Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Ralph Edward Carter, was licensed and eligible for licensure as a life and health insurance agent and general lines agent - property, casualty, surety and miscellaneous lines by petitioner, Department of Insurance and Treasurer (Department). When the events herein occurred, respondent was licensed as a property and casualty insurance agent for Bankers Insurance Company (BIC) and Underwriters Guarantee Insurance Company (UGIC). In March 1987 respondent purchased an insurance franchise and began operating an insurance firm under the corporate name of Mr. Auto of South St. Petersburg, Inc. Records on file with the Department of State reflect that effective June 25, 1988 the name of the corporation was changed to Reliable Insurance of South St. Petersburg, Inc. Since February 1989 the business has been located at 3135 18th Avenue, South, No. C- 3, St. Petersburg, Florida. The corporation was primarily engaged in doing business as a general lines insurance agency. Respondent has been licensed as an agent since 1968, and during his tenure as an agent, has worked in sales with several large insurance companies. In January 1988 Betty Andrews purchased from respondent liability and property damage coverage on her two automobiles, a 979 Ford station wagon and a 1980 Chrysler. The insurance was written through UGIC and was effective for the year beginning January 8, 1988. Shortly after May 16, 1988 Andrews received a notice from UGIC reflecting that she owed an additional $38.90 on her policy. For some undisclosed reason, Andrews did not pay the additional premium owed. On July 6, 1988 Andrews visited respondent's office for the purpose of adding comprehensive and collision coverage on her two automobiles. After respondent quoted a rate, she agreed to purchase the additional coverage, filled out an application, and gave respondent two checks totaling $166. These monies were deposited into respondent's business account. The balance was to be paid in three monthly payments of approximately $55 each month through a finance company. Respondent gave Andrews a document entitled "Receipt and Binder Certificate" reflecting she had comprehensive and collision coverage with "Bankers" effective from July 6, 1988 to January 6, 1989. "Bankers" was in fact Bankers Insurance Company. When Andrews did not receive a policy from BIC, she attempted to contact respondent on several occasions to ascertain its whereabouts. Andrews could not recall when or how many times she telephoned respondent's office but indicated she was never able to reach him. This was probably because respondent operated a one-man office with no clerical help and was frequently absent from his office. In late August 1988 Andrews received a notice from UGIC advising that UGIC intended to cancel her policy effective September 7, 1988 because she failed to pay the $38.90 premium still due. At about this same time Andrews' husband sold the station wagon and purchased a truck. Accordingly, Andrews needed to transfer her insurance to the new vehicle. She went to respondent's office in early September 1988 and asked him why she had never received the new policy. She also asked him to find out why her existing policy was being cancel led and requested him to transfer coverage from the station wagon to the new truck. In Andrews' presence, respondent made a telephone call to UGIC and learned that Andrews' husband had failed to disclose on the insurance application that he had received a traffic ticket. This in turn caused a $38.90 increase in the annual premium, and because that amount had not been paid, the policy was being cancelled. Respondent attempted to persuade UGIC to reinstate the policy but was unsuccessful. Dissatisfied, Andrews told respondent she intended to file a complaint with the Department of Insurance. Respondent then wrote her a check for $166 which represented a full refund of her monies. There is no evidence to establish that respondent intended to defraud Andrews or to evade the requirements of the insurance code. Despite the fact that Andrews did not receive a policy, she was covered until September 1988 by her original policy and respondent's errors and omissions policy. Through testimony by an underwriting manager for BIC, David R. Wardlow, it was established that respondent had entered into a correspondent agreement with an agent of BIC. Wardlow's review of BIC's records reflected that BIC had never received Andrews' application and premium nor was a policy written on her behalf. However, there was no evidence to establish how promptly respondent was required to remit a new application and premium to BIC or whether respondent violated BIC policy by retaining the application and monies for some sixty days until he learned that the existing policy had been cancel led. Respondent readily conceded that he never forwarded the application and premium monies to BIC. He explained his actions by pointing out that after Andrews left his office he decided to secure the coverage from UGIC rather than BIC in order to have the entire coverage with one company at a cheaper rate. When he later learned that UGIC intended to cancel Andrews' policy for nonpayment of premium, he thought he might be able to persuade UGIC to reinstate the policy but was unsuccessful. He offered no excuse except inadvertence as to why he had not promptly followed up on Andrews' application. Petitioner also presented the testimony of Johnnie Ruth Bell who purchased automobile insurance from respondent in October 1988. Although Bell's testimony was often vague and confusing, the following facts were established. On or about October 1, 1988 Bell went to respondent's office to purchase full insurance coverage on her 1987 Toyota Corolla. After discussing various options with respondent, Bell agreed to purchase a policy issued through Redmond-Adams, a Sarasota underwriter for UGIC. Bell gave respondent a check in the amount of $227 as a down payment and agreed to finance the balance through a finance company at a rate of $78 per month for eight months. These monies were deposited into respondent's bank account. Respondent issued a "Receipt and Binder Certificate" reflecting coverage with "Underwriter - Redmond Adams". Because Bell had financed the car with a local bank, it was necessary for respondent to furnish the bank with evidence of insurance. Through inadvertence, but not intentionally or willfully, respondent misplaced the application and never forwarded the application and premium to the insurance company nor did he notify the bank of Bell's insurance coverage. However, Bell was covered during this period of time by respondent's errors and omissions policy. After Bell did not receive a copy of her policy from Redmond-Adams, but received a number of telephone calls and notices from her bank, she met with respondent around December 2, 1988. Respondent accepted an additional $156 in cash from Bell and issued her a new binder effective that date which was identical to the first binder except for the date. It is unknown why the additional money was collected. He then tore up the first binder. When Bell had still not received her policy by April 1989, she filed a complaint with petitioner. After respondent learned that Bell had filed a complaint, he contacted her in May 1989 and refunded all of her monies. There was no evidence to establish how promptly respondent was required to submit applications and premiums to UGIC or how that company construed the term "in the regular course of business" in the context of agents remitting applications and premiums. Respondent blamed his problems on the fact that he is the sole employee of his office and, according to his estimate, services some 500 active clients per year and more than 1,500 accounts. He desires to continue in the insurance profession and points to the fact that, of the many insurance transactions handled by him over the last twenty-two years, the Andrews and Bell transactions are the only two that have spawned any significant problems. Moreover, he has never been disciplined by petitioner during his tenure as an agent. Respondent asks that any penalty be limited to a period of probation during which time he can have the opportunity to improve his management and bookkeeping skills. There was no evidence to establish whether respondent's conduct demonstrated a lack of fitness or trustworthiness to engage in the insurance profession. As to respondent's knowledge and technical competence to engage in the transactions authorized by his licenses, he conceded he lacks training in bookkeeping and management skills, both needed for a general lines agent, but denied that he lacks the necessary skills in the sales part of the business. This was not contradicted. Finally, respondent has taken curative steps to insure that applications are not misplaced and the customer receives the requested insurance.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating sections 626.611(8) and 626.734 and that his general lines license be suspended for thirty days. All other charges should be dismissed with prejudice. DONE AND ORDERED this 13 day of March, 1990, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 13 day of March, 1990. APPENDIX Petitioner: 1-4. Partially adopted in finding of fact 1. 5-7. Partially adopted in finding of fact 3. 8-11. Partially adopted in finding of fact 6. Note - Where a finding has been partially adopted, the remainder has been rejected as being irrelevant, unnecessary, cumulative, subordinate, not supported by the evidence, or a conclusion of law. Respondent: A Partially adopted in findings of fact 5 and 6. Rejected as being irrelevant. Partially adopted in finding of fact 3. Partially adopted in finding of fact 5. Partially adopted in finding of fact 6. Rejected since respondent did not move his office until February 1989. Partially adopted in finding of fact 4. Partially adopted in finding of fact 6. I. Partially adopted in findings of fact 3 and 8. Partially adopted in findings of' fact 7 and 8. Partially adopted in findings of fact 6 and 7. Partially adopted in finding of fact 10. Partially adopted in finding of fact l. Partially adopted in finding of fact 10. Partially adopted in finding of fact 1. Note - Where a finding has been partially used, the remainder has been rejected as being irrelevant, cumulative, unnecessary, subordinate, not supported by the evidence or a conclusion of law. COPIES FURNISHED: Honorable Tom Gallagher Insurance Commissioner Plaza Level, The Capital Tallahassee, FL 32399-0300 Willis F. Melvin, Jr., Esquire 412 Larson Building Tallahassee, FL 32399-0300 Richard J. DaFonte, Esquire O. Box 41750 St. Petersburg, FL 33743-1750 Donald A. Dowdell, Esquire General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 =================================================================
Findings Of Fact Respondent, Kathryn Genevieve Saviak, did business as J & J Insurance Agency at all times pertinent to these proceedings. As a general lines insurance agent, she maintained five offices at one time or another in Dade, Broward and Hillsborough counties, for the sale of automobile insurance. Respondent did not deal with customers directly herself. She visited her offices occasionally, perhaps once a month, and spoke to the office managers more frequently by telephone. Some of her employees travelled among offices. Respondent authorized her employees to write insurance policies on behalf of the FJUA under an arrangement with the United States Fidelity and Guaranty Company (USF&G), a servicing carrier for the FJUA. Prior to December, 1978, respondent was the only licensed agent with the J & J Insurance Agency assigned to USF&G. Agents like respondent who represented the FJUA were required to forward to the servicing carrier money thee received in payment of premiums on the date received or, at the latest, on the following day. An agent need not require payment of the entire premium in order to write an insurance policy, so long as the agent collected a specified minimum deposit. Any money actually collected above the amount of the minimum deposit, however, was to be forwarded to the servicing carrier daily. E.R. Milbourne, Jr., the USF&G employee with direct charge of FJUA operations, personally apprised respondent at various times, including prior to 1978, of the requirement that monies be forwarded upon receipt. Agents were first advised of this requirement in writing on or about September 17, 1973. Respondent is one of approximately 250 agents for whom USF&G has been designated the servicing carrier by FJUA. Respondent's offices wrote 60 to 70 policies a month as compared to USF&G's 25,000 FJUA policies a year. The FJUA policies respondent's offices wrote became effective on the date they were written. USF&G then had thirty days in which to issue the policy. In its last audit before the final hearing began, USF&G determined that two percent of its private passenger vehicle policies and four percent of its commercial vehicle policies had not been issued within the thirty-day period. Routinely, USF&G issued a notice of termination if the premium for a policy had not been paid in full within thirty days, but, in some cases, as many as sixty days might have elapsed from the date of application before USF&G issued a notice of termination. On March 30, 1978, Carlene Grigg made application for automobile insurance at respondent's Ft. Lauderdale Office. She made payment of $309.00 at that time. USF&G received the application on May 15, 1978, accompanied by only $200.00. In late July, Carlene's husband, Marvin, received a notice of termination from USF&G dated July 26, 1978, stating that USF&G was owed $188.00. Petitioner's exhibit No. 5. In September, Mr. and Mrs. Grigg paid an additional $73.00 to respondent's Ft. Lauderdale office. On or about November 6, 1978, USF&G received an additional $139.00 from respondent's Ft. Lauderdale office. Together with the initial $200.00, this constituted full payment of the premium for the policy Ms. Grigg applied for on March 30, 1978 (which has subsequently been revised to eliminate physical damage coverage, resulting in a decrease in premium.) (Count I) On August 14, 1978, Constantine A. Ronca made application for an automobile insurance policy at respondent's Ft. Lauderdale office and paid $257.00. USF&G received Mr. Ronca's application later in August, accompanied by $100.00. USF&G sent a notice of termination dated October 26, 1973, to be effective November 9, 1978, for the stated reason of unpaid premium. (Count II) On June 27, 1978, Antonio Vettorazzi purchased automobile insurance at respondent's Ft. Lauderdale office. Against a total premium of $437.00, Mr. Vettorazzi made a down payment of $153.00. The balance of the premium, $284.00, was financed. USF&G received Mr. Vettorazzi's application from respondent's Ft. Lauderdale office accompanied by a check for $284.00. Thereafter Mr. Vettorazzi received a notice of termination from USF&G dated November 15, 1978, threatening to terminate the policy effective November 29, 1978, for alleged nonpayment of a premium balance of $153.00. In late November or early December of 1978, USF&G received a check for $153.00 from respondent's Ft. Lauderdale office. Although Mr. Vettorazzi made his payments to the premium finance company, he made no additional payments directly to respondent after June 27, 1978. (Count III) Also on June 27, 1978, Linda Diane Moray Blair purchased automobile insurance from respondent's Ft. Lauderdale office. Against a total premium of $308.00 she made a cash down payment of $112.00, for which she received a receipt. Petitioner's exhibit No. 2 attached to petitioner's exhibit No. 3. The balance of the premium was financed by Capitol Premium Plan, Inc. Ms. Blair made monthly payments of $29.20 to Capitol Premium Finance in a timely fashion. Subsequently she received a notice from J & J Insurance that another $10.00 was due. In September of 1978, Ms. Blair sent a $10.00 money order to respondent's Ft. Lauderdale office. Thereafter, Ms. Blair received from USF&G a notice of termination dated October 12, 1978, stating that a balance was owed the company of $122.00. On October 27, 1978, USF&G received from respondent's Ft. Lauderdale office a check in the amount of $122.00. (Count IV) On October 18, 1978, David G. Fuerst purchased automobile insurance at respondent's Ft. Lauderdale office. He wrote a check for $210.00, half the annual premium. On November 21, 1978, Mr. Fuerst wrote another check in favor of J & J Insurance for the remainder of the premium in the amount of $210.00. Petitioner's exhibit No. 8. When USF&G received Mr. Fuerst's application, respondent's check in the amount of $150.00 accompanied the application. Eventually USF&G issued a notice of termination dated December 18, 1978, advising Mr. Fuerst that his policy would be terminated on account of an unpaid balance of $270.00. Petitioner's exhibit No. 9. Shortly after receiving the notice of termination, Mr. Fuerst received from respondent's Ft. Lauderdale office a form "Special Notice" stating that the cancellation of the policy "was due to a computer error. Petitioner's exhibit No. 10. On January 9, 1979, USF&G received the $270.00 balance from respondent's Ft. Lauderdale office. (Count XXVIII) On October 30, 1978, William Patrick Pete went into respondent's Ft. Lauderdale office. He purchased an automobile insurance policy for which he paid the entire premium of $170.00. Additionally, he purchased membership in an automobile club for which he paid $30.00. USF&G received Mr. Pete's application on November 8, 1978, accompanied by respondent's check for $50.00. On December 26, 1978, USF&G sent Mr. Pete a notice of termination for the stated reason that he owed $120.00 toward his premium. On January 9, 1979, USF&G received $120.00 from respondent's Ft. Lauderdale office. (Count XXIX) On October 3, 1978, Linda J. Brown purchased insurance from respondent's Ft. Lauderdale office. On that date she made a do payment of $96.00 against a total premium of $275.00. She financed the remainder of the premium, $179.00, under an agreement with Time Premium Company. Petitioner's exhibit No. 15. USF&G received Ms. Brown's application on October 18, 1978, accompanied by a check for $179.00. On December 11, 1978, USF&G directed a notice of termination to Ms. Brown for the stated reason that she owed $96.00 on her premium. Petitioner's exhibit No. 16. On January 2, 1979, USF&G received from respondent a check in the amount of $96.00. (Count xxx) 12. In July, 1978, Robert Charles Oberheim purchased insurance from respondent's Ft. Lauderdale office. He made a down payment of $249.00 against a quoted premium of $711.00. He financed the balance of $462.00, and made regular monthly payments of $63.00. When USF&G issued Mr. Oberheim's policy, it adjusted the premium downward by $40.00 so that the total premium was in fact $671.00. On October 2, 1978, USF&G issued a notice of termination for the stated reason of a balance owing by Mr. Oberheim of $209.00. Thereafter, some time before October 16, 1978, USF&G received respondent's check in the amount of $209.00. Not until August 1, 1979, did J & J Insurance draw a check in favor of Mr. Oberheim in the amount of $40.00, representing the refund he was owed. Petitioner's exhibit No. (Count XXXI) On November 4, 1977, Jean L. Snyder, wife of Paul Snyder, purchased automobile insurance from respondent's Miami office. She was quoted a premium of $1,153.00 and wrote a check for the full amount on November 16, 1977. Petitioner's exhibit No. 20. USF&G received this application on February 13, 1978, accompanied by a check in the amount of $400.00. (Count XXXII) On February 9, 1978, Joseph J. Guido purchased automobile insurance from respondent's Ft. Lauderdale office. He made a down payment of $221.00 against a total premium of $631.00, and financed the balance of $410.00 under an agreement with Time Premium Company. Petitioner's exhibit No. 25. He subsequently sold the vehicle he had insured and, on August 8, 1978, cancelled the policy. On August 28, 1978, Time Premium Company received a $490.00 refund check from USF&G. Brooksie Peeples, Time Premium Company's manager, deposited this check against Mr. Guido's account. The check was enough to pay off Mr. Guide's indebtedness to Time Premium Company in its entirety, with $207.73 remaining. This balance was forwarded to respondent's Ft. Lauderdale office on September 13, 1978. Petitioner's exhibit No. 26. The check was deposited on September 19, 1978. Beginning in November of 1978, Mr. Guido and his wife made repeated demands for the refund. Finally, when Mr. Guide refused to leave the premises until the check was written, on March 29, 1979, the manager of respondent's Ft. Lauderdale office wrote Mr. Guide a check for $207.73. (Count XXXIV) On December 7, 1978, Shirley Payne purchased automobile insurance from respondent's Ft. Lauderdale office. On that date she made a down payment in the amount of $300.32 against a quoted premium of $682.32. She was told she would receive her policy within thirty days, along with a bill for the balance due. In fact, she received her policy in March of 1979. She paid respondent another $100.00 on March 20, 1979, petitioner's exhibit No. 28, and the final $282.00 on March 28, 1979. Petitioner's exhibit No. 29. USF&G received Ms. Payne's application on February 28, 1979, accompanied by a check in the amount of $214.00. (Count XXXVI) Lena Sabel accompanied her daughter, Sylvia Robbins, to purchase automobile insurance at respondent's Hollywood office on July 25, 1978. On that date Ms. Sabel wrote a check in the amount of $556.23 in favor of J & J Insurance Agency. Petitioner's exhibit No. 22. The total premium for the policy she purchased was $406.00. When USF&G received the Robbins' application from respondent it was accompanied by a check in the amount of $150.00. On October 23, USF&G issued a notice of termination for the stated reason that $256.00 was owed for the premium. On receipt of this notice, Ms. Robbins' son sent USF&G a check for $256.00. It arrived shortly after a check in the same amount that respondent's office sent. Having received duplicate checks, USF&G wrote a refund check to the order of Sylvia Robbins in the amount of $256.00 and forwarded the check to respondent. Sylvia Robbins' endorsement was forged and the check was deposited to the J & J Insurance Premium account at the Commercial Bank and Trust Company in Miami. About two weeks before the final hearing began, Ms. Sabel received a refund check in the amount of $256.00. (Count XXXVIII) USF&G drew Check No. 111558 in favor of Robert K. Kaganac in the amount of $44.00 on December 11, 1978, and forwarded the check in care of respondent's Hollywood office. Mr. Kaganac's endorsement was forged and the check was deposited to J & J Insurance Premium account at Commercial Bank and Trust Company in Miami. (Count XXXIX) On December 1, 1978, USF&G drew a check to the order of J. Bruce Garland in the amount of $54.00 and forwarded it to respondent's Ft. Lauderdale office. There Mr. Garland's endorsement was forged and the check was deposited to the J & J Insurance Premium account at the Commercial Bank & Trust Company in Miami. On August 1, 1979, respondent mailed Mr. Garland a check in the amount of $24.00. (Count XLI) Guillermo Citelli purchased automobile insurance at respondent's Hollywood office. On November 22, 1978, USF&G drew its check No. F110271 in favor of Mr. Citelli in the amount of $91.00 and forwarded it to respondent's Hollywood office. Mr. Citelli's endorsement was forged and the check was deposited to the J & J Insurance Premium account at the Commercial Bank & Trust Company in Miami. (Count XLIII) On October 11, 1978, Kevin B. McGuire purchased automobile insurance at respondent's Hollywood office. On that day he paid a premium of $108.00. He later requested that the policy be cancelled. On December 5, 1975, USF&G drew its check No. F110568 in favor of Kevin B. McGuire in the amount of $53.00 and forwarded the check to respondent's Hollywood office. Mr. McGuire's endorsement was forged and the check was deposited to the J & J insurance Premium account at the Commercial Bank & Trust Company in Miami. In January, 1979, Mr. McGuire received a refund from respondent in the amount of $53.00. (Count XLIV) In each instance in which it was shown that USF&G had cancelled a policy for which respondent had failed to forward the entire premium, USF&G later reinstated the policy, effective retroactively to the date of cancellation. Paula Davis, who managed respondent's Hollywood office from March of 1978, until January of 1979, was instructed by respondent to forge endorsements on refund checks and did so. This practice antedated Ms. Davis' employment at the Hollywood office. Marie Vernon, also employed by respondent at her Hollywood office, forged endorsements on refund checks, believing respondent had directed that this be done. Before each forgery, a photostat of the refund check was made and attached to the pertinent file against the possibility that the payee might make demand for the refund. Deborah Goldberg's testimony on this and other points has not boon credited. With respect to certain classes of insurance, respondent instructed Ms. Davis to forward to USF&G only a specified minimum deposit even when the office received more than the minimum deposit toward payment of the premium. With respect to these policies, respondent gave Ms. Davis standing instructions to forward the premium balances only upon receipt of notices of termination from USF&G. These instructions were followed, and monies belonging to USF&G were diverted to a separate account. Respondent also represented an Alabama insurance company to whom she forwarded premiums as promptly as that company required. Many of her employees engaged in no improper conduct of any kind and were completely unaware of what was going on. Both parties have furnished proposed findings of fact which have been considered in preparation of the foregoing findings of fact. Proposed findings of fact inconsistent with the foregoing are hereby expressly rejected.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner revoke respondent's license and her eligibility for licensure. DONE and ENTERED this 16th day of April, 1980, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Patrick F. Maroney, Esquire S. Strom Maxwell, Esquire Department of Insurance The Capitol Tallahassee, Florida 32301 Edward S. Jaffry, Esquire. S. Jack Carrouth, Esquire Suite 300, Barnett Bank Building Tallahassee, Florida 32302
The Issue The issue presented is whether Respondent, a licensed insurance agent, is guilty of violating the statutes regulating the conduct of an insurance agent, and if so, what disciplinary action should be taken against him, if any.
