The Issue Whether or not Petitioner's application for examination as a general lines agent should be approved.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compiled herein, I hereby make the following relevant factual findings: On or about September 2, 1989, Petitioner, Kimberly L. Strayer, formerly known as Kimberly Lindsay, filed an application for examination as a general lines agent with Respondent, Department of Insurance. Since January 1988, Petitioner has been the sole owner and president of Central Florida Insurance Agency (Central). On or about December 28, 1989, Respondent informed Petitioner, by letter, that her application for examination as a general lines agent was denied for the following reasons: Petitioner operated Central Florida Insurance Agency without a licensed general lines agent in the full-time active charge of that agency from January 1, 1988 through August 31, 1988. During January 1988 Petitioner accepted applications and down payments from the following insureds: Robert Smallwood, Annelle Jones, Mickey Lawson, Donald Johnson, Thomas Jones, Manning O'Callahan and Christopher Stevens. Petitioner issued a binder and an automobile identification card for each insured indicating that coverage was bound with State Farm Mutual Insurance Company, as servicing carrier for the Florida Joint Underwriting Association (FJUA). At the time Petitioner had no authority to accept either applications or premiums on behalf of State Farm. Petitioner failed to forward such applications and premiums to the insurer until April 12, 1988. During January 1988, Petitioner accepted an application and premium payment of $274.00 from Tammy Clay. Petitioner issued a binder indicating that coverage was bound with State Farm and Union American Insurance Companies. Petitioner failed to forward either the application or the premium payment to any insurer. Petitioner issued a fictitious policy number to Ms. Clay and after nearly four months, submitted a money order to State Farm payable to Tammy Clay, on or about May 1989. At the hearing, Petitioner admitted that she did not have a licensed general lines agent in full-time active charge of her agency; that she accepted applications and premium payments from the above-named insureds for auto insurance to be bound with State Farm Mutual Insurance Company and that she accepted an application for premium payment for automobile insurance from Tammy Clay in the amount of $274.00 for coverage to be bound by State Farm Mutual Insurance Company. Petitioner was first employed in the insurance sales industry during the summer of 1987. At the time, she was only seventeen years old and had completed the eleventh grade. Petitioner's first employment in the insurance industry was with Friendly Auto Insurance (Friendly) which had several offices throughout Polk County, Florida. Friendly was owned by Petitioner's now husband, Larry Lindsay when she was hired. Petitioner formed Central during late 1987 and began operating Central on or about January 1, 1988. Petitioner received her supervision and training while employed with Friendly, primarily through on the job experiences. During late 1987, Petitioner's husband encountered problems with one of his business partners which resulted in strained relations. The resultant strained relations prompted Petitioner to organize Central. Central purchased several of Friendly's agencies of which her now husband had an interest, with Petitioner paying a nominal amount for the "book of business" that Friendly had generated. When Central commenced operations during January of 1988, Bob Seese was the licensed insurance agent who was authorized under the rules of the FJUA to accept applications and bind coverage through one of the FJUA servicing carriers, State Farm. Friendly and its successor, Central, generated a substantial volume of so-called high risk auto insurance business for drivers who could not obtain insurance through the regular market. Bob Seese had been associated with and served as the licensed agent for the Friendly agency in Lakes Wales which Central purchased in January 1988. At the time Petitioner commenced operating Central, she hired Bob Seese as the licensed general lines agent. She considered that Central was authorized to accept applications and continue to bind FJUA insurance coverage through State Farm. Petitioner forwarded all of the FJUA insurance applications which were bound by Bob Seese to State Farm within a period ranging from one week to approximately one month. State Farm refused to accept the applications submitted by Petitioner based on its contention that initially, Bob Seese was not authorized to bind coverage through Central, as he had not transferred his license to Central and Seese could only operate out of the Friendly agency of Lake Wales. 