Findings Of Fact Respondent has worked in the insurance business some eleven years, including a five year stint with the Metropolitan Life Insurance Company in New York and two years with Gulf Life Insurance Company. Although respondent remained an ordinary agent for Independent Life Insurance Company until January of 1978, he and a partner, William Andrew Carrigan, contracted, in October of 1977, with Gordon Burnham, one of PIC's managing general agents, to act as general agents for the sale of life, health and disability insurance on a franchise group basis. On behalf of PIC, they sought out employers willing to let them offer insurance to their employees and to arrange for payment of premiums by payroll deduction. Under the arrangement with PIC, respondent's partnership, Carrie & Associates, was permitted to borrow, subject to a weekly maximum, the lesser of $250.00 or "fifty percent of [the] annualized commission," p. 21, Lee Logan's deposition, whenever respondent or his partner sold an insurance policy and submitted the appropriate papers to PIC. The indebtedness respondent and his partner incurred in receiving the advance was to be gradually reduced, as premiums on the policy were paid to PIC. In the event a policy was cancelled before the advance was repaid, PIC was authorized to look to other policies sold by the same agents for repayment. Respondent and his partner regularly asked for advances and ordinarily received them within a week of forwarding a new policy application to PIC. Ordinarily, the first month's premium was required to accompany an application for a new policy. When, however, a new policy was sold to an employee of an employer who already deducted PIC premiums from employees' paychecks, there was no requirement that the first month's premium accompany the papers respondent or his partner furnished PIC. In the event PIC received no premium within 30 days, PIC was authorized to look to other policies sold by the partnership for repayment of the advance. By February of 1978, Carrie & Associates had sold insurance policies to employees of, among other businesses, Tower Coiffures in Lakeland and Seminole Bakery in Sanford. Business was slow that February, so respondent decided to write applications for insurance policies for nonexistent people, in order to improve his cash flow. He wrote an application for life insurance for a fictitious Peter Paulson, whom he described as a 34 year old Texan, 5 feet 9 inches tall, weighing 149 pounds, and whom he falsely reported to be an employee of Seminole Bakery. He wrote an application for life and health insurance for a fictitious Bob Webb, falsely reporting him as an employee of Seminole Bakery, and on Rohnda (sic) Webb, Bob's imaginary wife. In connection with the Webb application, respondent signed his partner's name in a blank on a form entitled "Signature of Soliciting Agent," only apprising his partner afterwards. Respondent wrote applications for insurance for fictitious persons named Brian Williams, Christine Williams, Robert Jackson, Muriel Carter and Kim Stone, whom he falsely reported to be employees of Seminole Bakery, as well as for Kim's fictitious spouse, Ronald Stone. He wrote applications for life and health insurance for a fictitious Virginia Birch and for a fictitious Janice D. Boynton, falsely reporting them as employees of Tower Coiffures. In each instance, respondent forwarded the falsified papers to PIC and, in each instance, PIC advanced money on the strength of the papers. At the time of the hearing, respondent (who is no longer licensed as an agent with PIC) and his partner owed PIC $5,342.31, representing unrepaid commission advances on lapsed or fictitious policies, together with accrued interest. At the time of the hearing, proceeds from policies still in force applied against this indebtedness at the rate of $60.48 per month. Charles William "Bill" Honaker employed respondent as an insurance agent, at the time of the hearing. Mr. Honaker began in the insurance business in 1953. Since that time he has seen "bogus" policies many times, yet he has never heard of a state license revocation for a one-time bogus business problem.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner revoke respondent's license as an insurance agent. DONE and ENTERED this 27th day of July, 1979, in Tallahassee, Florida. ROBERT T. BENTON, II 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 27th day of July, 1979. COPIES FURNISHED: Patrick F. Maroney, Esquire 428-A Larson Building Tallahassee, Florida 32301 James W. Markel, Esquire and Leslie King O'Neal, Esquire Post Office Drawer 1991 Orlando, Florida 33802
Findings Of Fact At all times material hereto, Respondent is and has been eligible for licensure and licensed as a life insurance agent, a an ordinary life including health insurance agent, as a general lines insurance agent, and as a health insurance agent. On July 25, 1986, Respondent pled guilty and was found guilty in the United States District Court for the Southern District of Florida of conspiracy to possess with intent to distribute cocaine, a felony. He was sentenced to serve one year and one day in a penal institution and was fined $50. On September 10, 1986, Respondent pled guilty and was convicted in the United States District Court for the Southern District of Florida of conspiracy to import marijuana, a felony. He was given a five year sentence to run concurrent with his other sentence, with the requirement that six months be served in a jail-type institution, and with the execution of the remainder of the sentence of imprisonment being suspended. Additionally, Respondent was placed on probation for a period of five years to commence upon his release from confinement, was assessed a fine of $50, and was required to perform 250 hours of community service work during his first year of probation, 200 hours of community service work during his second year of probation, and 100 hours of community service work during his third year of probation. Other charges involving either the sale or possession of machine guns were dismissed. No underlying facts regarding the marijuana conviction were offered in evidence. Respondent and a companion negotiated with federal undercover agents for the sale of approximately 4700 automatic weapons (machine guns). Those discussions ultimately lead into negotiations for the sale of 15 kilos of cocaine. The final agreement was that the first transaction would involve 10 kilos of cocaine. On July 10, 1985, Respondent and two companions sold to the undercover agents 2 kilos of cocaine, Respondent explaining to the undercover agents that there would be a delay in him supplying the additional 8 kilos. The actual sale took place at Respondent's insurance office, as had many of the telephone contacts between Respondent and the federal agents. Respondent and his companions were arrested at Respondent's insurance office immediately following Respondent's sale of the 2 kilos of cocaine to the federal agents. Three firearms were seized from Respondent and his companions at the time of their arrests. No evidence was offered to show that Respondent has completed serving his probation or that his civil rights have been restored. Respondent has been licensed by Petitioner since 975. None of his insurance licenses have been previously revoked.