Findings Of Fact At all times material hereto, Respondent has been eligible for licensure and licensed as a life and health insurance agent and as a dental health care contract salesman. For many years, Respondent had also been licensed to solicit general lines -- property, casualty, surety, and miscellaneous lines -- insurance in this state. Respondent was unaware that this license expired on March 24, 1987. At all times material hereto, Respondent was, however, eligible for licensure as a general lines agent. At all times material hereto, Respondent was one of the officers of Johnson's Model City Insurance Agency #1, Inc., a Florida corporation. That corporation was involuntarily dissolved on November 4, 1988. On December 30, 1986, Respondent telephoned Petitioner to discuss the propriety of an insurance agent charging a consulting fee. Following that telephonic conversation, an attorney for Petitioner directed correspondence to Respondent confirming that telephone conversation, advising that a consulting fee could legally be charged under certain circumstances. Those circumstances included the use of a separate consulting contract between the agent and the insured so that the insured would fully understand that he or she was entering into a separate contract and paying a separate consideration in advance of the performance of consulting services. Additionally, the services rendered must be other than those normally provided by an insurance agent. Further, if a separate consulting contract were effectuated, an agent could set up a separate consulting corporation to enter into such contracts. Hartford Insurance Company sells automobile insurance in the State of Florida by use of a toll-free telephone number. People who know the telephone number can call Hartford directly, obtain a quote for automobile insurance, and purchase a policy directly from Hartford. Hartford has no insurance agents in the State of Florida and pays no commissions to insurance agents in Florida for the obtaining of automobile insurance customers. A person can obtain a quote in writing from the Hartford in advance of purchasing a policy. Sometimes, the quotation card and the policy are issued and mailed simultaneously by Hartford to its new insureds. On September 20, 1987, Patricia Moss telephoned J. M. C. Insurance Consultants pursuant to an ad in the telephone yellow pages. She inquired about obtaining automobile insurance to replace her current policy which would expire on September 22, 1987. She spoke with an employee named Betty who advised her that she could obtain replacement insurance at a cost of $927. Since the cost quoted to her was substantially lower than the prices she had been quoted by the other agencies she had consulted, Moss went to the offices of J. M. C. on September 21, 1987. Betty presented Moss with a number of documents to sign. She signed a Power of Attorney appointing Johnson's Model City Insurance, Inc., doing business as JMC Insurance Consultants as her attorney-in-fact to obtain insurance for her, specifically ratifying and confirming actions taken on her behalf by J. L. Johnson- consultant. She also executed an Agreement with Consultant specifying the services that JMC Insurance Consultants would perform on her behalf. She signed a further statement which provided that: "I understand that JMC Insurance is acting as Consultants for my insurance placement and is entitled to any and all consultation fees." She also signed a document written in boldfaced type which states: IMPORTANT NOTICE THIS LETTER IS TO INFORM YOU THAT JMC INSURANCE CONSULTANTS ARE NOT AGENTS NOR DO WE REPRESENT HARTFORD INSURANCE COMPANY IN ANY WAY WHATSOEVER. WE REPRESENT "YOU" THE CLIENT AND WE ACT IN YOUR BEHALF WITH THE RIGHT THAT YOU GIVE US THROUGH A POWER OF ATTORNEY. WE ENDEAVOR TO PLACE YOUR AUTO INSURANCE FOR YOU ON YOUR BEHALF. WE ARE YOUR CONSULTANT. IF YOU HAVE A PROBLEM PLEASE CALL US WE ARE HERE TO HELP AND ACT IN YOUR BEHALF. CALL US FIRST. LET US HANDLE IT. CLIENT. I HAVE READ AND I UNDERSTAND. Moss gave JMC Consultants a check in the amount of $262.50 for which she was given a receipt which carried the specific notation that the money she had paid was for an insurance consultant's fee. She was also given a small card entitled Insurance Identification Card on which Betty filled in information showing that she would be insured by Hartford effective on the following day and specifically describing the coverage provided, the automobile insured, and the name and address of Moss. Within a week she received directly from the Hartford an insurance policy for the benefits which she sought. The policy itself reflected that the premium for the policy was $632 and that she would be receiving a bill from Hartford for that amount. She telephoned Betty, demanding a refund of her $262.50, which demand was refused. Betty explained to her that the amount was for the consultant's fee for obtaining the low- cost coverage for Moss. Hartford's direct marketing program does allow people to purchase insurance on someone else's behalf utilizing a Power of Attorney. Although Hartford's records do not reflect a Power of Attorney from Moss to J. M. C. Consultants or Respondent, Hartford's records regarding their policyholder Moss are not accurate. For example, they erroneously reflect that they quoted a rate to Moss on September 15, a week before they received any contact on her behalf. Although Moss testified that Betty told her the $262.50 was the down payment on her insurance premium, her testimony is not credible in view of the numerous documents that she signed stating that she fully understood that Respondent was not an agent for Hartford, that Respondent would be acting on her behalf pursuant to the Power of Attorney and Consultant's Agreement which she had signed, and the other documents reflecting that the $262.50 was a consultant's fee which she was paying to Respondent to act on her behalf. Her testimony that she did not understand is refuted by the documents she signed saying that she did. There is no allegation that Moss, a retired registered nurse, was unable to read. Rather, it is concluded that Moss voluntarily chose to pay the Hartford premium plus Respondent's consulting fee since the total price for the two charges was still substantially less than she could have obtained insurance for from other sources. Allstate Insurance Company is an insurer which sells insurance policies through their agents in the State of Florida. It also has a division which participates in Florida's Joint Underwriting Association (hereinafter "FJUA"), a program through which high-risk drivers who cannot obtain insurance in the regular voluntary insurance market can obtain automobile insurance. Prior to the time that his general lines agent license expired, Respondent participated in that program and was assigned to write insurance for Allstate for policyholders participating in the program. The Producers Contract entered into between Respondent and the FJUA, which assigned him to Allstate Insurance Company, provided that it would automatically terminate if an agent's general lines license expired. On July 22, 1988, James Tillie came to the office of J. M. C. to procure automobile insurance for the van that he used in his business. After meeting with Respondent, Tillie gave Respondent a check in the amount of $204 as a down payment on an automobile insurance policy. The check was endorsed and deposited into the business bank account of J. M. C. Respondent gave James Tillie an automobile insurance binder which reflected that his insurance policy was to be issued through Allstate Insurance Company. Under the terms of Respondent's contract with the FJUA, Respondent was required to submit James Tillie's application and premium to Allstate within 24 hours. The FJUA application acts as a binder. Once the application is completed and the premium is paid to the agent, the insured has automatic coverage for 30 days during which time the carrier, Allstate in this case, can act on the application. There is no evidence as to when Respondent forwarded James Tillie's application to Allstate; however, Allstate has no record of ever receiving the application. Respondent did tell James Tillie that within a couple of months he would receive from Allstate his policy and instructions for payment of the balance of his premium. After a month or two had elapsed, James Tillie became concerned since he had not yet received his insurance policy. He contacted Respondent who assured him that he did have insurance coverage. Shortly thereafter, James Tillie received in the mail from Respondent a card entitled Insurance Identification Card. On that card information had been filled in showing a policy number, the effective date, the insurance company as Allstate Insurance Company, a description of the insured vehicle, and the name and address of James Tillie. This is not an official Allstate identification card, and no one purported it to be such. An official Allstate Insurance card is issued by Allstate as part of the policy issued by it. On September 23, 1988, Sina Tillie, James' mother, visited J. M. C. for the purpose of purchasing automobile insurance for her new automobile. Sina Tillie is an elderly person who had never before owned an automobile or possessed a driver's license. She wished to purchase insurance on a brand- new automobile. Sina Tillie gave Respondent $1,828 in cash as full payment of the policy's annual premium. Respondent gave her an insurance binder which reflected that her insurance was placed with Allstate. Allstate has no record of receiving Sina Tillie's application and premium from Respondent. Subsequently, Sina Tillie became concerned when she had not yet received her insurance policy. She asked her daughter to contact Respondent. Respondent advised her daughter not to worry. He then mailed to Sina Tillie an Insurance Identification Card similar to the one which he had provided to James Tillie reflecting James' coverage. He also telephoned Sina Tillie to assure her that if anything happened, all she would need to do would be to show the card saying that she was covered and to contact him. Since neither he nor his mother had received a policy from Allstate, James Tillie called Allstate. He did not know that there were, in effect, two Allstates. The Allstate office which he contacted was a regular Allstate office which markets insurance to customers who call or come in, and not an office affiliated with the FJUA program. The person with whom he spoke told him that neither he nor his mother were insured by Allstate and that the policy numbers reflected on the Insurance Identification Cards given by Respondent to James and his mother were not Allstate policy numbers, but rather were binder numbers. James Tillie then contacted Respondent who consistently maintained that both James and Sina were insured. Respondent contacted Allstate regarding James' and Sina's policies. James Tillie came to the office of J. M. C. and met with Respondent. He advised Respondent that he and his mother had obtained insurance elsewhere and requested refunds of the premiums that he and his mother had paid. Respondent told Tillie that he could not refund the premiums since both James and his mother were insured in exchange for those premiums. Respondent eventually told James Tillie that he would refund the premiums if the Tillies would sign releases. James Tillie maintained that he would sign releases only after he had received the refund of the premiums. The meeting ended in stalemate. James Tillie contacted Petitioner, and Petitioner contacted Respondent. Respondent maintained that he would refund the premiums in exchange for a release. Petitioner forwarded a copy of Respondent's letter to James Tillie. Respondent eventually made arrangements with James and his mother to refund the premiums in monthly payments since he did not have the money to refund the premiums in full. By the time of the final hearing in this cause, Respondent had only refunded the total amount of $600 to the Tillies. At the time that Respondent's general lines agent license with Integrity Insurance Company was cancelled on March 24, 1987, he believed that he was being re-licensed by Fortune Insurance Company. However, he never received a license for or from Fortune and never checked to ascertain why.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of statutory violations as set forth in this Recommended Order and suspending Respondent's licensure and eligibility for licensure for a period of 60 days from the date of the Final Order entered in this cause. DONE and ENTERED this 13th day of June, 1990, at Tallahassee, Florida. 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 June, 1990. APPENDIX TO RECOMMENDED ORDER Petitioner's proposed findings of fact numbered 1-3, 7-9, 14-19, 21-26, and 28-32 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed findings of fact numbered 4-6, 10, 11, 13, 20, and 27 have been rejected as not being supported by the weight of the credible evidence in this cause. Petitioner's proposed finding of fact number 12 has been rejected as being unnecessary for determination of the issues in this cause. COPIES FURNISHED: James A. Bossart, Esquire Department of Insurance and Treasurer Division of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Johnny L. Johnson 17120 Northwest 27th Avenue Opa Locka, Florida 33056 Honorable Tom Gallagher 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 =================================================================
The Issue The issues are whether Respondent is guilty of any violations of the Insurance Code, including Chapter 626, Florida Statutes, and, if so, what penalty should be imposed.
Findings Of Fact At all material times, Respondent has been licensed as a general lines insurance agent, holding license number A129688. At all material times, Respondent has been the sole owner and director of America Security Insurance Agency, Inc., formerly known as America Auto Security Insurance Agency, Inc. (America Security). On April 1, 2000, Dionne Jacques purchased a motor vehicle from Sawgrass Ford in Fort Lauderdale. She did not own a vehicle at the time and testified that she purchased a model that was selected for her by someone at the dealership. In closing on the purchase, Ms. Jacques dealt extensively with a dealer employee named Herbert McKenzie. Ms. Jacques financed the motor vehicle purchase with Ford Credit. In the course of completing the required paperwork at the dealership, Mr. McKenzie referred Ms. Jacques to American Security for motor vehicle insurance. Mr. McKenzie mentioned that he dealt with someone named "AJ" at the insurance agency. According to Ms. Jacques, Mr. McKenzie informed Ms. Jacques that one year's insurance would cost $468 or $468.99. Mr. McKenzie did not testify, but Respondent testified that he spoke with Ms. Jacques on the telephone and explained the relevant features of the policies that were available to her. Although it is unclear who quoted the premium to Ms. Jacques, Petitioner has failed to prove by clear and convincing evidence that Mr. McKenzie did so. Ms. Jacques agreed to purchase the insurance and produced a credit card for the amount due. The testimony of Ms. Jacques suggests that she allowed Mr. McKenzie to charge her credit card for the insurance premium. However, the more definitive testimony of Respondent, which is credited, is that he took her credit card information over the telephone and arranged for the card debit. In return, according to Ms. Jacques, Mr. McKenzie gave her a document that she believed would document her coverage until she received an insurance policy in the mail in about 30 days. It is impossible to determine on this record that Mr. McKenzie attempted to bind coverage on behalf of the insurer. At no time prior to the purchase of the insurance did Respondent, Mr. McKenzie, or anyone else disclose to Ms. Jacques that she was purchasing other ancillary products besides insurance. Likewise, no one informed her that she was financing part of the annual insurance premium. For unclear reasons, Respondent did not obtain insurance coverage for Ms. Jacques until May 2000. At that time, he took the $468 that she had charged and, without her knowledge, applied only $143 of this sum toward the policy premium. Without Ms. Jacques' knowledge, Respondent, or someone at his direction, signed Ms. Jacques' name to a premium finance agreement, evidencing an unpaid premium balance of $504. At the same time, also without Ms. Jacques' knowledge, Respondent used $300 of the initial $468 that Ms. Jacques paid to purchase ancillary coverage that she had not agreed to purchase. This ancillary coverage included towing, supplemental medical coverage, replacement rental car, and emergency cash. These coverages supplemented a $647 personal injury protection policy containing no personal liability or uninsured motorist coverage. At no time has American Security designated a primary agent. By Immediate Final Order entered March 12, 1991, the Florida Department of Insurance, now known as Petitioner, ordered Respondent to cease and desist from the unlicensed sale of insurance. However, Respondent has made substantial restitution to Ms. Jacques, who suffered no significant financial injury as a result of Respondent's misdealings.