1/ Bob Seese was formally authorized by State Farm to conduct business through Central during February 1988. As a result of that authorization, all of the above-named insureds obtained insurance and none of the insureds suffered any monetary loss as a result of Seese's belated authorization. All of the premium payments that Petitioner received were, in time, forwarded to the respective carriers. Petitioner properly gave new insureds binder numbers which were serially dispensed in the order that premium payments were received. During January 1988, Petitioner accepted an application and premium payment for auto insurance from Tammy Clay for coverage to be bound by State Farm. Petitioner submitted Clay's application and premium payment to State Farm and it was returned on one occasion based on the fact that a facsimile stamp was used by the purported licensed agent (Seese). Petitioner resubmitted it and State Farm again returned it based on State Farm's contention that Seese was not authorized to conduct business through Central. Petitioner has now completed the required formal educational courses to demonstrate her eligibility to sit for the general lines agent's examination. Petitioner is now knowledgeable about insurance matters and is aware of the proper procedures for operating as a general lines agent. When Petitioner formed Central, she had less than one year's experience in the insurance business and was ineligible to sit for the general lines agent exam as she was not of majority age.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Respondent enter a Final Order granting Petitioner's application for examination as a general lines insurance agent. DONE and ENTERED this 31st day of October, 1990, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of October, 1990.
The Issue Whether the Petitioner's application for licensure as a nonresident general lines insurance agent and a nonresident surplus lines insurance agent should be approved or denied.
Findings Of Fact On August 4, 2006, the Petitioner filed an application for licensure as a "09-20" nonresident general lines insurance agent and a "91-20" nonresident surplus lines insurance agent. By Notice of Denial dated December 11, 2006, the Respondent denied the Petitioner's application for licensure. The Notice of Denial, in material part, sets forth the factual basis for the denial as follows: You, Brian D. Boneck, at all times pertinent to the facts set below, were licensed in this state as a resident general lines insurance agent. You, Brian D. Boneck, at all times pertinent to the facts set forth below, were the owner of Brooke Agency Services of Bradenton, Florida. You, Brian D. Boneck, at all times pertinent to the facts set forth below, were the President and owner of Sierra Insurance Underwriters, Inc. On or about the last week of December, 2005, Christopher Waters of Port Charlotte, Florida, called the Brooke Agency in Bradenton, Florida, and spoke to you, Brian D. Boneck, regarding the renewal of a commercial general liability insurance policy for Waters Developers, LLC. On or about, January 4, 2006, Mr. Waters delivered a check to you in the amount of $809.30, payable to Sierra Underwriters. This check was to pay the down payment on the premium for renewal of Mr. Waters' general liability policy. Sometime in April 2006, Mr. Waters was notified by Mid-Continental [sic] Casualty Company that the policy was cancelled for non-payment of premium. You, Brian D. Boneck, failed to submit the money paid to you by Mr. Waters to the insurer, Mid-Continental [sic] Casualty Company, or to the insurer's general agent, Florida Homebuilders Insurance Agency, Inc. You, Brian D. Boneck, misappropriated the down payment made to you by Mr. Waters. To this date, you have not returned the money to Mr. Waters or paid the money to Mid- Continental [sic] Casualty Company, or to the Florida Homebuilders Insurance Agency, Inc. Your ownership of Brooke Agency Services of Bradenton, Florida, was through a franchise agreement with Brooke Franchise Corporation. Brook Insurance and Financial Services is a subsidiary corporation that manages business for Brooke Franchise Corporation. Pursuant to this relationship, you, Brian D. Boneck, were required to pay a share of the commissions received by Brooke Agency Service of Bradenton to Brooke Insurance and Financial Services and were required to provide information on insurance sales to Brooke Insurance and Financial Services. According to a sworn affidavit by Marian Ann Eupizi, who was formerly employed by you at Brooke Agency Services, you, Brian D. Boneck, also misappropriated premium payments made to you by other customers whose insurance was written by you or other agents of Brooke Agency Services of Bradenton, Florida, through the Florida Homebuilders