The Issue The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint, and, if so, what disciplinary action should be imposed.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the extensive factual stipulations set forth in the parties' Statement of Facts Admitted3: Respondent works as the manager of a Cash Register Insurance ("Cash Register") office in New Port Richey. Cash Register is owned by Direct General Insurance Agency, Inc. ("Direct General"). Respondent sells automobile insurance to individual customers. During the relevant period, Respondent also sold four ancillary products: a vehicle protection plan, an accident medical protection plan, a travel protection plan, and a term life insurance policy.4 Respondent is paid a salary, and receives no commission on the sale of automobile insurance. Respondent does receive a ten percent commission on the sale of ancillary products. Respondent received 34 percent of her overall income from the sale of ancillary products during the relevant time period. Respondent deals with at least 50 customers per day, six days per week. She sells between seven and ten automobile insurance policies per day, on average. Given her customer volume, Respondent cannot remember each customer to whom she has sold insurance. Respondent frankly testified that she had no specific recollection of selling the policies to the individuals named in the Statement of Facts Admitted. However, Respondent also testified that she sells insurance according to a script, and that in light of this unvarying practice she could state with confidence whether she had or had not engaged in the specific sales techniques alleged by the Department and its witnesses. Respondent testified at length as to her sales routine. When talking to potential customers on the telephone, Respondent must follow the script provided by Direct General. Respondent testified that agents are not required to follow the script when customers come in to the office, but that she generally adheres to the format provided by her employer. All of the sales at issue in this proceeding were generated via in-person sales at Respondent's Cash Register office. Respondent first obtains basic information from the customer: name, address, date of birth, Social Security number, whether there are persons over age 14 in the household and whether those persons will drive the insured vehicle. She then asks the type of vehicle and the type of coverage the customer wants to purchase. Respondent enters the information into her computer, which generates a price quote. If the customer wants only basic personal injury protection ("PIP") and property damage coverage, Respondent informs the customer that the quoted price includes PIP with an optional deductible of $1,000, a coverage limit of $10,000, and property damage coverage of $10,000. The price quote includes a down payment and monthly payments. The quoted amounts vary depending on whether the customer chooses to make 10 or 12 payments. During her presentation, Respondent mentions that the price quoted for the monthly payments includes the ancillary products. Once the customer has agreed to the price quote, Respondent makes a computer inquiry to obtain the customer's driving record. While waiting on these records, Respondent goes over a "pen sale" document with the customer. The pen sale document is a handwritten sheet that Respondent draws up in the presence of the customer to explain the policies. Respondent's pen sale sheets for Mr. Gatlin, Ms. Johnson, Mr. Hansen, and Mr. Dossantos (hereinafter referred to collectively as the "Complaining Customers") were admitted into evidence. At the top of the page, under the heading "Mandatory," Respondent outlined the PIP and property damage coverages, with the customer's options regarding deductibles. Lower on the page, under the heading "Optional," Respondent outlined the details of the ancillary coverages included in the price quote. Respondent testified that she sits with the customer and uses the pen sale sheet to explain the mandatory coverages in detail. She explains that Florida law requires that she offer bodily injury liability coverage, but that the customer has the option to reject it, and she indicates the customer's decision on the pen sale sheet. She explains the ancillary policies, and indicates on the pen sale sheet which of these policies the customer accepts and which ones the customer rejects. The customer is asked to sign the bottom of the sale sheet. When shown the pen sale sheet for each Complaining Customer, Respondent was able to state with confidence which ancillary policies each of them has accepted or rejected. None of the Complaining Customers denied having been shown the pen sale sheet, though none of them appeared to grasp its significance. Each of the Complaining Customers conceded that the signature at the bottom of his or her respective pen sale sheet was genuine. After Respondent obtains the customer's signature on the pen sale sheet, and has received the customer's driving records, she prints out the policy paperwork and goes over it with the customers. The earliest of the Complaining Customers was James Gatlin (Counts I, II, and III of the Administrative Complaint), who purchased insurance from Respondent on October 7, 2005.5 Mr. Gatlin's signed pen sale sheet indicated that he accepted the accident medical protection plan, the travel protection plan, and the term life policy. It also indicated that he rejected optional uninsured motorist, medical payment, accidental death, and comprehensive and collision policies offered by Respondent. Mr. Gatlin's policy paperwork was admitted into evidence. After explaining the automobile policy, Respondent explained the ancillary products that Mr. Gatlin had initially accepted on the pen sale sheet.6 Respondent first showed Mr. Gatlin a spreadsheet titled, "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)." Under the subheading "Auto Policy Coverages," the spreadsheet set forth the amount and type of coverage for each of the two cars for which Mr. Gatlin was buying insurance, as well as a premium estimate for each vehicle. Under the subheading "Optional Policies," the spreadsheet set forth the following: "American Bankers Travel Protection Plan," "Lloyds Accident Medical Protection Plan," and "Life Insurance." A monthly premium amount was set forth next to each of the three optional coverages. The subheading "Optional Policies," the list of the optional policies, the premium amounts for each optional policy, and the total estimated cost of all products are separately circled by hand on the spreadsheet. Respondent testified that it is her practice to circle these items as she explains them to the customer. Mr. Gatlin's initials appear above the list of optional policies. Below the grids of the spreadsheet is the following text (emphasis added): I, the undersigned, acknowledge that: The above premiums are estimates and that the actual premium charged to me will be determined by the Insurance Company issuing the policy. Further, I am responsible for the amount of the premium charged at the time the policy is issued. I agree that if my down payment or full payment check is returned by the bank for any reason, coverage will be null and void from the date of inception. I acknowledge that I have been advised of and understand the above coverage(s), and cost breakdowns, including non-insurance products, if any, and further [sic] that I have received a complete copy of this product. This document is only an explanation of insurance coverage and other products, if applicable—it is not a contract. The policy, if issued, will contain the terms and conditions of coverage. The level of coverage illustrated above is based on preliminary information which I have supplied. My eligibility for coverage is subject to the acceptance of my application in accordance with the Insurance Company's underwriting requirements. Customer Signature Date The signature line was signed by "James D. Gatlin" and dated October 7, 2005. At the hearing, Mr. Gatlin conceded the authenticity of his initials and signature on the spreadsheet. Respondent next explained the details of the accident medical protection plan to Mr. Gatlin. She explained the coverage options (individual, husband and wife, or family), and the annual premium for each. On the application, Respondent circled the "Individual Coverage Only" option. Mr. Gatlin placed his initials in the space provided to indicate his choice of coverage, and signed the application on the line provided. A second page, titled "Accident Medical Protection Plan," detailed the coverage provided and the method of filing a claim under the policy. The following text is provided at the bottom of the page (emphasis added): THE ACCIDENT MEDICAL PLAN IS A LIMITED POLICY. READ IT CAREFULLY. I, the undersigned, understand and acknowledge that: The Accident Medical Plan does not provide Liability Coverage insurance for bodily injury or property damage, nor does it meet any financial responsibility law. I am electing to purchase an optional coverage that is not required by the State of Florida. My agent has provided me with an outline of coverage and a copy of this acknowledgement. If I decide to select another option, or cancel this policy, I must notify the company or my agent in writing. I agree that if my down payment or full payment check is returned by the bank for any reason, coverage will be null and void from the date of inception. Insured's Signature Date I hereby REJECT this valuable coverage: Insured's Signature Date Mr. Gatlin signed and dated the form on the first line provided, indicating his acceptance of the accident medical protection plan. Respondent next explained the travel protection plan. The two forms associated with this plan set forth the coverages provided, the limits of those coverages, and the premium associated with the plan. The first form was titled, "American Bankers Insurance Company Optional Travel Protection Plan." After listing the coverages and their limits, the form read as follows: Purchasing the Optional Travel Protection Plan is not a condition of purchasing your automobile liability policy. I hereby acknowledge I am purchasing an Optional Travel Protection Plan, and that I have received a copy of this acknowledgement. Insured Signature Date I HEREBY REJECT THIS VALUABLE COVERAGE: Insured Signature Date Mr. Gatlin signed and dated the first line of the form, indicating his acceptance of the policy. The second form, titled "Travel Protection Plan—Florida Declarations," listed the effective dates of the policy, the premium, the automobile covered, repeated the coverages and their limitations, and gave notice to the insured of his 30-day right to examine the policy and return it for a full refund provided no loss has occurred. Mr. Gatlin signed and dated the "Applicant's Signature" line. Respondent next went over the documents relating to the term life policy that Mr. Gatlin accepted on the pen sale sheet. The policy named Carol Burinskas, with whom Mr. Gatlin lived, as the beneficiary on the $10,000 policy, and stated an annual premium of $276.00. Mr. Gatlin initialed his "no" answers to six standard insurability questions dealing with recent medical history and exposure to HIV. Mr. Gatlin signed and dated his acceptance of the policy on the signature line provided. After completing her explanation of the various policies and obtaining Mr. Gatlin's acceptance, Respondent next explained the premium finance agreement. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the four policies accepted by Mr. Gatlin, totaling $1,363.00, plus $4.55 in documentary stamp tax, less a down payment of $151.00, for a total amount financed of $1,216.55. The page disclosed the finance charge ($139.99) and the annual percentage rate of the loan (24.37%). Mr. Gatlin opted to make 10 monthly payments of $135.65, and initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate his acceptance of the loan terms. Finally, Respondent showed Mr. Gatlin a document titled "Insurance Premium Financing Disclosure Form," which redundantly set forth in a simplified form exactly what Mr. Gatlin was purchasing and a breakdown of what each element of his purchase contributed to the total cost of the loan. The itemization read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $578 Property Damage Liability (PD) $314 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)7 $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $0 Medical Payments $0 Uninsured Motorist $0 Comprehensive $0 Collision $0 Accidental Death $0 Towing $0 Travel Protection Plan $60 Rental $0 Hospital Indemnity $110 Life Insurance $266 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $1,363 Document Stamp Tax, if applicable $4.55 Less Down Payment applied $151.00 AMOUNT FINANCED (loaned to you) $1,216.55 I, James Gatlin, have read the above and understand the coverages I am buying and how much they cost. _ Signature of Named Insured Date Mr. Gatlin signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. As noted above, Carol Burinskas lives with Mr. Gatlin and was named as the beneficiary in the term life policy the Respondent sold to Mr. Gatlin. Ms. Burinskas testified that she went into Respondent's Cash Register office on Mr. Gatlin's behalf a day or two before he completed the transaction. Ms. Burinskas had obtained quotes from several agencies in the course of doing the legwork for Mr. Gatlin's insurance purchase. Ms. Burinskas testified that she told Respondent that she was shopping for Mr. Gatlin, and was seeking quotes on the bare minimum insurance, "just what we needed to get a tag for the car." Based on information provided by Ms. Burinskas, Respondent provided a price quote, which Ms. Bruinskas showed to Mr. Gatlin at home that evening. Mr. Gatlin looked over the quote and pronounced it acceptable. He told Ms. Burinskas that he would stop in at the Cash Register office the next day and complete the paperwork for the policy. Mr. Gatlin testified that he believed the Cash Register quote offered the most reasonable price he had seen, but he was unaware that Respondent's quote included the ancillary policies discussed above. When he went into Respondent's office, he reiterated to her that he wanted only "the bare minimum insurance." Mr. Gatlin owned his vehicles outright and saw no need to carry extra coverage on them. Mr. Gatlin testified that Respondent asked him if he wanted life insurance, and he declined. Mr. Gatlin already had a $250,000 life insurance policy through his employer, Pasco County, for which Mr. Gatlin's sister is the beneficiary. He testified that if he had known he was purchasing a life insurance policy from Respondent, he would have made his sister the beneficiary. As noted above, Ms. Burinskas is the stated beneficiary of the term life policy Respondent sold to Mr. Gatlin. Mr. Gatlin testified that Respondent "was speaking very quickly and putting the papers in front of me just as fast as she was talking, so I was busy signing and dating." By the end of the process, "there was a stack of papers, rather thick" in front of Mr. Gatlin. Mr. Gatlin never heard Respondent say that some of the items he was purchasing were optional. In fact, he could not remember much at all about the content of Respondent's presentation. He remembered that Respondent talked while he initialed and signed in the places where she pointed. On cross-examination, Mr. Gatlin conceded that Respondent may have explained the ancillary policies, but so fast that he could not understand. He even conceded that he had allowed Respondent to talk him into buying the policies, though he later amended his answer to assert that he had been "bamboozled." Mr. Gatlin made no effort to slow down Respondent's presentation, and he had no questions about anything Respondent was saying. Mr. Gatlin stated that his only concern was how much he was paying, and that he was satisfied with the price quoted by Respondent at the time he bought the policies. Mr. Gatlin stated that it should have been obvious to Respondent that he was not reading the documents he was signing. He trusted Respondent to treat him the right way, and not sell him products without his knowledge. Respondent denied that she ever rushes anyone through the sales process, or has ever sold a customer a policy the customer did not agree to purchase. Ms. Burinskas discovered the ancillary policies only after reading a newspaper article about Direct General and the practice of sliding. She asked Mr. Gatlin if he had purchased any policies mentioned in the article, and he said that he had not, "as far as he knew." Ms. Burinskas pulled out the insurance paperwork, and in short order was able to ascertain that Mr. Gatlin had purchased the ancillary products described above. The next Complaining Customer was Gabriella Jungling, now known by her married name of Johnson (Counts IV and V). On August 17, 2006, Ms. Jungling and her future husband, Jeremy Johnson, were at a Division of Highway Safety and Motor Vehicles ("DHSMV") office. Mr. Johnson was attempting to have his suspended license reinstated, but was informed that he must obtain the SR-22 form before his license could be issued. A DHSMV employee gave Ms. Jungling the names of several insurance companies that could immediately write a policy. Ms. Jungling noted that Respondent's Cash Register office was near the DHSMV office. Ms. Jungling and Mr. Johnson drove to Respondent's office. Ms. Jungling testified that she handled all the transactions that occurred at Respondent's office. She and Mr. Johnson intended to obtain "full coverage," whatever they needed to fulfill the SR-22 requirement and satisfy the bank that financed Mr. Johnson's truck, which was the only vehicle on the resulting policy. Ms. Jungling told Respondent that she wanted full coverage for a financed truck. Respondent made her standard sales presentation to Ms. Jungling. She gathered the basic information described in Finding of Fact 7 above, then gave Ms. Jungling a price quote that included the amount of the down payment and monthly payment amounts. Included in the price quote were the optional vehicle protection plan and a term life insurance policy. Respondent explained to Ms. Jungling that the optional vehicle protection plan included $125 per day for hospitalization resulting from an accident and $25 per day for a rental car if the insured car is in an accident or is stolen. Ms. Jungling agreed to the price quote. Respondent next went over a pen sale sheet with Ms. Jungling. As noted in the general pen sale findings above, Ms. Jungling did not deny having seen the pen sale sheet and admitted that she signed it. The pen sale document was different from that shown to Mr. Gatlin because Direct General had ceased offering the travel protection plan and instead offered the vehicle protection plan. See footnote 4, supra. The signed pen sale sheet indicated that Ms. Jungling accepted the vehicle protection plan and the term life insurance policy. It also indicated that she rejected optional uninsured motorist, medical payment, accidental death, comprehensive and collision policies. Respondent next printed the policy paperwork and reviewed it with Ms. Jungling. Ms. Jungling signed the vehicle protection plan application on the signature line, directly beneath the following language: "The purchase of this plan is optional and is not required with your auto insurance policy. I hereby request that the above coverages be placed in effect on the date and for the term indicated." The application indicated that Ms. Jungling was opting for a "family plan"8 with a term of one year. Ms. Jungling also signed a separate page titled, "Optional Vehicle Protection Plan Summary & Acknowledgement." This form listed the coverages and limitations provided under the vehicle protection plan. Below this listing, in bold type, was the statement, "Please Read Your Policy Carefully For A Full Explanation of Benefits." Beneath the bold type was the following language: Purchasing the Vehicle Protection Plan is not a condition of purchasing your automobile policy. I hereby acknowledge that my agent has fully explained to me and I understand: the coverage provided under the Vehicle Protection Plan; that the Vehicle Protection Plan is an optional insurance product that is separate from my automobile insurance policy; that purchasing this optional Vehicle Protection Plan is not a condition of purchasing my automobile insurance policy; I have made an informed decision to purchase the Vehicle Protection Plan, and I have received a copy of my signed acknowledgement. Insured Signature Date I HEREBY REJECT THIS VALUABLE COVERAGE: Insured Signature Date Ms. Jungling signed the first signature line, indicating her acceptance of the policy. Respondent went over the documents relating to the term life policy that Ms. Jungling accepted on the pen sale sheet. The policy named Mr. Johnson as the beneficiary on the $10,000 policy, and stated an annual premium of $108.00. Ms. Jungling initialed her "no" answers to the standard insurability questions, and signed and dated her acceptance of the policy on the signature line provided. Respondent showed Ms. Jungling an "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)" spreadsheet identical in form to that shown Mr. Gatlin. The "Optional Policies" subheading listed the optional policies, their premium amounts, and the total estimated cost of all products. These optional items were individually circled by Respondent and initialed by Ms. Jungling. The spreadsheet contained language identical to that set forth in Finding of Fact 18 above. Ms. Jungling signed and dated the sheet in the spaces provided. Respondent presented the premium finance agreement to Ms. Jungling in the same fashion described in Finding of Fact 26 above. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the three policies (auto, life, and vehicle protection) accepted by Ms. Jungling, totaling $3,052.00, plus $9.80 in documentary stamp tax, less a down payment of $295.00, for a total amount financed of $2,766.80. The page disclosed the finance charge ($308.35) and the annual percentage rate of the loan (23.51%). Ms. Jungling opted to make 12 monthly payments of $256.26, and initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate her acceptance of the loan terms. Finally, Respondent showed Ms. Jungling the Insurance Premium Financing Disclosure Form. The itemization for Ms. Jungling's policies read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $491 Property Damage Liability (PD) $405 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)[9] $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $782 Medical Payments $0 Uninsured Motorist $0 Comprehensive $131 Collision $830 Accidental Death $20 Towing $0 Rental $0 Life Insurance $98 Accident Medical Plan $0 Vehicle Protection Insurance $260 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $3,052 Document Stamp Tax, if applicable $9.80 Less Down Payment applied $295.00 AMOUNT FINANCED (loaned to you) $2,766.80 I, Gabriella N. Jungling, have read the above and understand the coverages I am buying and how much they cost. Signature of Named Insured Date Ms. Jungling signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. Ms. Jungling testified that she already has a life insurance policy through her employer, Wells Fargo, and that she told Respondent that she was not interested in buying more. She admitted that the initials and signatures on the life insurance policy were hers, but had no recollection of Respondent's explanation of the policy. Ms. Jungling believed that she would have recalled an explanation had one been given by Respondent, and stated that she would have rejected the policy had Respondent told her it would cost $108.00 over and above the amount she was paying for auto insurance. However, Ms. Jungling conceded that Respondent did not rush her through the signing process. Ms. Jungling was in a hurry to purchase insurance and get back to her job. She admitted that Respondent presented the paperwork page by page, and that nothing prevented her from reading the paperwork. Ms. Jungling had no problem with the price quoted by Respondent. The life insurance paperwork plainly states, in bold lettering above Ms. Jungling's signature, that the annual premium for the policy is $108.00. The price of the policy is also stated on the Explanation of Policies, Coverages and Cost Breakdown page and on the Insurance Premium Financing Disclosure Form, both of which were signed by Ms. Jungling. Ms. Jungling also did not recall the explanation given to her by Respondent of the vehicle protection plan paperwork. She testified that she would have rejected the policy if Respondent had told her that it was separate and apart from the automobile insurance required by law. However, as noted above, the Optional Vehicle Protection Plan Summary & Acknowledgement page clearly stated that the vehicle protection plan was not a condition of purchasing an automobile policy and was an optional product separate from the automobile insurance policy. Ms. Jungling acknowledged that she signed this page. Ms. Jungling testified that she did not really read her insurance paperwork until she received a call from a Department investigator, who asked if she had knowingly purchased life insurance and the vehicle protection plan. Ms. Jungling gave a statement to a Department investigator in February 2007. On March 16, 2007, she went to Respondent's office and signed the paperwork to cancel the term life and vehicle protection policies, for which she received a pro-rated refund. The next Complaining Customer was Bruce Hansen (Counts VI and VII). On August 19, 2006, Mr. Hansen entered Respondent's Cash Register office to purchase insurance. Mr. Hansen testified that he has done business with Cash Register for years, but this was the first time he had done business with Respondent's office. Mr. Hansen stated that he had never bought anything other than basic auto coverage from Cash Register, and had no intention of buying anything else when he walked into Respondent's office. Mr. Hansen was purchasing new insurance, not renewing an existing policy. In fact, his driver's license had been suspended for lack of insurance coverage. Mr. Hansen testified that he told Respondent he wanted the most basic insurance that would get his license reinstated. He owned his car outright, and therefore was unconcerned about satisfying a financing entity. Respondent made her standard presentation to Mr. Hansen. She gathered the basic information described in Finding of Fact 7 above, then gave Mr. Hansen a price quote that included the amount of the down payment and monthly payment amounts. Included in the price quote were the optional vehicle protection plan and a term life insurance policy. Mr. Hansen agreed to the price quote. Respondent next went over a pen sale sheet with Mr. Hansen. As noted in the general pen sale findings above, Mr. Hansen did not deny having seen the pen sale sheet and admitted that he signed it. The pen sale document was identical to that shown to Ms. Jungling. Respondent used the pen sale sheet to explain to Mr. Hansen that the optional vehicle protection plan included a $1,000 medical expense that could be used toward his PIP deductible, hospital coverage of $125 per day, and rental car reimbursement of $25 per day if the insured car is in an accident or is stolen. Respondent also used the pen sale sheet to explain the term life insurance offered in the price quote. The signed pen sale sheet indicated that Mr. Hansen accepted the vehicle protection plan and the term life insurance policy. It also indicated that he rejected optional uninsured motorist, medical payment, accidental death, comprehensive and collision policies. Respondent next printed the policy paperwork and reviewed it with Mr. Hansen. The paperwork for the vehicle protection plan application was identical to that described in Findings of Fact 45 and 46 relating to Ms. Jungling. Mr. Hansen opted for the "individual plan" with a term of one year. He signed on the signature line of the application page, and signed the "Optional Vehicle Protection Plan Summary & Acknowledgement" page indicating his acceptance of this optional policy. Respondent went over the documents relating to the term life policy. The policy named Mr. Hansen's mother, who lived with Mr. Hansen, as the beneficiary on the $10,000 policy, and stated an annual premium of $108.00. Mr. Hansen initialed "no" answers to the standard insurability questions, and signed and dated his acceptance of the policy on the signature line provided. Respondent showed Mr. Hansen an "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)" spreadsheet identical in form to that shown Mr. Gatlin and Ms. Jungling. The "Optional Policies" subheading listed the optional policies, their premium amounts, and the total estimated cost of all products. These optional items were individually circled by Respondent and initialed by Mr. Hansen. The spreadsheet contained language identical to that set forth in Finding of Fact 18 above. Mr. Hansen signed and dated the sheet in the spaces provided. Respondent presented the premium finance agreement to Mr. Hansen in the same fashion described in Finding of Fact 26 above. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the three policies (auto, life, and vehicle protection) accepted by Mr. Hansen, totaling $833.00, plus $2.80 in documentary stamp tax, less a down payment of $92.00, for a total amount financed of $743.80. The page disclosed the finance charge ($93.36) and the annual percentage rate of the loan (26.56%). Mr. Hansen opted to make 10 monthly payments of $83.72, initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate his acceptance of the loan terms. Finally, Respondent showed Mr. Hansen the Insurance Premium Financing Disclosure Form. The itemization for Mr. Hansen's policies read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $311 Property Damage Liability (PD) $219 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)[10] $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $0 Medical Payments $0 Uninsured Motorist $0 Comprehensive $0 Collision $0 Accidental Death $0 Towing $0 Rental $0 Life Insurance $98 Accident Medical Plan $0 Vehicle Protection Insurance $170 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $833 Document Stamp Tax, if applicable $2.80 Less Down Payment applied $92.00 AMOUNT FINANCED (loaned to you) $743.80 I, Bruce K. Hansen, have read the above and understand the coverages I am buying and how much they cost. Signature of Named Insured Date Mr. Hansen signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. Mr. Hansen testified that he left Respondent's office believing he had bought only basic automobile insurance. He did not recall Respondent's explanations of the optional policies, and conceded that he was in a hurry to complete the transaction and spent a total of a half-hour in Respondent's office that day. Mr. Hansen testified that "I was flipping page after page, just signing my name to get out of there . . . I was trusting the person I was working with." Mr. Hansen testified that he did not recall Respondent explaining that the vehicle protection plan was a separate optional policy that would cost him an extra $170. He did recall Respondent asking the insurability questions related to the life insurance policy, but he thought they were just "procedure." Mr. Hansen conceded that Respondent might have explained every page of the paperwork to him, but that he was not paying attention. Mr. Hansen left Respondent's office with a copy of all the paperwork on his policies. He never looked at the paperwork until he was contacted by a Department investigator in February 2007. Mr. Hansen gave a statement to the Department investigator and agreed to testify in order to "stop stuff like this from happening," as well as try to obtain a full refund for the vehicle protection and term life policies. On March 3, 2007, he went to Respondent's office and signed the paperwork to cancel the term life and vehicle protection policies, for which he received a pro-rated refund. The final Complaining Customer was Sidney Dossantos (Counts VIII and IX). On July 20, 2006, Mr. Dossantos entered Respondent's Cash Register office to purchase insurance. Mr. Dossantos was renewing his policy with Direct General, though this was the first time he had done business with Respondent's office. In August 2005, Mr. Dossantos had purchased auto insurance plus an optional accident medical protection plan, a travel protection plan, and a term life insurance policy. Mr. Dossantos testified that he told Petitioner that he wished to purchase only basic automobile insurance, and that he rejected the optional term life and vehicle protection policies when Petitioner offered them. Respondent testified that her initial procedure is different with a renewing customer. She looks up the customer on her computer to verify the existing policies and determine if any money is owed. She verifies the customer's name, address and phone number. Respondent testified that the address is important because the customer's zip code is partially determinative of the rates offered on auto insurance. Respondent stated that the computer also lists the optional policies that are also due for renewal, and that it is her practice to go over these and inquire whether the customer wants to renew them. Mr. Dossantos' case was complicated by the fact that Direct General no longer offered the travel protection plan as a separate product. In these cases, Respondent would explain the vehicle protection plan, which was the current equivalent of the accident medical protection and travel protection plans that Mr. Dossantos purchased in 2005. See footnote 4, supra. Respondent testified that, after the customer verifies the information on file and states which policies he wishes to renew, she goes over a pen sale sheet with the customer. As noted in the general pen sale findings above, Mr. Dossantos did not deny having seen the pen sale sheet and admitted that he signed it. The pen sale document was identical to those shown to Ms. Jungling and Mr. Hansen. The signed pen sale sheet indicated that Mr. Dossantos accepted the vehicle protection plan and the term life insurance policy. It also indicated that he rejected optional uninsured motorist, medical payment, accidental death, comprehensive and collision policies. Respondent next printed the policy paperwork and reviewed it with Mr. Dossantos. The paperwork for the vehicle protection plan application was identical to that described in Findings of Fact 45 and 46 relating to Ms. Jungling. Mr. Dossantos opted for the "individual plan" with a term of one year. He signed on the signature line of the application page, and signed the "Optional Vehicle Protection Plan Summary & Acknowledgement" page indicating his acceptance of this optional policy. Respondent went over the documents relating to the term life policy. The policy named Mr. Dossantos' parents as the beneficiaries on the $10,000 policy, and stated an annual premium of $108.00. Mr. Dossantos was not asked the standard insurability questions, because this was a renewal of an existing policy. Mr. Dossantos signed and dated his acceptance of the policy on the signature line provided. Respondent showed Mr. Dossantos an "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)" spreadsheet identical in form to that shown to Mr. Gatlin, Ms. Jungling, and Mr. Hansen. The "Optional Policies" subheading listed the optional policies, their premium amounts, and the total estimated cost of all products. These optional items were individually circled by Respondent and initialed by Mr. Dossantos. The spreadsheet contained language identical to that set forth in Finding of Fact 18 above. Mr. Dossantos signed and dated the sheet in the spaces provided. Respondent presented the premium finance agreement to Mr. Dossantos in the same fashion described in Finding of Fact 26 above. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the three policies (auto, life, and vehicle protection) accepted by Mr. Dossantos, totaling $913.00, plus $3.15 in documentary stamp tax, less a down payment of $80.00, for a total amount financed of $836.15. The page disclosed the finance charge ($102.47) and the annual percentage rate of the loan (25.93%). Mr. Dossantos opted to make 10 monthly payments of $93.86, initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate his acceptance of the loan terms. Finally, Respondent showed Mr. Dossantos the Insurance Premium Financing Disclosure Form. The itemization for Mr. Dossantos' policies read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $368 Property Damage Liability (PD) $242 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)[11] $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $0 Medical Payments $0 Uninsured Motorist $0 Comprehensive $0 Collision $0 Accidental Death $0 Towing $0 Rental $0 Life Insurance $98 Accident Medical Plan $0 Vehicle Protection Insurance $170 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $913 Document Stamp Tax, if applicable $3.15 Less Down Payment applied $80.00 AMOUNT FINANCED (loaned to you) $836.15 I, Sidney Dossantos, have read the above and understand the coverages I am buying and how much they cost. Signature of Named Insured Date Mr. Dossantos signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. As noted above, Mr. Dossantos testified that he told Respondent he only wanted basic automobile insurance. Mr. Dossantos, a 25-year-old college student at the time he purchased insurance from Respondent, acknowledged having purchased the optional policies the previous year, when he was still living with his parents. However, in July 2006 he was living in an apartment with his girlfriend and money was tighter. He received life insurance through his employer, Publix Supermarkets, and did not want more. Mr. Dossantos conceded that his policy paperwork clearly stated that the vehicle protection plan was optional, but that he did not read it during the sale. Mr. Dossantos simply signed whatever papers Respondent placed in front of him. Mr. Dossantos testified that when he walked out of Respondent's office on July 20, 2006, he believed that he had bought basic auto insurance and nothing else. Like Ms. Jungling and Mr. Hansen, he learned otherwise only after being contacted by the Department's investigator in February 2007. Unlike Ms. Jungling and Mr. Hansen, Mr. Dossantos did not later cancel the optional policies. All four of the Complaining Customers credibly testified that the Department made no promises that they would obtain full refunds of the premiums paid on the optional policies in exchange for their written statements or their testimony in this proceeding. On or about August 9, 2006, Respondent changed her principal business street address from 6318 U.S. Highway 19 North, New Port Richey, Florida, to 5116 U.S. Highway 19 North, New Port Richey, Florida, but did not notify the Department of this change in principal business street address until on or about March 3, 2007.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner issue a final order finding Respondent guilty of committing the violation alleged in Count X of the Administrative Complaint, fining her $250.00 for such violation, and dismissing the remaining counts of the Administrative Complaint. DONE AND ENTERED this 8th day of February, 2008, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 8th day of February, 2008.
The Issue Should discipline be imposed by Petitioner against Respondent's license as a limited customer representative (4-42), held pursuant to Chapter 626, Florida Statutes?
