Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to the allegations of the First Amended Administrative Complaint, respondent Dennis Victor Daniels was licensed as an Ordinary Life including Disability Agent in Florida and was employed by Gulf Health/Life, Inc. in St. Petersburg, Florida. On or about January 14, 1980, Julie Stratton (then Julie Marzec) contacted respondent at the offices of Gulf Health/Life, Inc. for the purpose of purchasing health insurance. She and respondent discussed different insurance policies, and respondent informed her that if she joined the American Benevolent Society (ABS) she could obtain a lower rate for her policy and obtain the best policy for her money. Mrs. Stratton could not remember if respondent informed her of the exact amount of money she would save on her insurance if she joined the ABS. She was informed that other benefits and discounts from area businesses would be available to her as a member of the ABS. Mrs. Stratton joined the ABS in order to obtain less expensive insurance. She wrote two checks -- one in the amount of $15.00 payable to the ABS and the other in the amount of $54.26 payable to CNA Insurance Company. She obtained two insurance policies. The form numbers on these policies were 51831 and 52176. Based upon a referral from an agent with Allstate Insurance Company, John Valentine and his wife went to the offices of Gulf Health/Life in order to obtain hospitalization and surgical insurance coverage. Before moving to Florida, Mr. Valentine was covered by a group policy through his place of employment. Respondent informed Mr. Valentine that members of the ABS could obtain a policy at group rates which entailed a lesser premium than individual rates. Mr. Valentine wrote two checks -- one in the amount of $178.73 payable to CNA Insurance Company and the other in the amount of $25.00 payable to the ASS. Mr. Valentine received two policies from CNA -- one bearing form number 51831 and the other bearing form number 52176. He also received a brochure listing the places of business from which he could receive discounts as a member of the ABS. Gulf Health/Life, Inc. was a general agent for CNA. During the relevant time periods involved in this proceeding, CNA had different policies for health insurance. Policies with a form number of 51831 required the policyholder to be a member of an organization endorsing CNA in order to purchase that policy. Form 51831 policyholders paid a lesser premium for their policies. The difference in premiums between the group or organization policy and an individual policy with the same coverage is approximately $10.00. To obtain the policy bearing form number 52176, there is no requirement that the policyholder be a member of a group or an organization. Ms. Watkins, a secretary employed with Gulf Health/Life, Inc. between December of 1978 and June of 1979 observed a device known as a "light box" on the premises of Gulf Health/Life. This was a square-shaped plywood box with a slanted glass top and a high-intensity lightbulb within the box. On from a half-dozen to a dozen occasions on Fridays between January and April, 1979, Ms. Watkins observed respondent bent over the light box with a pen in his hand tracing a signature onto an insurance application. She could not produce any documents or recall any names of any insurance applicant whose signature was traced or copied by the respondent.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the First Amended Administrative Complaint filed against the respondent on April 29, 1982, be DISMISSED. Respectfully submitted and entered this 10th day of September, 1982, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of September, 1982. COPIES FURNISHED: Curtis A. Billingsley, Esquire Franz Dorn, Esquire 413-B Larson Building Tallahassee, Florida 32301 William A. Patterson, Esquire Masterson, Rogers, Patterson and Masterson, P. A. 447 Third Avenue North St. Petersburg, Florida 33701 Honorable Bill Gunter Insurance Commissioner The Capitol Tallahassee, Florida 32301
The Issue Whether Michael McIntosh (Mr. McIntosh) and/or Phoenix Financial Solutions, Inc. (Phoenix Solutions) (collectively, Respondents) committed the offenses alleged in the Amended Notice of Intent to Issue Cease and Desist Order (Amended Notice) filed by the Department of Financial Services (Petitioner) and, if so, the penalties that should be imposed.
Findings Of Fact Mr. McIntosh is not currently licensed, and at all times relevant to this proceeding, was not licensed, as a life insurance agent in the State of Florida. Mr. McIntosh is currently licensed, and at all times relevant to this proceeding, was licensed, as a title insurance agent in the State of Florida. Mr. McIntosh's title insurance agent license is E099115. Mr. McIntosh's title insurance agency, Phoenix Title & Escrow, Inc., has been licensed by Petitioner, but the license was not active as of June 2010. Phoenix Solutions is not currently licensed, and at all times relevant to this proceeding, was not licensed, as an insurance agency in the State of Florida. Bishop Jose Decena (Bishop Decena), an individual, is the owner of Bishop Decena Ministries, Inc. (Decena Ministries), a Florida corporation. Mr. McIntosh was the president of Operations for Decena Ministries. Mr. McIntosh was also a signatory on bank accounts in the name of Decena Ministries. Bishop and Decena Ministries created "The Benevolent Ministries Program" (Program). The Program was a comprehensive insurance plan. There was no evidence that the Program actually secured any insurance policy for any member of a church or other organization. The following is a description of how the Program was designed and what Respondents agreed to do. The Program is no longer in existence.3 Respondents are no longer associated with the Program. In late 2008, Respondents entered into an agreement with Bishop Decena and Decena Ministries to perform the services described below. Respondents and Decena Ministries created separate websites to describe and promote the Program. While there was no contract introduced into evidence, the information posted on Respondents' website detail Respondents' duties and responsibilities. Respondents were to be paid $375,000.00 per year for five years. Respondents terminated their agreement with Bishop Decena and Decena Ministries on September 21, 2010. The Program was designed to put individual insurance plans in place for members of churches and other organizations. The Program was designed to provide life insurance and funeral benefits at no cost to "Members" of the Program. The Program contemplated the use of a "Trustee," whose duties will be discussed below. Bishop Decena was to serve as the Trustee. The website formerly maintained by Respondents to provide information as to the Benevolent Ministries Program to prospective members contained a letter from Bishop Decena that included the following: The Trustee recognizes the amount of efforts [sic] made by church leaders to find identifying [sic] ways which can ease the pain of unfortunate situations when they arise. As a result, the Trustee offers all Pastors and their members an opportunity to leave an inheritance to break the bondage of poverty. We know that countless ministries and other faith-based organizations provide vital services. Therefore, the Trustee has designed a finance system to develop funding for various projects to release the burden on the churches with respect to funeral expenses for its members. The churches also have a financial option with this program to help benefit the church. (example: [sic] build a church, help with the churches [sic] financial needs, [and] help its members) The Trustee has initiated a special Comprehensive Insurance Plan for your members. The plan will include life insurance and funeral benefits at no cost to you. The policy will be owned by the Trustee, the church and/or organization is the primary beneficiary and you [,] the member [,] will designate your own beneficiary. The