Findings Of Fact Background. Petitioner, George T. Lloyd, Jr., has been employed by the State of Florida, Department of Revenue, for over 14 years, and was, at all times material hereto, a participant in the State of Florida Employees Group Health Self Insurance Plan (Plan), with family coverage. On March 25, 1986, petitioner's son, George T. Lloyd, III (George), then 17 years of age and an eligible dependent under the Plan, was admitted through the emergency room to Broward General Medical Center (Hospital), Fort Lauderdale, Florida. George was placed in the Hospital's Intensive Care Unit, and remained there until his recovery and transfer to the Hospital's psychiatric floor on April 4, 1986. Upon admission, George was comatose and diagnosed as having suffered a severe barbiturate drug overdose. Blood tests performed at the time demonstrated a serum barbiturate level of 145.6 UG (milligrams per milliliter) and a serum Dilantin level of 23.3 UG. At such levels, or even one-half such levels, George would have died of respiratory depression absent medical intervention. On or about August 9, 1986, Blue Cross and Blue Shield of Florida, Inc., the State's administrator of the Plan, notified petitioner that the Hospital's statement for services and supplies rendered during the course of his son's admission of March 25, 1986 to April 4, 1986, totalling $17,402.95, was ineligible for payment based upon the Plan's exclusion of benefits for intentional self-inflicted injuries, to wit: attempted suicide. Pertinent to this case, the Plan provides: VII. EXCLUSIONS The following exclusions shall apply under the Plan: * * * E. Any services and supplies received due to the following circumstances: * * * 2. Resulting from an intentional self- inflicted injury. Over the course of the next two years petitioner's claim for such expenses was reevaluated by the Plan administrator, as well as respondent, Department of Administration (Department). At the conclusion of that review, the Plan administrator concluded that the documentation available to it demonstrated that such expenses were incurred as a consequence of George's attempt to take his own life and were therefore excluded from coverage. By letter of August 19, 1988, the Department notified petitioner that his claim for benefits arising from his son's hospital admission of March 25, 1986 to April 4, 1986, was denied because such expenses resulted from his son's attempt at suicide. Petitioner filed a timely protest of the Department's decision, and the matter was referred to the Division of Administrative Hearings to conduct a formal hearing. An Intentional Self-Inflicted Injury? Petitioner's son has a history of alcohol and drug (marijuana and cocaine) abuse and emotional problems accompanied by periods of depression that predate the incident in question by a number of years. His mother and father (petitioner) were divorced in 1971 when George was approximately three years of age. Thereafter, George resided in Florida with his mother until his fifth birthday, at which time he was sent out-of-state to reside with his father. George resided with his father until he was eleven years old, and then returned to live with his mother in Florida. In the summer of 1984, George was abusing alcohol and drugs, and experiencing difficulties in school. At that time, his mother again sent George to live with his father in the apparent hope that he could assist George in addressing these problems. The petitioner secured group counseling for George in an attempt to assist him. George continued, however, to use alcohol and drugs, and within four months, dropped out of school and ran away. Approximately four or five months later, George reappeared and returned to Fort Lauderdale to live with his mother and stepfather. Following his return, George did little of a constructive nature, and what jobs he was able to secure as a tenth grade dropout were menial in nature and of a minimal wage. Variously he worked as a bag boy, mowed lawns, and washed cars. On March 25, 1986, George was unemployed, and had just concluded an argument with his stepfather concerning his unemployment and failure to follow any constructive pursuit. Depressed at his circumstances, George ingested phenobarbital and Dilantin, drugs that had been prescribed for his stepfather, with the intention of taking his own life. But for the medical intervention previously discussed, George's attempt would have proven successful. At the time he ingested the drugs, George was not under the influence of alcohol or any other drug, and was of sufficient age and maturity to appreciate the consequences of his actions. Both the nature of the drugs he took and the vast quantity he ingested indicate an intentional attempt to take his own life rather than an accidental overdose during "recreational" use. Here, the drugs he took were not "recreational" drugs, they produce no "high," and the dosage, as heretofore noted, was massive. Considering these factors, George's admission that he attempted suicide, and the totality of the circumstances, compels the conclusion that he did consciously attempt to take his own life, and that what depression he suffered did not deprive him of the ability to appreciate the consequences of his actions.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered dismissing, with prejudice, the petition for administrative review. DONE and ENTERED this 16th day of May 1989, in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK 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 16th day of May, 1989.
The Issue Whether the Amended Notice and Order to Show Cause issued in DOAH Case Number 11-1150, with which this unadopted rule challenge is now consolidated, contains an agency statement that comes within the definition of a rule but has not been adopted through rulemaking procedures, in violation of section 120.54(1)(a), Florida Statutes, and if so, whether costs and attorney’s fees should be awarded.
Findings Of Fact The Financial Services Commission has responsibility over rules implementing provisions of the Florida Insurance Code conferring duties upon the Commission or its subunits. The Office of Insurance Regulation (the Office) is a subunit of the Financial Services Commission responsible for enforcing the provisions of the Florida Insurance Code with respect to licensees of the Office. Guarantee Trust Life Insurance Company (GTL) is a foreign insurer, domiciled in Illinois, which holds a certificate of authority to transact business as a life and health insurer in Florida. GTL offers insurance products nationwide, except for New York, including Medicare long-term care, supplemental, cancer, college student, accident, and sickness policies. GTL is subject to the jurisdiction of the Office under the Florida Insurance Code, including fines and disciplinary actions. It is substantially affected by the Office’s action and is entitled to a hearing to determine if the Administrative Complaint filed against it constitutes an unadopted rule. On or about May 5, 2010, GTL sent a Termination Letter to at least 216 Florida residents (Members) covered under an out-of-state group major medical policy (Policy), as well as to about 70 Florida residents who held individual policies offered by GTL.1/ The Termination Letter advised that major medical coverage would not be renewed and that GTL would no longer be offering major medical type coverage. On January 12, 2011, the Office served GTL with a Notice and Order to Show Cause alleging that GTL had violated the Florida Insurance Code by continuing to non-renew policies and failing to offer converted policies. A conversion policy is a form of replacement insurance coverage for which certificate holders in a group policy may be eligible when their coverage under a group policy is terminated. On January 28, 2011, GTL filed a Petition for Administrative Hearing with the Office. It amended that Petition on February 1, 2011, still maintaining that it was not required to offer conversion policies. On September 2, 2011, an Order was issued granting the Office’s Unopposed Motion to Amend Notice and Order to Show Cause. Counts I and II of the earlier complaint were amended. The earlier complaint had charged in these counts that “Guarantee Trust violated the Florida Insurance Code by failing to offer converted policies as required by Section 627.6675, Florida Statutes.” Amended counts I and II alleged that “Guarantee Trust violated the Florida Insurance Code by issuing the Termination Letter without offering converted policies required by the Florida Insurance Code and Section 627.6675, Florida Statutes.” On November 15, 2011, GTL filed a Petition to Challenge Unadopted Rule. The Petition was served on the Office more than 30 days before it was filed with the Division of Administrative Hearings, as stipulated at hearing. The Financial Services Commission has not adopted the statement that it was a violation of provisions of the Florida Insurance Code for GTL to “issue a termination letter without offering converted policies as required by Section 627.6675,” or any similar statement, by rulemaking procedures.
The Issue At issue in this proceeding is whether the son of Floyd Goins, an enrollee of the State of Florida Employees Group Health Self Insurance Plan, is an eligible dependent under the provisions of such plan, and therefore eligible for insurance benefits.
Findings Of Fact Background Floyd Goins (the "Insured") has been employed by the State of Florida, Dade County State Attorney's Office, for approximately 11 years, and was, at all times material hereto, a participant in the State of Florida Employees' Group Health Self Insurance Plan (the "Plan"), with family coverage. On January 17, 1988, the Insured's son, Ronald Goins (Ronald), date of birth March 7, 1965, was involved in an automobile accident in which he sustained serious injury. As a consequence, Ronald was admitted to Jackson Memorial Hospital, where he apparently underwent extensive treatment. As a result of the accident, Ronald suffered severe physical handicap, in that he cannot walk or talk, and is not capable of self sustaining employment. Currently, Ronald resides with his parents, and is wholly dependent upon them for support. As a consequence of the medical expenses incurred on behalf of Ronald, a request for reimbursement was made to respondent, Department of Administration, Division of State Employees' Insurance (Department), under the Plan. Upon review, the Department, relying upon the provisions of Rule 22K- 1.103, Florida Administrative Code, concluded that Ronald, since he was over the age of 19 at the time of the accident and was not enrolled in and attending a school, college or university as a full-time student at the time of the accident, was ineligible for coverage as a dependent under the Plan. Accordingly, the Department denied the request for reimbursement. Thereafter, the Insured assigned to petitioner, The Public Health Trust of Dade County, Florida d/b/a Jackson Memorial Hospital, his interest in any benefits payable for services rendered by such facility as a consequence of Ronald's admission, and further authorized Jackson Memorial to take whatever legal action might be necessary to collect such benefits. As a consequence, petitioner filed a request for formal hearing to contest the Department's conclusion that Ronald was ineligible for coverage under the Plan. 1/ The issue of coverage. Under the provisions of the Plan, an employee's "eligible children" are included within the definition of "eligible dependents" who are eligible to participate in the Plan, provided family coverage has been selected. Rules 22K- 1.103(5) and 22K-1.201(2), Florida Administrative Code. "Eligible children" are defined by Rule 22K-1.103(4), Florida Administrative Code, as follows: "Eligible children" shall mean the employee's . . . own children . . . Such children are eligible for coverage as follows: From their date of birth to the end of the month in which their nineteenth (19th) birthday occurs; From their nineteenth (19th) birthday to the end of the month in which their twenty-third (23rd) birthday occurs, if they are enrolled in and regularly attending on a full-time basis any school, college or university which provides training or educational activities, and which is certified or licensed by a state or foreign country. Such children who are mentally or physically handicapped shall be eligible to continue coverage after attainment of the above age limits and while the employee's or retiree's family coverage is in effect provided such children are incapable of self- sustaining employment by reason of such mental or physical handicap and chiefly dependent upon the employee, retiree or supervising spouse for support and maintenance. (Emphasis added) And, Rule 22K-1.103(9), Florida Administrative Code, defines "full-time basis", as follows: (9) "Full-time basis" shall mean the number of hours required by the school, college or university to qualify an eligible child as a full-time student. In no case shall an eligible child be considered attending on a full-time basis unless such child is currently enrolled and attending, or has, during the previous twelve (12) month period, attended as a full-time student, two (2) semesters, three (3) quarters or eight (8) months at such school, college or university. (Emphasis added) Here, petitioner contends that Ronald was an eligible dependent of the Insured, and therefore covered by the Plan because he was "enrolled in and regularly attending on a full-time basis" Bauder College, an institution licensed by the State of Florida, at the time of his accident or, alternatively, because such accident rendered him "physically handicapped." The proof fails, however, to support the conclusion that Ronald was an eligible dependent of the Insured, at the time of the accident, on either basis. Ronald's educational pursuits. Regarding Ronald's educational pursuits, the proof demonstrates that his public education was interrupted in or about 1984 when he was incarcerated in the State prison system, and that he remained so incarcerated until the later part of 1987. While incarcerated, Ronald apparently pursued some educational program, although no specifics were offered at hearing from which any conclusion could be drawn regarding its "full-time" nature, since the Department of Education awarded to him a high school diploma on December 12, 1984. Ronald apparently also pursued, while incarcerated, a course of study in electronic repair through Sumter Vocational School, during the period of November 1, 1985 to September 20, 1986. [Petitioner's Exhibit 1]. Again, no specifics were offered at hearing from which any conclusion could be drawn regarding the "full- time" nature of this program, but Ronald was awarded a certificate upon its completion. In sum, the proof fails to support the conclusion that Ronald, while incarcerated, was enrolled in and regularly attending any school on a "full-time basis", as that term is defined by Rule 22K-1.103(9), Florida Administrative Code. Moreover, there is no proof of record that Ronald pursued any educational program after September 20, 1986, a date in excess of 12 months prior to his automobile accident, excepting his enrollment at Bauder College. Regarding Ronald's enrollment at Bauder College, the proof demonstrates that on November 3, 1987, Ronald executed an enrollment agreement with Bauder College whereby he elected to pursue an educational program in electronic engineering technology. According to the enrollment agreement, the program was to start January 19, 1988, and the school calendar [Respondent's Exhibit 1] confirms that January 19, 1988, was "ORIENTATION/REGISTRATION - FIRST DAY" of the 1988 Winter Quarter. Ronald was, however, hospitalized on January 17, 1988 as a consequence of his automobile accident, and never started his course of training. 2/ Therefore, Ronald, although enrolled, was not yet "regularly attending" school when injured and, therefore, was not at the time of his accident an eligible dependent of the Insured. 3/ Ronald's handicapped status. Here, petitioner also contends that, as a consequence of his handicap, Ronald was an eligible dependent under the Plan. Such contention is rejected as contrary to the provisions of Rule 22K-1.103(4), Florida Administrative Code. Handicap, under the facts of this case, is not a factor which renders a person eligible for coverage. Rather, handicap is a factor which permits the child of the insured "to continue coverage" after attainment of the age limits for coverage. Rule 22K-1.103(4)c), Florida Administrative Code. Ronald, not having been a covered dependent at the time he suffered his handicap, had no coverage to continue. Estoppel Notwithstanding the rules which govern eligibility to participate in the Plan, petitioner contends that the Department should be estopped to apply such rules in the instant case. 4/ The predicate for petitioner's argument lies in a brochure [Petitioner's Exhibit 7] that was provided the Insured, and which defines eligible dependents as follows: Your own children . . . ; if they are under the age of 19, if they are full-time students under the age of 23, or if they are determined by the administrator to be mentally or physically handicapped, incapable of self- sustaining employment, chiefly dependent upon your support, and otherwise insurable. Petitioner's claim of estoppel is unpersuasive for a number of reasons. First, the brochure does not purport to replicate the Plan, but to summarize it, and advises all recipients that it "is not a contract since it does not include all of the provisions, definitions, benefits, exclusions and limitations" of the Plan. Under such circumstances, it would not be reasonable to rely solely on the brochure for any definition of coverage. Second, and perhaps most importantly, the proof is not persuasive that the Insured relied upon the referenced provision of the brochure or that he made any change in position as a consequence of such provision.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered which finds that Ronald Goins is not covered by the Plan, and which dismisses the petition with prejudice. DONE and ENTERED this 6th day of December 1991, at Tallahassee, Florida. WILLIAM J. KENDRICK 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 6th day of December 1991.