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 the factual allegations contained within the Administrative Complaint filed herein, revoking Respondent's licenses, and revoking Respondent's eligibility for licensure as an insurance agent in this state. DONE and RECOMMENDED this 30th day of June, 1988, at Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of June, 1988. APPENDIX TO RECOMMENDED ORDER DOAH Case No. 88-1374 Petitioner's proposed findings of fact numbered 1, 2, and 4-6 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 3 has been rejected as being irrelevant to the issues under consideration herein. Petitioner's proposed findings of fact numbered 7 and 8 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. COPIES FURNISHED: William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Robert C. Byerts, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32399-0300 Leslie L. Florez, Esquire Ocean Bank Building, Suite 604 780 N.W. LeJune Road Miami, Florida 33126 Don Dowdell, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32399-0300
Findings Of Fact On June 30, 1983, Petitioner, Timothy Bond Taber, entered a plea of nolo contendere to the charge of sale, delivery, or possession of cannabis with intent to sell, which is defined as a third degree felony by Section 893.13, Florida Statutes, in the Circuit Court for Leon County, Florida. On the basis of his plea, he was found guilty as charged and, inter alia, placed on probation for three years. However, on August 29, 1983, upon Motion by Mr. Taber, the judge entered an Order deleting the adjudication of guilt and withholding adjudication. The probation and other aspects of the prior action were not disturbed. Petitioner explained the facts and circumstances leading up to his arrest which took place in Tallahassee on, January 28, 1983. At that time, Petitioner, who was a 19 year old high school graduate who had lived in Tallahassee for seven years, was working for U-Haul. His co-defendant in the criminal case was his U-Haul supervisor who, at the time, was on a work release program from the Leon County Jail. He was also engaged in repeated sales of marijuana and convinced Petitioner to allow him to store his stock of marijuana in Petitioner's car and to hold the money from the sales. Petitioner admits to being engaged in this activity but denies any sales himself. He now knows his actions were a big mistake and he deeply regrets his participation in them. He has no other criminal history. In addition to the probation, Petitioner was sentenced to community service the term of which was subsequently reduced due to his good behavior. There is some indication his probation officer will recommend termination of his probation one year early due to his good behavior. After leaving U-Haul, where he had worked for five years, Petitioner went to work as a trainee for Mr. Hudgins, District Manager in Tallahassee for Family Life Insurance Co. Mr. Hodgins observed Petitioner carefully during the training period. He found Petitioner epitomized the good qualities looked for by his company to represent it in insurance sales. Integrity is a watchword in the insurance industry and Mr. Hudgins does not see anything in Petitioner's past which would show he does not have this requisite integrity. In fact, Mr. Hudgins sees traits in Petitioner, such as honesty, drive, and a desire to help, which would lead to success in the field. When Petitioner made his application for employment with Mr. Hudgins' company, he answered "no" to the question regarding any prior convictions, since the question does not relate to arrests. Even knowing of Petitioner's misconduct, Mr. Hudgins does not consider Petitioner is disqualified. In his opinion, because Petitioner was young when he made a mistake he should not be perpetually tarred because of it. These sentiments are echoed in the statement of a co- worker of Petitioner's at U-Haul who has know him for six years and who has recently hired him to work at Ryder Truck Rental. Mr. Earlywine has had many compliments from customers and co- workers about Petitioner's outstanding work and business ethics. These qualities were also recognized by Joan O'Steen, a Deputy Sheriff in Hillsborough County, who is convinced that Petitioner is a strong and morally superior individual. On the basis of the above, it would appear, therefore, that Petitioner is neither unfit nor untrustworthy at this time. On June 28, 1985, Petitioner submitted to Respondent an application for filing for examination as an ordinary life, including health, agent. At question 11, he properly indicated he had been charged with a felony but not convicted. On the basis of his plea, however, on August 30, 1985, the chief, Bureau of Licensing for Respondent, denied Petitioner's application.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that Petitioner's application to sit the examination for licensing as an ordinary life, including health, agent be denied. RECOMMENDED in Tallahassee, Florida, this 21st day of January, 1986. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of January, 1986. COPIES FURNISHED: Honorable William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32301j Bernard F. Daley, Jr., Esquire P. O. Box 1177 Tallahassee, Florida 32302 David G. Poucher, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32301
The Issue The issue for consideration is whether Respondent's license or eligibility for licensure as an insurance agent in Florida should be disciplined because of the Administrative Complaint filed herein, and whether Respondent should be denied a resident license to represent various insurance companies in this state because of the misconduct alleged in the Administrative Complaint.