member and the church and/or organization will be required to sign an acknowledgment and hold harmless agreement agreeing to the terms and conditions under which the Trustee will be applying for life insurance on your life. [Emphasis is in the original.] The Program contemplated that the church or other organization would become enrolled in the Program as an eligible organization. The members of an eligible organization would then be eligible to become Members of the Program after the church or organization: (1) submits a "Program Organization Set-up Form;" (2) pays a $1,000.00 fee to Decena Ministries or to Bishop Decena; and (3) signs an "Acknowledgement and Hold Harmless Agreement." To become a Member of the Program, a member of the eligible church or other organization were required to: (1) file a "Pre-Qualification Form for the Benevolent Ministries Program;"4; (2) pay a $20.00 processing fee to Decena Ministries or to Bishop Decena; and (3) sign an Acknowledgment and Hold Harmless Agreement, agreeing to the terms and conditions under which the Trustee will apply for life insurance on the Member's life. Individuals seeking to become Members were also referred to as the "Proposed Insured." All Pre-Qualification Forms for the Benevolent Ministries Program and all Program Organization Set-up Forms were to be sent directly to Phoenix Solutions. The $1,000.00 fee associated with the Program Set-up Form and the $20.00 fee associated with the Pre-Qualification Form were to be sent directly to Phoenix Solutions. Phoenix Solutions was to collect these sums on behalf of Bishop Decena and/or Decena Ministries. Respondents were not to keep any portion of either fee. Respondents were not to receive any commission for any insurance policy that was to be sold. A prospective Member was required to complete a "General Client Information Form" that contained the letterhead of Phoenix Solutions and required the Member to designate the type of life insurance wanted, other insurance on the Member's life, and the name and address of the writing insurance agent. The form requested detailed medical information and a list of the available insurance carriers. Church or organizations members seeking to become a Member of the Program were to sign an "Authorization" form that authorized the release of the prospective Member's medical information and provide the following as to the use of otherwise confidential medical information: . . . This protected health information is to be disclosed under this Authorization so that Phoenix Financial Solutions may: 1) underwrite my application for coverage, make eligibility, risk rating, policy issuance, enrollment determinations; 2) obtain reinsurance; 3) administer claims and determine or fulfill responsibility for coverage and provisions of benefits; 4) administer coverage; and 5) conduct other legally permissible activities that relate to any coverage I have or have applied for with Phoenix Financial Solutions. The "Authorization" form also contained the following acknowledgment: I further understand that if I refuse to sign this authorization to release my complete medical record, Phoenix Financial Solutions may not be able to process my pre- qualification. Phoenix Solutions was to forward a Member's information to an insurance carrier for processing. There was conflicting information on Respondents' website as to the entity that would apply for the life insurance. Some material reflected that the Trustee would be the entity applying for insurance on the Member's life. Other material reflected that the eligible church or other organization would be the entity to apply for insurance on the Member's life. A licensed insurance agent was to fill out the insurance application for each Member. Phoenix Solutions was to coordinate with the insurance carrier a physical examination for a Member. Any life insurance policy issued on a Member's life was to be owned by the "Trust", which was owned by Bishop Decena, and was to be controlled by the "Trustee" (Bishop Decena). Decena Ministries was to pay to the insurance company all premium payments related to a life insurance policy issued on a Member's life. The eligible church or other organization was to be considered the primary beneficiary of the insurance policy on a Member's life. The eligible church or other organization was to only receive $8,000.00 of a $250,000.00 policy; only $16,000.00 of a $500,000.00 policy; and only $30,000.00 of a $1,000,000.00 policy. A Member may also designate his or her own secondary beneficiary. The eligible church or other organization was to instruct the Trustee to allocate to the secondary beneficiary only $100,000.00 of a $250,000.00 policy; only $250,000.00 of a $500,000.00 policy; and only $400,000.00 of a $1,000,000.00 policy. There was no guarantee that the Member's designated secondary beneficiary would obtain any benefits. The Acknowledgment and Hold Harmless Agreement that a prospective Member would be required to sign includes the following provision in paragraph 4: 4. Assuming you qualify for coverage medically and financially, neither you nor your heirs will have any control or stake in the policy insuring your life under the Program once it has been issued to the trust. . . . At your death, if the policy remains in force, The Insurance Company will not pay any of the policy proceeds to your heirs. Paragraph 7 of the Acknowledgment and Hold Harmless Agreement includes the following: 7. The trust may require third party financing in order to pay some or all of the Premiums needed to keep the life insurance policy on you [sic] life in force. Thus, a substantial portion of proceeds payable upon you [sic] death may be used to retire the debt on funds borrowed from such lender. Paragraph 9 of the Acknowledgment and Hold Harmless Agreement includes the following: 9. The Trust will upon you [sic] death, administer and be responsible for taking care of your final burial arrangements in accordance with you [sic] written wishes. The Trust will also assume responsibility for your named beneficiaries and do there [sic] utmost to take care of their needs whether it is completion of education, welfare or day to day care [sic]. Paragraph 11 of the Acknowledgment and Hold Harmless Agreement includes the following: 11. The Trust, as owner of the policy, is responsible for premium payments. Interest rates, morality [sic] charges, monthly deductions, and other administrative charges may very [sic] which can have a negative impact on policy performance and cause the policy to lapse unless additional premiums are paid. Phoenix Solutions was to receive the proceeds of Members' life insurance policies from the Trustee and distribute those proceeds to various parties as directed by the Trustee. Because there was no life insurance policy issued pursuant to the program described in this Recommended Order, Respondents did not actually do many of the tasks they agreed to do. For example, they never managed any of the insurance proceeds because there were none. It is clear that Mr. McIntosh went to various churches to promote the Program, sometimes with an insurance agent and sometimes without an insurance agent. At least 31 individuals submitted a "Pre-Application for Proposed Insured" form, which was required to be submitted with the $20.00 fee described above. It is also clear that Respondents collected fees from churches and from prospective Members. Mr. McIntosh testified, credibly, that when asked questions about an insurance policy, he would advise that he was not an insurance agent and would refer the person or persons to an insurance agent. Bishop Decena, as Trustee of the Program, did not have an insurable interest in the lives of individual members of churches or other organizations. Information on Respondents' website that the Trustee would apply for life insurance on a Member's life was misleading. While the Trustee may submit such an application, the Trustee would not be able to lawfully obtain the life insurance.