The Issue The issue for determination in this case is whether Respondent's license as an insurance agent, and his eligibility for licensure as an insurance agent in Florida should be disciplined for violation of certain provisions of Chapter 626, Florida Statutes, and Rule 4-215.210, Florida Administrative Code, as set forth in the Administrative Complaint.
Findings Of Fact Petitioner, DEPARTMENT OF INSURANCE AND TREASURER, is the agency of the State of Florida vested with the statutory authority to administer the disciplinary provisions of Chapter 626, Florida Statutes. Respondent, ROBERT DARREN CARLSON, at all times material hereto, was eligible for licensure and was licensed in Florida as a life insurance agent, life and health insurance agent, and variable annuity contracts salesman. Respondent was initially licensed in 1992. Respondent's license is currently under emergency suspension as a result of the actions alleged in the Administrative Complaint filed in this case. Respondent is thirty years old, married with one son, and resides in St. Petersburg, Florida. In 1993 Respondent became a shareholder and vice-president of National Consultants International, Inc. (National), a Florida corporation operating as an insurance agency in Pinellas County, Florida. National was incorporated on November 29, 1993, and dissolved on August 24, 1994. The principal shareholder and president of National was Coreen McKeever. At National Coreen McKeever was also responsible for the administrative functions of the agency. Respondent became an agent for National in March 1994. Respondent's duties were to contact potential customers, discuss the customer's insurance needs, explain products that might address the customer's needs, and write policies if purchased by the customer. Respondent collected the premiums, but as a usual practice at National, would turn the premium checks over to Coreen McKeever for administrative processing. Respondent was also authorized to make deposits and withdrawals on National's premium trust account at Republic Bank in Seminole, Florida. Findings as to Count III - Ralph Cody Ralph Cody is an eighty-nine year old retired school maintenance worker from Kentucky. Mr. Cody retired to Florida in 1980, and currently lives with his wife, Edna, in Pinellas County. Mr. Cody is in good health, but has difficulty with his eyesight and hearing. Mr. Cody no longer drives. Mr. Cody first met the Respondent approximately two years ago. At that time Respondent sold Mr. Cody an insurance policy with a company called United American. Mr. Cody was satisfied with this insurance policy. Subsequent to his initial contact with Respondent, Mr. Cody became interested in obtaining an insurance policy which would provide for in-home health care. Mr. Cody was particularly interested in such an insurance policy because of his concern for his wife's deteriorating health, and his desire that health care be provided at home for him and his wife, and not in a nursing home. Because of his interest in obtaining an in-home health care insurance policy, Mr. Cody met with Respondent. Respondent suggested, and Mr. Cody agreed, to the purchase of a policy called Fortis Long Term Security Home Health Care (Fortis), which was underwritten by Time Insurance Company (Time) of Milwaukee, Wisconsin. Respondent was an agent with Time. Mr. Cody believed the Time policy would meet his insurance needs. On or about March 31, 1994, Respondent received from Mr. Cody a check for $3,164.40. This sum was intended by Mr. Cody to be the premium payment for the Fortis home health care insurance policy underwritten by Time. Pursuant to Respondent's directions, the check from Mr. Cody was made payable to Respondent's agency, National, not to Time Insurance Company. Respondent directed this procedure because at this time, National had limited experience with Time, and National did not have "netting" privileges. "Netting" privileges allow an insurance agency to deduct its commission prior to forwarding a premium check to the underwriting company. Because of National's limited experience with Time, and the lack of netting privileges, Respondent did not believe it was unusual to make the Cody check payable to National, or to deposit the Cody check into National's account. Time has a general policy requiring that premium checks be made payable directly to Time; however, Time, on occasion, will accept premium checks from agencies. Time also requires that an application and premium check be immediately sent to the company for processing. Respondent deposited the Cody check into National's account at Republic Bank. Respondent took the Cody application back to National, entered the information into the computer and delivered the Cody application for the issuance of the Fortis policy to Coreen McKeever. Neither the Cody check, nor the Cody application for issuance of the Fortis policy was received by Time. Within three weeks of depositing the check and delivering the application, Respondent inquired of Coreen McKeever as to the status of the Cody application. Respondent was informed by Coreen McKeever that the application had been denied by Time because of Mrs. Cody's health problems. Contrary to Ms. McKeever's report, Time did not consider nor decline the application for issuance of the Fortis policy to the Codys because of Mrs. Cody's health or any other reason. Respondent did not personally check on the Cody application, and did not contact Time regarding the issuance of the policy to the Codys. Respondent had no personal knowledge whether the Cody application had been declined and received no written notification regarding the Cody application. Respondent did not question the representations made by Coreen McKeever in this regard. Shortly thereafter, Respondent informed Mr. Cody that the application to Time had been declined. Respondent met with Mr. Cody and suggested that Mr. Cody consider purchasing a product offered by a company called Secure Care Home Services, Inc. (Secure Care), which also provided home health care and was approximately the same purchase price as the Fortis policy underwritten by Time. Respondent at that time represented to Mr. Cody, and Mr. Cody was under the belief, that the Secure Care product was substantially equivalent to the Fortis policy underwritten by Time. Mr. Cody was aware that the Secure Care product was not insurance. Secure Care is a corporation located in Seminole, Florida. Secure Care is not an insurance company, but offers "membership agreements" marketed primarily to elderly persons to contractually provide in-home health care services to its members. Coreen McKeever (a/k/a Coreen J. Morgan) is a director of Secure Care, and has an interest in Secure Care. Secure Care is currently under a Cease and Desist Order suspending its business operations. The Cease and Desist order was entered by the Petitioner on March 13, 1995. On or about May 18, 1994, Mr. and Mrs. Cody entered into a membership agreement with Secure Care. The initial cost of the membership for both of the Codys as reflected in the agreement was $3,027.00; however, the record reflects that the ultimate cost to the Codys for the Secure Care membership actually totalled $3098.40. Respondent signed the agreement as an authorized agent for Secure Care. On May 26, 1994, Respondent met with the Codys at their home. At this time Respondent offered to refund to Mr. Cody the purchase price of the Time policy. To this end, Respondent tendered check number 1191 drawn on National's account in the amount of $3,164.40 to Mr. Cody; however, because the purchase price of the Codys' membership in Secure Care which Mr. Cody had already agreed to purchase was almost as much as the Time policy, Mr. Cody requested that Respondent apply the check for the Time policy to the Secure Care membership, and refund Mr. Cody the difference. Respondent accordingly on May 27, 1994, issued a check number 1189 drawn on National's account to Mr. Cody the amount of $65.70, which represented the difference in the cost of the two products. Several months after his purchase of the Secure Care membership, Mr. Cody became aware that some of his neighbors were dissatisfied with the home health care provided by the company. Thereafter, Mr. Cody became concerned that the Secure Care membership would not meet his or his wife's needs. At this time Mr. Cody had no personal experience with Secure Care. Neither Mr. Cody nor his wife ever used, or sought to use their Secure Care membership. Mr. Cody complained to Petitioner regarding Secure Care. Mr. Cody also contacted Time and discovered that his application and check had not been received. Respondent learned of Mr. Cody's concerns with Secure Care after Mr. Cody complained to Petitioner and a departmental investigation of this matter had been undertaken. Respondent then contacted Mr. Cody who told Respondent he wanted a refund of the purchase price of the Secure Care membership. Respondent contacted Secure Care, but learned that the company was not giving refunds at that time. Respondent suggested that Mr. Cody then attempt to deal with Secure Care directly. Mr. Cody was unable to obtain a refund of the cost of the Secure Care membership. The Codys obtained no benefit from their Secure Care membership. The Secure Care membership was not substantially equivalent to the Fortis policy underwritten by Time. Secure Care was not an established company and did not have the resources or capability to provide the services offered by Time. Count II - Leila G. Smith Leila G. Smith is a widowed ninety-one year old retired first grade school teacher, originally from Georgia. Mrs. Smith currently resides with her niece, Miriam Enright, in Seminole, Florida. Brenda Blager is Miriam Enright's daughter, and Mrs. Smith's great-niece. Ms. Blager currently resides in Champagne, Illinois. Mrs. Smith receives a monthly income from her teacher's pension and Social Security benefits. Mrs. Smith is in generally good health for a person of her age, but has experienced a significant loss of vision, is totally blind in her left eye, and cannot read without the aid of a magnifying glass. Mrs. Smith moved to Florida approximately three years ago. Respondent was first introduced to Mrs. Smith by Mrs. Enright to whom Respondent had previously sold annuities. Respondent visited the Enright home and met with Mrs. Smith, Mrs. Enright, Ms. Blager, and also Mrs. Smith's nephew, Robert Smith, to discuss Mrs. Smith's insurance and investment needs. At that time Mrs. Smith purchased an annuity in the amount of $100,000 from Respondent. Approximately one month later Mrs. Smith purchased a second annuity in the amount of $100,000 from Respondent, and gave Robert Smith $60,000 for the purchase of an annuity. The interest payments from the second annuity purchased by Mrs. Smith were sent to Robert Smith. Brenda Blager usually reviewed and consulted Mrs. Smith regarding Mrs. Smith's personal finances; however, after moving to Florida and meeting Respondent, Mrs. Smith also began to rely on and trust Respondent with regard to advising her in her personal financial matters. Prior to moving to Florida, Mrs. Smith's investments consisted primarily of her home and certificates of deposit in banks and savings institutions in Georgia. Mrs. Smith was conservative in her investments, had never purchased stocks or bonds, and only wanted to place her savings in "safe" investments. Subsequent to her purchase of annuities, Mrs. Smith and Mrs. Enright contacted Respondent to discuss other financial concerns. Specifically, Mrs. Smith had sold her home in Georgia and was interested in moving her certificates of deposit to Florida, achieving a higher rate of return, addressing tax problems associated with the payment of the annuity interest to her nephew, and purchasing a new Cadillac automobile. Whenever Respondent met with Mrs. Smith to discuss her finances and investments, Mrs. Enright, or another member of Mrs. Smith's family was also present. Respondent reviewed several financial documents relating to Mrs. Smith's Georgia certificates of deposit. Mrs. Smith's financial records were disorganized. Respondent advised Mrs. Smith that there would be substantial penalties if she prematurely removed her funds and invested in certificates of deposit. Despite the penalties and Respondent's advice to the contrary, Mrs. Smith decided to cash in her Georgia certificates of deposit and relocate her funds to Florida. Respondent assisted Mrs. Smith in cashing in the Georgia certificates of deposit. Respondent also assisted Mrs. Smith in using some of these funds to purchase a Cadillac automobile. Mrs. Smith had initially been interested in leasing the automobile; however, Respondent reviewed the lease arrangement, and advised Mrs. Smith that a purchase was in her best interest. Mrs. Smith followed Respondent's advice in this regard. Mrs. Smith trusted Respondent. To assist Mrs. Smith in relocating her funds to Florida, and also achieve a higher rate of return, Respondent presented Mrs. Smith with proposals to invest in promissory notes with two local firms, Zuma Engineering and Allstate Finance. (Allstate Finance is not associated with Allstate Insurance Company). Zuma Engineering (Zuma), is a start-up company located in Largo, Florida, engaged in the business of recycling tires. The rubber in the tires is converted to crumb rubber to be resold and used in asphalt roads, playground resurfacing and other products. Respondent first became aware of Zuma at a seminar in July of 1994 through another agent, Michael Mann, who was then raising funds for Zuma. Mr. Mann took Respondent to the Zuma facility and introduced Respondent to the president of the company. Thereafter, Respondent regularly toured the facility, inspected Zuma's existing and revised business plans, attended business meetings, and reviewed the company's monthly financial reports. The Zuma physical facility consisting of a warehouse and processing plant appeared to be consistent with the business plan. Respondent also obtained documents from Zuma reflecting that the company had initiated a research and development program associated with the University of South Florida. Respondent observed independent auditors at the Zuma facility, and reviewed financial documents that indicated Zuma had made progress toward a private stock offering. Respondent took reasonable actions to examine the operational and fiscal soundness of Zuma. When Respondent met with Mrs. Smith he presented her with documents including the Zuma business plan, and explained the investment opportunity in Zuma. Mrs. Smith does not recall Respondent explaining the Zuma investment proposal, nor does Mrs. Smith recall reading any documents or other material relating to Zuma. Given Mrs. Smith's extremely poor vision and the technical nature of the Zuma business plan, it is highly unlikely that Mrs. Smith read the business plan or any other documents pertaining to Zuma. Mrs. Smith did not comprehend the nature of the investment opportunity in Zuma. Although Mrs. Smith did not comprehend the nature of the Zuma investment, between September 26, 1994 and May 31, 1995 she nonetheless made several purchases of promissory notes payable by Zuma. Specifically, Mrs. Smith signed checks payable to Zuma as follows: September 26, 1994, two checks, one in the amount of $10,000, and another in the amount of $20,000; December 6, 1994, in the amount of $70,000; March 10, 1995 in the amount of $10,000; March 29, 1995 in the amount of $10,000; and, May 31, 1995 in the amount of $90,000. Mrs. Smith did not actually write the checks. Because of her poor eyesight, Mrs. Smith signed the checks in blank, and Respondent filled in the date, payee, and amount. Respondent remitted Mrs. Smith's checks to Zuma. In exchange, Zuma issued promissory notes to Mrs. Smith. The Zuma promissory notes were not insurance products. No interest has been paid on the Zuma promissory notes, and several of the notes are now in default. Mrs. Smith has not received any of the principal of the promissory notes back from Zuma. The prospectus of Zuma states that securities in Zuma are speculative, carry a high degree of risk, and "...should not be purchased by anyone who cannot afford the loss of his or her entire investment." Mrs. Smith did not understand the high risk involved in purchasing securities in Zuma. In addition to Mrs. Smith, Respondent sold promissory notes issued by Zuma to approximately thirty other investors. Subsequent to selling the Zuma notes to Mrs. Smith, Respondent met with an investigator from the Florida Comptroller's Office, and was informed that due to fiscal irregularities at Zuma, Respondent should refrain from selling Zuma securities. Respondent was not aware of the problems with Zuma prior to his meeting with the Comptroller's investigator. At the same time that Respondent presented Mrs. Smith with the Zuma proposal, Respondent also presented Mrs. Smith with information from Allstate Finance. Allstate, which is not related to the Allstate Insurance Company, is a company located in Tampa, Florida, in the business of automobile financing. Mrs. Smith purchased at least one promissory note in the amount of $40,000 from Allstate. The Allstate promissory note purchased by Mrs. Smith was not an insurance product. Mrs. Smith has received, and continues to receive, monthly interest payments from Allstate. In June of 1995, Mrs. Smith allowed the Allstate promissory note to renew for another year. In July of 1995, Brenda Blager received a telephone call from her mother, Miriam Enright, requesting assistance in reviewing Mrs. Smith's investments. Ms. Blager has worked in a financial planning office, but is not a certified financial planner. Prior to that time Ms. Blager had no knowledge of Zuma. Ms. Blager obtained a Dunn & Bradstreet report on Zuma and became very concerned regarding Mrs. Smith's investment in Zuma. Ms. Blager then came to Florida from Illinois for the purpose of reviewing Mrs. Smith's investments. After reviewing the Zuma and Allstate promissory notes, Ms. Blager met with an attorney and attempted to recover Mrs. Smith's funds; however, Ms. Blager was unable to do so. As a result of Respondent's actions, Mrs. Smith has cashed in all of her certificates of deposit to purchase the Zuma and Allstate promissory notes, and her Cadillac automobile. Mrs. Smith has no other savings or investments. While Mrs. Smith did want to relocate her funds from Georgia, Respondent was aware that Mrs. Smith desired and intended to place her funds in safe, low risk, investments. Respondent's advice and assistance, which resulted in placing Mrs. Smith's funds in a high risk security such as a Zuma promissory note, was not appropriate for an elderly woman in Mrs. Smith's circumstances.