The Issue Whether Respondent committed the offenses described in the administrative complaint? If so, what punishment should he receive?
Findings Of Fact Based on the record evidence the Hearing Officer makes the following Findings of Fact: Respondent is now, and has been for approximately the past 20 years, licensed by Petitioner as a general lines insurance agent. On July 3, 1986, Petitioner received a complaint concerning Respondent from Elsa Garcia. Garcia reported that she had purchased automobile insurance through Dixie Insurance Brokers and had been given a temporary insurance binder bearing the signature of a "Paul J. Lovelace" reflecting that her coverage was to be effective March 11, 1985. According to Garcia, however, she had subsequently discovered, after having been involved in an automobile accident on March 23, 1985, that her insurance coverage had not taken effect until after the accident. Garcia's complaint was assigned to one of Petitioner's employees, Burton Powell, to review and investigate. As part of his investigation, Powell contacted Alan D. Kruger, Garcia's attorney. Kruger supplied Powell with Garcia's affidavit and other pertinent documents, including a copy of Garcia's automobile insurance application and the temporary insurance binder she had been given by Dixie Insurance Brokers. The application reflects that Garcia was seeking coverage for the period from April 2, 1985, to October 2, 1985. The binder, on the other hand, indicates that it was to be effective for one month commencing, not April 2, 1985, but March 11, 1985. Someone other than Respondent signed his name to both the application and the binder. 1/ On various occasions prior to December 18, 1987, Respondent was the general lines insurance agent of record for Dixie Insurance Brokers. 2/ On these occasions he never personally signed any insurance applications, nor did he otherwise play any role in the operation and control of the agency. By his own admission, he simply allowed the agency to use his license, without any restrictions imposed by him, in exchange for monetary consideration. In so doing, he willfully engaged in a scheme designed to circumvent the licensing requirements of the Florida Insurance Code.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner enter a final order (1) dismissing Count I of the administrative complaint; (2) finding Respondent guilty of Count II of the administrative complaint; and (3) revoking Respondent's general lines insurance agent license for his having engaged in the conduct specified in Count II of the administrative complaint. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of November, 1989. STUART M. LERNER 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 2nd day of November, 1989.
The Issue The issue in this case is whether Respondent committed the offenses alleged by the Department of Financial Services in the Administrative Complaint dated May 27, 2009, and, if so, what penalty should be imposed.
Findings Of Fact Petitioner, the Department of Financial Services ("Petitioner" or "the Department") has regulatory responsibility for Chapter 626, Florida Statutes (2009), the insurance licensing procedures law. Respondent, Eileen P. Suarez ("Respondent" or "Suarez"), is a licensed general lines agent transacting in property and casualty insurance, under license number E129078. She operated and was the agent in charge of the Suarez Insurance Agency, Inc. ("Agency"), in Hialeah, Florida. The Agency held a valid state license from 7/21/2006 to 7/27/2009. The Department filed a three-count Administrative Complaint against Respondent alleging that she violated various provisions of Chapter 626, Florida Statutes. COUNT I John Vila is the president of Vila Home Group, Inc., a trucking company that is in the business of hauling sand, soil, and gravel. In April 2005, he purchased a dump truck and, at the suggestion of the dealer, contacted Suarez for insurance. Suarez sold Vila two insurance policies, for the period April 29, 2005 to April 29, 2006, one with AequiCap Insurance Company ("AequiCap") and the other with the Underwriters at Lloyds, London ("Lloyds"). The AequiCap Policy was a commercial liability insurance policy. The Lloyds Policy was a commercial automobile physical damage insurance policy. In March 2006, Vila gave Suarez a check in the amount of $10,876.41, made payable to the Agency to renew the AequiCap and Lloyds policies, for the period April 29, 2006 to April 29, 2007. The AequiCap policy quote was approximately $5,350.00. The Lloyds policy quote was approximately $5,500.00. The check was deposited in the Agency's trust account, but the Lloyds policy was allowed to expire on April 29, 2006, and was not renewed until October 26, 2006, creating a six-month gap in commercial automobile physical damage insurance coverage for Vila. When it was renewed, the Lloyds Policy cost $5,712.03. Vila's AequiCap policy expired on April 29, 2006, and was not renewed because Suarez failed to pay MAI Risk Management, AequiCap's managing general agent. The funds were not returned to Vila. While the March 2006 quotes were pending, the registered driver of the truck, Andres Vila, was involved in an accident and was at fault for hitting a wire. Rather than risk an increase in the pending insurance quotes, Vila paid Bellsouth $2,390.36 in damages. COUNT II On or about October 26, 2006, Suarez provided Vila a Certificate of Liability showing that the truck was insured with AequiCap, under policy number TC012695, and with Lloyds, under policy number R641440/0251, for the period April 29, 2006 to April 29, 2007. Vila was not insured under AequiCap policy number TC012695 from April 29, 2006 to April 29, 2007. The Certificate of Liability was a false document that Suarez created on her computer, printed, and gave to Vila. COUNT III Shelly, Middlebrooks & O'Leary, Inc. ("Shelly Middlebrooks") is a licensed insurance agency, located in Jacksonville, that acts as a general agent for multiple insurance companies. Suarez collected insufficient funds to include the premiums that were intended to be forwarded to Shelley Middlebrooks for policies to insure the following trucking companies: All Nations Logistics, LLC (Policy Number 486865); Jose Veiga, d/b/a JJ Freightways (Policy Number 486885); Gary Castle/Diamond Mine (Policy Number 74APN338354); and Nics Oil, Inc. (Policy Number 74APN401617). For each of the four companies, she requested and received binders for insurance from Shelly Middlebrooks, followed by invoices for the premiums that were to have been paid within ten days of the date the invoices were received. In each instance, Suarez did not pay Shelly Middlebrooks, which cancelled the policies for non-payment of the premium. It also obtained a default judgment in the Circuit Court in and for Duval County, Florida, that requires Suarez to pay it the outstanding balances due for the four policies and a $25 insufficient funds check fee, for a total of $8,335.60, which she has been unable to pay. Instead of paying for insurance, Suarez used most of the funds she collected to pay for various other corporate expenses for the same trucking companies, including state and federal government filings for intrastate or interstate travel that were prerequisites to their becoming insurable. Suarez expected to collect the additional funds needed for insurance later, but the clients, the owners of the trucking companies, did not pay her. Suarez admits that she failed her clients in 2006, after her father's death in February 2006. She realized the Vila errors and tried to correct them in October. The Agency is now closed. Suarez's husband has been unemployed for over a year, and their home is in foreclosure. She is receiving social security disability payments and has insufficient funds to file for bankruptcy.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Department of Financial Services: Finding Respondent guilty of violating Subsections 626.611(7), (8) and (10); Subsection 626.561(1); and Subsections 626.621(2) and (6), Florida Statutes, as charged in Count I of the Administrative Complaint; Finding Respondent guilty of violating Subsections 626.611(7) and (8); Subsection 626.621(6); and Subsection 626.9541 (1)(e)1., Florida Statutes, as charged in Count II of the Administrative Complaint; Finding Respondent guilty of violating Subsections 626.611(7), (8) and (10); Subsection 626.561(1); and Subsections 626.621(2) and (6), Florida Statutes, as charged in Count III of the Amended Complaint; Revoking Respondent's licenses and appointments issued or granted under or pursuant to the Florida Insurance Code; Ordering Respondent to make restitution to John Vila in the amount of $5,164.38; and Ordering Respondent to make restitution to Shelly Middlebrooks & O'Leary in the amount of $8,335.60. DONE AND ENTERED this 16th day of February, 2010, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of February, 2010.
