rescission, the Nolans demanded and received from Brennan assurances that if the amount deposited in the annuity were not received by March 3, 1986, that Brennan would pay 10 percent interest per year on the proceeds until the Nolans received the proceeds. The Nolans received the amount before the agreed date when Brennan would begin to pay interest. The amount they received was only the principal paid in, however, and did not include any interest for the period the money had been held by Great American Life Insurance Company. Repayment of the $7,234 rendered these funds subject to current income taxes, because that income had not been subject to tax when placed in the annuity. The Nolans' Other Insurance Purchases From Brennan When the Great American Section 403(b) annuity was purchased, the Nolans also purchased other insurance products. These included two $2,000 individual retirement accounts (IRAs) for Mr. and Mrs. Nolan with National Western in the form of annuity policies, a Kemper Life Insurance policy on Mr. Nolan with a face value of $100,000 to replace the existing policies he had cancelled, and a $30,000 single premium endowment policy on Mrs. Nolan from National Western Life Insurance Company, which included a life insurance benefit so that the face amount of the policy was $200,602. These purchases saved the Nolans about $3,000 in income taxes. The Nolan's had had IRA accounts at savings and loan institutions before they came to Brennan, which they would roll over when the instruments in which the money was deposited matured. Brennan explained that these National Western annuities were different than the accounts they had. These annuities were cancelled because the Nolans became dissatisfied with Brennan due to the non-disclosure of the surrender charge on the Section 403(b) annuity with Great American Life Insurance Company. Mr. Brennan arranged for those to be cancelled without penalty at the request of the Nolans. They received the principal paid in plus interest. After the cancellation of the prior whole life policies at Brennan's suggestion, see Finding of Fact 37, above, Mr. Nolan purchased a Kemper Life Insurance term life insurance policy. At first he considered rescinding it along with the IRAs, also due to dissatisfaction with Brennan because of the failure to disclose the surrender charge on the Section 403(b) annuity. Ultimately he kept the Kemper policy, which was a better policy than the ones that had been cancelled. The $30,000 inheritance Mr. Nolan received was used to purchase a $30,000 single premium life endowment policy on Mrs. Nolan, which then paid 11.12 percent interest on the amount deposited and permitted borrowing from the policy at 7.4 percent. The policy was placed on Mrs. Nolan's life because she was the better underwriting risk. The interest which accrued on that policy was not subject to current federal income taxation, so the purchase was consistent with the Nolan's goal of achieving a high yield on the money with minimum taxation. That $30,000 premium purchased over $200,000 worth of life insurance on Mrs. Nolan, which Brennan described as "a freebie" in connection with the tax sheltered investment of the $30,000. This policy was cancelled under a policy provision which gave the right to cancel the policy during the first year, in part due to dissatisfaction with Brennan over the non-disclosure of the surrender charge on the Section 403(b) tax sheltered annuity. Nolan was also dissatisfied with the endowment policy after he received it because (1) the interest guaranteed to be paid on the $30,000 was only 4 percent although he understood that the actual interest to be paid would fluctuate with economic conditions and be competitive and (2) to access the $30,000 he could not withdraw money, but had to borrow from the policy. Although a loan could be processed quickly, Mr. Nolan did not like the idea of having to borrow his own money. The record is not clear whether the Nolans did or did not receive interest on the $30,000 for the time it was on deposit with National Western Life Insurance Company before the cancellation. The policy itself provides that on cancellation the insured "will be refunded the greater of the premium you paid or the cash value at that time." (Respondent's Exhibit 25) Because Mrs. Nolan signed an application naming Mr. Nolan and beneficiary for the insurance purchased with the $30,000, because she had a physical examination to obtain the policy, and because the check to purchase it was made out to National Western Life Insurance, Mr. Nolan's testimony that he did not understand that the "investment" he was making with his $30,000 involved the purchase of an insurance policy is not accepted. Brennan did sell the $30,000 policy to the Nolans in part on the basis that they would receive approximately $200,000 in free life insurance. The Nolans were more interested in a tax shelter for the $30,000 that would pay high interest, not in the insurance benefit. In summary, Brennan failed to explain the surrender charge associated with the Great American Life Insurance Company Section 403(b) tax sheltered annuity to the Nolans when it was purchased. Brennan made no misrepresentations with respect to the sale of the two annuities from National Western Life Insurance which were to be used as the Nolans' individual retirement accounts. There were no misrepresentations made to Mr. Nolan with respect to the purchase of his Kemper Life Insurance policy, which he still has. Brennan told the Nolans that they would receive free life insurance associated with the deposit of $30,000 in the endowment policy on Mrs. Nolan's life, which had been purchased due to the tax free accumulation of interest on the $30,000 deposited.