The Issue The issue is whether Respondent is guilty of discrimination in employment on the basis of age.
Findings Of Fact Petitioner Boots is 56 years old. Prior to his termination, he had been employed in the life insurance business by Respondent or its predecessors for over 20 years. Until early 1988, Petitioner's employer was Security Trust Life Insurance Company. During that year, Respondent or its parent, Southlife Holding Company, purchased the assets or stock of Security Trust Life Insurance Company. In any event, the result from Petitioner's point of view was that Respondent became his new employer. Following the change in ownership, the operations of the two companies were combined. Prior and subsequent to the merger of operations, Petitioner was the manager of the Orlando district office, which was primarily involved in the sale of debit insurance. The physical turnover of operations in the Orlando office took place on or about March 7, 1988. Prior to this date, representatives of Respondent had conducted meetings with the employees of Security Trust Life Insurance Company and discussed with them, among other things, the compensation that they could expect to receive as employees of the new company, especially during the start-up period. Following the merger, Petitioner believed that Respondent was not living up to the promises that it had made to him and the employees under his supervision. Unable to reach his immediate supervisor, Petitioner called Ted Lazenby, who is president and chairman of the board of Southlife Holding Company. Petitioner voiced his complaints to Mr. Lazenby. Following the telephone conversation, Mr. Lazenby contacted Petitioner's immediate supervisor, Frank Gregor, and expressed his displeasure with Petitioner and his attitude. Mr. Gregor consulted with his immediate supervisor, James C. Bellamy, who is the senior vice president of Respondent. Messrs. Gregor and Bellamy had previously discussed Petitioner's attitude that Respondent was poorly managed and cheap with its employees. Messrs. Gregor and Bellamy had already discussed Petitioner's record with Respondent. In general, it was not good, and the Orlando district did not show signs of the kind of growth necessary for a successful debit insurance business. Petitioner's production record was the worst in the division and the region. The manager of the next-worst district was also fired. With Mr. Lazenby's complaint as a catalyst, Messrs. Gregor and Bellamy decided to terminate Petitioner. The following morning, Mr. Gregor visited Petitioner in the Orlando office and fired him, citing Petitioner's poor record combined with questionable judgment in complaining to the head of the holding company. Respondent replaced Petitioner with a 44 year old man, who had been assistant manager of the Orlando office.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Petition for Relief filed by Petitioner be dismissed. ENTERED this 16th day of June, 1989, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings on this 16th day of June, 1989. APPENDIX Treatment Accorded Proposed Findings of Petitioner 1-7 Adopted or adopted in substance. There was a conflict in testimony between Mr. Gregor and Petitioner as to when the merger took place. Mr. Gregor's testimony has been given the greater weight, but the difference is immaterial to the outcome of the case. 8-9 Rejected as subordinate to the finding that Petitioner's performance was substandard. Rejected as against the greater weight of the evidence. Adopted. Rejected as irrelevant. Treatment Accorded Proposed Findings of Respondent 1 Adopted 2-3 Rejected as legal argument. 4-6 Adopted. Rejected as recitation of testimony. Adopted. Rejected as irrelevant and subordinate. 10-12 Adopted in substance. 13-15 Rejected as subordinate. 16. Rejected as recitation of testimony. COPIES FURNISHED: Donald A. Griffin Executive Director Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, FL 32399-1925 Dana Baird, Esquire General Counsel Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, FL 32399-1925 Margaret Agerton, Clerk Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, FL 32399-1925 N. James Turner Buso & Turner, P.A. 17 South Lake Avenue, Suite 104 Orlando, FL 32801 Joseph A. Woodruff Waller Lansden Dortch & Davis 2100 One Commerce Place Nashville, TN 37239
The Issue The issue in this case is whether the license of James Joseph Sines (Respondent) should be disciplined by the Department of Insurance and Treasurer (Petitioner) based upon actions he is alleged to have taken during July 1987, involving an insured, Eunice Chappell, which would constitute an unlawful misappropriation and conversion of her funds, as more particularly set forth in the Administrative Complaint issued herein on, or about June 22, 1989.
Findings Of Fact At all times material hereto, Respondent has been licensed, and eligible for licensure, in the State of Florida as a life and health debit agent, life and health agent, general lines agent limited to industrial fire insurance, and health insurance agent. From August 1, 1986, through August 28, 1987, Respondent was employed by Union National Life Insurance Company as a life and health debit agent. All funds received by Respondent under his licenses representing premiums, returned premiums, and other funds belonging to insured persons or insurers were trust funds received in a fiduciary capacity. It was Respondent's usual practice to cash checks for his debit policyholders when he visited them to collect their premiums, as many of his policyholders did not have checking or savings accounts, and thus, had some difficulty cashing checks. He did this as a service to policyholders, and as a way of making sure that insurance premiums were paid up to date, since when he cashed a check for a policyholder, he would deduct the amount of any outstanding overdue premiums, and return the balance of the check proceeds to the policyholder. The value of checks which Respondent cashed for policyholders ranged from $1 to $900, with the average check being around $300. Eunice Chappell was a policyholder with Union National Life Insurance Company at all times material hereto. Respondent visited her in her home on a regular basis, usually weekly, to collect the premiums on her debit policies, and to assist with the filing of any claims on her policies. In fact, he assisted her with the filing of a claim under policies with Union National for income replacement and convalescent benefits for a period of hospitalization from June 24, 1987, to July 3, 1987. On or about July 30, 1987, Respondent received Check Number 352955, dated July 28, 1987, issued by Union National Life Insurance Company and made payable to Eunice Chappell, in the amount of $729, representing benefits due her under policies with Union National for her period of hospital confinement in late June and early July 1987. Shortly after receiving this check, Respondent visited Chappell at her home. Since she was a number of weeks behind on her premiums, she asked him to cash this check for her, and to pay her overdue premiums out of the proceeds. However, Respondent did not have sufficient cash on hand. Therefore, he had her endorse the check, and took it to his bank to cash after he also endorsed the check and placed his account number under his endorsement. Due to her frail physical condition, Respondent had to help Chappell sign her name to the back of this check by placing his hand over hers and guiding it as she made her signature. The only person present during this visit in Chappell's home, other than Respondent and Chappell, was Michael Pierazek, a co-worker and fellow agent for Union National. When Respondent presented this check at his bank, it could not be cashed since he did not have sufficient funds in his account to cover it. Therefore, he returned to Chappell's house, accompanied by Pierazek, and told her he was unable to cash the check for her. However, she insisted that Respondent assist her in any way possible in cashing the check because of her severely limited physical abilities. He told her that the only thing he knew to do would be to return to the bank and deposit the check in his personal account, wait for the funds to clear in a few days, and then return with the proceeds. Chappell agreed to this procedure. It is strictly against the policy of Union National for agents to deposit into their own personal account any policyholder's check received in the course of their business. Respondent was aware of this policy, but sought no exemption from this policy. He did deposit Chappell's check in his account on or about August 3, 1987. On August 14, 1987, Eunice Chappell's daughter, Ethel Small, called the district manager for Union National, Donald R. Sanders, to inquire about the status of her mother's insurance claim check. She indicated to Sanders that her mother had never received the check for $729, dated July 28, 1987. From the evidence received, as well as the demeanor of the witnesses who testified, it is found that Small was simply unaware of her mother's arrangement with Respondent, and the fact that Check Number 352955 had been presented to Chappell by Respondent