The Issue Whether the Respondent committed the acts alleged in the Amended Administrative Complaint filed by the Petitioner on October 6, 1997, and, if so, the penalty which 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 of Insurance is the state agency responsible for regulating the business of insurance in the State of Florida. Section 624.307, Florida Statutes. This power extends to the licensing and discipline of insurance agents. Sections 626.291, .611, and .621, Florida Statutes. Howard Irvin Vogel ("Respondent") is, and was at all times material to this action, licensed as a general lines agent (2-20) and a health insurance agent (2-40); Respondent is also currently licensed as a Florida Property and Casualty Joint Underwriting Association representative (0-17). Respondent is, and was at the times material to this action, the president of Federal Auto Ins., Inc., 1/ ("Federal Insurance"), an incorporated general lines insurance agency located in Lake Worth, Florida. He is, and was at the times material to this action, the only officer of the corporation who is a licensed insurance agent. In 1993, 1994, 1995, and 1996, Respondent was a director of the corporation and its designated primary agent. Respondent is, and was at the times material to this action, also the only licensed insurance agent who has the authority to sign checks drawn on the Federal Insurance trust account. At the times material to this action, Federal Insurance employed at least two licensed insurance agents in addition to the Respondent. The Respondent regularly worked full-time in the Federal Insurance office during 1993, 1994, and 1995, and he was aware of the way in which the agents he employed sold insurance. All monies received by the agents were turned over to the agency, and the Respondent approved all refunds and signed all refund checks. The Respondent ran the day-to-day operations of the insurance agency and supervised the agents who worked there. At the times material to this action, it was the practice at Federal Insurance to impose a service charge for the preparation of certificates of insurance 2/ if a customer indicated he or she would need certificates prepared throughout the year. It was also the practice not to charge customers for the preparation of the first three certificates, but the agents employed there had the option, depending on the person and on the amount of the premium, of charging $5 for each certificate prepared in excess of the three free ones or of charging a flat fee of $100 per year. The charge was imposed to cover the costs of preparing the certificates. The agents employed by Federal Insurance were expected to explain the charge to the customer and to make it clear that the $100 was an additional charge and not part of the insurance premium. The fees received for the preparation of certificates of insurance were deposited in Federal Insurance's trust account. Some insurance agencies do not charge for the preparation of certificates of insurance on behalf of their customers. At the times material to this action, Federal Insurance sold automobile towing coverage provided by L.N.V., Inc., a Florida corporation whose directors since its incorporation in 1987 have been Howard and Alicia Vogel. L.N.V., Inc., reimburses its members for the expense of towing an insured vehicle if an accident occurs during the period the customer's automobile insurance policy is in effect. Federal Insurance had, at the times material to this action, a separate application for the towing coverage, which applicants for the coverage were required to sign. The agents employed by Federal Insurance were expected to explain the nature of the coverage and to make it clear to the customer that the charge for the towing coverage was separate from the premium charged for the underlying automobile insurance policy. The membership fees received for the towing coverage were deposited into a separate account for L.N.V., Inc. The Respondent is the only licensed insurance agent authorized to sign checks on this account. Michael Clark On December 19, 1993, Michael J. Clark went to the office of Federal Insurance to purchase a commercial general liability insurance policy and to renew his commercial automobile insurance policy. He met with Lee Vogel, who was a licensed general lines agent employed by Federal Insurance. Lee Vogel quoted Mr. Clark an annual premium of $776 for the renewal of his commercial automobile insurance policy for a vehicle used in his business, Eastern Electric. Mr. Clark applied for the policy, which was written by the Granada Insurance Company ("Granada"); $776 was the correct premium for the coverage Mr. Clark requested. Mr. Clark paid Federal Insurance a down payment of $330 and signed a Premium Finance Agreement and Disclosure Statement in order to obtain financing for the balance of the premium. When Mr. Clark signed the premium finance agreement, the portion identified as the Federal Truth-in-Lending Disclosure Statement had not been completed by Lee Vogel, so the form did not reflect the amount of the down payment. Mr. Clark and Lee Vogel used a worksheet when they were discussing the coverage and the cost of the policy. The worksheet Lee Vogel prepared during these discussions shows that he added $100 to the $776 premium for the commercial automobile insurance policy and stated a total of $876 on the worksheet. Mr. Clark signed the worksheet on which the $100 charge is shown, and he apparently did not question at that time the purpose of the additional $100 charge. Several weeks after he purchased the commercial automobile insurance policy, Mr. Clark received the documents and payment book from the premium finance company. These documents reflected that he had been credited with a down payment of only $230 rather than the $330 down payment Mr. Clark thought he had made on the policy. At the same time he purchased the commercial automobile insurance policy, Mr. Clark purchased a commercial general liability insurance policy. Lee Vogel quoted Mr. Clark a premium of $281 for a policy which would be written by the American Surety and Casualty Insurance Company ("American Surety"). Mr. Clark applied for this policy and paid Federal Insurance $381 as payment in full for the general liability policy. The worksheet prepared by Lee Vogel shows a $100 charge added to the $281 premium quoted to Mr. Clark. Although Mr. Clark claims that Lee Vogel did not explain the $100 charge to him, Mr. Clark did not question Lee Vogel about the additional $100 charge. He signed the worksheet and paid Federal Insurance $381 for the general liability coverage even though he was quoted $281 as the premium for the coverage. Lee Vogel added the $100 charge to the $776 and $281 premiums for the automobile and general liability policies as a service charge to cover the costs of preparing any certificates of insurance Mr. Clark might request during the policy year. According to Lee Vogel, customers are not charged for the preparation of certificates for commercial automobile insurance policies because certificates of insurance are not usually prepared for such policies. If they are, it is in conjunction with certificates of insurance prepared to confirm commercial general liability coverage. At the time he purchased the policy, Mr. Clark requested that four certificates of insurance be prepared, and, on December 20, 1993, Howard Vogel signed four certificates of insurance verifying that Eastern Electric had general liability coverage with American Surety. During the 1993-94 policy year, Federal Insurance prepared a total of seventeen certificates of insurance on behalf of Eastern Electric, which certified that Eastern Electric had general liability coverage with American Surety. Five of the seventeen certificates of insurance confirmed both that Eastern Electric had general liability coverage with American Surety and that Eastern Electric had automobile insurance coverage with Granada Insurance Company. No separate certificates of insurance were prepared by Federal Insurance for the commercial automobile insurance policy written by Granada Insurance Company. Mr. Clark testified that he was not informed of the $100 service charge added to the premiums for the commercial automobile insurance policy and the commercial general liability insurance policy. He was in a hurry when he purchased these policies, and, when Lee Vogel gave him two or three papers to sign, he signed the papers without really reading them. Except for his signature appearing on several of the certificates of insurance prepared by Federal Insurance for Eastern Electric, the Respondent's only direct involvement with Mr. Clark's case was a letter the Respondent wrote to the Department, dated June 20, 1994, in which he complained about the way in which the investigation of Mr. Clark's complaint was being handled. Cheryl Lee Andrews On February 23, 1994, Cheryl Andrews purchased a commercial general liability insurance policy for her husband's lawn care business, Tropic Green Lawn Care, through Federal Insurance. After having spoken with him on the telephone, Ms. Andrews met with Bryan Sanders, a licensed general lines insurance agent employed by Federal Insurance, who quoted Ms. Andrews a premium of $673 for a policy written by American Surety. The wholesale broker in this transaction, with whom Federal Insurance had a contract, was Amelia Underwriters, Inc. Ms. Andrews made a down payment of $271 on the policy, and she was given a receipt which indicated that she had paid a $271 payment on a "GL" policy with "Amelia." When she paid the down payment on the policy, Ms. Andrews also signed a Premium Finance Agreement to finance the remainder of the premium through Del Rio Discount Corp. When Ms. Andrews signed the premium finance agreement, the portion identified as the Federal Truth-in-Lending Disclosure Statement had not been completed by Mr. Sanders; the premium finance agreement contained only the number of payments, the amount of each payment, and the date the first payment was due. Soon after, Ms. Andrews spoke with the Respondent on the telephone and requested a copy of the premium finance agreement with a completed disclosure statement. The Respondent sent her a copy of the agreement by facsimile transmittal, but it was not legible. Ms. Andrews telephoned the Respondent again and requested that he send her a copy by mail. When she did not receive another copy from Federal Insurance, she contacted American Surety, which contacted Amelia Underwriters, and the underwriters provided a completed copy of the Premium Finance Agreement. The down payment identified in the agreement was $171. On the day she purchased the insurance policy, Mr. Sanders asked if she wanted any certificates of insurance. At that time, Ms. Andrews did not know what this was, and Mr. Sanders told her it was proof of insurance. She asked that he prepare one certificate of insurance for Tropic Green Lawn Care