Findings Of Fact Facts Admitted by Answer Pursuant to Chapter 626, Florida Statutes, you, Anna Michelle Mack, currently are licensed in this state as a limited customer representative (4-42), and were so licensed at all times relevant to the dates and occurrences referenced herein. Your license identification no. is A161579. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services has jurisdiction over your license and appointments. At all times relevant to the dates and occurrences referenced herein you, Anna Michelle Mack, were employed with Beck Insurance, in Jacksonville, Florida. At all times relevant to the dates and occurrences referenced herein you, Anna Michelle Mack, had a duly-appointed supervising agent, Monica Beck. Count I - Nelson Yettman On July 20, 2001, Nelson Yettman purchased mobile home homeowner's insurance from Beck Insurance. In the interest of obtaining the insurance policy he completed an application upon a form related to the Florida Residential Property and Casualty Joint Underwriting Association (FRPCJUA), Petitioner's Exhibit numbered 4. He signed the application. It reflects the signature of Monica Beck as agent, but Mr. Yettman dealt with the Respondent in the details involved with the transaction. On July 21, 2001, the only person that Mr. Yettman did business with at Beck Insurance from the beginning until the end of the transaction was the Respondent. Respondent made no explanation to Mr. Yettman as to her status as an insurance agent or not. At the time, Respondent was a limited customer representative (4-42), as she has remained. Monica Beck bound the mobile home homeowner's policy as the primary agent for Beck Insurance. On July 20, 2001, Mr. Yettman paid $377 for the mobile home homeowner's policy premium. In return Respondent provided Mr. Yettman a receipt noting that payment, Petitioner's Exhibit numbered 5. The receipt had Respondent's first name affixed. The receipt also referred to a $75 charge for "Nation Homeowners." That amount was not tendered on July 20, 2001. The reference to "Nation Homeowners" refers to a product from Nation Safe Drivers described as Homeowners/Renters contract customer service. Mr. Yettman signed for Plan 3, the $75 Plan within that service. This arrangement was one in which, according to the document, executed the agreement between the contracting parties as set forth in Petitioner's Exhibit numbered 6, was "NATION HOMEOWNERS/RENTERS PLAN agrees that the person named in the schedule made a part heheof [sic], in consideration of the payment of fee [sic] provided in paid schedule, is a nw/amed [sic] member of the NATION HOMEOWNERS/RENTERS PLAN, and entitled to all the services benefits and proviledges [sic] hereof, for and in connection with the ownership, or rental of a home or apartment in the name of the member, for the period set forth, within the United States of America, its territories, possessions, or Canada, . . . ." In particular, the services being offered were related to: Burglary & Vandalism Reward and Emblem: Nation Homeowners/Renters Plan; Extra Living Expense; Credit Card Protection; Major Appliance Allowance; Ambulance Service; Lock and Key Service; Notary Public Service; Touring and Travel Services; World Wide Tour Service; and Post Office Box. Mr. Yettman acknowledges signing Petitioner's Exhibit numbered 6, the Homeowners/Renters contract and that on July 23, 2001, he paid the $75 called for in the contract. To that end, on July 23, 2001, Respondent provided a receipt to Mr. Yettman with her first name affixed noting payment of the additional $75 Petitioner's Exhibit numbered 5. While Mr. Yettman realizes that he paid $75 for the Homeowners/Renters contract, no explanation was given to him by Respondent concerning the purchase. Mr. Yettman did not realize that it was an optional item unrelated to his mobile home homeowner's policy. He did not realize that there was an additional charge for the purchase until he paid the $377 for the mobile home homeowner's policy and was reminded that he owned an additional $75 which he eventually paid. Mr. Yettman asked what the additional $75 was for. Respondent told Mr. Yettman in response that he needed to pay another $75. Mr. Yettman went home and discussed the extra payment with his wife, and returned two days later to pay the extra $75. Mr. Yettman returned to make payment with the belief that the extra $75 was something in relation to the mobile home homeowner's insurance premium. Mr. Yettman had not read the details set forth in the Homeowners/Renters contract, Petitioner's Exhibit numbered 6. When Mr. Yettman returned on July 23, 2001, to pay the additional $75 he found out that the money was in relation to the Homeowners/Renters contract. With this knowledge he did not reject the contract at that time. Nonetheless, his overall impression remained that $452 paid in the aggregate was for a homeowner's insurance policy. As Respondent identified in her testimony, she is aware that her limited customer representative license (4-42) pertains to her opportunity to write and discuss automobile insurance. It is limited to that activity. It is unrelated to the ability to write insurance for property and casualty insurance, such as homeowner's insurance, an opportunity reserved to a general lines agent (2-20). Notwithstanding this limitation, Respondent believes that she was entitled to obtain experience while employed at Beck Insurance, under supervision leading to her licensure as a general lines agent (2-20). Respondent asserts that she was undergoing training toward that goal from Jennifer L. Faloon, a Beck Insurance employee who held a general lines agent (2-20) license. In this connection, to the knowledge of Respondent, only three or four homeowner's policies are written at Beck Insurance per month. Respondent asked Jennifer Faloon to help her in processing the application for mobile home homeowner's insurance completed by Mr. Yettman, in such matters as an item referred to as a cost estimator. Respondent wrote in the information on the application, as well as the receipts for payment that have been previously described. Respondent, in her testimony, acknowledged that the Homeowners/Renters contract was involved with items unrelated to the mobile home homeowner's insurance policy, which Mr. Yettman had come to Beck Insurance to purchase. Respondent describes the manner in which she would have presented the Homeowners/Renters contract to Mr. Yettman by telling him what it covers. "It covers the ambulance, it covers lock and key, notary, touring, covers major appliance allowance, credit cards, and stuff like that." Respondent indicated that the signature of the customer is obtained for the Homeowners/Renters contract "to let them know that they have this." This is a similar concept, as a product, to the towing and rental product sold to customer Laura Brown, whose transaction is also discussed in this case. Respondent's remarks about her description to Mr. Yettman are perceived as being what would be typical in dealing with a Homeowners/Renters contract with a customer, not specifically related to Mr. Yettman. Respondent does not recall any specific questions, which Mr. Yettman may have had about the Homeowners/Renters contract. When asked if Mr. Yettman signed the contract in her presence, she replied "Yes, Sir, he would have," meaning again that this would be the expected outcome. Respondent explained that the different plans described in the Homeowners/Renters contract are not presented to the customer by any method. Count II - Carolyn Grant On March 12, 2001, Carolyn Grant purchased automobile insurance from Beck Insurance, together with auto rental reimbursement and towing service reimbursement from All World All Safe Drivers (All World). These transactions are evidenced in applications, questionnaires, an inspection form and a receipt for payment, variously described in Petitioner's Exhibits numbered 8 through 11, and Respondent's Exhibit numbered 1. Respondent did not deal with Ms. Grant in the transactions. Count III - Laura Brown On January 21, 2002, Laura Brown purchased automobile insurance through Beck Insurance. She dealt with Valerie Webster and Anna Michelle Mack, employees at Beck Insurance. Ms. Brown dealt primarily with Ms. Webster during the transaction, with Ms. Mack there to assist Ms. Webster on and off. At various times in 2002 and 2003 Valerie Lynn Webster had applied to Petitioner to be licensed as a (2-14) life, including variable annuity agent and a limited customer representative (4-42). No licenses were issued to Ms. Webster. Before arriving at Beck Insurance, Ms. Brown had obtained a preliminary quotation by telephone from the agency related to the purchase of automobile insurance. Ms. Brown was interested in obtaining full coverage for her car. The nature of the discussion at the agency was about the purchase of automobile insurance, not about a towing and rental contract, motor club membership, or the All World plan. A down-payment was made with installments to follow, associated with the automobile insurance. Ms. Brown thought that the entire amount of the down-payment was for the insurance premium. No explanation was made to the effect that the motor club was separate from the automobile insurance policy. When Ms. Brown left the Beck Insurance agency, she did not realize that she had purchased anything other than automobile insurance. Petitioner's Exhibit numbered 12 (DOAH Case No. 03-3666PL) is the automobile insurance application through Superior executed by Ms. Brown on the date in question. It was signed by Ms. Faloon noting that the policy was bound. Ms. Faloon had no other direct involvement in the transaction. Petitioner's Exhibit numbered 13 (DOAH Case No. 03-3666PL) is a receipt dated January 22, 2002, issued to Ms. Brown by Ms. Webster and Ms. Mack, totaling $247 that Ms. Brown paid on that date. It is broken out as $184 for Superior, $60 for All World Motor Club, and $3 for a motor vehicle report. Petitioner's Exhibit numbered 14 (DOAH Case No. 03-3666PL), is an executed application for All World automobile rental and towing service reimbursement executed by Ms. Brown for a period January 22, 2002, through June 22, 2002, under Plan 3. This form does not reflect the cost of that plan. Ms. Brown executed the Beck Insurance questionnaire, Petitioner's Exhibit numbered 15 (DOAH Case No. 03-3666PL) that contains item 11 relating to the motor club stating, "I am aware that the towing and rental car reimbursement is optional. I want to carry this coverage. (This coverage can only be renewed by coming into the office, as it is not written with your auto carrier.)" This creates an option to purchase then immediately withdraws the option. The form additionally sets forth in another place, that the towing and rental car reimbursement is optional but without the opportunity to decline that option that is specifically described for other optional coverage in the form, such as uninsured motorists and medical payments. In an affidavit containing Ms. Brown's statement prepared on May 23, 2002, Ms. Brown stated, "I knew that I had purchased towing or rental reimbursement policy for my policy 1/22/2002/2003 because I saw the form and I asked questions about it. The lady in picture number 10 (Ms. Mack depicted in Petitioner's Exhibit numbered 17, DOAH Case No. 03-3666PL), told me I would get so many tows for free, she also told me it was from Beck Insurance." But in that affidavit Ms. Brown goes on to state, "I did not know that I paid an additional $60 for the towing policy. I thought this was just something I got with the car insurance policy." Nothing in Petitioner's Exhibit numbered 14 (DOAH Case No. 03-3666PL), the application for All World towing and rental reflects the cost of Plan 3. That was made known in the receipt, Petitioner's Exhibit numbered 13 (DOAH Case No. 03-3666PL). Ms. Brown does not recall whether Ms. Mack, in her participation in the transaction, indicated that Ms. Mack's status at the Beck Insurance agency was other than that of an insurance agent. Disciplinary History Respondent has no prior disciplinary history.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That a final order be entered finding Respondent in violation of those provisions within Counts I and III that have been referred to, dismissing the others within those Counts, dismissing Count II, suspending her license for one-year, placing Respondent on two years probation, and requiring attendance at such continuing education courses as deemed appropriate. DONE AND ENTERED this 3rd day of June, 2004, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS 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 3rd day of June, 2004.
Findings Of Fact At all times pertinent to the allegations contained herein, the Petitioner, Department of Insurance, (Department), was the state agency responsible for the licensing and registration of insurance agents in Florida and for the regulation of the insurance industry in this state. At the same time, Respondent was licensed in Florida as a general lines agent, a life and health (debit) agent, a life and health agent, and as a dental health care services contract salesman. He was president, director and registered agent of, and was the only licensed insurance agent working at, Devor of Brandon, a general lines insurance agency located in Brandon, Florida. At the times in issue, Respondent employed Jay Schetina, not a licensed insurance agent in Florida, to work as a salesman at the Brandon office. Mr. Schetina worked directly under the supervision and control of the Respondent and was in charge of the Brandon office when Respondent, who worked four days a week at the other office he owned in Cape Coral, Florida was not there. On January 11, 1989, Nellie Wynperle Henry went to the Respondent's Brandon agency to buy automobile insurance. She dealt with Mr. Schetina who sold her a policy to be issued by Underwriters Guarantee Insurance Company for an annual premium of $1,288.00, and to be effective January 17, 1989. She gave Mr. Schetina a $429.00 down payment and ultimately was issued policy no. 12207947. The policy reflected Respondent as agent for the company. Though she was not told what it was and does not recall signing it, an application for an auto service contract, to be issued by Century Auto Service, was also prepared and bears what purports to be her signature. That application was prepared and submitted without her knowledge or permission. The fee for the policy was $40.00, of which the agency got to keep 90%. Since she was already a member of AAA and had their service coverage, Ms. Wynperle did not need the service club policy sold to her at Respondent's agency and, in fact, had told Mr. Schetina so. Though she was charged for the service policy, she never received a copy of it and did not know she had it. At the time she applied for the auto insurance, Ms. Wynperle also applied to finance the unpaid balance due over and above the down payment through Underwriter's Financial of Florida, Inc., a premium finance company. The premium finance agreement includes the amount of the unwanted service policy, and is also incorrect in that it reflects that the down payment tendered by Ms. Wynperle was only $389.00. Dorothy Lunsford purchased auto insurance from the Respondent's agency on January 18, 1989. The premium for her policy, also with Underwriters Guarantee, was $707.00 and she made a down payment, by check, of $217.00. She financed the balance but the application for financing showed a down payment of only $177.00. On the same day, an application form for an auto service policy was also submitted in Ms. Lunsford's name. The cost of this policy was $40.00. On January 31, 1989 Joanne Coleman applied for automobile insurance at Respondent's agency. She was to be insured by two companies' policies, one issued by United Guarantee and one by Hamilton Insurance Company. The total combined premium was $670.00. Both policies were issued and Respondent's agency was listed as agent on both. She paid for the policies with a check for $687.00. No explanation was given for the difference. At the same time she applied for the auto insurance, though she had had no discussion with the clerk with whom she dealt at the agency about it, an application for an auto service policy was also filled out in her name, carrying a premium of $20.00. She did not receive a service policy. She neither authorized or consented to the submittal of the service club application in her name. Ms. Coleman's memory of the events, however, was not clear, but it is clear that she did not want the service policy she was charged for. On February 9, 1989, Kathy Gall applied for auto insurance with the Respondent's agency. The annual premium was$733.00 and at the time, she gave the agent a check for the down payment in the amount of $240.00. She applied to finance the balance but when prepared at the agency, the application form reflected a down payment of only $220.00. This was in error. However, at that same visit, an application for an auto service policy was also filled out in Ms. Gall's name. The policy bore a premium of $20.00. At no time did Ms. Gall authorize that service policy nor, in fact, was it ever discussed with her and she did not know she was purchasing it. Finally, on February 6, 1989, Lucinda Romano applied with the Respondent's agency for an automobile insurance policy with Allegheny Mutual Casualty Company. At that time, she gave Devor a check for $61.80. Though at the time she went into the agency she did not intend to purchase an auto service contract because she was having financial problems and wanted only the most basic lawful coverage, and did not sign the application for it, she was charged for an auto service policy at a cost of $20.00. She thought she was purchasing only PIP coverage which cost $60.00. Ms. Romano subsequently requested a refund of the amount she paid for the auto service policy and the payment was refunded by check on May 19, 1989 from Jay Schetina. Sometime after the Devor agency was taken over by Sam Capitano/Action Insurance Agency, and the latter's employees were servicing the company's files, Ms. Brown-Parker, an employee of Action found the auto service policies, including those issued in the name of Ms. Romano, Ms. Gall, Ms. Coleman, and Ms. Wynperle,and Ms. Lunsford, which had not been transmitted to the policyholders. Both copies of the policy were in the file. Respondent is also the subject of a Consent Order issued on February 26, 1990, subsequent to the date of the matters in issue herein. The Settlement Stipulation For Consent Order, on which the Order is based, refers to the matters in issue here which relate to Respondent's allowing his non-licensed employees to use his license to practice insurance, and allowed the agency to operate, at least at times, without an active, full time agent in charge. At paragraph 10(c), the Stipulation provides, in part: ... If the Department has good cause to believe that, after the issuance of the Consent Order in this cause, unlicensed individuals are transacting insurance at any agency at which Respondent operates as a general lines agent ..., or that any agency at which Respondent operates ... is not at all times after issuance of the Consent Order in this cause under the active, full-time charge of a general lines agency, the Department shall initiate proceedings to suspend or revoke the licenses and eligibility for licensure and registrations of the Respondent based upon the original grounds as alleged in the Administrative Complaint referred to herein. The original charges referred to, supra, relate to Respondent's alleged authorization of unlicensed employees to transact insurance, and his alleged authorization of the agency to, at times, operate without an active, full-time agent in charge. It did not refer to the incidents alleged herein, to wit: theimproper charges for undesired auto club membership and the preparation of false premium finance applications.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be issued dismissing the allegations that Respondent, John W. Ganter, violated Section 626.611, Florida Statutes, but finding him guilty of violations of Section 626.621, 626.9521 and 626.9541(1)(k)1, Florida Statutes, as to Ms. Wynperle, Ms. Gall, Ms. Coleman, Ms. Romano, and Ms. Lunsford, and imposing a suspension of his licenses and eligibility for licensure for a period of one year. However, under the provisions of Section 626.691, it is further recommended that in lieu of the suspension, the Respondent be placed on probation for a period of two years under such terms and conditions as specified by the Department. DONE and ENTERED in Tallahassee, Florida this 10th day of October, 1991. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of October, 1991. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: 1. - 5. Accepted and incorporated herein. 6. & 7. Accepted and incorporated herein. Accepted and incorporated herein. - 12. Accepted and incorporated herein. 13. - 16. Accepted and incorporated herein. 17. - 19. Accepted and incorporated herein. 20. - 22. Accepted and incorporated herein. 23. & 24. Accepted. 25. Not a Finding of Fact. FOR THE RESPONDENT: 1. & 2. Accepted and incorporated herein. Accepted expect for the representation that Petitioner presented no evidence as to Count II. The Stipulation of the parties clearly makes detailed reference to the allegations regarding Ms. Lunsford. Accepted as to Counts VI, VII & VIII. Rejected as to Count II. Accepted and incorporated herein. - 8. Accepted and incorporated herein. Rejected. - 14. Accepted and incorporated herein. Rejected. - 20. Accepted and incorporated herein. Rejected. & 23. Accepted and incorporated herein. Accepted. Accepted. Accepted. Rejected. - 34. Accepted as to the actual dealings of the Respondent. COPIES FURNISHED: David D. Hershel, Esquire Division of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Orrin R. Beilly, Esquire The Citizens Building, Suite 705 105 S. Narcissus Avenue West Palm Beach, Florida 33401 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil General Counsel The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue The issues are (1) whether respondent's licenses as a life and health (debit) agent, life, health and variable annuity contracts agent, life agent, life and health agent, general lines agent and health agent should be disciplined for the reasons stated in the amended administrative complaint, and (2) whether respondent's applications for the issuance and renewal of a resident license should be granted.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Stephen Schnur, was licensed and eligible for licensure as a life and health (debit) agent, life, health and variable annuity contracts agent, life agent, life and health agent, general lines agent - property, casualty, surety and miscellaneous lines, and health agent by petitioner, Department of Insurance and Treasurer (Department). When the events herein occurred, respondent was licensed as a property and casualty insurance agent for Clarendon National Insurance Company (CNIC) and had placed his license as a general lines agent with Devor Insurance Agency (DIA), an incorporated general lines insurance agency located at 6611 West Hillsborough Avenue, Tampa, Florida. He has been licensed by petitioner for approximately nineteen years. In August 1987 respondent was associated with Bill Ely Insurance (Ely) in Tampa, Florida. Because that firm was unable to write automobile insurance on young drivers, Schnur referred some of Ely's business to DIA, a firm owned by one Marcia Cline, who held no insurance licenses. In September 1987 Schnur received an offer from Cline of a weekly salary of $150 if he would place his property and casualty general lines agency license with DIA. After obtaining independent verification from petitioner that DIA had no pending "problems", and accepting Cline's representation, albeit false, that the firm had an errors and omissions policy, respondent accepted Cline's offer and placed his license with DIA effective that month. He continued to utilize his other licenses to sell insurance for Ely, his principal employer. It should also be noted that another unnamed general lines agent had placed her license at DIA during this same period of time. At first Schnur attempted to review all automobile insurance applications received by DIA. However, because of his duties at Ely, he was unable to devote more than a few hours per week to DIA. In view of this, he agreed to sign in blank applications and binders for Cline to use in his absence. In doing so, he relied upon Cline's honesty and integrity and assumed she would forward all applications and premiums to the insurance company and secure coverage for DIA's customers. Under this arrangement, Cline was considered to be an employee of DIA and operating under Schnur's direct supervision and control. In October 1987 five customers purchased various types of automobile insurance from Cline. 1/ Each customer gave Cline either cash or checks as payment for their policies. Although none of the customers met with or spoke with respondent, and dealt exclusively with Cline, each received a binder from Cline signed by respondent evidencing insurance with CNIC. In addition, Cline gave each customer a receipt of payment also carrying respondent's signature. As it turned out, Cline did not process the applications or forward them to CNIC. She also failed to remit any monies to the insurance company. Consequently, none of the customers received a policy from CNIC or any other insurance company. However, respondent had no reason to suspect anything since he periodically examined the office files during this period of time and found all documents in order. On January 3, 1988, respondent learned from other office personnel that there was a problem with Cline's handling of insurance applications. He immediately telephoned petitioner's Tampa district office the same day and advised that DIA applications were found unprocessed and in the waste basket. When Schnur asked if he should pull his license from DIA, he was told by petitioner's representative not to do anything. In the meantime, the other general lines agent at DIA pulled her license and left the state. On January 28, 1988 DIA sent a form letter to various customers, including the five who had purchased policies in October 1987. The letter read as follows: Dear We are writing you this letter concerning the insurance policy which you sought through our agency. Please consider this letter as official notification from our agency that you need to purchase insurance coverage from another agency or agencies as soon as possible. You have no insurance coverage on your vehicle or vehicles. Again, you must secure insurance on your vehicle or vehicles immediately, as in today!! Sincerely, Devor Insurance Agency It should be noted that none of the five customers received any refund of monies. In early February 1988 respondent pulled his license with DIA. Since then, he has worked full-time with Ely. Respondent has fully cooperated with the Department during the course of this investigation. At hearing, Schnur was can did and forthright and admitted he used extremely poor judgment in signing in blank the binders and receipts and relying on Cline's honesty. However, there was no intent on his part to violate the insurance code or otherwise harm the customers. He strongly desires to continue in the insurance profession, a field in which he has worked without a blemish for the last nineteen years. His present employer, Ely, has expressed complete trust and confidence in Schnur, allows him to handle all of the firm's money, and intends to reward him with a part ownership of that business. Other than the charges set forth in the pending amended administrative complaint, there is no basis upon which to deny the applications for renewal and issuance of a resident license.