and subsequently deposited into his personal account with the knowledge and agreement of Chappell. Small was not present during this transaction. An affidavit executed by Chappell on August 21, 1987, states that she received no proceeds from Check Number 352955, which is correct. It does not state that she never was presented with said check. A second check was issued by Union National to Eunice Chappell dated August 19, 1987, which was delivered to her by Sanders and the Respondent on August 21, 1987. This second check was numbered 355819. Ethel Small endorsed this second check on behalf of her mother, under a purported power of attorney. However, the document which she claims gave her Eunice Chappell's power of attorney was signed by a notary public on August 6, 1987, at the place provided on the document for the signature of the person giving the power of attorney, and recites that Ethel Small, rather than Eunice Chappell, was known to, and appeared before said notary public acknowledging "the within power of attorney to be her (Ethel Small's) act and deed." Nowhere on this purported power of attorney does Eunice Chappell's signature or mark appear, nor is there any evidence that she even appeared before the notary public who signed this document. Between August 3, 1987, when he deposited Chappell's first check into his personal account, until August 14, 1987, when Ethel Small contacted the district manager of Union National, Respondent was waiting for this check to clear, and therefore, did not give Chappell any proceeds from this check. While it is not clear from the evidence presented exactly when this first check did clear, and funds became available in Respondent's personal account, it was established that Respondent did not give Chappell any proceeds from this first check. He had been instructed by his district manager, Sanders, not to contact Chappell in any way after August 14, except in his presence. Respondent complied with this directive, and awaited the issuance of a second check to accompany Sanders to Chappell's house to deliver this check. Respondent was terminated by Union National as a result of this transaction, and an amount equal to the proceeds from the first check was deducted by Union National from his personal savings account with the company, the balance of which he received at termination, in order to reimburse Union National for the issuance of the second check. There is no evidence that Respondent used the proceeds of the first Chappell check for his own benefit, or that Union National expended funds beyond what they were obligated to pay to Chappell on her claim as a result of Respondent's actions in this transaction. He did violate company policy by depositing Chappell's first check in his personal account, but this was done with her full knowledge and consent, and was, in fact, done at her request. At the time of hearing, Eunice Chappell was deceased, and therefore, the findings set forth herein concerning her arrangement with the Respondent are based upon the demeanor and credibility of witnesses who testified and who were present on July 30, 1987, when Respondent and Chappell met, as well as the demeanor of the one witness who disputes Respondent's account of this transaction, Ethel Small. It is specifically found that Small's testimony lacks credibility because it was conflicting and implausible, and because she had a personal motive to have a second check issued. She testified she was always present with her mother in the home and never left her side during the times in question, but then offered conflicting, vague and uncertain testimony about when she moved into her mother's house, times she had to leave her mother to go to the store, do laundry and cash checks, and about leaving her mother with her sister. She admitted that on two occasions each week she would take a taxi cab to the store and back, and this would take an hour or so, plus the time necessary to wait for the cab. Her testimony that she never left her mother's house when her husband periodically came to visit her from Deland is not credible. Small had a motive for wanting a second check to be issued by Union National after she found out that her mother had a private arrangement with Respondent concerning the first check. Under the purported power of attorney which she had executed only a few days after her mother gave the first check to Respondent, she endorsed and cashed the second check for $729. Ethel Small filed a complaint with the Petitioner concerning this matter in May or June 1988. No evidence was presented in support of the Respondent's affirmative defense of laches, and it was not shown that Petitioner's actions between receipt of this complaint and the filing of the Administrative Complaint in this matter was dilatory or prejudicial to Respondent.
Recommendation Based upon the foregoing, it is recommended that Petitioner enter a Final Order dismissing all charges against Respondent contained in the Administrative Complaint filed in this matter. DONE AND ENTERED this 18th of December, 1989 in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1989. APPENDIX (DOAH CASE NO. 89-3999) Rulings on the Petitioner's Proposed Findings of Fact: Adopted in Finding 1. Adopted in Finding 2. Adopted in Finding 5. Rejected in Finding 14. Adopted in Findings 5, 6. Rejected as irrelevant and immaterial. Adopted in Finding 9. 8-9. Adopted and Rejected in part in Findings 9, 10. Rejected in Findings 6-10. Rejected in Findings 6, 14. Adopted in part in Finding 11, but otherwise rejected in Finding 14 and as not based on competent substantial evidence. Adopted and Rejected in part in Finding 10. Adopted in Finding 12. Adopted in Finding 15. Rulings on the Respondents Proposed Findings of Fact: Adopted in Findings 6 - 10, 14. Rejected in Finding 15. COPIES FURNISHED: John C. Jordan, Esquire 412 Larson Building Tallahassee, FL 32399-0300 Terry M. Brocklehurst, Esquire Countryside Place, Suite 110 2605 Enterprise Road East Clearwater, FL 34619 Don Dowdell, Esquire General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300
The Issue The issue is whether Interamerican Financial Corporation is guilty of six types of violations of the Florida Retail Installment Sales Act alleged in the Department's Administrative Complaint of June 23, 1992, and, if so, what penalty should be imposed.
Findings Of Fact Interamerican Financial Corporation (Interamerican) is a Florida corporation with its sole place of business at 2600 S.W. 3rd Avenue, Suite 730, Miami, Florida. Interamerican is registered with the Department as a Retail Installment Seller, under license number HI-0004299/SF-592236293 000. The Department is authorized by the Florida Retail Installment Sales Act (Chapter 520, Florida Statutes) to examine licensees engaged in the retail installment financing business. Interamerican is in the business of financing automobile loans. Most of its loans are ones banks will not make because of the age of the automobile or because of the borrower's lack of a credit history. Borrowers are often first time retail installment purchasers. The purchase price of the vehicles financed ranges from about $2,000.00 to $5,000.00. Interamerican is owned by Raul Lopez and his wife. Mr. Lopez is President of the corporation. Its affairs are conducted on a day to day basis by Ms. Iris Hernandorena, who has been an employee of Interamerican since its inception twelve years ago in December 1980. There are 3 employees other than Ms. Hernandorena, two of whom are full time employees. Interamerican has flexible criteria for reviewing applications when deciding whether to make loans. Interamerican weighs the length of the applicant's employment, the length of residence at the applicant's present address, personal references, and the applicant's salary. Applicants often speak little or no English. They depend on Ms. Hernandorena to explain each element of the transaction to them. They are highly dependent on the good faith of Ms. Hernandorena, and their limited fluency in English leaves most of them ill-equipped to protect their own interests in the financing transaction. The Department conducted an examination of Interamerican on February 10 and February 27, 1992. This examination covered the period from November 1, 1990, through January 31, 1992. The examining officer examined 7.6 percent of Interamerican's 314 financing contracts for the examination period. Ms. Iris Hernandorena is a single mother with three children, is a naturalized American citizen and a native of Argentina. As a practical matter, Ms. Hernandorena runs the affairs of Interamerican for Mr. Lopez with little supervision. Ms. Hernandorena reviews and approves applications for credit using the criteria set out in Finding 4, pays the automobile dealers when an application has been approved, and handles face-to-face dealings with the borrowers. Before the time period covered by the examination, Interamerican was an authorized agent for Bankers Insurance Group to issue credit life insurance certificates to Interamerican borrowers who elected to purchase credit life insurance. It was Interamerican's practice to include credit life insurance on the