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 Respondents guilty of the violations alleged in Count II of the Amended Notice and not guilty of the violations alleged in Counts III, IV, and VI. It is further recommended that the Final Order impose against Respondents an administrative fine in the total amount of $5,000.00 payable jointly and/or separately. DONE AND ENTERED this 3rd day of October, 2011, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of October, 2011.
Findings Of Fact Respondent is currently licensed as an Ordinary-Combination Life, including Disability Insurance Agent to represent Interstate Life and Accident Insurance Company and as a General Lines Agent Limited to Industrial Fire to represent Interstate Fire Insurance Company. (Exhibit 37) During the period June 1, 1974, until October 1, 1976, Respondent was an agent for Gulf Life Insurance Company. In his application for licensing by Petitioner on the application dated July 3, 1974, Respondent listed his date of birth as December 14, 1928 (Exhibit 36), on the application dated June 28, 1975, Respondent listed his date of birth as November 11, 1928 (Exhibit 35), and on his application dated October 5, 1976, Respondent listed his date of birth as November 14, 1926 (Exhibit 34). By affidavit dated January 4, 1978 (Exhibit 33), Respondent declared he was born November 14, 1926. On March 15, 1974, John L. Harris was issued life insurance field policy No. 745 676 678 (Exhibit 1) and weekly premiums were paid continuously on this policy. He was also issued whole life policy No. 715 090 733 on October 18, 1971 (Exhibit 2), and weekly premiums were paid continuously on this policy. Although Harris paid the premiums each week when due to the Respondent, at one period these premiums were not remitted to Gulf Life and the policies lapsed. Immediately thereafter, on May 1, 1975, an application for new policies (Exhibit 5), was submitted to Gulf Life by Respondent with the name of John Harris in the space for the signature of the proposed insured. This signature was not that of Harris and Respondent signed the application as a witness to Harris signature. Gulf Life issued a policy to Harris (Exhibit 4) based upon this application. Evidence was presented that similar procedures were followed by Respondent in Gulf Life policies issued to Frances Harris, Dorcas Cohen, James Cohen, Joe Bryant, Peggy Hanie Bryant, Wilma Hanie and Brenda Bryant, whereby policies serviced by Respondent were lapsed by Gulf Life who later issued new policies on forged applications submitted by Respondent.
The Issue The issue for determination is whether Respondent committed the offenses set forth in the Amended Administrative Complaint and, if so, what action should be taken.
Findings Of Fact HSH No. 2 is a six-bed assisted living facility. It provides services to individuals with mental deficits and/or psychiatric issues. HSH No. 2 is located at 20700 Southwest 122nd Avenue, Miami, Florida. After a settlement agreement with AHCA, South Dade was allowed to submit a CHOW to purchase HSH No. 2 from the prior owner. South Dade became the legal owner of HSH No. 2 on December 28, 2005. Prior to obtaining initial licensure from AHCA, South Dade was required to provide AHCA with proof of liability insurance. Liability insurance coverage is for the protection of residents at the assisted living facility in case of injury or death. Without liability insurance, a resident injured at a facility would have no recourse if he/she was harmed or injured in any way. AHCA, not the facility, is listed on each facility’s certificate of insurance as the certificate holder. Additionally, the address of AHCA’s licensure department is listed on each facility’s certificate of insurance in order that AHCA will be notified in the instance of a lapse of insurance coverage. South Dade provided proof of liability insurance to AHCA on October 17, 2005, for the period of September 23, 2005, through September 23, 2006. South Dade obtained the liability coverage from an insurance company in Miami, Florida. Having obtained liability insurance and having provided proof of liability insurance, South Dade obtained licensure from AHCA. South Dade was eventually issued a standard biennial license by AHCA for the period of December 28, 2007, through December 27, 2009. South Dade was the licensee. On September 4, 2007, South Dade, as a corporation, was administratively dissolved due to its failure to file its annual report as required by law. At the time, South Dade was 100 percent owned by Larazo Martinez. South Dade does not dispute that Mr. Martinez allowed the dissolution of South Dade in order for Natalie Egea, who had recently become HSH No. 2’s administrator, to gain ownership of HSH No. 2.1 South Dade continued to carry-on business, as HSH No.2, even though it (South Dade) was administratively dissolved. South Dade’s corporate status was reinstated on May 11, 2009, over two years after its dissolution. Mr. Martinez was listed as the only officer, i.e., president. Instead of applying for a CHOW to begin the process of new ownership of HSH No. 2, an application for renewal of the license was submitted to AHCA. An application for licensure renewal was filed on November 13, 2007, with AHCA. Only South Dade, as the licensee, could apply for renewal of the license. Ms. Egea completed the application for the licensure renewal. She listed Mr. Martinez, the individual, as the owner of HSH No. 2, not South Dade, the corporation. Furthermore, she indicated that the applicant was an individual, not a corporation. Ms. Egea was aware that there was a difference between South Dade, the corporation, and Mr. Martinez, the individual, owning HSH No. 2.2 After receiving the renewal application, AHCA sent a letter dated December 6, 2007, by certified mail, return receipt, to Ms. Egea, as the administrator of HSH No. 2, advising her, among other things, that the application omitted several documents and was, therefore, incomplete; that the liability insurance for HSH No. 2 had expired; and that proof of current liability insurance coverage needed to be provided. Further, the letter advised Ms. Egea that, in several items on one of the forms, she listed herself as the owner of the facility, but, on another document, she listed Mr. Martinez as the owner of the facility and listed herself as the administrator. By letter dated December 20, 2007, Ms. Egea responded to AHCA’s letter dated December 6, 2007, and, among other things, provided the omitted documents and corrected the documents referring to the owner of HSH No. 2 to reflect Mr. Martinez as the owner. Furthermore, Ms. Egea advised AHCA that the facility was having difficulty in obtaining liability insurance coverage. The evidence demonstrates that, when Ms. Egea filed the renewal application, the intent in the application process was to change the ownership of HSH No. 2 to Mr. Martinez, and, eventually, to herself. Further, the evidence demonstrates that Ms. Egea considered Mr. Martinez as owning HSH No. 2, even though AHCA’s licensure documents showed South Dade as owning HSH No. 2 and as the licensee. AHCA issued South Dade a conditional license for the period December 28, 2007, through February 27, 2008, pending proof of liability insurance coverage. Through the issuance of a license to an assisted living facility, AHCA is guaranteeing to the public that that facility is in compliance with all the requirements set by AHCA. But through the issuance of a conditional license, AHCA is putting the public on notice that there are outstanding conditions of licensure that the facility has not met. Even though AHCA renewed the license in the name of South Dade, the application should have been considered a CHOW. AHCA mistakenly treated the application as a renewal, instead of a CHOW. The renewal application was in actuality an application for licensure by an individual, not previously licensed by AHCA. As a result, the application was a CHOW, not a renewal application for licensure. When a facility’s liability insurance coverage expires, the facility is required to provide AHCA with proof of a renewal policy or proof of a new policy. At the expiration of its liability insurance on September 