on February 23, 1994. A second certificate of insurance was prepared by Federal Insurance for Tropic Green Lawn Care on March 28, 1994. Mr. Sanders did not discuss with Ms. Andrews at any time a charge for preparation of certificates of insurance. When she questioned the Respondent during a telephone conversation about the additional $100 she had paid Federal Insurance, he told her that it was a charge for certificates of insurance and other service charges and that, if she wanted any information, she should ask in writing. She then wrote a letter to the Respondent, dated June 10, 1994, requesting a breakdown of these charges, but she did not receive a response. In a letter dated July 26, 1996, written to the Department, Mr. Sanders confirmed that Federal Insurance charged $100 Ms. Andrews for preparation of certificates of insurance. Tropic Green was reimbursed $100 by Federal Insurance by a check drawn on the Federal Insurance trust account and dated January 8, 1996. Virginia Davidson On August 17, 1994, Virginia Davidson applied for personal automobile insurance through Federal Insurance. She dealt with a woman whose name she does not remember and who has not been identified in these proceedings. The policy was to cover a 1985 Chrysler, and she told the woman that she wanted insurance only for a short time because she intended to sell the car in the near future. At the time of this transaction, Ms. Davidson was in her late sixties. Ms. Davidson was told she needed to buy a one-year policy, and she recalled being quoted a price of $386 for an automobile insurance policy written by Armor Insurance Company ("Armor"). She paid the $386 by check dated August 17, 1994, and made payable to Federal Insurance; she was given a receipt that indicated that she had paid in full the premium on the Armor automobile insurance policy for one year. In fact, the premium for this policy was initially computed as $281 on the Brokerage Auto Application form. Although Ms. Davidson signed the application form on which this quote appeared, her signature appeared only on the reverse of the application form, while the quote appeared on the front. Ms. Davidson does not recall that anyone on August 17, 1994, explained that the $386 quoted to her included a separate $100 charge for towing coverage to be provided by L.N.V., Inc. At the time she purchased the insurance policy, Ms. Davidson was a member of AAA and would not have knowingly purchased towing coverage. Ms. Davidson's signature appears on a separate application form which clearly displayed the terms "Towing Coverage" and "LNV Corp." The "membership fee" for this coverage was shown on the form as $100. Ms. Davidson was asked to sign a number of documents when she applied for the automobile insurance policy, and she does not recall signing the application form for towing coverage. In a notice from Armor dated September 16, 1994, Ms. Davidson was notified that she owed an additional premium of $116 on her automobile insurance policy. The additional premium was due as a result of Armor's investigation of Ms. Davidson's driving history. In a letter to Armor dated October 11, 1994, Ms. Davidson requested that the policy be cancelled and that she receive a refund of unearned premium. Armor sent Federal Insurance a check dated October 31, 1994, in the amount of $163.70, representing the unearned premium on Ms. Davidson's automobile insurance policy. Mr. Vogel signed a check to Ms. Davidson on the Federal Insurance trust account, dated November 11, 1994, for $163.70. Ms. Davidson did not receive this check, and a replacement check was prepared, dated December 5, 1994. Ms. Davidson does not recall receiving this check, and neither of these checks has cleared Federal Insurance's account. The Respondent refused to issue another replacement check unless Ms. Davidson waited six months for the checks to clear the bank or paid Federal Insurance the $25.00 fee charged by the bank to stop payment on the replacement check. During December 1994, the Respondent recalculated the amount of the refund owing Ms. Davidson, including for the first time the agency's unearned commission and a pro rata refund of the $100 fee for the towing coverage. The Respondent issued a check to Ms. Davidson, drawn on the Federal Insurance trust account and dated December 26, 1994, in the amount of $117.20. The check specified that it was for "cancellation in full" of Ms. Davidson's automobile insurance policy. Ms. Davidson did not cash this check because she disputed that it was the full amount of the refund owed to her. Armor subsequently issued a check to Ms. Davidson in the amount of $184.80, which included the $163.70 and an additional amount of unearned premium which Armor had neglected to include in its calculations. Ms. Davidson does not recall receiving this check. All of the checks were sent to Ms. Davidson at her correct address in West Palm Beach, Florida. The Respondent was involved in the transaction involving Ms. Davidson only after she cancelled her automobile insurance policy. The Respondent signed the refund checks issued in her name, and, after Ms. Davidson filed a complaint with the Department, he responded to the Department's inquiry regarding the refund due to her. After having reviewed the files of Mr. Clark, Ms. Andrews, and Ms. Davidson, the Respondent was satisfied with the way the agents employed by Federal Insurance transacted business with these individuals. Summary The evidence is uncontroverted that the employees of Federal Insurance are supervised on a daily basis by and are under the direct control of the Respondent. The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that Michael Clark was unaware that he was charged $100 in addition to the premiums quoted on the commercial automobile insurance policy and commercial general liability insurance policy he purchased through Federal Insurance. Although he may not have been told the purpose of the extra charge, Mr. Clark was quoted premiums of $776 and $281, respectively, for the insurance policies. The worksheet he signed clearly shows that $100 was added to each of these premiums; in fact, Mr. Clark paid $381 as payment in full for the commercial general liability insurance policy when he knew that the premium for the policy was $281. On the other hand, the evidence presented is sufficient to establish that Lee Vogel deducted a $100 service charge for certificates of insurance from Mr. Clark's down payment of $330 on the commercial automobile insurance policy even though this charge was not imposed on commercial automobile insurance policies because separate certificates of insurance are not prepared for such coverage. The evidence presented by the Department is sufficient to establish that Bryan Sanders did not inform Cheryl Andrews of the $100 service charge added to the premium for the general liability insurance policy she purchased for Tropic Green Lawn Care and to establish that Ms. Andrews could reasonably believe that the entire down payment of $271 would be applied to the insurance premium. However, the evidence is uncontroverted that, when she spoke to the Respondent by telephone, he told her that the charge was for preparation of certificates of insurance and other services. The evidence presented by the Department is sufficient to establish that, even though she signed an application form for towing coverage to be provided by L.N.V. Corp., Ms. Davidson was not told of the purpose of the application, the nature of the coverage, or the $100 fee for the coverage. In fact, the receipt for $386 that she received from Federal Insurance did not make any reference at all to the towing coverage or to L.N.V. Corp. The evidence presented by the Department is, however, not sufficient to establish that the Respondent refused to refund the monies owing to Ms. Davidson; under the circumstances presented, it was not unreasonable for Federal Insurance to refuse to issue a second replacement check. The evidence presented by the Department is sufficient to establish that the Respondent instituted the practice of charging a $100 service fee for the preparation of certificates of insurance for commercial general liability insurance purchased through Federal Insurance. The evidence presented by the Department is not sufficient to establish that Federal Insurance was prohibited by agreement or contract from imposing a service charge for the preparation of certificates of insurance. The evidence presented by the Department is not sufficient to establish that the Respondent instituted a policy at Federal Insurance requiring customers to purchase towing coverage from L.N.V., Inc., as a condition of purchasing an automobile insurance policy or that the Respondent developed a sales scheme whereby the application for and explanation of the towing coverage was hidden. The evidence is sufficient to establish only one instance in which an unidentified person employed at Federal Insurance failed to disclose the particulars of the towing coverage. The evidence presented by the Department is not sufficient to establish a pattern at Federal Insurance of agents failing to disclose the $100 service charge for preparing certificates of insurance, of agents imposing the service charge to policies for which no certificates of insurance are prepared in the normal course of business, or of failing to inform customers of the nature of and charge for ancillary coverage such as towing coverage. Finally, the evidence presented by the Department does not establish that the Respondent or the agents involved in the transactions at issue in this proceeding failed to remit any portion of the premiums owing to the insurance companies for the policies sold to Mr. Clark, Ms. Andrews, or Ms. Davidson. In the case of Mr. Clark and Ms. Andrews, the premiums quoted to them were correct and the premiums set forth on the premium finance agreements were correct; it is irrelevant in this respect that Mr. Clark and Ms. Andrews may have believed that their $330 and $271 down payments were to be applied solely to the premiums owed on the policies. Likewise, the full amount of the premium initially calculated for Ms. Davidson's automobile insurance policy was paid to the insurance company by Federal Insurance.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance enter a final order dismissing all three counts of the Amended Administrative Complaint filed against Howard Irvin Vogel. DONE AND ENTERED this 16th day of September, 1998, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 16th day of September, 1998.
The Issue The issue for determination is whether Respondent made or is accountable for misrepresentations that were made in the course of sales of automobile personal injury protection insurance policies to various consumers; thereby committing violations of Chapter 626, Florida Statutes, sufficient to subject Respondent's licensure as general lines insurance agent to disciplinary action.