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Counts I and II of the Amended Administrative Complaint be DISMISSED. That on Count III, for offering free life insurance as an inducement for the deposit of $30,000 in the single premium endowment policy, Brennan be FINED $2,500.00 and his license SUSPENDED for a period of three (3) months. DONE AND ORDERED this 1st day of May, 1987, in Tallahassee, Florida. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of May, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-0707 The following constitute my specific rulings pursuant to Section 120.59(2), Florida Statutes (1985), on the proposed findings of fact submitted by the parties. See Rule 28-5.405(3), Florida Administrative Code. Rulings on Proposed Findings of Fact Submitted by Petitioner Before ruling on the individual proposals made by the Petitioner, it is appropriate to make some general comments. The proposals submitted by the Petitioner are exceptionally detailed, indeed unnecessarily so. Many are rejected as unnecessary or cumulative to the facts found in the Recommended Order. Others are irrelevant because they address issues not properly raised by the allegations of the First Amended Administrative Complaint. The testimony of the principal witnesses on counts one and two, Rebecca Fisher and Celine Rompre, was certainly sincere but generally unpersuasive. The testimony of the other expert witnesses who make their livings by selling tax sheltered annuities was also not convincing because their view of Mr. Brennan and his activities is so colored by their competition. Mr. Parmele's testimony left an abiding impression of hostility to Brennan for trying to persuade clients of Parmele to switch their annuities to companies represented by Brennan, and Parmele's testimony is discounted based upon his hostility. Mr. Indianer was not as hostile, but his financial interest in removing Brennan as a competitor also causes substantial discounting of his testimony. The opinions of Robert Storms are accorded little weight because he does not regard himself as an expert in tax sheltered annuities. To the extent necessary, covered in Finding of Fact 1. Covered in Findings of Fact 3-6. Covered in Finding of Fact 7. To the extent relevant, covered in Finding of Fact 2. Rejected as irrelevant. Rejected because it is not a finding of fact. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as a statement of law, not a finding of fact. Covered in Finding of Fact 8. Rejected as unnecessary. To the extent relevant, covered in Finding of Fact 2. Rejected as unnecessary. Rejected as a statement of law, not a finding of fact. Rejected as unsupported by the transcript citation given. To the extent necessary, covered in Finding of Fact 10. Rejected as irrelevant. Although true, rejected as unnecessary. Covered in Finding of Fact 8. Rejected as unnecessary, and unsupported by the transcript citation given. Covered in Finding of Fact 25. Rejected as unnecessary. Covered in Finding of Fact 13. Rejected as unsupported by transcript citation given which only reflects a division of commissions between the Jones' and Brennan with respect to sales to employees of the Boca Raton Academy. Rejected as irrelevant. Rejected as unnecessary and not supported by the exhibit citation given. PX 25 authorizes Langsett to procure applications; whether this is a license as a "writing agent" is unclear. Rejected as a statement of law. Rejected because Betty Jones had no written contract with the Brennan firm. Langsett's relationships are covered in Finding of Fact 8. Rejected because Jones had no written contract with the Brennan firm. With respect to Langsett's contract with the firm, rejected as irrelevant. To the extent relevant, covered in Finding of Fact 8. Jones had no written contract with the firm. Rejected because Langsett and Jones testified that being independent contractors included that they pay their own expenses, not meant that they pay their own expenses. Rejected as irrelevant. Covered in Finding of Fact 14. Rejected as unnecessary. Rejected as inconsistent with the transcript citations given. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. To the extent that the information was provided in the form of sales kits, covered in Finding of Fact 12. Covered in Finding of Fact 12. Rejected as not supported by the evidence. Rejected as unnecessary. Rejected as not constituting a finding of fact. Rejected as not constituting a finding of fact. Rejected as not constituting a finding of fact. Rejected as subordinate and cumulative to Finding of Fact 12. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary and inconsistent with the transcript citation given. Rejected as unnecessary and irrelevant. Rejected as unnecessary and irrelevant. Rejected as unnecessary and irrelevant. Rejected as unnecessary and irrelevant. Rejected as unnecessary and irrelevant. Rejected as unnecessary and irrelevant. Rejected as unnecessary and irrelevant. Rejected as unnecessary and irrelevant. Rejected as a recitation of testimony, not a finding of fact, also irrelevant. Rejected as irrelevant. Rejected as unnecessary and irrelevant. Rejected as unnecessary Rejected as unnecessary. The citation given supports only the statement made as to Betty Jones. Rejected as unnecessary. To the extent necessary, covered in Finding of Fact 9. Rejected as unnecessary. Covered in Finding of Fact 12. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Covered in Finding of Fact 15. Covered in Finding of Fact 15. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. To the extent necessary, covered in Finding of Fact 12. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. To the extent necessary, covered in Finding of Fact 12. Covered in Finding of Fact 12. Rejected as unnecessary. To the extent necessary, covered in Finding of Fact 15. Rejected as unnecessary. Rejected as unnecessary. - Rejected as a statement of law, not a finding of fact, also unnecessary. Rejected as a statement of law, not a finding of fact, also unnecessary. Rejected as a statement of law, not a finding of fact. Rejected as a statement of law, not a finding of fact. Rejected as a statement of law, not a finding of fact. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Covered in Finding of Fact 23. To the extent necessary, covered in Finding of Fact 23. Rejected as subordinate to Finding of Fact 23. Rejected as subordinate to Finding of Fact 23. Rejected as inconsistent with Finding of Fact 23. Rejected as unnecessary. Rejected as unnecessary. Subordinate to Finding of Fact 33. Subordinate to Finding of Fact 33. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Covered in Finding of Fact 33. Subordinate to Finding of Fact 33. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected for the reasons stated for the rejection of proposed finding of fact 32. Rejected as unnecessary. Rejected as unnecessary. Rejected as cumulative to Finding of Fact 15. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as irrelevant and unnecessary. Further, Mr. Storm's testimony is not persuasive on the point. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected because the form, PX 9, is a creation of a committee which is advisory to the risk manager of the School Board of Broward County and has no legal status. Rejected because the form, PX 9, is a creation of a committee which is advisory to the risk manager of the School Board of Broward County and has no legal status. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Mr. Storm's testimony as to what would be misleading is unpersuasive. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Although true, rejected as unnecessary. The power to appoint sub-agents who become producers for insurance carriers does not mean that Brennan exercised direct supervision and control over such persons, or over Langsett and Jones in the situations at issue in this matter. Although true, rejected as unnecessary. Covered in Finding of Fact 14. Covered in Findings of Fact 8 and 25. Covered in Finding of Fact 2. Rejected as irrelevant. Covered in Finding of Fact 13. Rejected as irrelevant. Rejected as irrelevant. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as a recitation of testimony7 not a finding of fact. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Covered in Finding of Fact 12. Rejected as unnecessary. Rejected as unnecessary. Covered in Finding of Fact 9. Subordinate to Finding of Fact 12. Rejected as Rejected as unnecessary. Rejected as irrelevant. Rejected as irrelevant. Rejected as irrelevant. Rejected as unnecessary. Rejected as irrelevant. Rejected as irrelevant. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected because the finding is taken out of context. Agents such as Langsett submit business through the Brennan firm and receive their commission through the accounting system at the Brennan firm. When the files are submitted to the carriers, this does not imply that the firm has the right not to pay Langsett, it is the medium through which his payments are processed. See Finding of Fact 12. Covered in Finding of Fact 12. Rejected as a misstatement of the testimony. That testimony occurred because Langsett was asked about commissions payable in a situation he never had experienced. Rejected as unnecessary. Rejected as irrelevant and unnecessary. Rejected as irrelevant. Rejected as irrelevant. Covered in Finding of Fact 12. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as a recitation of testimony, not a finding of fact. Rejected as a recitation of testimony, not a finding of fact. Rejected as unnecessary. Generally covered in Finding of Fact 12. Covered in Finding of Fact 12. Rejected as unnecessary. Rejected as cumulative to Finding of Fact 12 concerning education. Rejected as unnecessary. Covered in Finding of Fact 12. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Covered in Finding of Fact 12. Covered in Findings of Fact 12 and 25. Rejected as unnecessary. Rejected as unnecessary. Rejected as cumulative to Finding of Fact 12. Rejected as unnecessary. Rejected as unnecessary. Rejected as irrelevant and unnecessary. Rejected as irrelevant and unnecessary. Rejected as unnecessary. Generally covered in Findings of Fact 15 and 16. As pointed out at the beginning of these rulings, Mrs. Fisher's version of her dealings with Langsett and Brennan were not found persuasive. For example, only one meeting occurred between Fisher and Langsett, not two. Rejected as irrelevant to the allegations in the Amended Administrative Complaint and unnecessary. Rejected as a recitation of testimony, not a finding of fact. Rejected because I do not accept Mrs. Fisher's version of the events, rendering Mr. Indianer's comments on that version irrelevant and unnecessary. See also the general comment about Indianer at the beginning of this section. The issue of free life insurance is covered in Finding of Fact 20. Rejected as unnecessary. Rejected as a recitation of testimony, not findings of fact. Covered in Findings of Fact 27, 29, 30 and 31. Many of the proposed findings are rejected as unnecessary. Covered in Findings of Fact 29, 30 and 31. The proposal that Jones told Rompre she could deposit $4,000 per year for five years is rejected and the contrary testimony of Ms. Jones, incorporated in Finding of Fact 31, has been accepted. Rejected because the testimony of Mr. Storms is not found persuasive. Rejected as a recitation of testimony, not findings of fact. Many of the proposals are unnecessary. Rejected as unnecessary. Generally rejected because Mr. Parmele's testimony is not found persuasive. Further, many of the proposals aggregated in the finding are unnecessary. That Jones told Rompre she could deposit $4,000 a year for five years has been rejected. Rulings on Proposed Findings of Fact Submitted by Respondent Covered in Finding of Fact 1. To the extent relevant, covered in Finding of Fact 2. To the extent necessary, covered in Finding of Fact 2. Rejected as unnecessary. Covered in Finding of Fact 8. To the extent necessary, covered in Finding of Fact 8. To the extent necessary, covered in Finding of Fact 25. The proposal that Jones had a written agent's agreement with the Brennan firm is rejected because no such document was offered in evidence. To the extent necessary, covered in Findings of Fact 9 and 12. Rejected as cumulative to Finding of Fact 9. Rejected as unnecessary but discussed in the introduction to the rulings on the Petitioner's proposed findings of fact as relates to the credibility of Indianer and Parmele. Rejected as unnecessary. Rejected as unnecessary but discussed in the introduction to the rulings on the Petitioner's proposed findings of fact. Rejected as unnecessary. Rejected as not constituting a finding of fact. Covered in Findings of Fact 8 and 14. Covered in Findings of Fact 15 and 16. Rejected as a recitation of testimony, not a finding of fact. Rejected as a recitation of testimony, not a finding of fact. Rejected as a recitation of testimony, not a finding of fact. Rejected as a recitation of testimony, not a finding of fact. Rejected as unnecessary. To the extent necessary, covered in Finding of Fact 21. Rejected as a recitation of testimony, not a finding of fact. Rejected as a recitation of testimony, not a finding of fact. Rejected as a recitation of testimony, not a finding of fact. Rejected as unnecessary. Rejected as unnecessary because Indianer's testimony has not been accepted. Rejected as unnecessary. Covered in Findings of Fact 14 and 25. Covered in Findings of Fact 26, 27 and 31. Covered in Finding of Fact 29. Covered in Finding of Fact 31. Covered in Finding of Fact 31. Rejected as cumulative to Findings of Fact 30 and 31. Rejected as unnecessary, and as a recitation of testimony, not a finding of fact. Rejected as unnecessary. Covered in Finding of Fact 32. Rejected because the testimony of Mr. Parmele has not been accepted for the reasons. stated in the introduction to the rulings on the Petitioner's proposed findings of fact. See also Finding of Fact 33. Generally rejected as a recitation of testimony. Rejected as unnecessary because it is based on income of $7,200 which was not Mrs. Rompre's income at the time of her meeting with Betty Jones. Accepted in Finding of Fact 33. To the extent not cumulative, covered in Finding of Fact 31. Covered in Findings of Fact 35 and 38. Covered in Finding of Fact 43. Rejected