Recommendation It is RECOMMENDED that the Department of Financial Services enter a final order suspending Respondent's license for one year. DONE AND ENTERED this 18th day of November, 2004, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 2004. COPIES FURNISHED: Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Pete Dunbar, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Gregg S. Marr Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Charles P. Randall Charles P. Randall, P.A. Bank of America Tower, Suite 500 150 East Palmetto Park Road Boca Raton, Florida 33432-4832
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint and, if so, what penalties should be imposed.
Findings Of Fact Based upon the evidence adduced at hearing and the record as a whole, the following findings of fact are made: Respondent's Licensure and Work History Respondent is now, and has been at all times material to the instant case, licensed by Petitioner as a general lines (property and casualty) insurance agent. At no time material to the instant case has he been licensed as a surplus lines agent. In the 30 plus years that he has been in the insurance business, no licensing agency has taken any disciplinary action against him. From January of 1997 until July of 1997 (which includes the entire period during which the events described in the Administrative Complaint took place), Respondent worked as an insurance agent for Braishfield of Florida, Inc. (Braishfield), an insurance agency/brokerage firm. (In July of 1997, he started his own insurance agency/brokerage firm, Bandel and Associates, which he still operates.) The Saxony Condominium Association The Saxony Condominium Association (Association) consists of the owners of the 672 units (located in 14 buildings) in the "Saxony" section of the Kings Point condominium development in Delray Beach. The development is approximately seven to ten miles from the Atlantic Ocean. For the past six years, Elinor Lichten has been the president of the Association. The Association's Insurance Committee In August of 1992, before Ms. Lichten became president of the Association, Hurricane Andrew made landfall in the South Florida area and caused extensive property damage. In the years that followed, the premiums that the Association paid for insurance increased dramatically. In February of 1996, in an effort to contain these escalating insurance costs, the Association formed an insurance committee. Ms. Lichten named Dan Miller to serve as the chairman of the committee. Mr. Miller appointed the remaining members on the committee. Ed Greenbaum was among those Mr. Miller appointed to the committee. Ms. Lichten was not a voting member of the committee, although she did attend some (but not all) of the committee's meetings. The Association's Fireman's Fund Policies At the time the insurance committee was formed, the Association was insured by Fireman's Fund. It obtained this insurance coverage through Sedgwick James of Florida, Inc. (Sedgwick). The insurance agent who represented Sedgwick in its dealings with the Association was J. Simione. In October of 1996, the Association received a notice that the Fireman's Fund policies would not be renewed. Upon receiving the notice, Ms. Lichten telephoned Mr. Simione, who advised her that he was "negotiating to reinstate that policy and that in all probability it would be reinstated." Mr. Simione subsequently contacted Ms. Lichten and advised her that the negotiations had been successful. The Fireman's Fund policies were thereafter renewed. The renewed policies had an effective date of December 1, 1996, and an expiration date of December 1, 1997. The Association agreed to the renewal notwithstanding the renewed policies' high premiums and deductibles. Members of the insurance committee, who had met with Mr. Simione "between three to five times" prior to the renewal of the policies, had advised the committee members that there were no better options available and that they should "be absolutely delighted [to] have the coverage [they] had since insurance companies were not renewing policies." When they asked Mr. Simione to "find [a] layered program [for the Association, like those other condominium associations in the area had] where the [risk] is divided so that the premiums are reduced," Mr. Simione told them that it "wasn't possible," explaining that "all of the layering programs [they] had referred to had since fallen apart." The Insurance Committee's Discussions with Respondent Following the renewal of the Fireman's Fund policies, members of insurance committee, at the direction Mr. Miller, "start[ed] to interview" other insurance agents "to see whether or not Mr. Simione's comment to [them concerning the unavailability of a layered program for the Association] had any validity." Respondent was the second agent to be "interview[ed]." He was initially contacted by Ed Greenbaum, who told him that the insurance committee "was very upset by the current coverage package they had" and wanted to see if "there was something better." Respondent spoke subsequently with both Mr. Greenbaum and Mr. Miller. Following this conversation, he sent Mr. Greenbaum the following letter, dated February 23, 1997: It was pleasure talking to you and Dan Miller and I appreciate your candor. Based on the information you provided on the phone, it appears the premiums and deductibles that are currently in force are excessive. My comment is based on what is available in the marketplace today. It appears that the earliest I can sit down and discuss this with the board is in May. My recommendation is that we move our meeting up to March or April. This will enable us to obtain the best possible terms and conditions as we will have ample time prior to the beginning of the hurricane season. The association has nothing to lose and potentially a lot to gain. My evaluation requires a minimum amount of time. After our meeting and a review of the current program and losses, I will be in a position to confirm in writing what improvements can be made. I look forward to hearing from you. Respondent provided the "marketing person" at Braishfield with the information he had been provided by Mr. Greenbaum and Mr. Miller concerning the Association's insurance needs and loss history. The "marketing person" thereupon canvassed the market to determine if there were any alternatives to the Fireman's Fund policies. Such canvassing revealed that there did exist an alternative to the Fireman's Fund policies, in the form of a layered program in which three of the participating insurers were not "authorized insurers," as that term is used in Florida's "Surplus Lines Law." The "marketing person" prepared the following "Statement of Diligent Effort" for Respondent's signature as the "producing agent": Pursuant to [sic] Section 626.914(4), Florida Statutes, requires producing agents to document that a diligent effort has been made to place a risk with at least three (3) authorized insurers prior to contacting a surplus lines agent to export the risk in the surplus lines market. The following form, prescribed by the Department, must be completed IN FULL for each risk. Name of person contacted and telephone number are MANDATORY. COUNTY OF RISK: Palm Beach County NAME OF INSURED: Saxony A-N Condominium Association TYPE OF COVERAGE: Property AUTHORIZED INSURER #1 NAME- Hartford Insurance TELEPHONE NUMBER- 800-824-1732 PERSON CONTACTED- Ben Wilson DATE OF CONTACT- March 21, 1997 REASON FOR DECLINATION- Type of Risk/Property Location AUTHORIZED INSURER #2 NAME- General Accident Ins. TELEPHONE NUMBER- 407-660-1985 PERSON CONTACTED- Bob Rayser DATE OF CONTACT- March 21, 1997 REASON FOR DECLINATION- Type of Risk/Property Location AUTHORIZED INSURER #2 NAME- RISCORP TELEPHONE NUMBER- 800-226-7472 PERSON CONTACTED- Bryan Flowers DATE OF CONTACT- March 21, 1997 REASON FOR DECLINATION- Risk does not qualify for program Respondent signed this "Statement of Diligent Effort" on the line provided for the "[s]ignature of [p]roducing [a]gent." He did so in good faith based upon the representations made to him by the "marketing person." In April of 1997, Respondent met with members of the insurance committee and Ms. Lichten at Mr. Miller's residence to discuss the possibility of the Association obtaining, through Braishfield, the layered program of insurance described above to replace the Fireman's Fund policies that were then in effect. Respondent, on behalf of Braishfield, made a "conceptual" proposal at the meeting. After the meeting, Respondent sent the following letter, dated April 16, 1997, to Dan Miller: It was a pleasure meeting with you and the committee and again I want to apologize for arriving late. Per our discussions, we will provide our final proposal after receiving written confirmation regarding the three year loss history for property and liability. Our proposal will be effective June 1, however we will use whatever date is acceptable to the committee. We anticipate, it will take us approximately two weeks from the time we go into the marketplace until everything is finalized. It appears, there is minimal exposure for equipment, such as heating, cooling and electrical systems. Consequently, we will not include machinery and equipment breakdown in our final proposal. I strongly recommend that you obtain an updated appraisal on your buildings as it is extremely important that your replacement cost reflect today's cost. This will eliminate any potential coinsurance or under insurance problem in the event of a loss. I look forward to working with you and the committee and being appointed as your broker to assist you in all your insurance needs. In May of 1997, Respondent, on behalf of Braishfield, presented a detailed formal written proposal (Braishfield's Written Proposal) to the Association. Braishfield's Written Proposal contained an "Executive Summary" which read as follows: Executive Summary Per our conceptual proposal and correspondence of April 16, we are pleased to present our final program including terms and conditions. Our proposal is based on information provided by the Insurance Committee on policies that are currently in force. Our comparison of coverages incorporates this information. The differences are what we believe to be the key or salient features of each program. The bottom line is, we are offering a substantial premium savings, significantly lower deductibles with comparable coverage. Our recommendation is to appoint Braishfield of Florida as your broker to place all coverage in effect as soon as possible. The "final program" referenced in the "Executive Summary" was a layered program. The "[p]articipating [c]arriers" in the program and their "Best's Ratings" were listed as follows in Braishfield's Written Proposal: PARTICIPATING CARRIERS Property Insurance Carriers Best's Rating Lexington Insurance A++15 General Star Insurance A++7 Royal Surplus Lines A-7 General Liability/Crime New Hampshire Insurance A++15 Directors & Officers Liability Chubb Insurance Group A++15 Umbrella Liability Great American Insurance A+11 The three "carriers" providing "property insurance" coverage were not "authorized insurers," within the meaning of the "Surplus Lines Law." The "[b]enefits of the Braishfield [p]roposed [p]rogram [o]ver [c]urrent [p]rogram" were described in Braishfield's Written Proposal as follows: A Premium Savings of $42,529 Annually.* No Coinsurance Penalty. A 2% Deductible per building as respect to the perils of wind and hail. A $5,000,000 limit for Excess Liability A $5,000 AOP Deductible * Our premium savings is based on the following: Company Coverage Premiums Fireman's Fund Package $144,071 Fireman's Fund Umbrella $2,168 TOTAL $146,239 $ 12,966 (Agent's Fee) TOTAL $159,205 Proposal Cancellation Date June 1, 1997 Pro Rata Return Premium- $79,761 Short Rate Return Premium- $71,801 NOTE: A $1,000,000 Umbrella would produce a further savings of $3,395 Braishfield's Written Proposal also contained a "Program Comparison," which provided as follows: Coverage Current Proposed Program Program $20,454,000 Blanket As Per Limit on Schedule Real and Personal Property Coinsurance Yes No Demolition $250,000 Cost Law & $5,000,000 $500,000 Ordinance Deductible -Wind 3% of $20,454,00 2% Per Building -AOP $10,000 $5,000 Valuation Replacement Cost Re- Placement Cost Unnamed Yes See Note Storm Deductible Umbrella $1,000,00 $5,000,000 Limit NOTE: Our comparison does not include unnamed storm wind coverage. This will be discussed during the presentation. Respondent met with the committee members and Ms. Lichten for about eight hours on or about May 6, 1997. At the meeting, he explained Braishfield's Written Proposal in detail and answered questions. On or about May 9, 1997, Respondent sent the following letter to Mr. Miller for the insurance committee's consideration: The benefits to the association under Braishfield's proposal are: A $5,000 AOP deductible Significantly lower premium No co-insurance penalty A superior wind deductible in the event of a catastrophe such a hurricane. The elimination of any rate increase in 1997 even if this is a bad year for the insurance industry. Outstanding insurance service will include a renewal strategy meeting 120 days prior to expiration. This meeting will disclose options, market conditions and pricing projections. This will allow the committee to act proactively instead of reactively in the best interest of the association. -$5,000,000 Umbrella. One other point to consider involves the payment of premium. If you cancel the Fireman's Fund Package policy on June 1, the earned premium is estimated to be $72,035. If you include a short rate penalty this increases to $79,239. Including the May installment the association has paid $96,165. The difference or the return premium due the association is $24,130 which should be refunded within 60 days. Since you have paid more premium than is earned no payment should be made for June. This enables the association to apply June's payment of $12,015 toward the down payment under Braishfield's program of $26,557.16. The net amount the association has to come up with is $14,542.16. I trust this will be helpful to the committee. It has not been shown that that Respondent at any time knowingly provided the Association (through its officers and representatives) with any false or misleading information or that he knowingly, with the intent to deceive, hid any information from the Association. He disclosed, among other things, that Braishfield's proposed layered program, unlike the Fireman's Fund policies, included "unauthorized insurers" and explained the differences between "unauthorized" and "authorized" insurers. In explaining these differences, he talked about the Florida Insurance Guaranty Act, which protects those insured by "authorized insurers" in the event of insurer insolvency, but does not offer similar protection to those insured by "unauthorized insurers." Respondent also advised that the mid- term cancellation of the Fireman's Fund policies would result in a "short rate" penalty and, in addition, he discussed how Braishfield's proposed layered program would be financed and the interest rates that would be charged. The Association's Acceptance of Braishfield's Written Proposal The insurance committee brought Braishfield's Written Proposal before the Association's board of directors, which voted 15 to 14 in favor of accepting the proposal and replacing the Fireman's Fund policies with the layered program proposed by Braishfield. Post-Acceptance Activities After learning of the results of the vote, Respondent sent the following letter, dated May 27, 1997, to Mr. Miller: I was delighted to hear that the board has made their decision in favor of Braishfield. If we are looking at a May 31, 1997, effective date it is essential that the following matters be addressed immediately: The original finance agreement signed in the appropriate places indicated by "x." A check in the amount of $26,557.67 should be made payable to Braishfield of Florida for the down payment. Both the finance agreement and the check must be available to be picked up by me prior to May 31, 1997. A broker of record letter naming Braishfield on the Director's and Officer's liability policy must be executed and signed. The specific policy number should be included in the caption. A sample letter was included in our final proposal. We will be sending you a completed statement of values form which will require signature of a board or insurance committee member. I have taken the liberty of drafting a letter advising the agent to cancel all coverages effective May 31, 1997. Included is a request to confirm the return premium due the association as well as any unearned fee that will be returned. This letter should be written on Saxony letterhead and signed by you or the President of the association. In accordance with Respondent's suggestion, Ms. Lichten sent the following letter, dated May 28, 1997, to Mr. Simione: Re: Fireman's Commercial Insurance Pkg. Policy #S15MZX80662013 Fireman's Umbrella Insurance Policy #XSC 00074217738 Dear Mr. Simione: Effective May 31, 1997, please cancel above captioned policies. The Saxony Board of Directors at a Special Meeting held on May 27, 1997 voted to appoint a new agent. Please acknowledge the above cancellation in writing and also confirm the return premium due under each policy, including any penalty. Confirmation of any unearned brokerage fee should also be included. All calculations should be based on a May 31, 1997 cancellation date. Thank you for your cooperation and consideration you have given Saxony over the past few years. The following day, May 29, 1997, Ms. Lichten sent the following letter, with the described enclosures, to Respondent: Enclosed herewith please find the following: Duly signed Finance Agreement for our Insurance as agreed upon. Check #001 payable to Braishfield of Florida date May 28, 1997 drawn on Sun Trust in the amount of $26,557.67, which represents our down payment. Please send us [a] letter acknowledging receipt of the above together with [a] letter indicating that we will indeed have insurance as we agreed to commencing May 31, 1997. Looking forward to working with you. That same day, May 29, 1997, Respondent sent Ms. Lichten "copies of binders confirming coverage effective May 31, 1997 as per [Braishfield's] May 6th proposal." On June 5, 1997, Ms. Lichten sent Mr. Simione a signed (by Ms. Lichten) and dated (May 29, 1997) "Cancellation Request/Policy Release" form formally requesting cancellation of the Fireman's Fund policies, effective May 31, 1997. On or about June 20, 1997, Ms. Lichten was sent a Certificate of Insurance "certify[ing] that the policies listed [which had been described in Braishfield's Written Proposal] ha[d] been issued to the [Association] for the policy period indicated [May 31, 1997, to May 31, 1998]." On or about June 30, 1997, the appraiser that the Association had hired (Allied Appraisal Service) completed the "updated appraisal on [the Association's] buildings" that Respondent had recommended. Respondent reviewed the appraisal report and prepared a written analysis of the report, which he subsequently discussed with the members of the insurance committee and Ms. Lichten. In his written analysis, Respondent stated, among other things, the following: This proposal analyzes the appraisal made by Allied Appraisal Service on June 30, covering the building and surrounding improvements at Saxony "E," Delray Beach, Florida 33446. The purpose is two fold. To ascertain if the values being reported to the insurance companies reflect as closely as possible the exposure at risk. This includes the impact on coverages such as limits and deductibles. The other area is the premium which includes various options. The property coverage is underwritten in a layered program using three companies. The total limit of coverage is $20,454,000, which is subject to a sublimit per building of $1,461,000. Based on the updated appraisal, the 100% replacement cost on buildings and improvements is $24,561,978 which breaks down to $1,754,427 per building. These amounts were arrived at by eliminating and or reducing those items that were not the responsibility of the association. Other adjustments were made regarding contingencies and contractor's profit which should be discussed. The breakdown is provided on Exhibit I attached. The difference or the amount of increase required to comply with the appraisal is $4,107,978. The change in values increases the wind deductible from $29,220 to $35,088 per building. On or about July 18, 1997, Respondent (who, by this time, had left the employ of Braishfield and had started his own insurance agency/brokerage firm) sent Ms. Lichten a letter, which read as follows: Per our meeting with the insurance committee on Wednesday, July 16, it was recommended the building values be amended based on the property appraisal made by Allied Appraisal Service[] on June 30, 1997. The 100% replacement value including improvements is $24,561,978. The total amount of insurance in force is $20,454,000. The net result is a[n] increase of $4,107,978. Also included in the appraisal is the cost to change certain items revised by current building codes. This is known as law or ordinance coverage. We recommend an increase in the limit by $850,000 to $1,350,000 to cover the additional exposure. Both of the above increases place the property insurance in compliance with the appraisal. The underwriter has agreed to provide blanket coverage using 90% coinsurance. The blanket amount excluding law or ordinance coverage is $22,105,760. This is an improvement over the existing program as the blanket amount would apply to any one loss and the basis for determining the premium would be significantly less. Using an effective date of July 31, the additional premium including taxes and fees is $8,446.20. In addition to the improvement in coverage and key deductibles, our program provides a net savings in excess of $34,000 a year over the Fireman's Fund policy. The changes that Respondent had recommended based upon the "updated Appraisal" were "bound," as Respondent advised Ms. Lichten by the following letter dated August 12, 1997: This will confirm that effective July 31, the following changes have been bound: The total insurable value increased to $22,105,780. The Law or Ordinance coverage increased to $1,350,000. Coverage is on a blanket basis. The coinsurance clause has been amended to 90%. The 2% wind deductible per building is increased to $31,580. All of these changes were based on the property appraisal made by Allied Appraisal Service on June 30, with some exceptions, such as Misc. & Contingencies and Overhead/Profits. It was agreed by the insurance committee not to include these items. Attached is our invoice amount of $8,446.20 representing the additional premium due hereunder. Please make your check payable to Braishfield of Florida and send it to me. In October of 1997, Respondent submitted a renewal proposal to the Association. The proposal was accepted and renewed coverage was bound, effective December 1, 1997, for a period of three years.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department issue a final order dismissing the Administrative Complaint issued against Respondent. DONE AND ENTERED this 7th day of July, 2000, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of July, 2000.
