The Issue The issue in this case is whether Respondent, Thomas Felix Diaz, has violated various provisions of the Florida Insurance Code as alleged in an Administrative Complaint dated March 26, 1992 and, if so, what disciplinary action should be imposed against his license as an insurance agent in Florida.
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: At all times relevant to this proceeding, Respondent was licensed in this state as a life insurance agent. Respondent is currently licensed as a life insurance agent, as a life and health insurance agent, and as a health insurance agent. At all times pertinent to this proceeding, Respondent was appointed to sell life insurance with Mass Indemnity and Life Insurance Company (MILICO) which has recently changed its name to Primerica Financial Services. In that capacity, all funds received by, from or on behalf of consumers, representing premiums for insurance policies, were trust funds received in a fiduciary capacity and were to be paid over to an insurer, insured, or other persons entitled thereto in the regular course of business. Sometime around March of 1991, the president of Delta Picture Frame Company ("Delta" or the "Company") of Miami decided to change the health insurance for two of his employees. The insurance was being provided at company expense. The prior policy included a small life insurance component as part of the coverage. The president of the Company contacted the MILICO agency to inquire regarding their group health policy and asked to see an agent. On or about March 18, 1991, Respondent accompanied another agent for MILICO, Nelson Barrera, to Delta's office to meet with the president of the Company. At the time of the meeting, Respondent was only licensed as a life insurance agent. He did not obtain his health and life license until approximately April 15, 1991. At the meeting, Barrera explained the coverage and price for health insurance. The president of Delta agreed to purchase the health insurance policies but never verbally expressed any interest in purchasing life insurance for his employees. In fact, he specifically rejected a proposed life and health insurance package stating that the company would only pay for health insurance. Respondent spoke separately with the employees. Applications for both life and health insurance were filled out and signed by the employees. The evidence was inconclusive as to whether life insurance was actually discussed with either of the employees. Only one of the employees testified at the hearing. She verified her signature on the application for life insurance, but she claims that she only discussed health insurance with the agents and did not knowingly apply for life insurance. The president of Delta signed the last page of the life insurance applications which authorized automatic withdrawals to pay MILICO for the life insurance policies. The circumstances surrounding the execution of the life insurance applications was not clearly established by the evidence.. However, the evidence was clear that the president of the Company never intended to purchase life insurance and never knowingly agreed to authorize bank withdrawals for life insurance. The evidence established that the president of the Company clearly indicated that the Company would only pay for health insurance and he never knowingly assented to the issuance of life insurance policies for the employees at company expense. When the president of the Company noticed that the bank records reflected withdrawals payable to MILICO, he inquired further and learned that the deductions were for life insurance. He immediately called Respondent who agreed to cancel the life insurance policies and provide a refund. Respondent was entitled to receive a commission of 75 percent of the first year's premiums for the sale of the life insurance policies to the employees of Delta.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance issue a Final Order finding Respondent guilty of violating Section 626.621(6) and that Respondent's licenses be suspended for a period of three months, or, in lieu of a suspension, Respondent should be required to pay to the Department a fine of $500 and be placed on probation for a period of two years subject to such terms and restrictions as the Department may apply. RECOMMENDED this 3rd day of June 1993, at Tallahassee, Florida. J. STEPHEN MENTON 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 June 1993.