retail installment contracts at the time they were initially presented for a borrower's consideration. Credit life insurance was always explained to the customer by Ms. Hernandorena. Whenever a borrower requested it, the credit life insurance and the premiums were deleted from the retail installment contract. Fewer than 4% of Interamerican's borrowers declined credit life insurance. When the loan documents were signed, the borrowers signed Franchise Creditor Insurance Certificate applications which disclosed credit life insurance premiums. These premiums were also disclosed on the face of the retail installment contracts. If a borrower elected credit life insurance, a certificate of insurance was issued and Interamerican forwarded one half of the premium disclosed on the financing contract to Bankers Insurance Group. Because the premium was included in the total amount financed by borrowers, this payment to Bankers was an additional cash outlay by Interamerican. Over the life of the loan, the borrower repaid the full amount financed and Interamerican recovered pro rata in each payment its cash outlay to Bankers (the first 1/2 of the insurance premium financed), and its commission (the second 1/2 of the premium financed). During its examination, the Department made its random sampling of 314 Interamerican customer files. It found four which contain the following information concerning charges for credit life insurance: Bankers Credit Life Amount of Credit Insur. Account Buyer's Date of Life Insurance Certif. Number Name Contract Premium Charged Number TA 388 Maria E. Arias 12-24-91 $60.22 FLO 44341 VE 165 Juan A. DelVilla 11-25-91 $74.38 FLO 43482 BEN 603 Julio C. Figueroa 05-06-91 $32.52 FLO 43378 HON 178 Darryl D. Pride 02-27-91 $70.38 FLO 43018 (Administrative Complaint, Paragraph 6) The monies received from these customers for credit life insurance policies were never remitted to Bankers Insurance Group. Bankers Insurance Group had no record of franchise creditor insurance certificates issued on behalf of these borrowers, or of any payments from Interamerican to Bankers for the period January 1, 1991, to February 26, 1992. Franchise credit life insurance certificates on the borrowers were not submitted to Bankers Insurance Group, nor do any of the certificate numbers match any series of numbers issued by Bankers during the past five years. The standard credit life insurance policies which had been issued through Bankers Insurance Group before the credit period had provided that Interamerican was named as beneficiary in the event of the borrower's death. The amount of the insurance coverage automatically reduced during the life of the loan so that the benefits due under the policy in the event of the death of the borrower equaled the amount of the loan balance at all times. Before the period covered by the Department's examination, Interamerican had two occasions when a borrower died and Interamerican had to make application to Bankers Insurance Group for payment of the proceeds due on the credit life insurance the borrower had purchased. In both instances, Interamerican had a difficult time collecting the remaining portion of the loan from Bankers Insurance Group. As a result of these experiences, before the audit period at issue here, Ms. Hernandorena decided on her own that Interamerican should become "self-insured," rather than send Bankers Insurance Group fifty percent of the credit life insurance premium financed by the borrower at the signing of the retail installment contract. After Interamerican ceased sending credit life insurance premiums to Bankers Insurance Group, it was the intention of Ms. Hernandorena to use the funds collected for credit life insurance premiums as a sort of reserve for bad debts out of which to pay the uncollected loan balances of borrowers who died, after having paid for credit life on their retail installment contracts. No specific escrow or reserve account was established with the funds, however. Because so few borrowers decline credit life insurance (see Finding 7), for about 96% of the 314 financing contracts entered into during the credit period, borrowers were charged for credit life insurance which was never put in force. Ms. Hernandorena reasoned that borrowers were not harmed by this arrangement. Borrowers never would have received any payment from Bankers Insurance Group if the credit life insurance became payable--Interamerican was the only beneficiary of the insurance, which would pay only the outstanding loan balance. They received a substitute of equal value in her eyes, the waiver by Interamerican of any claim for the remaining balance due on the loan if the borrower died after having paid for what appeared to be "credit life" insurance issued through Bankers Insurance Group. The Department examined the following four Interamerican customers' files which disclosed that these customers were charged premiums for credit life insurance on their retail installment contracts apparently placed with Bankers Insurance Group after August 31, 1991 in excess of the uniform rate permitted by the Department of Insurance for credit life insurance contracts: Credit Life Uniform Account Buyer's Date of Insurance Rate Amount of Number Name Contract Premm Chrgd Permitted Ovrchrge VE 163 Early H. Wims 11-21-91 $57.66 $48.05 $ 9.61 TA 395 Reyna I. Boyd 01-27-92 $64.60 $53.84 $10.76 HON 236 A. Sarrantos 01-08-92 $58.93 $49.10 $ 9.83 TA 388 Maria E. Arias 12-24-92 $60.22 $50.19 $10.03 & Mario F. Carrion (Administrative Complaint, Paragraph 7) How these overcharges came about were not explained at the hearing. The Department submitted no evidence that these overcharges were part of a scheme to intentionally overcharge customers. There was no evidence that these four instances of overcharge in the sample of contracts audited equate to any specific likely percentage of overcharges in contracts not selected for audit. Contrast Finding 13, above. Interamerican failed to journal payment for and to affix documentary stamps to the following three customer contracts: Interamerican Account Buyer's Number Name Date of Charge Amount of Documentary Stamps Charged on Contract TA 395 Reyna I. Boyd 01-27-92 $6.15 TA 388 Maria E. Arias 12-24-91 $5.70 VE 159 Maria A. Reyes 10-25-91 $8.40 (Administrative Complaint, Paragraph 8) Interamerican did purchase the requisite amount of documentary stamps from the Florida Department of Revenue. The explanation given for the error in not affixing the stamps was that stamps of small denomination were not always on hand. Since the examination was in February 1992, this reason is not persuasive. Two of the contracts involved were ones from October and December of 1991. There had been adequate time to exchange larger stamps for smaller ones or to purchase more small denomination stamps. The amount involved, however, is trivial ($20.25). Interamerican negligently failed to maintain credit insurance acknowledgment forms, since it was not actually placing credit life insurance in force. See Findings 13 through 14, above. Contrary to the allegations of Paragraph 9 of the Administrative Complaint, Interamerican did not charge finance charges in excess of the legal maximum permitted by law. The contracts for the borrowers set forth below contained an "amount charged" on the face of the contract which is slightly in excess of the legal maximum charge. This came about because the machine used to calculate the amount placed on the contact had a limited number of decimal places. Each of these borrowers was later furnished with a payment coupon book by Interamerican which contained an amount charged within the maximum rate. These payment books were prepared with computer programs using more decimal places, and the payment books are what borrowers used in repaying their loans. No additional notification was given to the borrowers calling attention to the small differences, indicating that the payment books, rather than the contracts, stated the correct amount due. The payment books served as a notice of correction to the borrowers. No Interamerican customer has paid any finance charges in excess of the legal maximum (Tr. 23). The customer contracts examined contained the following information: Account Number Buyer's Name Total Amount Charged Per Contract Legal Maximum Differences VE 178 Sonia E. Vanturyl $2,152.86 $2,147.84 $5.02 VE 173 Monique D. Jordan $1,715.13 $1,711.16 $3.97 VE 165 Juan A. Delvilla $1,481.37 $1,477.99 $3.38 VE 152 Edward Mantilla $1,712,56 $1,708.56 $4.40 Jannette S. Williams $1,347.97 $1,344.84 $3.13 The Department conducts an examination of Interamerican and other retail installment sellers on a periodic basis. The prior examinations by the Department revealed no violations by Interamerican before the examination that is the subject of this proceeding. Throughout this examination by the Department, Interamerican furnished the Department with all the information and documents requested, made no attempt to conceal anything from the examiner, and was cooperative throughout the examination. This is consistent with Ms. Hernandorena's belief that on the credit life insurance charges, Interamerican had done nothing wrong.