The Issue Whether the Petitioner committed the violations alleged in the Amended Administrative Complaint filed October 14, 2003, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department is the state agency responsible for issuing licenses for insurance agents in the State of Florida, and for regulating and disciplining licensed insurance agents. Sections 626.016, 626.611, and 626.281, Florida Statutes (2004). At all times material to this proceeding, Mr. Pomerantz was licensed in Florida as a property and casualty general lines insurance agent, which is referred to as a "2-20 license." At all times material to this proceeding, Mr. Pomerantz did business as A Able insurance agency, an unincorporated entity located at 124 South Federal Highway, Pompano Beach, Florida. Mr. Pomerantz owned the A Able insurance agency, worked in the office in Pompano Beach, and was the agent in charge of the office. Automobile insurance was the primary product sold at the Pompano Beach office of the A Able insurance agency. No primary agent for the A Able insurance agency office in Pompano Beach was registered with the Department, but Mr. Pomerantz functioned as its de facto primary agent at that location. An insurance agency known as the Wide World of Insurance was, and perhaps still is, located in Margate, Florida. Mr. Pomerantz's brother, Randy Pomerantz, operated this agency. In the summer of 2000, the two offices merged, but the merger dissolved in the early spring of 2002. During the time that the two agencies operated as a single entity, they continued to maintain the two office locations. Applications and other paperwork generated in the Pompano office were, as a rule, sent to the Margate office for processing. Prior to May 2003, however, when he began working in a general administrative capacity at the Margate office, Mr. Pomerantz did not work in the Margate office and had no personal knowledge of the operations of the Margate office or the applications for automobile insurance handled by that office. At the times material to this proceeding, Mr. Pomerantz was the appointed agent for Ocean Harbor Insurance Company ("Ocean Harbor"), Southern Group Indemnity, Inc. ("Southern Group"), and U.S. Security Insurance Company ("U.S. Security"). As an appointed agent, Mr. Pomerantz, as well as agents working in the Pompano Beach office of the A Able insurance agency, acted on behalf of these companies, and the agents could bind coverage with the companies and accept premium payments on behalf of these companies. An insurance agent can "bind" automobile insurance coverage with an insurance company that has appointed or registered the agent as its representative by calling the insurance company and getting a binder number and time of day. A binder obligates the insurance company to provide the coverage specified until the binder is converted into an insurance policy or the binder is cancelled. Southern Group's agreement with Mr. Pomerantz required him to send the signed application for a new automobile insurance policy, for a renewal of an existing policy, or an amendment to an existing policy, together with a check or draft for the premium net commissions, postmarked within 72 hours of the time at which the coverage was bound. Although not reduced to writing, the standard policy of U.S. Security requires its appointed agents to mail the application and payment to the company immediately upon coverage being bound. Ocean Harbor's general rules applicable to its appointed agents require that a completed application and the required premium, together with other documentation, be received by the company within five working days of the date on which coverage is bound. Within 20 to 30 days after coverage is bound on an application, each of these three companies sends a notice to the agent listing the binders for which the company has not received the application, premium, and other required paperwork. The notice advises the agent that the binder is cancelled. This means that the insurance company no longer provides automobile insurance coverage under the binder. If the application, premium, and other required paperwork is subsequently forwarded to the insurance company, the company, after review by its underwriters, can accept the application and issue a policy with an effective date retroactive to the effective date stated on the application for the policy. In some circumstances, the underwriting review will result in an additional premium being charged on the policy. In this circumstance, a notice is sent to the insured advising them of the additional premium due. At the time the application for automobile insurance coverage is completed and the coverage is bound by an agent appointed or registered by the company, the customer pays the insurance agent either the full amount of the premium determined by the agent to be due or a down payment on the premium when the premium is financed by a premium finance company. Insurance companies using appointed or registered agents do not, as a rule, accept payment directly from the customer; rather, the payment received from a customer is deposited in the agency's account, and the agency, after deducting its commission, sends an agency check to the insurance company. When the premium is financed, the down payment is deposited in the agency account, and the agency, after deducting its commission, sends an agency check to the premium finance company. When a customer finances his or her insurance premium through a premium finance company, the customer signs a premium finance agreement in which he or she agrees to pay monthly installments to the premium finance company for the total owed under the agreement; the premium finance company, in turn, pays the full premium to the insurance company at the time the application is submitted to the insurance company. Premium finance companies provide agents with whom they do business company drafts, which are prepared by the insurance agent on behalf of the premium finance company. Mr. Pomerantz and the A Able insurance agency did business with the premium finance company ETI Finance Corporation ("ETI Finance"), and A Able insurance agency was supplied with ETI Finance premium finance agreements and ETI Finance drafts. In ETI Finance's premium finance agreement, the customer agrees to assign to ETI Finance a security interest in any unearned return premiums that may become due upon the cancellation of the insurance policy. The insurance company sends this unearned return premium directly to ETI Finance if the insurance policy is cancelled. ETI Finance deducts any amounts owed under the premium finance agreement; if the amount of unearned return premium exceeds the amount the customer owes ETI Finance under the premium finance agreement, ETI Finance remits the balance owed to the customer to the insurance agent; if the amount of unearned return premium is insufficient to cover the amount the customer owes ETI Finance, ETI Finance bills the insurance agent for the balance owed under the premium finance agreement. ETI Finance handles unearned return premium credits and debits on an account current basis whereby a bi-monthly statement is prepared for each of the agents with whom it does business. The statement lists customers and all debits and credits to the agent's account for each of the customers listed. When an insurance policy is cancelled, the agent statement includes the amount of unearned return premium received by ETI Finance from the insurance company, and shows whether the customer is owed money, which is shown as a credit to the agent's account, or whether the agent owes ETI Finance money, which is shown as a debit to the agent's account. All of the debits and credits are totalled on the bi-monthly statement; if a total credit is shown, an ETI Finance check is included with the statement; if a total debit is shown, the agent is required to send ETI Finance a check to cover the amount owed. ETI Finance's agent statement advises the agent to review the statement carefully because the agent might owe a customer a refund. If a customer pays the agent the full premium and the agent then pays the premium with an agency check, the insurance company sends the agent an unearned return premium. It is the agent's responsibility to refund the unearned return premium to the customer. In addition to paying a customer any unearned return premium received upon cancellation of a policy, the agent is responsible for refunding any unearned commissions the agent was paid on the policy. Either the insurance company or the agent calculates the amount of the unearned commission, and this is included in the payment to the customer. At all times material to this proceeding, Alida High, nee Watson, held a "2-20 license" allowing her to sell property and casualty insurance in Florida. She was employed by the A Able insurance agency and worked in the office located at 124 South Federal Highway, Pompano Beach, Florida. She began working for the A Able insurance agency in July 1999, and was paid a weekly salary plus commissions Mr. Pomerantz and Ms. High were authorized signatories on the A Able insurance agency's Bank of America checking account number 91895073. Ms. High and Mr. Pomerantz signed the signature card on February 18, 2000. Ms. High functioned as a licensed insurance agent in the Pompano Beach office of the A Able insurance agency, and her responsibilities included working with customers to prepare applications for automobile insurance coverage, binding coverage with the insurance companies, receiving payment for the premiums on the policies or for the down payment on a premium finance agreement if the premium was financed, preparing the application package to be sent out to the insurance company, and issuing temporary identification cards. If a customer of the A Able insurance agency paid his or her premium for a policy in full, the cash or check was deposited in the agency's account, and the insurance agency issued a check payable to the insurance company for the premium minus the agency's commission. In this circumstance, Ms. High prepared the application package and placed it on Mr. Pomerantz's desk so that he could write the agency's check and send the application package and check to the appropriate insurance company. Ms. High followed this procedure throughout her employment at the A Able insurance agency, in accordance with the directions Mr. Pomerantz gave her when she began working for the A Able insurance agency. If one of Ms. High's customers financed part of the premium with a premium financing company, Ms. High routinely issued the drafts of the premium finance company for the premium owed for an insurance policy, and she mailed the draft and the application package to the insurance company. Ms. High also occasionally prepared and signed checks on the A Able insurance agency's Bank of America checking account payable to "BCRC"2 to pay for automobile tags and titles issued by Broward County and other, minor, miscellaneous items. During the summer and early fall of 2002, Ms. High prepared checks at Mr. Pomerantz's request and signed his name. Most of these checks were to "BCRC", but several were to pay for office expenses, and one was written to U.S. Security Insurance Company to pay a customer's additional insurance premium. Ms. High wrote checks on the A Able insurance agency account only when she had Mr. Pomerantz's permission to do so. Writing checks was not among her normal responsibilities at the A Able insurance agency, and Ms. High would not write checks on the agency's account without Mr. Pomerantz's express permission because she did not know anything about the account balance. Beginning in the summer of 2002, Mr. Pomerantz's interest in the business of the A Able insurance agency waned, according to Ms. High, and his visits to the office became more and more infrequent. Initially during this period Mr. Pomerantz came in every few days and wrote checks and sent application packages out to insurance companies, but eventually applications for insurance prepared and bound by Ms. High began to accumulate on Mr. Pomerantz's desk. When Ms. High reminded Mr. Pomerantz that the applications on his desk had been bound and needed agency checks cut so they could be sent to the insurance companies, Mr. Pomerantz told her to leave them, that he would take care of it. Ms. High became more and more concerned about the backlog of applications on Mr. Pomerantz's desk, and, when he was in the office, she constantly reminded him of the need to send the applications to the insurance companies. Count I: John Thierwechter In February 2002, John Thierwechter went to the A Able insurance agency to purchase the minimum amount of automobile insurance required by law for a 1993 Nissan Sentra. The total premium quoted was $1,550.00 for personal injury protection/physical damage/comprehensive/collision coverage with Ocean Harbor and for a policy covering reimbursement of the $500.00 deductible on the Ocean Harbor policy. Mr. Thierwechter decided to finance the premium, and Ms. High completed an ETI Finance premium finance agreement, which Mr. Thierwechter signed on February 21, 2002. The first installment on the Premium Finance Agreement signed by Mr. Thierwechter was due on March 23, 2002. Mr. Thierwechter owed a down payment of $289.00 under the Premium Finance Agreement. On February 22, 2002, he paid $200.00 of the down payment in cash, and he received a receipt signed by Mr. Pomerantz. Mr. Thierwechter returned to the agency on February 25, 2002, to pay the remaining $89.00, and he received a receipt signed by Ms. High. Mr. Thierwechter had previously had a bad experience with Ocean Harbor, and, within a few weeks, he purchased automobile insurance coverage from GEICO Casualty Company. This coverage was effective March 16, 2002. In a letter dated March 15, 2002, that he hand-delivered to the A Able insurance agency, Mr. Thierwechter requested that his Ocean Harbor policy be cancelled and that he receive a refund of "the unearned premium" . . . within the next 30 days." On March 16, 2002, Ms. High completed an All Purpose Endorsement requesting that Ocean Harbor cancel Mr. Thierwechter's insurance coverage effective March 16, 2002. This request was received by Ocean Harbor on March 23, 2002. Because Mr. Thierwechter had financed the premium for his Ocean Harbor policy with ETI Finance, Ocean Harbor sent the unearned return premium to ETI Finance, pursuant to the Premium Finance Agreement signed by Mr. Thierwechter. ETI Finance received the cancellation notice and check for the unearned return premium from Ocean Harbor on April 9, 2002. The amount of the unearned return premium was included on the agent's statement for the A Able insurance agency dated May 1, 2002. That statement reflected return premium in the amount of $757.35. This amount was less than the amount Mr. Thierwechter owed ETI Finance because Mr. Thierwechter had not made any of the monthly installments required by the Premium Finance Agreement. As a result, the May 1, 2002, agent's statement recorded a $63.47 debit against the account of the A Able insurance agency. The A Able insurance agency was responsible for paying Mr. Thierwechter the amount of unearned commission, if any, that exceeded the $63.47 it owed to ETI Finance. Pursuant to Mr. Pomerantz's calculations, Mr. Thierwechter was owed $70.16 in unearned commission retained by the A Able insurance agency, and Mr. Pomerantz wrote Mr. Thierwechter a check for that amount on the A Able insurance agency account on July 1, 2002. Mr. Thierwechter picked up the check on or about July 22, 2002. Count III: Shirley Shaffer On or about June 11, 2001, Shirley Shaffer purchased a 1996 Kia Sephia from the Coral Springs Auto Mall. Before Ms. Shaffer could drive the car off of the car lot, the car dealer required her to secure automobile insurance. The dealer called a person to assist Ms. Shaffer, and a man arrived at the dealership within a short period of time. This man presented Ms. Shaffer with a card on which was printed "Wide World of Insurance"; there was no individual's name on the card, but the card showed a Margate, Florida, address. Ms. Shaffer wanted to purchase only the basic coverage, and a U.S. Security application for a "physical damage only" policy was prepared specifying comprehensive and collision coverage only. The application identified the insurance agency as the A Able insurance agency, located in Pompano Beach. According to a notation on the application, the comprehensive and collision insurance coverage was bound with U.S. Security at 3:00 p.m. on June 12, 2001.3 In addition, Ms. Shaffer signed a Summary of Coverages and Cost Breakdown form carrying the name "Wide World of Insurance" and an address in Margate, Florida. This form was also dated June 12, 2001. At some point during the application process at the Coral Springs Auto Mall, the person representing the insurance agency went outside the dealership offices, telling Ms. Shaffer that he was going to take photographs of her car to attach to the application for insurance coverage. Ms. Shaffer financed the premium for her automobile insurance policy, and she paid a deposit of $200.00, which she charged on her credit card. U.S. Security received Ms. Shaffer's application for comprehensive and collision coverage on June 18, 2001, and a Physical Damage Policy was issued to Ms. Shaffer on June 26, 2001, with a policy term of June 13, 2001, to June 13, 2002. Ms. Shaffer received a copy of this policy. The agent identified on the policy was the A Able insurance agency in Pompano Beach. A Notice of Cancellation dated July 18, 2001, was sent to Ms. Shaffer by U.S. Security. In the notice, Ms. Shaffer was advised that her insurance policy would be cancelled effective September 2, 2001, because her application was incomplete. After she received the cancellation notice, Ms. Shaffer called the Margate office of the Wide World of Insurance insurance agency because that was the office whose address was on the card she was given when she applied for the U.S. Security insurance policy. Someone at the Margate office told her that, because she lived in Pompano Beach, her account was handled by the agency's Pompano Beach office and that she should call that office. Ms. Shaffer contacted the Pompano Beach office and spoke to a man who told her that everything about her policy looked fine in the computer and that she should not worry about the letter from U.S. Security. After this conversation, she contacted the Margate office again and was told that they knew nothing about the problem with the policy at that office. Ms. Shaffer then telephoned U.S. Security and was told that her insurance agent needed to take care of the problem, which she was led to believe was minor. Finally, Ms. Shaffer received a letter dated August 7, 2001, from a person named Gary. The letter carried the name "Wide World of Insurance" and the Margate address. In the letter, Gary requested that Ms. Shaffer "PLEASE STOP BY OUR OFFICE SO WE MAY TAKE PICTURES OF THE KIA. ORIGINAL ONES DID NOT COME OUT. ALSO NEED REGISTRATION. IMPT!!!!!" Gary stated in the letter that Ms. Shaffer needed to provide the requested information by August 21, 2001, "to avoid any further delays or cancellation requests from the insurance company." When she received the August 7, 2001, letter, which she recalled was on a Friday, Ms. Shaffer called the Margate office and arranged to bring her car in for photographs at 8:00 a.m. the following Monday.4 Ms. Shaffer arrived at the Margate office slightly before 8:00 a.m., and a few minutes later the man who had taken her application at the Coral Springs Auto Mall arrived at the office and took pictures of her car. Ms. Shaffer also provided a copy of her automobile registration, as requested in the August 7, 2001, letter. Ms. Shaffer also purchased personal liability insurance coverage from the Pompano Beach office of the A Able insurance agency, and she charged the $659.00 premium on her Visa credit card. Ms. Shaffer handled the entire transaction during a telephone conversation with a person in the Pompano Beach office, but she does not know the name of the person with whom she spoke. When Ms. Shaffer went to the Margate office in response to Gary's letter of August 7, 2001, she was given a receipt dated August 6, 2001, for the $659.00 premium she had paid for "addl liability coverage"; it was stated on the receipt that the coverage would be effective from September 1, 2001, to June 12, 2001. The person who signed the receipt was not identified, and the signature is indecipherable. The transaction date shown on Ms. Shaffer's credit card statement was August 7, 2001, and the statement showed that the charge was credited to "A ABLE WIDE WORLD OF I POMPANO BEACH FL." Ms. Shaffer also received a Florida Automobile Insurance Card confirming that she had personal injury protection benefits, property damage liability, and bodily injury liability coverage with U.S. Security; the agent identified on the card was "A Able Wide World of Insurance," with a post office box address in Margate, Florida. U.S. Security cancelled Ms. Shaffer's physical damage policy effective September 2, 2001, because her application was incomplete. U.S. Security sent a check dated September 26, 2001, to ETI Finance for $323.85, which was the unearned return premium owing on Ms. Shaffer's policy. U.S. Security never received an application for the "additional liability coverage" Ms. Shaffer requested and paid for on August 7, 2001. On October 22, 2001, Ms. Shaffer was caught in a flash flood, and she drove her Kia automobile into an area of water that was so deep her automobile floated. At one point, a bus drove through the water near the Kia, and the wake caused the Kia to wash into railroad ties that were used in the yard of a nearby home for landscaping. The railroad ties tore off the front of the car. The damage to the Kia was so extensive that it was considered a total loss. Ms. Shaffer filed a claim with U.S. Security, and received a letter dated October 25, 2001, from Corporate Claim Services, Inc., acknowledging receipt of her claim on behalf of U.S. Security. Ms. Shaffer then received a letter from Corporate Claim Services, Inc., dated October 26, 2001, advising her that her insurance policy with U.S. Security was cancelled effective September 2, 2001. Because Ms. Shaffer had no automobile insurance at the time her car was damaged, she had the Kia repaired at her own expense and incurred substantial expense and inconvenience because she had to arrange for alternative transportation during the year-and-a-half it took to have her car repaired. Ms. Shaffer did not receive any unearned premium or unearned commission refund after the cancellation of her policy. Ms. Shaffer never did business in person with Mr. Pomerantz. In fact, she met him for the first time the week before the final hearing, when her deposition was