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Petitioner DEPARTMENT OF INSURANCE AND TREASURER enter a final order finding Respondent, ROBERT DARREN CARLSON, in violation of the provisions of Chapter 626, Florida Statutes, as set forth above, and that Respondent's licenses and eligibility for licensure be SUSPENDED for a period of fifteen (15) months. DONE and ENTERED this 21st day of March, 1996, in Tallahassee, Florida. RICHARD HIXSON, 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 21st day of March, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-4947 To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1.-4. Accepted and incorporated. Accepted as to Zuma was a start-up company, recycling tires. Rejected as to Mrs. Smith's knowledge and consent. Accepted as to Mrs. Smith wanting safe investments. Rejected as to Respondent being employed by Zuma. 7.-10. Accepted and incorporated. 11.-12. Accepted to the extent that Mrs. Smith desired safe investments. 13.-21. Accepted and incorporated. Respondent's Proposed Findings of Fact. 1.-6. Accepted and incorporated. 7.-13. Accepted and incorporated. 14.-16. Rejected as to Respondent's reasonable basis for believing the representations of Coreen McKeever. 17. Accepted, except to the extent that Mr. Cody was led to believe Secure Care was equivalent to Time. 18.-25. Accepted and incorporated. Rejected as not necessary. Accepted and incorporated. Rejected as not an accurate assessment of Mr. Cody's testimony. 29.-30. Accepted and incorporated. 31.-32. Accepted; Time's general policy allowed checks from agencies. 33.-35. Rejected as not supported by the weight of the evidence. 36.-43. Accepted and incorporated. 44. Accepted except to the extent that Zuma and Allstate promissory notes were not appropriate investments for Mrs. Smith. 45.-54. Accepted to the extent that Respondent investigated Zuma, reviewed fiscal reports, and believed Zuma to be a viable start-up company. 55.-57. Accepted and incorporated. 58. Accepted to the extent that Mrs. Smith had document relating to Zuma; rejected to the extent that Mrs. Smith understood the nature of the Zuma investment. 59.-63. Accepted and incorporated. Accepted to the extent that Mrs. Smith allowed the Allstate not to renew. Accepted to the extent that Mrs. Smith wanted her certificates of deposit moved from Georgia. Rejected to the extent that Respondent knew, or should have known, the investments were high risk. Accepted to the extent that Ms. Blager is not a certified financial planner. Rejected to the extent that Zuma has defaulted on several of Mrs. Smith's notes, and not returned any interest or principal. Rejected as not supported by the weight of the evidence. COPIES FURNISHED: James A. Bossart, Esquire Department of Insurance 200 East Gaines Street Tallahassee, Florida 32399-0333 Robert D. Newell, Jr., Esquire NEWELL & STAHL 817 North Gadsden Street Tallahassee, Florida 32303 Dan Sumner, Acting General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300 Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue The issue for determination in this case is whether the Florida insurance license of Respondent should be disciplined for violation of certain provisions of Chapter 626, Florida Statutes, as contained in allegations set forth in the five- count Administrative Complaint filed by Petitioner.
Findings Of Fact Based upon observation of the witnesses and their demeanor while testifying and documentary materials received in evidence, stipulations by the parties, evidentiary rulings made pursuant to Section 120.57, Florida Statutes (2003), and the record compiled herein, the following relevant and material facts are found: 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 (2001). Respondent is and, at all times material, was licensed in Florida as a life and health insurance agent. His Florida insurance license number is A283290. The Department has disciplined the license of Respondent on two previous occasions. The last discipline was taken pursuant to a Consent Order in Case Number 20371-97-A. Respondent was placed on probation for a period of three years beginning on July 29, 1999, and ending July 9, 2002, as a result of having enrolled five customers in a health plan without their knowledge or consent. A condition of his probation required Respondent to "strict[ly] adhere to all provisions of the Florida Insurance Code and Rules of the Department of Insurance and Treasurer" during his probation period. Respondent was also fined $7,500. Respondent is and, at all times material, was operating as a health insurance agent for PHP. Respondent, as an employee of PHP, was paid a commission on his enrollment of each client with PHP. He was assigned PHP employee number 6232. His employment with PHP did not preclude nor deny his freedom to market life insurance. PHP is an insurance company that maintains a contract with the State of Florida's Agency for Health Care Administration (AHCA) to deliver benefits to Medicaid recipients. The state screens potential Medicaid recipients to determine individual eligibility. The Medicaid plan "marketing agent," who is an insurance agent (Respondent), must hold an "event," invite the public, and explain benefits of the PHP plan. Each such event shall be approved by AHCA. As a part of the terms of employment with PHP, certain activities are prohibited and are not to be engaged in by "marketing agents." The prohibitions included: knocking on doors and offering to parents of children who have been determined eligible for benefits monetary awards, gifts, rebates, or any other incentives to induce enrollment of a child in Medicaid plans. PHP retained MDA Investigations, an independent investigative company, to investigate irregularities in the marketing processes resulting from marketing agents' conduct and/or client dissatisfaction brought to the attention of PHP and to provide PHP with an investigative report of each such irregularity. It was through this agency that complaints about Respondent were referred for investigation. Count I Julia Benefield (Ms. Benefield), complainant, has a high school diploma and is the mother of T.K. and K.K. Both children, having met certain entitlement criteria determined by the state, are entitled to receive Medicaid benefits. Ms. Benefield decides what physician treats her children and, at all times material to this issue, had previously selected Dr. Arlene Haywood as their chosen health care provider. From her past experience in selecting the health care provider for her children, Ms. Benefield was not new to the required enrollment processes. She recalled initially meeting Respondent at the apartment rented by her mother. During the meeting, Respondent asked if her children were on Medicaid, to which she responded affirmatively, informing Respondent that they received medical services from Dr. Arlene Haywood, a physician who had previously treated Ms. Benefield when she was a child. During the course of his sales pitch conversation, Respondent discussed with Ms. Benefield life insurance policies for her minor children and intermingled his discussion with statements urging her to switch her Medicaid provider to PHP. During the course of this meeting and conversation, Ms. Benefield signed a "Request to Enroll Card" with the clear understanding that her signature thereon meant: "[I]t was to put my kids on life insurance." She emphatically denied ever intending or desiring to change from her then present physician provider and enroll her children in PHP offered by Respondent. During this process, Respondent presented Ms. Benefield with a Request to Enroll Card. The card, which Ms. Benefield acknowledged signing, contained the names, dates of birth, and social security numbers of her two children. Above the signature line, the Request to Enroll Card has printed the condition of enrollment, to wit: "By signing this card, I understand that I am only indicating my intent to enroll my family members in the Medicaid HMO plan listed above. To complete the enrollment process I will need to sign and return an enrollment form that will be sent to my home by the Medicaid Options Program." Ms. Benefield became aware of the switch of her Medicaid provider from Dr. Arlene Haywood to PHP when she received a letter mailed to her mother's apartment address informing her that her children were then enrolled (switched) with PHP. This switch to PHP caused her not to be able to obtain medical services from the children's regular pediatrician, Dr. Arlene Haywood. Ms. Benefield, dissatisfied with the method and manner of Respondent changing her Medicaid provider against her stated desires and without her permission, complained about the switch to PHP to the Department. Respondent justified and defended his conduct in this instant with the summary statement: "that if she knew the difference of the two policies [PHP and life insurance] then how could she have made a mistake when life insurance cost money and Medicaid is free." Ms. Benefield firmly maintained, "[H]e went ahead and enrolled them anyway [in PHP] without my permission." At the time Ms. Benefield executed the enrollment card presented to her by Respondent, it was not her intent to switch from her then Medicaid provider, Dr. Arlene Haywood, to PHP. The intentional misrepresentations made by Respondent induced Ms. Benefield to sign the enrollment card. Count II Dahlia Malcolm (Ms. Malcolm), complainant, is a high school graduate who also earned a cosmetology degree. She is the mother of A.M., a minor who is qualified to receive Medicaid benefits. Ms. Malcolm recalled Respondent coming uninvited to her home during which time he repeatedly suggested switching from her Medipass provider to his employer, PHP provider. Following the pattern of his conversation with Ms. Benefield, Respondent discussed with Ms. Malcolm life insurance policies for her minor child intermingled with statements urging her to switch her Medicaid provider to PHP. In this instant, and as an additional inducement incentive, Respondent offered to give Ms. Malcolm money to cover the cost of a "pizza" or "pizza party," if Ms. Malcolm would either invite her friends over or provide Respondent with the names of her friends with children who were Medicaid eligible. Ms. Malcolm recalled laughing at the suggestion of a "pizza party." A few weeks later, she received a package mailed to her stating: "thank you for enrolling in PHP." According to Ms. Malcolm, the signature "Dahlia Malcolm" on the Request to Enroll Card, dated July 5, 2001, was "definitely" not her signature. She emphatically denied giving Respondent permission or authority to enroll her son in PHP. Dissatisfied with Respondent switching her Medicaid provider, Ms. Malcolm complained to both PHP and the Department. Respondent suggested that the mother of Ms. Malcolm was probably not happy with Ms. Malcolm enrolling her children with PHP and that to cover her mistake, Ms. Malcolm made a complaint to the Department; that suggestion is without merit. Ms. Malcolm at no time evidenced a knowing intent to switch her Medicaid provider to PHP. Assuming Ms. Malcolm did, in fact, sign the Request to Enroll Card, her inducement to sign the Request to Enroll Card was due to the intentional misrepresentations made to her by Respondent. Count III The complainant, Calandra Birdine, did not appear at the final hearing to testify. Respondent consented to admission of a Department Inquiry form containing statements from another person, written by Joseph Rufus, who also did not testify. Attached thereto were two Request to Enroll Cards containing the names and ages of six minor children who were qualified to receive Medicaid services, dated August 23, 2001. Although admitted into evidence without objection from the Respondent, the documents are hearsay, as are the contents. The Department failed to provide independent corroboration of the hearsay statements, and the documents and their contents are insufficient to support a finding of fact. Accordingly, the Department failed to prove by competent substantial evidence the allegations contained in Count III of the Administrative Complaint. Count IV The complainant, Monique Young, did not appear at the final hearing to testify. Respondent consented to admission of the Department Inquiry form that contained statements from another person, written by Keith Yore, who did not testify. Attached thereto were two Request to Enroll Cards containing the names and ages of eight minor children who were qualified to receive Medicaid services, dated May 11, 2001. Although admitted into evidence without objection from Respondent, the documents and contents are hearsay. The Department failed to provide independent corroboration of the hearsay evidence, and, therefore, the documents and their contents are insufficient to support a finding of fact. Accordingly, the Department failed to prove by competent substantial evidence allegations contained in Count IV of the Administrative Complaint. Count V The complainant, Jamie Powell, did not appear at the final hearing to testify. Respondent consented to admission of the Department Inquiry form containing statements of another person, written by Robekah (no last name in the record), who did not testify. Attached thereto was one Request to Enroll Card containing the name and age of one minor child who was qualified to receive Medicaid services, dated June 2, 2001. Although admitted into evidence without objection of Respondent, the documents and contents are hearsay. For a lack of independent corroboration, the documents and contents are insufficient to support a finding of fact. Accordingly, the Department failed to prove by competent substantial evidence the allegations contained in Count V of the Administrative Complaint. Respondent complained that he was employed with PHP for 11 months after the first complaint was filed against him in January 2001. He maintained that he was not notified of these complaints by the special investigator, Gladys Kennedy, until December 2001, one month after he no longer worked for PHP. It was his belief that PHP instigated the complaints because he went to work with a competing company. Respondent maintains that he had written over 1,500 applications per year with PHP and his success record demonstrated that "I must be doing something right." Respondent, under the impression that the Department assumed he was taking advantage of his client because of their educational level, testified that he, too, has only a high school diploma. Respondent, evidenced by Findings of Fact 3 through 12 hereinabove, violated his probation condition imposed in the Consent Order, of July 29, 1999, in Case Number 20371-97-A.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order as follows: Finding Respondent, Roger Lee White, guilty, as alleged in Count I and Count II of the Administrative Complaint, of violating Section 626.611 and Subsections 626.9541(1)(k)1. and 626.611(7), (9), and (13), Florida Statutes. Revoking the license of Respondent and eligibility for licensure. Dismissing Counts III, IV, and V of the Administrative Complaint filed against Respondent, Roger Lee White. DONE AND ENTERED this 16th day of December, 2003, in Tallahassee, Leon County, Florida. S FRED L. BUCKINE 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 16th day of December, 2003. COPIES FURNISHED: David J. Busch, Esquire Department of Financial Services, Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Roger Lee White 257 Coastal Hill Drive Indian Harbour Beach, Florida 32937 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The issue in this proceeding is whether Respondent’s certificate of authority to transact life insurance in the State of Florida should be revoked, suspended, or otherwise disciplined.
