The Issue Whether Respondent engaged in conduct proscribed by the Insurance Code as is particularly set forth in the Administrative Complaint filed December 7, 1993.
Findings Of Fact During times material, Respondent, Nelson Speer Benzing, was licensed with Petitioner, Department of Insurance and Treasurer, as a life insurance and as a life and health insurance agent. During times material, Respondent was an employee of U.S. Savings Trust Management (herein USSTM). During times material, Respondent was never appointed with Petitioner to represent Wisconsin National Life Insurance Company (herein Wisconsin). However, Respondent did attend a workshop sponsored by Wisconsin. At some time prior to March 5, 1992, Respondent met with George Cantonis, President of Mega Manufacturing, Inc. (herein Mega) in order to obtain Cantonis' permission to make a sales presentation to Mega's employees. Cantonis granted Respondent permission to make a sales presentation to Mega's employees. On March 5, 1992, Respondent made a sales presentation to Mega's employees. The purpose of said presentation was to enroll the employees of Mega in a "savings plan" offered by USSTM. The presentation lasted approximately 15- 30 minutes. Employees were told that the plan, as presented, incorporated an insurance savings plan which had a "liquid" component as well as a long term savings component. At no time during this sales presentation did Respondent explain to employees of Mega that he was a licensed life insurance agent. During the course of his presentation, Respondent described USSTM's product variously as an "insurance saving plan", as an "investment in insurance companies" and as a "retirement savings plan". At no time during the presentation did Respondent specifically state that he was selling life insurance. At the conclusion of the presentation, Respondent enrolled all interested employees in USSTM's plan. During the enrollment procedure, Respondent told the employees to complete portions of at least three documents which included a form entitled "Employee History", a Wisconsin's life insurance application, and an employee payroll deduction authorization. Cantonis enrolled through the above procedure and signed a blank Wisconsin National Life Insurance application. Subsequent to the group sales presentation, Respondent made a similar presentation to Tina Netherton, Mega's office manager, who was working in the office and answering the telephone. At the conclusion of the presentation to Netherton, she enrolled in the plan and also signed a blank Wisconsin National Life Insurance application pursuant to instructions from Respondent. Both Netherton and Cantonis believed that the "savings plan" consisted of both a short term "liquid cash element and a long term investment". Neither were aware that they had purchased life insurance. Both Netherton and Cantonis had, in their opinion, adequate life insurance at the time of Respondent's sales presentation, and would not have purchased additional life insurance if they had been told (by Respondent) that they were purchasing life insurance. Both Netherton and Cantonis executed beneficiary designations on their belief that such was needed so that disbursements, if any, could be made to their designee in the event of their death. Approximately three weeks after enrollment, Netherton and Cantonis received brochures from USSTM which acknowledged their enrollment and detailed the benefits of the "savings plan". The brochure advised that Netherton and Cantonis had enrolled in an insurance "savings plan" and failed to state that they had purchased life insurance. Cantonis and Netherton attempted to withdraw funds from the liquid portion of the plan and were unable to do so. Four to five months after their enrollment, Cantonis and Netherton received life insurance policies from Wisconsin. Pursuant to the insurance applications, Cantonis and Netherton were issued Wisconsin life insurance policy numbers L00566485 and L00566483, respectively. Cantonis and Netherton maintained their Wisconsin policies in order to realize some gain from their overall loss in dealing with Respondent and USSTM. At the time that Respondent made his presentation to Mega's employees and officials, he had never before made sales presentations in order to enroll employees in plans offered by USSTM. Respondent's general manager, Vincent Radcliff, was the agent of record of Wisconsin. The insurance application and policies issued to Cantonis and Netherton were signed by an agent other than Respondent. Respondent's supervisor, Vincent A. Radcliff, III, was disciplined by Petitioner and Respondent cooperated with the Petitioner in investigating the complaint allegations filed against his supervisor, Radcliff. Respondent was first licensed by Petitioner on November 15, 1989. Respondent has not been the subject of any prior disciplinary actions by Petitioner.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Petitioner enter a Final Order suspending Respondent's life and health insurance licenses for a period of three (3) months. It is further RECOMMENDED that Petitioner order that Respondent engage in continuing education respecting the manner and means of soliciting on behalf of insurance companies, and to the extent that he completes the required courses within an acceptable time frame, that the suspension be suspended pending the outcome of Respondent's satisfactory completion of such continuing education courses. 1/ RECOMMENDED this 1st day of July, 1994, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of July, 1994.