23, 2006, South Dade was unable to immediately renew its liability insurance or obtain new liability insurance from companies in Miami. South Dade blamed the recent hurricanes in the South Florida area as causing insurance companies to become reluctant to issue new liability insurance policies. However, AHCA was the agency licensing and renewing the licensure of assisted living facilities in the entire State of Florida; but AHCA was not aware of any other assisted living facilities in the South Florida area having such difficulty. The undersigned does not find the reason put forth by South Dade for the difficulty in obtaining liability insurance coverage as a plausible reason. AHCA sent a notice of violation (NOV) dated December 4, 2007, by certified mail, return receipt, to Ms. Egea, as the administrator, for the lapse of liability insurance coverage. The NOV, among other things, requested proof of current liability insurance within ten days and indicated, among other things, that the failure to comply could result in an administrative proceeding to revoke the license or deny licensure. AHCA’s interpretation of the ten-day period is the maximum amount of time that a facility has to provide evidence to AHCA that it has current liability insurance and that there has not been a lapse and, therefore, no violation. AHCA’s interpretation is found to be reasonable. South Dade failed to provide proof of insurance within the ten-day period or during the month of December 2007. A second NOV dated January 2, 2008, was sent by certified mail, return receipt, to Ms. Egea, as the administrator, for the failure to have liability insurance coverage. The second NOV also requested proof of current liability insurance within ten days and indicated, among other things, that the failure to comply could result in an administrative proceeding to revoke the license or deny licensure. South Dade was finally able to obtain liability insurance coverage, effective January 2, 2008, through January 2, 2009. AHCA was provided proof of the coverage. However, approximately three months later, the liability insurance coverage was canceled, effective March 24, 2008, for non-payment of premium. Notification of the canceled liability insurance coverage was faxed to AHCA on July 17, 2008. AHCA sent a NOV dated July 18, 2008, the next day by certified mail, return receipt, to Ms. Egea, as the administrator, for the failure to have liability insurance coverage. The NOV also requested proof of current liability insurance within 21 days and indicated, among other things, that the failure to comply could result in an administrative proceeding to revoke the license or deny licensure. AHCA states that the purpose of the NOV dated July 18, 2008, was to make certain that there was no lapse in the policy providing liability insurance coverage, not to provide South Dade a time frame in which to purchase the required liability insurance coverage. The purpose stated by AHCA is found to be reasonable. South Dade received the NOV dated July 18, 2008, on July 23, 2008. South Dade obtained liability insurance coverage on August 12, 2008, effective August 12, 2008, through August 12, 2009. The usual procedure of the insurance agent from whom South Dade obtained the liability insurance coverage was to mail the Certificate of Liability Insurance to both the insured and AHCA when the insurance carrier approves and binds coverage. A finding of fact is made that the insurance agent followed the same procedure in the instant case. On November 3, 2008, AHCA issued its Administrative Complaint charging South Dade, among other things, with failure to maintain liability insurance coverage. After receiving the Administrative Complaint, Ms. Egea contacted the insurance agent regarding the Certificate of Liability Insurance. The insurance agent reiterated to Ms. Egea that the Certificate of Liability Insurance was mailed to AHCA in August 2008. On November 5, 2008, AHCA received the Certificate of Liability Insurance, as proof of insurance, when it was faxed to AHCA by the insurance agent. Also, the liability insurance policy, effective August 12, 2008, had a different policy number than the last liability insurance policy. The different policy number indicated that the liability insurance coverage effective on August 12, 2008, was a new, not a renewal, policy.3 South Dade was without liability insurance coverage from March 24, 2008, until August 12, 2008, when liability insurance coverage was obtained. South Dade failed to maintain continuous liability insurance coverage from March 24, 2008, to August 11, 2008. South Dade had a lapse in liability insurance coverage from March 24, 2008, to August 11, 2008. No evidence was presented to show that any resident was harmed in any form or manner at HSH No. 2.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order: Finding that South Dade Elderly Care Corporation, d/b/a Home Sweet Home No. 2, committed the offenses set forth in Counts I, II, and III in the Amended Administrative Complaint. Revoking the license of South Dade Elderly Care Corporation, d/b/a Home Sweet Home No. 2. DONE AND ENTERED this 3rd day of May, 2010, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 3rd day of May, 2010.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts are found: At all times relevant to this proceeding, the respondent Frank Cimino, Jr. was licensed as an ordinary life, ordinary life including disability and dental health plan insurance agent. Respondent was also the president and incorporator of National Consumer Investment Counselors, Inc., a Florida corporation doing business at Post Office Box 1520, Brandon, Florida. Charles R. Ritzi is an insurance salesman employed at National Consumer Investment Counselors, Inc., and respondent is his supervisor. On or about November 2, 1979, Mr. Ritzi went to the home of Edward Kimball for the purpose of discussing insurance with him. He received from Mr. Kimball his other existing insurance policies and took them back to his office to analyze and compare their benefits, costs and terms with a policy which could be provided by respondent's corporation. Among the policies taken was Mr. Kimball's State Farm Insurance Company "IRA" annuity policy number 4,664,836. Several days later, Mr. Ritzi and respondent returned to Mr. Kimball's residence. Mr. Kimball made a decision to purchase an insurance Policy from respondent and numerous forms were signed by Mr. Kimball. These forms were then taken back to respondent's office and processed. Mr. Kimball did not sign a cash surrender form for his State Farm "IRA" annuity policy and he did not intend for that policy to be cancelled. On December 6, 1979, the offices of State Farm Life Insurance Company received in the mail a cash surrender request form on Edward Kimball' s "IRA" annuity policy number 4,664,836. Mr. Kimball's name appeared on the signature line of the form. The form also contained a change of mailing address section in which had been written the respondent's business address. The form constitutes a request for a withdrawal of dividends and surrender of the policy. By the terms of the policy, only the owner of the policy may make such a request. The "IRA" annuity policy funds a retirement plan. If the request form had been processed, there would have been a penalty imposed by the Internal Revenue Service for a premature distribution of funds and the funds distributed would have been treated as ordinary income for tax purposes. State Farm sent a service agent to Mr. Kimball's residence and it was discovered that Mr. Kimball did not desire to give up his "IRA" policy number 4,664,836, and that he did not sign the cash surrender request form. A handwriting expert confirmed that the handwriting appearing on the line entitled "Signature of Policyowner" was not the signature of Mr. Kimball. It is concluded as an ultimate finding of fact that respondent or an employee acting under his supervision signed the name of Edward Kimball, Jr. appearing on the State Farm cash surrender form and transmitted sold form to State Farm without the knowledge or consent of Mr. Kimball, the policy owner. In February of 1980, respondent placed an advertisement in the East Hillsborough Edition of The Tampa Tribune, a newspaper with a circulation of approximately 36,000. The advertisement guaranteed the reader that: "...if you are insurable and own any personal, ordinary life insurance, regardless of the company, we can show you a method of rearranging your program in a way that will: Increase the amount of money which would be paid to your beneficiary in the event of your death. 