taken. Count IV: Terensinha Honczarenko On or about March 30, 2001, Terensinha Honczarenko went to the Margate office of the Wide World of Insurance insurance agency to purchase automobile insurance for a newly- purchased Toyota Corolla.5 Ms. Honczarenko had done business with the insurance agency located in Margate for a number of years. A man working at the Margate office named Greg completed Ms. Honczarenko's application for automobile insurance coverage with Southern Group, which she signed.6 The A Able insurance agency in Pompano Beach was identified in the application as the agent producing the application. Coverage on Ms. Honczarenko's policy was bound on the policy on March 30, 2001, and Southern Group received the application on April 4, 2001. The underwriting review of Ms. Honczarenko's application was completed on May 29, 2001, and Southern Group issued a policy to Ms. Honczarenko on June 26, 2001, with an effective date of March 31, 2001, through March 31, 2002. The A Able insurance agency in Pompano Beach was identified on the policy as the insurance agent. Ms. Honczarenko paid a $275.00 down payment on the total policy premium of $1098.00, and financed the remainder of the premium with ETI Finance.7 The Premium Finance Agreement was dated March 30, 2001, and was processed by ETI Finance on April 18, 2001. Ms. Honczarenko made payments pursuant to the Premium Finance Agreement from April 30, 2001, until August 2001. Ms. Honczarenko regularly made these payments at the Margate office, sometimes paying in cash and sometimes paying by check. When she took her August 2001 payment to the Margate office, Greg told her that there was a problem with her insurance policy and that she should come back in two days. When she returned to the Margate office, she was told that her automobile insurance policy had been cancelled. When she asked for her money back, Greg refused. At some point in June 2001, Southern Group sent Ms. Honczarenko a notice at her correct address advising her that she owed $263.00 in additional premium on Southern Group automobile insurance policy. She was given three options: To pay the additional premium by June 28, 2001, and keep the policy in force; to request by July 18, 2001, that Southern Group cancel the policy and refund any unearned premium; or to do nothing, in which case the policy would be cancelled effective July 18, 2001, and the unearned premium refunded. Ms. Honczarenko claims she never received this notice. Southern Group also sent Ms. Honczarenko a notice dated June 21, 2001, to her correct address, advising her that the vehicle identification number on her insurance application did not correspond to the vehicle identification number in their records. Southern Group asked Ms. Honczarenko to check her registration and return the letter to Southern Group with the correct information set forth on the bottom of the letter. Ms. Honczarenko claims she never received this notice. Southern Group also sent a copy of the notice to the "Wide World of Ins Pompano Bch." In a letter dated June 29, 2001, "Gary" advised Ms. Honczarenko that she needed to supply the Margate office with a copy of the registration for her 1985 Toyota. This letter was sent to the same address as the notices sent Ms. Honczarenko by Southern Group. Ms. Honczarenko received the June 29, 2001, letter from the Margate office of the Wide World of Insurance insurance agency.8 Because Southern Group received no response from Ms. Honczarenko to its notice that she owed additional premium on her automobile insurance policy, it cancelled her policy effective July 18, 2001, and sent her a notice of cancellation dated June 29, 2001. The notice was sent to the same address as was the notice of additional premium and the notice that there was a discrepancy in her automobile identification number. Ms. Honczarenko received the notice of cancellation. On August 10, 2001, Southern Group sent a check to ETI Finance for unearned return premium on Ms. Honczarenko's automobile insurance policy in the amount of $572.90. ETI Finance received the check on August 16, 2001, and included Ms. Honczarenko's unearned return premium in the statement it sent to the A Able insurance agency in Pompano Beach on or about August 31, 2001. The statement showed that ETI Finance had received $572.90 in unearned return premium on Ms. Honczarenko's account, and it included a credit to the A Able insurance agency of $71.95. Ms. Honczarenko did not receive any refund of unearned return premium or unearned commission from A Able insurance agency. Count V: Cecil Worrall On June 10, 2002, Cecil Worrall went to the A Able insurance agency in Pompano Beach to renew his automobile insurance within Southern Group. At that time, he had done business with A Able insurance agency in Pompano Beach for eight-to-ten years. Mr. Pomerantz completed Mr. Worrall's application, which Mr. Worrall signed. Mr. Worrall gave Mr. Pomerantz a check in the amount of $570.00 as payment of the full amount of the renewal premium. Mr. Pomerantz gave the application to Ms. High and expected her to bind the coverage and process the application. According to a notation of the application, coverage was bound on June 19, 2002, at 3:46 p.m., and, as was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the application package and payment to Southern Group. Mr. Worrall's June 10, 2002, check was deposited into the account of "A Able Wide World of Insurance." Southern Group did not receive the application and agency check for the premium net commission on Mr. Worrall's renewal within the 72 hours required by Southern Group's agreement with Mr. Pomerantz. On July 12, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that Mr. Worrall's binder coverage had expired because Southern Group had not received the application.9 Southern Group advised the A Able insurance agency to check its records to make sure that the application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance." The Department of Insurance10 made an inquiry of Southern Group on October 16, 2002, regarding the status of Mr. Worrall's insurance policy, and Southern Group replied in a letter dated October 28, 2002, that, although coverage had been bound for Mr. Worrall, it had no record of having received Mr. Worrall's application and the premium payment or a response to its July 12, 2002, notice to the A Able insurance agency that the binder had expired. After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group application for Mr. Worrall was retrieved. On December 10, 2002, Southern Group issued an automobile insurance policy to Mr. Worrall, with an effective date retroactive to June 26, 2002, the date the policy would have been effective had the application and premium payment been transmitted to Southern Group timely. Count VI: Cynthia Mousel Cynthia Mousel was a client of the A Able insurance agency Pompano office, and primarily Ms. High handled her business. On or about September 18, 2002, Ms. High completed an application within U.S. Security for automobile insurance coverage on behalf of Ms. Mousel. Ms. Mousel signed the application, and coverage was bound on September 18, 2002. Ms. Mousel paid the full premium of $524.00. As was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the application package and payment to U.S. Security. In October 2002, the Department of Insurance sent an inquiry to U.S. Security regarding the status of Ms. Mousel's automobile insurance policy. In a letter dated October 30, 2002, U.S. Security advised the Department of Insurance that it had no record that, as of that date, it had received an application for automobile insurance coverage under Ms. Mousel's name.11 Count VII: Fred Hublitz Fred Hublitz was a long-time customer of the A Able insurance agency in Pompano Beach. On September 13, 2002, Mr. Hublitz visited the office, and Ms. High completed an Endorsement Request Form on his behalf to add coverage to his automobile insurance policy with Ocean Harbor for a 2000 Mercury Sable automobile. Mr. Hublitz signed the endorsement and wrote a check for $260.00, which was the full amount of the premium to add this coverage. The coverage was bound on September 13, 2002. As was her custom, Ms. High put the endorsement package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the endorsement and payment to Ocean Harbor. The check written by Mr. Hublitz on September 13, 2002, was deposited into the account of "A Able Wide World of Insurance." In a letter dated October 16, 2002, the Department of Insurance inquired of Ocean Harbor regarding the status of Mr. Hublitz's automobile insurance policy. Ocean Harbor responded in a letter dated November 7, 2002, that it had no record of having received the endorsement or premium payment for Mr. Hublitz's 2000 Mercury Sable. An Ocean Harbor representative went to the A Able insurance agency office in Pompano Beach on November 15, 2002, and picked up applications and endorsements for automobile insurance coverage. Among these documents was Mr. Hublitz's endorsement, and Ocean Harbor added the 2000 Mercury Sable to Mr. Hublitz's existing Ocean Harbor automobile insurance policy, effective retroactively.12 Count VIII: Lori O'Connell Lori O'Connell had obtained automobile insurance coverage from the A Able insurance agency in Pompano Beach. She had received a notice that her policy with Southern Group was to expire on August 14, 2002, and a friend, Joseph Balsamo, went to the A Able insurance agency office on July 9, 2002, and gave Ms. High a check for $364.00, which was full payment for the policy renewal. Ms. High bound the renewal on July 12, 2002. As was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the renewal application package and payment to Southern Group. A month later, Ms. O'Connell had not received an insurance card or renewal policy, and Mr. Balsamo telephoned the A Able insurance agency Pompano Beach office and inquired about the policy. Ms. High told him that the insurance company was slow in processing the renewals and that Ms. O'Connell should receive the materials shortly. Ms. High knew, at the time, that the renewal application was sitting on Mr. Pomerantz's desk, waiting for him to write a check and mail the application and payment to Southern Group. Southern Group did not receive the renewal application and agency check for the premium net commission on Ms. O'Connell's renewal within the 72 hours required by Southern Group's agreement with Mr. Pomerantz. On August 2, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that Ms. O'Connell's binder coverage had expired because Southern Group had not received the renewal application.13 Southern Group advised the A Able insurance agency to check its records to make sure that the application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance." The Department of Insurance made an inquiry of Southern Group on October 16, 2002, regarding the status of Ms. O'Connell's renewal policy, and Southern Group replied in a letter dated October 28, 2002, that, although coverage had been bound for Ms. O'Connell on July 12, 2002, it had no record of having received Ms. O'Connell's renewal application and the premium payment or a response to its August 2, 2002, notice to the A Able insurance agency that the binder on Ms. O'Connell's renewal had expired. After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group renewal application for Ms. O'Connell was retrieved. On November 26, 2002, Southern Group issued an automobile insurance policy renewal to Ms. O'Connell, with an effective date retroactive to August 14, 2002, the date the renewal would have been effective had the application and premium payment been transmitted to Southern Group timely. Count IX: Carol Scott On July 10, 2002, Ms. High prepared an application for automobile insurance coverage with Southern Group on behalf of Carol Scott. The premium for the coverage specified in the application was $655.00. Ms. High bound the coverage on July 10, 2002. Southern Group did not receive Ms. Scott's application and the agency check for the premium net commission within the 72 hours required by Southern Group's agreement with Mr. Pomerantz. On August 2, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that Ms. Scott's binder coverage had expired because Southern Group had not received the application. Southern Group advised the A Able insurance agency to check its records to make sure that the application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance." The Department of Insurance made an inquiry of Southern Group on October 16, 2002, regarding the status of Ms. Scott's automobile insurance policy, and Southern Group replied in a letter dated October 28, 2002, that, although coverage had been bound for Ms. Scott on July 10, 2002, it had no record of having received Ms. Scott's application and the premium payment or a response to its August 2, 2002, notice to the A Able insurance agency that the binder on Ms. Scott's application had expired. After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group application for Ms. Scott was retrieved. On November 26, 2002, Southern Group issued an automobile insurance policy renewal to Ms. Scott, with an effective date retroactive to July 11, 2002, the date the renewal would have been effective had the application and premium payment been transmitted to Southern Group timely. Count X: Janice Misconis On or about June 25, 2003, Janice Misconis visited the A Able insurance agency office in Pompano Beach to renew her Ocean Harbor automobile insurance policy. Ms. High prepared a Summary of Coverages and Premium covering a 1990 Buick Skylark. Ms. High bound the coverage on June 24, 2002, for a renewal with a policy period commencing July 8, 2002. The premium shown on the summary totalled $570.00, and Ms. High prepared a receipt affirming that Ms. Misconis had paid the $570.00 renewal premium in full on June 25, 2002. In a letter dated October 16, 2002, the Department of Insurance inquired of Ocean Harbor regarding the status of Ms. Misconis's automobile insurance policy. Ocean Harbor responded in a letter dated November 7, 2002, that it had no record of having received an application or premium payment for Ms. Misconis's policy renewal. An Ocean Harbor representative went to the A Able insurance agency office in Pompano Beach on November 15, 2002, and picked up applications and endorsements for automobile insurance coverage. Among these documents was Ms. Misconis's renewal application, and Ocean Harbor issued a policy of automobile insurance coverage, effective retroactively to the date it would have been effective had the application and premium payment been forwarded to Ocean Harbor timely.14 Count IX: Diane Carroll In October 2001, Diane Carroll, a/k/a Diane Heinen, purchased an automobile insurance policy with the Aires Insurance Company ("Aires") from the Wide World of Insurance insurance agency in Margate. After she had an accident and her car was sitting in a repair shop, she cancelled this policy. In late January 2002, Ms. Carroll went again to the Wide World of Insurance office in Margate, and a person working in that office took her application for another automobile insurance policy. The policy was placed with Aires, and the total premium was $2,637.00. The effective date of the policy was February 1, 2002, for the term of one year. Ms. Carroll made a down payment of $660.00, and financed the balance of the premium with Assured Premium Finance Corporation, a company that is serviced by ETI Finance. Ms. Carroll made all of the payments required under the Premium Finance Agreement she signed in January 2002. Ms. Carroll took each of the payments to the Wide World of Insurance insurance agency office in Margate. On January 8, 2003, Ms. Carroll had an automobile accident. She called the Wide World of Insurance insurance agency in Margate to report a claim, and she was told that she did not have an insurance policy, that Aires "went under." The person at the Margate office of the Wide World of Insurance insurance agency told Ms. Carroll that she had been sent notification by mail. Ms. Carroll requested a copy of the letter, which she claims she did not receive. The letter is dated November 27, 2002, and bears the letterhead of "Wide World of Insurance," with a Margate post office address. The letter is addressed to Ms. Carroll at her then-correct address and provides notice that Aires has been "PLACED IN LIQUIDATION ON NOVEMBER 14, 2002, BY THE STATE OF FLORIDA. ALL INSURANCE POLICIES WITH THE ABOVE- CAPTIONED INSURANCE COMPANY SHALL CEASE AS OF 12:01 AM, DECEMBER 14, 2002. PLEASE CONTACT OUR OFFICE IMMEDIATELY TO REPLACE THIS INSURANCE COVERAGE." The name "A Able Wide World of Insurance" is included on the letter. There is no indication on the letter that it was sent by certified mail.15 Summary Count I: Mr. Thierwechter The evidence presented by the Department is sufficient to establish that the refund of unearned commission on Mr. Thierwechter's cancelled Ocean Harbor automobile insurance policy was not made timely by the A Able insurance agency, but was held by the A Able insurance agency from early May 2002, when the A Able insurance agency received the agent statement from ETI Finance showing the debit to the A Able insurance agency's account, until July 1, 2002, when Mr. Pomerantz issued a check for the amount of unearned commission the A Able insurance agency owed to Mr. Thierwechter. Count III: Ms. Shaffer The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that either Mr. Pomerantz or the Pompano Beach office of the A Able insurance agency was involved in any meaningful way in any transactions relating to Ms. Shaffer's physical damage automobile insurance policy. Although, during the summer and fall of 2001, the A Able insurance agency located in Pompano Beach and the Wide World of Insurance agency located in Margate had merged and were doing business as a single entity, Mr. Pomerantz was the agent in charge of the Pompano Beach office. There was no evidence presented to establish that Mr. Pomerantz ever operated in the Margate office or supervised the agents in that office. Even though the Pompano Beach office of the A Able insurance agency is identified as the agent on Ms. Shaffer's U.S. Security policy, there was no creditable evidence presented to establish that anyone in the Pompano Beach office prepared the application for Ms. Shaffer's physical damage insurance policy or was responsible for servicing the policy. The evidence presented by the Department regarding the "additional liability coverage" purchased by Ms. Shaffer is scanty. Although Ms. Shaffer handled the transaction over the telephone with a man in the Pompano Beach office of the insurance agency and the charge on Ms. Shaffer's credit card was credited to the A Able insurance agency in Pompano Beach, there is no evidence identifying the person who prepared the receipt for the premium payment. The totality of the evidence presented by the Department is not sufficient to support an inference that Mr. Pomerantz was personally involved in the transaction or that he knew or should have known of the transaction. Count IV: Terensinha Honczarenko The evidence presented by the Department is not sufficient to establish that Mr. Pomerantz caused Ms. Honczarenko's automobile insurance policy to be cancelled, either directly or through his negligence or the negligence of any of the agents working in the A Able insurance agency Pompano Beach office. All of her dealings were with the Margate office, and there was no evidence that a copy of the notice from Southern Group advising Ms. Honczarenko that she owed additional premium on her policy was sent to the A Able insurance agency at the Pompano Beach address or that it was the practice of Southern Group to send such notices to agents as well as to its insureds.16 The evidence presented by the Department is, however, sufficient to establish that A Able insurance agency received notice from ETI Finance that it owed Ms. Honczarenko a refund of unearned return premium in the amount of $71.95 and that Ms. Honczarenko did not receive this refund. Counts V, VI, VII, VIII, IX, and X: Mr. Worrall, Ms. Mousel, Mr. Hublitz, Ms. O'Connell, Ms. Scott, and Ms. Misconis The evidence presented by the Department is sufficient to establish that Mr. Pomerantz was personally responsible for writing agency checks for premium net commission and for sending applications for automobile insurance coverage generated in the A Able insurance agency Pompano Beach office and premium checks received in that office to the various insurance companies. During the summer and early fall of 2002, Ms. High constantly reminded Mr. Pomerantz that the applications accumulating on his desk needed attention, and Mr. Pomerantz assumed the responsibility for handling the applications when he told her that he would handle them. The evidence presented by the Department is also sufficient to establish that Mr. Pomerantz failed to forward the applications and premiums for Mr. Worrall, Ms. Mousel, Mr. Hublitz, Ms. O'Connell, Ms. Scott, and Ms. Misconis and that the A Able insurance agency had the benefit of the premium payments made by these individuals from the time the coverage binders expired until such time as the policy applications and payments were received by the various insurance companies who issued policies with coverage retroactive to the date of the applications and premium payments. Count XI: Ms. Carroll The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that either Mr. Pomerantz or any employee of the Pompano Beach office of the A Able insurance agency was involved in the transactions with respect to Ms. Carroll's automobile insurance policy with Aires. All of Ms. Carroll's business dealings with regard to this policy were at the Margate office of the Wide World of Insurance insurance agency. Even though the name "A Able Wide World of Insurance" appears on the letter dated November 27, 2002, notifying Ms. Carroll that Aires was in liquidation and that she needed to replace her automobile insurance policy, there was no evidence presented to establish that anyone in the Pompano Beach office prepared the application for Ms. Carroll's policy or had any dealings with her on this or any other automobile insurance policy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order finding that Jay Lawrence Pomerantz 1. Violated Sections 626.561(1), 626.611(4), (7), and (10), and 626.621(2) and (6), Florida Statutes (2002) with respect to Counts I, IV, V, VI, VII, VIII, IX, and X of the Amended Administrative Complaint filed October 14, 2003; Dismissing Counts II, III, and XI of the Amended Administrative Complaint20; and Revoking the property and casualty insurance agent's license of Jay Lawrence Pomerantz. DONE AND ENTERED this 30th day of April, 2004, in Tallahassee, Leon County, Florida. S PATRICIA HART MALONO Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 2004.