Findings Of Fact At all times pertinent to the allegations contained herein, Michael Eugene Best was either licensed or eligible for licensure as a life insurance agent, a life and health insurance agent, and a health insurance agent in the State of Florida, and was engaged in the sale and brokerage of insurance, doing business as M. E. Best Investments. The Department of Insurance is the state agency responsible for the monitoring and regulation of the insurance business in this state. Ms. Dorothy Clark, a 73 year old woman, has known and done business with Mr. Best in the insurance area for approximately ten years. In August, 1988, she met with him to discuss her possible purchase of some kind of insurance. She cannot recall what kind of insurance it was. She gave him some money to pay for the insurance in question, which was to be procured from some insurance company, the name of which she could not initially remember, but subsequently recalled to be American Sun Life Insurance Company. The premium payment which she gave to Mr. Best was in the amount of $1,200.00, but she cannot recall whether he was obliged to use that money for the purchase of insurance from that particular company, or whether he had the option to place the insurance with another company. To the best of her limited recollection, Mr. Best did get a policy for her from American Sun Life Insurance Company, but she cannot recall if she kept that policy or if it was changed to another company. She does not recall requesting him to change companies, however, but does recall that she ultimately received a policy issued by United American Life Insurance Company and that Mr. Best was the agent who procured it for her. At hearing she denied ever attempting to cancel the United American policy though she claims she did not want it. She claims that she never received a refund check from United American, however, a check payable to her in the amount of $799.90 was issued to her by that company with address shown as her home of record. The check bears what purports to be her endorsement on the back thereof, followed by the endorsement of Mr. Best's company, but at first she claimed she did not place it there. When shown the check at the hearing, however, she admitted the signature on the endorsement was hers and that she most likely signed it. This check was issued as a result of her unremembered direction to Mr. Best to cancel the policy. She claims she did not authorize Mr. Best to take the money it represented and use it for his purposes. She claims that the check was subsequently deposited by her to her account and that Mr. Best never got possession of it or the money. This is patently wrong, however, inasmuch as Mr. Best admits that he did have the check and placed his company's endorsement on it. He subsequently used the check, with her agreement, to apply toward a policy with another company, and to his recollection, she voluntarily endorsed the check to him. Ms. Clark also purchased a $30,000.00 annuity policy through Mr. Best with another company, the name of which she cannot recall, at about the same time as the first policy mentioned herein. To get this policy she issued a check to Mr. Best in the amount of $30,000.00. When the policy was issued, she requested that it be cancel led because by the time she received it, she had reconsidered and determined that she did not want it. She notified Mr. Best of her desires that the policy be cancelled, but claims she never communicated directly with the company. The company has a letter reputedly from her, however, which complains of Respondent's purported trickery and deceit. It is found that this latter letter was prepared for her signature by someone else. When Ms. Clark told Mr. Best she did not want the policy, and requested him to cancel it, he asked her to wait awhile, for some reason which was unclear to her. Instead, she indicated to him then that she did not want to do so but wanted her money back. Some time after this discussion, but before the policy was cancelled, Mr. Best came to see her and though she cannot recall if he got her to sign anything, she identified her signature on a letter to the company which had issued the annuity policy in question , which indicated that she was satisfied with the policy and withdrawing her request to cancel. She recalls Mr. Best requesting that she sign the letter, but cannot recall what he said at the time. As she remembers, he appeared normal when he came to see her, and she voluntarily signed the letter of her own free will. It is obvious, however, that Ms. Clark did not understand what was being said to her or what she was signing because, she claims, she still wanted the policy cancelled. Her recollection of the incident is shaky - and unsure. She cannot recall if Mr. Best made her sign the letter, and she cannot recall where she signed it. It may have been at her home or at some other location, but she does not know for certain. In addition, she cannot recall if the letter was typed when she signed it, or if the paper was blank. Though she contends Mr. Best tried to keep her from cancelling this annuity policy, at this time she cannot recall what he told her; what reasons he gave her; or why he wanted her to wait. Whenever she dealt with Mr. Best, he was not rude to her. She did not feel she was being forced by him to take out any insurance from him or to do any of the things or sign any of the documentation that she did. Ms. Clark filed the complaint against Mr. Best because she was told by someone that he had forged her name on a check. At the time she signed the complaint, and at the time of the hearing, she did not know whether he did it or not, nor does she know which check he is supposed to have forged. In fact, Ms. Clark finds it difficult to recall much of what had happened and is not sure of any of the facts to which she testified. She does know, and it is found, that all the money she paid to Mr. Best was reimbursed to her and she has lost nothing as a result of her dealing with him. Ms. Clark recalls that about this time, upon the advice of her attorney, Mr. Kanetsky, she engaged in dealings with another insurance agent who advised her to cancel the annuity policy and, in fact, wrote the letter of cancellation to the insurance company for her. Mr. Kanetsky, an attorney practicing in Venice, Florida, has worked with Ms. Clark for approximately ten years, primarily in the area of estate planning for her and her sister. Over the years, he has discussed with Ms. Clark various insurance policies and other financial products, and is aware of the insurance dealings involved in this case which he learned about from his discussions with his client. He claims that in August or September, 1988, Ms. Clark called his office and solicited advice from him as to how she could get rid of an insurance policy she did not want. He advised her to come in with all her papers to discuss it and at their first meeting, found that she had purchased the $30,000.00 annuity on the life of a niece, and also a health policy, from Respondent. The annuity policy was a single premium annuity, and the health policy had a $1,200.00 premium, for both of which, she had written checks. During this discussion Ms. Clark was quite sure that she did not want to keep the annuity policy. She was somewhat confused about the health policy, but was also satisfied that she didn't want it, though