2. Increase the amount of cash available for retirement [sic], 3. Retain all of your existing guarantees and benefits and 4. We can do all this with no increase in premium." The four guarantees mentioned in the advertisement may not be capable of performance in all life insurance policies. However, it is possible for a qualified agent to accomplish the four guarantees in personal ordinary cash value life insurance policies. The guarantees are made to those persons who are insurable and who own personal, ordinary life insurance.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED THAT: The charges in the Administrative Complaint relating to a Penn Mutual Life Insurance Whole Life Policy be dismissed; Count II of the Administrative Complaint relating to an advertisement appearing in The Tampa Tribune be dismissed; Respondent be found guilty of violating Florida Statutes, Sections 626.611(4),(5),(7),(9), and (13) and 626.9541(1)(f); and Pursuant to Section 626.611, Florida Statutes, the insurance licenses presently held by the respondent be suspended for a period of one (1) year. Respectfully submitted and entered this 6th day of February, 1981, in Tallahassee, Florida. DIANE D. TERMOR Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of February, 1981. COPIES FURNISHED: Richard P. Harris, Esquire Department of Insurance 428-A Larson Building Tallahassee, Florida 32301 Frank Cimino, Jr. Post Office Box 1520 Brandon, Florida 33511 Honorable Bill Gunter Office of Treasurer Insurance Commissioner The Capitol Tallahassee, Florida 32301
The Issue Should Respondent's license as an insurance agent in the State of Florida be disciplined for the alleged violation of certain provisions of Chapter 626, Florida Statutes, as set forth in the Administrative Complaint and, if so, what penalty should be imposed?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the agency of the State of Florida vested with the statutory authority to administer the disciplinary provisions of Chapter 626, Florida Statutes. Respondent, at all times relevant to this proceeding, was licensed as an insurance agent in the State of Florida. Respondent is also currently licensed in the State of Florida as a life and life and health insurance agent. Sometime around May 30, 2000, Patricia I. Coburn and her husband, Kevin L. Coburn received a postcard from Guarantee Reserve Life Insurance Company (Reserve Life) indicating that the Coburns may want to consider life insurance since Social Security only paid $250.00 in death benefits. Kevin Coburn was no longer employed, and the life insurance coverage with his former employer was no longer in force. Therefore, the Coburns, in response to the postcard, made contact with Respondent by telephone. Patricia Coburn testified that Respondent came to the Coburn's home on May 30, 2000, in response to the telephone call. However, Respondent was in the Coburns' home on only one occasion and that was when the application was completed and signed, which was May 31, 2000. The Coburns were looking for an insurance policy that would cover "final" expenses. The Coburns settled on a joint whole life policy with Reserve Life, which carried death benefits of $18,000.00, with an $18,000.00 accidental death coverage and a $5,000.00 child rider. At all times relevant to this proceeding, Kevin Coburn suffered from impaired vision (due to diabetic retinopathy), heart problems (by-pass surgery and congestive heart failure), and kidney problems (in renal failure and currently receiving dialysis three times a week). However, Kevin Coburn's health condition was not readily apparent to Respondent at the time he was in the Coburns' home around May 31, 2000. The application for the insurance policy required that Respondent ask both Kevin Coburn and Patricia Coburn a series of health questions, which required a yes or no answer. The application also required Respondent to mark each of the Coburn's responses in the appropriate place on the application. Respondent asked both Kevin Coburn and Patricia Coburn the required health questions. Other than question number 7 and question number 12, which did not require an answer due to the Coburns' age, each answered the questions with a "no" answer, notwithstanding Patricia Coburn's testimony to the contrary, which lacks credibility in this regard. Based on the Coburns' responses, Respondent marked "no" to the appropriate questions on application. Questions 3(A) and (F), 6.(3), and 9. of the Application provide in pertinent part as follows: Have your ever been diagnosed or treated by a member of the medical profession as having, or have you ever taken medication for: (1) Chronic Kidney Disease; or (2) any kidney disorder for which you are currently receiving dialysis? * * * F. Congestive Heart Failure? * * * 6. During the last 1 year, have you had a . . .(3) heart or by-pass surgery . . .? * * * 9. During the last 5 years, have you had Heart-By-Pass surgery? Respondent marked the answer "no" to these questions for both Kevin Coburn and Patricia Coburn. The application inquired as to whether either of the applicants was disabled. The Coburns responded that they were not disabled but employed, and Respondent so marked the application. After Respondent completed the application, he handed the application to the Coburns for them to review and sign. While it may be questionable as to whether Kevin Coburn reviewed the application, including the answers to the health questions, due to his failing eyesight, Patricia Coburn certainly had the opportunity to review the application, including the answers to the health questions. Neither Patricia Coburn nor Kevin Coburn discussed or revealed Kevin Coburn's current medical condition with Respondent prior to, or during the time, Respondent was filling out the application, including the responses to the health questions, notwithstanding Patricia Coburn's testimony to the contrary, which lacks credibility in this regard. Had Respondent been made aware of Kevin Coburn's medical problems, he could have placed the Coburns' insurance with another insurance company (Cotton State Life Insurance Company or Americo Financial Life and Annuity Insurance Company), notwithstanding Kevin Coburn's medical problems. Admittedly, the policies would not have been at the standard issue rates and there would have been graded death benefits or limited death benefits. Furthermore, Respondent's commission on this type policy would be higher than on a regular death policy. Reserve Life acted favorably on the Coburns' application and in June 2000, issued Policy No. OJ11976 to the Coburns with the Basic Death Coverage as set out in the Application. Kevin Coburn died on September 19, 2000, from a staph infection as a result of his leg being amputated in August 2000, due to the diabetes. Shortly thereafter, Patricia Coburn filed a death claim with Reserve Life. Because Kevin Coburn died within two years of the issuance of the insurance policy, Reserve life, in accordance with company policy, requested Kevin Coburn's medical records so that it could review his health history in order to determine if the health questions had been answered correctly. Upon review of Kevin Coburn's health records, Reserve Life discovered that Kevin Coburn, at the time of the application, was diabetic, underwent dialysis, had undergone heart by-pass surgery, had other health problems, and was disabled. Because of his health problems and disability, Kevin Coburn was not eligible to purchase this particular insurance policy, and had Reserve Life been made aware of Kevin Coburn's health problems and disability, Reserve Life would not have issued this particular policy. In response to Reserve Life's inquiry concerning Kevin Coburn's health history, Patricia Coburn wrote a letter to Reserve Life asserting that she and Kevin Coburn had advised Respondent of Kevin Coburn's health problems, and that Respondent had apparently marked the "no" block instead of the "yes" block concerning the health questions without their knowledge. Without giving Respondent an opportunity to refute Patricia Coburn's allegations, Reserve Life offered Patricia Coburn $9,000.00 as a settlement, which she accepted. The reason for the offer of settlement by Reserve Life was that it would be Patricia Coburn's "word" against Respondent's "word." There is insufficient evidence to show that Respondent knew, or should have known, of Kevin Coburn's medical condition at the time the Coburn's applied for the insurance with Reserve Life.