Findings Of Fact Respondent holds a property and casualty insurance license, life and health insurance license, and life insurance license for the State of Florida. She has held her property and casualty license for about 20 years. In 1976, she was employed as an agent for the Orlando office of Commonwealth insurance agency, which she purchased in 1977 or 1978. She continues to own the Commonwealth agency, which is the agency involved in this case. Respondent has never previously been disciplined. In 1979 or 1980, Respondent was appointed to the board of directors of the Local Independent Agents Association, Central Florida chapter. She has continuously served on the board of directors of the organization ever since. She served as president of the association until September, 1991, when her term expired. During her tenure as president, the local association won the Walter H. Bennett award as the best local association in the country. Since May, 1986, Commonwealth had carried the insurance for the owner of the subject premises, which is a 12,000 square foot commercial block building located at 923 West Church Street in Orlando. In July, 1987, the insurer refused to renew the policy on the grounds of the age of the building. Ruth Blint of Commonwealth assured the owner that she would place the insurance with another insurer. Mrs. Blint is a longtime employee of the agency and is in charge of commercial accounts of this type. Mrs. Blint was a dependable, competent employee on whom Respondent reasonably relied. Mrs. Blint contacted Dana Roehrig and Associates Inc. (Dana Roehrig), which is an insurance wholesaler. Commonwealth had done considerable business with Dana Roehrig in the past. Dealing with a number of property and casualty agents, Dana Roehrig secures insurers for the business solicited by the agents. Dana Roehrig itself is not an insurance agent. In this case, Dana Roehrig served as the issuing agent and agreed to issue the policy on behalf of American Empire Surplus Lines. The annual premium would be $5027, excluding taxes and fees. This premium was for the above- described premises, as well as another building located next door. The policy was issued effective July 21, 1987. It shows that the producing agency is Commonwealth and the producer is Dana Roehrig. The policy was countersigned on August 12, 1987, by a representative of the insurer. On July 21, 1987, the insured gave Mrs. Blint a check in the amount of $1000 payable to Commonwealth. This represented a downpayment on the premium for the American Empire policy. The check was deposited in Commonwealth's checking account and evidently forwarded to Dana Roehrig. On July 31, 1987, Dana Roehrig issued its monthly statement to Commonwealth. The statement, which involves only the subject policy, reflects a balance due of $3700.86. The gross premium is $5027. The commission amount of $502.70 is shown beside the gross commission. Below the gross premium is a $25 policy fee, $151.56 in state tax, and a deduction entered July 31, 1987, for $1000, which represents the premium downpayment. When the commission is deducted from the other entries, the balance is, as indicated, $3700.86. The bottom of the statement reads: "Payment is due in our office by August 14, 1987." No further payments were made by the insured or Commonwealth in August. The August 31, 1987, statement is identical to the July statement except that the bottom reads: "Payment is due in our office by September 14, 1987." On September 2, 1987, the insured gave Commonwealth a check for $2885.16. This payment appears to have been in connection with the insured's decision to delete the coverage on the adjoining building, which is not otherwise related to this case. An endorsement to the policy reflects that, in consideration of a returned premium of $1126 and sales tax of $33.78, all coverages are deleted for the adjoining building. The September 30 statement shows the $3700.86 balance brought forward from the preceding statement and deductions for the returned premium and sales tax totalling $1159.78. After reducing the credit to adjust for the unearned commission of $112.60 (which was part of the original commission of $502.70 for which Commonwealth had already received credit), the net deduction arising from the deleted coverage was $1047.18. Thus, the remaining balance for the subject property was $2653.68. In addition to showing the net sum due of $944.59 on an unrelated policy, the September 30 statement contained the usual notation that payment was due by the 12th of the following month. However, the statement contained a new line showing the aging of the receivable and showing, incorrectly, that $3700.86 was due for more than 90 days. As noted above, the remaining balance was $2653.68, which was first invoiced 90 days previously. Because it has not been paid the remaining balance on the subject policy, Dana Roehrig issued a notice of cancellation sometime during the period of October 16-19, 1987. The notice, which was sent to the insured and Commonwealth, advised that the policy "is hereby cancelled" effective 12:01 a.m. October 29, 1987. It was the policy of Dana Roehrig to send such notices about ten days in advance with two or three days added for mailing. One purpose of the notice is to allow the insured and agency to make the payment before the deadline and avoid cancellation of the policy. However, the policy of Dana Roehrig is not to reinstate policies if payments are received after the effective date of cancellation. Upon receiving the notice of cancellation, the insured immediately contacted Mrs. Blint. She assured him not to be concerned and that all would be taken care of. She told him that the property was still insured. The insured reasonably relied upon this information. The next time that the insured became involved was when the building's ceiling collapsed in June, 1988. He called Mrs. Blint to report the