Conclusions Paragraph 2 of Petitioner's exceptions takes exception to the Hearing Officer's Statement of the Issues, Preliminary Statement, Conclusions of Law, and Recommendation because none of these sections of the Recommended Order address the April 9, 1990 denial of the renewal of Respondent's resident license to represent C M Life Insurance Company as a life and health insurance agent. Petitioner filed a motion for consolidation regarding the April 9 denial on April 17, 1990. Although the record contains no Order ruling on-the last motion for consolidation, it appears that the parties agreed that the April 9 denial be considered together with the administrative complaint and the denial of Respondent's application to represent United States Life Insurance Company of NY as a life and health insurance agent (February 14, 1990) and the denial of Respondent's application to represent Acceleration Life Insurance Company as a life and health insurance agent (April 6, 1990). Because the three denials of Respondent's applications for licensure or renewal of licensure were based upon the allegations in the administrative complaint in this case, all three denials (February 14, April 6, and April 9, 1990) will be consolidated with the administrative complaint for disposition by this Final Order. Accordingly, Petitioner's exception numbered 2 is accepted. RULING ON PETITIONER'S EXCEPTION TO CONCLUSIONS OF LAW Paragraph 3 of Petitioner's Exceptions takes exception to the Hearing Officer's Conclusion of Law numbered 4 because that Conclusion of Law refers to Section 626.611(6), Florida Statutes, which was not alleged in the administrative complaint, and the Conclusion of Law does not refer to Section 626.611(7), Florida Statutes. Section 626.611(6), Florida Statutes addresses misrepresentations by insurance claims adjusters or agents in effecting claims settlements. Clearly, Section 626.611(6), Florida Statutes has no application to the instant case, and violation of that section was not charged in the administrative complaint. On the other hand, Section 626.611(7), Florida Statutes lists the demonstration of lack of fitness or trustworthiness to engage in the business of insurance as grounds for the-suspension or revocation of an insurance agent's license. This statute was included in the charges in each count of the administrative complaint. The hearing officer apparently considered Section 626.611(7), Florida Statutes, in his Conclusions of Law numbered 3 and 4. Accordingly, the citation to Section 626.611(6), Florida Statutes is deemed to be a typographical error and it is assumed that Section 626.611(7), Florida Statutes was the intended citation. In light of the foregoing, Petitioner's exception in Paragraph 3 is accepted. RULING ON PETITIONER'S EXCEPTION TO RECOMMENDATION Paragraph 4 of Petitioner's Exceptions takes exception to the Hearing Officer's Recommendation that Respondent's license be suspended for fifteen (15) days and that Respondent's applications for licensure be granted after the expiration of the fifteen-day suspension. After a complete evaluation of the record the hearing officer's recommended penalty of a 15-day suspension and acceptance of Respondent's applications after the 15-day suspension is hereby rejected for the following reasons: The Hearing Officer found, in Findings of Fact numbered 2, that Respondent accepted an offer to "place" his general lines insurance agent license with Marcia Cline, an unlicensed person. This finding is supported by the Respondent's testimony at hearing. (Tr. 71, 72) Respondent was compensated with a weekly salary of $150. (Tr. 72); The Hearing Officer found, in Findings of Fact numbered 3, that Respondent had signed, in blank, applications and binders for Cline to use in Respondent's absence. This finding is supported by Respondent's testimony at hearing. (Tr. 72, 79, 81); The Hearing Officer concluded, in Conclusions of Law numbered 4, that Cline wrongfully withheld premiums from the insurer, made willful misrepresentations to her customers, demonstrated a lack of trustworthiness, engaged in fraudulent and dishonest practices, and misappropriated monies belonging to others, as proscribed by sections 626.561(1), 626.611(5), 626.611(7), 626.611(9) and 626.611(10), Florida Statutes. The Hearing Officer further concluded that Respondent is responsible for Cline's wrongdoing pursuant to Section 626.734, Florida Statutes. (Concl. of Law #4); The Hearing Officer was of the opinion that Respondent was "the victim of circumstances which happened to place his license with the wrong person at the wrong time, and because of poor judgment, is now saddled with Cline's misconduct." (Concl. of Law #5). This circumstance, together with the facts that Respondent immediately notified the Department when he learned that Cline had misused his license (Finding of Fact #6) and that Respondent was candid and forthright under oath at the hearing of this matter and admitted that he used poor judgment (Finding of Fact *8), led the Hearing Officer to recommend the 15- day suspension. It should be noted that Respondent voluntarily "placed" his license with an unlicensed individual. (Tr. 71, 72). Not only was this "placing" of the license the result of poor judgment, but it is prohibited by Section 626.441, Florida Statutes. That section provides: 626.441 License or permit: transferability.--A license or permit issued under this part is valid only as to the person named and is not transferable to another person. S626.441, Fla. Stat. Accordingly, it is illegal to place an insurance agent's license on the wall of an agency in order to assist unlicensed persons in selling or servicing insurance policies in the absence of the licensed agent. However, because a violation of Section 626.441, Florida Statutes was not alleged in the Administrative Complaint, this final order does not rule on that issue. Additionally, agents are prohibited from supplying blank forms, applications and other supplies to unlicensed persons for use in soliciting, negotiating, or effecting contracts of insurance. S626.342, Fla. Stat. Respondent admitted that he signed blank applications and binders for Cline, an unlicensed individual, to use in his absence. (Fact Stipulation of March 5, 1990; Finding of Fact *3). Violation of Section 626.342, Florida Statutes was not alleged in the Administrative Complaint, and is not addressed by this Order. While Respondent was not charged with violation of Sections 626.342 and 626.441, Florida Statutes in the Administrative Complaint, his "poor judgment" in becoming involved in this illegal arrangement is an aggravating rather than a mitigating factor in this case. Accordingly, this aggravating factor should be considered together with the mitigating factors referred to by the Hearing Officer. The Hearing Officer concluded that Respondent is liable for the acts of Cline while his license and signature were used by Cline, and that therefore, Respondent is guilty of violating five subsections of Section 626.611, Florida Statutes. Section 626.611, Florida Statutes compels the Department of Insurance to deny, suspend, revoke, or refuse to renew or continue the license of any agent who commits any of the acts listed in Section 626.611, Florida Statutes. However, the mitigating factors found by the Hearing Officer in Conclusion of Law numbered 5, namely Respondent's immediate notification of the Department when he learned of possible wrongdoing and Respondent's cooperation in the investigation, make the 15-day suspension an appropriate, if lenient, penalty in this case. However, the aggravating factor of the improper situation entered into by Respondent in "placing" his license and supplying forms to Cline renders acceptance of Respondent's applications at the end of the 15-day suspension period inappropriate in this case. Petitioner's exception to the Hearing Officer's Recommendation is therefore accepted. IT IS THEREFORE ORDERED: That the Findings of Fact of the Hearing Officer are hereby adopted in toto as the Department's Findings of Fact. That the Conclusions of Law of the Hearing Officer are hereby adopted in toto with the exceptions noted above; That the recommendation of the Hearing Officer is hereby rejected for the reasons set forth in paragraph 4 above, Ruling on Petitioner's Exception to Recommendation; That Respondent is guilty of violating subsections 626.561(1), 626.611(1), 626.611(5), 626.611(7), 626.611(9), and 626.611(10), Florida Statutes; That as a result of Respondent's violations of the above referenced statutes, the licenses and eligibility for licensure of Respondent, Steven Schnur, are hereby SUSPENDED for a period of fifteen (15) days, effective upon the date of this Order. The denial letters dated February 14, 1990, April 6, 1990, and April 9, 1990 are hereby AFFIRMED. Upon expiration of the suspension period, Respondent is free to reapply for any insurance licenses, and the Department of Insurance shall not deny Respondent's applications based upon any of the facts and circumstances at issue in this action. Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to Section 120,68, Florida Statutes and Rule 9.110, Florida Rules of Appellate Procedure. Review proceedings must be instituted by filing a petition or notice of appeal with the General Counsel, acting as the agency clerk, at 412 Larson Building, Tallahassee, Florida 32399- 0300, and a copy of the same with the appropriate district court of appeal within thirty (30) days of the rendition this Order. ORDERED this 21 day of June , 1990. TOM GALLAGHER Treasurer and Insurance Commissioner Honorable Donald R. Alexander Hearing Officer Division of Administrative Hearings 1230 Apalachee Parkway Tallahassee, FL 32399-1550 Alan J. Kerben, Esquire 8814 Rocky Creek Drive Tampa, FL 33615 C. Christopher Anderson, III, Esquire Department of Insurance Division of Legal Services 412 Larson Building Tallahassee, FL 32399-0300
Recommendation Based on the foregoing findings of fact and conclusions of law, it is: RECOMMENDED that respondent be found guilty of violating subsections 626.561(1) and 626.611(5),(6),(9) and (10) that his licenses be suspended for fifteen days. The other charge should be dismissed with prejudice. It is further recommended that his applications for renewal and issuance of resident licenses be approved after the suspension is lifted. DONE AND ORDERED this 19 day of April, 1990, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administative 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 19 day of April, 1990.
The Issue Whether the Petitioner committed the violations alleged in the Amended Administrative Complaint filed October 14, 2003, 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 responsible for issuing licenses for insurance agents in the State of Florida, and for regulating and disciplining licensed insurance agents. Sections 626.016, 626.611, and 626.281, Florida Statutes (2004). At all times material to this proceeding, Mr. Pomerantz was licensed in Florida as a property and casualty general lines insurance agent, which is referred to as a "2-20 license." At all times material to this proceeding, Mr. Pomerantz did business as A Able insurance agency, an unincorporated entity located at 124 South Federal Highway, Pompano Beach, Florida. Mr. Pomerantz owned the A Able insurance agency, worked in the office in Pompano Beach, and was the agent in charge of the office. Automobile insurance was the primary product sold at the Pompano Beach office of the A Able insurance agency. No primary agent for the A Able insurance agency office in Pompano Beach was registered with the Department, but Mr. Pomerantz functioned as its de facto primary agent at that location. An insurance agency known as the Wide World of Insurance was, and perhaps still is, located in Margate, Florida. Mr. Pomerantz's brother, Randy Pomerantz, operated this agency. In the summer of 2000, the two offices merged, but the merger dissolved in the early spring of 2002. During the time that the two agencies operated as a single entity, they continued to maintain the two office locations. Applications and other paperwork generated in the Pompano office were, as a rule, sent to the Margate office for processing. Prior to May 2003, however, when he began working in a general administrative capacity at the Margate office, Mr. Pomerantz did not work in the Margate office and had no personal knowledge of the operations of the Margate office or the applications for automobile insurance handled by that office. At the times material to this proceeding, Mr. Pomerantz was the appointed agent for Ocean Harbor Insurance Company ("Ocean Harbor"), Southern Group Indemnity, Inc. ("Southern Group"), and U.S. Security Insurance Company ("U.S. Security"). As an appointed agent, Mr. Pomerantz, as well as agents working in the Pompano Beach office of the A Able insurance agency, acted on behalf of these companies, and the agents could bind coverage with the companies and accept premium payments on behalf of these companies. An insurance agent can "bind" automobile insurance coverage with an insurance company that has appointed or registered the agent as its representative by calling the insurance company and getting a binder number and time of day. A binder obligates the insurance company to provide the coverage specified until the binder is converted into an insurance policy or the binder is cancelled. Southern Group's agreement with Mr. Pomerantz required him to send the signed application for a new automobile insurance policy, for a renewal of an existing policy, or an amendment to an existing policy, together with a check or draft for the premium net commissions, postmarked within 72 hours of the time at which the coverage was bound. Although not reduced to writing, the standard policy of U.S. Security requires its appointed agents to mail the application and payment to the company immediately upon coverage being bound. Ocean Harbor's general rules applicable to its appointed agents require that a completed application and the required premium, together with other documentation, be received by the company within five working days of the date on which coverage is bound. Within 20 to 30 days after coverage is bound on an application, each of these three companies sends a notice to the agent listing the binders for which the company has not received the application, premium, and other required paperwork. The notice advises the agent that the binder is cancelled. This means that the insurance company no longer provides automobile insurance coverage under the binder. If the application, premium, and other required paperwork is subsequently forwarded to the insurance company, the company, after review by its underwriters, can accept the application and issue a policy with an effective date retroactive to the effective date stated on the application for the policy. In some circumstances, the underwriting review will result in an additional premium being charged on the policy. In this circumstance, a notice is sent to the insured advising them of the additional premium due. At the time the application for automobile insurance coverage is completed and the coverage is bound by an agent appointed or registered by the company, the customer pays the insurance agent either the full amount of the premium determined by the agent to be due or a down payment on the premium when the premium is financed by a premium finance company. Insurance companies using appointed or registered agents do not, as a rule, accept payment directly from the customer; rather, the payment received from a customer is deposited in the agency's account, and the agency, after deducting its commission, sends an agency check to the insurance company. When the premium is financed, the down payment is deposited in the agency account, and the agency, after deducting its commission, sends an agency check to the premium finance company. When a customer finances his or her insurance premium through a premium finance company, the customer signs a premium finance agreement in which he or she agrees to pay monthly installments to the premium finance company for the total owed under the agreement; the premium finance company, in turn, pays the full premium to the insurance company at the time the application is submitted to the insurance company. Premium finance companies provide agents with whom they do business company drafts, which are prepared by the insurance agent on behalf of the premium finance company. Mr. Pomerantz and the A Able insurance agency did business with the premium finance company ETI Finance Corporation ("ETI Finance"), and A Able insurance agency was supplied with ETI Finance premium finance agreements and ETI Finance drafts. In ETI Finance's premium finance agreement, the customer agrees to assign to ETI Finance a security interest in any unearned return premiums that may become due upon the cancellation of the insurance policy. The insurance company sends this unearned return premium directly to ETI Finance if the insurance policy is cancelled. ETI Finance deducts any amounts owed under the premium finance agreement; if the amount of unearned return premium exceeds the amount the customer owes ETI Finance under the premium finance agreement, ETI Finance remits the balance owed to the customer to the insurance agent; if the amount of unearned return premium is insufficient to cover the amount the customer owes ETI Finance, ETI Finance bills the insurance agent for the balance owed under the premium finance agreement. ETI Finance handles unearned return premium credits and debits on an account current basis whereby a bi-monthly statement is prepared for each of the agents with whom it does business. The statement lists customers and all debits and credits to the agent's account for each of the customers listed. When an insurance policy is cancelled, the agent statement includes the amount of unearned return premium received by ETI Finance from the insurance company, and shows whether the customer is owed money, which is shown as a credit to the agent's account, or whether the agent owes ETI Finance money, which is shown as a debit to the agent's account. All of the debits and credits are totalled on the bi-monthly statement; if a total credit is shown, an ETI Finance check is included with the statement; if a total debit is shown, the agent is required to send ETI Finance a check to cover the amount owed. ETI Finance's agent statement advises the agent to review the statement carefully because the agent might owe a customer a refund. If a customer pays the agent the full premium and the agent then pays the premium with an agency check, the insurance company sends the agent an unearned return premium. It is the agent's responsibility to refund the unearned return premium to the customer. In addition to paying a customer any unearned return premium received upon cancellation of a policy, the agent is responsible