Findings Of Fact At all times pertinent to this hearing, Petitioner held a license issued by the Florida Department of Insurance as a general lines insurance agent. On or about April 3, 1979, Steven B. Atkinson entered the Okeechobee Insurance Agency in West Palm Beach, Florida, from whom he had purchased his auto insurance for approximately three years. His intention at this time was to purchase only that insurance necessary to procure the license tags for his automobile, a seven-year-old Vega. He told the person he dealt with at that time at the insurance agency that this was all he wanted. He did not ask for auto club membership, did not need it, and did not want it. He asked only for what he needed to get his tags. However, he was told by a representative of the agency that he needed not only "PIP" insurance, but also auto club membership and accidental death and dismemberment insurance. Of the $144 premium, $31 was for the required "PIP" coverage, $75 was for auto club membership (not required), and $38 was for accidental death and dismemberment (AD&D) (not required). Representatives of the agency told him that he needed all three to get the tags and, though he knew what he was getting and knew he was purchasing all three, he agreed because he was told by the agency representatives that he needed to have all three in order to get his tags. 3 Diane Phillipy McDonald contacted the Okeechobee Insurance Agency in April, 1979, because she had heard on the radio that their prices were inexpensive. All she wanted was personal injury protection (PIP), which was what she thought the law required to get tags on her automobile. When she first called the agency and asked how much the coverage she wanted would be, she was told she could pay a percentage down and finance the rest. When she entered the agency, she was waited on by a man whose name she cannot remember. However, she did not ask for auto club coverage or accidental death and dismemberment coverage, nor did those subjects ever come up in the conversation. She asked only for PIP, and she paid a $50 deposit on her coverage. In return for her deposit, she was given a slip of paper that reflected that she had purchased PIP coverage. She was not told she was charged for auto club membership or accidental death and dismemberment. The forms that she signed, including those which reflect a premium for all three coverages in the total amount of $137, bear her signature, and though she admits signing the papers, she denies having read them or having them explained to her before she signed them. In fact, she cannot recall whether they were even filled out when she signed them. In regard to the papers, the premium finance agreement signed by the witness on April 3, 1979, reflects in the breakdown of coverage total premium of $137. However, immediately below, the total cash premium is listed as $158, $21 more than the total of the individual premiums for the three coverages, and the financing charge is based on that amount1 less the down payment. Marvin W. Niemi purchased his auto insurance from the Okeechobee Insurance Agency in March, 1979, after he heard their advertisement on the radio and went in to get the insurance required by the State in order to get his license tags. When he entered the agency, he asked personnel there for the minimum insurance required to qualify for tags because he was strapped for money at the time and could not afford anything else. He definitely did not want auto club membership. In fact, discussion of that did not even arise, nor did he want the accidental death policy. When he left the agency, he thought he was only getting what he had asked for; to wit, the PIP minimum coverage. All the forms that he signed were blank when he signed them. This application process took place very quickly during his lunch hour from work. He admits giving his son's (David Robert) name as the beneficiary on his insurance, but did not realize at the time that he was purchasing coverage other than the minimum coverage required. His rationale for giving his son's name as beneficiary was that agency personnel asked and the witness felt if there was any money involved, it should go to his son. In fact, Mr. Niemi was sold not only the PIP, but membership in an auto club and PIP coverage with an $8,000 deductible. Again, the total premium was $137, when the actual premium for the coverage he asked for was only $24. Frank Johnson purchased his insurance from Okeechobee Insurance Agency in April, 1979, because he had heard and seen their advertisement on radio and television and it appeared to be reasonable. He wanted only PIP coverage as required by law sufficient to get his license tags. When he entered the agency, he spoke with a man whose name he does not know, who after consulting the books came up with the premium for the coverage to be purchased. During this meeting, the question of motor club or AD&D coverage was not mentioned. His signature does not appear on the statement of understanding, which outlines the coverage and the premium therefor. In this case, because Mr. Johnson had had some prior traffic tickets, his total premium came to $243. His coverage, however, included bodily injury liability, property damage liability, PIP, and auto club. After paying a $50 down payment, he made two additional payments which totaled approximately $50, but thereafter failed to make any additional payments. On August 1, 1980, Marguerite and Steven von Poppel entered the Federal Insurance Agency in Lake Worth, Florida, to purchase their automobile insurance coverage. They purchased policies which included bodily injury and property damage liability, PIP coverage, and comprehensive and collision coverage. The PIP coverage had a deductible of $8,000, and the comprehensive and collision coverage both had $200 deductibles. Mrs. von Poppel indicates that it was not their intention to have such large deductibles on their coverage. In any event, on that day, they gave a check for down payment in the amount of $320 and advised the employee of the agency that upon billing for the balance due of the $915 total premium, they would send the check. Neither Mrs. von Poppel nor Mr. von Poppel desired to finance the balance due of $595, and Mrs. von Poppel did not affix her signature to an application for premium financing with Devco Premium Finance Company dated the same day which bears the signature of Kevin D. Cox as agent. This premium finance agreement lists a cash premium of $966, as opposed to $915. The receipt given to the von Poppels initially reflects a down payment of $320, which is consistent with the receipt, and an amount financed of $646, as opposed to $595, which would have been the balance due under the cash payment intended and desired by the von Poppels. Somewhat later, Mrs. von Poppel received a premium payment booklet from Devco in the mail. When she received it, she immediately went to the Federal Insurance Agency, told them she did not desire to finance the payments, and that day1 September 3, 1980, gave them a check in the amount of $595, which was the balance due on their insurance coverage. This check was subsequently deposited to the account of Federal Insurance Agency and was cashed. This did not end the von Poppel saga, however, as subsequently the von Poppels were billed for an additional amount of $116.18, which reflects the interest on the amount ostensibly financed. When the von Poppels received this statement, they contacted the Federal Insurance Agency and were told that there was some mistake and that the matter would be taken care of. They therefore did not make any further payments, except a total payment of $20, which they were told was still owing. This $20 payment was made on May 29, 1981, after their insurance had been cancelled for nonpayment of the balance due on the finance agreement. The policy was, however, subsequently reinstated, back-dated to the date of cancellation, after the von Poppels complained. Their complaints, however, did nothing to forestall a series of dunning letters from a collection agency to which Devco had referred the von Poppels' account. It is obvious, therefore, that Federal Insurance Agency did not notify Devco of the fact that the amount due and payable had been paid, and did not clear the von Poppels with Devco or with the collection agency thereafter. As a result, the von Poppels filed a complaint with the Insurance Commissioner's office. That terminated their difficulty on this policy. On September 15, 1980, Federal Insurance Agency submitted a check in the amount $595, the amount paid to them by the von Poppels in full settlement of their account, to Devco. There appears to have been no additional letter of explanation, and though Devco credited this amount to the von Poppel account, it did not know to cancel the finance charges since the von Poppels' decline to finance their premium. Of the total amount of the von Poppel premium, the majority, $636, was attributable to the basic insurance in the amount of $10,000-$20,000 liability written by American Risk Assurance Company of Miami, Florida. The supplemental liability carrying a premium of $180 and covering $40,000-$80,000 liability was written by Hull and Company, Inc., out of Fort Lauderdale for Empire Fire and Marine Insurance Company. The third portion of the coverage carrying a charged premium in the amount of $150 covered the AD&D covered by Reliance Standard Life Insurance Company (RSLIC) of Philadelphia, Pennsylvania. This coverage, in the principal sum of $10,000 in the case of Mr. von Poppel and $5,000 in the case of Mrs. von Poppel, was included without the knowledge or the cosnet of the von Poppels. The policies, numbered 10753 R and 10754 R, were never delivered to the von Poppels as, according to an officer of RSLIC, they should have been, but are in the files of the Federal Insurance Agency. Further, the von Poppels were overcharged for the coverage. Respondent, however, did not remit any of the premium to Reliance Standard Life Insurance Company Instead, on August 1, 1980, the same day the von Poppels were in to purchase their insurance, he issued a sight draft drawn on Devco Premium Finance Company to Reliance Standard Life in the amount of $150. Reliance Standard Life was not the same company as Reliance Standard Life Insurance Company, was not controlled by Reliance Standard Life Insurance Company, and in fact had no relation to Reliance Standard Life Insurance Company. Reliance Standard Life was a corporation duly organized and existing under the laws of the State of Florida in which Kevin D. Cox was president and Howard I. Vogel was vice president-secretary. Of the $150 premium, 90 percent was retained by Respondent or his company as commission and 10 percent was transmitted to Nation Motor Club along with a 10 percent commission on policies written for other individuals. Nation Motor Club would then transmit the bona fide premium of 24 cents per $1,000 coverage to RSLIC. More than a year later, on October 16, 1981, Federal Insurance Agency reimbursed the von Poppels with a check for $42.50, representing the unearned portion of the unordered AD&D coverage. Clifford A. Ragsdale went to the Federal Insurance Agency in Lake Worth on April 19, 1982, to purchase his auto insurance because after calling several agencies by phone and advising them of the coverage he wanted, this was the least expensive. To do this, he would read off the coverage from his old policy and get a quote for the identical coverage. After getting this agency's quote, he went to the office where, after talking with two different ladies to whom he described the coverage he desired, he got to the person with whom he had talked on the phone and read his current coverage, and who already had some of the paperwork prepared. During all his discussions with the agency's employees on the phone and in person, he did not speak of, request, or desire auto club membership. He has been a member of AAA since 1977, and his membership there covers all the contingencies he is concerned with. Additional auto club membership in another club would be redundant. He gave the agency representative a check for $247 as a down payment and agreed to finance the balance due through Premium Service Company. Though he was given a receipt for the $247 deposit, the premium finance agreement he signed that day at the Federal Insurance Agency reflected a cash down payment of only $147, thus falsely inflating the balance due to be paid by the client. The $100 difference was refunded to Mr. Ragsdale by Federal Insurance Agency on October 25, 1982, some six months later after he complained to the Insurance Commissioner's office and was told that the $100 difference was for membership in a motor club that he did not desire or agree to. As late as December 29, 1982, over eight months later, the agency had still not remitted the $147 to Premium Service Company, who then added this deposit already paid by the client back to the account balance. Mr. Ragsdale did not read all the documents he signed at the agency, and he never received the policy he ordered. He was told he was signing an application for insurance and signed several instruments in blank at the request of the personnel at Federal Insurance Agency. He was told they would later fill in what wad needed. Respondent was the general lines agent of record for the Okeechobee Insurance Agency, located at 1874 Okeechobee Boulevard, West Palm Beach, Florida, during March and April, 1979, and at the Federal Insurance Agency, 3551 South Military Trail, Lake Worth, Florida, during the period which included August, 1980, and April, 1982. In each agency, he had instructed his' personnel how to serve and handle customers who came to the agency requesting the lowest minimum required insurance in which the agency specialized and which the agency, through its advertising program, purported to offer. As testified to by Linda Holly, an employee of Federal Insurance Agency, and as admitted by Respondent, when a prospective customer entered the agency requesting the minimum required coverage, the agent was to ask if the customer knew what the minimum was. The agent would then explain what was required and quote a premium which included not only the minimum required insurance, but also some additional service which, depending on the time, could be AD&D, towing, motor club, or the like, none of which was required by the State of Florida. Respondent instructed his employees to do this on the rationale that the premiums and commissions on the minimum required insurance were so low that the agency could not make sufficient profit on the sale of it, alone, to stay in business.
Recommendation Based on the foregoing, it is RECOMMENDED: That Respondent's license as a general lines agent in the State of Florida be revoked. RECOMMENDED this 3rd day of August, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings Department of Administration 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of August, 1983 COPIES FURNISHED: Daniel Y. Sumner, Esquire William W. Tharpe, Jr., Esquire Department of Insurance Legal Division 413-B Larson Building Tallahassee, Florida 32301 Mr. Kevin Denis Cox 1483 S.W. 25th Way Deerfield Beach, Florida 33441 The Honorable Bill Gunter State Treasurer and Insurance Commissioner The Capitol Tallahassee, Florida 32301
The Issue Should discipline be imposed by Petitioner against Respondent's license as a life, health, and variable annuity agent (2-15), general lines agent (2-20), and a legal expense agent (2-56), held pursuant to Chapter 626, Florida Statutes (2003)?