Findings Of Fact Respondent is Lori Ann Thomas, currently licensed and eligible for licensure by Petitioner as a general lines insurance agent. Respondent has held such licensure status since March 12, 1985. At all times pertinent to these proceedings, Respondent was the general lines agent of record for Mr. Auto Insurance of Clearwater Inc. (Mr. Auto), located in Clearwater, Florida. On March 4, 1987, Kelly John O'Brien went to Mr. Auto after being notified by state officials that his failure to maintain required automobile insurance would result in the loss of his driver's license. He made a number of telephone calls to ascertain the amount of money necessary to purchase the minimum amount of insurance required by law at the least expensive price. Of the quotes O'Brien obtained, Respondent's price was the cheapest. O'Brien received a receipt from Respondent's agency in return for his payment of $82. The total premium charge for the personal injury protection (PIP) insurance purchased by him was $52. As part of his purchase of PIP coverage, O'Brien was charged $30 for membership in the Colonial Touring Association, a motor club providing towing coverage and accidental death insurance benefits to members. O'Brien was not asked whether he wanted to purchase a membership in the Colonial Touring Association and would, if he had known extra cost was involved, have rejected the membership. During the course of the insurance purchase at Respondent's agency, O'Brien signed and initialled an application form for PIP coverage with B.I.G. Underwriters, Inc., a subsidiary corporation of Bankers Insurance Group, Inc., which discloses the $52 premium cost for PIP coverage. In addition to signing and initialling the application form, O'Brien also signed and initialled a form supplied by Respondent indicating his rejection of bodily injury and property damage liability coverage; election of no-fault deductibility in the amount of $2,000; rejection of uninsured motorist coverage; rejection of basic property protection and collision insurance; and election to purchase the accidental death insurance benefit and motor club towing coverage package. Further, at the bottom of this form he signed a statement that he had read and understood all provisions of the form. It is found that O'Brien signed the form in order to acquire the PIP coverage which he sought to purchase and did not voluntarily purchase the accidental death benefit and motor club towing coverage. On May 28, 1987, Susan Weatherwax went to the offices of Mr. Auto to acquire the basic minimum required insurance coverage for registration of her automobile. A previous telephone survey by her indicated that Mr. Auto offered the cheapest price for the desired coverage. She was told by the salesman at the agency that the cost for PIP coverage would be $65. She received a receipt for this amount. While at Mr. Auto, Weatherwax signed and initialled an application form for PIP coverage with B.I.G. Underwriters, Inc., a subsidiary corporation of Bankers Insurance Group, Inc., which discloses the correct premium cost for the PIP coverage purchased by her to be $35. Weatherwax also signed and initialled a form supplied by Respondent indicating rejection by her of bodily injury and property damage liability coverage; election of no-fault deductibility in the amount of $2,000; rejection of uninsured motorist coverage; rejection of basic property protection and collision insurance; and election to purchase the accidental death insurance benefit and motor club towing coverage package. Further, at the bottom of this form she signed a statement that she had read and understood all provisions of the form. It is found that Weatherwax was charged $30 for membership in the Colonial Touring Association, the accidental death insurance benefit and motor club towing coverage package, which she did not request to purchase. She signed Respondent's form in order to acquire the PIP coverage which she desired and did not voluntarily purchase the accidental death benefit and motor club towing coverage. On April 22, 1987, Bruce Campbell went to the offices of Mr. Auto to purchase the legally required PIP minimum coverage necessary to get tags for his automobile. He paid $82 and received a receipt for that amount. He also signed and initialled an application form for PIP coverage with B.I.G. Underwriters, Inc., a subsidiary corporation of Bankers Insurance Group, Inc., which discloses the correct premium cost for the PIP coverage purchased to be $52. He also signed and initialled a form supplied by Respondent indicating rejection of bodily injury and property damage liability coverage; election of no-fault deductibility in the amount of $2,000; rejection of uninsured motorist coverage; rejection of basic property protection and collision insurance; and election to purchase the accidental death insurance benefit and motor club towing coverage package otherwise known as membership in the Colonial Touring Association. Further, at the bottom of this form he signed a statement that he had read and understood all provisions of the form. Campbell's testimony establishes that he purchased the motor club benefit package because he understood such purchase was required in order to receive the PIP coverage. It is found that he did not request to purchase the $30 membership in the Colonial Touring Association. He signed the form in order to acquire the PIP coverage which he desired and did not voluntarily purchase the accidental death benefit and motor club towing coverage. On a subsequent visit to Mr. Auto, Campbell purchased PIP coverage without the auto club membership, but only after specifically stating he did not want the coverage and waiting until the salesperson sought and received confirmation that such a sale could be made. Patrick Golik went to Mr. Auto on January 23, 1987, to purchase PIP and liability insurance on his automobile. His testimony fails to establish that he was sold membership in the Colonial Touring Association without his informed consent. He did, however, profess dissatisfaction with the membership's benefits. On May 5, 1987, Richard Davis went to Mr. Auto to buy just the basic amount of required insurance for a second automobile to "make it legal." He was informed that the premium cost for PIP coverage would be $65. He paid this amount and received a receipt. He also signed and initialled an application form for PIP coverage with B.I.G. Underwriters, Inc., a subsidiary corporation of Bankers Insurance Group, Inc., which discloses the correct premium cost for the PIP coverage purchased to be $35. He also signed and initialled a form supplied by Respondent indicating rejection of bodily injury and property damage liability coverage; election of no-fault deductibility in the amount of $2,000; rejection of uninsured motorist coverage; rejection of basic property protection and collision insurance; and election to purchase the accidental death insurance benefit and motor club towing coverage package otherwise known as membership in the Colonial Touring Association. Further, at the bottom of this form he signed a statement that he had read and understood all provisions of the form. Davis' testimony establishes that he did not request to purchase the $30 membership in the Colonial Touring Association. He signed the form in order to acquire the PIP coverage which he desired and did not voluntarily purchase the accidental death benefit and motor club towing coverage. On May 2, 1987, Jeri Exner went to Mr. Auto to acquire PIP coverage. He was told the premium would be $65. He paid this amount and received a receipt. He also signed and initialled an application form for PIP coverage with B.I.G. Underwriters, Inc., a subsidiary corporation of Bankers Insurance Group, Inc., which discloses the correct premium cost for the PIP coverage purchased to be $35. He also signed and initialled a form supplied by Respondent indicating rejection of bodily injury and property damage liability coverage; election of no-fault deductibility in the amount of $2,000; rejection of uninsured motorist coverage; rejection of basic property protection and collision insurance; and election to purchase the accidental death insurance benefit and motor club towing coverage package otherwise known as membership in the Colonial Touring Association. Further, at the bottom of this form he signed a statement that he had read and understood all provisions of the form. Exner's testimony establishes that he did not request to purchase the $30 membership in the Colonial Touring Association. He signed the form, but did not read it, in order to acquire the PIP coverage which he desired and did not voluntarily purchase the accidental death benefit and motor club towing coverage. The proof establishes that a general business practice prevailed at Mr. Auto, a corporation duly organized under the laws of the State of Florida, whereby consumers requesting to purchase PIP insurance were quoted a price including a membership in the Colonial Touring Association. Such memberships, while including a life insurance benefit, are not insurance policies.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered suspending Respondent's license and eligibility for licensure as an insurance agent for a period of one year. DONE AND ENTERED this 19th day of July, 1989, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 1989. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. 1-15. Addressed. 16.-20. Accepted in part, but rejected as to the deception implied in proposed finding 19 on the basis that a review of Golik's testimony shows he recalled being questioned about the purchase. He was dissatisfied with the company. 21.-32. Addressed. Respondent's Proposed Findings. Respondent's proposed findings of fact consisted of two unnumbered paragraphs. The first paragraph is addressed in substance. The second paragraph is rejected as not supported by the weight of the evidence. COPIES FURNISHED: Robert V. Elias, Esq. Office of Legal Services 412 Larson Building Tallahassee, FL 32399-0300 Thomas F. Woods, Esq. 1709-D Mahan Drive Tallahassee, FL 32308 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol Tallahassee, FL 32399-0300 Don Dowdell, Esq. The Capitol, Plaza Level Tallahassee, FL 32399-0300