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order finding Respondent, Jerry Lee Surratt not guilty of violating Subsections 626.611(4),(5),(7),(8),(9), and (13), Subsections 626.621(2),(3), and (6), and Subsections 626.9541(1)(a)1., and (e)1., Florida Statutes, and dismissing the Administrative Complaint filed against Jerry Lee Surratt. DONE AND ENTERED this 15th of March, 2002, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 2002. COPIES FURNISHED: James A. Bossart, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street, Room 612 Tallahassee, Florida 32399-0333 Jerry Lee Surratt 926 Lake Deeson Pointe Lakeland, Florida 33805 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307
The Issue The issue in this case is whether the Department of Insurance should discipline the Respondent for alleged violations of provisions of the Insurance Code governing agents.
Findings Of Fact The Respondent, Frank Lefler, Jr., is licensed in the State of Florida as a life and variable annuity contracts salesman, as a life insurance agent, and as a general lines insurance agent. During 1991 and 1992, he was employed by Metropolitan Life Insurance Company (MetLife). In the summer of 1991, a woman named Theresa Novovesky, a registered professional nurse living in New Orleans, Louisiana, received a telephone solicitation regarding a "Nurses Insured Retirement Plan." At the time, she was engaged to be married later in the summer to an Air Force pilot named David Russell. Not wanting to deal with the matter over the telephone, she asked the caller to mail her the information. She later received in the mail a brochure advertising for a "Nurses Insured Retirement Plan" being offered by "Metropolitan Life and Affiliated Companies." The Plan was advertised as "a convenient way for you to accumulate cash for the future you deserve." The plan's five "important benefits" included: CONTROL If you should leave your present nursing position, your retirement benefits can stay with you. FLEXIBILITY Accessibility of cash. TAX BENEFITS Tax deferred accumulation while providing a life insurance benefit. SECURITY Can be used to provide life time income. DISABILITY Your monthly contribution can continue to be deposited by Metropolitan should you become disabled. Novovesky was interested in the program described in the brochure and telephoned the toll-free number on the brochure for more information. Her call was received at the Tampa, Florida, offices of MetLife, and she used the descriptions contained in the advertising brochure to attempt to describe the reason for her call and the area of her interest. She left her telephone number so that she could be contacted at her residence in New Orleans. Not long afterwards, the Respondent telephoned Novovesky in New Orleans. She again used the descriptions contained in the advertising brochure to attempt to describe the reason for her call and the area of her interest. The Respondent made an appointment to visit Novovesky at her apartment complex in New Orleans to show her the MetLife products that were consistent with her area of interest. He mentioned at the time that he was new and in training with the company and that he would have his supervisor, Rick Urso, with him to assist. Urso and the Respondent met with Novovesky on July 25, 1991. They discussed aspects of Novovesky's career, personal and financial goals and ascertained that she was interested in a retirement savings plan. The Respondent presented a MetLife product that actually was a whole life insurance policy. He described the tax-free accumulation of cash value from contributions of $100 a month, and he estimated the cash value at age 59 as in the neighborhood of $600,000. It is unclear whether the Respondent orally explained to Novovesky in so many words during the July 25, 1991, meeting that the product being presented was in fact a whole life insurance policy. She testified that he did not, and the product could have been explained in terms that did not clarify to her that it was in fact a life insurance policy. But Novovesky also testified that she did not understand life insurance or investment terminology and knew little about either. It is conceivable that the Respondent explained the true nature of insurance product in terms that she should have been able to understand but that she did not understand what he was telling her. In his testimony, her husband (then fiance) confirmed that possibility. In addition, by Novovesky's own testimony, the Respondent asked her to verify the accuracy of information the Respondent took from her during the meeting and wrote on a form entitled, "Application for Life Insurance." Among other things, the form included a section on "Medical Data" "TO BE COMPLETED FOR ALL PERSONS TO BE INSURED." Although Novovesky denies that she read or understood the form, she clearly signed it. Although she testified that she did not recall, Novovesky also apparently was required to undergo a physical examination, including blood sampling and testing, to qualify for the insurance for which she had applied. When applying for the insurance she ultimately bought, Novovesky post- dated the check for the initial premium until after her fiance's scheduled return to the United States in August, 1991, for a brief period of leave from active Air Force duty in England. She reasoned that, in addition to helping her make final arrangements for their imminent wedding, he could advise her on whether to go through with the application she had signed. During the hustle and bustle of the prenuptial arrangements, her fiance telephoned the Respondent to assure himself and his fiancee that she had made reasonable retirement plans. From what she had told him, he assumed that she had purchased an annuity-type of retirement investment. He previously had made it clear to her that he did not think it was smart for her to buy life insurance. For whatever reason--perhaps because she preoccupied with planning their imminent wedding, or perhaps because she was afraid to tell him that she had applied for life insurance against his advice, or perhaps because she truly did not comprehend that she had in fact applied for a life insurance policy--she apparently did not tell him that she had applied for life insurance. Working from the incorrect assumption that his fiancee had purchased annuity-type of retirement investment, he asked the Respondent certain questions regarding guaranteed and anticipated performance and was given certain answers that did not alert him that the Respondent was referring to a life insurance policy. Satisfied with the answers he had gotten, Novovesky's fiance told her that it looked "OK" to him, and they got on with their busy lives. It appears that, on or about August 30, 1991, someone with MetLife delivered to Novovesky her whole life insurance policy, as well as a typical written illustration of predicted performance of the whole life insurance policy, given certain assumptions. The illustration included references to: life paid up at 95; total, initial annual, and initial semi-annual premium; annual dividend; a guaranteed death benefit; additional insurance purchased by dividends; illustrative death benefit; guaranteed cash value; cash value of additional insurance; illustrative cash value; life insurance surrender cost index; and life insurance net payment cost index. It is difficult to understand how, but Novovesky testified that, even after receipt of the policy and illustration, she still did not understand that she had applied for and purchased life