Findings Of Fact Respondent, Liberty National Life Insurance Company, is a foreign insurer licensed to transact life insurance in Florida under a Certificate of Authority issued by the state. The application for life insurance used by LNL is form A-250. This application is used for all regular and batch life insurance applications, except Career Life Plus and Group Term life insurance policies, which are not at issue in this proceeding. Form A-251 is the application used to apply for life insurance riders on an applicant's spouse or children. Both applications are used in multiple states and are intended to elicit information that may or may not be relevant or used in the state relevant to any given applicant. For instance, Question 16 in form A-250 asks, "Is the Proposed Insured a Citizen of the United States? (If "No" complete and attach A- 282-2.") Form A-282-2 is titled "Residency Questionnaire." The form elicits information related to whether an applicant is a legal resident of the United States, whether the applicant intends to remain a resident of the United States and what citizenship the applicant holds. Like the applications, the residency form is used in multiple states and is intended to elicit information that may or may not be relevant or used in the state relevant to any given applicant. For instance, the questionnaire asks whether the proposed insured has traveled outside the United States during the last 12 months. The applicant's response to the travel question was not intended to be used for underwriting purposes in Florida after it enacted a law prohibiting the denial of insurance based solely on an applicant's past travel or future travel plans. See § 626.9541(1)(dd)1., Fla. Stat. Importantly, Florida does not prohibit any insurer from asking about such travel and such inquiry does not violate Florida law. Each application, along with any required or additional information, is submitted by an agent to LNL's centralized underwriting department and is assigned to an individual underwriter. The underwriter reviews the application for completeness. If the application is not complete or if there are questions about the application, the underwriter either requests the information from the agent or requests a telephone interview be done. Activity on the application is entered into LNL's electronic processing system which maintains the electronic application file. How much detail support information is entered on any given application file varies by underwriter. None of the underwriters who made entries in the application files at issue in here testified in this proceeding. LNL's policy is to process most applications within two weeks, with some few applications taking up to 30 days. Pending applications are maintained on a pending applications list which is reviewed by upper management for compliance with LNL's processing policy. LNL’s underwriting guidelines for persons of foreign national origin residing in the United States were instituted in 2003 or 2004 over concerns the company had regarding the reliability of documents from certain countries and the potential for fraud based on such unreliable documents. Towards that end, LNL categorized foreign nations into four groups: “A,” “B,” “C,” and “D.” The basis for the categorization was the long-time, actuarially-recognized standard in the life insurance industry and the re-insurance industry that mortality risks are severe in “D” countries, somewhat severe in “C” countries, and moderate in “A” and “B” countries. In part, these mortality risks are derived based on the political stability of a country, crime rates, law enforcement, and access to good quality medical care and treatment in a given country. In general, C and D countries possess one or more of the factors that contribute to severe mortality risks. Additionally, political instability causes the authenticity and availability of birth and death records to be unreliable. These country code classifications are used throughout the life insurance industry. Importantly, these country codes are sustained by mortality statistics generally regarded as reliable by life insurance actuaries, and by the professional opinion of Mr. Himmelberger, the only expert life insurance actuary who testified at final hearing. LNL's underwriting guidelines for foreign nationals or foreign risks were reflected in a memorandum dated July 26, 2004, and sent to all of the company's district managers for dissemination. The memorandum stated as follows: If the proposed insured is from a country classified as A or B you should follow normal underwriting procedures. If a proposed insured is from a country classified as C or D, you must submit the following information. If the proposed insured is a U.S. Citizen: A copy of citizenship documents or A notarized statement verifying that the proposed insured is a citizen and providing the date citizenship was acquired. An IBU (Interview by Underwriter) is required on all cases. If the proposed insured is not a U.S. Citizen: Form A-282-2 . . . is required on all A-250/A-251 or batch applications. Copies of W-2 forms from the last three years are required. The ultimate face amount issued (if any) will be limited to the income for the most recent year. Attach a cover letter indicating the number of consecutive years the proposed insured has been in the United States (subject to rejection if less than 10 years, depending on other information submitted). An IBU . . . is required on all cases. Minor children of non-citizen parents will be underwritten as non-citizens. Applications for $100,000 and above will be reviewed on a case-by-case basis. The information above is required for all cases regardless of face amount. These guidelines were also incorporated into the company’s instruction manual for its agents. The goal of these underwriting guidelines and the use of the country codes are to try to assess the risk of a person who was born outside of the United States permanently returning to their country of origin where, depending on the country, there may be a higher risk of mortality. An applicant’s connection to the United States, as evidenced by steady employment or family, and desire to permanently stay in this country, as evidenced by naturalization or length of legal residency, lowers the actuarial risk underwritten by LNL. The evidence demonstrated that these criteria were actuarially supported. Therefore, applicants who are foreign nationals born in “A” or “B” countries with lower mortality risks, and who legally reside in the United States or are naturalized United States citizens at the time they apply for insurance are underwritten using the same underwriting criteria as applied to United States citizens. The only extra information required is proof of residency or citizenship and a confirming interview by the underwriter (IBU) or by an outside subcontractor through a rapid interview process. Life insurance applications by foreign nationals from “C” or “D” countries who have become naturalized United States citizens at the time they apply for insurance are underwritten using the same underwriting criteria that LNL applied to United States citizens and require the same information as those from “A” or “B” countries. Applicants who are foreign nationals from “C” or “D” countries and who are not naturalized United States citizens, but reside in the United States at the time of application for insurance, are required to provide proof of legal residency for 1 year and annual income for three years. Both of these factors indicate a stronger connection to the United States and desire not to return to live in a country with a higher mortality risk. These applicants are also required to complete a telephone interview to confirm this information. Additionally, applicants from “C” or “D” countries who are legal residents in the United States at the time of application for insurance may be declined for coverage or have the coverage limited to the amount of the applicant’s income. However, whether the application is declined depends on other information (such as employment history and income) that shows a stronger connection to the United States. There is no requirement that the underwriter decline to issue or limit the amount of insurance to such an applicant simply because the person has not resided in the United States continuously for 10 years. Clearly, LNL’s underwriting guidelines do not cause LNL to refuse to issue insurance to applicants from “C” or “D” countries based solely on the applicant’s national origin. Rather, these underwriting rules and guidelines incorporate the political, social and economic climate of a country which leads to instability, crime and poor access to health care and relatively higher or lower risks of mortality. Additionally, these guidelines require the length, nature, and quality of the applicant’s residency in the United States to be considered to determine the strength, quality, and duration of the applicant’s ties to the United States. The additional underwriting information required for such applicants is designed to gather evidence of such matters so that LNL’s underwriters may make informed underwriting judgments about the underwriting risks associated with issuing insurance. These underwriting guidelines are consistent with the actuarial risks posed by higher mortality risks in “C” or “D” countries and the risk that applicants will voluntarily or involuntarily return to his or her country of origin to again take up residence there, and thereby be subjected to the high mortality risks associated with residing in a “C” or “D” country. The evidence demonstrated that these guidelines are consistent with generally accepted actuarial principles of risk classification. The limitation of coverage amount to the applicant’s most recent year’s income is likewise consistent with generally accepted actuarial principles of risk classification and risk management for life insurers. Indeed, there was no expert actuarial evidence offered by OIR to the contrary. Additionally, there was no substantive evidence that demonstrated LNL had an informal policy or practice of refusing to issue life insurance to applicants who are persons of “C” or “D” countries solely because of their national origin. The evidence clearly showed that LNL had issued policies to such applicants given the number of applications reviewed by OIR in its examination of LNL. On July 1, 2006, Florida’s “Freedom to Travel Act,” Section 624.9541(1)(dd), Florida Statutes, became effective. Around July 6, 2006, LNL sent a memorandum to its underwriters informing them of the passage of Florida’s “Freedom to Travel Act” and instructing them to comply with the act. The memorandum also informed the underwriters that they could no longer use an applicant’s past travel or future travel plans to underwrite life insurance on Florida applicants. However, as indicated earlier, the multi-state residency questionnaire asks about an applicant’s past travel. Such information is not used for underwriting purposes by LNL on Florida applications. After notification of Florida’s “Freedom to Travel Act,” it has been LNL’s policy, in respect to applications for life insurance from Florida residents, not to refuse life insurance or limit life insurance coverage based solely on the individual's past lawful foreign travel or future travel plans. Additionally, it should be noted that the term travel had a variety of meanings during the hearing. At times it referred to short-term travel and at other times it referred to an applicant’s more permanent return to a country to reside in that country. From June 23, 2008 through November 14, 2008, OIR conducted a "market conduct" examination of LNL pursuant to Section 624.3161, Florida Statutes. A market conduct examination is a review of the business practices and records of an insurer. The examination is designed to monitor marketing, advertising, policyholder services, underwriting, rating, and claims practices. The LNL examination covered the period from January 1, 2004, through March 31, 2008, and was conducted by Examination Resources, LLC, at the offices of LNL in Birmingham, Alabama. The purpose of the examination was to verify compliance by the company with the Florida Unfair Trade Practices Act, Section 626.9541, Florida Statutes. Examination Resources assembled a team of examiners to conduct the survey. Some members were more experienced than others were in examining records of a company and in performing a market conduct survey. At least two of the team members, Terry Corlett and Todd Fatzinger, were certified financial examiners (CFE), certified insurance examiners (CIE) and fellows of the Life Management Institute (FMLI). One member of the examination team was a certified life underwriter (CLU). During the examination period, LNL’s underwriters reviewed approximately 1,500 life insurance applications per week from Florida, in addition to applications from other states. As a consequence, LNL received 101,461 applications for life insurance. Approximately 40,000 applications out of the total applicant pool were batch processed. Batch-processed applications are standard applications (A-250 and A-251) that are processed through an automated computer system with no further underwriting review and are either approved or disapproved based on information in the application for life insurance. The evidence indicated that some applications from applicants born outside of the United States were batch-processed applications. However, the batch process does not capture any information based on an applicant's country of birth or travel in the electronic file system used by LNL. Since the batch process does not capture country of birth or travel information, these applications were not reviewed by the examiners in the market conduct survey of LNL's records. Because these applications were not reviewed, it is unknown how many of these applicants were born outside of the United States. Out of the approximately remaining 61,000 applications, the team reviewed 7,040 life insurance applications received by LNL during the period of January 1, 2004 through March 31, 2008, that LNL identified as being from an applicant born outside the United States. No one member of the examination team reviewed all of the files. There was some evidence that the criteria or standards of review and interpretation of files by each examiner was not consistent during the exam process. Very few of the examiners conducted any interviews or took testimony from the people who made entries in or handled a particular file that was reviewed. More importantly, the evidence did not demonstrate that the information sought during these rare interviews of unidentified underwriters on an unidentified file had any relevancy to the issues or allegations involved in this case. The only testimony regarding these few and unknown underwriters was that they generally did not recall anything about the file beyond what was in the electronic records of LNL. Such generalizations do not otherwise provide support for the interpretation of data or information in these files by the examiners or the failure to adduce such evidence by going to the human source of the data or information contained in the electronic records of LNL. Moreover, conspicuously absent from the examination process was an expert in statistical analysis and sampling of data from a universal pool of applicants. Given this lack of expertise, there is no evidence which demonstrated that the group of 7,040 applications reviewed by the examiners was a valid sample of all the applications processed during the examination period. Examination Resources submitted their draft report of examination to OIR around mid-November 2008. The report contained a number of statistics and conclusions drawn from those statistics. However, because of the absence of any reliable or valid statistical analysis of the information gathered by the examiners, none of the statistics or conclusions drawn from such statistics that were contained in the draft report is probative of any of the alleged violations contained in the Petitioner's Order in this matter. In short, other than to list the electronic records of LNL that were examined, the market conduct study and report provide no credible or substantive evidence that demonstrates LNL violated any provision of Florida law. The report may have formulated a basis that warranted OIR to investigate LNL further, but it is insufficient on its own to establish by any evidentiary standard that any violations occurred. The evidence did not demonstrate that a draft report from the examiners was finalized by Examination Resources or OIR. However, no further examination of the files of LNL was done after the draft report was completed. Likewise, no further analysis of the data was completed after the submission of the draft report to OIR. Both of these facts indicate that the draft report was the final report. In any event, as a consequence of OIR's perception of the report as a draft, OIR did not furnish a copy of the draft examination to LNL and did not afford LNL the opportunity for an informal conference concerning the draft examination report’s allegations or an opportunity to correct any of the alleged violations referred to in the order. Such a conference would have been required by Section 624.319, Florida Statutes, and Florida Administrative Code Rule 69N-121.066 if the report had been finalized with the Office. Instead, OIR used the report to issue its Order to suspend or revoke LNL's certificate of authority and required LNL to cease and desist from engaging in unfair trade practices as defined in Section 626.9541(1)(g)1., (x)1. and (dd), Florida Statutes, based on 35 counts involving 35 separate applications. Counts 17 (insurance issued to a 34-year-old Haitian- born female), 18 (insurance issued to an 18-year-old