she could not elaborate why. Due to Ms. Clark's conditions, both financial and otherwise, Mr. Kanetsky felt she would be better off in a liquid position rather than having such a large annuity outstanding, and since she apparently wanted to cancel both policies, he agreed to help her. To do so, he first contacted an individual in the insurance business who was aware of Mr. Best and his operation. Upon advice of this individual, Mr. Kanetsky then contacted the insurance company on which the annuity policy had been written and requested that it be cancelled. Mr. Kanetsky also referred Ms. Clark to another insurance agent to get the health policy cancelled and a new policy issued. He also contacted Mr. Best to have him refund the $400.20 difference between the $1,200.00 which Ms. Clark had paid in as a premium on the health policy, and the $799.80 which had been refunded to her by the company when the first policy was cancelled. There is some misunderstanding as to how that first $799.80 check was handled. On its face, the check reflects it was sent to Ms. Clark who, in turn, endorsed it over to Mr. Best to be applied toward another policy. Mr. Kanetsky, on the other hand, indicates the check, though addressed to Ms. Clark, was actually sent to Mr. Best, who had Ms. Clark endorse it and who applied it to another policy. In any event, since Ms. Clark wanted that policy cancel led and apparently intended to do no further business with Mr. Best, Mr. Kanetsky requested that Best refund all monies paid. Mr. Best immediately issued his check for $400.20. The insurance company, apparently concluding it had sent the first check to Mr. Best by mistake, issued another check to Ms. Clark in the amount of $799.80, which represents the actual premium cost, with the balance being the agent's legitimate commission. Since Mr. Best had already forwarded his check for $799.80, when the second insurance company check was received it was immediately refunded to Mr. Best. The $30,000.00 paid in for the annuity policy was refunded to Ms. Clark directly by the insurance company. Mr. Kanetsky contends that notwithstanding he had written to Mr. Best to advise him to stay away from Ms. Clark, there is some indication that Best thereafter came to Ms. Clark's residence to discuss the annuity policy with her. Mr. Best does not deny having gone to Ms. Clark's home on several occasions; once to talk to her about the health and accident policy, and another time, to talk about the annuity. In both cases, however, this is a standard practice in the insurance industry, suggested by the company, to attempt to "conserve" the business by making a follow-up call in an effort to dissuade a policy holder from cancelling. It is found that no improper pressure was applied by Mr. Best in his efforts to conserve his sales. Over his years of experience with Ms. Clark, Mr. Kanetsky has found that she confuses easily, and though she is competent, she is extremely limited in business experience and understanding. She does not have a guardian of her property, but is clearly not equipped emotionally to handle many of her financial affairs. It is found that her recollection of the incidents in question here is so poor as to render her testimony almost irrelevant and without merit, and though she is quite sure she did not want the insurance she bought, and attempted to cancel it, she is totally unsure of the circumstances surrounding her relationship with Respondent and the details of any conversations and transactions she may have had with him. Consequently, her testimony, the only direct testimony regarding the issue of what transpired between her and Mr. Best, is, for all purposes here, worthless. Mr. Best denies threatening Ms. Clark or attempting to coerce her into purchasing insurance from him. When he saw her in August, 1988, it was the first time he had seen her for a while and had, in fact, forgotten about her until she came into his office to file a claim. At that point, he made an appointment with her for a review of her policy status. At that time Ms. Clark had no Medicare coverage, (she does now), and he offered to attempt to get her medical coverage, to which she agreed. She wrote a check for a policy to be issued by American Sun Life Insurance Company which, subsequently, rejected her. When the rejection came through, Mr. Best immediately notified her of that fact and told her then he would convert to another company, to which she agreed. Mr. Best is satisfied Ms. Clark understood he would apply the refund check he received from American Sun to the second policy issued by United American Life, and he did this. She thereafter cancelled that policy. After Mr. Best received notice of the cancellation, he went to her home to explain everything to her. At no time, however, did he threaten her, a fact to which she agrees. He claims she had received the initial refund from united American for $799.80, which she agreed he could apply toward a policy with another company, and she voluntarily endorsed the check over to him. She also cancelled this second policy. With regard to the annuity policy, when she notified the company that she was cancelling it, he received notice of this from the home office which suggested he do what he could to conserve the business. When he went to see her about it, she agreed, he claims, that she would keep the policy. At that time he wrote out, by hand, a note to be signed by her indicating her satisfaction with the policy and her desire it be maintained. When the company thereafter indicated it preferred a typed statement to that effect, he went to her with a typed notice which said the same thing, and which Ms. Clark signed. No threats were made, and Ms. Clark agrees to this. Mr. Best also sold an insurance policy to an Ann Ward, which she cancelled for a reason totally unrelated to the Respondent. When Mr. Best found out she had cancelled the policy, he went to see her to inquire as to her reasons. At that time, as in all her dealings with him over a period of time, he was not, and she has never found him to be, overbearing, unprofessional, or coercive. In all their transactions together, he has always fully explained his product, and on the basis of their relationship, she would be happy to deal with him again. When Ms. Ward cancelled her policy, the company wrote to Mr. Best and advised him of this fact and that he must refund a portion of the premium which it had paid to him as a commission. When he received this letter, he called the company and authorized it to withhold from the amount owed to him for renewal commissions, any amount the company claimed as reimbursement. He claims to have believed this procedure, a standard action within the industry, satisfied his obligation to the company. He was, therefore, quite surprised when the company complained and he immediately wrote a check to the company to cover the balance due it which is now paid in full. However, the evidence of record shows he was sent several notices of delinquency, even several for the balance after he authorized the company to take his earned commissions, without his taking any action and the company ultimately, on December 22, 1988, terminated his agency. His failure to pay over is found to be more negligent than willful, however. Mr. Best has been in the insurance business since 1979 and claims he has had no prior administrative complaints filed against him since that time. The Department showed none.