loss. After an adjuster investigated the claim, the insured heard nothing for months. He tried to reach Respondent, but she did not return his calls. Only after hiring an attorney did the insured learn that the cancellation in October, 1987, had taken effect and the property was uninsured. Notwithstanding the cancellation of the policy, the October 31 statement was identical to the September 30 statement except that payment was due by November 12, rather than October 12, and the aging information had been deleted. By check dated November 12, 1987, Commonwealth remitted to Dana Roehrig $3598.27, which was the total amount due on the October 30 statement. Dana Roehrig deposited the check and it cleared. The November 30 statement reflected zero balances due on the subject policy, as well as on the unrelated policy. However, the last entry shows the name of the subject insured and a credit to Commonwealth of $2717 plus sales tax of $81.51 minus a commission readjustment of $271.70 for a net credit of $2526.81. The record does not explain why the net credit does not equal $2653.68, which was the net amount due. It would appear that Dana Roehrig retained the difference of $125.87 plus the downpayment of $1000 for a total of $1125.87. It is possible that this amount is intended to represent the earned premium. Endorsement #1 on the policy states that the minimum earned premium, in the event of cancellation, was $1257. By check dated December 23, 1987, Dana Roehrig issued Commonwealth a check in the amount of $2526.81. The December 31 statement reflected the payment and showed a zero balance due. The record is otherwise silent as to what transpired following the issuance of the notice of cancellation. Neither Mrs. Blint nor Dana Roehrig representatives from Orlando testified. The only direct evidence pertaining to the period between December 31, 1987, and the claim the following summer is a memorandum from a Dana Roehrig representative to Mrs. Blint dated March 24, 1988. The memorandum references the insured and states in its entirety: Per our conversation of today, attached please find the copy of the cancellation notice & also a copy of the cancellation endorsement on the above captioned, which was cancelled effective 10/29/87. If you should have any questions, please call. Regardless of the ambiguity created by the monthly statements, which were not well coordinated with the cancellation procedure, Mrs. Blint was aware in late March, 1988, that there was a problem with the policy. She should have advised the insured, who presumably could have procured other insurance. Regardless whether the June, 1988, claim would have been covered, the ensuing litigation would not have involved coverage questions arising out of the cancellation of the policy if Mrs. Blint had communicated the problem to the insured when she received the March memorandum. Following the discovery that the policy had in fact been cancelled, the insured demanded that Respondent return the previously paid premiums. Based on advice of counsel, Respondent refused to do so until a representative of Petitioner demanded that she return the premiums. At that time, she obtained a cashiers check payable to the insured, dated June 1, 1990, and in the amount of $2526.81. Although this equals the check that Dana Roehrig returned to Commonwealth in December, 1987, the insured actually paid Commonwealth $1000 down and $2885.16 for a total of $3885.16. This discrepancy appears not to have been noticed as neither Petitioner nor the insured has evidently made further demands upon Respondent for return of premiums paid. The insured ultimately commenced a legal action against Commonwealth, Dana Roehrig, and American Empire. At the time of the hearing, the litigation remains pending.
Recommendation Based on the foregoing, it is hereby recommended that the Department of Insurance and Treasurer enter a final order finding Respondent guilty of violating Sections 626.561(1) and, thus, 626.621(2), Florida Statutes, and, pursuant to Sections 626.681(1) and 626.691, Florida Statutes, imposing an administrative fine of $1002.70, and placing her insurance licenses on probation for a period of one year from the date of the final order. If Respondent fails to pay the entire fine within 30 days of the date of the final order, the final order should provide, pursuant to Section 626.681(3), Florida Statutes, that the probation is automatically replaced by a one-year suspension. RECOMMENDED this 5th day of February, 1992, 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 this 5th day of February, 1992. COPIES FURNISHED: Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300 Bill O'Neil, General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 James A. Bossart Division of Legal Affairs Department of Insurance 412 Larson Building Tallahassee, FL 32399-0300 Thomas F. Woods Gatlin, Woods, et al. 1709-D Mahan Drive Tallahassee, FL 32308
Findings Of Fact At all times relevant and material to the allegations in the Administrative Complaint, the Respondent, Alan Jay Gottlieb, was licensed in the State of Florida as a life insurance agent, as a life and health insurance agent, and as a health insurance agent. In March of 1991, Mr. George Alboum was interested in purchasing a health insurance policy for his wife, Mildred Alboum. To that end he contacted Mr. Jordan S. Cain, who was one of the principals in an insurance firm named San Souci Insurance. Mr. Alboum contacted Mr. Cain because he had previously done business with Mr. Cain and with San Souci Insurance. In response to the contact from Mr. Alboum, Mr. Cain sent the Respondent to meet with Mr. Alboum on or about March 18, 1991, to discuss procuring a health insurance policy for Mrs. Mildred Alboum. At that time the Respondent was an employee of Mr. Cain and of San Souci Insurance working in the area of insurance sales. At the time of his meeting with Mr. Alboum, the Respondent