insurance. She testified that she did not read the material when she received it and that, after the wedding, Novovesky (now Mrs. Russell) moved with her husband to England. The policy and other papers she relating to her dealings with the Respondent were packed away in boxes and were relatively inaccessible until after their return to the United States. Notwithstanding her testimony at final hearing and her prior hearsay statements to Insurance Department regulators, not only were the words "life insurance" mentioned in written statements she received from MetLife, she herself wrote a letter to the Respondent on November 4, 1991, advising that, while she was living in England with her husband, she would be unable to utilize the "Check-O-Matic" payment plan the Respondent had set up for her and that personal checks would be "my only means of paying my life insurance monthly." When the Mrs. Russell did not receive monthly or even quarterly statements from MetLife, and MetLife responded to inquiries by saying that only an annual statement was due her, Mr. Russell especially became concerned about exactly what his wife had purchased. Still, the policies and information was inaccessible, and they decided it could wait until after their return to the United States. When they returned and Mrs. Russell received her first Anniversary Statement in the mail, Mr. Russell could tell that his wife had not purchased an annuity-type investment, and he decided it was time to find the policy and related MetLife information to determine just what was going on. When he located and inspected the documentation, an incredulous Mr. Russell realized for the first time that his wife had purchased a life insurance policy, which was precisely what he told her not to buy. His reaction was that he could not understand how she could have been so foolish, and he told her so. She blamed it on the Respondent and MetLife. Approximately a year later, in summer of 1993, the Russells read a newspaper article indicating that many MetLife policyholders were registering similar complaints and that state insurance regulators were investigating. Mr. Russell became persuaded that, after all, perhaps MetLife, and not his wife, was to blame for the mistake. They successfully pursued their desire to rescind the life insurance policy, get a full refund from MetLife, and reinvest the refund in another investment vehicle. (Initially, they invested in an annuity; they later changed to a stock mutual fund.)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Insurance enter a final order dismissing the Administrative Complaint in this case. RECOMMENDED this 11th day of October, 1994, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 11th day of October, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-2210 To comply with the requirements of Section 120.59(2), Fla. Stat. (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1.-6. Accepted and incorporated to the extent not subordinate or unnecessary. 7. The visit was on July 25, 1991; otherwise, first sentence, accepted and incorporated. Second sentence, rejected as not proven exactly what the Respondent said. 8.-9. Accepted and incorporated to the extent not subordinate or unnecessary. Rejected as not proven that life insurance was not discussed. Otherwise, accepted and incorporated. Rejected as not proven that she did not read any of the application. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. 12.-13. Accepted and incorporated to the extent not subordinate or unnecessary. Rejected as not proven: (1) that Russell formed any opinion about what the Respondent "was soliciting" (he was concerned only about what his fiancee was buying); or (2) that life insurance was discussed. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Rejected as not proven that the documents were "numerous" or that she did not "review" them. Accepted, but not proven that the Respondent knew about them or sent them, and unnecessary. Rejected as not proven that she did not know she had purchased a life insurance policy. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Accepted, technically, but unnecessary. First sentence, rejected as not proven; second sentence, accepted and incorporated to the extent not subordinate or unnecessary. 20.-21. Accepted and incorporated to the extent not subordinate or unnecessary. (However, implication that they were informed for the first time is rejected as not proven.) First sentence, rejected as not proven; second sentence, accepted and incorporated. "Unknowingly" is rejected as not proven. Otherwise, accepted but subordinate and unnecessary. Second and third sentences, accepted but subordinate and unnecessary. The rest is rejected as not proven. "Understandingly unhappy" is rejected as not proven. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Accepted and subordinate to facts found. Respondent's Proposed Findings of Fact. 1.-2. Accepted and incorporated. Rejected as being conclusion of law. Accepted and incorporated. The year 1990 is rejected as being contrary to facts found. (The meeting was in 1991.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. First sentence, not clear from the evidence. Otherwise, accepted but largely subordinate and unnecessary. Last sentence, rejected as being argument. Otherwise, accepted but subordinate to facts found, and unnecessary. Accepted but subordinate to facts found, and unnecessary. 9.-10. Accepted and incorporated. 11.-12. Accepted and incorporated to the extent not subordinate or unnecessary. 13.-14. Accepted but subordinate to facts found, and unnecessary. 15.-17. Accepted and incorporated to the extent not subordinate or unnecessary. Accepted but subordinate to facts found, and unnecessary. Accepted and incorporated to the extent not subordinate or unnecessary. Accepted but subordinate to facts found, and unnecessary. Accepted and incorporated to the extent not subordinate or unnecessary. Accepted but subordinate and unnecessary. 23.-24. Accepted but subordinate to facts found, and unnecessary. Accepted but subordinate and unnecessary. As to last sentence of the first paragraph, rejected as contrary to the evidence that "any misperception stemming from the brochure" "could not be due to" the Respondent (although not proven that it was). Otherwise, the first paragraph is accepted and incorporated. The second paragraph is argument and a transcript excerpt that is subordinate to facts found, and unnecessary. 27.-28. Accepted and incorporated to the extent not subordinate or unnecessary. 29. Accepted but argument, subordinate, and unnecessary. 30.-31. Cumulative. (Also, subordinate and argument.) Rejected as contrary to facts found that Lefler was not identified. Otherwise, largely accepted but subordinate to facts contrary to those found. Argument and subordinate. 34.-35. Accepted but subordinate and unnecessary. Argument, subordinate and unnecessary. Last sentence, rejected as being argument and as being subordinate to facts contrary to those found. Otherwise, accepted but subordinate to facts found, and unnecessary. 38.-40. Largely accepted but subordinate and unnecessary. 41. First sentence, accepted but subordinate to facts found, and unnecessary. Second sentence, rejected as argument, as subordinate and as unnecessary. 42.-44. Accepted and incorporated to the extent not subordinate or unnecessary. Argument, subordinate and unnecessary. Largely, accepted and incorporated to the extent not argument, subordinate or unnecessary. Cumulative. First sentence, accepted but subordinate to facts found. Second sentence, cumulative. COPIES FURNISHED: James B. Bossart, Esquire Daniel T. Gross, Esquire Department of Insurance and Treasurer 612 Larson Building Tallahassee, Florida 32399-0333 Jonathan L. Alpert, Esquire David Ferrentino, Esquire Alpert, Josey & Hughes First Union Center 100 S. Ashley Drive, Suite 2000 Tampa, Florida 33602 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300
The Issue Whether Petitioner is entitled to a refund from the State of Florida Group Health Self Insurance Plan of pre-tax supplemental insurance premiums in the amount of $47.46 or $47.45 a month that were deducted from his pay for the 2007 and 2008 insurance plan years.