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 Respondent, Shirley Arlene Cook, is currently licensed by Petitioner as a life agent, a life and health agent, and a general lines agent, and has been so licensed since February 17, 1982, February 17, 1982, and February 13, 1980, respectively. Respondent has been employed in the insurance business since 1954. She has operated her current agency, American Family Insurors, since January 1990. During times material, Respondent engaged in the business of insurance through the corporate entity, American Family Insurors, Inc. (Family Insurors). Respondent was the sole officer and director of Family Insurors, Inc. from May 25, 1990 through February 26, 1992. As corporate officer and director of Family Insurors, Respondent was personally liable and accountable for wrongful acts, misconduct, or other violations of any provision of the insurance code committed by herself or agents who worked under her direct supervision and control. During times material, Respondent maintained a business bank account No. 1263147295 at Barnett Bank, in the name of Family Insurors. Respondent and Richard Rock were the authorized signators on the Respondent's account. Sometime in 1990, Rock was taken from the account as an authorized signator. Richard Rock was employed by Respondent as an outside producer and primarily solicited new accounts and canvassed existing accounts to pick up deposits and insurance applications which were collected by auto salesmen. He paid such salesmen ten dollars for every property damage referral that materialized into a policy with Family Insurors. Richard and his wife, Michelle Rock, who was also employed by Respondent, left Respondent's agency during June 1992. They left Respondent's agency due to personal problems stemming from Richard's drug and alcohol abuse, and when Respondent learned that he was paying referral fees to auto salesmen. Richard paid the salesmen the referral fees from Respondent's petty cash account, an account which was maintained and controlled by his wife, Michelle. Respondent was not aware of the referral fees and other gratuities which Richard would give to outside salesmen from time to time. The gratuities consisted of gift certificates to various retail establishments which were primarily restaurants. Funds received by Respondent and deposited into bank account No. 1263147295, which were received from or on behalf of consumers, represented premiums for insurance polices and were trust funds received in a fiduciary capacity. As such, they were to be accounted for and paid over to an insuror, insured, or other persons entitled thereto in the applicable regular course of business. During times material, Onyx Underwriters, Inc. (Onyx) was the sole managing general agent for Orion Insurance Company, now known as Aries, and American Skyhawk Insurance Company (American Skyhawk). On January 16, 1990, Respondent entered into an Insurance Broker's Agreement with Onyx. The broker's agreement was cancelled on March 19, 1992. While the broker's agreement was effective, all insurance placed by Respondent with Orion/Aries or American Skyhawk was pursuant and subject to the provisions of the broker's agreement with Onyx and constituted brokerage business. Pursuant to the broker's agreement with Onyx, Respondent retained agency commissions on policies issued and was responsible for forwarding the net premium to Onyx. This procedure is known in the industry as "netting authority" and is a procedure whereby the agent deducts the commissions that he or she is entitled to from gross premiums received on policies and forward the net premium to, in this case, Onyx. THE BARBARA CECIL TRANSACTION On October 13, 1990, Barbara Cecil (Cecil) purchased an automobile from Tony Taylor of Taylor Automotive in Pinellas Park. In connection with the sale, Tony Taylor, an unlicensed individual, solicited automobile insurance from Cecil on behalf of Respondent. Cecil paid Tony Taylor eighty dollars ($80.00) as the premium down payment, and Respondent later deposited Cecil's payment into her bank account. Respondent represented to Cecil that she was bound on October 13, 1990; however, the insurance documents indicate that coverage was bound for Cecil on October 27, 1990, or approximately fourteen (14) days after the date that she purchased her auto from Taylor Automotive. Cecil was, however, given a binder on October 13, 1990. Respondent later completed a policy application and submitted it to Orion Insurance Company (Orion). Orion thereafter issued a policy to Cecil for the policy period of October 27, 1990 through October 27, 1991. Orion cancelled Cecil's policy on February 6, 1991, due to the absence of photographs of her automobile. In this connection, Respondent had previously submitted a set of photographs to Orion which did not clearly depict the automobile. Therefore, a second set of photos were requested by Orion. The second set of photos was not sent to Orion prior to the cancellation date. The cancellation of Cecil's policy resulted in an unearned premium of one hundred eighty dollars and ninety-two cents ($180.92), and an unearned commission of thirty-eight dollars and seventy cents ($38.70). Cecil was without automobile insurance from February 6, 1991 to October 27, 1991, and she was informed of the cancellation. During times material, Tony Taylor was not licensed in Florida as an insurance agent, customer representative, or solicitor. THE KIMBERLEY JONES TRANSACTION On June 20, 1991, Kimberley Jones purchased an automobile from Tony Taylor of Taylor Automotive. In connection with this automobile purchase, Tony Taylor solicited insurance on behalf of Jones from Respondent's agency. Kimberley Jones paid Taylor one hundred dollars ($100.00) as the premium down payment and Taylor issued a receipt to Jones. Respondent did not bind coverage with American Skyhawk for Jones until one week later, i.e., June 27, 1991. The Jones' policy ran its full term. THE KAREN KLEIN TRANSACTION On August 26, 1991, Karen Klein purchased an automobile from Keith Rice of Car Stop Automobile Sales. In connection with this purchase, Keith Rice, an unlicensed insurance individual, solicited automobile insurance from Klein on behalf of Family Insurors. Klein paid Keith Rice approximately one hundred dollars ($100.00) as a premium down payment for issuance of an insurance policy on her newly purchased automobile, which was to be effective on August 26, 1991. American Skyhawk issued a policy to Klein for the period effective August 27, 1991 through August 27, 1992. Onyx cancelled Klein's policy on December 3, 1991, for underwriting reasons. That cancellation resulted in an unearned premium of three hundred thirty-three dollars and thirty-one cents ($333.31), and an unearned commission of seventy-three dollars and sixty-eight cents ($73.68). THE EDITH PURCELL TRANSACTION On September 27, 1991, Edith Purcell purchased an automobile from Bill Hoskins of Taylor Automotive. In connection with that purchase, Hoskins solicited automobile insurance from Purcell on behalf of Family Insurors. Hoskins advised Purcell that her coverage would be effective September 29, 1991, upon receipt of her down payment of one hundred dollars ($100.00). Purcell paid Hoskins the premium down payment on September 29, 1991, and Hoskins issued a receipt indicating Family Insurors as the recipient. Hoskins, on behalf of Family Insurors, represented to Purcell that she had full coverage for the policy period, September 27, 1991 through September 26, 1992, pursuant to binder number P91-1022. American Skyhawk thereafter issued a policy to Purcell for the period of October 3, 1991 through October 3, 1992. Purcell's policy was cancelled on December 26, 1991, for underwriting reasons. That cancellation resulted in an unearned premium of four hundred forty-two dollars ($442.00), and an unearned commission of seventy-seven dollars and thirty-five cents ($77.35). THE JOHN J. NARKIN, III TRANSACTION On October 4, 1991, John J. Narkin, III (Narkin) purchased an automobile from Bill Hoskins of Taylor Automotive. In connection with that purchase, Hoskins, an individual who was not licensed as an insurance agent, representative, or solicitor, solicited an automobile insurance policy for Narkin on behalf of Family Insurors. Hoskins requested and Narkin paid him the one hundred dollar down payment for issuance of the policy. Hoskins issued Narkin a receipt from Family Insurors for the down payment indicating full coverage for the period October 4, 1991 through October 3, 1992, pursuant to binder number N91-1059. American Skyhawk issued a policy to Narkin effective for the period of October 7, 1991 through October 7, 1992. American Skyhawk issued a notice of cancellation for nonpayment of an additional premium of fifty-four dollars ($54.00), because Narkin failed to provide proof of holding a Florida Driver's License when he was requested to do so. Respondent notified Narkin of this request by letter dated December 7, 1991. Narkin was told that he had until December 27, 1991 to remit his payment. Narkin paid Respondent the additional premium by check on December 13, 1991, which deposit was entered into Family Insuror's business bank account on December 18, 1991. The additional premium was not forwarded by Respondent to Onyx prior to the December 27, 1991 cancellation date with the result that Narkin's policy was cancelled. Narkin was without insurance from December 27, 1991 through October 7, 1992, and he had no knowledge of this fact. The cancellation of Narkin's policy resulted in an unearned premium of six hundred fifty dollars and eighty-two cents ($650.82), and an unearned commission of one hundred forty-nine dollars and sixty-three cents ($149.63). THE WENDY WARDLE TRANSACTION On May 17, 1991, Family Insurors solicited an American Skyhawk application for automobile insurance from Wendy Wardle. Wendy Wardle paid Respondent ninety-eight dollars ($98.00) as the premium down payment, and the policy was thereafter issued to Wardle. On August 19, 1991, American Skyhawk cancelled Wardle's policy for underwriting reasons, resulting in an unearned premium of two hundred dollars and fifty-seven ($200.57), and an unearned commission of sixty-one dollars and seventy-eight cents ($61.78). THE MARY ANN MAFETONE TRANSACTION On October 28, 1991, Mary Ann Mafetone purchased an automobile for her daughter, Cindy Mafetone, from John Rosa of River Auto Sales. In connection with this purchase, John Rosa, an individual who was not licensed as an insurance agent, broker, or solicitor, solicited automobile insurance for the Mafetones from Family Insurors. Mafetone paid Rosa one hundred twelve dollars ($112.00) as the premium down payment for issuance of a policy in the name of her daughter, Cindy. In exchange for soliciting insurance on behalf of or from Family Insurors, Family Insurors, through Richard Stock, paid various automobile salesmen commissions, ranging from ten dollars to twenty per transaction. These commissions were based on specific coverage being purchased by the consumer. Respondent's Position Andrew Beverly, an expert in the field of insurance, is a chartered property and casualty underwriter, a chartered life underwriter and a chartered financial consultant. He is the owner and operator of the Florida Insurance School, a statewide firm that prepares individuals for entry level positions in the insurance industry. Beverly reviewed Respondent's binder books and practices respecting the subject insureds in this proceeding. The binder book and procedures utilized by Respondent are typical industry practices for agents and agencies writing policies with nonstandard companies. In the process of taking an insurance application to an actual hard copy policy, three sets of numbers are used. They are the binder number signed by the agent in numerical sequence as customers make application for coverage, the working number which is assigned by an underwriter until the actual (hard copy) policy is issued and the policy number which is computer generated by the company. Discrepancies between the binding date and the coverage date is normal within the industry and coverage is effective as of the binder date. Thus, in all of these transactions, the insureds had coverage the instant they received binders from Respondent. Respondent's files indicate that Barbara Cecil was timely notified that the pictures taken on her vehicle were not properly developed and she needed to return to the agency with her vehicle to take new pictures to be forwarded to her insuror. Mrs. Cecil did not return in a timely manner and her policy was therefore cancelled. Respondent's records respecting Edith Purcell indicate that Purcell was given a quote, and coverage for her was bound on October 3, 1991. An application for insurance was taken and she was provided the paperwork including a copy of the premium finance agreement. Purcell was notified on November 13, 1991, that her driver license information could not be verified. On November 21, 1991, Purcell visited Respondent's office and provided the necessary information. Respondent telecopied the information to the underwriting company; however, she was not