was not appointed as an agent with Boston Mutual Life Insurance Company. The procurement of health insurance for Mrs. Mildred Alboum was complicated by the fact that an application could not be submitted to one of the potential insurers, Acceleration Life, because Acceleration Life would not accept an application for coverage for Mrs. Alboum. The reason for Acceleration Life's refusal to accept such an application was that during 1990 Acceleration Life had issued a health insurance policy covering Mrs. Mildred Alboum that was rescinded later that same year on the grounds of either material misrepresentation in the application or material omission in the application. The rescinded policy had been procured by Mr. Jordan S. Cain. During the meeting on March 18, 1991, the Respondent and Mr. George Alboum discussed possible ways of obtaining health insurance coverage for Mrs. Alboum. Because of the problems with the prior policy that had been recently rescinded, the Respondent wanted to be especially careful in handling any further efforts to obtain health insurance coverage for Mrs. Alboum. Because of the underwriting consequences that flow from having had a prior policy rescinded for material misrepresentation or material omission or from previous denials of coverage, under circumstances like those presented by Mrs. Mildred Alboum an insurance agent will often make informal telephone inquiries to potential insurers as to the acceptability of a described risk, rather than submit an application without some advance indication that it would meet the underwriting standards of the insurance company to whom the application was submitted. Accordingly, although the matter is not entirely free from doubt, it is unlikely that the Respondent solicited or procured an application for a health insurance policy from Mrs. Mildred Alboum when he met with Mr. Alboum on March 18, 1991. Rather, it is more likely that he recommended informal inquiries to several insurance companies prior to the submission of an application to any specific insurance company. Similarly, although again the matter is not entirely free from doubt, it is unlikely that the Respondent received a check from Mr. Alboum when he met with him on March 18, 1993. Shortly after the March 18, 1991, meeting with Mr. Alboum, the Respondent transferred out of insurance sales and began to do bookkeeping for San Souci Insurance.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that a Final Order be issued in this case dismissing all charges against the Respondent on the grounds that the evidence submitted at hearing was insufficient to establish the allegations of the Administrative Complaint by clear and convincing evidence. DONE AND ENTERED this 26th day of July, 1993, at Tallahassee, Leon County, Florida. MICHAEL M. PARRISH, 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 26th day of July, 1993. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 92-1902 The following are the Hearing Officer's specific rulings on all proposed findings of fact submitted by all parties. Proposed findings of fact submitted by the Petitioner: Paragraph 1: Accepted. Paragraph 2: It is accepted that on or about March 18, 1991, the Respondent met with Mr. George Alboum and discussed the possibilities for obtaining health insurance coverage for Mr. Alboum's wife. The other facts proposed in this paragraph are rejected as not supported by clear and convincing evidence. Although there is some evidence that touches upon the facts proposed in this paragraph, that evidence falls somewhat short of the clear and convincing standard described in such cases as Smith v. Department of Health and Rehabilitative Services, 522 So.2d 956 (Fla. 1st DCA 1988), and Slomowitz v. Walker, 429 So.2d 797 (Fla. 4th DCA 1983). Paragraph 3: Rejected as not supported by clear and convincing evidence. Although there is some evidence that such a check was written and delivered to the Respondent, that evidence is by no means clear and convincing because, in view of the circumstances when the Respondent met with Mr. Alboum, it is unlikely that the Respondent would have asked for a check. Paragraph 4: Rejected as not supported by clear and convincing evidence and as, in any event, being contrary to the greater weight of the evidence. In view of the recision of Mrs. Alboum's previous policy, it is most unlikely that the Respondent would be expressing assurances about the issuance of the next policy. Paragraphs 5 and 6: Rejected as not supported by clear and convincing evidence inasmuch as there is no clear and convincing evidence that the Respondent ever received the application and the check. Although Mr. Alboum testified that the Respondent received the application and the check, that testimony has not been found to be clear and convincing. Paragraph 7: Rejected as irrelevant because there is no clear and convincing evidence that the Respondent ever received the check. Paragraph 8: Accepted that at the time the Respondent met with Mr. Alboum, the Respondent was not appointed as an agent with Boston Mutual Life Insurance Company. The implication in this paragraph that the Respondent solicited Mrs. Alboum is rejected as not supported by clear and convincing evidence. Proposed findings of fact submitted by the Respondent: (None submitted) COPIES FURNISHED: Joseph D. Mandt, Esquire Department of Insurance and Treasurer Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0330 Mr. Alan Jay Gottlieb, pro se 20527 Northeast 9th Place North Miami Beach, Florida 33179 Honorable 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, Plaza Level II Tallahassee, Florida 32399-0300
The Issue The issue in this case is whether, for the reasons alleged in the Administrative Complaint dated February 10, 1984, the Petitioner should revoke the Respondent's license and eligibility for licensure as an insurance agent or impose some lesser penalty authorized by statute.