Findings Of Fact Facts Established by the Answer Pursuant to Chapter 626, Florida Statutes, you, Brian Whitney McDaniel (Respondent), currently are licensed in this state as a life, health, and variable annuity (2-15), general lines (2-20) and legal expense (2-56) agent, and were so licensed at all times relevant to the dates and occurrences referenced herein. Respondent's license identification no. is A171563. Pursuant to Chapter 626, Florida Statutes, Petitioner has jurisdiction over your (Respondent's) license and appointments. At all times relevant to the dates and occurrences referenced herein Respondent, was employed with Cash Register. Respondent's Duties at Cash Register Respondent was employed at the Cash Register agency in Gainesville, Florida from March 1998 through September 2002. He began his employment as a limited customer service representative (4-40). Respondent became the designated primary agent at the location in June 2000, at which time he was licensed as a general lines agent (2-20). He continued in the capacity as a designated primary agent until his departure from the agency. As the primary agent at Cash Register, Respondent was expected to make sure that the customer service representatives employed at the agency were properly trained and the customers were taken care of in a manner that they were expecting as consumers. Respondent also took care of paper work such as payroll, keeping the lights on, and similar activities. In addition to his supervisory duties Respondent dealt with the public, to include selling insurance to members of the public. The principal form of insurance sold at Cash Register was automobile insurance. Cash Register also sold boat insurance, insurance for motorcycles, and ancillary products, such as towing and rental. Cash Register sold legal insurance underwritten by Southern Legal Services (Southern Legal). Other products sold were hospital indemnity and accidental death benefits policies. The products such as hospital indemnity and legal service plans, were insurance products that could be financed for the balance of the amount due following a down-payment. The towing and rental contracts were not insurance products and not subject to financing. Hypothetically, and the hypothetical pertains to the experiences that customers in this case would typically be exposed to when the customer came into the agency, the customer took a seat and Respondent began to collect necessary information. That information pertained to name, address, phone number, age, driving record, and vehicle information. Then the discussion would turn to the nature of the automobile insurance that the customer was interested in purchasing. That issue concerned whether the customer wanted only property damage liability, and personal injury protection (PIP), as required by the State of Florida to maintain their tag registration or desired greater coverage. Other offerings included bodily injury liability, uninsured motorists, comprehensive and collision. Comprehensive and collision was explained to the customer as being a necessary coverage where automobiles have been financed. The information that had been gathered would be entered into a computer program which Cash Register used. That program was known as "Quick Quote." The quotation method was designed to select the better price from among a number of insurance companies. This process that has been described concerning the quote would pertain equally when quotations were provided over the telephone. Cash Register is affiliated with LR3 Enterprises, Inc. (LR3), its parent company. The parent company insisted that its employees who sold automobile insurance at Cash Register agencies during the time in question follow a script in selling the insurance. This involved the offer of several options to purchase. The first option was to pay the full price of the insurance. The second option was a standard down-payment, which was a greater amount down than the third option. The second option with the greater down-payment carried a smaller monthly payment in the part financed and saved money for the customer over time compared to the remaining option. The third option was a lower down-payment with a larger monthly payment that included necessarily, among other mandatory alternatives, in accordance with the management policy from LR3, the purchase of a legal service plan in relation to traffic violations to include DUIs, accidents, and child support. The legal service plan that is at issue here is legal insurance underwritten by Southern Legal. The value of this required purchase was that if any of the legal services were needed, the insurance plan that was required under option three would help defray the cost for those legal services. Respondent emphasized that the employees within the Cash Register agency must follow the script concerning the three options, failing which the employee would be "fired on the spot." Respondent described how this requirement was the first thing he had been told when he was hired. Having considered this explanation concerning the three options, it leaves the impression that a customer might come to believe that the legal insurance plan was an integral part of the automobile insurance that the customer sought to purchase. This impression could be created notwithstanding the documents that might be produced beyond that point, where careful review might lead one to a different conclusion as to the necessity to purchase the ancillary product. It is a significant issue in that most customers who purchased automobile insurance wanted the lowest down-payment available when transacting business with Cash Register. In this connection, the majority of customers who were served by Cash Register were interested in obtaining "tag insurance," referring to the basic coverage necessary to comply with Florida law. Those are the customers who almost always wanted a low down-payment. Returning to the several options that were explained by Respondent, option two carried a 35 percent down-payment with no necessity to purchase an ancillary product in addition to the automobile insurance. By contrast the third option carried an 18 percent down-payment and the Cash Register agency through its employees, to include Respondent, would require that the customer buy a legal services plan to warrant the low down- payment. Alternatively, the 18 percent down-payment under option three would be available in the instance where a customer bought a motor club contract, towing and rental. In this setting, unlike the legal plan, the towing and rental contract could not be financed. More specifically, Respondent explained that when customers called for a quotation on automobile insurance, he routinely, that is taken to include those instances described in this case, would say to the customer, "There's three different ways of paying for this. You can pay for it all at once, paid in full, the cash price is this, or we have two different payment options. The standard down-payment option is more out of your pocket, but it keeps your monthly low and saves you money in the long run, and it is this. We also have a low down- payment, which is the other way around, it's less money out of your pocket, but your monthly payment goes up and it includes an additional coverage for legal fees for traffic violations, DUIs, accidents. If you need an attorney it helps to pay his fee and that price is this." The same script was followed with customers who came to the office, as opposed to calling on the telephone. Respondent described how the application involved with the purchase of auto insurance was printed and brought to the desk where the customer was located. The application was not the only document involved in the transaction. Among the papers with the insurance application, was a confirmation of coverages, a premium finance agreement, where applicable; and a disclosure form, and a new business receipt, where applicable. All these documents were printed through a computer program. The documents were presented to the customer so that the customer could read it. As Respondent explains, it was not necessary for the employee to read it because the employee was familiar with the information that is established by the documents. A pen would be used to direct attention to documents, the first document pointed out, the confirmation of coverages. An example of the discussion with the customer would be, "You are buying property damage liability with a $10,000.00 limit, personal injury protection with a $10,000.00 limit, with a $2,000.00 deductible. You are rejecting bodily injury liability. You are rejecting uninsured motorists. You are purchasing comprehensive and collision with a $500.00 deductible. You chose the low down-payment option so you are purchasing the legal protection plan which goes with the low down-payment option. Please sign both of these signatures and date it for me." The arrangement was one in which the low down-payment option necessarily committed the customer to purchasing a legal protection plan as Respondent describes the arrangement. The next document in the series was in relation to the automobile insurance application per se. By using a pen the Respondent would show the purchaser what they were obtaining in coverage and what they were not. Respondent would gain the signature from the customer. Next in series, depending on the nature of the option pursued by the customer, was the legal protection plan or motor club, if it was involved in the purchase; the finance agreement; and the disclosure form and receipt, as applicable. Copies of the documents that have been identified were provided to the customers. Other remarks concerning the legal protection plan, which Respondent would make to the customers, would be that it helps to pay legal fees such as, if you were given a ticket that is contested or an accident where the customer is being sued, or have issues concerning child support, the plan would help to pay for legal fees. Nothing in this explanation was designed to explain to the customer that the legal insurance was not part of the automobile insurance. Count I Beverly Akpo-Sani On November 27, 2001, Beverly Akpo-Sani went to the Cash Register in Gainesville and purchased automobile insurance. She was waited on by Respondent. Ms. Akpo-Sani intended only to purchase what the state required to maintain coverage for her 1988 Plymouth station wagon. She also discussed the requirement for an SR-22, which is a Florida financial responsibility form to provide proof of insurance. Respondent followed the script that has been set forth earlier in selling automobile insurance and legal insurance plan to Ms. Akpo-Sani, with the exception that additional discussion was held concerning the SR-22 Florida financial responsibility form. Respondent described to Ms. Akpo-Sani the three agency options for purchasing the automobile insurance. Her interest was to have a low down-payment. As a consequence, Respondent offered her option three. Ms. Akpo-Sani applied for automobile insurance from Direct General Insurance Company (Direct General Insurance). Petitioner's Exhibit numbered 1. Ms. Akpo-Sani also executed a document in relation to legal insurance, referred to as "Sav-Cash Traffic Protectors," for pre-paid traffic violation insurance. That insurance was underwritten by Southern Legal. A copy of the document supporting the purchase is Petitioner's Exhibit numbered 3. Ms. Akpo-Sani and Respondent signed the document. On its face it indicates that it was paid for through a premium finance agreement with Direct General Financial Services, Inc. (Direct General Financial), and an amount of $105.00 is stated. In pertinent part, the document related to the pre- paid traffic violation insurance stated: Cardholder acknowledges receipt of goods and/or services in the amount of the total shown hereon and agrees to perform the obligations set forth in the cardholder's agreement with the issuer. I hereby apply for participation in Southern Legal Services Plan, Inc. SL 210 Driver's Protection Legal Plan, and acknowledge coverage is conditioned by receipt and approval by the Company. I understand that legal services will be provided under the plan for certain legal proceedings and that I am responsible for all costs associated with any matter. I agree to abide by the provisions and rules of the plan. I agree and authorize that the premiums be paid as indicated above. I understand that my attorney-client relationship will be with the attorney providing legal services under the plan and not with Southern Legal Services Plan, Inc. I represent that to the best of my knowledge all of the information contained herein is correct and that no person to be insured under this policy is now involved in any litigation, court proceedings, or other matter which could result in legal action. Petitioner's Exhibit numbered 3, which is by way of an application, was to be mailed to Robinson Insurance Agency c/o CTA in Palm Coast, Florida. Other than the information which has been quoted from the application document, the exact nature of the coverage provided by the pre-paid traffic violation insurance has not been explained in this record. Although Ms. Akpo-Sani signed the document applying for the legal insurance as reflected in Petitioner's Exhibit numbered 3, she believed that she was purchasing automobile insurance and to the extent that the legal insurance was not part of the automobile insurance purchase she had no intent to buy it. Respondent did not explain adequately the legal insurance purchase. Instead Ms. Akpo-Sani was led to believe that it was part of the procedure necessary to get her automobile insurance policy. No oral explanation was made that the cost of the legal insurance was an additional charge. Ms. Akpo-Sani was provided additional documents that portrayed the legal insurance as a different cost item, mainly the Premium Finance Agreement with Direct General Financial. A copy of that finance agreement is Petitioner's Exhibit numbered 5, which was signed both by Ms. Akpo-Sani and Respondent. On its first page under the schedule of policies, it separately sets out that the auto coverage was for a premium of $688.00, with $124.10 down and the balance to be paid to Direct General Insurance on her behalf. The schedule of policies refers to the legal insurances as "LGL," totaling a $105.00 premium, with $18.90 down and $86.10 to be paid to Southern Legal on Ms. Akpo-Sani's behalf. But the document goes on to set out the total premium financed in the aggregate, without separately stating the amount related for Direct General Insurance and the Southern Legal, with installment payments in the aggregate of $73.68, to be made in connection with both purchases at an annual percentage rate of 27.29 percent. The second page in disclosing information about her purchases referred to the PIP, property damage liability, and bodily injury pertaining to an SR-22 requirement. It goes on to describe the legal services purchase separately on the second page. Ms. Akpo-Sani received a receipt, referred to as a New Business Receipt drawn on a form by Cash Register. That receipt is Petitioner's Exhibit numbered 4. It breaks out the cost items under a heading entitled "Vehicle(s)," wherein it sets out property damage liability, PIP, and bodily injury liability, all in the automobile insurance coverage category, as well as the driver's protection legal plan, which is not part of the automobile insurance. Nonetheless, it is depicted under the heading "Vehicle(s)." The document explains the amount tendered as an aggregate amount paid, which would be constituted of $124.10 for the automobile insurance and $18.90 for the legal plan, totaling $146.00 as depicted on the receipt. The document goes on to describe the "policy total" under the section in relation to the vehicle as being $796.00, which would include both the automobile insurance and the driver's protection legal plan. Other than the brief reference to the drivers protection legal plan depicted as part of the "Vehicle(s)," the balance of the receipt provides information concerning the automobile insurance side of the purchase. Another document provided to Ms. Akpo-Sani and signed by her on the occasion, was a document titled "Confirmation of Coverages." It is Respondent's Exhibit number 5. In relation to purchases made it sets out the property damage liability, and the PIP as required coverage, bodily injury liability as optional coverage, and the election of a driver's protection legal under ancillary products identified as optional. Although the document refers to the legal insurance as an optional opportunity, by the design of the form, given the manner in which this sale was made to Ms. Akpo-Sani, the impression created by Respondent would lead one to believe that it was not an option for her to decline the drivers protection legal. Instructions within the Confirmation of Coverages document explain the several parts. These parts are: auto insurance coverages required (1, 2), optional auto insurance coverages (3-6) and ancillary products (optional) (7-10), among them the driver's protection legal (10). The instructions state: Please READ the ten (10) sections above to be sure the coverages or benefits circled or checked are the coverages or benefits you want. The terms 'Full Coverage', 'Minimum Coverage', and 'State Required Coverage' are not specific enough to assure that you are buying the insurance coverages or benefits you want. The above confirmations are meant to protect you, your agent, and your insurance company from misunderstandings. If 'NO COVERAGE' or 'DECLINED' is marked in any section, you are not buying that sections coverages and benefits. COVERAGES AND BENEFITS ARE SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE INDIVIDUAL POLICIES OR PLANS. Please read the policy jacket or plan descriptions that re available to you for detailed definitions of the coverages and benefits. If you still have questions, ask your agent to explain in more detail. Items seven (7) through ten (10) are high commission items that allow the agency to make a reasonable profit and continue to offer you the most competitive rates available on your auto insurance. These are separate plans from your auto policy and are optional. I have read, confirm and consent to the coverages and benefits indicated on this form. The instructions identify ancillary products, to include the driver's protection legal, as separate from the auto policy but the sales pitch by Respondent related to option three did not treat the purchase in that manner. It made the purchase of the legal plan appear mandatory. Moreover the instructions themselves make it appear that the ancillary products are linked with the auto insurance in the interest of establishing competitive auto insurance rates. Ms. Akpo-Sani did not read the application for pre- paid traffic violation insurance which is Petitioner's Exhibit numbered 3 before signing it. Similarly Ms. Akpo-Sani did not notice the details within the Premium Finance Agreement. Petitioner's Exhibit numbered 5. Ms. Akpo-Sani did not read the Confirmation of Coverages document, Respondent's Exhibit numbered 5, before signing. Mr. Akpo-Sani was in a hurry and this explains why she did not take the time to carefully read the documents that have been described. Count II Samina C. Ashraf On July 20, 2001, Samina C. Ashraf purchased automobile insurance at Cash Register in Gainesville from Respondent. Respondent also sold Ms. Ashraf pre-paid traffic violation insurance underwritten by Southern Legal as part of the transaction. Petitioner's Exhibit numbered 19 is the deposition provided by Ms. Ashraf which forms the basis of her testimony for hearing purposes. Attached to that deposition are various exhibits. Exhibit "A" is the application for insurance with Direct General Insurance. Exhibit "B" is Confirmation of Coverages document. Exhibit "C" is a document referring to a travel protection plan, which cost $60.00 as a premium. Exhibit "C" is related to bail bond coverage, ambulance assistance, collision loss of use, theft loss of use, emergency travel loss of use, and personal effects loss from an auto rented as a result of loss under previously stated coverages. Exhibit "D" to the deposition is the application for pre-paid traffic violation insurance through Southern Legal. Exhibit "E" to the deposition is the Premium Finance Agreement with Direct General Financial, which sets out costs related to the basic automobile insurance, the legal insurance, and the travel protection plan, which is a type of motor club. The automobile and legal insurance was financed beyond the down-payment. The motor club premium was fully paid at the time the transaction commenced. In format the application with Direct General Insurance, the Confirmation of Coverages document, the pre-paid traffic violation insurance underwritten by Southern Legal, and the Premium Finance Agreement are the same as has been discussed concerning Ms. Akpo-Sani. Highlighting the Ashraf transaction, $105.00 was paid for the legal insurance, consisting of an $18.90 down-payment, with $86.10 to be financed with Direct General Financial. The Premium Finance Agreement with Direct General Financial included the automobile insurance and legal insurance, with a total amount to be financed of $873.15 at 25.71 annual percentage rate, $97.93 due on each payment financed. When Ms. Ashraf arrived at Cash Register she was interested in purchasing the minimum insurance necessary for her automobile. She had just purchased the auto and told Respondent that she needed to obtain insurance and return to the car lot where she had purchased the auto and show proof of insurance coverage. Ms. Ashraf was interested in a low down-payment for auto insurance. Respondent told her that she could pay the full amount of the insurance premium. Alternatively, Respondent explained what the down-payment amount would be and the continuing payment process beyond that point in time. In discussing towing and rental, Respondent told Ms. Ashraf the cost for that premium. Respondent explained the towing option (motor club) to Ms. Ashraf. Respondent did not tell Ms. Ashraf of other options available, to include the legal plan, as she recalls the transaction. Ms. Ashraf did sign the various documents involved in the transaction that have been described. The documents that have been identified were stacked one on top of the next. Respondent told Ms. Ashraf in relation to those documents, "Just sign here, here, here, here." Respondent did not discourage Ms. Ashraf from reading the documents but she did not read them. She was in a hurry. She had told Respondent that she was only interested in the automobile insurance that was necessary in association with the purchase of the car on that day. She erroneously assumed that Respondent was giving her what was needed and nothing more. Aside from the motor club, which Ms. Ashraf knowingly purchased, she did not realize that she had also purchased legal insurance through Southern Legal. Respondent had not separately explained that the legal insurance product was optional and that it was not part of the basic auto insurance policy or that there was an additional charge for the legal plan, notwithstanding any written explanation provided that would suggest otherwise. In relation to the Premium Finance Agreement, Respondent explained the portion dealing with the amount financed, the finance charge, the total payments, and the total sales price, but not the individual breakout of charges set out at the top of the document. Count III Kim Langford and Count IV Joana Samad Kim Langford and Joana Samad bought auto insurance from the Cash Register agency in Gainesville and the legal plan through Southern Legal, as alleged in the Amended Administrative Complaint. However, Respondent did not sell the legal plan to these customers. He was not immediately involved with either transaction and cannot be factually implicated under terms set forth in the Amended Administrative Complaint.1 Count V Albert B. Tomes On November 2, 2001, Albert B. Tomes bought auto insurance from Respondent at Cash Register in Gainesville. The company that he purchased the automobile insurance from was Direct General Insurance. The application for auto insurance is Respondent's Exhibit numbered 24. Respondent also sold Mr. Tomes pre-paid traffic violation insurance underwritten by Southern Legal. Petitioner's Exhibit numbered 13. The format of the application for the legal insurance is the same as with Ms. Akpo-Sani. The total cost of the legal insurance was $105.00. During the transaction, a Confirmation of Coverages document was executed. Respondent's Exhibit numbered 27. A Premium Finance Agreement was entered into following a down- payment in relation to the Direct General auto coverage insurance and the legal insurance through Southern Legal. Respondent's Exhibit numbered 25. The format of Confirmation of Coverages and the Premium Finance Agreement through Direct General Financial were the same as with the transaction involving Ms. Akpo-Sani. The documents that have been described were laid out in front of Mr. Tomes and he quickly signed his name and initials where necessary. As he explains it, he was told, "Initial here, initial here, initial here, sign this, sign this, and that's what I did." Mr. Tomes was there at the agency about 20 minutes. Mr. Tomes signed all documents that have been described in relation to the transaction. Mr. Tomes did not read the Premium Finance Agreement which he signed that set out the charges for the auto insurance and legal insurance. Mr. Tomes signed the Confirmation of Coverages document without reading it. Mr. Tomes paid a down-payment for the auto insurance of $107.50, with a premium to be financed in the amount of $358.00. He paid $31.50 as a down-payment for the legal insurance, with $73.50 to be financed. As reflected in the Premium Finance Agreement pertaining to the purchase of auto insurance, and legal insurance, the total amount financed was $325.40 at an annual percentage rate of 33.55 percent. The installment amount for each payment was $37.75. Mr. Tomes had called ahead before going to Cash Register. Information provided in the telephone call described a down-payment and monthly payments beyond that point. When Mr. Tomes arrived at Cash Register and spoke to Respondent, he was told by the Respondent that the automobile insurance could be paid for in cash or a down-payment could be made in monthly payments to follow. Mr. Tomes was told by Respondent that if more were paid down, then the monthly payments would be lower in cost. Although Mr. Tomes acknowledged signing the application for pre-paid traffic violation insurance, he does not recall seeing the document on November 2, 2001. He did not understand what he was buying as evidenced by the document. The product described in the document was not explained to him by Respondent. All that Mr. Tomes was interested in purchasing was automobile insurance sufficient to "be legal." He just wanted the basic automobile insurance coverage, and that is what he asked for. He understood this to mean PIP coverage. Although Mr. Tomes does not recall the application for legal insurance and its terms, Respondent and Mr. Tomes generally discussed the legal plan. Mr. Tomes told Respondent he did not want the legal plan. Respondent said to Mr. Tomes "You don't have to have the legal plan just take the standard down-payment option. I know that is a little harder on your checkbook today, but it keeps your monthly payment a lot lower and saves you money in the long run." This is taken to mean the option that required a larger down-payment and smaller monthly payments without having to purchase the additional product, the legal plan. Mr. Tomes told Respondent in reply "Well, I want the low down-payment option but I don't want the legal." Respondent said in turn that he couldn't do it that way. He stated that if Mr. Tomes took the 18 percent down-payment, he would also have to take the legal plan. Mr. Tomes was not happy with that arrangement where he was allowed a low down-payment conditioned upon the purchase of the legal plan but ultimately "did it." Count VI Raymond L. Washington On September 19, 2001, Raymond L. Washington purchased automobile insurance from Cash Register in Gainesville. Respondent was the employee for the agency involved in the transaction. The automobile insurance was purchased from Direct General Insurance. At the same time, Respondent sold Mr. Washington pre-paid traffic violation insurance from Southern Legal and a motor club contract from American Bankers Motor. A Premium Finance Agreement was entered into between Mr. Washington and Direct General Financial in relation to the automobile insurance and the legal insurance. A Confirmation of Coverages document was executed on this occasion. The format of all documents that have been described was the same as for the Akpo-Sani transaction. Mr. Washington signed all the documents. The automobile insurance application is Respondent's Exhibit numbered 28. The application for pre-paid traffic violation insurance is Petitioner's Exhibit numbered 15. The Premium Finance Agreement with Direct General Financial is Respondent's Exhibit numbered 29. The Confirmation of Coverages document is Respondent's Exhibit numbered 31. The Premium Finance Agreement sets out a down-payment of $93.10, with a balance to be paid of $418.90 pertaining to the automobile insurance. Mr. Washington, according to the Premium Finance Agreement, paid $18.90 down for the legal insurance, with $86.10 to be paid through installment payments. The Premium Finance Agreement sets out that $567.10 in the aggregate was financed for the auto insurance and for the legal insurance, at an annual percentage rate of 28.22 percent. The monthly payment was $64.30. The motor club was a $60.00 one time premium payment. On the date in question, Mr. Washington went to Cash Register with the intent to purchase basic insurance, what he refers to as "PIP." He told Respondent what he wanted to buy. Respondent offered towing and rental insurance. Mr. Washington was interested in that offering and purchased the towing and rental through the motor club contract. By contrast, Mr. Washington has no recollection of the discussion between the parties of the legal insurance through Southern Legal. He was told he needed to sign the document applying for the legal insurance and that he should have it. The legal insurance was not something he was interested in purchasing. Mr. Washington had called for a quotation of the price of auto insurance before arriving at Cash Register. Once there, he spent approximately one and one-half hours to finish his business. Respondent explained the several options for auto insurance, to include the cash purchase, a higher down-payment or a lower down-payment, with the purchase of an additional product. Mr. Washington wanted to make a lower down-payment. While at the agency Mr. Washington read some of the Premium Finance Agreement but not in all its details. He did not read the top of the document referring to the schedule of policies, with the types of coverage and the listing of the auto insurance, legal insurance and motor club. He did not read the upper right portion of the document pertaining to the companies being paid through the finance agreement. He read the part setting forth the monthly amount to be paid as an installment, which was $64.30. Mr. Washington did not read the application for legal insurance through Southern Legal before signing the document. Concerning the Confirmation of Coverages, Mr. Washington looked at that part of that document that told him to read all ten sections above. But he did not read item 10 which had a check-mark placed next to the driver's protection legal plan SL-210-A. Although Mr. Washington was at the agency for over an hour, he did not feel that he had time to read all the documents provided him. He was in a hurry to leave. Mr. Washington cannot remember the details of the discussion but he does recall that some questions that he asked Respondent concerning the transaction were not fully addressed. He has no recollection of any discussion of item 10 within the Confirmation of Coverages document associated with the driver's protection legal plan, and he did not realize that he had purchased the legal insurance. Respondent recalls his dealings with Mr. Washington and the offering of the three options to purchase auto insurance and that Mr. Washington chose the low down-payment option. Count VII Change of Address On August 1, 2003, Respondent became an agent for Allstate at West Newberry Road, Highway 26, Jonesville, Florida, without notifying Petitioner of this change in his business address. According to records maintained by the Petitioner, Respondent had not provided information concerning the change of address as late as March 3, 2004. Petitioner's Exhibit numbered 18. Respondent proceeded with the mistaken belief that once he was appointed as an agent for Allstate, that the insurer would notify Petitioner of that appointment and presumably include information on the address of his business.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That a Final Order be entered finding Respondent in violation of those provisions within Counts I, II, and V through VII, that have been concluded as violations, dismissing the others within those counts, dismissing Counts III and IV; suspending Respondent's licenses for one year, imposing a $100.00 administrative fine, placing Respondent on two years' probation and requiring attendance at such continuing education courses as deemed appropriate. DONE AND ENTERED this 1st day of July, 2004, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of July, 2004.