Insurance Agency. You, Brian D. Boneck, did this by having customers write premium checks payable to your other company, Sierra Insurance Underwriters, Inc. By doing so, Brooke Insurance and Financial Services was unaware of your actions and you also misappropriated commissions owed to them. Also according to Ms. Eupizi, you, Brian D. Boneck, in mid- 2005, misappropriated a refund check issued for a policy on Callis Construction in the amount of approximately $1200. The Respondent offered no reliable evidence at the hearing to support the allegations which served as the factual basis for the denial. As to the allegation that Christopher Waters delivered the check to the Petitioner, the Respondent offered only the sworn affidavit of Mr. Waters and various attachments in support of the allegation. At the hearing, the Petitioner testified that he did not accept premium checks from customers and that the office staff accepted and processed premium checks. The Respondent offered no credible evidence to the contrary, and, for purposes of this Order, the Petitioner's testimony is credited. The Petitioner testified that the Waters account was one of 35 transferred to the corporate franchisor when the Petitioner sold the agency back to the Brooke Agency Services. Negotiations for the sale occurred over a period of time and concluded with a bill of sale executed in August 2006. Although the Petitioner's testimony regarding the chronology of the sale was poorly defined, there was no evidence that the Waters account was not included within those transferred. As to the allegation that the premium was misappropriated and not forwarded to Mid-Continent Casualty Insurance Company, the Respondent offered a copy of a sworn statement wherein a Mid-Continent Casualty representative alleged that the company's investigation indicated that the Waters premium was never forwarded through the Brook Agency to the Florida Homebuilders Insurance Agency, which initially issued and then ultimately cancelled the policy. Additionally, the Respondent offered a copy of an email to the Respondent's investigator from a representative of Florida Home Builders Insurance, Inc., wherein the representative restates information provided to the email writer from unidentified representatives of the Brooke Agency and AmGro Premium Finance Company (with whom the remaining premium due from Mr. Waters had been financed). The Respondent also offered banking records apparently provided in response to a subpoena that indicate the Waters check was deposited into the Sierra Insurance Underwriters Account, to whom the check was made payable. The Respondent offered no credible evidence that the deposit of the Waters check into the Sierra account was improper. As to the allegation that no money had been refunded to Mr. Waters as of the December 11, 2006, Notice of Denial, the Petitioner testified that the money was refunded by a check to Mr. Waters and had a check to Waters Developers from Sierra Underwriters, Inc., dated July 24, 2006, for $1,471 admitted into evidence. It is unclear why the refund amount exceeded the initial premium amount, but there is no evidence contrary to the Petitioner's testimony that the check was issued as a premium refund. As to the allegations related to the ownership structure of the Petitioner's agency, the Respondent offered no credible evidence regarding the interrelationship between the Brooke entities or how the Brooke entities operated with the Petitioner’s Sierra Underwriters, Inc. Regarding the allegations attributed to sworn affidavit of Marian Ann Eupizi, the Petitioner testified that Ms. Eupizi was a customer service representative who was not involved in the fiscal operation of the agency and whom he had fired for falsification of documents. There was no credible evidence contrary to the Petitioner's testimony, and it is credited. Ms. Eupizi’s affidavit has been disregarded in its entirety. There was no credible evidence to support the assertion in the affidavit that the Petitioner misappropriated premium payments from other customers, misappropriated commissions due to Brooke Insurance and Financial Services, or misappropriated a refund check to an entity identified as Callis Construction.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order granting the application of Brian D. Boneck for licensure as a nonresident general lines insurance agent and a nonresident surplus lines insurance agent. DONE AND ENTERED this 18th day of September, 2007, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of September, 2007. COPIES FURNISHED: Brian D. Boneck 70 East Horizon Ridge Parkway, No. 140 Henderson, Nevada 89002 William Gautier Kitchen, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol Plaza Level 11 Tallahassee, Florida 32399-0307