Findings Of Fact Based on the testimony of the witnesses and the exhibits admitted into evidence, I make the following Findings of Fact: 1/ On June 16, 1982, the Respondent, Shelby Dewey Blackman, executed an Application for Qualification as Nonresident Life Agent, which application he thereafter caused to be filed with the Petitioner, Department of Insurance and Treasurer. In that application Mr. Blackman stated that his residence address and his business address in his state of residence were both "2549 New York Avenue, Pascagoula, Miss. 39567." (Pet. Ex. 1; Tr. 12-13) The Department of Insurance and Treasurer does not issue Nonresident Life Agent licenses to people who are in fact residents of the State of Florida. Such licenses are only issued to people who are nonresidents of this state. Applicants for Resident Life Agent licenses are required to take an examination prior to licensure. Applicants for Nonresident Life Agent licenses are not required to take an examination prior to licensure. The Department would not have issued a Nonresident Life Agent license to Mr. Blackman if the Department had known that Mr. Blackman was a Florida resident. (Tr. 14) As a result of the filing of the application described above, the Department issued to Mr. Blackman a license as a Nonresident Life and Health Agent for the American Sun Life Insurance Company, which was the only company he was authorized to write insurance for in the State of Florida. When Mr. Blackman received his license, the license listed the name of the the only company he was authorized to write insurance for in this state. Licensees who are authorized to represent more than one insurance company in this state receive a separate license for each company they are authorized to represent. Mr. Blackman had only the one license to represent one company. (Pet. Ex. 1 and 2; Tr. 14-18) At all times material to this case, Mr. Blackman was a resident of Santa Rosa County, Florida. Specifically, Mr. Blackman was a resident of Santa Rosa County, Florida, at the time he applied for and was issued a Nonresident Life and Health Agent license and at the time of writing the four insurance applications which are described hereinafter. (Pet. Ex. 3; Tr. 20-21, 53) Continental Bankers Life Insurance Company of the South does not currently hold, and has never held, a Certificate of Authority to write insurance in the State of Florida. In November of 1982 Continental Bankers Life Insurance Company of the South was licensed to write insurance in the State of Alabama and Mr. Blackman was authorized by Continental to write insurance for Continental in the State of Alabama. (Pat. Ex. 8; Tr. 24-25) During November of 1982, Mr. Blackman wrote four applications for health insurance policies to be issued by the Continental Bankers Life Insurance Company of the South. One was an application dated November 2, 1982 from Mr. Thomas J. Barrow. Another was an application dated November 4, 1982, from Mr. Jimmie R. Williams. The last two were applications dated November 12, 1982, from Mr. Henry E. Marshall and Mr. Ercy L. Henderson, respectively. All four of the applications were written and signed in Jay, Florida. No part of the transactions which culminated in the writing of the four applications took place in the State of Alabama. On three of the applications Mr. Blackman wrote that the application was written and signed in Brewton, Alabama, and on one of the applications Mr. Blackman wrote that the application was written and signed in Flomaton, Alabama. The statements that the applications were written and signed in Alabama were false statements that Mr. Blackman knew to be false statements. (Pet. Ex. 4, 5, 6, 7; Tr. 37-38, 42, 49, 53-54) The false statements written on the four applications described above were relied upon by the Continental Bankers Life Insurance Company of the South and were, therefore, material misrepresentations. If Mr. Blackman had truthfully written on the applications that they were written and signed in the State of Florida, Continental would not have issued policies on the basis of those four applications because Continental was not licensed to write insurance in the State of Florida. The MM-6 policy is an insurance policy that Continental markets in Alabama and the false statements on the applications which indicated that the policies were applied for and completed in Alabama induced Continental to issue the policies. (Tr. 25-27, 32, 34-35)
Recommendation For all of the reasons set forth above, and particularly because of Mr. Blackman's demonstrated disregard for the truth, I RECOMMEND that the Department of Insurance and Treasurer enter a Final Order revoking Mr. Blackman's license and eligibility to hold a license. DONE AND ORDERED this 31st day of July, 1984, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 904/488-9575 Filed with the Clerk of the Division of Administrative Hearings this 31st day of July, 1984.