Recommendation A final order should be entered finding Interamerican guilty of violations of Sections 520.995(1)(a), (b) and (c) and 520.07(4), Florida Statutes (1990 Supp.) as alleged in Paragraphs 11 and 12 of the Administrative Complaint, and dismissing the charges made in Paragraphs 13, 14 and 15 of the Administrative Complaint. The Department has suggested that the appropriate penalty in this case is to find Interamerican guilty of all allegations made in the Administrative Complaint and impose a cease and desist order enjoining Interamerican from future violations of the Retail Installment Sales Act, and to impose an administrative fine of $1,000 for each violation. It is difficult to determine whether the Department suggest a fine of $6,000.00, one for each paragraph in the Conclusions of Law in its Administrative Complaint (Paragraphs 11-15), or whether a separate fine of $1,000.00 is meant to be imposed for each violation alleged in each contract containing a violation, which would be a fine of approximately $16,000.00. Based on the belief that Interamerican was guilty of all the violations alleged, the Department also recommended that the retail installment sellers license of Interamerican be revoked. It seems pointless to enter an order that Interamerican desist from future violations of the act, and at the same time revoke its authority to engage in business under the act. The penalty of revocation is too draconian. Revocation is certainly a penalty available under the statute, but revocation is appropriate where there is a pattern of misconduct which indicates that the licensee will not conform to applicable rules and statutes in the future, or that the misconduct is so egregious that, without consideration of the likelihood of future misconduct, severe discipline is warranted. This is not such a case. Moving from the less serious to more serious charges, the three instances of failure to attach documentary stamps to contracts is only proof of lack of attention to detail, since a sufficient supply of stamps had been purchased from the Department of Revenue. There was no violation of the disclosure requirements of Section 520.07(3)(e), Florida Statutes (1990 Supp.). With respect to charging, in four instances, credit life insurance premiums in excess of those permitted by the uniform rates filed with the Department of Insurance, in those four cases the amount of each overcharge was approximately $10.00. Interamerican should be required to refund the excess amounts due to the borrowers, with interest at the legal rate from the date of the contract. Due to the small amounts involved, for each instance Interamerican also should be assessed a fine of $250.00, for a total fine of $1,000.00 for that class of violations. No penalty can be imposed on the allegation that Interamerican charged excess finance charges, because it did not do so. Neither can a penalty be imposed for failure to maintain credit insurance acknowledgment forms, since no insurance was placed to be acknowledged by an insurer. Although it is true that those forms were not maintained, the real violation, which is the most serious violation, is the failure to have purchased the insurance at all. The Administrative Complaint alleges in Paragraph 7 four instances where charges were made for credit life insurance where no insurance was actually purchased. Ms. Hernandorena had mistakenly decided that by charging the amount permitted for credit life insurance, without purchasing it, and waiving the right of Interamerican to obtain payment from any borrower who died after paying for credit life insurance, the borrowers were receiving what they paid for. In a rough sense, this was true, but the transaction documents simply were not structured that way. Had the evidence been convincing that borrowers were being charged for credit life insurance as a ruse to obtain additional money from them, when they were receiving nothing in return, I would not hesitate to recommend that the Department revoke the license of Interamerican, especially when the evidence demonstrates that the overcharge occurred not only in the four cases alleged, but in 96% of all contracts Interamerican entered into. On the other hand, Interamerican's evidence was persuasive that the borrowers were receiving something of value for the credit life insurance premiums, even though the insurance was never purchased. The testimony of Ms. Hernandorena was sincere, and I simply do not believe that her explanation of what was done was an after-the-fact justification concocted in an attempt to excuse Interamerican's misconduct. Ms. Hernandorena made a serious error in doing what she did, but she did not engage in a scheme to defraud borrowers. On this charge, Interamerican should be required to repay the amount of credit life insurance premiums plus interest at the legal rate to the four borrowers listed in Paragraph 6 of the Administrative Complaint, and to review its records and make similar refunds to all borrowers who paid for credit life insurance, plus interest at the legal rate from the date of each contract. An administrative fine in the amount of $4,000.00 should also be imposed, the maximum fine for the four instances of overcharge alleged and proven. Had the Department undertaken to allege and prove additional instances of overcharges, the fine would be larger, but that is not how the complaint was drafted. Although the conduct proven does not rise to the level of an intentional scheme to defraud, the misconduct is sufficiently serious that a significant penalty, less severe than revocation, ought to be imposed. That Interamerican has otherwise conducted its affairs over the years in conformity with the law weighs in its favor. The appropriate penalty here is to suspend the licensure of Interamerican for 30 days, to place its licensure on probation for the following 11 months, and to restrict its licensure to prohibit the "waiver of liability" plan created by Ms. Hernandorena and to require submission of all credit life insurance premiums to an appropriate insurer. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 21st day of December, 1992. WILLIAM R. DORSEY, JR. 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 December, 1992. APPENDIX TO RECOMMENDED ORDER IN DOAH CASE NO. 92-4404 The following are my rulings on findings proposed by the parties: Findings proposed by the Department: 1.-4. Adopted in Findings of Fact (FOF)1. 5. Adopted in FOF 5. 6.-7. Rejected as unnecessary. 8.-9. Adopted in FOF 5. 10.-11. Rejected as recitations of testimony, not findings of fact. Adopted in FOF 6. Implicit in FOF 6. Adopted in FOF 3. Adopted in FOF 6. Rejected as unnecessary. Adopted in FOF 4. Adopted in FOF 8. Adopted in FOF 13 and 14. Adopted in FOF 7. Adopted in FOF 4. Adopted in FOF 13. Rejected as unnecessary-Interamerican never contended it was an insurance company. Findings proposed by Respondent: Adopted in FOF 1. Adopted in FOF 2 and 4. Adopted in FOF 5. Adopted in FOF 3, 4 and 6. Adopted in FOF 7. Adopted in FOF 9. Adopted in FOF 10. Adopted in FOF 12. Adopted in FOF 13 and 14. The Borrower was the insured, Interamerican was the beneficiary. Adopted in FOF 11. Adopted in FOF 13. Adopted in FOF 15. Adopted in FOF 16. Adopted in FOF 17. Adopted in FOF 18. Adopted in FOF 19. COPIES FURNISHED: Steven R. Walker, Esquire Office of Comptroller Suite 708-N 401 N.W. 2nd Avenue Miami, Florida 33128 Ted Bartlestone, Esquire Suite 1550, 1 Biscayne Tower 2 South Biscayne Boulevard Miami, Florida 33131 The Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 William G. Reeves, General Counsel Department of Banking and Finance The Capitol, Room 1302 Tallahassee, Florida 32399-0350
The Issue Whether Respondent violated the following statutory provisions: Sections 626.561(1), 626.611(5), 626.611(7), 626.611(8), 626.611(9), 626.611(10), 626.611(13), 626.621(2), 626.621(4), 626.621(6), 626.9521, and 626.9541(1)(o)1., Florida Statutes, and if so what discipline should be imposed.