Haitian- born male), and 29 through 35 charged that LNL knowingly discriminated "between individuals of the same actuarially supportable class and equal expectation of life,” in violation of Subsection 626.9541(1)(g)1., Florida Statutes. These “actuarially supportable class” charges are addressed as a group. The remainder of the charges involving violations of Subsections 626.9541(1)(x)1. and 626.9541(1)(dd), Florida Statutes, are addressed below per each count. As to the actuarially-supportable class charges, OIR offered no competent substantial evidence defining or establishing what the actuarially supportable class consisted of or who the members of that class were. The only references to the alleged class were unsupported statements by OIR representatives and unqualified witnesses that the actuarial class was the whole world. Moreover, there was no evidence in the record that demonstrated that these members had the same life expectancy. Indeed, the only evidence in the record about the actuarial class was the testimony of Mr. Himmelberger who stated that the alphabetical classifications of countries established actuarial classes for persons born in those countries and that persons born in “C” or “D” countries residing in the United States are not in the same actuarially-supportable class as persons who are United States citizens (including United States citizens born in “C” or “D” countries), or as persons born in “A” or “B” countries residing in the United States. OIR presented no evidence to contradict Mr. Himmelberger's testimony. Even assuming arguendo that Mr. Himmelberger's testimony is not accepted, the fact remains that no other qualified actuarial expert provided this statutorily crucial evidence. Given these facts, OIR has not established that LNL violated Subsection 626.9541(1)(g)1., Florida Statutes, in Counts 17, 18, and portions of Counts 29 through 35 that pertain to Subsection 626.9541(1)(g)1., Florida Statutes, and those counts should be dismissed. COUNT 1 Count 1 of the OIR Order alleged that, in June 2004, LNL refused to issue a $100,000 life insurance policy to a 23- year-old female born in Haiti and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. At the time of the application, the applicant had resided in the United States for less than 10 years. The unrefuted evidence demonstrated that this applicant was declined insurance because she had no income. LNL’s underwriting rules limited the amount of insurance that could be issued to the prior year’s income. Since she had no income, the application was denied. However, in April 2006, when the applicant filed another application for life insurance and demonstrated that she had income, LNL issued a life insurance policy to her. OIR offered no competent evidence that LNL refused to insure this applicant solely on the basis of her national origin since it had an independent basis for its action based on its underwriting guidelines. As discussed above, these guidelines have several actuarially-sound underlying factors that are not related to the particular national origin of an applicant. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 2 Count 2 of the OIR Order alleged that, in June 2004, that LNL refused on two separate occasions to issue life insurance policies to a 65-year-old male born in Haiti and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. The applicant had originally applied for an $82,000 policy (A005491299) with his wife in April 2004. Later, in June 2004, the applicant applied for a $15,000 policy (A0050974020). At the time of the applications, the applicant had resided in the United States for less than 10 years. The first application required medical tests to be performed prior to approval. These tests included a paramedical examination, EKG, blood profile and urine sample. None of the medical tests were completed and no medical information was supplied prior to the time the underwriting decision to decline the application was made. Similarly, the medical underwriting information was not submitted with the second application. The evidence showed that LNL had a standard underwriting procedure that a second application cannot be processed unless all missing underwriting information required for a previous application is submitted with the second application. If such information is not submitted with the second application, the application is not processed and is closed or cancelled. As indicated, the second application was not submitted with the medical underwriting information required for the first application. Clearly, LNL did not refuse to issue insurance to this applicant solely because of his national origin. Its decision to decline to issue insurance on the first application was based on the lack of required medical information. The second application was not processed because the required medical information was not submitted with the second application. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 3 Count 3 alleged that, in June 2004, LNL refused to issue a $15,000 life insurance policy to a 23-year-old female born in Haiti and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. At the time of the application, the applicant had resided in the United States for less than 10 years. No proof of income was submitted with the application. Vague underwriting notes in the file indicate the underwriter referred to this application as a “Haiti case.” However, the underwriter did not testify as to what was meant by this reference. Ms. Saxon, the Chief Underwriter for LNL, testified that she interpreted the reference to be the underwriter’s shorthand method of noting that the underwriting guidelines for “C” and “D” countries applied to this application. OIR argues, without evidence, that the quoted phrase means that the underwriter based the decision to decline this application on the applicant’s national origin. Given the vagueness of this phrase, its presence in the file does not support a conclusion that LNL refused to issue insurance to this applicant based solely on national origin. The better evidence demonstrated that this applicant was declined insurance on her application because she had not resided in the United States for 10 consecutive years, and had provided no proof of income at the time the underwriting decision was made. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 4 Count 4 charged that, in May 2004, LNL refused to issue a $21,000 life insurance policy to a 32-year-old Haitian- born female who was residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. At the time of the application, the applicant had resided in the United States for less than 10 years and was a homemaker. The application file reflected the application was declined because the applicant failed to meet LNL underwriting rules after review by LNL’s legal department. No further explanation is contained in the file regarding the reason the application was declined. However, the evidence demonstrated that this applicant had also applied for a “critical illness policy” at the same time she applied for the $21,000 life insurance policy. The application was batch processed and the “critical illness policy” was issued to the applicant, indicating national origin was not a consideration for LNL. On the other hand, OIR, who has the burden of proof on this issue, offered no competent or convincing evidence that LNL refused to insure this applicant solely because of national origin. To conclude that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, from the lack of information in the file is pure conjecture and inappropriate especially given that this file was underwritten in 2004. Given these facts and the lack of convincing evidence, OIR failed to establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 5 Count 5 in the OIR Order alleged that, in May 2004, LNL refused to issue a $50,000 life insurance policy to a 27- year-old female born in Haiti and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. At the time of the application, the applicant had resided in the United States for over 10 years, but had recently started her own business. The uncontradicted evidence demonstrated that this application was declined because proof of recent income was not supplied at the time of the underwriting decision. The applicant had supplied an affidavit from her former employer showing her income for 2002 and 2003. However, there was no information regarding her income since she had started her own business, leaving her ability to pay the premium in doubt. Again, OIR offered no competent evidence that LNL refused to insure this applicant solely because of national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 6 Count 6 charged that, in May 2004, LNL refused to issue a $20,000 life insurance policy to a 63-year-old Haitian- born male who resided in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. At the time of the application, the applicant had resided in the United States for more than 10 years and was retired. The unrefuted evidence showed that the application was cancelled and not processed by LNL because there was no documentation by the immigration authorities of the applicant’s legal residency status in the United States. Similarly, no proof of income was provided by the applicant. There was a notation in the file which read, “non[-]receipt of W2.” However, this phrase does not demonstrate that the applicant did not receive a W-2 or some other employer proof of retirement income or that LNL had any knowledge that the applicant was unable to provide such a document. In fact, in July 2004, the applicant submitted a second application for which a policy of life insurance was issued. Clearly, LNL did not refuse to insure this applicant solely because of national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 7 Count 7 alleged that, in April 2004, LNL refused to issue a $25,000 life insurance policy to an 18-year-old Haitian- born female who resided in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. The applicant had been in the United States for at least 12 months and was a student. A notation in the file indicated that the agent was requested to ask the applicant to provide information on how long she had been in the United States. However, for unknown reasons, the requested information was not provided. As a consequence, the file was not processed and was cancelled for incompleteness. Such cancellation does not demonstrate that LNL refused to issue insurance but that the processing of the application was stopped due to incomplete information. Handwritten notes in the file indicated that the application would be declined if the applicant had not been in the United States for more than 10 years. However, the note writer did not testify at the hearing. This handwritten note does not support the conclusion that LNL based its decision solely on the basis of the applicant’s national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 8 Count 8 of the OIR Order alleged that, in May 2004, LNL refused to issue a $50,000 life insurance policy to a 39- year-old Haitian-born female who resided in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. The evidence demonstrated that this application was the applicant’s second application (A005491240). At the top of the computer information screen that summarizes actions taken on this file, there was a handwritten note, “Haiti.” At the bottom of this screen, by the initialing dates on the screen, there was a handwritten note “cancel.” There was no evidence that the two notes are associated with each other or were entered at the same time. Whoever wrote the notes did not testify at the hearing regarding these, otherwise vague, notes. The uncontradicted evidence demonstrated that the first application (A005458685), dated February 14, 2004, was not processed because the applicant did not provide proof of income and other underwriting information. The application was cancelled on March 15, 2004. Likewise, the second application, dated April 18, 2004, was not processed and was canceled for failing to submit an acceptable proof of income that was required on the first application. In this case, the applicant provided with the second application an affidavit from her employer that she had been employed since December 2003 and was paid $7.00 an hour. However, the employer’s affidavit was considered insufficient as proof of income because it did not show how many hours she worked. Such information was critical in calculating income for this applicant and the application was cancelled. Such cancellations do not constitute a refusal to insure by LNL, but only reflect that the application cannot be processed without the required or requested information. Later, in August 2005, the applicant applied for life insurance a third time (A006467227) and was issued a policy of insurance. Clearly, LNL did not refuse to issue insurance to this applicant solely because of national origin since the applicant’s national origin had not changed and they later issued such insurance. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 9 Count 9 of the OIR Order alleged that, in May 2004, LNL refused to issue a life insurance policy to a 52-year-old Haitian-born female who resided in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. The evidence demonstrated that processing of this application was canceled because a telephonic interview to explore unclear and questionable written information submitted by the applicant was not completed and because proof of income was not submitted. Indeed, the file reflected that the telephone number for the applicant was disconnected when the telephone interview was attempted. The file also reflected that the person paying the premium did not have the same last name as the applicant which raised legitimate questions regarding the payor’s interest in the policy and the relationship between the payor and the applicant. It was appropriate for LNL to seek to clarify these discrepancies. The applicant's file, also, contained an “Underwriter Support Summary” computer screen. The screen contained handwritten notes stating, “Haiti, Cancel-unemployed, non-US citizen.” Again, the writer of these vague notes did not testify at the hearing and the notes do not support a conclusion that LNL refused to issue insurance to this applicant based solely on her national origin. As indicated, necessary underwriting information was not submitted by the applicant and processing of the application was stopped, and the application was cancelled. OIR offered no competent evidence that LNL either refused to insure this applicant or that such alleged refusal was solely because of national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 10 Count 10 of the OIR Order alleged that, in March 2004, LNL refused to issue a $50,000 life insurance policy to a 34- year-old Haitian-born male who resided in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. The evidence demonstrated that the applicant had lived in this country for more than 10 years, was a permanent resident and was a self- employed taxi driver. The application file reflected that processing of this application was cancelled because additional information that the agent was requested to obtain was not returned. Additionally, no proof of income was submitted by the applicant. The file was not clear whether the additional information being sought was related to proof of income or medical issues. Later, blood work information was received that indicated this applicant had some medical risks that were outside of LNL’s underwriting guidelines. OIR offered no competent evidence that LNL either refused to insure this applicant or that such alleged refusal was solely because of national origin. Given these facts and the general lack of evidence in this applicant’s file, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 11 Count 11 of the OIR Order charged that, in May 2004, LNL refused to issue a $20,000 life insurance policy to a 61- year-old Haitian-born female who resided in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. The applicant had resided in the United States for more than 10 years and had high blood pressure. She had applied for United States citizenship, but was unemployed. Her sister was listed as the person paying the premiums on the policy. The file also reflected that the applicant was single and that she was supported by her husband. This inconsistent information legitimately needed to be clarified in order for the underwriting process to continue. The underwriter requested an IBU. The request for the IBU was sent to a company that performs such interviews for LNL. The application file does not reflect whether the company attempted to perform the interview. However, information from that request was never submitted to LNL and processing of the applicant’s file was stopped, resulting in the cancellation of the application. As with other cancellations, terminating the processing of a file and cancellation of the application for lack of legitimate underwriting information was not a refusal by LNL to insure the applicant. The process simply could not move forward without the requested information. OIR offered no competent evidence that LNL either refused to insure this applicant or that such alleged refusal was solely because of national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 12 Count 12 alleged that, in February 2004, LNL refused to issue a $50,000 life insurance policy to a 47-year-old male born in Haiti and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. However, the evidence demonstrated that this application was declined due to the applicant’s announced foreign travel plans. At the time of this application, Florida’s “Freedom to Travel Act,” Subsection 626.9541(1)(dd), Florida Statutes, had not been passed and would not be enacted until July 1, 2006, some two years later. The Act has no retroactive effect. Therefore, declining to insure a Florida applicant for such plans before the effective date of the “Freedom to Travel Act” was not prohibited at the time of the underwriting action on this application. OIR argues that the absence of a specific notation in the file that it was declined based on foreign travel plans demonstrated that LNL refused to issue insurance based solely on national origin. However, this argument ignores OIR’s burden of proof in this case. The lack of such notation demonstrates nothing and does not provide either a clear or convincing basis to draw any inferences from the absence of such notations. Additionally, such an inference ignores the unrefuted testimony in this case that the application was declined based on the applicant’s foreign travel plans. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 13 Count 13 alleged that, in January 2004, LNL refused to issue a $100,000 life insurance policy to a 45-year-old female born in Haiti and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. Information in the file reflected that the applicant was a United States citizen. The evidence demonstrated that this application was declined because the applicant did not furnish proof of her United States citizenship. Additionally, the required telephonic interview was not completed. Again, OIR argues that the absence of specific notations in the file that the application was cancelled based on the missing information demonstrates that LNL refused to issue insurance based solely on national origin. As noted above, this argument ignores OIR’s burden of proof in this case. The lack of such notations does not provide a clear or convincing basis to draw any inferences to support OIR’s position. Additionally, OIR’s argument ignores the unrefuted testimony in this case that the application was cancelled based on the fact that required information was not supplied. Finally, the evidence demonstrated that this application was cancelled, not declined. As with other cancelled applications, such cancellations do not constitute a refusal to insure and OIR offered no other competent evidence that LNL refused to insure this applicant solely because of national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 14 Count 14 alleged that, in January 2004, LNL refused to issue a $50,000 life insurance policy to a 31-year-old female born in Haiti and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. At the time of the application, the applicant had not resided in the United States for more than 10 years. The applicant had also recently had a baby and was unemployed. As a consequence, the applicant’s mother was the person who would be paying the premium on the policy. The evidence demonstrated that LNL declined to issue insurance on this application because the applicant was not employed and had no income. As discussed earlier, LNL’s underwriting rules limit the amount of coverage that may be issued to an amount equal to the applicant’s annual income for the preceding year. Since the applicant reported no income, LNL’s underwriting rules did not permit the issuance of coverage. However, on April 10, 2006, the applicant submitted a second application (A007241169) that met OIR’s underwriting rules and LNL issued insurance to the applicant. Clearly, LNL did not refuse to issue insurance solely based on national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 15 Count 15 alleged that, in February 2004, LNL refused to issue a $25,000 life insurance policy to a 41-year-old male born in Haiti and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. The evidence showed that a telephonic interview was required to be completed under LNL’s underwriting rules. Handwritten notes in the file state, “IBU ordered due to client being Haitian. Canceled-IBU not received.” Again, the writer of these handwritten notes did not testify at the hearing and they do not support a conclusion that LNL refused to issue insurance based on national origin. The evidence did demonstrate that because the telephonic interview was not completed as required, the application could not be processed further and the application was cancelled. Such a cancellation is not a refusal to insure. OIR offered no competent evidence that LNL refused to insure this applicant solely because of national origin. There was no evidence that the IBU request was a ruse by LNL to cover up its alleged desire to refuse insurance based on national origin. Even in some of the Counts contained in this case, the evidence showed that LNL issued insurance to Haitian applicants when they met its underwriting rules. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 16 Count 16 alleged that, in February 2004, LNL refused to issue a $25,000 life insurance policy to a 63-year-old male born in Haiti and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. The evidence demonstrated that processing of this application was canceled because the applicant had not completed a required telephonic underwriting interview. A handwritten notation on the file stated, “Find a way to cancel/decline.” The note was from the person who reviewed pending files that had not been handled within the timeframe established by LNL for life insurance applications. This application had exceeded those timeframes since it had been pending for six weeks. The note was intended to finalize the processing of the file and remove it from the pending files list. There was no evidence that the note demonstrated an intention to refuse to issue insurance based solely on the applicant’s national origin. Moreover, the evidence demonstrated that LNL reinstated a life insurance policy previously issued to this applicant after that policy had lapsed. Clearly, LNL did not refuse to insure this applicant solely because of national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 19 Count 19 alleged that, in June 2004, LNL refused to issue a $100,000 life insurance policy to a 26-year-old male born in Colombia and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. Colombia was listed as a “D” country under the country code classifications used by LNL for underwriting purposes. A residency questionnaire was also submitted with the application. The questionnaire revealed that the applicant was employed and had an annual income of $40,000. The application also indicated that the applicant was a permanent resident of the United States, but had lived in the United States for less than 10 years. The residency questionnaire reflected that the applicant was unsure of his VISA number and that it had either expired or was about to expire. The applicant hoped to have it reinstated next year. Additionally, the official Immigration and Naturalization Service residency status documentation that was provided with the application showed that the applicant’s residency status had expired. The applicant, therefore, had not submitted the required documentation that he was a current legal resident of the United States. However, because the application was for a $100,000 policy, LNL’s underwriting rules required that the application be submitted to a re-insurance company to insure the risk. Direct insurance companies often utilize re-insurance companies to shift the risk of an insurance application to the re- insurance company. Such companies follow their own underwriting rules to determine whether they will issue insurance on an application. This application was forwarded to one of the re- insurance companies that LNL utilizes for re-insurance. The re- insurance company declined to issue insurance on the application and returned the application to LNL. Thereafter, LNL declined to issue insurance on this application because the documentation submitted with the application showed that the applicant’s legal residency status in the United States had expired and the re- insurance provider utilized by LNL declined to re-insure the applicant. OIR offered no competent evidence that LNL refused to insure this applicant solely because of national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 20 Count 20 of the OIR Order alleged that, in May 2004, LNL refused to issue a $25,000 life insurance policy to a 20- year-old female born in South Africa and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. At the time of the application, South Africa was listed as a “D” country under the country code classifications used by LNL for underwriting purposes. The applicant in this case was the daughter of an LNL insurance agent. At the time of the application, she was a full-time student, unemployed and had no income. The evidence showed that LNL’s underwriting rules limited the amount of coverage to an amount equal to the applicant’s annual income for the preceding year. Since the applicant had no income, LNL’s underwriting rules did not permit the issuance of coverage and the policy was declined. OIR offered no competent evidence that LNL refused to insure this applicant solely because of national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. Count 21 Count 21 of the OIR Order alleged that, in April 2004, LNL refused to issue a $100,000 life insurance policy to a 42- year-old male born in Colombia and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. The evidence demonstrated that the applicant had lived in the United States for less than 10 years, but was a resident because he had received political asylum in the United States. Political asylum is a non-permanent status that could result in the resident being returned to his or her country of origin. Political asylum status was considered by LNL’s underwriters to constitute too tenuous a residency status in the United States to warrant undertaking the risk of issuing insurance to an individual who may at any time be returned to residency in his country of origin, with its attendant severe mortality risks. However, because the application was for a $100,000 policy, LNL sent the application to one of the re-insurance companies that it uses for re-insurance. The re-insurance company declined to issue insurance on the application based on the temporary nature of the applicant’s residency status and returned the application to LNL. Thereafter, LNL declined to issue insurance to this applicant because he had resided in the United States for less than 10 years and his residency in the United States was based on political asylum status. OIR offered no evidence to refute LNL’s position on political asylum and offered no competent evidence that LNL refused to insure this applicant solely because of national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. Count 22 Count 22 of the OIR Order alleged that, in April 2004, LNL refused to issue a $25,000 life insurance policy to a 17- year-old male born in Ghana and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. Ghana is listed as a “D” country under the country code classifications used by LNL for underwriting purposes. The evidence showed that the applicant had indicated on his application that he had a work visa which permitted him to remain a resident of the United States. However, the applicant, also, indicated he was a full-time high school student. The file also indicated that his sister, who is a contingent beneficiary, paid the initial application amount. On the other hand, the application indicated that the applicant’s fiancée would be the person responsible for payment of the insurance premium. Because of these inconsistencies, a telephonic interview was requested, but, for unknown reasons, was not completed. Because the interview was not completed, LNL declined to issue insurance on this application because the information that would have been supplied in a telephone interview was not provided before the underwriting decision was made. Again, OIR argues that the absence of specific notations in the file that it was cancelled based on missing documentation demonstrates that LNL refused to issue insurance based solely on national origin. This argument ignores OIR’s burden of proof in this case. The lack of such notations does not provide either a clear or convincing basis to draw any inferences regarding the reason for not issuing a policy. Additionally, OIR’s argument ignores the unrefuted testimony in this case that the application was declined based on the lack of information that would have been supplied if the required telephone interview had been completed. Other than its argument, OIR offered no competent evidence that LNL refused to insure this applicant solely because of national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 23 Count 23 of the OIR Order alleged that, in August 2004, LNL refused to issue a $100,000 life insurance policy to a 27-year-old male born in Colombia and residing in the United States solely because of the applicant’s national origin in violation of Subsection 626.9541(1)(x)1., Florida Statutes. The evidence showed that the applicant was a temporary resident based on a grant of political asylum he received in 2000. As with Count 21, LNL sent the application to one of the re-insurance companies that it uses for re-insurance. The re-insurance company declined to issue insurance on the application based on the temporary nature of the applicant’s residency status and returned the application to LNL. Thereafter, LNL declined to issue insurance to this applicant because he had resided in the United States for less than 10 years and his residency in the United States was based on political asylum status. Again, political asylum status is considered by LNL’s underwriters to constitute too tenuous a residency status in the United States to warrant undertaking the risk of issuing insurance to an individual who may at any time be returned to residency in his country of origin, with its attendant severe mortality risks. OIR offered no competent evidence that LNL refused to insure this applicant solely because of national origin. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(x)1., Florida Statutes, and the Count should be dismissed. COUNT 24 Count 24 of the OIR Order alleged that LNL refused to issue life insurance or limited the amount, extent, or kind of life insurance coverage to a 59-year-old male applicant who was born in Guyana and resided in the United States based solely on past lawful foreign travel experience or future lawful travel plans, in violation of Subsection 626.9541(1)(dd)2., Florida Statutes. Guyana was listed as a “D” country under the country code classifications used by LNL for underwriting purposes. The unrefuted evidence demonstrated that underwriting review of this application (A007302898) was postponed because the applicant was going to be out of the country on a mission trip to Liberia and could not complete a required paramedical examination requested by the paramedical examination company until his return to the United States. For unknown reasons, the applicant’s agent submitted a new application (A007313656) when the applicant returned from his trip. Medical tests were completed which revealed the applicant had prostate cancer and abnormal blood lab results. The original application was cancelled and the second application was denied based on the medical risk posed by the applicant. Clearly, neither cancellation of the first application nor denial of the second application was based on the applicant's travel. OIR offered no competent evidence that LNL refused to insure this applicant, or limited the amount, extent, or kind of life insurance coverage available to them, based solely on past lawful foreign travel or future lawful travel plans. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(dd)1. or 2., Florida Statutes, and the Count should be dismissed. COUNT 25 Count 25 of the OIR Order alleged that in January 2007, LNL refused to issue life insurance or limited the amount, extent, or kind of life insurance coverage to a 23-year-old male applicant who was born in Palestine and resided in the United States based solely on past lawful foreign travel experience or future lawful travel plans, in violation of Subsections 626.9541(1)(dd)1. and 2., Florida Statutes. Palestine was listed as a “D” country under the country code classifications used by LNL for underwriting purposes. The evidence demonstrated that the applicant applied for a $100,000 insurance policy. The applicant indicated that he traveled to Palestine every few years. The insurance policy was issued but contained a policy endorsement excluding coverage for foreign travel. The policy was also issued with a rate above what would be normally charged for the type of insurance issued. Clearly, LNL did not refuse to issue insurance based on this applicant’s past travel or future travel plans. However, LNL did limit the insurance issued because of the applicant’s future travel plans when it issued the policy with a foreign travel endorsement. This underwriting decision was made after the effective date of Florida’s “Freedom to Travel Act.” In this case, the application was submitted to one of the re-insurance companies used by LNL. The re-insurance company only agreed to re-insure the application if the policy included a foreign travel exclusion endorsement. LNL’s underwriting department was under the mistaken belief that LNL’s re-insurers were underwriting their risks according to the same Florida “Freedom to Travel Act” restrictions imposed by Florida on direct insurers such as LNL. Since the re-insurer to whom this application was submitted required a foreign travel exclusion endorsement, LNL assumed the exclusion was consistent with Florida travel underwriting requirements, and issued the policy with the foreign travel exclusion endorsement. The mistake was admitted by LNL and seems to be an underwriting error due to the inexperience of LNL’s underwriter’s in regard to the relatively new “Freedom to Travel Act.” There was no evidence that LNL’s decision was willful. However, LNL's decision was a violation of the Act. COUNT 26 Count 26 of the OIR Order alleges that in February 2007, LNL refused to issue life insurance or limited the amount, extent, or kind of life insurance coverage to a 44-year-old male applicant who was born in Haiti and was a citizen of the United States based solely on past lawful foreign travel experience or future lawful travel plans, in violation of Subsections 626.9541(1)(dd)1. and 2., Florida Statutes. The applicant had applied for a $150,000 policy and indicated in his telephone interview that he traveled to Haiti one or two times a year. The evidence demonstrated that Ms. Saxon’s underwriting unit processes approximately 1,500 applications from Florida a week, in addition to applications from other states. Ms. Saxon admitted that, when she processed this application, she missed the fact that this application was from Florida and subject to the “Florida Freedom to Travel Act.” She issued an ALX policy for $15,000. An ALX policy limits benefits to a return of premiums should an insurable event occur during the first three years of the policy. There was no evidence that Ms. Saxon willfully violated Florida’s “Freedom to Travel Act,” but made a mistake in processing this application. However, LNL did limit the kind or extent of insurance based solely on this applicant’s travel plans, contrary to the Florida “Freedom to Travel Act.” COUNTS 27 AND 28 Count 27 and 28 of the OIR Order alleges around July or August 2006, LNL refused life insurance to or limited the amount, extent, or kind of life insurance coverage on two insureds who were married, filed applications at the same time and were born in Haiti based solely on their past lawful foreign travel experience or future lawful travel plans, in violation of Subsections 626.9541(1)(dd)1. and 2., Florida Statutes. The applications were submitted to LNL on June 12, 2006, prior to the effective date of the “Freedom to Travel Act.” The decisions to issue the policies were made on July 6, 2006, five days after the Act's effective date on July 1, 2006. However, the policies were made effective retroactively to July 1, 2006, the same day the Act came into effect. The insurance policies were issued at a reduced face amount of $33,000 due to the underwriting rule that limited the amount of a policy to an applicant's annual income. Additionally, and more importantly for these Travel Act charges, the policies were issued with a foreign travel endorsement required. Once the underwriting decisions were made, the applicants' files were sent to the issuance department of LNL for finalization of the paperwork on the policies. This process is the standard process used by LNL for the insurance policies it writes. No one from the issuance department testified at the hearing and the evidence was not clear whether part of the policy had been finalized or placed with the insured. However, on July 20, 2006, the foreign travel policy endorsements for the policies were sent to the branch office. Again, the evidence was not clear what the branch office was to do with these endorsements, but it appears that the expectation was to have the endorsements signed by the applicants and returned to the issuance department. The travel endorsements were not accepted or returned by the applicants and the policies were eventually cancelled by LNL. Again, the evidence was not clear why the endorsements were not returned. Based on these facts, the evidence was clear that LNL limited the kind or extent of insurance based solely on these applicants’ travel plans contrary to the Florida “Freedom to Travel Act.” However, the evidence did not demonstrate that these violations were willful given the timeframes involved in the files. COUNT 29 Count 29 of the OIR Order alleges that in June 2006, LNL refused to issue life insurance or limited the amount, extent, or kind of life insurance coverage to a 54-year-old female applicant who was born in Honduras and was residing in the United States based solely on past lawful foreign travel experience or future lawful travel plans, in violation of Subsections 626.9541(1)(dd)1. and 2., Florida Statutes. Honduras was listed as a "D" country on the country code classifications used by LNL for underwriting purposes. In this Count, the applicant applied for a $50,000 policy. Her telephone interview reflected that her most recent annual income was $6,000. She, also, indicated that she might travel to Honduras in the future for Christmas. The unrefuted evidence demonstrated that the policy was issued at a reduced amount of $6,000 based on the income of the applicant. As discussed earlier, this reduction was in compliance with LNL's underwriting rules for the risks posed by non-citizen applicants who were born in a "C" or "D" country. There was no competent evidence that this reduction was related to the applicant's future travel plans. Based on these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(dd)1 or 2., Florida Statutes, and the Count should be dismissed. COUNT 30 Count 30 of the OIR Order alleges that in August 2006, LNL refused to issue life insurance or limited the amount, extent, or kind of life insurance coverage to a 47-year-old male applicant who was born in Haiti and was residing in the United States based solely on past lawful foreign travel experience or future lawful travel plans, in violation of Subsections 626.9541(1)(dd)1. and 2., Florida Statutes. As found earlier, Haiti is listed as a "D" country on the country code classifications used by LNL for underwriting purposes. The applicant had applied for a $50,000 policy. His most recent (2005) tax return reflected an annual income close to $11,000. His telephone interview reflected a current income of 36,000. However, this income was not in line with either of the applicant's 2003 or 2004 tax returns which reflected income closer to the 2005 tax return. Indeed, the evidence indicates that the $36,000 income reported in the telephone interview reflected business income prior to subtracting any business expenses. The applicant also indicated that he had returned to Haiti for a three-month period approximately four years prior to the date of his application to visit his family, but had no travel plans to visit Haiti in the future. The better evidence demonstrated that this policy was issued at a reduced amount of $17,000 based on the best estimate of the most recent annual income of the applicant. As discussed earlier, this reduction was in compliance with LNL's underwriting rules for the risks posed by a non-citizen applicant who was born in a "C" or "D" country. There was no competent evidence that this reduction was related to the applicant's past or future travel plans. Based on these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(dd)1 or 2., Florida Statutes, and the Count should be dismissed. COUNT 31 Count 31 of the OIR Order alleges that in August 2006, LNL refused life insurance to or limited the amount, extent, or kind of life insurance coverage to a 30-year-old female applicant who was born in Haiti and residing in the United States based solely on past lawful foreign travel experience or future lawful travel plans, in violation of Subsections 626.9541(1)(dd)1. and 2., Florida Statutes. The applicant had applied for a $100,000 policy. Her W-2 statements reflected an annual income of $42,000. She also indicated that she had traveled to Haiti approximately two years prior to the application, but had no future plans to travel. The unrefuted evidence demonstrated that the policy was issued at a reduced amount of $42,000 based on the income of the applicant. As discussed earlier, this reduction was in compliance with LNL's underwriting rules for the risk posed by non-citizen applicants who were born in a "C" or "D" country. There was no competent evidence that this reduction was related to the applicant's future travel plans. Based on these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(dd)1 or 2., Florida Statutes, and the Count should be dismissed. COUNT 32 Count 32 of the OIR Order alleges that in September 2006, LNL refused life insurance to or limited the amount, extent, or kind of life insurance coverage to a 60-year-old female applicant who was born in Colombia and was a resident of the United States based solely on past lawful foreign travel experience or future lawful travel plans, in violation of Subsections 626.9541(1)(dd)1. and 2., Florida Statutes. Colombia was listed as a "D" country on the country code classifications used by LNL for underwriting purposes. The applicant had applied for a $35,000 policy. The applicant indicated she had an annual income of $25,000. Her most recent W-2 showed income slightly under $24,000. The applicant also indicated that she traveled to Colombia within the 12 months preceding her application and that she traveled there about every 5 years. The unrefuted evidence demonstrated that the policy was issued at a reduced amount of $25,000 based on the income of the applicant. As discussed earlier, this reduction was in compliance with LNL's underwriting rules for the risk posed by non-citizen applicants who were born in a "C" or "D" country. There was no competent evidence that this reduction was related to the applicant's past travel or future travel plans. In fact, the file contains a specific handwritten note from LNL's legal department on a copy of the OIR's official notification regarding the effective date of the Travel Act that indicated the underwriter could not take adverse actions on the application based on the applicant's travel plans. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(dd)1 or 2., Florida Statutes, and the Count should be dismissed. COUNT 33 Count 33 of the OIR Order alleges that in September 2006, LNL refused life insurance to or limited the amount, extent, or kind of life insurance coverage to a 36-year-old female applicant who was born in Thailand and was a resident of the United States based solely on past lawful foreign travel experience or future lawful travel plans, in violation of Subsections 626.9541(1)(dd)1. and 2., Florida Statutes. Thailand was listed as a "D" country on the country code classifications used by LNL for underwriting purposes. The applicant applied for a $75,000 policy. Her most recent income tax return reflects income of $40,000. She also indicated that she regularly travels to Thailand for one week about every five years and intends to continue to travel there. The unrefuted evidence demonstrated that the policy was issued at a reduced amount of $40,000 based on the income of the applicant. As discussed earlier, this reduction was in compliance with LNL's underwriting rules for the risk posed by non-citizen applicants who were born in a "C" or "D" country. There was no competent evidence that this reduction was related to the applicant's past travel or future travel plans. As with Count 32, the file contains a specific handwritten note from LNL's legal department on a copy of the OIR's official notification regarding the effective date of the Travel Act. The note indicated that the underwriter could not take adverse actions on the application based on the applicant's travel plans. Given these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(dd)1 or 2., Florida Statutes, and the Count should be dismissed. COUNT 34 Count 34 of the OIR Order alleges that in November 2007, LNL refused life insurance to or limited the amount, extent, or kind of life insurance coverage to a 41-year-old male applicant who was born in India and was a resident of the United States based solely on past lawful foreign travel experience or future lawful travel plans, in violation of Subsections 626.9541(1)(dd)1. and 2., Florida Statutes. India was listed as a "D" country on the country code classifications used by LNL for underwriting purposes. The applicant had applied for a $100,000 policy. His most recent W-2 showed income of slightly more than $12,000. The applicant, also, indicated that he traveled to India every few years and had plans to travel there in the future. The evidence demonstrated that this application was submitted to one of the re-insurance companies used by LNL because the application was for a $100,000 policy. The re- insurance company declined to re-insure the risk based on the travel plans of the applicant and returned the application to LNL. However, LNL recognized that it could not decline the application for the reason the re-insurance company declined the re-insurance. LNL reviewed the policy based on its underwriting guidelines for applicants from "C" or "D" countries. The policy was issued at a reduced amount of $15,000 based on the income of the applicant and rated for a person with diabetes. This reduction was in compliance with LNL's underwriting rules for the risk posed by non-citizen applicants who were born in a "C" or "D" country. Additionally, the rating for diabetes was in line with LNL's underwriting guidelines for medical conditions. There was no competent evidence that either the reduction or rating were related to the applicant's past travel or future travel plans. Based on these facts, the evidence did not establish that LNL violated Subsection 626.9541(1)(dd)1. or 2., Florida Statutes, and the Count should be dismissed. COUNT 35 Count 35 of the OIR Order alleges that in March 2007, LNL refused life insurance to or limited the amount, extent, or kind of life insurance coverage to a 34-year-old male applicant who was born in Nepal and was a resident of the United States based solely on past lawful foreign travel experience or future lawful travel plans, in violation of Subsections 626.9541(1)(dd)1. and 2., Florida Statutes. Nepal was listed as a "D" country on the country code classifications used by LNL for underwriting purposes. The applicant had applied for a $200,000 policy. His most recent W-2 showed income around $10,000. The telephone interview reflected annual income of about $30,000 since he was self-employed. The applicant, also, indicated that he traveled to Nepal about every two years and had plans to travel there in the future. The evidence demonstrated that this application was submitted to one of the re-insurance companies used by LNL because the application was for over $100,000 policy. The re- insurance company declined to re-insure the risk based on the travel plans of the applicant and returned the application to LNL. Again, LNL recognized that it could not decline the application for the reason the re-insurance company declined the re-insurance. The policy was issued at a reduced amount of $30,000 based on the income of the applicant. This reduction was in compliance with LNL's underwriting rules for the risk posed by a non-citizen applicant who was born in a "C" or "D" country. There was no competent evidence that this reduction was related to the applicant's past travel or future travel plans. Based on these facts, the evidence did not establish that LNL violated Subsection 626.9541 (1)(dd)1. or 2., Florida Statutes, and the Count should be dismissed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that Counts 1 through 24 and 29 through 35 of OIR’s June 3, 2009, Order be dismissed. As to Counts 25, 26, 27, and 28 of OIR’s June 3, 2009, Order it is further RECOMMENDED that OIR enter a Final Order finding four violations of Section 626.9541(1)(dd), Florida Statutes, imposing an administrative fine of $1,000 per violation and ordering Respondent to underwrite the applications of the four affected individuals, and to offer to issue coverage to them from the date the policies were declined in such amount as is consistent with LNL’s underwriting guidelines, in compliance with the underwriting restrictions in Section 626.9541(1)(dd), Florida Statutes. It is further RECOMMENDED that OIR issue a cease and desist order to LNL regarding violations of Section 626.9541, Florida Statutes. DONE AND ENTERED this 9th day of November, 2010, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER 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 9th day of November, 2010. COPIES FURNISHED Amanda Allen, Esquire Elenita Gomez, Esquire Office of Insurance Regulation Larson Building 200 East Gaines Street Tallahassee, Florida 32399 Daniel C. Brown, Esquire Carlton Fields, P.A. Post Office Drawer 190 Tallahassee, Florida 32302-0190 Kevin M. McCarty, Commissioner Office of Insurance Regulation Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0305 Steve Parton, General Counsel Office of Insurance Regulation Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0305
The Issue This case concerns the issue of whether the Petitioner should be required to pay back premiums for chiropractic coverage under his family health insurance with the State of Florida Employees Group Health Self Insurance Plan for the period August, 1981, to December, 1982. At the formal hearing, the Petitioner testified on his own behalf and the Respondent called one witness, Ms. Barbara Power. Petitioner had marked for identification eight exhibits. Exhibits 1 through 5 and Exhibit 7 were admitted and Exhibit 6 was withdrawn. Petitioner's Exhibit No. 8 was a copy of Rule 22K-1.20, Florida Administrative Code, and it was marked for identification only. The Respondent had marked for identification 10 exhibits. Respondent offered and had admitted Respondent's Exhibit Nos. 2, 3, 7, 8, 9, and 10. Both the Petitioner and Respondent submitted proposed findings of fact and conclusions of law for consideration by the undersigned Hearing Officer. The proposed findings of fact and conclusions of law were considered by the Hearing Officer and to the extent that those proposed findings of fact and conclusions of law are inconsistent with the facts contained herein, they were considered to be not supported by the evidence or were rejected as being unnecessary to the disposition of this cause.