Findings Of Fact Respondent, Ronald T. Pascale (Pascale), was at all times material hereto licensed by the State of Florida as a general lines agent and health agent. Pertinent to these proceedings, Pascale was licensed by Fortune Life Insurance - Company (Fortune Life) as a health insurance agent, but not as a life insurance agent. Respondent Leonard C. Chandler (Chandler), was at all times material hereto licensed by the State of Florida as a general lines agent, and as a life and health agent. Pertinent to these proceedings, Chandler was licensed by Fortune Life as a health insurance agent, but not as a life insurance agent. Pascale and Chandler did business through Briar Bay Insurance Agency, Inc. (Briar Bay). Briar Bay is an incorporated general lines insurance agency selling general lines insurance products through licensed agents and unlicensed sales people acting under the supervision and control of a licensed general lines agent. Briar Bay conducted business from two agency locations: 14229 South Dixie Highway, Miami, Florida (the Dixie Highway office); and 13061 North Kendall Drive, Miami, Florida (the Kendall office). Pascale is the president and a director of Briar Bay, and the general lines agent for its Kendall office. Chandler is the general lines agent for the Dixie Highway office. Pascale did, however, frequently visit the Kendall office to oversee and manage the writing of insurance. As the general lines agent for their respective offices, Pascale and Chandler were required to be in active full time control of their operations. The parties have stipulated that, pursuant to Section 626.734, Florida Statutes, Pascale and Chandler are personally and fully liable and accountable for any wrongful acts, misconduct, or violations of any provisions of this code by them or any person who sold the insurance cover ages at issue in this proceeding. David Trudnak (Pascale Complaint-Count I) On January 18, 1986, David Trudnak called the Kendall office to get a quote for automobile insurance on his 1984 Gran Prix. Mr. Trudnak's automobile was financed through GMAC, and he informed the salesperson, Ernesto Martinez, that he wanted the minimum coverage necessary to satisfy that company. Mr. Trudnak was given a quote of approximately $1,230. Late that afternoon, near closing time, Mr. Trudnak went to the Kendall office and was waited on by Mr. Martinez. Mr. Trudnak again told Mr. Martinez that he wanted the minimum coverage necessary to satisfy GMAC. Mr. Martinez laid a number of papers before Mr. Trudnak and told him to "sign here, here, here, and here". Among the papers he signed were two applications to Fortune Life for accidental death policies and an application to Nation Motor Club, even though he never asked for or desired such additional coverages. 2/ The two Fortune Life policies generated a premium of $250, and the motor club member- ship a premium of $20. Mr. Trudnak was misled to believe that the quote he was given, and the premium he paid, was for the minimum coverage he had requested. Had he been accorded the minimum coverage he requested, Mr. Trudnak's premium would have been $1,006 instead of the $1,276 he was charged. Juan M. Leon (Pascale Complaint-Count II) Late in the afternoon of January 20, 1986, Juan M. Leon went to the Kendall office and was waited on by Mr. Martinez. Mr. Leon informed Mr. Martinez that he had just purchased a new van, and that he needed automobile insurance to satisfy the financing agency. Mr. Martinez laid a number of papers before Mr. Leon to sign. Among the papers he signed were three applications to Fortune Life for accidental death policies and an application to Nation Motor Club, even though he never asked for or desired such additional coverages. The three Fortune Life policies generated a premium of $400, and the motor club membership a premium of $20. Mr. Leon was misled to believe that the quote he was given, and the premium he paid, was for the automobile coverage he had requested. Had he been accorded the coverage he requested, Mr. Leon's premium would have been $1,367 instead of the $1,787 he was charged. Carol Lynn Wilson (Pascale Complaint-Count III, Chandler Complaint-Count I) On January 22, 1986, Carol Lynn Wilson went to the Dixie Highway office, along with her father, to purchase automobile insurance. She was waited on by a man named Bill, but Pascale also participated in the transaction. Ms. Wilson advised the salesman that she wanted the least expensive full coverage policy she could get. The salesperson laid a number of papers before Ms. Wilson to sign. Among the papers she signed was an application to Fortune Life for a life insurance policy 3/ and an application to nation Motor Club, even though she never asked for or desired such additional coverages. 