Findings Of Fact Respondent, Gus Jones, Jr., is currently and was at all times relevant to this proceeding a licensed insurance agent in this state doing business under the name of A. Maples Insurance Agency. In August, 1990, Jesus Escalera, who had a roofing business, came to Respondent to obtain workers' compensation insurance. Mr. Escalera's insurance was placed through the National Counsel on Compensation Insurance (NCCI) which is a pool for assigned risk insurance. Mr. Escalera's policy was with Aetna with coverage effective through October 26, 1991. On August 16, 1991, Mr. Escalera came to Respondent to renew his workers' compensation insurance. Mr. Escalera gave Respondent $409.00, which represented a down payment of one-half the premium for one year's coverage. The remainder of the premium was to be financed with Financial Industries, Inc. Aetna had withdrawn from the original risk insurance pool, therefore it was necessary to submit a new application to NCCI for placement of insurance for Mr. Escalera. Respondent sent the application to NCCI in October, 1991. Mr. Escalera's insurance was placed with United States Fidelity and Guaranty Company (USF&G) on November 13, 1991. Respondent kept a supply of blank drafts from Financial Industries, Inc. at his office. Respondent sent a Financial Industries, Inc.'s draft to NCCI for Mr. Escalera's insurance with USF&G. Financial Industries stopped payment on the draft because they had decided to discontinue financing workers' compensation insurance. Respondent attempted to finance Mr. Escalera's insurance through Premium Assignment Company (Premium). Respondent sent a premium draft to NCCI, but Premium stopped payment on the draft for Respondent's failure to send a transmittal to Premium. Mr. Escalera had called Respondent three or four times asking for his payment book so that he could make the installment payments for the insurance. Respondent advised Mr. Escalera that the payment book was in the mail. USF&G performed an audit on Mr. Escalera's payroll and determined that Mr. Escalera owed $13,724.00 for earned premiums. In January, 1992, Respondent contacted Mr. Escalera and advised him that USF&G intended to cancel the insurance effective February 16, 1992. On February 3, 1992, Mr. Escalera went to see Respondent. Respondent explained that he could not get financing for Mr. Escalera and requested Mr. Escalera to pay the balance of the premium of $817.00. Mr. Escalera paid $409.00 to Respondent and received a receipt for that amount. Respondent sent USF&G a check for $817.00. The policy was reinstated with coverage effective December 13, 1991. USF&G gave notice dated March 13, 1992 that Mr. Escalera's policy would be terminated April 13, 1992 for non-payment. By letter dated April 16, 1992, USF&G returned Respondent his check due to the second cancellation. By letters dated June 2, 1992, USF&G advised Respondent that Mr. Escalera owed a earned premium of $13,724.00. The policy was terminated effective April 13, 1993, because Mr. Escalera had failed to pay the earned premium. In April or May, 1992, Respondent placed the retuned check from USF&G in his trust account. Respondent did not advise Mr. Escalera that the premium had been returned. According to Mr. Escalera, he did not know at the time of the hearing who had the money. On February 6, 1993, Respondent called David Peters, a representative of USF&G and asked Mr. Peters what to do with the $817. Respondent let the money remain in the trust account and awaited further instruction from Mr. Peters. After Respondent received the administrative complaint, he called USF&G and spoke with Marilyn Bailey who was now handling the account on behalf of USF&G. Based on his conversation with Ms. Bailey, Respondent sent USF&G a cashier's check for $817 dated May 18, 1993.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance and Treasurer issue a Final Order finding Respondent guilty of a violation of Sections 626.561(1) and 626.621(2) and that Respondent be assessed an administrative fine of $500 and be placed on probation for a period of one year subject to such terms and restrictions as the Department may apply. DONE AND ENTERED this 19th day of October, 1993, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 19th day of October, 1993.
The Issue Whether the Respondent committed the offenses alleged in the Administrative Complaint dated October 1, 2002, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department is the state agency charged with the administration of the Insurance Code of the State of Florida, including Chapter 626, Florida Statutes. See Section 20.121, Florida Statutes (2002). At the times material to this proceeding, Mr. Klein was licensed in Florida as an insurance agent for several lines of insurance. Mr. Klein was an authorized agent for Freedom Life. On or about February 6, 2002, the Department received a Termination of Appointment Form from Freedom Life, in which Freedom Life notified the Department that Mr. Klein's appointment as its agent had been terminated. Documentation attached to the form included four applications for health insurance and four checks for premium submitted with the applications. After receiving the Termination of Appointment Form, the Department initiated an investigation into the matter. Applicants Steven and Nancy Schwinn. The first questionable application for health insurance provided to the Department by Freedom Life named Steven and Nancy Schwinn as applicants, carried a signature purporting to be that of Mr. Klein, and was dated November 23, 2001. In the application, Mr. Schwinn's address was listed as Post Office Box 256 in Fort Lauderdale; his employer was identified as M.L.K. Inc. Investments; and Blue Cross/Blue Shield was identified as his current health insurance carrier. The Department's investigation revealed the following: The telephone number given for Steven and Nancy Schwinn is disconnected and neither Bellsouth nor AT&T has any record of having ever assigned a telephone number to Steven and/or Nancy Schwinn. A computer search failed to turn up a telephone number in Florida for Steven and/or Nancy Schwinn. The United States Postal Service reported that Post Office Box 256 in Fort Lauderdale is not assigned to Steven and/or Nancy Schwinn, but is, and has been, assigned to another individual unaffiliated with the transaction at issue herein. A search of property records in Miami-Dade, Broward, and Palm Beach counties failed to show any real property listed in the names of Steven and/or Nancy Schwinn. The Social Security Administration reported that the Social Security numbers listed on the application for Steven and Nancy Schwinn are invalid; that is, the Social Security numbers do not exist. The Florida Department of Revenue reported that a search of its records did not reveal any wage information for Steven or Nancy Schwinn under the Social Security numbers provided on the application. Blue Cross/Blue Shield reported that it could find no evidence that it had ever provided health insurance coverage to Steven Schwinn. Applicants Cary and Bonnie Washington. The second questionable application for health insurance provided to the Department by Freedom Life named Cary and Bonnie Washington as applicants, carried a signature purporting to be that of Mr. Klein, and was dated November 23, 2001. In the application, Mr. Washington's address was listed as Post Office Box 256 in Fort Lauderdale; his employer was identified as M.L.K. Investments; and Blue Cross/Blue Shield was identified as his current health insurance carrier. The Department's investigation revealed the following: The telephone number given for Cary and Bonnie Washington is disconnected and neither Bellsouth nor AT&T has any record of having ever assigned a telephone number to Cary and/or Bonnie Washington. A computer search failed to turn up a telephone number in Florida for Cary and/or Bonnie Washington. The United States Postal Service reported that Post Office Box 256 in Fort Lauderdale is not assigned to Cary and/or Bonnie Washington, but was, and has been, assigned to another individual unaffiliated with the transaction at issue herein. A search of property records in Miami-Dade, Broward, and Palm Beach counties failed to show any real property listed in the names of Cary and/or Bonnie Washington. The Social Security Administration reported that, although the Social Security numbers listed on the application for Cary and Bonnie Washington are valid, they are not issued to persons named Cary and Bonnie Washington. The Florida Department of Revenue reported that a search of its records did not reveal any wage information for Cary or Bonnie Washington under the Social Security numbers provided on the application. Blue Cross/Blue Shield reported that it could find no evidence that it had ever provided health insurance coverage to Cary Washington. Applicants Robert and Kathy Antetomer. The third questionable application for health insurance provided to the Department by Freedom Life named Robert and Kathy Antetomer as applicants, carried a signature purporting to be that of Mr. Klein, and was dated November 23, 2001. In the application, Mr. Antetomer's address was listed as Post Office Box 256 in Fort Lauderdale; his employer was identified as M.L.K. Investments; and Blue Cross/Blue