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Counts I and II of the Administrative Complaint relating to the Respondent, Michael Eugene Best, be dismissed; and that as to Count III, he pay an administrative fine of $500.00. It is further RECOMMENDED that Mr. Best's applications to represent World Insurance Company, Travellers Life Insurance Company, and American Integrity Insurance Company be denied, such denial to be without prejudice to re-filing of the applications at a later time to be set by the Department. RECOMMENDED this 15th day of February, 1990, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of February, 1990. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to S 120.59(2), Florida Statutes, as to all of the Proposed Findings of Fact submitted in this case. FOR THE PETITIONER; 1. - 3. Accepted and incorporated herein. Accepted and incorporated herein. -10. Accepted and incorporated herein. 11.-14. Accepted and incorporated herein. 15.&16. Accepted and incorporated herein. 17. Accepted and incorporated herein, with the understanding that the failure to deal with American Sun Life was not due to any misconduct of Respondent but because of the Company's rejection of Ms. Clark. 18.-20. Rejected as not supported by the evidence. 21.-24. Accepted and incorporated herein. 25.-27. Rejected as not supported by the evidence. 28.-31. Accepted and incorporated herein. 32.&34. Accepted and incorporated herein. 35. Accepted and incorporated herein. COPIES FURNISHED: C. Christopher Anderson, III, Esquire Office of Legal Services Department of Insurance 412 Larson Building Tallahassee, Florida 32399-0300 Michael E. Sweeting, Esquire Pflaum, Dannheisser and Sweeting, P. A. 100 Wallace Avenue, Suite 210 Sarasota, Florida 34237 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue Whether Respondent engaged in conduct proscribed by the Insurance Code as is particularly set forth in the Administrative Complaint filed December 7, 1993.
Findings Of Fact During times material, Respondent, Nelson Speer Benzing, was licensed with Petitioner, Department of Insurance and Treasurer, as a life insurance and as a life and health insurance agent. During times material, Respondent was an employee of U.S. Savings Trust Management (herein USSTM). During times material, Respondent was never appointed with Petitioner to represent Wisconsin National Life Insurance Company (herein Wisconsin). However, Respondent did attend a workshop sponsored by Wisconsin. At some time prior to March 5, 1992, Respondent met with George Cantonis, President of Mega Manufacturing, Inc. (herein Mega) in order to obtain Cantonis' permission to make a sales presentation to Mega's employees. Cantonis granted Respondent permission to make a sales presentation to Mega's employees. On March 5, 1992, Respondent made a sales presentation to Mega's employees. The purpose of said presentation was to enroll the employees of Mega in a "savings plan" offered by USSTM. The presentation lasted approximately 15- 30 minutes. Employees were told that the plan, as presented, incorporated an insurance savings plan which had a "liquid" component as well as a long term savings component. At no time during this sales presentation did Respondent explain to employees of Mega that he was a licensed life insurance agent. During the course of his presentation, Respondent described USSTM's product variously as an "insurance saving plan", as an "investment in insurance companies" and as a "retirement savings plan". At no time during the presentation did Respondent specifically state that he was selling life insurance. At the conclusion of the presentation, Respondent enrolled all interested employees in USSTM's plan. During the enrollment procedure, Respondent told the employees to complete portions of at least three documents which included a form entitled "Employee History", a Wisconsin's life insurance application, and an employee payroll deduction authorization. Cantonis enrolled through the above procedure and signed a blank Wisconsin National Life Insurance application. Subsequent to the group sales presentation, Respondent made a similar presentation to Tina Netherton, Mega's office manager, who was working in the office and answering the telephone. At the conclusion of the presentation to Netherton, she enrolled in the plan and also signed a blank Wisconsin National Life Insurance application pursuant to instructions from Respondent. Both Netherton and Cantonis believed that the "savings plan" consisted of both a short term "liquid cash element and a long term investment". Neither were aware that they had purchased life insurance. Both Netherton and Cantonis had, in their opinion, adequate life insurance at the time of Respondent's sales presentation, and would not have purchased additional life insurance if they had been told (by Respondent) that they were purchasing life insurance. Both Netherton and Cantonis executed beneficiary designations on their belief that such was needed so that disbursements, if any, could be made to their designee in the event of their death. Approximately three weeks after enrollment, Netherton and Cantonis received brochures from USSTM which acknowledged their enrollment and detailed the benefits of the "savings plan". The brochure advised that Netherton and Cantonis had enrolled in an insurance "savings plan" and failed to state that they had purchased life insurance. Cantonis and Netherton attempted to withdraw funds from the liquid portion of the plan and were unable to do so. Four to five months after their enrollment, Cantonis and Netherton received life insurance policies from Wisconsin. Pursuant to the insurance applications, Cantonis and Netherton were issued Wisconsin life insurance policy numbers L00566485 and L00566483, respectively. Cantonis and Netherton maintained their Wisconsin policies in order to realize some gain from their overall loss in dealing with Respondent and USSTM. At the time that Respondent made his presentation to Mega's employees and officials, he had never before made sales presentations in order to enroll employees in plans offered by USSTM. Respondent's general manager, Vincent Radcliff, was the agent of record of Wisconsin. The insurance application and policies issued to Cantonis and Netherton were signed by an agent other than Respondent. Respondent's supervisor, Vincent A. Radcliff, III, was disciplined by Petitioner and Respondent cooperated with the Petitioner in investigating the complaint allegations filed against his supervisor, Radcliff. Respondent was first licensed by Petitioner on November 15, 1989. Respondent has not been the subject of any prior disciplinary actions by Petitioner.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Petitioner enter a Final Order suspending Respondent's life and health insurance licenses for a period of three (3) months. It is further RECOMMENDED that Petitioner order that Respondent engage in continuing education respecting the manner and means of soliciting on behalf of insurance companies, and to the extent that he completes the required courses within an acceptable time frame, that the suspension be suspended pending the outcome of Respondent's satisfactory completion of such continuing education courses. 1/ RECOMMENDED this 1st day of July, 1994, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 1st day of July, 1994.