reinstated. Respondent contacted the company about the cancellation, but the company refused to rescind the cancellation and underwrite that risk. Kimberly Jones was given a quote of $276.00 for insurance coverage by Respondent and she paid a $100.00 down payment. The balance was to be paid in installments. However, during the policy period, Ms. Jones was involved in an automobile accident which resulted in an increase in her premiums. Respondent advised Ms. Jones to pay the additional premium of approximately of forty percent as required by the company and add the balance of that additional premium to her contract. Ms. Jones complied and her policy remained in effect the full term. Ms. Mafetone paid Respondent a down payment of $112.00 and Respondent notified her that an additional $32.00 was required. Ms. Mafetone erroneously remitted the additional money to the (premium) finance company instead of the insurance company. As a result, her account was not properly credited and her policy was cancelled. Respondent thereafter notified the premium finance company and found that she had been given a credit on her monthly account statement. Respondent had not been provided a statement to reflect that credit when Mafetone's policy was cancelled. A portion of Respondent's statement was telecopied to her and she immediately remitted the $212.00 to the insuror to reinstate Ms. Mafetone's policy. Ms. Mafetone's policy was reinstated and remained in full force for its term. Respondent's files respecting Wendy and Douglas Wardle indicate that Mr. Wardle did not have a valid Florida driver's license at the time his policy was purchased. Based on Mr. Wardle's failure to provide proof of a driver's license, the company cancelled his policy. Karen Klein was provided a quote by Michelle Rock. An application was prepared for her on August 17, 1991, and coverage was bound on August 27, 1991. Klein's policy was cancelled because she did not have a valid Florida driver's license. Ms. Klein was notified in writing and she did not return to Respondent to handle the matter. As a result, the company cancelled her policy. Respondent's file relating to Narkin reveals that he was given a quote of $320.00, of which he paid $100.00 as a down payment. Narkin was billed the balance of the premium. Narkin's policy was issued on October 7, 1991, and he paid the balance. Respondent notified Narkin that the company was unable to ascertain that he had a valid Florida driver's license. This problem was ultimately resolved and his policy was reinstated. However, an additional premium was required from Narkin because of his license status at the time he made his application. The additional $54.00 was remitted by Narkin to the agency and Respondent forwarded it on to the company. Narkin was cancelled for failing to timely make the payment. Although Respondent maintains that it was the insuror's obligation to notify Narkin that his policy was cancelled, the records indicate that Narkin promptly paid Respondent and the amount was not timely remitted to the company which resulted in the cancellation. Respondent therefore did not timely remit the additional premium amount paid by Narkin to his policy was cancelled. Respondent utilizes a practice of binding coverages on applications the moment a completed application is filed. In each of the above referenced transactions, Respondent timely issued binder numbers and each applicant was bound the moment their application was completed and when the binder was issued. In each instance, Respondent promptly bound each of the above referred insureds. Respondent was unaware that Michelle and Richard Rock were providing kickbacks and other gratuities to automobile salesmen who are not insurance agents, customer representatives, or solicitors. When she did discover that this activity was ongoing, she took immediate steps to terminate this practice. As a result of that activity, she terminated her relationship with Michelle and Richard Rock.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Petitioner enter a Final Order imposing an administrative fine of $500.00 to be payable to Petitioner within thirty (30) days of the entry of its Final Order for the violation derived in paragraph 50. In all other respects, Petitioner shall enter a Final Order dismissing the remaining allegations of the first Amended Administrative Complaint filed herein. DONE AND ENTERED this 6th day of December, 1994, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of December, 1994. APPENDIX TO RECOMMENDED ORDER, IN CASE NO. 93-7105 Rulings on Petitioner's proposed findings of fact: Paragraph 10 rejected, contrary to the greater weight of evidence. Paragraphs 13, 14, 15, 17, 18, 20, 23, 24, 25, 27, 29, 30, 31, 32, 35, 37, 38, 39, 42, 43, 45, 47, 48, 51, 53, 54, 55 rejected, contrary to the greater weight of evidence, paragraphs 37-46 recommended order. Paragraph 56 adopted as modified, paragraphs 36 and 46 recommended order. Rulings on Respondent's proposed findings of fact: Respondents proposed findings are in the form of a review of the testimony and written argument on that testimony. As such, although considered, no specific rulings are made with respect to Respondent's proposed findings of fact. COPIES FURNISHED: Daniel T. Gross, Esquire Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0300 Thomas F. Woods, Esquire Gatlin, Woods, Carlson & Cowdery 1709-D Mahan Drive Tallahassee, Florida 32308 Tom Gallagher State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil General Counsel Department of Insurance Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole (including the admissions made by Respondent), the following Findings of Fact are made: Background Information Respondent is now, and has been since 1978, licensed by Petitioner as a general lines insurance agent. During the period of her licensure, Petitioner has not taken any disciplinary action against her. Professional Future Development Corporation (hereinafter referred to as "Professional") is an insurance agency located at 2234 Northwest 2nd Avenue in Miami, Florida. Respondent owns and works as an insurance agent for Professional. Count I Joseph Ha is the owner of Dashiwa Corporation. Dashiwa Corporation operates the Liberty Flea Market in Miami, Florida. Ha enlisted Respondent's services to obtain workers' compensation insurance for his business. 3/ In November and December of 1993, Ha provided Respondent with monies (in the form of checks made out to Professional) to be used to pay the premiums for such insurance. Respondent deposited the checks in Professional's bank account. She did not properly and promptly (in the regular course of business) remit the premium payments to the insurer. Instead, without Ha's consent, she used these monies to help pay the medical expenses of a cousin who had AIDS. As a result of Respondent's dereliction, Ha's business was without the workers' compensation insurance coverage Respondent was supposed to obtain for him. Respondent has yet to make a complete refund of the monies Ha provided her to obtain such coverage. Count II On or about December 21, 1993, Rene Hernandez, on behalf of his mother, Gloria Hernandez, provided Respondent with a down payment (in the amount of $251.00) for insurance that Respondent was to obtain for an automobile owned by Gloria Hernandez. The balance of the premium was to be financed by a premium finance company. Respondent failed to take the necessary steps (in the regular course of business) to obtain insurance for Gloria Hernandez's automobile. In March of 1994, Hernandez's automobile was involved in an accident. As of the date of the accident, Respondent had neither obtained insurance for the automobile, nor had she refunded (in the regular course of business) the monies she had been given to obtain such insurance. Following the accident, in June of 1994, Respondent finally secured coverage for Hernandez's automobile Count III On or about August 15, 1994, Jacquetta Jackson provided Respondent with a down payment for insurance that Respondent was to obtain for an automobile that Jackson owned. The application for such insurance coverage was bound on or about that same day. Respondent submitted the application (on an outdated form) to Bankers Insurance Company (as a member of the Florida Automobile Joint Underwriting Association) on or about November 14, 1994. The application was accompanied by a "sight-draft" from a premium finance company in an amount less than the gross premium that was due for the requested insurance coverage. Rule 2B of the Rules of General Practice of the Florida Automobile Joint Underwriting Association provides that premiums are to be submitted to the insurer on a gross remittance basis within one business day after the application for coverage is bound. Respondent failed to comply with the requirements of Rule 2B in her efforts to obtain automobile insurance for Jackson. By letters dated November 14, 1994, and December 20, 1994, Bankers Insurance Company notified Respondent that it had rejected the application she had submitted on behalf of Jackson because the application had been submitted on an outdated form and had not been submitted in accordance with the requirements of Rule 2B. It was not until January 18, 1995, that Respondent submitted another application to Bankers Insurance Company on behalf of Jackson. 4/ The insurance that Jackson had requested was finally obtained on February 28, 1995 (from Fortune Insurance Company by another insurance agent to whom Respondent had transferred the matter). Respondent never advised Jackson, during the period that Jackson was without coverage (from on or about August 15, 1994, to February 28, 1995), that the requested insurance had not been obtained. Count IV On or about September 26, 1994, Roderick Cole provided Respondent with a down payment for insurance that Respondent was to obtain for an automobile that Cole owned. The application for such insurance coverage was bound on or about that same day. Respondent submitted the application (on an outdated form) to Bankers Insurance Company (as a member of the Florida Automobile Joint Underwriting Association) on or about November 14, 1994. The application was accompanied by a "sight-draft" from a premium finance company in an amount less than the gross premium that was due for the requested insurance coverage. Respondent failed to comply with the requirements of Rule 2B in her efforts to obtain automobile insurance for Cole. Bankers Insurance Company subsequently notified Respondent by letter that it had rejected the application she had submitted on behalf of Cole because the application had been submitted on an outdated form and had not been submitted in accordance with the requirements of Rule 2B. It was not until January 18, 1995, that Respondent submitted another application on behalf of Cole. The insurance that Cole had requested was finally obtained on March 7, 1995 (from Fortune Insurance Company by another insurance agent to whom Respondent had transferred the matter). Respondent never advised Cole, during the period that Cole was without coverage (from on or about September 26, 1994, to March 7, 1995), that the requested insurance had not been obtained.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner enter a final order: (1) finding Respondent guilty of the violations noted in the Conclusions of Law of this Recommended Order; (2) penalizing Respondent for having committed these violations by revoking her license; and (3) dismissing the remaining allegations of misconduct advanced in the Administrative Complaint. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 5th day of December, 1996. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 5th day of December, 1996.