Shield was identified as his current health insurance carrier. The Department's investigation revealed the following: The telephone number given for Robert and Kathy Antetomer is disconnected and neither Bellsouth nor AT&T has any record of having ever assigned a telephone number to Robert and/or Kathy Antetomer. A computer search failed to turn up a telephone number in Florida for Robert and/or Kathy Antetomer. The United States Postal Service reported that Post Office Box 256 in Fort Lauderdale is not assigned to Robert and/or Kathy Antetomer, but is, and has been, assigned to another individual unaffiliated with the transaction at issue herein. A search of property records in Miami-Dade, Broward, and Palm Beach counties failed to show any real property listed in the names of Robert and/or Kathy Antetomer. The Social Security Administration reported that, although the Social Security number listed on the application for Kathy Antetomer is valid, it is not issued to a person named Kathy Antetomer. The Social Security Administration reported that the Social Security number listed on the application for Robert Antetomer is invalid; that is, the Social Security number does not exist. The Florida Department of Revenue reported that a search of its records did not reveal any wage information for Robert or Kathy Antetomer under the Social Security numbers provided on the application. Blue Cross/Blue Shield reported that it could find no evidence that it had ever provided health insurance coverage to Robert Antetomer. Applicants Karen and Paul Holock. The fourth questionable application for health insurance provided to the Department by Freedom Life named Karen and Paul Holock as applicants, carried a signature purporting to be that of Mr. Klein, and was dated November 29, 2001. In the application, Mrs. Holock's address was listed as Post Office Box 431 in Fort Lauderdale; her employer was identified as M.L.K. Investments; and Foundation Health was identified as her current health insurance carrier. The Department's investigation revealed the following: The telephone number given for Karen and Paul Holock is disconnected and neither Bellsouth nor AT&T has any record of having ever assigned a telephone number to Karen and/or Paul Holock. A computer search failed to turn up a telephone number in Florida for Karen and/or Paul Holock. The United States Postal Service reported that Post Office Box 431 in Fort Lauderdale is not assigned to Karen and/or Paul Holock, but is, and has been, assigned to another individual unaffiliated with the transaction at issue herein. A search of property records in Miami-Dade, Broward, and Palm Beach counties failed to show any real property listed in the names of Karen and/or Paul Holock. The Social Security Administration reported that, although the Social Security numbers listed on the application for Karen and Paul Holock are valid, they are not issued to persons named Karen and Paul Holock. The Florida Department of Revenue reported that a search of its records did not reveal any wage information for Karen or Paul Holock under the Social Security numbers provided on the application. Foundation Health reported that it could find no evidence that it had ever provided health insurance coverage to Karen Holock. According to the records of the Florida Division of Corporations, M.L.K. Inc. was administratively dissolved in September 1997; Mr. Klein is listed as the only director of the corporation. The four checks that accompanied the four health insurance applications were written on an account purportedly belonging to "M.L.K. Inc."; three of the checks were returned to Freedom Life with "Account Closed" stamped on the front; Freedom Life did not submit the fourth check for deposit. Mr. Klein admitted in the letter sent to the Department's counsel on or about April 11, 2003, that he had written "bad checks" for the four policies.4 The evidence presented by the Department is sufficient to establish with the requisite degree of certainty that Mr. Klein is not trustworthy or fit to engage in business as an insurance agent, and he has committed dishonest and fraudulent practices as an agent licensed by the State of Florida and appointed by Freedom Life: Mr. Klein completed and submitted four health insurance applications to Freedom Life when he knew that the persons named as applicants were fictitious and that the information contained in the applications was false; Mr. Klein knowingly and deliberately sent with the applications four checks for the policy premiums that were drawn on a bank account that he knew was closed and contained no funds.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order finding that Matthew Lawrence Klein violated Section 626.611(7) and (9), Florida Statutes (2001), and suspending his license(s) to engage in the business of insurance for a period of 36 months. DONE AND ENTERED this 21st day of May, 2003, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 2003.
The Issue At issue is whether respondent committed the offenses alleged in the administrative complaint and, if so, what disciplinary action should be taken.
Findings Of Fact At all times pertinent hereto, respondent, James Brian Cantwell, was licensed by petitioner, Department of Insurance and Treasurer (Department) as an insurance agent. At all times pertinent hereto, respondent was, pursuant to a written agreement of appointment dated January 11, 1993, appointed as an agent for Capital Security Life Insurance Company (Capital) to solicit applications for insurance on behalf of Capital. In exchange therefor, Capital obligated itself to pay respondent such commissions, progress and persistency bonuses, and service fees due under its schedule of compensation for policies issued as a result of applications submitted by respondent. Following respondent's resignation in October 1993, Capital undertook an audit of respondent's accounts. Such audit revealed that between March 17, 1993, and September 23, 1993, respondent submitted to Capital fifty applications for insurance in the name of fictitious or non-existent persons, and that in reliance on each application Capital had issued a policy of insurance and had paid respondent the total sum of $4,035.09 in first-year commissions, progress and persistency bonuses, and service fees for securing such policies. 1/ Such audit further demonstrated that each of the fifty policies lapsed following issuance due to nonpayment of premium. As a consequence, Capital lost the premiums it would have earned had the policies been predicated on legitimate applications and had they remained in effect; however, the value of that loss is not of record. The out-of-pocket loss to Capital as heretofore noted, of $4,035.09, has, however, been established.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department enter a final order revoking the licenses and eligibility for licensure of respondent, James Brian Cantwell. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 1st day of March 1995. 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 1st day of March 1995.
Findings Of Fact Respondent is currently licensed as an Ordinary-Combination Life, including Disability Insurance Agent to represent Interstate Life and Accident Insurance Company and as a General Lines Agent Limited to Industrial Fire to represent Interstate Fire Insurance Company. (Exhibit 37) During the period June 1, 1974, until October 1, 1976, Respondent was an agent for Gulf Life Insurance Company. In his application for licensing by Petitioner on the application dated July 3, 1974, Respondent listed his date of birth as December 14, 1928 (Exhibit 36), on the application dated June 28, 1975, Respondent listed his date of birth as November 11, 1928 (Exhibit 35), and on his application dated October 5, 1976, Respondent listed his date of birth as November 14, 1926 (Exhibit 34). By affidavit dated January 4, 1978 (Exhibit 33), Respondent declared he was born November 14, 1926. On March 15, 1974, John L. Harris was issued life insurance field policy No. 745 676 678 (Exhibit 1) and weekly premiums were paid continuously on this policy. He was also issued whole life policy No. 715 090 733 on October 18, 1971 (Exhibit 2), and weekly premiums were paid continuously on this policy. Although Harris paid the premiums each week when due to the Respondent, at one period these premiums were not remitted to Gulf Life and the policies lapsed. Immediately thereafter, on May 1, 1975, an application for new policies (Exhibit 5), was submitted to Gulf Life by Respondent with the name of John Harris in the space for the signature of the proposed insured. This signature was not that of Harris and Respondent signed the application as a witness to Harris signature. Gulf Life issued a policy to Harris (Exhibit 4) based upon this application. Evidence was presented that similar procedures were followed by Respondent in Gulf Life policies issued to Frances Harris, Dorcas Cohen, James Cohen, Joe Bryant, Peggy Hanie Bryant, Wilma Hanie and Brenda Bryant, whereby policies serviced by Respondent were lapsed by Gulf Life who later issued new policies on forged applications submitted by Respondent.
The Issue The issue is whether the petitioner's applications for qualification and for examination as an insurance agent should be granted.