Findings Of Fact Petitioner is the state agency in Florida responsible for the regulation and licensing of general lines insurance agents. Its responsibility includes the duty to sanction those licensed under the insurance code for violations of the code. At all times relevant, Respondent was a licensed general lines insurance agent and possessed license #265736194 issued by the Petitioner on December 21, 1990. Respondent's license is presently active. On June 5, 1992, an order of liquidation, injunction and notice of automatic stay was entered in Case No. 92-1766, Circuit Court, Leon County, Florida, In Re: The Receivership of First Miami Insurance Company, a Florida corporation. On December 14, 1992, Salma Zacur, the operations manager for the receiver for First Miami Insurance Company, mailed a letter to Respondent. On June 7, 1993, a summary order directing immediate delivery of funds was entered in Case No. 92-1766, Circuit Court, Leon County, Florida, In Re: The Receivership of First Miami Insurance Company, a Florida corporation. On June 8, 1994, an order on receiver's motion for entry of final judgment was entered in Case No. 92-1766, Circuit Court, Leon County, Florida, In Re: The Receivership of First Miami Insurance Company, a Florida corporation. Petitioner failed to produce evidence of the contents of the December 14, 1992 letter which was non-hearsay and, therefore, failed to establish the relevance of the court orders of June 7, 1993 and June 8, 1994 in this matter. The Petitioner failed to present clear and convincing evidence that Respondent violated Section 631.155, or Chapter 626, Florida Statutes.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department enter a final order dismissing the Administrative Complaint filed against Respondent. DONE and ENTERED this 23rd day of August, 1995, in Tallahassee, Florida. DANIEL M. KILBRIDE 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 23rd day of August, 1995. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.57(1)(b)9., Florida Statutes. Proposed findings of fact submitted by Petitioner. Accepted in substance: paragraphs 1, 2, 3, 4, 5, 7 (in part), 12 (in part). Rejected as not proven by clear and convincing evidence: paragraphs 6, 7 (in part), 8, 9, 10, 11, 12 (in part) 13. Proposed findings of fact submitted by Respondent. Accepted in substance: paragraphs 1, 2, 3, 4, 5, 6, and 7. COPIES FURNISHED: Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner Acting General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300 Michael K. McCormick, Esquire Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0300 Jed Berman, Esquire Infantino and Berman O. Drawer 30 Winter Park, Florida 32790
The Issue Whether Respondent acted as an agent for a membership organization, International Water Safety Foundation (IWSF), and its insurance underwriter, North American Marine (NAM), that had been ordered to cease and desist transacting insurance related business in this state; if so, whether (and what) discipline should be imposed on Respondent's license to transact business as an insurance agent.
Findings Of Fact The Parties Petitioner is the state agency charged with the licensing and regulation of insurance agents in Florida and is responsible for administrating the disciplinary provisions of chapter 626, pursuant to section 20.121(2)(g) and (h), Florida Statutes. At all times material to this case, Respondent was a licensed general lines insurance agent in the state of Florida. Respondent also is a director and officer of the Marta De La Paz Agency, Inc. (MDLPA), which she has co-owned with her daughter, Jenny Mondaca Toledo, since 2000. Respondent was a "captive agent" of Allstate Insurance Company (Allstate) for the period of 2000 to 2010. During this time, pursuant to an agreement with Allstate, Respondent could only sell Allstate insurance products. If Allstate did not carry a particular insurance product line, Respondent was allowed to sell the products of other carriers to her clients if the other carrier was approved by Allstate. The Events Giving Rise to the Recommended Revocation Insurance agents licensed by the State of Florida are only permitted to sell insurance provided by entities which have a "certificate of authority" and which are authorized to sell in Florida. Agents are fiduciaries of the consumers who use their services. Sales of insurance through unauthorized entities place the consumer at risk because unauthorized entities do not participate in the Florida Insurance Guarantee Fund (FIGA), a fund maintained by the State to protect consumers from losses should an authorized insurance carrier become insolvent or unable to pay claims. IWSF is a membership organization which offers various benefits and services to its members, including watercraft insurance through a master policy