Findings Of Fact In an Administrative Complaint containing 48 counts and an Amended Administrative Complaint containing an additional six counts, Respondent in DOAH Case No. 87-3046 was charged with some 43 counts of "sliding" accidental death and automobile club coverages with PIP coverage without client's informed consent; 5 counts alleging the financing of policies for which the insured had paid full coverage by forging the insured's signature on a finance agreement; and counts involving failure to remit premiums to the insurance company on whom the policies were written. At the hearing, no evidence was presented on the "sliding" charges, although Exhibits 5, 6, 7 and 8 contain affidavits of numerous clients who averred they were sold accidental death and automobile club coverage either without their knowledge and consent or told it was compulsory to purchase this coverage with PIP coverage. The investigation which led to the charges preferred against Lindsay in DOAH Case No. 87-3046 centered on four offices of Friendly Insurance agency, all owned by Lindsay. However, the only office for which Lindsay was the authorized agent was the Bartow office. Investigations were conducted at each of these offices, and the agent authorized to write policies at that office was a subject of the investigations. Evidence presented at the hearing in DOAH Case No. 87-3046 was that insurance companies licensed only one agent to write policies on the company at each office, and no one else could approve a policy at the Winter Haven office, for example, but the agent so licensed. Respondent in Case No. 87-3046 was the licensed agent at the Bartow office only. At the original hearing, the only witness who testified regarding Respondent's participation in the operation and control of the office in Haines City was Norma Judd who was office manager there. Her testimony that Respondent was her direct supervisor and was aware of activities that were subject to the Administrative Complaint was somewhat discredited by the fact she was fired from her job by Respondent and by a rebuttal witness' testimony contradicting Judd's testimony that Judd was unemployed by testimony that this witness had purchased an insurance policy the day before written up by Judd who told this witness the auto club (or accidental death) policy was required when PIP was purchased. Exhibits 5, 6, 7 and 8 contain several affidavits of Friendly Insurance Agency employees that Lindsay exercised supervision and control over the Winter Haven, Haines City and Lake Wales offices much more so than did the licensed agents at those offices. Those affidavits would support a conclusion that Lindsay exercised supervision and control over the employees of those offices. A fee of $8600 would constitute a reasonable attorney's fee in this case. Costs to Petitioner were $1867.44. While attempting to show that special circumstances existed existed which would make the award of attorney's fees to Lindsay unjust, the Department called Lindsay to the witness stand to elicit testimony that he was untruthful in his testimony at the original hearing. Upon the advice of his attorney, Lindsay invoked the Fifth Amendment privilege against giving incriminatory evidence against himself.
The Issue The issues are whether the sale of ancillary products to two purchasers of automobile insurance involved sliding, as that term is defined in Subsection 626.9541(1)(z), Florida Statutes (2005)1; whether the alleged acts violated Subsections 626.611(7) and (9), 626.621(6), and 626.9521(1), which respectively prohibit a lack of fitness or trustworthiness to engage in the business of insurance, fraudulent or dishonest practices, and unfair trade practices; and, if so, what penalty should be imposed against Respondent's insurance license.
Findings Of Fact Petitioner is the state agency responsible for regulating insurance and insurance-related activities in Florida pursuant to Chapters 626 and 627. Respondent is licensed as a life, including variable annuity, general lines insurance agent pursuant to license number A085250. From October 22, 2003, through September 2, 2005, Respondent was employed as an insurance agent by Direct General Insurance Agency, Inc. (Direct). Direct is a Tennessee corporation doing business in Florida as Cash Register Insurance (Cash Register). Cash Register employed Respondent in an office located at 6325 North Orange Blossom Trail, Orlando, Florida, which conducts business as Friendly Auto Insurance Company (Friendly). Friendly-Cash Register paid Respondent a salary and commissions. Friendly-Cash Register paid commissions on the sale of ancillary products such as travel protection, accident medical protection, and term life insurance. Commissions comprised 18 percent of the compensation paid to Respondent. The two transactions at issue in this proceeding occurred on July 11 and August 29, 2005. In each transaction, Respondent sold automobile insurance and three ancillary products to Ms. Heather Dickinson and Ms. Carmen Phillips, respectively. Ms. Dickinson subsequently married and testified at the hearing as Ms. Heather Mason. When Ms. Mason and Ms. Phillips entered the Friendly- Cash Register office, each consumer requested the minimum automobile insurance coverage needed to be "legal and on the road." Neither customer left the office understanding she had purchased ancillary products. Ms. Mason purchased automobile insurance for a 1995 Jeep Cherokee 4x4 at an annual premium of $1,175.00. Friendly-Cash Register charged Ms. Mason a total sales price (total price) of $1,609.24. Ms. Mason agreed to pay $194.00 as a down payment and the balance in 12 installments of $117.94 at an annual percentage rate of 25.27 percent. Ms. Mason purchased three ancillary products at a total cost of $278.00. Ms. Mason paid $60.00 for travel protection, $110.00 for accident medical protection, and $98.00 for term life insurance. A finance charge of $151.69 and a charge of $4.55 for Florida documentary stamp taxes comprised other charges that are not at issue in this proceeding. Ms. Phillips purchased automobile insurance for a 1992 Chevrolet Blazer 4x4 at an annual premium of $779.00. Friendly-Cash Register charged Ms. Phillips a total price of $1,271.64. Ms. Phillips agreed to pay $129.00 as a down payment and the balance in 10 installments of $114.26 at an annual percentage rate of 25.06 percent. Ms. Phillips purchased three ancillary products at a total cost of $368.00. Ms. Phillips paid $60.00 for travel protection, $200.00 for accident medical protection, and $108.00 for term life insurance. A finance charge of $120.79 and a documentary stamp charge of $3.85 comprised other charges that are not at issue. Both Ms. Mason and Ms. Phillips signed Friendly-Cash Register forms which disclose that the ancillary products they purchased are optional and entail additional costs. Each customer signed a package of documents numbering approximately 19 pages.2 Page 1 of each package discloses the annual price for automobile insurance. The optional ancillary products and separate charges are disclosed in several additional pages. The package of documents that Ms. Mason signed discloses the annual cost for travel protection on pages 000006 and 000014 through 000016 (hereinafter pages 6, 14, 15, etc.). Pages 8, 9, and 14 through 16 disclose the cost of the accident medical protection. Pages 10 and 12 through 16 each disclose the cost for term life insurance. Pages 7, 9, 14, and 15 expressly provide that the ancillary products are optional. Page 16, the Premium Finance Agreement, separates the charges for mandatory automobile insurance from the optional ancillary products and the other charges. Ms. Mason signed or initialed pages 3 through 11, pages 14 through 17, and page 19. The package that Ms. Phillips signed includes disclosures similar to those in the package signed by Ms. Mason. Ms. Phillips signed or initialed relevant pages in the same manner as Ms. Mason. Ms. Mason and Ms. Phillips had adequate time to review the documents they signed or initialed, but neither customer read the documents. Each consumer is a literate adult with no disability or infirmity that would impede her capacity to understand the transaction. The factual disputes are whether Respondent orally explained the ancillary products that the two customers purchased, and, if so, whether the oral explanation was adequate. For reasons discussed in the Conclusions of Law, Respondent is not required to prove she did explain the ancillary products and that the explanation was adequate. Rather, Petitioner must prove Respondent did not explain the ancillary products or that the explanation was inadequate. Respondent does not recall the specific transactions at issue in this proceeding because she sold as many as 10 insurance policies each day at Friendly-Cash Register for almost two years. However, Respondent does recall that she followed the identical procedure with each customer and that the procedure she followed was carefully scripted by Friendly-Cash Register as a condition of employment. Respondent orally explained each disputed transaction in this proceeding in a manner that was adequate for each consumer to understand the transaction. Respondent orally explained that the ancillary products were optional. Respondent circled the optional items in the documents and explained that each ancillary product entailed an additional cost. The sixth document that Respondent reviewed with each customer is the "Explanation of Policies, Coverages, and Cost Breakdown." That page appears as page 14 in the exhibits, but page 14 is not organized in the exhibits in the same order that Respondent presented it to customers. Respondent orally explained pages pertaining to specific ancillary products after Respondent explained the page entitled "Explanation of Policies, Coverages, and Cost Breakdown." The procedure scripted by Friendly-Cash