Findings Of Fact Wallace F. Sharrett applied on or about May 14, 1987, for qualification as a general lines agent or solicitor for insurance, and also applied for examination as a life and health insurance agent. On or about July 30, 1987, he filed another application for examination as a life and health agent. On all these applications he listed his social security number as 113- 20-3677. His social security number is actually 113-30-2677. All three applications contain the same question #6, which asks: Have you ever held an insurance license in this or any other state? On all applications Mr. Sharrett answered "no." All three applications also contain question #11: Does any insurer or general agent claim that you are indebted under any agency contract or otherwise? If so, state name of claimant, nature of claim, and your defense thereto. To all three questions, Mr. Sharrett checked the box labeled "no." On all three applications, in response to question 14(b), asking, "What insurance experience have you had?", Mr. Sharrett answered "none." Mr. Sharrett previously had sought and had been issued licenses and qualifications by the Florida Department of Insurance to represent insurance companies as follows: Security Life Insurance Company of Georgia, issued August 26, 1977. Conger Life Insurance Company, issued October 20, 1977. Security Life Insurance Company of Georgia, issued January 31, 1979. Coastal States Life Insurance Company, issued July 12, 1979. Hartford Life and Accident Insurance Company, issued June 26, 1981. Mr. Sharrett has held no Florida licenses or qualifications for licensure for any insurers since 1984. From October 3, 1977, through December 27, 1978, Mr. Sharrett had been employed by Conger Life Insurance Company of Miami, Florida. After his termination, an internal audit of Mr. Sharrett's accounts at Conger Life was performed. The internal audit dated January 31, 1979, showed that Mr. Sharrett owed the company $707.66. Thereafter, Mr. Sharrett made payments of $510.14, and Conger Life's records show that as of March 31, 1979, based on total payments, and additional shortages allocated to Mr. Sharrett's account, he owed Conger Life $388.74. After Mr. Sharrett's termination of employment with Conger Life, he applied to become a salesman with Security Life Insurance Company of Georgia. On February 7, 1979, the agency vice president for that company, J. H. Phillips, wrote to Conger Life for information about Mr. Sharrett, and said: We particularly would be interested in, did he leave your company without a deficiency. On February 12, 1979, Mr. Henry J. Spaman of Conger Life wrote to Mr. Phillips stating He was employed by [us] from 10/3/77 to 12/22/78. He left our employment with a shortage of considerable amount which we are in the process of taking legal action [sic]. We also have reported to the State Department of Insurance the shortage and have been assured that it will be investigated. Nevertheless, Mr. Sharrett thereafter was hired as a salesman by Security Life Insurance Company of Georgia. Apparently the payment which Mr. Sharrett made of $510.14 settled his account with Conger Life Insurance Company to the satisfaction of Security Life Insurance Company of Georgia. Conger Insurance Company still maintains, however, that Mr. Sharrett is indebted to it in the amount of $388.74. No legal action to collect that amount from Mr. Sharrett has ever been taken, nor is there any evidence of a demand for payment being directed to him since his payment of $510.14 to Conger Life during the first quarter of 1979. Mr. Sharrett did not list his prior licenses to sell insurance on his recent applications because he had discussed his applications with a retired insurance agent, Mr. Morrelle, who had been an agent with Independent Life Insurance Company for 27 years, Mr. Morrelle told Mr. Sharrett that it was not necessary to list jobs with insurance companies which were more than five years old. Mr. Morrelle had not looked at the applications themselves, and did not know that the question about whether the applicant ever had been licensed in Florida or any other state has no time limit. Mr. Raines, the district sales manager for Independent Life Insurance Company, the company for which Mr. Sharrett will work if licensed, stated that he did not know that Mr. Sharrett had been employed by five different insurance companies. Independent Life's own background check of Salespeople through Equifax only goes back five years. Mr. Sharrett was employed by Independent Life from May 4, 1987, to January 22, 1988, and was a good employee. After this case began, Mr. Sharrett filed an amended application with the Department, dated February 17, 1988. In that application Mr. Sharrett listed his correct social security number, but with regard to question number 6 (concerning other insurance licenses) he listed only Conger Life Insurance Company, Security Life Insurance Company, and New England Life Insurance Company. He neglected to mention his licensure with Coastal States Life Insurance Company and Hartford Life and Accident Insurance Company. The Department has no record that Mr. Sharrett was qualified to represent New England Life Insurance Company. With respect to question number 11 (concerning whether any insurer or general agent claimed that Sharrett was indebted under any agency contract) on the amended application, he again answered "no." On question 14(b), Mr. Sharrett acknowledged 2 years experience in the insurance business in the amended application. The Hearing Officer finds no material misrepresentation with respect to question number 11 (claims of indebtedness by insurance companies) on any of the applications Mr. Sharrett filed. He had no reason to believe that Conger Life Insurance Company continued to maintain that he was indebted to it. Conger Life has never taken any action to collect the $388.74 it maintains Mr. Sharrett owes it. His payment of $514.14 during the first quarter of 1979, shortly after his termination with Conger Life settled the dispute between Conger Life and Mr. Sharrett. In making this finding, the Hearing Officer is persuaded that the dispute between Mr. Sharrett and Conger Life Insurance Company was made known to Security Life Insurance Company in February 1979, and it is more likely than not that both Security Life Insurance Company of Georgia and Mr. Sharrett were satisfied that an agreement had been reached with Conger Life about Mr. Sharrett's indebtedness to Conger Life before he would have been employed by Security Life. Mr. Sharrett did, however, make material misrepresentations in his applications for licensure. While the transposition of numbers on the portion of the application asking or a social security number would not, by itself, be sufficient proof of an intentional misrepresentation, although it would impede investigation into the applicant's background, the error in the social security number in the three original applications is highly significant in conjunction with two other facts: Mr. Sharrett did not reveal in answer to question 6 that he had been licensed to sell insurance in Florida before. Even crediting Mr. Morrelle's testimony that he told Mr. Sharrett it was not necessary to list insurance licenses more than five years old, a plain reading of the form would show that question 6 has no time limit on it, whereas question 10 asks for a record of employment "for the past five years" and is time limited. Minimal attention to the questions asked on the form would have put Mr. Sharrett on notice that he was required to disclose all past insurance licenses. This would have brought to light Mr. Sharrett's dispute with his prior employer, Conger Life, which he would be required to explain. Mr. Sharrett stated that he had no insurance experience in answer to question number 14(b). All these answers were simply untrue. The error in the social security number, the failure to list past licenses Mr. Sharrett held in Florida on three applications, the failure to correctly list past licenses on the fourth (amended) application, and the failure to acknowledge any past insurance experience, leads the Hearing Officer to find purposeful misrepresentation of Mr. Sharrett's past. These misrepresentations raise questions about Mr. Sharrett's trustworthiness. Although the dispute Mr. Sharrett had with Conger Life in 1979 can be explained and would not, in itself, disqualify him from licensure, several of the items of misinformation on his licensure applications apparently were designed to impede the Department from learning of the settled dispute with Conger Life. This misrepresentation is disqualifying.
Recommendation It is recommended that the applications of Mr. Sharrett for qualification and for examination as an insurance agent be denied. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 27th day of June, 1988. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 (904) 488-9765 Filed with the Clerk of the Division of Administrative Hearings this 27th day of June, 1988. APPENDIX The following are my rulings on the proposed findings of fact submitted by the petitioner pursuant to Section 120.59(2), Florida Statutes (1987). Covered in finding of fact 5. General covered in finding 6-9, whether the indebtedness was on the payment bond or is general indebtedness is not relevant. Covered in finding of fact 12. [Introduction] The content of the original applications are recounted in findings of fact 1-4. 4(a). Rejected as unnecessary. 4(b). Sentence 1 covered in finding of fact 1, the remainder rejected for the reason stated in findings of facts 17 and 18. 4(c). Rejected for the reason stated in finding of fact 17(a). 4(d). Accepted in finding of fact 16. Rejected as unnecessary. Covered in finding of fact 13. The following are my rulings on the proposed findings of fact submitted by the respondent pursuant to Section 120.59(2), Florida Statues (1987). Covered in finding of fact 5. Covered in finding of fact 6. Covered in finding of fact 8. 4(a). The name used on the application is not a problem. Concerning the social security, see finding of fact 1. 4(b). See finding of fact 1. 4(c). See finding of fact 1. [Appears to be misnumbering] Rejected as unnecessary. Rejected as unnecessary. Covered in finding of fact 11. Covered in finding of fact 12. Covered in findings of facts 1, 2, 3, 4, and 5. Same as previous ruling. Same as previous ruling. Covered in findings of facts 16, 17, and 18. COPIES FURNISHED: Mr. Wallace F. Sharrett 109 Southwest Third Avenue Hallendale, Florida 33009 Hon. William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 William W. Tharpe, Jr., Esquire Office of Legal Services 413-B Larson Building Tallahassee, Florida 32399-0300 Don Dowdell General Counsel State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue Whether Respondent engaged in conduct proscribed by the Insurance Code as is particularly set forth in the Administrative Complaint filed December 7, 1993.