with NAM. NAM, an unlicensed and unauthorized insurer, through IWSF, solicited Florida consumers to purchase insurance from NAM. On October 15, 2003, the Office of Insurance Regulation issued a cease and desist order (Order) against IWSF and NAM from conducting insurance related activities in Florida, including but not limited to, "transacting any new or renewal insurance business in this state, and from collecting any premiums from Florida insureds." The unlicensed, unauthorized, and, therefore, illegal transaction of insurance by IWSF and NAM was deemed to present an immediate danger to public health, safety, or welfare of Florida residents. On or about April 14, 2009, Carlos Guzman (Guzman), on behalf of himself and his brother-in-law, Jorge Saez (Saez), sought to purchase watercraft insurance for a boat which they co-own. Guzman went to MDLPA and met with employee, Odayls Chiullan (Chiullan). Chiullan, who has held a 2-20 Florida general lines insurance license for approximately 15 years, worked at MDLPA as an agent for approximately three months during the spring of 2009. Respondent, as the principal agent of MDLPA, had the responsibility to supervise Chiullan during the period she worked for MDLPA. In April 2009, Allstate was not providing watercraft insurance for customers in Florida. To determine which carrier, if any, could provide the insurance sought by Guzman and Saez, Chiullan referred to a list maintained in the office of MDLPA. Chiullan found the name of IWSF on the list and assumed that it was approved by Allstate as a licensed entity with which MDLPA could do business. Chiullan was unaware of the 2003 Order against IWSF and NAM. Chiullan contacted IWSF and secured an insurance price quote for Guzman and Saez. Chiullan arranged for Guzman and Saez to become members of IWSF, thereby enabling their boat to become insured under the master policy of IWSF with NAM for the initial period of May 6, 2009, through May 6, 2010, which was subsequently renewed for an additional year. Chiullan contacted Standard Premium Finance Company (Standard) on behalf of Saez and Guzman to assist them in financing the premium payments for their boat insurance. Respondent was on a cruise and not in contact with Chiullan during the period when Chiullan assisted Saez and Guzman with securing boat insurance or the financing for their premium payments. Although correspondence to and from IWSF and MDLPA was on MDLPA letterhead and fax transmittal sheets, Respondent had no contact with Saez, Guzman, IWSF, or NAM regarding this May 2009 transaction. Respondent became aware of the purchase of insurance from IWSF by Saez and Guzman when she was asked by Chiullan to sign the premium finance agreement with Standard as the owner of MDLPA. That was the full extent of Respondent's connection to this particular transaction which is at issue. Saez and Guzman renewed their policy through MDLPA with IWSF and NAM for the period of May 6, 2010, through May 6, 2011. Saez and Guzman made no claims against the policy or policies in effect from May 6, 2009, through May 6, 2011. Prior to receipt of the Administrative Complaint, Respondent was unaware of the Order against IWSF and NAM. Respondent was also unaware that neither entity was authorized to transact business in Florida. Respondent received no notice of the Order from Petitioner, Allstate, IWSF, NAM, or Standard. While serving as a captive agent for Allstate, Respondent did not receive alerts from Petitioner regarding unauthorized insurers. Although Respondent was aware of her obligations under Florida to stay apprised of which entities were authorized to issue insurance in Florida, she did so by maintaining a list in MDLPA, provided by Allstate, which she presumed was vetted and approved as state-authorized insurers. In fact, Respondent sold her son, Osmany Mondaca, insurance for his boat through IWSF and NAM for the period of November 26, 2007, through November 26, 2008, and this policy was renewed for two additional years. Respondent also sold boat insurance through IWSF and NAM for the coverage period of June 24, 2010, through June 24, 2011, to her boyfriend for a boat which they co-own. Prior to purchasing insurance through IWSF for her boyfriend and son, Respondent checked with Petitioner regarding the status of IWSF and was told there was no problem. As recently as December 2013, Respondent checked again with Petitioner and was advised there was no problem writing insurance through IWSF and NAM. Respondent credibly testified that, had she known about the Order, she certainly would not have sold policies through IWSF and NAM for a boat she co-owns with her boyfriend or for her son's boat. Although Petitioner offered evidence that it regularly provides updates on its website and in newsletters alerting agents to unauthorized insurers attempting to do business in Florida, including but not limited to alerts about IWSF and NAM, no evidence was provided that these communications were sent to, received, or reviewed by Respondent or Chiullan. Further, Respondent's testimony, that this information was not available by telephone from Petitioner, was not contradicted.1/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Insurance Agents and Agency Services, enter a final order which dismisses the Administrative Complaint filed against Respondent. DONE AND ENTERED this 28th day of March, 2014, in Tallahassee, Leon County, Florida. S MARY LI CREASY 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 28th day of March, 2014.