Findings Of Fact Petitioner, Detrick Murray ("Petitioner" or "Mr. Murray") was, at all times relevant to this proceeding, employed by the Florida Department of Corrections. As a state employee, he was given the option to participate in a pre-tax supplemental accident/disability insurance plan. Benefits, including insurance plans, are administered by a private contractor, Convergys, through a project called "People First," operated on behalf of Respondent, Department of Management Services, Division of State Group Insurance ("Respondent or the Division"). During the 2005 open enrollment period for the 2006 plan year, Mr. Murray elected to participate in a state- sponsored supplemental/accidental policy offered by Colonial Insurance Company ("Colonial"). The reverse side of the enrollment provided the following information and instructions: The enrollment form must be used to enroll in or change coverages. No changes will be accepted by e-mail or letter. Enrolling in a supplemental insurance plan, or changing options, does not automatically stop other coverages you currently have. To stop an existing coverage, you must place an "S" in the box provided for that Plan on the front of this form (Part 1). Only complete Part 2 on the front of this form if you wish to stop plans currently not offered. The Supplemental Enrollment Form must be submitted to the People First Service Center. Enrollment changes will not occur if forms and/or applications and the Supplemental Company Application are submitted directly to the supplemental insurance company. If you cancel or do not enroll in supplemental insurance, you will not be able to enroll again until the next annual open enrollment period, unless you experience a Qualifying Status Change. Supplemental premiums are deducted on a pre- tax basis. It is your responsibility to ensure that your enrollment selections are in effect. Check your payroll warrants to ensure that your deductions properly reflect your selections. Contact the People First Service Center immediately if these deductions are not correct. I understand my enrollment and/or changes will be effective the first of the month following a full payroll deduction. I also understand my elections are IRREVOCABLE until the next annual open enrollment period, unless I have a Qualifying Status Change as defined by the Federal Internal Revenue Code and/or the Florida Administrative Code. I understand that I must request such changes within thirty-one (31) calendar days of the Qualifying Status Change. The open enrollment period for the next year, the 2007 plan year, began on September 19, 2006, and ended on October 18, 2006. On October 14, 2006, Mr. Murray notified Colonial that he wanted to cancel the supplemental insurance for the 2007 plan year. He used a Colonial Request for Services form and sent it to the Colonial Processing Center in Columbia, South Carolina. In a letter dated February 14, 2007, Colonial acknowledged receiving Mr. Murray's request to cancel the insurance during the 2006 enrollment period, and informed him of its receipt of an "overpayment" of $47.46 monthly beginning January 1, 2007. Colonial directed Mr. Murray to contact his personnel officer "which will then work through the Division to issue your refund." After the open enrollment period ended, Mr. Murray had also contacted People First on November 14, 2006, and gave notice of his attempt to cancel with Colonial. He was informed that Colonial had not informed People First of the cancellation. Mr. Murray contacted People First again on January 29, 2007, questioning the continued payroll deductions and requesting a refund, as Colonial had suggested. He was told that he would have to cancel with People First during the open enrollment period, but he could send a letter of appeal to try to get a refund of premiums and try to cancel sooner. Despite repeated contacts, requests for refunds, and appeals to People First during 2007, Mr. Murray continued to have premiums for supplemental insurance deducted from his pay check. Ultimately, the Division denied his appeal. Although Mr. Murray was trying to get a refund for 2007 payroll deductions, he again failed to notify People First to cancel the insurance during the open enrollment period between September 17, 2007, and October 19, 2007, for the 2008 plan year. There is no evidence that Mr. Murray had a qualifying status change, as required by federal and state law, that would have permitted him to cancel the insurance at any time other than during open enrollment periods for the 2007 and 2008 plan years. The enrollment period for the 2009 plan year began on September 22, 2008, and ended on October 17, 2008. On September 24, 2008, Mr. Murray cancelled the supplemental insurance for the 2009 plan year by making a telephone call to a People First representative. In a late-filed exhibit produced by a manager for Convergys at the request of Petitioner, the Division showed that payments were made to Colonial to insure Mr. Murray through November 24, 2008. Sandi Wade, the Division's benefits administrator, noted that Colonial should not have canceled Mr. Murray's insurance policy. Colonial had no authority to send the letter of February 14, 2007, incorrectly telling Mr. Murray he was entitled to a refund. Ms. Wade's observations prompted Mr. Murray to question what, if any, remedies he might have with regard to Colonial's error. That issue is not and cannot be considered in this proceeding. In the absence of evidence that the Division or its agents were notified to cancel the supplemental insurance during open enrollment periods for 2007 and 2008, or based on a qualifying status change, Petitioner's request for a refund of premiums must be denied.
Recommendation Based on the foregoing, it is recommended that the Department of Management Services, Division of State Group Insurnace, enter a final order denying Petitioner, Detrick Murray, a refund of his accident/disability insurance coverage premiums paid in 2007 and 2008. DONE AND ENTERED this 12th day of May, 2010, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 2010. COPIES FURNISHED: Sonja P. Mathews, Esquire Department of Management Services Office of the General Counsel 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399 Detrick Murray 4370 Northwest 187th Street Miami, Florida 33055 John Brenneis, General Counsel Division of State Group Insurance Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