Findings Of Fact During times material, Respondent, Nelson Speer Benzing, was licensed with Petitioner, Department of Insurance and Treasurer, as a life insurance and as a life and health insurance agent. During times material, Respondent was an employee of U.S. Savings Trust Management (herein USSTM). During times material, Respondent was never appointed with Petitioner to represent Wisconsin National Life Insurance Company (herein Wisconsin). However, Respondent did attend a workshop sponsored by Wisconsin. At some time prior to March 5, 1992, Respondent met with George Cantonis, President of Mega Manufacturing, Inc. (herein Mega) in order to obtain Cantonis' permission to make a sales presentation to Mega's employees. Cantonis granted Respondent permission to make a sales presentation to Mega's employees. On March 5, 1992, Respondent made a sales presentation to Mega's employees. The purpose of said presentation was to enroll the employees of Mega in a "savings plan" offered by USSTM. The presentation lasted approximately 15- 30 minutes. Employees were told that the plan, as presented, incorporated an insurance savings plan which had a "liquid" component as well as a long term savings component. At no time during this sales presentation did Respondent explain to employees of Mega that he was a licensed life insurance agent. During the course of his presentation, Respondent described USSTM's product variously as an "insurance saving plan", as an "investment in insurance companies" and as a "retirement savings plan". At no time during the presentation did Respondent specifically state that he was selling life insurance. At the conclusion of the presentation, Respondent enrolled all interested employees in USSTM's plan. During the enrollment procedure, Respondent told the employees to complete portions of at least three documents which included a form entitled "Employee History", a Wisconsin's life insurance application, and an employee payroll deduction authorization. Cantonis enrolled through the above procedure and signed a blank Wisconsin National Life Insurance application. Subsequent to the group sales presentation, Respondent made a similar presentation to Tina Netherton, Mega's office manager, who was working in the office and answering the telephone. At the conclusion of the presentation to Netherton, she enrolled in the plan and also signed a blank Wisconsin National Life Insurance application pursuant to instructions from Respondent. Both Netherton and Cantonis believed that the "savings plan" consisted of both a short term "liquid cash element and a long term investment". Neither were aware that they had purchased life insurance. Both Netherton and Cantonis had, in their opinion, adequate life insurance at the time of Respondent's sales presentation, and would not have purchased additional life insurance if they had been told (by Respondent) that they were purchasing life insurance. Both Netherton and Cantonis executed beneficiary designations on their belief that such was needed so that disbursements, if any, could be made to their designee in the event of their death. Approximately three weeks after enrollment, Netherton and Cantonis received brochures from USSTM which acknowledged their enrollment and detailed the benefits of the "savings plan". The brochure advised that Netherton and Cantonis had enrolled in an insurance "savings plan" and failed to state that they had purchased life insurance. Cantonis and Netherton attempted to withdraw funds from the liquid portion of the plan and were unable to do so. Four to five months after their enrollment, Cantonis and Netherton received life insurance policies from Wisconsin. Pursuant to the insurance applications, Cantonis and Netherton were issued Wisconsin life insurance policy numbers L00566485 and L00566483, respectively. Cantonis and Netherton maintained their Wisconsin policies in order to realize some gain from their overall loss in dealing with Respondent and USSTM. At the time that Respondent made his presentation to Mega's employees and officials, he had never before made sales presentations in order to enroll employees in plans offered by USSTM. Respondent's general manager, Vincent Radcliff, was the agent of record of Wisconsin. The insurance application and policies issued to Cantonis and Netherton were signed by an agent other than Respondent. Respondent's supervisor, Vincent A. Radcliff, III, was disciplined by Petitioner and Respondent cooperated with the Petitioner in investigating the complaint allegations filed against his supervisor, Radcliff. Respondent was first licensed by Petitioner on November 15, 1989. Respondent has not been the subject of any prior disciplinary actions by Petitioner.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Petitioner enter a Final Order suspending Respondent's life and health insurance licenses for a period of three (3) months. It is further RECOMMENDED that Petitioner order that Respondent engage in continuing education respecting the manner and means of soliciting on behalf of insurance companies, and to the extent that he completes the required courses within an acceptable time frame, that the suspension be suspended pending the outcome of Respondent's satisfactory completion of such continuing education courses. 1/ RECOMMENDED this 1st day of July, 1994, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of July, 1994.
Findings Of Fact The parties have stipulated to the truth of the allegations of paragraph 1-7 of the Administrative Complaint. The Respondent is currently licensed in the State of Florida as a life and health (debit) agent, as well as a life and health agent. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Insurance, the Petitioner, has jurisdiction over the insurance licenses and appointments of the Respondent. On August 26, 1983, the Respondent entered into an agent contractual agreement with Capital Security Life Insurance Company (Capital). The agent's contract required that the Respondent account for and remit to Capital all premiums collected and received on behalf of that company. On or about October 18, 1991, Capital terminated its appointment of the Respondent, as one of its agents. This had the effect of cancelling the agent contract of the Respondent. The Respondent was terminated because Capital had detected the fact that certain premium monies collected by the Respondent from policy holders had not been remitted over to Capital on a repetitive basis. On or about October 18, 1991, Capital conducted an audit of the account of the Respondent. It was thus shown through the subject audit and work papers in evidence, as well as the testimony of Mr. Reynolds for the Petitioner, that the account of the Respondent contained a proven deficiency in the sum of $812.41 in insurance premiums collected but not remitted to Capital. Other than protest that the deficiency was a mistake and the result of computer error or that the financial information resulting in that figure had been erroneously input into Capital's computer by Capital's office personnel in charge of accounting for such matters and monies, no cogent credible explanation for the failure to remit over that sum of money referenced above has been established. The testimony of Mr. Reynolds is accepted over that of the Respondent as more credible and worthy of belief. It has thus been established that the Respondent misappropriated and converted to his own use and benefit, and unlawfully withheld, premium monies rightfully belonging to Capital while engaged in the applicable and ordinary course of his business as an agent for Capital.
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 a Final Order be entered by the Petitioner agency finding that the Respondent, Willie Frank Dennis, is guilty of the violations set forth as and in the manner in the Conclusions of Law above and that, therefore, his licenses and eligibility for licensure be revoked pursuant to Sections 626.611 and 626.621, Florida Statutes. DONE AND ENTERED this 3rd day of November, 1993, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of November 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-1222 Petitioner's proposed findings of fact: 1-9. Accepted. COPIES FURNISHED: William C. Childers, Esquire Department of Insurance and Treasurer Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0300 Willie Frank Dennis 1113 Kennard Street, Apartment No. 2 Jacksonville, Florida 32202 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300