for refunding any unearned commissions the agent was paid on the policy. Either the insurance company or the agent calculates the amount of the unearned commission, and this is included in the payment to the customer. At all times material to this proceeding, Alida High, nee Watson, held a "2-20 license" allowing her to sell property and casualty insurance in Florida. She was employed by the A Able insurance agency and worked in the office located at 124 South Federal Highway, Pompano Beach, Florida. She began working for the A Able insurance agency in July 1999, and was paid a weekly salary plus commissions Mr. Pomerantz and Ms. High were authorized signatories on the A Able insurance agency's Bank of America checking account number 91895073. Ms. High and Mr. Pomerantz signed the signature card on February 18, 2000. Ms. High functioned as a licensed insurance agent in the Pompano Beach office of the A Able insurance agency, and her responsibilities included working with customers to prepare applications for automobile insurance coverage, binding coverage with the insurance companies, receiving payment for the premiums on the policies or for the down payment on a premium finance agreement if the premium was financed, preparing the application package to be sent out to the insurance company, and issuing temporary identification cards. If a customer of the A Able insurance agency paid his or her premium for a policy in full, the cash or check was deposited in the agency's account, and the insurance agency issued a check payable to the insurance company for the premium minus the agency's commission. In this circumstance, Ms. High prepared the application package and placed it on Mr. Pomerantz's desk so that he could write the agency's check and send the application package and check to the appropriate insurance company. Ms. High followed this procedure throughout her employment at the A Able insurance agency, in accordance with the directions Mr. Pomerantz gave her when she began working for the A Able insurance agency. If one of Ms. High's customers financed part of the premium with a premium financing company, Ms. High routinely issued the drafts of the premium finance company for the premium owed for an insurance policy, and she mailed the draft and the application package to the insurance company. Ms. High also occasionally prepared and signed checks on the A Able insurance agency's Bank of America checking account payable to "BCRC"2 to pay for automobile tags and titles issued by Broward County and other, minor, miscellaneous items. During the summer and early fall of 2002, Ms. High prepared checks at Mr. Pomerantz's request and signed his name. Most of these checks were to "BCRC", but several were to pay for office expenses, and one was written to U.S. Security Insurance Company to pay a customer's additional insurance premium. Ms. High wrote checks on the A Able insurance agency account only when she had Mr. Pomerantz's permission to do so. Writing checks was not among her normal responsibilities at the A Able insurance agency, and Ms. High would not write checks on the agency's account without Mr. Pomerantz's express permission because she did not know anything about the account balance. Beginning in the summer of 2002, Mr. Pomerantz's interest in the business of the A Able insurance agency waned, according to Ms. High, and his visits to the office became more and more infrequent. Initially during this period Mr. Pomerantz came in every few days and wrote checks and sent application packages out to insurance companies, but eventually applications for insurance prepared and bound by Ms. High began to accumulate on Mr. Pomerantz's desk. When Ms. High reminded Mr. Pomerantz that the applications on his desk had been bound and needed agency checks cut so they could be sent to the insurance companies, Mr. Pomerantz told her to leave them, that he would take care of it. Ms. High became more and more concerned about the backlog of applications on Mr. Pomerantz's desk, and, when he was in the office, she constantly reminded him of the need to send the applications to the insurance companies. Count I: John Thierwechter In February 2002, John Thierwechter went to the A Able insurance agency to purchase the minimum amount of automobile insurance required by law for a 1993 Nissan Sentra. The total premium quoted was $1,550.00 for personal injury protection/physical damage/comprehensive/collision coverage with Ocean Harbor and for a policy covering reimbursement of the $500.00 deductible on the Ocean Harbor policy. Mr. Thierwechter decided to finance the premium, and Ms. High completed an ETI Finance premium finance agreement, which Mr. Thierwechter signed on February 21, 2002. The first installment on the Premium Finance Agreement signed by Mr. Thierwechter was due on March 23, 2002. Mr. Thierwechter owed a down payment of $289.00 under the Premium Finance Agreement. On February 22, 2002, he paid $200.00 of the down payment in cash, and he received a receipt signed by Mr. Pomerantz. Mr. Thierwechter returned to the agency on February 25, 2002, to pay the remaining $89.00, and he received a receipt signed by Ms. High. Mr. Thierwechter had previously had a bad experience with Ocean Harbor, and, within a few weeks, he purchased automobile insurance coverage from GEICO Casualty Company. This coverage was effective March 16, 2002. In a letter dated March 15, 2002, that he hand-delivered to the A Able insurance agency, Mr. Thierwechter requested that his Ocean Harbor policy be cancelled and that he receive a refund of "the unearned premium" . . . within the next 30 days." On March 16, 2002, Ms. High completed an All Purpose Endorsement requesting that Ocean Harbor cancel Mr. Thierwechter's insurance coverage effective March 16, 2002. This request was received by Ocean Harbor on March 23, 2002. Because Mr. Thierwechter had financed the premium for his Ocean Harbor policy with ETI Finance, Ocean Harbor sent the unearned return premium to ETI Finance, pursuant to the Premium Finance Agreement signed by Mr. Thierwechter. ETI Finance received the cancellation notice and check for the unearned return premium from Ocean Harbor on April 9, 2002. The amount of the unearned return premium was included on the agent's statement for the A Able insurance agency dated May 1, 2002. That statement reflected return premium in the amount of $757.35. This amount was less than the amount Mr. Thierwechter owed ETI Finance because Mr. Thierwechter had not made any of the monthly installments required by the Premium Finance Agreement. As a result, the May 1, 2002, agent's statement recorded a $63.47 debit against the account of the A Able insurance agency. The A Able insurance agency was responsible for paying Mr. Thierwechter the amount of unearned commission, if any, that exceeded the $63.47 it owed to ETI Finance. Pursuant to Mr. Pomerantz's calculations, Mr. Thierwechter was owed $70.16 in unearned commission retained by the A Able insurance agency, and Mr. Pomerantz wrote Mr. Thierwechter a check for that amount on the A Able insurance agency account on July 1, 2002. Mr. Thierwechter picked up the check on or about July 22, 2002. Count III: Shirley Shaffer On or about June 11, 2001, Shirley Shaffer purchased a 1996 Kia Sephia from the Coral Springs Auto Mall. Before Ms. Shaffer could drive the car off of the car lot, the car dealer required her to secure automobile insurance. The dealer called a person to assist Ms. Shaffer, and a man arrived at the dealership within a short period of time. This man presented Ms. Shaffer with a card on which was printed "Wide World of Insurance"; there was no individual's name on the card, but the card showed a Margate, Florida, address. Ms. Shaffer wanted to purchase only the basic coverage, and a U.S. Security application for a "physical damage only" policy was prepared specifying comprehensive and collision coverage only. The application identified the insurance agency as the A Able insurance agency, located in Pompano Beach. According to a notation on the application, the comprehensive and collision insurance coverage was bound with U.S. Security at 3:00 p.m. on June 12, 2001.3 In addition, Ms. Shaffer signed a Summary of Coverages and Cost Breakdown form carrying the name "Wide World of Insurance" and an address in Margate, Florida. This form was also dated June 12, 2001. At some point during the application process at the Coral Springs Auto Mall, the person representing the insurance agency went outside the dealership offices, telling Ms. Shaffer that he was going to take photographs of her car to attach to the application for insurance coverage. Ms. Shaffer financed the premium for her automobile insurance policy, and she paid a deposit of $200.00, which she charged on her credit card. U.S. Security received Ms. Shaffer's application for comprehensive and collision coverage on June 18, 2001, and a Physical Damage Policy was issued to Ms. Shaffer on June 26, 2001, with a policy term of June 13, 2001, to June 13, 2002. Ms. Shaffer received a copy of this policy. The agent identified on the policy was the A Able insurance agency in Pompano Beach. A Notice of Cancellation dated July 18, 2001, was sent to Ms. Shaffer by U.S. Security. In the notice, Ms. Shaffer was advised that her insurance policy would be cancelled effective September 2, 2001, because her application was incomplete. After she received the cancellation notice, Ms. Shaffer called the Margate office of the Wide World of Insurance insurance agency because that was the office whose address was on the card she was given when she applied for the U.S. Security insurance policy. Someone at the Margate office told her that, because she lived in Pompano Beach, her account was handled by the agency's Pompano Beach office and that she should call that office. Ms. Shaffer contacted the Pompano Beach office and spoke to a man who told her that everything about her policy looked fine in the computer and that she should not worry about the letter from U.S. Security. After this conversation, she contacted the Margate office again and was told that they knew nothing about the problem with the policy at that office. Ms. Shaffer then telephoned U.S. Security and was told that her insurance agent needed to take care of the problem, which she was led to believe was minor. Finally, Ms. Shaffer received a letter dated August 7, 2001, from a person named Gary. The letter carried the name "Wide World of Insurance" and the Margate address. In the letter, Gary requested that Ms. Shaffer "PLEASE STOP BY OUR OFFICE SO WE MAY TAKE PICTURES OF THE KIA. ORIGINAL ONES DID NOT COME OUT. ALSO NEED REGISTRATION. IMPT!!!!!" Gary stated in the letter that Ms. Shaffer needed to provide the requested information by August 21, 2001, "to avoid any further delays or cancellation requests from the insurance company." When she received the August 7, 2001, letter, which she recalled was on a Friday, Ms. Shaffer called the Margate office and arranged to bring her car in for photographs at 8:00 a.m. the following Monday.4 Ms. Shaffer arrived at the Margate office slightly before 8:00 a.m., and a few minutes later the man who had taken her application at the Coral Springs Auto Mall arrived at the office and took pictures of her car. Ms. Shaffer also provided a copy of her automobile registration, as requested in the August 7, 2001, letter. Ms. Shaffer also purchased personal liability insurance coverage from the Pompano Beach office of the A Able insurance agency, and she charged the $659.00 premium on her Visa credit card. Ms. Shaffer handled the entire transaction during a telephone conversation with a person in the Pompano Beach office, but she does not know the name of the person with whom she spoke. When Ms. Shaffer went to the Margate office in response to Gary's letter of August 7, 2001, she was given a receipt dated August 6, 2001, for the $659.00 premium she had paid for "addl liability coverage"; it was stated on the receipt that the coverage would be effective from September 1, 2001, to June 12, 2001. The person who signed the receipt was not identified, and the signature is indecipherable. The transaction date shown on Ms. Shaffer's credit card statement was August 7, 2001, and the statement showed that the charge was credited to "A ABLE WIDE WORLD OF I POMPANO BEACH FL." Ms. Shaffer also received a Florida Automobile Insurance Card confirming that she had personal injury protection benefits, property damage liability, and bodily injury liability coverage with U.S. Security; the agent identified on the card was "A Able Wide World of Insurance," with a post office box address in Margate, Florida. U.S. Security cancelled Ms. Shaffer's physical damage policy effective September 2, 2001, because her application was incomplete. U.S. Security sent a check dated September 26, 2001, to ETI Finance for $323.85, which was the unearned return premium owing on Ms. Shaffer's policy. U.S. Security never received an application for the "additional liability coverage" Ms. Shaffer requested and paid for on August 7, 2001. On October 22, 2001, Ms. Shaffer was caught in a flash flood, and she drove her Kia automobile into an area of water that was so deep her automobile floated. At one point, a bus drove through the water near the Kia, and the wake caused the Kia to wash into railroad ties that were used in the yard of a nearby home for landscaping. The railroad ties tore off the front of the car. The damage to the Kia was so extensive that it was considered a total loss. Ms. Shaffer filed a claim with U.S. Security, and received a letter dated October 25, 2001, from Corporate Claim Services, Inc., acknowledging receipt of her claim on behalf of U.S. Security. Ms. Shaffer then received a letter from Corporate Claim Services, Inc., dated October 26, 2001, advising her that her insurance policy with U.S. Security was cancelled effective September 2, 2001. Because Ms. Shaffer had no automobile insurance at the time her car was damaged, she had the Kia repaired at her own expense and incurred substantial expense and inconvenience because she had to arrange for alternative transportation during the year-and-a-half it took to have her car repaired. Ms. Shaffer did not receive any unearned premium or unearned commission refund after the cancellation of her policy. Ms. Shaffer never did business in person with Mr. Pomerantz. In fact, she met him for the first time the week before the final hearing, when her deposition was taken. Count IV: Terensinha Honczarenko On or about March 30, 2001, Terensinha Honczarenko went to the Margate office of the Wide World of Insurance insurance agency to purchase automobile insurance for a newly- purchased Toyota Corolla.5 Ms. Honczarenko had done business with the insurance agency located in Margate for a number of years. A man working at the Margate office named Greg completed Ms. Honczarenko's application for automobile insurance coverage with Southern Group, which she signed.6 The A Able insurance agency in Pompano Beach was identified in the application as the agent producing the application. Coverage on Ms. Honczarenko's policy was bound on the policy on March 30, 2001, and Southern Group received the application on April 4, 2001. The underwriting review of Ms. Honczarenko's application was completed on May 29, 2001, and Southern Group issued a policy to Ms. Honczarenko on June 26, 2001, with an effective date of March 31, 2001, through March 31, 2002. The A Able insurance agency in Pompano Beach was identified on the policy as the insurance agent. Ms. Honczarenko paid a $275.00 down payment on the total policy premium of $1098.00, and financed the remainder of the premium with ETI Finance.7 The Premium Finance Agreement was dated March 30, 2001, and was processed by ETI Finance on April 18, 2001. Ms. Honczarenko made payments pursuant to the Premium Finance Agreement from April 30, 2001, until August 2001. Ms. Honczarenko regularly made these payments at the Margate office, sometimes paying in cash and sometimes paying by check. When she took her August 2001 payment to the Margate office, Greg told her that there was a problem with her insurance policy and that she should come back in two days. When she returned to the Margate office, she was told that her automobile insurance policy had been cancelled. When she asked for her money back, Greg refused. At some point in June 2001, Southern Group sent Ms. Honczarenko a notice at her correct address advising her that she owed $263.00 in additional premium on Southern Group automobile insurance policy. She was given three options: To pay the additional premium by June 28, 2001, and keep the policy in force; to request by July 18, 2001, that Southern Group cancel the policy and refund any unearned premium; or to do nothing, in which case the policy would be cancelled effective July 18, 2001, and the unearned premium refunded. Ms. Honczarenko claims she never received this notice. Southern Group also sent Ms. Honczarenko a notice dated June 21, 2001, to her correct address, advising her that the vehicle identification number on her insurance application did not correspond to the vehicle identification number in their records. Southern Group asked Ms. Honczarenko to check her registration and return the letter to Southern Group with the correct information set forth on the bottom of the letter. Ms. Honczarenko claims she never received this notice. Southern Group also sent a copy of the notice to the "Wide World of Ins Pompano Bch." In a letter dated June 29, 2001, "Gary" advised Ms. Honczarenko that she needed to supply the Margate office with a copy of the registration for her 1985 Toyota. This letter was sent to the same address as the notices sent Ms. Honczarenko by Southern Group. Ms. Honczarenko received the June 29, 2001, letter from the Margate office of the Wide World of Insurance insurance agency.8 Because Southern Group received no response from Ms. Honczarenko to its notice that she owed additional premium on her automobile insurance policy, it cancelled her policy effective July 18, 2001, and sent her a notice of cancellation dated June 29, 2001. The notice was sent to the same address as was the notice of additional premium and the notice that there was a discrepancy in her automobile identification number. Ms. Honczarenko received the notice of cancellation. On August 10, 2001, Southern Group sent a check to ETI Finance for unearned return premium on Ms. Honczarenko's automobile insurance policy in the amount of $572.90. ETI Finance received the check on August 16, 2001, and included Ms. Honczarenko's unearned return premium in the statement it sent to the A Able insurance agency in Pompano Beach on or about August 31, 2001. The statement showed that ETI Finance had received $572.90 in unearned return premium on Ms. Honczarenko's account, and it included a credit to the A Able insurance agency of $71.95. Ms. Honczarenko did not receive any