Register required Respondent to first interview Ms. Mason and Ms. Phillips to gather information needed for input into a computer which printed the 19-page forms utilized by Friendly- Cash Register. The interview included questions regarding life insurance beneficiaries and questions pertaining to the medical condition of each customer. After interviewing Ms. Mason and Ms. Phillips, Respondent entered the information into a computer and printed the 19-page packages. Respondent placed each package in front of the respective customer and discussed each page. Respondent circled the word "optional" when it appeared on a page, obtained the signature or initials of each customer, turned the page over, and proceeded to the next page. The trier of fact finds the testimony of Respondent to be credible and persuasive. As Respondent explained: Q. Did you tell the customers that this quote included those ancillary products? A. Yes. I informed . . . them that they had been quoted with the optional policies. * * * Q. How is page 14 labeled at the top? A. It says "Explanation of Policies, Coverages, and Cost Breakdown." . . . I would circle the items that are circled on here, and then I would present it to the insured. And I would say, you're purchasing the mandatory personal injury protection, bodily injury, [or] there's no property damage, there's no bodily injury. You also have the optional policies for the travel protection plan, accidental medical plan, life insurance, these are the costs, sign here. Q. [A]re you pointing at your circles? A. Yes. I point to each circle and I kind of run my finger down the cost to draw attention to it. Q. You point to the cost? A. Yes. * * * Q. Okay. What do you go over next? A. The next page is the second page of the travel protection plan. Q. This is page 7 of Exhibit 2? A. Correct. Q. How is that labeled at the top? A. "Optional Travel Protection Plan." It says, "American Bankers Insurance Company." I'd point out that there's bail bond coverage, collision of loss of use [sic], personal effects loss from auto rented. Q. Do you make those circles that we see on that page? . . . . A. Yes. I circle them when they're sitting there and then I hand it--hand the paper to them, and I would say, "This is optional coverage, please sign here." * * * Q. Okay. After she signed that, what did you go over with her next? A. Next one would be the accidental medical protection plan. Q. Page 8 of Exhibit 2? A. Yes. Q. Okay. . . . [A]fter she signed that page, what did you do? A. Page 9. Q. Page 9 of Exhibit 2? A. Your cost is $110. The annual benefit is $45,625. . . . Please sign here. Q. Did you make those circles on a piece of paper? A. Yes. Before I handed it to her, I circled the items that are circled on it and drew the line. * * * Q. [A]fter she signed this page, what would you do next? A. Okay. The next page is page 10, which is the life insurance policy. Q. This is page 10 of Exhibit 2? A. Yes. Q. Okay. How would you explain this page to a customer? A. This 10,000 [sic] term policy. The premium is $108. It's not replacing any other previous life insurance policy. Q. Did you make those circles? A. Yes, I did. . . . * * * Q. This is page 13 of Exhibit 2? A. Yes. It's a statement of policy cost and benefit information that I would just run my finger down and just say, "These are your benefits and the cost, please sign here." Transcript (TR) at 251-270. Petitioner proposed in its PRO a finding that Respondent did not orally explain the ancillary products to the two consumers. However, Ms. Mason and Ms. Phillips did not remember what Respondent said to them. Testimony that a witness does not remember what Respondent said is less than clear and convincing evidence that Respondent did not explain the ancillary products adequately. The testimony of Ms. Mason during cross examination is illustrative. Q. Would you say that what you were really paying attention to when you conducted this transaction was how much it was going to cost you? A. Yeah. Yes. Q. Cause you . . . you talked [on direct] about your recollection about these things. And it was interesting that some things you were able to say you don't recall, but [counsel for Petitioner] was able to get you to commit to certain things that you absolutely said would not have happened. Such as, you know that if . . . the word "optional" had been used that you would not have accepted the product, correct? A. If it would have cost more, then I would not have accepted it. Q. Okay. But you don't specifically recall what was discussed in the course of your meeting with Ms. Fitzgerald, correct? A. No. Q. And you acknowledged that at least when confronted with some of the paperwork, things like a beneficiary on the $10,000 benefit for the life insurance policy, that was certainly discussed with you, right? A. I--yes, I guess. I don't--like I said, I feel so stupid because I don't--I know I said my brother's name and he's down for a beneficiary, but I don't remember why I would have--I don't understand why I did that. . . . * * * Q. You thought that the questions that were being asked to you about the life insurance policy--you thought that they were actually part of car insurance? A. I don't remember being asked questions about life insurance. Q. Do you remember being given a series of questions asking you about your health and about treatment-- A. Yes. * * * Q. So when . . . I ask you the question about whether or not you were told what your lump sum was going to be and you say, "I don't remember," that doesn't mean you weren't told? A. Correct. Q. It just means you don't remember? A. Correct. * * * Q. Turn to page 14. . . . Do you recall what explanation was given about this particular page? A. No. * * * Q. If you turn to page 15, please. . . . Fair to say that you don't recall what was said about this page? A. Yes. TR at 156-170. The oral explanation that Respondent provided to Ms. Mason and Ms. Phillips did not include a statement that each customer could have saved 17.27 and 28.94 percent of the total price, respectively, by declining the ancillary products. Nor did the oral explanation include a suggestion that either customer use the money to buy automobile insurance with a smaller deductible or more complete insurance.3 The omissions discussed in the preceding paragraph are not alleged in the Administrative Complaint as grounds for the statutory violations charged in the Complaint (the un-alleged omissions). Rather, the Complaint limits the alleged grounds to a failure to "inform" Ms. Mason and Ms. Phillips that the ancillary products were: . . . separate from and not a part of the automobile insurance she had requested, was not required by law or a lien holder, was optional, or that there was an additional charge for this product. . . . Administrative Complaint, paragraphs 7, 11, 15, 32, 36, 41, and 45. The un-alleged omissions did not involve the exercise of discretion by Respondent and were not willful. While it is clear that Respondent was the office manager, it is less than clear and convincing that Respondent was in charge of scripting the oral explanation for Friendly-Cash Register.4 Rather, Friendly-Cash Register required the omissions as a condition of Respondent's employment. As Respondent explained in her testimony: Q. . . . I don't see where [this script] asks the consumer if they actually want the optional policies. . . . So how would you know to quote the ancillary products if they had not asked for it yet? A. We were required to offer them to everybody. Q. And the method that Direct General instructed you to use was to just . . . include them in the quote; is that correct? A. State that they were optional, yes, and include them in the quote. * * * A. I would have preferred not to quote with them on the policy-- Q. Why? A. . . . I just preferred it that way, you know. . . . I didn't like it. Q. Do you feel like the way Direct General had you quote these consumers . . . may have led consumers possibly buying policies without full informed consent? A. No. TR at 280 and 295. On September 2, 2005, Respondent voluntarily left the employment of Friendly-Cash Register. Respondent is now employed by Car Insurance.com. Petitioner argues in paragraph 47 of its PRO that the Friendly-Cash Register forms are "vague or ambiguous and make it difficult to decipher (document-deficiency)." The Administrative Complaint does not allege document-deficiency as a ground for the charged violations. The alleged grounds are limited, in paragraphs 7, 11, 15, 32, 36, 41, and 45, to the "failure to inform" the consumers that they were purchasing ancillary products. Moreover, Petitioner acknowledges in paragraph 43 of its PRO that the "optional nature of the ancillary products is evident" from a review of the documents. If it were found that an allegation of document- deficiency is implied in the Administrative Complaint, the trier of fact finds that the ancillary products purchased by Ms. Mason and Ms. Phillips were not mis-labeled or illusory. They provided benefits to each purchaser. Travel protection primarily provided daily rental reimbursement of $25.00 up to 10 days during repairs for collision damage and up to five days during travel interruption. The accident medical protection plan provided medical expense reimbursement up to $1,000.00 and daily hospital coverage of $125.00 up to 365 days. The term life insurance provided a death benefit of $10,000.00. Even if the relevant forms were found to be deficient, any deficiency is rendered moot because each consumer testified that she did not read or rely on the content of the Friendly-Cash Register forms.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Respondent not guilty of the allegations in the Administrative Complaint. DONE AND ENTERED this 18th day of January, 2008, in Tallahassee, Leon County, Florida. S DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of January, 2008.