Findings Of Fact In April, 1978, the Petitioner, Owen Sellers, enrolled in the State of Florida Employees Group Health Self Insurance Plan (hereafter referred to as the Plan) . At the time of his enrollment, the Petitioner elected coverage for himself and his eligible dependents, including coverage for chiropractic services. Under the Plan, a portion of the premium for the health insurance coverage is paid by the state agency who employs the individual and the remaining portion is paid by the employee through payroll deduction. In approximately November, 1980, the Petitioner'S spouse also became a full time state employee entitled to the health insurance benefit. As a result of the entitlement of both family members, the state began paying the entire cost of the Plan, except for chiropractic coverage. In order to obtain chiropractic coverage, an employee in 1981 and 1982 was required to pay an additional premium for such coverage. From August, 1981, to December 1, 1982, the Petitioner and his family were covered by the Plan including chiropractic coverage. On or about November 4, 1982, the Petitioner, Owen Sellers, submitted a Change of Information form dropping chiropractic coverage. This change became effective December 1, 1982. At no time prior to this had the Petitioner requested such a change. Because of an error on the part of the employing agency, the premium for chiropractic coverage was not deducted from Mr. Sellers' pay from August, 1981, through October, 1982. The total amount of premiums due for that period for chiropractic coverage is $92.20. The error was discovered in November, 1982, and at that time, the Petitioner was notified of the underpayment. Petitioner refused to pay the $92.20 and requested an administrative hearing. During the time period August, 1981, through October, 1982, the Petitioner did not file a claim for any benefits under the chiropractic coverage. However, claims were submitted for non-chiropractic medical treatment received by the Petitioner or other members of his family.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent enter a Final Order directing the Petitioner to pay the sum of ninety-two dollars and twenty cents ($92.20) within ninety (90) days of entry of the Final Order. In the event Petitioner fails to make timely payment, that Respondent cancel his coverage under the State of Florida Employees Group Health Self Insurance Plan DONE and ENTERED this 3rd day of August, 1983, in Tallahassee, Florida. MARVIN E. CHAVIS, 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 3rd day of August, 1983. COPIES FURNISHED: Mr. Owen Sellers 1874 Woodleigh Drive West Jacksonville, Florida 32211 Daniel C. Brown, Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Mr. Nevin G. Smith Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32301
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Prior to the institution of this proceeding, Petitioner had undergone surgical sterilization through a procedure known as a vasectomy. Subsequent to the Petitioner having the vasectomy, Petitioner made a decision to have the procedure surgically reversed. At all times material to this proceeding, Petitioner was a member of the State of Florida Employees Group Health Self Insurance Plan (Plan). At some time prior to having the vasectomy surgically reversed the Petitioner obtained and reviewed the Brochure from the Plan (Petitioner's Exhibit 1). Page 1 of the Brochure advises the members of the Plan (members) that the Brochure is "not a contract since it does not include all of the provisions, definitions, benefits, exclusions, and limitations" of the Plan and that its purpose is to furnish members a summary of the benefits available under the Plan and provides a regular telephone number and a SunCom telephone number for the Office of State Employees Insurance (OSEI) in Tallahassee, Florida for the members to call if there are any questions. Page 4 of the Brochure contains a paragraph entitled "Benefit Inquiries" and provides a regular telephone number and a SunCom telephone number for members to call the OSEI on questions concerning benefits. Page 12 of the Brochure contains a paragraph entitled "Claims Inquiries" and provides a TOLL FREE WATS LINE number for the Jacksonville Office of Blue Cross and Blue Shield for members to use when calling that office on questions concerning claims or claims problems. OSEI interprets "Claims Inquiries" to mean inquiries concerning payment, nonpayment or timeliness of claims as distinguished from whether certain services are covered under the Plan which would be "Benefit Inquiry". Page 9 of the Brochure contains a paragraph entitled "Limitations and Exclusions" wherein surgery to reverse surgical sterilization is listed as one of those procedures that the Plan finds necessary to limit or exclude payment. Immediately above the paragraph entitled "Limitations and Exclusions" on page 9 the Brochure advises the member that exclusions and limitations are contained in the Benefit Document on file in the individual's personnel office and the OSEI in Tallahassee, Florida. The Benefit Document is defined on page 2 of the Brochure as the document containing "the provisions, benefits, definitions, exclusions and limitations of the" Plan. Section VII, EXCLUSIONS, subparagraph P. of the State Employees Group Health Insurance Benefit Document (Document) (Respondent's Exhibit 3) specifically excludes surgery to reverse surgical sterilization procedures from coverage under the Plan. The Department of Administration has been designated by the Florida Legislature as the State agency responsible for the administration of the Plan and to make the final determination as what benefits are covered under the Plan in accordance with the Document. There was no evidence presented to show that this responsibility had been delegated to Blue Cross and Blue Shield of Florida, Inc. (Administrator) who was selected by the competitive bid process to provide claims payment services, actuarial and printing services, and medical underwriting of late enrollee applications. Before having surgery to reverse surgical sterilization, the Petitioner contacted the Jacksonville Office of the Administrator and was advised by an unidentified person in that office that the Plan would cover the hospital costs for reverse surgical sterilization but would not cover the doctor's fee. The Petitioner did not at any time material to this proceeding contact the OSEI in Tallahassee or the local personnel office concerning the Plan's coverage of surgery to reverse surgical sterilization. Petitioner acted on the advice of the unidentified person in the Jacksonville Office of Blue Cross and Blue Shield, plus his reading of the Brochure, to come to the conclusion that there was a limitation on the benefits available under the Plan for surgery to reverse surgical sterilization rather than an exclusion of benefits for that procedure; the limitation being that the Plan would pay for hospital costs but not the doctor's fees. Prior to entering the hospital, the Petitioner's admission, being elective, was certified under the Plan's Preadmission Certification Program. However, the Petitioner was advised that the admission being certified did not mean that the services requested were covered under the Plan and that the services rendered would be subject to the limitations and exclusions listed in the Plan. On or about July 30, 1986, Petitioner was admitted to Fish Memorial Hospital where Dr. Youngman performed surgery to reverse surgical sterilization and was discharged on July 31, 1986. After surgery was performed, claims were made under the Plan and, the State of Florida, through the Administrator, made the following payments in connection with the surgery: (a) Fish Memorial Hospital - $935.10; (b) Southeast Volusia Radiology Associates - $19.10; (c) Clifford Chu, M.D. - $742.00 and; (d) Robert Charles Youngman, M.D. - 742.00 Although claims made by the different health care providers (providers) for the services rendered to the Petitioner indicated a diagnosis of Azoospermia which is defined as the absence of live spermatozoa in the semen, there was insufficient evidence to show that this diagnosis was the primary reason for payments being made in error to the providers by the Administra- tor for the services rendered in connection with Petitioner's surgery to reverse surgical sterilization. Subsequent to the health care providers being paid by the Administrator for services rendered to Petitioner under the Plan, the OSEI made a determination that none of the services rendered to the Petitioner to reverse surgical sterilization were covered under the Plan, and demanded reimbursement from the providers. All of the providers, with the exception of Dr. Youngman, reimbursed the Plan but, since the Petitioner had paid Dr. Youngman prior to the claim being made, the Petitioner had received Dr. Youngman's claim and subsequently reimbursed the Plan. Petitioner made a demand on the State to pay the providers since he had been informed by the Administrator that the services, at least the hospital costs, were covered under the Plan. Respondent, at Petitioner's request, reviewed its denial of coverage and determined that costs incurred for surgery to reverse surgical sterilization was not covered under the Plan. By letter dated September 25, 1987, received by Petitioner on October 1, 1987, Respondent advised Petitioner of that decision and of his right to a hearing should he desire one. Petitioner was also advised that he had twenty-one (21) days to file a petition and failure to timely comply would result in the action contemplated in the letter becoming final. A Petition For Formal Proceedings and Notice of Appearance was received by the Respondent on October 26, 1987 bearing a certificate of service dated October 23, 1987. The petition was mailed by Petitioner and received by the Respondent more than 21 days after receipt of the letter by the Petitioner on October 1, 1987. Respondent's ore tenus Motion For Remand Or, In The Alternative, To Dismiss The Petition citing Petitioner's failure to timely file his petition was filed at the hearing on May 12, 1988 some five and half (5 1/2) months after Respondent's receipt of the petition. Upon the Respondent determining that the Petitioner's surgery to reverse surgical sterilization was not covered under the Plan, Petitioner became responsible for all costs incurred for the surgery rather than just Dr. Youngman's fee which resulted in Petitioner being responsible for $3,057.70, in addition to Dr. Youngman's fee. Had the surgery been covered under the Plan, the Petitioner would have only been responsible for $91.90, plus Dr. Youngman's fee.
Recommendation HAVING considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that the Department of Administration enter a Final Order DENYING Petitioner payment for the costs incurred for the surgery to reverse surgical sterilization requested in his Petition for Formal Proceedings. RESPECTFULLY SUBMITTED and ENTERED this 20th day of July, 1988, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 20th day of July, 1988. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-1452 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner Petitioner's Proposed Findings of Fact were submitted in unnumbered paragraphs but, for clarity, I have numbered them 1 through 18. The first two sentences of paragraph one are rejected as not being supported by substantial competent evidence in the record. Although an employee of the Administrator represented to Petitioner that the procedure was covered, there was no approval in that the Administrator did not have that authority. The last two sentences of paragraph one are adopted in Findings of Fact 15, 16, and 17. The first two sentences of paragraph 2 are adopted in Finding of Fact 19 but clarified. The last two sentences in paragraph two are adopted in Finding of Fact 20. Adopted in Finding of Fact 20 but clarified. (4-7) Rejected as immaterial to irrelevant except the last sentence of paragraph 7 which is adopted in Finding of Fact 11 but clarified to show the 800 number being provided under "Claims Inquiries". Adopted in Finding of Fact 11. Adopted in Finding of Fact 11 but clarified. Adopted in Findings of Fact 11 and 14 but clarified. Adopted in Finding of Fact 16. Rejected as immaterial or irrelevant. Adopted in Finding of Fact 18. Adopted in Finding of Fact 24 but clarified. Rejected as not supported by substantial competent evidence in the record. Adopted in Findings of Fact 9 and 13 but clarified. The first sentence of paragraph 17 is adopted in Finding of Fact 8 and although there is a difference in the meaning of "limitations" and "exclusions", there was no substantial competent evidence in the record that the Brochure and Document were inconsistent in this regard, therefore the last sentence is rejected. Rejected as a restatement of a witness' testimony and not a finding of fact but additionally, rejected as not being supported by substantial competent evidence in the record. Specific Rulings on Proposed Findings of Fact Submitted by Respondent (1-6) Adopted in Findings of Fact 1 through 6, respectively. (7-8) Adopted in Finding of Fact 8. (9-10) Adopted in Finding of Fact 7. (11-14) Adopted in Findings of Fact 15, 12, 11 and 13, respectively. (15-16) Adopted in Finding of Fact 17. (17) Rejected as not supported by substantial competent evidence in the record. See Finding of Fact 17. (18-19) Adopted in Findings of Fact 18 and 19, respectively. (20) Rejected as a restatement of a witness' testimony and not a Finding of Fact. Also, it would be rejected as not being supported by substantial competent evidence in the record. (21-22) Adopted in Finding of Fact 20. (23) Adopted in Finding of Fact 21. (24-25) Adopted in Finding of Fact 22. (26-28) Adopted in Finding of Fact 10. Adopted in Finding of Fact 9. Rejected as a conclusion of law. COPIES FURNISHED: William A. Frieder, Esquire Department of Administration 440 Carlton Building Tallahassee, Florida 32399-1550 Lester A. Lewis, Esquire P. O. Drawer 9670 Daytona Beach, Florida 32020 Adis Vila, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