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: At all times material to the allegations of this case, Respondent is and has been licensed in the State of Florida as a life and health insurance agent and as a general lines insurance agent. On December 3, 1990, Respondent received an application for workers' compensation and employers' liability insurance from Emma Ware, corporate secretary for Abel Towing Service, Inc. Also at that time, Respondent received a check from the company in the amount of $817.00 which represented the premium due from the insured for the coverage sought. The check described above, which was made payable to A.B.C. Insurance Agency, was deposited by Respondent into an account for ABC Enterprises, Inc. on or about December 5, 1990. On December 3, 1990, Respondent issued to Lennon Ware, as the insured, a certificate of insurance indicating that the insured had obtained workers' compensation and employers' liability insurance effective 12/3/90 and that the company affording coverage was NCCI. NCCI does not afford workers' compensation insurance through authorized agents such as the Respondent. Consequently, the Respondent, or any other licensee, may not bind coverage on behalf of NCCI. NCCI receives applications for insurance, such as from Abel Towing and, when complete, assigns the insurance coverage to one of several companies in the assigned risk group. NCCI operates under plan guidelines to provide insurance for entities that cannot obtain coverage from the voluntary market. NCCI administers the assignment to insurance companies, and acts as the middle man to collect the premium. NCCI does not, itself, provide the insurance coverage. After December 3, 1990, based upon the certificate of insurance issued by Respondent, Emma Ware and Lennon Ware operated under the mistaken assumption that their company, Abel Towing Services, Inc. had obtained workers' compensation and employers' liability insurance. On January 29, 1991, an employee of Abel Towing was injured on the job and taken to a hospital for treatment. In connection with that injury, a claim was submitted to Respondent for payment under the insurance coverage presumed to be in effect. On or about February 5, 1991, Respondent forwarded an application for insurance coverage on behalf of Abel Towing to NCCI. That application was incomplete as it did not contain the company's form 941, federal quarterly tax reports, for the year 1990. NCCI returned the application as incomplete and advised Respondent as to the forms required for binding coverage. In response to requests from Respondent, Emma Ware delivered copies of Abel Towing's tax reports to Respondent in February, 1991. Respondent failed to timely forward the completed application to NCCI to secure an insurance binding date of February 7, 1991. Respondent then forwarded the application to NCCI in March, 1991. In order to secure a binding date of March 5, 1991, Respondent was required to have the application package completed by and postmarked to NCCI by March 20, 1991. Again, the information submitted by Respondent on behalf of Abel Towing was incomplete. Ultimately, the insurance was not bound and effective according to NCCI until March 27, 1991. Respondent failed to inform Abel Towing or the Wares that the insurance application had been returned by NCCI. Respondent failed to timely act to procure insurance for Abel Towing and the Wares in December, 1990. Respondent failed to timely procure insurance for Abel Towing and the Wares in January, 1991, when she became aware of the injury to one of Abel Towing's employees. NCCI allows fifteen days from the first receipt of an application for insurance within which to correct deficiencies or provide information needed to complete an application. If provided within the time line, NCCI will honor the original date and bind the insurance effective at that time. Respondent did not forward any insurance application to NCCI on behalf of the Wares or Abel Towing in December, 1990. ABC Enterprises, Inc. is not the corporate name under which Respondent does insurance business.