The Issue Whether the Respondent's licenses as an insurance agent should be disciplined for violations alleged in an Administrative Complaint of February 12, 1993?
Findings Of Fact At all times relevant to this proceeding, the Respondent, Samuel Bannister Love, was licensed in the State of Florida by the Department of Insurance and Treasurer (hereinafter referred to as the "Department"), as a life and health insurance agent and as a general lines insurance agent. On April 7, 1993, Florida Life Insurance Agency, Inc. (hereinafter referred to as "Florida Life"), was organized as a corporation in the State of Florida. From the time of Florida Life's formation until at least 1992, Mr. Love was an officer and director of Florida Life. Mr. Love was also an authorized signatory on the premium bank account of Florida Life. On August 15, 1994, Florida Life entered into an agency agreement (hereinafter referred to as the "Agency Agreement"), with Service Insurance Company (hereinafter referred to as "Service Insurance"). Pursuant to the Agency Agreement, Florida Life agreed to act as agent for Service Insurance and to receive and accept proposals for insurance on behalf of Service Insurance. For acting as agent, Florida Life was to receive a commission. Among other things, the Agent Agreement provided: TRUST AGREEMENT The Agent has full power and authority to collect, receive and receipt for premiums on insurance tendered by the Agent [Florida Life] to and accepted by the Company [Service Insurance]. All moneys paid by the policyholders to the Agent, or to anyone representing him shall be held by and chargeable to the Agent as a fiduciary trust for and on behalf of the Company, and shall be paid over to the Company as herein provided. Accounts of money due the Company on the business placed by Agent with the Company shall be rendered by the Company monthly; the balance therein shown to be due to the Company shall be paid not later than 45 days after the end of the month for which the account is rendered. Accounts of money due the Agent on the business shall be payable monthly and shall be paid by the Company not later than 45 days after the end of the month in which the amount became due. Mr. Love signed the Agency Agreement as an officer of Florida Life. Mr. Love registered with the Department as agent for Service Insurance for the period April 1, 1987 to December 30, 1988. Mr. Love was the only officer or director of Florida Life to register with the Department as agent for Service Insurance. In December, 1988, due to failure of Florida Life to remit premiums due to Service Life pursuant to the Agency Agreement, even after demand therefore, Service Life terminated the Agency Agreement. The total amount of premiums owed by Florida Life to Service Life after termination of the Agency Agreement was $84,088.15. Service Life and Florida Life eventually agreed that Service Life would be paid $47,000.00 as a settlement of Service Life's claims against Florida Life for unpaid premiums due under the Agency Agreement. Florida Life subsequently paid $22,000.00 of the $47,000.00 settlement to Service Life and a promissory note (hereinafter referred to as the "Note") for the $25,000.00 balance was entered into by Florida Life. Mr. Love did not personally sign the Note. In July, 1991, the Department entered an Administrative Complaint against Mr. Love as a result of the dispute between Service Life and Florida Life. This dispute was resolved by a Settlement Stipulation for Consent Order entered into by the Department and Mr. Love on January 14, 1991 (hereinafter referred to as the "Settlement"). Pursuant to the Settlement, Mr. Love was to pay an administrative fine and he was placed on probation subject to the following condition: That as a condition of probation Respondent shall use good faith and best efforts to facilitate payment by Florida Life Insurance Agency, Inc., to the Service Insurance Co. of Bradenton, Florida the sum of $25,000.00 together with interest at the rate of 9 percent per annum in accordance with the terms of the promissory note by Florida Life Insurance Agency, Inc., in favor of Service Insurance Company dated November 20, 1991 (copy attached). A copy of the Note was attached to the Settlement. The Settlement Agreement further provided: Violation of the conditions of probation as set forth in this Settlement Stipulation for Consent Order, or failure to pay on the debt owed to Service Insurance Company pursuant to the terms of the previously mentioned promissory note, shall result in immediate agency action seeking revocation of Respondent's licenses, which may result in revocation or other censure commensurate with the violation. . . . Pursuant to the conditions of Mr. Love's probation, he specifically agreed in paragraph (e) of the Settlement that his licenses with the Department could be revoked if he failed to adhere to the condition of paragraph (d) (to use his best efforts to see that Florida Life paid the Note) of the Settlement or if he failed to pay the debt owed to Service Insurance. Paragraph (e) of the Settlement and the Consent Order provided, however, the following: Notwithstanding anything to the contrary contained herein, the Respondent reserves and does not waive the right to assert all of his defenses to the violations alleged in the Administrative Complaint filed herein. The Settlement also provided: 7. By execution of this Settlement Stipulation for Consent Order and by the entry of the subsequent Consent Order in this case, the Department and the Respondent intend to and do resolve all issues which pertain to this matter in Case No. 91-L- 324JB, excpt as otherwise stated herein. Pursuant to the Settlement, a Consent Order was entered by the Department on February 6, 1991. The Consent Order specifically states that the Settlement "is hereby approved and fully incorporated herein by reference." In paragraphs (d) and (e) of the Consent Order the conditions of Mr. Love's probation set out in findings of fact 13, 14 and 16 are specifically included. The Note provided that the principal of the