4/ The Fortune Life policy generated a premium of $35, and the motor club membership a premium of $20. Ms. Wilson was misled to believe that the quote she was given, and the premium she paid, was for the least expensive policy she had requested. She was never informed that the life insurance policy or motor club membership were separate from, and in addition to, the basic coverage she desired. Had she been accorded the coverage she requested, Ms. Wilson's premium would have been $593 instead of the $748 she was charged. David Peters (Pascale Complaint-Count IV, Chandler Complaint-Count II) On January 23, 1986, David Peters went to the Dixie Highway office to purchase automobile insurance. After explaining to the salesperson that he needed full coverage because his car was financed, the salesperson laid a number of papers before him to sign. Among the papers he signed was an application to Fortune Life for a life insurance policy and an application to Nation Motor Club, even though he never asked for or desired such additional coverages. 5/ The Fortune Life policy generated a premium of $150, and the motor club membership a premium of $20. Mr. Peters was misled to believe that the quote he was given, and the premium he paid, was for the automobile coverage he had requested. Had he been accorded the coverage he requested, Mr. Peter's premium would have been $1,686 instead of the $1,856 he was charged. Herbert Cone (Pascale Complaint-Count V, Chandler Complaint-Count III) On January 21, 1986, Herbert Cone went to the Dixie Highway office to purchase automobile insurance. After explaining to the salesperson that he desired liability coverage, the salesperson laid a number of papers in front of him to sign. Among the papers Mr. Cone signed was an application to Fortune Life for a life insurance policy and an application to Nation Motor Club, even though he never requested or desired such additional coverages. The Fortune Life policy generated a premium of $50, and the motor club membership a premium of $20. Mr. Cone was misled to believe that the quote he was given, and the premium he paid, was for the automobile coverage he had requested. Had he been accorded the coverage he requested, Mr. Cone's premium would have been $425 instead of the $495 he was charged. Briar Bay Agency Forms In each of the foregoing transactions the Briar Bay agency representative obtained the signature of the customer on numerous forms, including the auto binder application, the Nation Motor Club application, and the Fortune Life application. Each of these applications were printed on what is commonly referred to as NCR paper, which consists of an original and two copies. The original is designed to be submitted to the issuing company, a copy retained by the agency, and a copy given to the customer. The Briar Bay representatives consistently failed to provide their customers with a copy of any of these applications, and thereby further obscured their deceptions. The Briar Bay representative also secured the signature of its customers on its own form. This form, consisting of one sheet of paper printed front and back, contained spaces for the customer's signature in up to 5 places. By signing the form, the customer was ostensibly acknowledging the rejection of certain coverages, the limitation on who would be covered in the operation of the vehicle, and an explanation of the coverages and their costs (the "Coverage and Cost Breakdown"). While the customers in each of the foregoing transactions signed the "Coverage and Cost Breakdown" portion of Briar Bay's form, as well as other sections, the proof established that such acknowledgment was routinely obtained in blank, or without the cost portion of the breakdown completed. The customers were routinely told to sign where the representative had marked an "X, and were led to believe that what they signed comported with the coverage they had requested. Under such circumstances, the customer's signature did not constitute an informed or meaningful acknowledgement. 6/ Policy Mixing The proof further established that Briar Bay representatives would routinely assemble the automobile insurance policies to include the Fortune Life policy and the Nation Auto Club "auto rental reimbursement riders. This practice further obscured the fact that such cover ages were not part of the automobile insurance its customers had sought to purchase. Commission Schedules An agent's commission on the sale of automobile insurance coverage (such as liability, PIP, comprehensive and collision) averages between 10-15 percent. The commission paid by Fortune Life on its policies was 90 percent, and the commission paid by Nation Motor Club was 80 percent. In the instant case, between January 18, 1986, and January 23, 1986, Briar Bay's representatives generated $796.50 in commissions on Fortune Life policies and $80 in commission on Nation Motor Club memberships through only five customers. 7/ Clearly, Respondents had a strong financial motive to push these products.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the licenses and eligibility for licensure as an insurance agent of Respondents, Ronald T. Pascale and Leonard C. Chandler, be REVOKED. DONE AND ORDERED this 24th day of June, 1987, in Tallahassee, Florida. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 1987.
The Issue The issue is whether the petitioner's applications for qualification and for examination as an insurance agent should be granted.