Recommendation Based on the foregoing, it is recommended that the Department of Insurance and Treasurer enter a final order finding that the Respondent has violated Section 626.611, Florida Statutes, and suspending her licenses for a period of six months. RECOMMENDED this 14th day of April, 1992, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of April, 1992. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-7566 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER: 1. Paragraphs 1 through 19 are accepted with the deletion of the phrase "Pursuant to the reapplication of February 26, 1991," found in paragraph 13. That phrase is rejected as contrary to the weight of the evidence or irrelevant. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: None submitted. COPIES FURNISHED: Joseph D. Mandt Division of Legal Services Department of Insurance and Treasurer 412 Larson Building Tallahassee, Florida 32399-0300 Janet Joyce Buck 6102 Walbridge Street Orlando, Florida 32809 Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil General Counsel Department of Insurance and Treasurer Division of Legal Services The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue The issues are whether Respondent, by entering a plea of nolo contendere to a misdemeanor charge of conspiracy to commit workers' compensation fraud, demonstrated a lack of fitness and trustworthiness to sell insurance in violation of Section 626.611(7), Florida Statutes, and if so, what penalty should be imposed.
Findings Of Fact At all times relevant to this proceeding, Respondent was eligible for licensure and licensed in the following areas: (a) as a health insurance agent; (b) as a life insurance agent; (c) as a life and health insurance agent; (d) as a life, health, and variable annuity agent; (e) as a surplus lines insurance agent; and (f) as a general lines insurance agent. In June 1992, the insurance agency that Respondent worked for was purchased by another insurance agency. Ronald Palmerton was a client of the owner of Respondent's former employer. Mr. Palmerton held a workers' compensation policy issued by Liberty Mutual Insurance Company (Liberty Mutual). After the owner of Respondent's former employer left the new agency, Respondent handled Mr. Palmerton's requests for additional insurance with Liberty Mutual. Respondent was never paid a commission for any work performed on Mr. Palmerton's behalf. Even so, Respondent's testimony that Mr. Palmerton was not up front with information that he provided to Respondent and that Respondent never told Mr. Palmerton that he could avoid his workers' compensation experience modification if he started another company is not persuasive. In a Fourth Amended Information dated April 16, 2001, Respondent and Mr. Palmerton, were charged in the Circuit Court of the First Judicial District, in and for Escambia County, Florida, Case No. 99-2081 CF, with several felony and misdemeanor violations. Specifically, Respondent was charged as follows: (a) with racketeering, a first-degree felony in violation of Section 895.03, Florida Statutes; (b) with conspiracy to commit racketeering, a first-degree felony in violation of Sections 895.03(4) and 777.04(3), Florida Statutes; and (c) conspiracy to commit workers' compensation fraud, a misdemeanor in violation of Sections 440.37(4) and 777.04(3), Florida Statutes. The misdemeanor criminal charge was based on allegations that, beginning on April 4, 1993, Respondent and Mr. Palmerton did unlawfully and knowingly conspire to commit workers' compensation fraud by knowingly making false or misleading oral or written statements and representations and/or knowingly omitting or concealing material information required by Section 440.381, Florida Statutes. According to the Fourth Amended Information, the purpose of the conspiracy was to avoid or diminish the amount of payment of any workers' compensation premiums to be paid by Mr. Palmerton and/or his related companies to a carrier or self-insurance fund. The criminal trial was scheduled for April 16, 2001. On April 12, 2001, the State of Florida offered a plea agreement to Respondent. Respondent initially refused the offer but changed his mind after learning that Mr. Palmerton had agreed to plead guilty to felony charges for perjury and racketeering, with a sentence for 18 months' house arrest and 15 years of probation. Respondent