as unnecessary. Covered in Finding of Fact 43. Covered in Findings of Fact 39, 44 and 46. Rejected as a recitation of testimony and because the problem was not only that the form did not contain the surrender charge, but that Brennan had not explained the surrender charge to the Nolans when the Great American Section 403(b) tax sheltered annuity was first purchased. Generally rejected as unnecessary. The surrender value is explained in the altered amendment to the employment contract. See Finding of Fact 39. To the extent necessary, covered in Finding of Fact 41. To the extent necessary, covered in Finding of Fact 44. Covered in Finding of Fact 44. Covered in Finding of Fact 46 and 47. Rejected for the reasons stated in Finding of Fact 46. Covered in Finding of Fact 46. To the extent necessary, covered in Finding of Fact 46. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Covered in Finding of Fact 23. Rejected as unnecessary and because the testimony of Mr. Indianer has not been found persuasive. Rejected because the testimony of Mr. Parmele has not been accepted. Covered in Finding of Fact 23. Sentences 1 and 2, covered in Finding of Fact 14. The remainder, rejected as unnecessary. Rejected as unnecessary. Covered in Finding of Fact 12. Covered in Findings of Fact 10 and 11. Generally covered in Finding of Fact 12. Covered in Findings of Fact 8 and 11. Rejected as unnecessary. COPIES FURNISHED: James F. Falco, Esquire Department of Insurance and Treasurer Room 413-B, Larson Building Tallahassee, Florida 32399-0300 Russell L. Forkey, Esquire Pamela M. Burdick, Esquire 400 Southeast 12th Street Fort Lauderdale, Florida 33316 Honorable William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell, General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 =================================================================
Findings Of Fact Mr. Jewell was employed as a life insurance agent from February, 1977 until June 12, 1978, with Gulf Life Insurance Company. During his employment as a "debit agent" with Gulf Life, Mr. Jewell misappropriated $1,363.77 of premiums from the company policyholders for his own use. His defalcation was discovered by the company in May of 1978, and as a result his employment was terminated. Part of his job as a debit agent included collecting premiums from the company's policyholders on a periodic basis. He was then to forward these premiums to Gulf Life. An audit of his books by Gulf Life in May of 1978 revealed that he was in fact misappropriating the funds. When confronted with the facts he was cooperative in establishing the amount of the defalcation. He made however, no attempt at restitution. On October, 1979 Gulf Life wrote a letter to him stating that he had a deficiency in his accounts and demanded payment therefor. The letter did not state the amount owed. Mr. Jewell still made no attempt to pay the amount due even though as early as June, 1979, he knew from a partial audit that his accounts were at least $700.00 short. Thereafter Mr. Jewell was sued by Gulf Life in Circuit Court for the misappropriated funds and a default judgement was obtained against him in May, 1979 for more than $1,300.00. There is still approximately $600.00 owing on the judgement. In the last nine months prior to the hearing Mr. Jewell has been employed by Reserve Life Insurance Company. He was hired as a manager-trainee and then promoted to be the district manager for the company's Merritt Island Office. It is the policy of Reserve Life that its district managers must spend at least 30 percent of their time in direct insurance sales while devoting the balance of their time to managerial duties. If Mr. Jewell's insurance license is suspended or revoked, he could possibly lose his position with Reserve Life because of the 30 percent sales rule. Since he has worked for Reserve Life his employer has been well pleased with his performance. His office has produced a remarkable amount of new business. His present supervisor, Mr. Patrick Anthony, thinks very highly of Mr. Jewell's integrity and character. He appeared on Respondent's behalf at the instant final hearing. While he may have mentioned having had some kind of a problem at Gulf Life, it does not appear that Mr. Jewell was completely candid about the nature or the extent of his defalcation at the time he was hired by Mr. Anthony for Reserve Life.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered by the State of Florida, Department of Insurance, suspending the license of Gary Thomas Jewell to represent an insurance company as an agent for the period of three (3) months beginning from the date of the final order DONE and ENTERED this 8th day of July, 1980, in Tallahassee, Florida. MICHAEL PEARCE DODSON Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904)488-9675 COPIES FURNISHED: L. Terry Coggin, Esquire Department of Insurance Larson Building Room 428-A Tallahassee, Florida 32301 Fred D. Leone, Esquire 3017 Riveredge Boulevard Suite 108, Riveredge Plaza Post Office Box 1536 Cocoa, Florida 32922