Note was to be paid on November 11, 1992. Florida Life failed to make this agreed payment. Demand for payment on the Note was made to Mr. Love. Mr. Love has not made any payment on the Note. As of the date of the final hearing, the premiums due to Service Insurance as represented in the Note have not been paid by Florida Life, Mr. Love or any other person. Florida Life has ceased operating and apparently does not have funds to pay the Note. In this proceeding, the Department has entered an Administrative Complaint containing two counts. Count I alleges several violations of Chapter 626, Florida Statutes, based essentially on the events which led up to the Settlement. Count II alleges that Mr. Love has violated the terms of the Settlement and Consent Order. Pursuant to the Settlement, as quoted in finding of fact 17, the Department and Mr. Love expressly agreed that the Settlement was intended to resolve all issues related to this matter. Based upon the language of the Settlement quoted in findings of fact 14 and 16, however, it appears that the parties may have intended that the Department would be required to prove the underlying facts of this matter in order to take further action against Mr. Love. The Department apparently agrees with the later interpretation in light of the fact that the Department, through Count I of the instant Administrative Complaint, has alleged that Mr. Love has committed the violations which the parties had attempted to resolve by the Settlement and the Consent Order. No objection to Count I has been raised by Mr. Love. Therefore, Count I will be considered and the Settlement and Consent Order will be interpreted to require proof of the violations alleged in Count I in order to discipline Mr. Love's licenses. Based upon the foregoing findings of fact, the Department has proved that Florida Life failed to keep premiums of Service Insurance in a separate account, and that Florida Life failed to pay Service Insurance those premiums. The Department also proved that Mr. Love, who registered on behalf of Florida Life with the Department as agent for Service Insurance, failed to keep premiums of Service Insurance in a separate account and failed to pay Service Insurance those premiums. Based upon the foregoing findings of fact, the Department has also proved that Florida Life demonstrated a lack of fitness or trustworthiness to engage in the business of insurance. The evidence failed to prove that Florida Life's actions were fraudulent or were the result of dishonest practices. The evidence proved that Florida Life misappropriated, converted or withheld unlawfully moneys belonging to Service Insurance. Although Mr. Love attempted to prove that he was not involved in the running of Florida Life, his legal authority and position with Florida Life does not absolve him from responsibility. Mr. Love was an officer and director of Florida Life and he had authority over the premiums account of Florida Life. Most importantly, Mr. Love, and only Mr. Love, held himself out as the insurance agent on behalf of Service Insurance. Mr. Love is now retired and does not intend to become active in the insurance business. Mr. Love has had no other charges brought against his insurance licenses, except those arising out of the Agency Agreement, during the more than twenty years that Mr. Love has held insurance licenses.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of the Treasurer and Department of Insurance enter a Final Order finding that Samuel Bannister Love has violated Sections 626.561(1), 626.611(7), 626.611(10), 626.611(13), 626.621(2) and 626.621(4), Florida Statutes. It is further RECOMMENDED that the allegation of Count I of the Administrative Complaint that Mr. Love violated Section 626.611(9), Florida Statutes, be DISMISSED. It is further RECOMMENDED that the Final Order find that Mr. Love violated the terms and conditions of his probation as agreed in the Settlement in violation of Section 626.611(13), Florida Statutes. It is further RECOMMENDED that the allegation of Count II of the Administrative Complaint that Mr. Love violated Section 626.611(7), Florida Statutes, be DISMISSED. It is further RECOMMENDED that Mr. Love's insurance licenses be suspended for a period of three years or until the Note is paid, which ever occurs first. Should the Note not be paid in full within the period of the suspension of Mr. Love's licenses, Mr. Love's insurance licenses should be revoked after the period of the suspension. DONE AND ENTERED this 3rd day of November, 1993, in Tallahassee, Florida. LARRY J. SARTIN 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 3rd day of November, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-1473 The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Department's Proposed Findings of Fact Accepted in 1. Accepted in 2-3. Accepted in 4-5. Accepted in 7. Accepted in 3. Accepted in 8 and hereby accepted. Accepted in 8. Accepted in 9. Hereby accepted. Accepted in 10. Accepted in 11 and hereby accepted. Accepted in 12-15 and 18. Accepted in 19. Accepted in 20-21. Accepted in 21. Accepted in 20 and hereby accepted. Accepted in 24. See 25-26. Mr. Love's Proposed Findings of Fact 1-2, First Page: Argument or not supported by the weight of the evidence. Second and Third Pages: Not relevant or not supported by the weight of the evidence. Argument, not relevant or not supported by the weight of the evidence. See 28. COPIES FURNISHED: James A. Bossart, Esquire Division of Legal Services Department of Insurance and Treasurer 612 Larson Building Tallahassee, Florida 32399-0333 Samuel Bannister Love 10835 South East Sunset Harbor Road Summerfield, Florida 34491 Tom Gallagher, Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil, Esquire Department of Insurance and Treasurer The Capitol, PL-11 Tallahassee, Florida 32399-0300
The Issue The issue to be determined is whether Respondent violated section 626.611(5), (7), (9), and (10), and section 626.621(6) and (9), Florida Statutes (2002), as alleged in the Administrative Complaint, and if so, what penalty should be imposed?