The Issue Whether the Respondent's insurance licenses should be disciplined on the basis of the alleged multiple violations of Chapter 626, Florida Statutes, as set forth in the Administrative Complaint.
Findings Of Fact Petitioner is the state agency charged with licensing insurance agents of all types, regulating licensure status, and enforcing the practice standards of licensed agents within the powers granted by the Legislature in Chapter 626, Florida Statutes. At all times material to these proceedings, Respondent Wolfe was licensed as an insurance agent in the following areas: Ordinary Life, Ordinary Life including Disability Insurance, General Lines, and Disability. Respondent was also registered with the Department as an Automobile Inspection and Warranty Salesperson. Respondent Wolfe conducted his insurance business through Edison Insurance Agency, Inc. (hereinafter Edison), which is located in Fort Myers, Florida. The Respondent is the President, the Director, and sole shareholder of the insurance agency. All of Edison's personnel who collected funds in a fiduciary capacity, on behalf of the insured named in the Administrative Complaint, acted through the supervision and control of Respondent Wolfe, the licensed general lines agent of record at Edison. One of the services provided to customers who sought insurance through Edison was the agency's processing of premium financing applications. If an insurance customer decided to finance premium payments, the Respondent or agency personnel, would arrange premium financing for the customer through Regency Premium Finance Company (hereinafter Regency). Once the insurance customer's application to Regency was processed, Regency would issue a check for the financed portion of the premium. The check would name Edison as the payee, and would be sent to the agency's offices. The Respondent or agency personnel acting through his licenses, were then required to remit the money to the insurance company to obtain the insurance coverage selected by the proposed insured. Count I On October 7, 1986, Regency issued a check in the amount of eleven thousand eighty four dollars and twenty five cents to Edison. Upon receipt of the check, Edison paid the outstanding balance of the premiums owed to Canal Insurance Company by Shirley Turlington, who became insured with the company through Edison on July 16, 1986, under policies numbered P02 31 71, and 14 43 39. On November 7, 1986, a Notice of Cancellation was sent by Regency to the insurer as the insured did not pay an installment payment, as agreed, by October 16, 1986. The insurance policies were cancelled by the insurer, and an unearned premium of ten thousand one hundred and twenty four dollars was credited to Edison's account with Dana Roehrig & Associates, an authorized representative of Canal Insurance Company. Pursuant to the Premium Finance Agreement signed by the insured Shirley Turlington, Regency was assigned all unearned premiums returned by the insurance company on these specific policies. Shirley Turlington was not entitled to the unearned premiums credited to Edison's account by Canal Insurance Company through Dana Roehrig & Associates. A determination of Regency's entitlement to the unearned premium refund is currently pending in a civil action. Count II On March 16, 1987, Regency issued a check in the amount of nine thousand four hundred and forty one dollars to Edison. The purpose of the check was to have Edison pay the outstanding balance of the premium owed to Canal Insurance Company by Guillermo Rodriguez for a commercial automobile liability policy numbered 152 656. In reality, the amount of money necessary for payment to Canal Insurance Company had already been earmarked in the account maintained by Dana Roehrig & Associates which shows the credits and debits placed on Edison's business transactions with Dana Roehrig & Associates. The premium was paid, and the policy was issued by Canal Insurance Company with an effective date of February 2, 1987. In the premium finance agreement completed on behalf of Mr. Rodriguez in Edison's Offices, the inception date of the policy was projected for March 29, 1987. Respondent Wolfe and Edison personnel were unable to bind Canal Insurance Company so that an actual policy number and policy inception date were unknown by Edison at the time the finance agreement with Regency was completed at the agency. As the commercial automobile liability market was very active at Dana Roehrig & Associates during this time period, it is unknown what basis was used for the projected inception date of the policy. On May 27, 1987, a Notice of Cancellation was sent by Regency to the insurer as the insured did not pay an installment payment, as agreed, on April 29, 1987. The policy was cancelled September 25, 1987. No evidence was presented at hearing to demonstrate what happened to the unearned premium refund. Count III On March 24, 1987, Regency issued a check in the amount of twenty one thousand four hundred thirty five dollars to Edison. The purpose of the check was to pay the outstanding balance of the premium on a commercial automobile liability policy from Lumbermans Mutual Insurance Company which had been applied for by Thomas Gleason through Edison. Edison did not purchase an insurance policy for Mr. Gleason with the funds sent to Edison by Regency for that purpose. The check from Regency was cashed, and the funds were commingled with other funds in the agency's account number 632717. Count IV On April 21, 1987, Regency issued a check in the amount of twenty five thousand one hundred and fifty eight dollar and seventy five cents to Edison. The agency was to apply these funds against the outstanding balances on premiums for Clayton Olding, Inc., a trucking firm. The proposed insured had applied for insurance coverage from Canal Insurance Company and Cadillac Insurance Company. Edison paid for policy number 155941 with Canal Insurance Company with check number 7120. The premium amount and the inception date listed on the Regency premium finance agreement were correct. A notice of cancellation was sent to Canal Insurance Company on July 1, 1987, as Clayton Olding had failed to pay the installment due Regency on June 13, 1987. However, the policy had already been cancelled by the insured on June 1, 1987. A credit of nineteen thousand one hundred seventeen dollars and eighty cents was placed against Edison's account with Dana Roehrig & Associates, the authorized representative for Canal Insurance Company. Paperwork given to Clayton Olding, Inc. represented that the company was insured by Cadillac Insurance Company through Edison. Edison was the authorized agent of Cadillac Insurance Company and was able to temporarily bind the company. However, the money which was to be given to Cadillac Insurance Company as the down payment on the insurance premium was never sent to the insurer. Instead, Rose Delaney, an employee of Edison, created interagency documents which reflected that the money had been sent, and took the money for her own personal use. When Clayton Olding, Inc. notified Ms. Delaney to cancel the policy on June 1, 1987, this customer believed that Edison had acquired the insurance policy requested with Cadillac Insurance Company. Clayton Olding, Inc. received a refund from Edison after the cancellation of the two policies in the amount of approximately one thousand dollars. It was not revealed at hearing whether the refund related to the Canal Insurance Company policy or the Cadillac Insurance Company policy, or both transactions. Count V On April 28, 1987, Regency issued a check in the amount of four thousand five hundred and sixteen dollars to Edison for payment of the outstanding balance of the premium purportedly owed by Arthur Farquharson to Canal Insurance Company through Edison. Edison did not purchase an insurance policy for Mr. Farquharson with the funds sent to Edison by Regency for that purpose. The check from Regency was cashed, and the funds were commingled with the funds in the agency's checking account numbered 632717. The policy requested by Mr. Farquharson was never obtained by Edison on his behalf. Counts VI through VIII Count VI through Count VIII of the Administrative Complaint involve requests from proposed insured to purchase insurance through Edison. The proposed insured were Clinton Roole, Bertel Alexander Prince, and A & E Young Trucking, Inc, respectively. In each application for insurance, the proposed insured requested premium financing through Regency. Regency issued checks on behalf of these proposed insured to Edison. The agency was to pay the outstanding balances on insurance premiums in the policies purportedly obtained by Edison on behalf of these customers. Edison did not properly apply the funds sent to the agency by Regency because the requested policies were never purchased by Edison on behalf of these customers. The checks from Regency were cashed by the agency, and commingled with other funds in the agency's checking account numbered 632717. The customers did not receive the benefits requested from Edison, their insurance agency. Count IX On May 7, 1987, Regency issued a check in the amount of thirty two thousand one hundred and nine dollars to Edison. The agency was to apply the funds against the outstanding balances on three policies which were purportedly applied for from the following companies through Edison: Canal Insurance Company, Cadillac Insurance Company, and South Atlantic Council. The proposed insured was Charles Bernardo d/b/a ABX, Inc. A binder of insurance was issued by Canal Insurance Company to Mr. Bernardo for a fifteen day period which expired on April 28, 1987. A full policy was never purchased by Edison on behalf of Mr. Bernardo with the funds sent to Edison by Regency for that purpose. No information was provided at hearing regarding the purported application for insurance from South Atlantic Council on behalf of Mr. Bernardo through Edison. The check from Regency to Edison was cashed, and the funds were commingled with other funds in the agency's checking account numbered 632717. Mitigation All of the insurance transactions involved in the Administrative Complaint were conducted by Rose Delaney, an employee of Edison. During the months of March 1987 through May 1987, this employee was involved in a complex embezzlement and document falsification scheme in which she embezzled funds from the insurance agency and created phoney insurance policies and premium financing agreements, as well as false agency control documents, to cover her misdeeds. Respondent Wolfe was unable to discover this embezzlement scheme until May 23, 1987. His inability to detect the scheme was based upon a number of extraordinary factors, in spite of his reasonable attempts to supervise his insurance business and the employees with the high degree of care commensurate with his responsibilities as an insurance agent. These extraordinary factors were: the rapid and intense growth of Respondent's business during this time period; the redesign of the computerized accounting program by the agency's accountant, who failed to recognize that he had disabled an account reconciliation function within the program; the sophistication of Ms. Delaney's embezzlement scheme, and her ability to generate false documents within the agency setting which hid her crimes from the supervisory reviews conducted by Respondent Wolfe over a two and one half month period. Rose Delaney, the perpetrator of the embezzlement and documentation falsification scheme, is currently being treated in a mental health institution for mental illness. She has been diagnosed as having major depression with psychotic features as well as suffering from latent schizophrenia, paranoid type. Based upon the professional opinions of the two psychiatrists who examined Ms. Delaney, she was insane during the time she handled the insurance transactions set forth in the Administrative Complaint. The McNaughton standard was applied by both of the experts, and no evidence to the contrary was presented during the administrative hearing.
Recommendation Based upon the foregoing, it is RECOMMENDED: That the Respondent, Gary Stephen Wolfe, be found not guilty of all nine counts set forth in the Administrative Complaint. DONE and ENTERED this 5th day of September, 1989, at Tallahassee, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1989. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-4927 Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO# 2. Accepted. See HO# 2. Accepted. See HO# 3. Accepted. See HO# 3. Petitioner's findings do not contain a number 5. Accepted. See HO# 3. Accepted. Accepted. See HO# 4. Accepted. Accepted. See HO# 5. Rejected. See HO# 27. Accepted. See HO# 5. Accepted, but for further exposition of the facts, see HO# 7. Accepted. See HO# 5. Accepted. See HO# 6 and # 7. Accepted. Accepted. Rejected. See HO# 27. Accepted. See HO# 8. Rejected. Irrelevant. See HO# 8. Rejected. See HO# 10. Accepted. Accepted. Rejected. See HO# 27. Accepted. See HO# 11. Accepted. See HO# 12. Accepted. See HO# 12. Accepted. Accepted. Rejected. See HOC 27. Accepted. See HO# 13. Rejected. Irrelevant. See HO# 13. Rejected. Irrelevant to pleadings. See HO# 13. Rejected. Irrelevant to pleadings. See HO# 13. Accepted. See HO# 14. Accepted. See HO# 14. Accepted. See HO# 14. Accepted. Accepted. Rejected. See HO# 27. Accepted. See HO# 17. Accepted. See HO# 18. Accepted. See 1O# 18. 43.-48. Not provided to the Hearing Officer. Accepted. See HO# 18. Accepted. Accepted. Rejected. See HO# 27. Accepted. See HO# 19. Accepted. See HO# 20. Accepted. See HO# 20. Accepted. Accepted. Accepted. See HO# 19. Accepted. See HO# 20. Accepted. See HO# 20. Accepted. Accepted. Rejected. See HO# 27. Accepted. See HO# 19. Accepted. See HO# 20. Rejected. Cumulative. Rejected. Improper summary. Rejected. Cumulative. Rejected. See HO# 25 and #27. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant and immaterial. Rejected. Irrelevant. Accepted. See HO# 25. Rejected. See HO# 27. Rejected. Irrelevant. Improper shifting of burdens of proof. Not an ultimate issue in these proceedings. Rejected. Immaterial. Outside the scope of the pleadings. Rejected. Contrary to fact. A co-signer was required on any checks signed by Ms. Delaney. Rejected. Outside the scope of the pleadings. Accepted that Respondent Wolfe was not personally involved in the wrongdoings committed by Ms. Delaney. See HO# 25. The rest of paragraph 84 is rejected as argumentative. Rejected. Irrelevant - Argumentative. Rejected. Improper summary. Rejected. Argument as opposed to proposed finding of fact. Improper summary. Respondent's proposed findings of fact are addressed as follows: Accepted. See HO# 2. Accepted. See HO# 3. Rejected. Irrelevant. Accepted the first statement in paragraph 4. See HO# 9. The rest is rejected a- irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Accepted. Rejected. Irrelevant. Rejected. Irrelevant. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO# 26. Accepted. Rejected. Irrelevant. Rejected. Not established by competent evidence. Accepted. Rejected. Improper summary with many factual conclusions that are immaterial to the allegationS in the Administrative Complaint. Rejected. Irrelevant to these proceedings. Rejected. Irrelevant. Accepted. Accepted. Accepted. Rejected. Not established by competent evidence. Rejected. Irrelevant to these proceedings. Accepted. Accepted. See HO# 27. Accepted. Accepted. See HO# 25. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Improper summary. For rulings on each transaction, refer to Findings of Fact in the Recommended Order. Accepted. See HO# 25. COPIES FURNISHED: S. Marc Herskovitz, Esquire Office of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Joseph D. Stewart, Esquire Hardt & Stewart 801 Laurel Oak Drive Suite 705, Sun Bank Building Naples, Florida 33963 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol Tallahassee, Florida 32399-0300 Don Dowdell, Esquire General Counsel Department of Insurance The Capitol Tallahassee, Florida 32399-0300 =================================================================