Findings Of Fact The Respondent, Richard Sidney Cole, is currently eligible for licensure and licensed in this state as a Health Insurance Agent, and was so licensed at all times relevant to these proceedings. The Respondent, at all times relevant to these proceedings, was licensed in this state to solicit health insurance on behalf of National States Insurance Company (National States). Count I -- Edith Kastel. On or about June 24, 1988, the Respondent visited the home of Edith Kastel of St. Petersburg, Florida, for the purpose of soliciting health insurance. She had responded to a "lead card" National States had sent to her, and her request for follow- up information was referred to the Respondent. Since Kastel was not yet eligible for Medicare, and could not purchase a Medicare supplement policy, the Respondent showed her the National States Limited Medical-Surgical Expense policy. This policy pays 40% of doctors' charges, outpatient hospital charges and outpatient charges for diagnostic laboratory and x- ray examinations and ambulance charges. During the application process, Kastel disclosed to the Respondent that she had suffered from diverticulitis in the past. The Respondent took this opportunity to explain to Kastel that the policy would not pay on preexisting conditions (i.e., according to the policy, loss "which results from sickness or disease for which treatment was advised or received, or medical advice given by a doctor, during the 180 day period just before the Policy Date") until after the expiration of a six-month waiting period. Kastel fully understood this provision of the policy. Kastel did not disclose to the Respondent during the application process any other preexisting conditions to which the waiting period would apply. She did tell him that she had an eye examination appointment that she had just scheduled for July 6, 1988, but she gave no indication that she knew there was something wrong with her eyes or that the appointment was for anything other than a routine vision check. She continued to maintain at the hearing that she did not know, at the time she applied for coverage through the Respondent, that she had cataracts. She did vaguely ask whether she would be covered if the examination revealed that something was wrong with her eyes, and the Respondent assured her that she would be covered and that she should submit any bills she might get with a claim on the policy. Kastel bought the policy, effective July 1, 1988. At her eye examination on July 6, 1988, Kastel was diagnosed with cataracts and was advised that elective cataract surgery would be beneficial. Kastel scheduled the surgery and had it performed in October, 1988. When she submitted her bills with a claim on the policy, National States rejected the claim as a preexisting condition for which claim was made within the policy's six_month waiting period. When the claim was rejected, Kastel complained to the Respondent, who made a written request to National States that the claim be paid. He reasoned that the claim should be covered because Kastel maintained that she did not know of the condition at the time she applied for coverage. Kastel and the Respondent were not able to change National States' position, and the claim still has not been paid. It was not proven that the Respondent misrepresented to Kastel that the policy paid 40% of all charges (as opposed to 40% of only doctors' charges, outpatient hospital charges and outpatient charges for diagnostic laboratory and x-ray examinations and ambulance charges) or that Kastel would not have purchased the policy if the Respondent had communicated to her exactly what kinds of charges it covered. Up to the time of the hearing, there is no indication that Kastel had any complaint against National States or the Respondent except that her cataract surgery claim was rejected as a preexisting condition. 2/ (All other claims Kastel has made under the policy have been paid.) Kastel's testimony elicited at the hearing, that the Respondent told her only that the policy covered 40% of all expenses, was not persuasive. Count II -- The Ogletrees. Like Kastel, Jack and Margaret Ogletree of Palm Bay, Florida, responded to National States advertising by sending in a "lead card" that was referred to the Respondent. The Respondent visited the Ogletrees on or about August 11, 1988. Margaret Ogletree was not yet eligible for Medicare, and the Respondent sold both her and her husband a National States Limited Medical-Surgical Expense Policy. These were not Medicare supplement policies, and the policies themselves state in bold print: "THIS POLICY IS NOT A MEDICARE SUPPLEMENT POLICY." The Respondent explained that the policy was totally unrelated to Medicare and would pay under its terms