understood that Mr. Palmerton would testify against Respondent if he elected to proceed to trial. On April 16, 2001, Respondent entered into a Plea Agreement in which he agreed to plead no contest to one count of conspiracy to commit workers' compensation fraud, a first-degree misdemeanor. The agreement included a provision for a sentence of one year of probation. Under the agreement, a sentence of nine months' incarceration in the Escambia County jail would be suspended pending Respondent's successful completion of all terms and conditions of probation. The agreement also provided that Respondent's probation would include the payment of any restitution ordered by the Court during a subsequent hearing. On April 16, 2001, the Court adjudicated Respondent guilty, withholding imposition of sentence and placing Respondent on one year of probation. The terms of Respondent's probation included, but are not limited to, the following: payment of a fine and court costs in the amount of $1,000; payment of the costs of prosecution in the amount of $5,000; and (c) payment of restitution as determined at a subsequent hearing. A few days after being adjudicated guilty, Respondent contacted Petitioner's staff to determine the effect of his nolo contendere plea to a misdemeanor offense on his licensure status. Petitioner's staff subsequently informed Respondent that a misdemeanor offense would not result in an automatic suspension of an insurance license. On April 11, 2002, the Court conducted a restitution hearing. During the hearing, the State of Florida and Respondent agreed and stipulated to the entry of a restitution order and judgment satisfactory to the victim, Liberty Mutual. On June 3, 2002, the Court entered a Restitution Order and Judgment against Respondent. The Order required Respondent to pay restitution in the amount of $225,000. Pursuant to the Order, Respondent and Mr. Palmerton are jointly and severally liable for payment of the restitution, with Respondent receiving credit toward the total obligation for $200,000 previously paid by Mr. Palmerton and $10,000 paid by Respondent on April 11, 2002. As such, the effective amount of the Restitution Order and Judgment was a $15,000 balance due from Respondent. In June 2002, Petitioner issued a renewal notice for Respondent's surplus lines insurance license. The notice requested the appointing insurance company or agency to certify that Respondent had not pled guilty, or nolo contendere to, or had not been found guilty of a felony since originally being appointed by the appointing entity. The notice did not inquire whether Respondent had pled guilty, or nolo contendere to, or found guilty of a misdemeanor. At the time of the formal hearing, Respondent and Mr. Palmerton were still jointly and severally obligated to pay $15,000 in unpaid restitution. Respondent had successfully completed his probation in all other respects. During the hearing, Petitioner denied any wrong doing in relation to the misdemeanor offense to which he pled no contest. Specifically, Respondent denied that he ever intended to assist Mr. Palmerton in any type of scheme to defraud or otherwise do harm to Liberty Mutual. Respondent's testimony in this regard in not persuasive. Respondent has been a licensed insurance agent for 32 years. Prior to the instant proceeding, Respondent's insurance licenses have not been the subject of a disciplinary proceeding or lawsuit. Liberty Mutual did not name Respondent as a party in its civil suit against Mr. Palmerton. Instead, Respondent cooperated with and testified on behalf of Liberty Mutual in that proceeding. Until Respondent committed the offense at issue here, his reputation in the insurance community indicates that he was an honest and trustworthy agent.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That Petitioner enter a final order imposing a six-month suspension of Respondent's insurance licenses. DONE AND ENTERED this 28th day of October, 2002, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD 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 28th day of October, 2002. COPIES FURNISHED: James A. Bossart, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street, Room 612 Tallahassee, Florida 32399-0333 Thomas E. Wheeler, Jr., Esquire Post Office Box 12564 Pensacola, Florida 32573-2564 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307