refund of unearned return premium or unearned commission from A Able insurance agency. Count V: Cecil Worrall On June 10, 2002, Cecil Worrall went to the A Able insurance agency in Pompano Beach to renew his automobile insurance within Southern Group. At that time, he had done business with A Able insurance agency in Pompano Beach for eight-to-ten years. Mr. Pomerantz completed Mr. Worrall's application, which Mr. Worrall signed. Mr. Worrall gave Mr. Pomerantz a check in the amount of $570.00 as payment of the full amount of the renewal premium. Mr. Pomerantz gave the application to Ms. High and expected her to bind the coverage and process the application. According to a notation of the application, coverage was bound on June 19, 2002, at 3:46 p.m., and, as was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the application package and payment to Southern Group. Mr. Worrall's June 10, 2002, check was deposited into the account of "A Able Wide World of Insurance." Southern Group did not receive the application and agency check for the premium net commission on Mr. Worrall's renewal within the 72 hours required by Southern Group's agreement with Mr. Pomerantz. On July 12, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that Mr. Worrall's binder coverage had expired because Southern Group had not received the application.9 Southern Group advised the A Able insurance agency to check its records to make sure that the application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance." The Department of Insurance10 made an inquiry of Southern Group on October 16, 2002, regarding the status of Mr. Worrall's insurance policy, and Southern Group replied in a letter dated October 28, 2002, that, although coverage had been bound for Mr. Worrall, it had no record of having received Mr. Worrall's application and the premium payment or a response to its July 12, 2002, notice to the A Able insurance agency that the binder had expired. After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group application for Mr. Worrall was retrieved. On December 10, 2002, Southern Group issued an automobile insurance policy to Mr. Worrall, with an effective date retroactive to June 26, 2002, the date the policy would have been effective had the application and premium payment been transmitted to Southern Group timely. Count VI: Cynthia Mousel Cynthia Mousel was a client of the A Able insurance agency Pompano office, and primarily Ms. High handled her business. On or about September 18, 2002, Ms. High completed an application within U.S. Security for automobile insurance coverage on behalf of Ms. Mousel. Ms. Mousel signed the application, and coverage was bound on September 18, 2002. Ms. Mousel paid the full premium of $524.00. As was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the application package and payment to U.S. Security. In October 2002, the Department of Insurance sent an inquiry to U.S. Security regarding the status of Ms. Mousel's automobile insurance policy. In a letter dated October 30, 2002, U.S. Security advised the Department of Insurance that it had no record that, as of that date, it had received an application for automobile insurance coverage under Ms. Mousel's name.11 Count VII: Fred Hublitz Fred Hublitz was a long-time customer of the A Able insurance agency in Pompano Beach. On September 13, 2002, Mr. Hublitz visited the office, and Ms. High completed an Endorsement Request Form on his behalf to add coverage to his automobile insurance policy with Ocean Harbor for a 2000 Mercury Sable automobile. Mr. Hublitz signed the endorsement and wrote a check for $260.00, which was the full amount of the premium to add this coverage. The coverage was bound on September 13, 2002. As was her custom, Ms. High put the endorsement package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the endorsement and payment to Ocean Harbor. The check written by Mr. Hublitz on September 13, 2002, was deposited into the account of "A Able Wide World of Insurance." In a letter dated October 16, 2002, the Department of Insurance inquired of Ocean Harbor regarding the status of Mr. Hublitz's automobile insurance policy. Ocean Harbor responded in a letter dated November 7, 2002, that it had no record of having received the endorsement or premium payment for Mr. Hublitz's 2000 Mercury Sable. An Ocean Harbor representative went to the A Able insurance agency office in Pompano Beach on November 15, 2002, and picked up applications and endorsements for automobile insurance coverage. Among these documents was Mr. Hublitz's endorsement, and Ocean Harbor added the 2000 Mercury Sable to Mr. Hublitz's existing Ocean Harbor automobile insurance policy, effective retroactively.12 Count VIII: Lori O'Connell Lori O'Connell had obtained automobile insurance coverage from the A Able insurance agency in Pompano Beach. She had received a notice that her policy with Southern Group was to expire on August 14, 2002, and a friend, Joseph Balsamo, went to the A Able insurance agency office on July 9, 2002, and gave Ms. High a check for $364.00, which was full payment for the policy renewal. Ms. High bound the renewal on July 12, 2002. As was her custom, Ms. High put the application package on Mr. Pomerantz's desk for him to review, prepare an agency check for the premium net commission, and mail the renewal application package and payment to Southern Group. A month later, Ms. O'Connell had not received an insurance card or renewal policy, and Mr. Balsamo telephoned the A Able insurance agency Pompano Beach office and inquired about the policy. Ms. High told him that the insurance company was slow in processing the renewals and that Ms. O'Connell should receive the materials shortly. Ms. High knew, at the time, that the renewal application was sitting on Mr. Pomerantz's desk, waiting for him to write a check and mail the application and payment to Southern Group. Southern Group did not receive the renewal application and agency check for the premium net commission on Ms. O'Connell's renewal within the 72 hours required by Southern Group's agreement with Mr. Pomerantz. On August 2, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that Ms. O'Connell's binder coverage had expired because Southern Group had not received the renewal application.13 Southern Group advised the A Able insurance agency to check its records to make sure that the application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance." The Department of Insurance made an inquiry of Southern Group on October 16, 2002, regarding the status of Ms. O'Connell's renewal policy, and Southern Group replied in a letter dated October 28, 2002, that, although coverage had been bound for Ms. O'Connell on July 12, 2002, it had no record of having received Ms. O'Connell's renewal application and the premium payment or a response to its August 2, 2002, notice to the A Able insurance agency that the binder on Ms. O'Connell's renewal had expired. After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group renewal application for Ms. O'Connell was retrieved. On November 26, 2002, Southern Group issued an automobile insurance policy renewal to Ms. O'Connell, with an effective date retroactive to August 14, 2002, the date the renewal would have been effective had the application and premium payment been transmitted to Southern Group timely. Count IX: Carol Scott On July 10, 2002, Ms. High prepared an application for automobile insurance coverage with Southern Group on behalf of Carol Scott. The premium for the coverage specified in the application was $655.00. Ms. High bound the coverage on July 10, 2002. Southern Group did not receive Ms. Scott's application and the agency check for the premium net commission within the 72 hours required by Southern Group's agreement with Mr. Pomerantz. On August 2, 2002, a notice was sent to "Wide World of Insurance Pomp" at the A Able insurance agency address in Pompano Beach advising that Ms. Scott's binder coverage had expired because Southern Group had not received the application. Southern Group advised the A Able insurance agency to check its records to make sure that the application package was not misplaced and further advised that a claim against the binder might result in a claim against its "Errors & Omissions Insurance." The Department of Insurance made an inquiry of Southern Group on October 16, 2002, regarding the status of Ms. Scott's automobile insurance policy, and Southern Group replied in a letter dated October 28, 2002, that, although coverage had been bound for Ms. Scott on July 10, 2002, it had no record of having received Ms. Scott's application and the premium payment or a response to its August 2, 2002, notice to the A Able insurance agency that the binder on Ms. Scott's application had expired. After Southern Group received the inquiry from the Department of Insurance, it sent a representative to the A Able insurance agency Pompano Beach office, where the Southern Group application for Ms. Scott was retrieved. On November 26, 2002, Southern Group issued an automobile insurance policy renewal to Ms. Scott, with an effective date retroactive to July 11, 2002, the date the renewal would have been effective had the application and premium payment been transmitted to Southern Group timely. Count X: Janice Misconis On or about June 25, 2003, Janice Misconis visited the A Able insurance agency office in Pompano Beach to renew her Ocean Harbor automobile insurance policy. Ms. High prepared a Summary of Coverages and Premium covering a 1990 Buick Skylark. Ms. High bound the coverage on June 24, 2002, for a renewal with a policy period commencing July 8, 2002. The premium shown on the summary totalled $570.00, and Ms. High prepared a receipt affirming that Ms. Misconis had paid the $570.00 renewal premium in full on June 25, 2002. In a letter dated October 16, 2002, the Department of Insurance inquired of Ocean Harbor regarding the status of Ms. Misconis's automobile insurance policy. Ocean Harbor responded in a letter dated November 7, 2002, that it had no record of having received an application or premium payment for Ms. Misconis's policy renewal. An Ocean Harbor representative went to the A Able insurance agency office in Pompano Beach on November 15, 2002, and picked up applications and endorsements for automobile insurance coverage. Among these documents was Ms. Misconis's renewal application, and Ocean Harbor issued a policy of automobile insurance coverage, effective retroactively to the date it would have been effective had the application and premium payment been forwarded to Ocean Harbor timely.14 Count IX: Diane Carroll In October 2001, Diane Carroll, a/k/a Diane Heinen, purchased an automobile insurance policy with the Aires Insurance Company ("Aires") from the Wide World of Insurance insurance agency in Margate. After she had an accident and her car was sitting in a repair shop, she cancelled this policy. In late January 2002, Ms. Carroll went again to the Wide World of Insurance office in Margate, and a person working in that office took her application for another automobile insurance policy. The policy was placed with Aires, and the total premium was $2,637.00. The effective date of the policy was February 1, 2002, for the term of one year. Ms. Carroll made a down payment of $660.00, and financed the balance of the premium with Assured Premium Finance Corporation, a company that is serviced by ETI Finance. Ms. Carroll made all of the payments required under the Premium Finance Agreement she signed in January 2002. Ms. Carroll took each of the payments to the Wide World of Insurance insurance agency office in Margate. On January 8, 2003, Ms. Carroll had an automobile accident. She called the Wide World of Insurance insurance agency in Margate to report a claim, and she was told that she did not have an insurance policy, that Aires "went under." The person at the Margate office of the Wide World of Insurance insurance agency told Ms. Carroll that she had been sent notification by mail. Ms. Carroll requested a copy of the letter, which she claims she did not receive. The letter is dated November 27, 2002, and bears the letterhead of "Wide World of Insurance," with a Margate post office address. The letter is addressed to Ms. Carroll at her then-correct address and provides notice that Aires has been "PLACED IN LIQUIDATION ON NOVEMBER 14, 2002, BY THE STATE OF FLORIDA. ALL INSURANCE POLICIES WITH THE ABOVE- CAPTIONED INSURANCE COMPANY SHALL CEASE AS OF 12:01 AM, DECEMBER 14, 2002. PLEASE CONTACT OUR OFFICE IMMEDIATELY TO REPLACE THIS INSURANCE COVERAGE." The name "A Able Wide World of Insurance" is included on the letter. There is no indication on the letter that it was sent by certified mail.15 Summary Count I: Mr. Thierwechter The evidence presented by the Department is sufficient to establish that the refund of unearned commission on Mr. Thierwechter's cancelled Ocean Harbor automobile insurance policy was not made timely by the A Able insurance agency, but was held by the A Able insurance agency from early May 2002, when the A Able insurance agency received the agent statement from ETI Finance showing the debit to the A Able insurance agency's account, until July 1, 2002, when Mr. Pomerantz issued a check for the amount of unearned commission the A Able insurance agency owed to Mr. Thierwechter. Count III: Ms. Shaffer The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that either Mr. Pomerantz or the Pompano Beach office of the A Able insurance agency was involved in any meaningful way in any transactions relating to Ms. Shaffer's physical damage automobile insurance policy. Although, during the summer and fall of 2001, the A Able insurance agency located in Pompano Beach and the Wide World of Insurance agency located in Margate had merged and were doing business as a single entity, Mr. Pomerantz was the agent in charge of the Pompano Beach office. There was no evidence presented to establish that Mr. Pomerantz ever operated in the Margate office or supervised the agents in that office. Even though the Pompano Beach office of the A Able insurance agency is identified as the agent on Ms. Shaffer's U.S. Security policy, there was no creditable evidence presented to establish that anyone in the Pompano Beach office prepared the application for Ms. Shaffer's physical damage insurance policy or was responsible for servicing the policy. The evidence presented by the Department regarding the "additional liability coverage" purchased by Ms. Shaffer is scanty. Although Ms. Shaffer handled the transaction over the telephone with a man in the Pompano Beach office of the insurance agency and the charge on Ms. Shaffer's credit card was credited to the A Able insurance agency in Pompano Beach, there is no evidence identifying the person who prepared the receipt for the premium payment. The totality of the evidence presented by the Department is not sufficient to support an inference that Mr. Pomerantz was personally involved in the transaction or that he knew or should have known of the transaction. Count IV: Terensinha Honczarenko The evidence presented by the Department is not sufficient to establish that Mr. Pomerantz caused Ms. Honczarenko's automobile insurance policy to be cancelled, either directly or through his negligence or the negligence of any of the agents working in the A Able insurance agency Pompano Beach office. All of her dealings were with the Margate office, and there was no evidence that a copy of the notice from Southern Group advising Ms. Honczarenko that she owed additional premium on her policy was sent to the A Able insurance agency at the Pompano Beach address or that it was the practice of Southern Group to send such notices to agents as well as to its insureds.16 The evidence presented by the Department is, however, sufficient to establish that A Able insurance agency received notice from ETI Finance that it owed Ms. Honczarenko a refund of unearned return premium in the amount of $71.95 and that Ms. Honczarenko did not receive this refund. Counts V, VI, VII, VIII, IX, and X: Mr. Worrall, Ms. Mousel, Mr. Hublitz, Ms. O'Connell, Ms. Scott, and Ms. Misconis The evidence presented by the Department is sufficient to establish that Mr. Pomerantz was personally responsible for writing agency checks for premium net commission and for sending applications for automobile insurance coverage generated in the A Able insurance agency Pompano Beach office and premium checks received in that office to the various insurance companies. During the summer and early fall of 2002, Ms. High constantly reminded Mr. Pomerantz that the applications accumulating on his desk needed attention, and Mr. Pomerantz assumed the responsibility for handling the applications when he told her that he would handle them. The evidence presented by the Department is also sufficient to establish that Mr. Pomerantz failed to forward the applications and premiums for Mr. Worrall, Ms. Mousel, Mr. Hublitz, Ms. O'Connell, Ms. Scott, and Ms. Misconis and that the A Able insurance agency had the benefit of the premium payments made by these individuals from the time the coverage binders expired until such time as the policy applications and payments were received by the various insurance companies who issued policies with coverage retroactive to the date of the applications and premium payments. Count XI: Ms. Carroll The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that either Mr. Pomerantz or any employee of the Pompano Beach office of the A Able insurance agency was involved in the transactions with respect to Ms. Carroll's automobile insurance policy with Aires. All of Ms. Carroll's business dealings with regard to this policy were at the Margate office of the Wide World of Insurance insurance agency. Even though the name "A Able Wide World of Insurance" appears on the letter dated November 27, 2002, notifying Ms. Carroll that Aires was in liquidation and that she needed to replace her automobile insurance policy, there was no evidence presented to establish that anyone in the Pompano Beach office prepared the application for Ms. Carroll's policy or had any dealings with her on this or any other automobile insurance policy.
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 Jay Lawrence Pomerantz 1. Violated Sections 626.561(1), 626.611(4), (7), and (10), and 626.621(2) and (6), Florida Statutes (2002) with respect to Counts I, IV, V, VI, VII, VIII, IX, and X of the Amended Administrative Complaint filed October 14, 2003; Dismissing Counts II, III, and XI of the Amended Administrative Complaint20; and Revoking the property and casualty insurance agent's license of Jay Lawrence Pomerantz. DONE AND ENTERED this 30th day of April, 2004, in Tallahassee, Leon County, Florida. S 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 30th day of April, 2004.
The Issue Whether petitioner should take action against respondent for the reasons alleged in the administrative complaint?