regardless of Medicare coverage. The evidence did not prove that the Respondent said or did anything to lead the Ogletrees to believe that they were buying a Medicare supplement policy, except perhaps to say that the policy would pay for some things that Medicare would not pay for. It was not proven that Jack Ogletree had a Medicare supplement policy in force at the time or whether he planned to, or did, replace a Medicare supplement policy with the policy the Respondent sold him. It was not proven that the Respondent was required to submit a replacement form or indicate on the application that the policy was "intended to replace any accident or sickness insurance, health service or health maintenance contract." The evidence proved that the Ogletrees told the Respondent during the application process that Jack Ogletree had successful open heart surgery for an aortic valve replacement in April, 1984, and remained on medication for his heart condition. The Respondent led the Ogletrees to believe that losses resulting from the heart condition would be covered after the six-month waiting period for preexisting conditions. In completing Jack Ogletree's application, the Respondent wrote "no" in answer to: question 6.c., asking whether he had or ever had "high or low blood pressure, varicose veins or disorder of the heart or circulatory system; question 7.a., asking whether he had consulted or been treated by any physician or practitioner in the last five years; and question 7.b., asking whether he had been confined in a hospital in the last five years. The evidence is that, under National States' underwriting policies, a successful aortic valve replacement performed over four years before an application would not mean automatic rejection of the application. Had questions 6.c., 7.a. and 7.b. on Jack Ogletree's application been answered correctly, National States typically would have investigated and may or may not have rejected the application, depending on the results of the investigation. Likewise, it is not clear from the evidence whether National States would consider the misrepresentation on the Jack Ogletree application to be a material misrepresentation that would require rejection if Jack Ogletree were to make a claim based on his heart disorder. To the date of the hearing, no such claim had been made. (Claims that have been made have been paid.) Count III -- Gunnar Sundstrom. Like Edith Kastel and the Ogletrees, Gunnar Sundstrom sent in a "lead card" that was referred to the Respondent. The Respondent visited Sundstrom on or about December 9, 1987. At the time, Sundstrom had in force an Old Southern Life Insurance Company (Old Southern) Medicare supplement policy. Sundstrom wanted to replace the Old Southern policy with a National States policy which the Respondent sold him. He wanted a minimum of overlap between the effective date of the new National States policy and the lapse of the Old Southern policy, but he also wanted to be sure that there would be no gap in coverage of any preexisting conditions. He and the Respondent discussed this thoroughly, but the Respondent could not answer all of Sundstrom's questions because he was not sure at the time whether National States was going to increase the waiting period for preexisting conditions from three to six months. It was decided that Sundstrom would apply for the policy, review it upon receipt, and cancel it and ask for a full refund within 30 days, as he had a right to do under the policy, if the waiting period for preexisting conditions turned out to be six months. On the Sundstrom application, the Respondent answered "no" to the question whether the National States policy for which Sundstrom was applying was "intended to replace any accident or sickness insurance, health service or health maintenance contract." The Respondent did not submit any replacement forms as required by F.A.C. Rule 4-51.007 when a Medicare supplement policy is being replaced. 3/ The Respondent explained that he thought the "no" answer on the Sundstrom application was appropriate and that no replacement form was necessary because Sundstrom was not cancelling the Old Southern policy, only perhaps allowing it to lapse. He now concedes that perhaps he was wrong. All claims Sundstrom made under the National States policy through the date of the hearing were paid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Petitioner, the Department of Insurance, enter a final order suspending the license, and eligiblity for licensure, of the Respondent, Richard Sidney Cole, for four (4) months. RECOMMENDED this 28th Tallahassee, Florida. day of August, 1990, in J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of August, 1990.
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.