Findings Of Fact The Department is the state agency charged with the licensing and regulation of insurance agents in the State of Florida, and is responsible for administering the disciplinary provisions of chapter 626, Florida Statutes, pursuant to section 20.121(2)(g) and (h). Respondent has been licensed as a life, including variable annuity and health, agent (2-15), life, including variable annuity, agent (2-16), and a life and health agent (2- 18) at all times relevant to this proceeding. During the period relevant to these proceedings, Respondent was the president of BCMI, Inc. Pamela Johnson was employed by the Volusia County Sheriff's Department and on duty when she was involved in a motor accident on I-95 on September 4, 1998. Ms. Johnson was injured in the accident and was unable to continue working as a result. Ms. Johnson filed suit against the company owning the truck that hit her, and in 2000 received a compensatory award of approximately $650,000. She hired an investment advisor to handle the award, and placed her funds in a money market account. Until that time, she had no prior investment experience. Ms. Johnson describes herself as a person who wants to take very few risks with her money. She wanted all of her investments to be very safe and conservative. In 2002, she spoke to Respondent regarding possible investments. She was acquainted with Respondent through her sister. After Respondent met with her at her home, she decided to remove $100,000 from her money market account and invest in an annuity that Respondent was offering. She received a check for $100,000 from the money market account and signed it over to Respondent. Respondent assisted her in filling out an application for an annuity. He then deposited the check into his business account. Respondent did not, however, actually purchase the annuity with the funds entrusted to him. Ms. Johnson did not receive any paperwork regarding her purchase of the annuity, other than her initial application, and asked Respondent when she would receive the paperwork. At first, Respondent told her that he had received his copy and she should receive hers in the mail. She did not. Ms. Johnson called Respondent repeatedly and made several appointments with him between June and October, 2002, in order to obtain more information regarding her investment. Ms. Johnson was finally able to meet with Respondent in October of 2002, and learned for the first time that Respondent had not purchased on her behalf the annuity for which she had applied. Instead, he decided (without input from her) to use the money in a real estate investment. He represented to her that she had already made $5,000 on her investment. At this time, Respondent told Ms. Johnson that if she still wanted to purchase an annuity, she would have to write him another check. She did so, this time directly to Transamerica Life and Annuity instead of to Respondent. She has since moved the management of that annuity to another insurance agency. Ms. Johnson continued to seek documentation for her first investment, to no avail. She told Respondent she needed some documentation in order to complete her taxes, so in February 2003, he showed her a sheet of paper entitled "Account Summary," which listed her two investments. The first investment was her annuity with Transamerica Life and Annuity. The second investment is entitled "Corporate Note," with "real estate" in parenthesis, an identification number (which is her social security number), and an account balance of $105,000. The document stated at the bottom below Respondent's name and address, "**No taxes are due on these accounts at this time." Despite multiple contacts by both Ms. Johnson and a friend of Ms. Johnson, no further documentation regarding her investment has ever been provided. Finally, in May of 2004, Respondent told Ms. Johnson that an employee of the real estate company had embezzled all of the funds and that her entire investment was lost. Both the Financial Industry Regulatory Authority (FINRA) and Ms. Johnston eventually filed complaints with DFS regarding Respondent's handling of her first $100,000 investment. Respondent has offered several payment plans to Ms. Johnson over the years, but he has never actually returned any money to her. He did not have her permission to invest in a real estate transaction. He only had permission to purchase an annuity.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED that the Department of Financial Services enter a Final Order finding Respondent guilty of violating section 626.611(5), (7), (9), and (10) and section 626.621(6); revoking his license; and requiring that he make restitution to Pamela Johnson in the amount of $100,000 pursuant to the authority in section 626.692. DONE AND ENTERED this 23rd day of June, 2011, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON 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 23rd day of June, 2011.
Findings Of Fact Petitioner was found guilty of breaking and entering in 1974, and was charged with burglary and attempted escape in 1976. The burglary charge was, upon adjudication reduced to trespassing and too attempted escape charge was dropped. Respondent's license application form contains the question, "Have you ever been charged with or convicted of a felony?" Details are required if a "yes" answer is given. Petitioner disclosed the 1974 breaking and entering conviction but did not include either of the 1976 charges or the 1976 misdemeanor conviction. However, this was not an attempt by Petitioner to withhold information, but was rather a misunderstanding of the request to list all felony charges regardless of disposition and not merely those involving felony convictions. Petitioner's reputation for truthfulness was attested to by the police officer who arrested him in 1974 and 1976, and monitored his subsequent rehabilitation. Petitioner readily admitted the acts for which he was arrested in 1974, and has never been otherwise known to lie. Petitioner, who was 26 years old at the time he filed his application in April of 1980, has overcome his earlier difficulties. Since 1976, he has completed a drug therapy program, taken mental health technician courses at a community college, and worked as a counselor and supervisor in a community mental health facility. He is currently a convenience store manager in Fort Pierce, and recently trained part-time with a local insurance agency in anticipation of licensing.
Recommendation From the foregoing, it is RECOMMENDED that the application of Ricky D. Brown for filing for examination as ordinary-combination life including disability agent be granted. DONE and ORDERED this 10th day of December, 1980, in Tallahassee, Leon Country, Florida. R. T. CARPENTER Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of December, 1980. COPIES FURNISHED: Mr. Ricky D. Brown 601 North 15th Street Fort Pierce, Florida 33450 Leon Rolle, Esquire Office of Treasurer and Insurance Commissioner 220 Larson Building Tallahassee, Florida 32301