Findings Of Fact The parties stipulated that respondent Kenneth E. Schneider has been a general lines agent and so licensed by respondent, at all pertinent times. He has been doing business in Pensacola, Florida, as Friendly Auto Insurance of Pensacola, Inc. (Friendly). Mr. Schneider was "agent for Friendly," Petitioner's Exhibit No. 16, and he and his wife ran the office (T. 124) with the help of a clerical assistant. Respondent was the licensed agent who "waited on customers." (T. 125) At the time of the final hearing, he was licensed to represent Protective Casualty Insurance Company, and Allied Fidelity Insurance Company. Petitioner's Exhibit 20. Additionally, and "only during 1982," petitioner was licensed to represent Dixie Insurance Company, Kenilworth Insurance Company, Colonial Insurance Company of California, and Fortune Insurance Company. Petitioner's Exhibit No. 19. When Mr. Schneider wrote policies for insurance companies other than those he was licensed to represent, he did so by agreement with "a managing general agency." (T. 141). Not all of these agreements he had with managing general agencies were in writing and the Department of Insurance was apprised of none of them. (T. 142, 143). Respondent "broker[ed] . . . business through a general agency in the State of Florida . . . [or] in Atlanta." (T. 141). Time Premium Company (TPC) of Hollywood, Florida, finances insurance premiums. TPC supplies Friendly (and other insurance agencies) with form contracts and blank drafts. Customers of Friendly wanting to borrow money to pay part of their insurance premiums sign a form contract filled in by a Friendly employee obligating the customer to repay TPC the portion of the premium it finances, on an installment basis. Among other things, the form contract provides: That in consideration of the payment by TIME to the respective insurance companies, or their agents, of the balance of the premiums upon the policies of insurance hereinbefore described, the assured agrees with TIME as follows: The assured hereby assigns to TIME as security for the total amount payable hereunder, any and all unearned return premiums and dividends which may become payable under the policies listed in the schedule and loss payments under said policies which reduce the unearned premiums. . . . 4. The assured hereby appoints TIME his attorney in fact to cancel and give notice of cancellation of said policies for non-payment of any amounts due hereunder, and said insurance companies are hereby authorized and directed, upon the demand or request of TIME, to cancel said policies and to pay TIME the unearned return premiums pursuant to the assignment contained in paragraph 1 about thereon without proof of default hereunder or breach thereof or of the amount owning hereunder. In the event that the unearned return premiums are not sufficient to pay the total amount due hereunder, the assured shall pay the deficiency with interest at the highest allowable rate. Petitioner's Exhibit No. 1. A Friendly employee consummates the loan by drawing on TPC and forwarding the draft to the insurance company (or agency) for whom Friendly is writing the insurance. In the event that a company fails to repay TPC, TPC causes the insurance coverage to be cancelled and applies return premiums against the outstanding indebtedness, including, when received, unearned commissions in Friendly's hands at the time of cancellation. TPC notifies Friendly of any shortfall, once it has received return premiums from the insurance companies (or agencies), and Friendly forwards all or part of its unearned commission to TPC, as appropriate. By print-out mailed four times monthly, TPC notifies Friendly of unearned commissions Friendly owes TPC. If return premiums, including unearned commissions, do not satisfy the debt, TPC duns the customer. Friendly is under an obligation to return to the customer any part of an unearned commission it does not owe to TPC or some other premium finance company. BARAHONA On November 29, 1982, Victor Barahona bought insurance from Friendly. Friendly wrote policy No. FAP508054 on Horizon Insurance Company (Horizon) on behalf of Guaranteed Insurance Underwriters (Guaranteed) for liability coverage; and, for comprehensive and collision coverage, policy No. SPP0401130 on Southern Insurance Company (Southern), on behalf of Florida General Agency. Mr. Barahona made a downpayment of $159.00 and Friendly effected a loan to him from TPC in the amount of $386.00 for the remainder of the combined premiums. Together with the finance charge and documentary stamps, Mr. Barahona's obligation to TPC aggregated $437.60, which he was to repay in eight monthly installments of $54.70 each, the first being due on December 30, 1982. On January 6, 1983, TPC notified Mr. Barahona that it had not received an installment payment, and that the policies would be cancelled if the payment was not received within ten days. On January 17, 1983, TPC requested cancellation of both policies. Later TPC notified Mr. Barahona that the policies were cancelled effective February 25, 1983. As a result of the cancellation of the Barahona policies, TPC received a total of $311.63 in return premiums, $127.95 from Florida General Agency and $183.68 from Horizon or Guaranteed. As of September 2, 1983, Barahona still owed TPC $114.78, and TPC had not received any part of the unearned commission on Barahona's policies from Friendly, but it was not until August that TPC had received the last insurance company return premium. Some time thereafter it billed Friendly on the entire unearned commission. In July of 1984, Friendly paid TPC the money it owed TPC on account of the cancellation of the Barahona policies. TAYLOR December 6, 1982, Friendly wrote policy No. SPP0401329 on Southern on behalf of Florida General Agency and policy No. 389868 on Protective Casualty Insurance Company (Protective) on behalf of Specialty Insurance Underwriters (Specialty) for James M. Taylor. Mr. Taylor made a down payment of $97.00, and Friendly effected a loan to him from TPC in the amount of $226.00 for the remainder of the combined premiums. Together with the finance charge and documentary stamps, Mr. Taylor's obligation to TPC aggregated $264.43, which he was to repay in eight equal monthly installments of $33.06, the first being due January 7, 1983. On January 12, 1983, TPC notified Mr. Taylor that it had not received an installment payment, and that the policies would be cancelled if the payment was not received within ten days. At TPC's behest, both policies were cancelled effective February 28, 1983, leaving an outstanding balance of $274.48. As a result of the cancellation of the Taylor policies, TPC received a total of $185.62 in return premiums, $88.02 from Florida General Agency and $97.60 from Protective in March of 1983. A notice of cancellation was sent to Friendly as well as to Protective and Southern, but Friendly did not pay the unearned commission it owed TPC until July of 1984. (T. 19). BIVINS On November 29, 1982, Friendly wrote policy No. 0401124 on Southern on behalf of Florida General Agency for Walter L. Bivins. Of the $159.00 total premium, Delores T. Bivins paid $99.00 as a cash downpayment, and Friendly effected a loan to her from TPC in the amount of $60.00 for the remainder of the premium. Together with the finance charge and documentary stamps, Mr. Bivins' obligation to TPC aggregated $81.93, which he was to repay in three equal installments of $27.31, the first of which was due December 30, 1982. Delores T. Bivins mailed TPC a check for $30.31 ($27.31 plus a $3.00 late charge) dated December 31, 1982. TPC deposited this check, but it was returned unpaid. As a result TPC assessed a $10.00 delinquency charge, and an additional $10 charge, because the check was returned, and caused the cancellation of Mr. Bivins' policy, effective March 2, 1983, claiming a balance due of $104.93. TPC received a return premium from Southern or Florida General Agency later the same month. TPC received the $12.80 unearned commission Friendly owed it in July of 1984. GORECKI On January 6, 1983, Friendly wrote policy No. SPP0403316 on Southern on behalf of Florida General Agency and policy No. 031555 on Allied Fidelity Insurance Company on behalf of Specialty Insurance Underwriters, Inc. for James T. Gorecki. The combined premiums amounted to $481.00. Mr. Gorecki made a down payment of $144.00 and financed the remaining $337.00 through TPC. Friendly effected the loan from TPC. Together with the finance charge and documentary stamps, Mr. Gorecki's total obligation to TPC aggregated $384.56, which he was to repay in eight equal monthly installments of $48.07, the first being due February 6, 1983. Mr. Gorecki sold his car and requested cancellation of both insurance policies in February of 1983. He executed documents at Friendly's office to effect the cancellation. Mr. Gorecki made no payment to TPC and TPC requested cancellation of both policies as a result, although at least one of them had already been cancelled. The Southern policy, No. SPP0403316, was cancelled March 3, 1983, and on March 17, 1983, a check for Southern's return premium, in the amount of $145.33, was sent to TPC, and TPC received it shortly thereafter. The return premium check for Allied Fidelity's policy No. 031555 reached TPC no later than May of 1983. (T. 26). On June 21, 1983, Mr. Gorecki's mother filled out an "insurance consumer service request" complaining that "[t]hey have been telling us since February they would send us a check for the unearned premium." After applying both return premium checks against Mr. Gorecki's indebtedness, a balance of $45.16 remained. TPC notified Friendly by written statement mailed June 23, 1983, that unearned commissions up to $45.16 should be forwarded to TPC. Unearned commissions in excess of $45.16, if any, should have been returned to Mr. Gorecki. (T. 41). BOURGEOIS On January 5, 1983, Friendly wrote policy No. SPP0403324 on Southern on behalf of Florida General Agency and policy No. 031572 on Allied Fidelity Insurance Company on behalf of American Underwriters, Inc. for Edward Bourgeois. The combined premiums amounted to $397.00. Mr. Bourgeois made a down payment of $119.00 and financed the remaining $278.00. Friendly effected the loan from TPC. Together with the finance charge and documentary stamps, Mr. Bourgeois' total obligation to TPC aggregated $320.64, which he was to repay An eight equal monthly installments of $40.08, the first being due February 8, 1983. Mr. Bourgeois made no payments to TPC and TPC caused the cancellation of both policies, effective March 29, 1983, as a result. Notice of cancellation went to both insurance companies and Friendly. On April 27, 1983, TPC received an insurance company return premium of $135.29 and the other insurance company return premium arrived in May of 1983. (T. 27). Friendly paid TPC the unearned commission in July of 1984. A YEAR BEHIND TPC deals with some four or five hundred insurance agencies in Florida. TPC normally receives unearned commissions from agencies within 45 to 60 days after billing, although a TPC employee testified that 90 days was "acceptable." (T. 30). TPC bills the agencies with a computer printout, representing an accumulation of accounts. Possibly one other agency has taken longer than a year to repay moneys owed under similar circumstances. (T. 29). When respondent Schneider fell behind in forwarding unearned commissions, TPC telephoned to discuss the problem. He began sending money to reduce his indebtedness and continues to do so. TPC "would like him to do better, but . . . [is] working with him on this." (T. 31-32). Respondent Schneider sent TPC checks for $800.00 on April 26, 1983, for $500.00 on July 21, 1983, for $400.00 on May 25, 1983, for $400.00 on June 15, 1983, and for $500.00 on July 21, 1983. At the time of the hearing, he was paying $3,000.00 a month "[a]gainst old accounts that . . . [TPC needs] money on on the unearned commissions," (T. 42) but TPC has "asked him to raise it to four or five." (T. 38). TPC applies money it gets from respondent to the oldest accounts first, and Mr. Schneider was aware of this. (T. 38). The money TPC received in 1983 was applied to "possibly `81 or `82 files." (T. 32). A TPC employee testified without contradiction that unearned commissions insurance agencies like Friendly owed it would be TPC's money in the hands of the agent. LE On September 9, 1982, Hang Thi Le purchased Allied Fidelity Insurance Company's policy No. 09-104802 from Friendly for automobile liability, property damage and personal injury protection coverage. She paid Friendly $123.00 on September 9, 1982. Friendly forwarded $104.55 to Allied Fidelity and retained the balance as its commission. On January 26, 1983, Ms. Le made a written request that coverage be cancelled, by executing a form which stated, "I have sold my car." Petitioner's Exhibit No. 12. Allied Fidelity Insurance Company cancelled the policy and, on April 22, 1985, mailed Friendly a check "in the amount of $532.10 with a notation on the bottom of the check indicating that this involved return premium[s] . . . for two policyholders, one being Hang Thi Le . . . indicating the amount of return [for Ms. Le] to be $50.15." (T. 51). Ms. Le was due a total return premium of $59.00, of which $8.85 was unearned commission still in respondent's hands. After she had telephoned Friendly three times and been told at least once that Mr. Schneider was not in, Ms. Le received a refund check in the amount of $50.15 dated July 21, 1983. The check bore the notation "returned premium" and was signed by respondent Schneider, Petitioner's Exhibit No. 12, but did not include the $8.85 respondent owed Ms. Le. In a separate transaction with Friendly, Ms. Le bought insurance and financed the premium. She "put a down payment and . . . ma[d]e a[nother] payment," (T. 69) before deciding to cancel her insurance and stop payment on a check. LOGOS On March 29, 1982, Edward T. Logos went to Friendly's office because he had seen an advertisement on the back of the Pensacola News-Journal's "TV Tab", to wit: [Graphic image of Petitioner's Exhibit 16, as displayed on page 16 of the original Recommended Order, has been omitted. To view this portion of this document, please contact the Clerk's Office.] Mr. Logos "told the lady [in Friendly's office that he] wanted to buy PIP and that's all. [He] assumed they were honorable enough that they would sell [him] what [he] asked for." (T. 91). He was quoted $52.00 and complained about the price. He had waited an hour and a half or two for his turn to buy insurance and signed multiple documents where a woman in respondent's employ had marked them with "x"s. Among the papers he signed was an application for membership in Nation Motor Club, Inc., even though he never asked to join and would have declined an offer to purchase a membership. He also signed the following document: [Graphic image of Petitioner's Exhibit 15, as displayed on pages 17-18 of the original Recommended Order, has been omitted. To view this portion of this document, please contact the Clerk's Office.] The premium for the PIP policy with its $8,000 deductible, was $17.00. The $35.00 difference between the PIP premium and what Mr. Logos paid was apparently the cost of the motor club membership. More than a month later Mr. Logos received his policy in the mail, along with papers indicating he was a member of the Nation Motor Club. Mr. Logos never asked to join Nation Motor Club and would not knowingly have paid to do so. He made inquiries, then complained to the Insurance Commissioner. Respondent refunded the entire $52.00 by check dated August 27, 1982.
Findings Of Fact At the time of the hearing, and at all times relevant to the allegations contained in the Administrative Complaint, Alan David Cottrill was licensed as a general lines property, casualty, surety and miscellaneous lines agent by the Department of Insurance. The Department of Insurance regulates general lines-property, casualty, surety and miscellaneous lines agents pursuant to Chapters 626 and 627, Florida Statutes. Lloyd Register, III, and his son, Lloyd Register, IV, operate directly or indirectly a number of insurance agencies specializing in the sale of nonstandard insurance. These agencies generally employ an agent, who is an officer of a separate corporation in which one or both of the Registers is also an officer; and the Registers own a controlling interest in the corporation or otherwise have the capacity to terminate each corporation. Alan David Cottrill started his employment with Cash Register of Arlington, Inc. in July, 1992. He was designated as the primary agent at Cash Register of Jacksonville, Inc. at the end of July, 1992, at which time he was president of the corporation. In February of 1993, he became vice president and president of Cash Register of Westside, Inc. In March of 1993, the Mr. Cottrill was again employed by Cash Register of Arlington, Inc., and was an officer of that corporation and primary agent of that insurance agency. He was the primary agent and general manager of Cash Register of Palatka, Inc., from November of 1993 until October of 1994. From February of 1993 until October of 1994, Mr. Cottrill was general manager of all Cash Register Offices in Jacksonville and Orange Park, Florida. The Respondent was again employed full time by Cash Register of Westside, Inc. in March of 1994, and became the primary agent for that agency in May of 1994. All of the Cash Register Auto Insurance agencies with which the Respondent was employed, as indicated in Paragraph 4, above, were insurance agencies regulated under the laws of Florida. Lloyd Register, IV, was an officer and director of the foregoing Cash Register Auto Insurance agencies. Colonial Touring Association, Inc., is an automobile club providing accidental death and dismemberment as an ancillary product. COUNT I, II, and III The Petitioner did not present any evidence on the allegations of Counts I, II, III, VI, VII, IX, and X in the Administrative Complaint. COUNT IV Cassie Reimer contacted Cash Register Auto Insurance of Orange Park, Inc., at 203 Blanding Boulevard, Jacksonville, Florida, on January 8, 1993, regarding the purchase of automobile insurance. At the time Ms. Reimer purchased insurance from Cash Register Auto Insurance of Orange Park, Inc., the Respondent admitted he was the manager of the Orange Park office. The application executed by Ms. Reimer indicates that the Agency's name is "Cash Register Auto Insurance of Jax, Inc., 5631 University Blvd. W., Jacksonville, FL 32216," and the agent's number is 8009. Prior to going the Orange Park office of Cash Register Auto Insurance, Ms. Reimer had called and had obtained a quote for liability, collision, and personal injury protection for her automobile. Ms. Reimer advised the individual with whom she spoke on the phone that she wanted the minimum coverages necessary to satisfy the lien-holder of her automobile loan and the Florida law. Based upon the quote which she received, she went to the Orange Park office of Cash Register Auto Insurance. When Ms. Reimer arrived at the office, she was assisted by Andrew Voshell, who she knew as "Andy" and who helped her fill out the insurance applications (Petitioner's Exhibits 1 & 2) for liability, collision, and personal injury protection from American Union Insurance Company. Mr. Voshell helped her fill out the premium financing agreement, accepted a down payment in the amount of $83 from Ms. Reimer, and presented Ms. Reimer an application which she executed for Colonial Automobile Club which included additional insurance for accidental death and dismemberment (ADD) which cost $80. The transaction was memorialized in Petitioner's Exhibit 3 (the premium financing agreement), Petitioner's Exhibit 4 (cash receipt from Voshell), Petitioner's Exhibit 5 (Colonial Touring Association, Inc. designation of beneficiary), and Petitioner's Exhibit 6 (confirmation of coverage). The Confirmation of Coverage form (Petitioner's Exhibit 6) indicates that there were $2,000, $1,000, $500, and $250 deductibles for bodily injury; and that ADD coverage from Colonial was optional and cost $80. Ms. Reimer signed each of the spaces on the Confirmation of Coverage, indicating she had read and understood the policy. The Premium Financing Agreement (Petitioner's Exhibit 3) indicates that the total amount financed was $551, which included the $80 premium for Colonial Touring Association (CTA) for ADD and the $471 premium for American Union (AIB) for property damage and personal injury protection. Ms. Reimer was not advised by Mr. Voshell that she was purchasing an optional automobile club membership, and that the cost thereof was being added to her premiums and financed. Andrew Voshell was not a licensed agent at the time he dealt with Ms. Reimer. It was Mr. Voshell who acted as the agent presenting the applications and obtaining Ms. Reimer's signature and accepting payment from her; however, Alan David Cottrill knew about the transaction because he signed Ms. Reimer's applications outside her presence. COUNT V On December 10, 1992, Curtis Newton bought automobile insurance at the University Boulevard office of Cash Register Auto Insurance of Jacksonville, Inc. The Respondent was employed at that office as the primary agent at that time. Mr. Newton called the office and obtained a quote for the minimum liability and PIP coverage required by law. The Respondent completed most of Mr. Newton's application for insurance while speaking with him on the telephone. Because Mr. Newton wanted to finance the premiums, the Respondent included an auto club membership with ADD coverage in the quote. When Mr. Newton came to the agency, he dealt with Linda Palmer, an unlicensed individual, exclusively. Ms. Palmer worked at the office from September, 1992 until August, 1993 under the supervision of the Respondent. Ms. Palmer did not hold a license to transact any type of insurance business during her employment with Cash Register Auto Insurance. The Respondent permitted Ms. Palmer to take applications and receive money. The Respondent required that Ms. Palmer explain to the customer the Confirmation of Coverages form which the customer signed. This was the only explanation provided to customers of the insurance they were buying, and constituted an explanation of policies. Mr. Newton advised Ms. Palmer that he did not want to join an auto club and did not want ADD coverage. Ms. Palmer crossed off the ADD coverage on the Premium Financing Agreement; however, she had Mr. Newton execute the Coverage Confirmation which indicated $4,000 coverage for ADD, but which did not state a premium amount. There is no place under ADD to indicate "no coverage" as there is for the other optional coverages. Mr. Newton also executed a designation of beneficiary form for Auto Accidental Death Coverage, and paid a down payment of $91 to Ms. Palmer. Ms. Palmer did not advise Mr. Newton that he had executed the paperwork for ADD coverage. Ms. Palmer was required by Respondent to sell auto club and ADD coverage. The inclusion of the forms for auto club and ADD coverage was intentional. The premium financing agreement was for the amount of the liability and PIP coverage, $256, and this coverage was provided. However, the premium financing agreement indicates the down payment was $51, not $91. There is no evidence that Mr. Newton was provided with ADD coverage, which he did not want, but the $40 difference between the $51 down payment and the $91 which Mr. Newton tendered to Ms. Palmer was not refunded to Mr. Newton. There was no evidence that Mr. Newton ever made demand for this overpayment. Had the Respondent handled Mr. Newton's application, the Respondent would have known that Mr. Newton did not desire ADD coverage, and that the down payment tendered was excessive and inconsistent with the insurance being provided and the amount being financed. In filling out the applications, explaining the forms, and accepting the money from Mr. Newton, Ms. Palmer engaged in activities restricted to agents with the knowledge and consent of the Respondent. COUNT VI and VII The Department did not present any evidence regarding Counts VI and VII. COUNT VIII On October 22, 1992, Rosa Coleman bought automobile insurance at the 3796 Blanding Boulevard office of Cash Register Auto Insurance of Westside, Inc. from the Respondent who was employed at that office at that time. Ms. Coleman advised the Respondent that she wanted the minimum required coverages. Ms. Coleman came into the office on her lunch hour and executed an application (Petitioner's Exhibit 7) for bodily injury, property damage, and PIP insurance to Union American Insurance Company. Ms. Coleman executed various forms, among which were a Confirmation of Coverage form and Designation of Beneficiary form which indicated she was obtaining auto club and ADD coverage. The Respondent did not explain that there was a separate charge for auto club membership which included the ADD coverage, or that she did not have to have this coverage. The total insurance premium for the liability and PIP coverage was $291 and the charge for the auto club was $30, for a total of $321. The handwriting makes it difficult to read the two amounts; however, the ADD was for $3,000, and the premium was $10 per thousand of coverage. The receipt indicates the Respondent received $40 down payment. The remainder of the premium was financed by Ms. Coleman with Equity Premium, Inc. The application (Petitioner's Exhibit 7) the receipt (Petitioner's Exhibit 8) and designation of beneficiary form (Petitioner's Exhibit 11) indicate that insurance company was Cash Register Auto Insurance, 5631 University Blvd. West, Jacksonville, FL 32216. Although the Respondent was not the agent for the Blanding Boulevard office at the time Ms. Coleman purchased her insurance, the Respondent, who personally sold Ms. Coleman her insurance, was the primary agent for the agency listed on the application and receipt which she received from the Respondent. COUNT IX AND X The Department did not present any evidence on these two counts. COUNT XI On or about December 22, 1993, Dennis Hurlburt went into the Palatka office of Cash Register Auto Insurance of Putnam County, Inc., in Palatka, Florida, and purchased liability and PIP on his truck. At that time, the Respondent was the primary agent in the Palatka office. (Volume III, Page 345, line 19.) Mr. Hurlburt completed an application for property damage and PIP insurance from Security Insurance Company of Hartford with the assistance of Andrew Voshell, an unlicensed employee of Cash Register Auto Insurance of Putnam County, Inc. in Palatka, Florida, who was under the supervision of the Respondent. Mr. Hurlburt's premium for the coverages he applied for was $229, and he paid Andrew Voshell $75. Mr. Hurlburt financed the balance of the premiums which included PIP, property damage, automobile club, and ADD. Mr. Voshell receipted for the down payment, and signed Respondent's name on Mr. Hurlburt's application as brokering agent. The Respondent denied that he was aware of Mr. Voshell's actions; however, he was primary agent in that office during the time in question and is charged with the supervision of the office. Money was received and receipted for by Mr. Voshell, who the Respondent admits was authorized to see customers, review applications, make deposits, and keep books. At this time, the Respondent was also actively engaged as primary agent in another office. Based upon the record as a whole and credibility of the various witnesses, the Respondent's denial is rejected. GENERAL FINDINGS ON THE CONDUCT OF RESPONDENT'S BUSINESS Most purchasers of nonstandard automobile insurance who finance their premiums do not complete payment of the premiums; whereupon, the finance company notifies the insurance company which cancels the insurance and cancels the commission earned by the selling agent after deducting for the coverage provided. By selling the auto club memberships, which included ADD coverage, the agent receives 90 percent of the premium which protects the agent against the loss of unearned premiums charged back by insurance companies. It is for this reason that the owners and management of Cash Register had the employees of their outlets include auto club memberships in insurance contracts, particularly those with premium financing. In those cases in which a customer declines auto club membership, the Cash Register agencies refuse to finance premiums, or increase the charges for financing. The Respondent and his employees sell between 80-140 automobile insurance policies per month. The average premium has increased over time, but varied between $250 and $550 for the counts presented. The Respondent receives a commission between 15 and 17.5 percent on automobile insurance. The commission for an auto club ADD contract is 90 percent which means that the agency receives $54 of a $60 premium. This is a "guaranteed" commission because there is no refund on the auto club membership, and this permits the agency to risk the loss of unearned commission which occurs when an insured defaults on his or her premium financing agreement. The customers made a down payment, which was received by the agency, and the balance of the amount owed was financed by the customer. According to the premium financing contract, the down payment was subtracted from that total due for PIP, property damage, and ADD insurance; and the balance due was financed. Under the terms of the contract, the customer financed a portion of the ADD coverage. In actuality, the down payment was applied first to the auto club membership, which included ADD coverage, and only PIP and property damage coverages were financed. The contract for the premium financing and the explanations of what was being financed do not accurately reflect this reality. Government Employees Insurance Company markets its automobile insurance through the mail, and sends applications to the customers through the mail, which are subsequently executed by the agent when returned by the customer by mail. Prior to October 12, 1993, the Department had no rule proscribing the practice of unlicensed persons giving quotes on behalf of a licensed agent. The Department has no rule defining "solicit" and "procure" with respect to the sale of insurance. The Department has no rule which requires an agent sign an application in the presence of the insured.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That the Department revoke the license of the Respondent for violation of Section 626.611(5) and (9), Florida Statutes, by aiding others to act as agents as alleged in Count V, and That the Department revoke the license of the Respondent for violation of Section 626.611(5) and (9), Florida Statutes, by aiding others to act as agents as alleged in Count VIII, and That the Department revoke the license of the Respondent for violation of Section 626.621(12), Florida Statutes, by aiding others to act as agents as alleged in Count IV, and That the Department revoke the license of the Respondent or impose a fine of $2,500 for violation of Section 626.621(12), Florida Statutes, by aiding others to act as agents as alleged in Count V, and That the Department revoke the license of the Respondent or impose a fine of $2,500 for violation of Section 626.621(12), Florida Statutes, by aiding others to act as agents as alleged in Count XI, and That the Department impose a $2,500 fine for Respondent's violation of Section 627.8405, Florida Statutes, by including ADD coverage in a premium financing agreement as alleged in Count XI, and That the Department impose a $500 fine for violation of Section 627.4085(1), Florida Statutes, for improperly identifying the agency's address as alleged in Counts IV, and That the Department impose a $500 fine for violation of Section 627.4085(1), Florida Statutes, for improperly identifying the agency's address as alleged in Counts VIII. DONE and ENTERED this 11th day of January, 1996, in Tallahassee, Florida. STEPHEN F. DEAN, 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 11th day of January, 1996. APPENDIX CASE NO. 94-5460 Both parties submitted proposed findings of fact which were read and considered. The following states where their findings were adopted or why they were rejected: Petitioner's Recommended Order Findings Paragraph 1,2 Paragraph 1 Paragraphs 3-10 Paragraph 4 Paragraph 11 Paragraph 5 Paragraphs 12,13 Paragraph 6 Paragraph 14,15 Paragraph 14 Paragraphs 16,17 Paragraph 18 Paragraph 18 Paragraph 6 Paragraph 19 Irrelevant and unnecessary. Paragraph 20 Paragraph 8 Paragraph 22,23 Paragraph 11 Paragraph 24 Paragraph 15 Paragraph 25 Contrary to better evidence. Paragraph 26 Paragraph 12 Paragraphs 27,28 Paragraphs 12,13,15 Paragraph 29 Paragraph 16 Paragraph 30 Subsumed by paragraph 15. (S-15.) Paragraph 31,32 Paragraph 28 Paragraph 33 Paragraph 29 Paragraph 34 Unnecessary. Paragraph 35 Paragraph 31 Paragraph 36 Contrary to better evidence. Paragraph 37 Paragraph 31 Paragraph 38 Contrary to better evidence. Paragraph 39,1st sent. Paragraph 30 Paragraph 39,remainder Contrary to better evidence. Paragraph 40 Contrary to better evidence. Paragraph 41 Paragraph 33 Paragraphs 42,43 Paragraph 34 Paragraphs 44-47 Paragraph 35 Paragraph 48 Paragraph 18 Paragraph 49 Subsumed in Paragraph 19. Paragraph 50 Subsumed in Paragraph 22. Paragraph 51 Paragraph 21 Paragraphs 52-55,57 Paragraph 24 Paragraph 56 Paragraph 22 Paragraph 57 Subsumed in Paragraph 24. Paragraphs 58,59 Paragraph 21 Paragraph 60 Paragraph 22 Paragraphs 61,63,64 Unnecessary. Paragraph 62 Subsumed in Paragraph 23. Paragraph 65 Subsumed in Paragraph 36. Paragraphs 66,67 Paragraph 38 Paragraph 68 Contrary to better evidence. Paragraph 69 Irrelevant. Paragraph 70 Paragraph 39 Paragraph 71 Irrelevant. Paragraph 72 Contrary to better evidence. Paragraph 73 Subsumed in Paragraph 33. Paragraph 74 Irrelevant. Paragraph 75 Paragraph 37 Respondent's Recommended Order Findings Paragraph 1 Paragraph 2 Paragraph 2 Paragraph 1 Paragraph 3 Irrelevant as to time. Paragraph 4 Irrelevant. Paragraph 5 Subsumed in Paragraph 17. Paragraph 6-8 Subsumed in Paragraph 7. Paragraph 9 Paragraphs 8,11 Paragraph 10 Paragraph 9 Paragraph 11 Subsumed in Paragraph 8. Paragraph 12 Subsumed in Paragraph 11. Paragraph 13 Subsumed in Paragraph 13 and second application is irrelevant. Paragraph 14 Subsumed in Paragraph 14. Paragraph 15 Contrary to Reimer's testimony: Vol I, pg 118. Paragraph 16 Subsumed in Paragraph 14. Paragraph 17 Subsumed in Paragraph 13. Paragraph 18 Subsumed in Paragraph 14. Paragraph 19 Irrelevant. Paragraph 20 Paragraph 20 Paragraph 21,22 Contrary to better evidence. Paragraph 23 Paragraph 18 Paragraph 24 Subsumed in Paragraph 19. Paragraph 25 Paragraph 19 Paragraphs 26,27 Subsumed in Paragraphs 20,21. Paragraphs 28,29 Subsumed in Paragraph 22. Paragraph 30 Subsumed in Paragraph 24. Paragraph 31 Rejected because Respondent's failure to perform the acts required of the agent lead to his mistaken belief. Paragraph 32 Paragraph 22 Paragraphs 33-35 Irrelevant. Paragraphs 36,37 Paragraph 27 Paragraph 38 Paragraph 28 Paragraph 39 True, but Respondent was the agent who dealt with Coleman and was directly responsible for his own acts. Paragraph 40 Subsumed in Paragraph 30. Paragraph 41 Rejected as contrary to better evidence. Paragraphs 42,43 Subsumed in Paragraph 30. Paragraphs 44,45 Irrelevant. Paragraphs 46,47 Paragraph 32 Paragraph 48 Paragraph 33 Paragraph 49 Rejected as contrary to better evidence. Paragraphs 50-52 Irrelevant. Paragraphs 53,54 Paragraphs 34,35 Paragraph 55 Rejected as contrary to better evidence. Paragraph 56 Subsumed in various paragraphs. Paragraph 57,58 Paragraph 36 Paragraph 59-69 Irrelevant or not necessary to resolution of the issues. Paragraph 70 Rejected as contrary to better evidence. Paragraph 71 Irrelevant. Paragraph 72 Not necessary to resolution of the issues. Paragraph 73,74 Rejected as contrary to better evidence. Paragraph 75-79 Irrelevant. Paragraph 80 While true, the fact asserted is contrary to the financing paper work. This is part of the misleading activities by Respondent and his employees. Paragraph 81-84 Irrelevant. Paragraph 85 Recites Hearing Officer's ruling. Paragraph 86,87 Not necessary to resolution of the issues. Paragraph 88,89 Irrelevant. Paragraphs 90,92 Paragraphs 43,44 Paragraphs 91 Irrelevant. Paragraph 93,94 Paragraph 45 COPIES FURNISHED: Allen R. Moayad, Esquire Department of Insurance Division of Legal Services 612 Larson Building Tallahassee, FL 32399-0333 Jed Berman, Esquire Infantino and Berman Post Office Drawer 30 Winter Park, FL 32790 Bill Nelson, State Treasurer and Insurance Commissioner Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 Dan Sumner, Acting General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, FL 32399-0300
Findings Of Fact At all times material hereto Respondent was licensed as an Ordinary Life and General Lines Agent (Exhibit 1) and was the agent for Dixie Insurance Company at the Bartow office. As such, he had the authority to write policies binding the insurer. At all times relevant hereto, Respondent was president and principal stockholder of Friendly Insurance Companies of Bartow, Winter Haven, Lake Wales and Haines City. The corporate records (Exhibit 3 for Polk County) show this to be the same as Friendly Auto Insurance of Lake Wales, Inc. Respondent was the agent for Dixie Insurance Company only at the Bartow office. Dixie Insurance Company qualifies agents, not offices, to sell their policies. Respondent had no authority to act as agent for Dixie Insurance at any of these offices other than the Bartow office as the insurance company has but one agent per office. To support the allegations in count 34 of the Administrative Complaint, Edward Bland testified, and Exhibits 21 through 23 were admitted. Bland applied for automobile insurance at Friendly Auto Insurance at the Winter Haven office, which he paid for by check in the amount of $728 (Exhibit 23) as full payment for the one year premium. Subsequent thereto, a Premium Finance Agreement was prepared on which Bland's signature was forged showing $546 of the premium to be financed. This finance agreement was signed by T. R. Shaw as agent. Upon learning that the finance agreement had been issued on his coverage, Bland contacted the Winter Haven office manager, and after a few weeks of "run around" contacted the Department of Insurance and "got his money back." Bland never saw Shaw or Respondent. Rafael Gomez, M.D. purchased automobile insurance on his three cars from Friendly Auto Insurance of Winter Haven in December 1985 for which he paid $3452.71 for the annual premium. Subsequently thereto, he received a call from the Barnett Bank, which had financed one of the cars, to tell him that the bank needed evidence of insurance on the financed auto. Dr. Gomez contacted Ruth Kent, the office manager at the Winter Haven office, who assured him she would supply the bank with the necessary documentation. When the bank contacted Dr. Gomez later to again demand proof of insurance, Gomez went to the Winter Haven office and demanded to see his file. He made copies of certain documents which he took to the bank. Dr. Gomez subsequently learned that a finance agreement had been entered into on his behalf, but without his knowledge or consent, and that the address shown on the agreement under his name was that of Ruth Kent. Although when accosted by Dr. Gomez with this information, Ms. Kent denied such an intentional act, this would have allowed her to hold the finance coupons and get all information supplied by the finance company to the borrower without Dr. Gomez learning that the policy for which he had paid in full was subsequently financed. After learning of the subterfuge, Dr. Gomez contacted the Department of Insurance. Ruth Judd was office manager at the Friendly Insurance Agency of Haines City for a period of time ending in 1987 when she was terminated by Respondent. Ms. Judd contends she was only the office manager, and Respondent was the boss of the office and hired all employees. During the time she worked in the office, Ms. Judd testified several different people served as the licensed agent for the office, but they spent little time in the office with Donald Leroy Flentke, towards the end of his tenure, coming in only for his weekly paychecks. No evidence was presented from which a determination could be made that for a specific period of time any of the four offices were not being supervised by a licensed agent. Ms. Judd testified she was aware of one policy for which the insured had paid the premium in full being submitted for a premium finance agreement with forged documents. She also was aware that monthly financing payments were made by the Haines City office on some three or four other premium finance agreements. Ms. Judd testified on March 2, 1988, that she was presently unemployed. Respondent called one witness that testified and produced documentary evidence (Exhibits 24 through 26) that on March 2, 1988, this witness purchased insurance from Ms. Judd at New Horizons and was required to buy an accidental death policy in order to obtain PIP coverage. Exhibit 7 shows that an automobile insurance policy was issued to Jackie Bryan, the policy was sold through Friendly Insurance of Winter Haven, Inc., that the premium was financed, the borrower owed an additional $142.66 on the finance agreement, and the policy expired 2-26-86. Respondent acknowledged that his signature appears on the premium finance application. Some 5000 policies are sold by Respondent's agencies per year, and Respondent has no independent recollection of that finance agreement. Dixie Insurance Company issued a policy to Johnny Davis which was also financed through Envoy, but this application was signed by Shaw. Although Dixie Insurance Company had their own premium finance organization and, if the premium is financed, preferred to do the financing, Respondent testified that occasionally, if a client did not want to finance their premium through Dixie, the agency would go through another premium finance company such as Envoy. Exhibits 9, 10, 11 and 12 show premium finance agreements were contracted for on behalf of Raymond Scott, Mark Turner, Kathy Smith and Cathy Phillips, but no auto insurance policies were issued by Dixie Insurance Company to these individuals. Only one of these finance agreements (Exhibit 12) purports to be prepared at the Bartow office, and two of the drafts (Exhibits 9 and 12) purport to be signed by Respondent. Respondent testified he neither signed those drafts nor authorized someone else to sign for him. The forgery on both Exhibits 9 and 12 appear to have been perpetrated by the same person. Cathy Phillips, a friend of Ruth Kent, testified without contradiction that the signature purporting to be hers on Exhibit 12 was forged, that she never entered into a premium finance agreement with Envoy Finance Corporation, and that she had never seen Exhibit 14 until presented to her by the Petitioner's attorney. Ms. Phillips did receive a past-due notice on one occasion and called Ruth Kent who told her not to worry about it, that everything was taken care of. Subsequently, Ms. Phillips' husband wrote a letter to Envoy Finance Corporation denying any knowledge of any insurance policy written by Friendly Insurance of Bartow. Considerable testimony was submitted regarding the activities of Chuck Evans who was, at one time, employed by Respondent at the Winter Haven agency as a non-licensed employee with authority to write checks on the Trust Account. While the statements made by Evans to Department of Insurance officials contributed to the initiation of the investigation of Respondent's agencies, none of this testimony was relevant to the charges here at issue.