Findings Of Fact Wallace F. Sharrett applied on or about May 14, 1987, for qualification as a general lines agent or solicitor for insurance, and also applied for examination as a life and health insurance agent. On or about July 30, 1987, he filed another application for examination as a life and health agent. On all these applications he listed his social security number as 113- 20-3677. His social security number is actually 113-30-2677. All three applications contain the same question #6, which asks: Have you ever held an insurance license in this or any other state? On all applications Mr. Sharrett answered "no." All three applications also contain question #11: Does any insurer or general agent claim that you are indebted under any agency contract or otherwise? If so, state name of claimant, nature of claim, and your defense thereto. To all three questions, Mr. Sharrett checked the box labeled "no." On all three applications, in response to question 14(b), asking, "What insurance experience have you had?", Mr. Sharrett answered "none." Mr. Sharrett previously had sought and had been issued licenses and qualifications by the Florida Department of Insurance to represent insurance companies as follows: Security Life Insurance Company of Georgia, issued August 26, 1977. Conger Life Insurance Company, issued October 20, 1977. Security Life Insurance Company of Georgia, issued January 31, 1979. Coastal States Life Insurance Company, issued July 12, 1979. Hartford Life and Accident Insurance Company, issued June 26, 1981. Mr. Sharrett has held no Florida licenses or qualifications for licensure for any insurers since 1984. From October 3, 1977, through December 27, 1978, Mr. Sharrett had been employed by Conger Life Insurance Company of Miami, Florida. After his termination, an internal audit of Mr. Sharrett's accounts at Conger Life was performed. The internal audit dated January 31, 1979, showed that Mr. Sharrett owed the company $707.66. Thereafter, Mr. Sharrett made payments of $510.14, and Conger Life's records show that as of March 31, 1979, based on total payments, and additional shortages allocated to Mr. Sharrett's account, he owed Conger Life $388.74. After Mr. Sharrett's termination of employment with Conger Life, he applied to become a salesman with Security Life Insurance Company of Georgia. On February 7, 1979, the agency vice president for that company, J. H. Phillips, wrote to Conger Life for information about Mr. Sharrett, and said: We particularly would be interested in, did he leave your company without a deficiency. On February 12, 1979, Mr. Henry J. Spaman of Conger Life wrote to Mr. Phillips stating He was employed by [us] from 10/3/77 to 12/22/78. He left our employment with a shortage of considerable amount which we are in the process of taking legal action [sic]. We also have reported to the State Department of Insurance the shortage and have been assured that it will be investigated. Nevertheless, Mr. Sharrett thereafter was hired as a salesman by Security Life Insurance Company of Georgia. Apparently the payment which Mr. Sharrett made of $510.14 settled his account with Conger Life Insurance Company to the satisfaction of Security Life Insurance Company of Georgia. Conger Insurance Company still maintains, however, that Mr. Sharrett is indebted to it in the amount of $388.74. No legal action to collect that amount from Mr. Sharrett has ever been taken, nor is there any evidence of a demand for payment being directed to him since his payment of $510.14 to Conger Life during the first quarter of 1979. Mr. Sharrett did not list his prior licenses to sell insurance on his recent applications because he had discussed his applications with a retired insurance agent, Mr. Morrelle, who had been an agent with Independent Life Insurance Company for 27 years, Mr. Morrelle told Mr. Sharrett that it was not necessary to list jobs with insurance companies which were more than five years old. Mr. Morrelle had not looked at the applications themselves, and did not know that the question about whether the applicant ever had been licensed in Florida or any other state has no time limit. Mr. Raines, the district sales manager for Independent Life Insurance Company, the company for which Mr. Sharrett will work if licensed, stated that he did not know that Mr. Sharrett had been employed by five different insurance companies. Independent Life's own background check of Salespeople through Equifax only goes back five years. Mr. Sharrett was employed by Independent Life from May 4, 1987, to January 22, 1988, and was a good employee. After this case began, Mr. Sharrett filed an amended application with the Department, dated February 17, 1988. In that application Mr. Sharrett listed his correct social security number, but with regard to question number 6 (concerning other insurance licenses) he listed only Conger Life Insurance Company, Security Life Insurance Company, and New England Life Insurance Company. He neglected to mention his licensure with Coastal States Life Insurance Company and Hartford Life and Accident Insurance Company. The Department has no record that Mr. Sharrett was qualified to represent New England Life Insurance Company. With respect to question number 11 (concerning whether any insurer or general agent claimed that Sharrett was indebted under any agency contract) on the amended application, he again answered "no." On question 14(b), Mr. Sharrett acknowledged 2 years experience in the insurance business in the amended application. The Hearing Officer finds no material misrepresentation with respect to question number 11 (claims of indebtedness by insurance companies) on any of the applications Mr. Sharrett filed. He had no reason to believe that Conger Life Insurance Company continued to maintain that he was indebted to it. Conger Life has never taken any action to collect the $388.74 it maintains Mr. Sharrett owes it. His payment of $514.14 during the first quarter of 1979, shortly after his termination with Conger Life settled the dispute between Conger Life and Mr. Sharrett. In making this finding, the Hearing Officer is persuaded that the dispute between Mr. Sharrett and Conger Life Insurance Company was made known to Security Life Insurance Company in February 1979, and it is more likely than not that both Security Life Insurance Company of Georgia and Mr. Sharrett were satisfied that an agreement had been reached with Conger Life about Mr. Sharrett's indebtedness to Conger Life before he would have been employed by Security Life. Mr. Sharrett did, however, make material misrepresentations in his applications for licensure. While the transposition of numbers on the portion of the application asking or a social security number would not, by itself, be sufficient proof of an intentional misrepresentation, although it would impede investigation into the applicant's background, the error in the social security number in the three original applications is highly significant in conjunction with two other facts: Mr. Sharrett did not reveal in answer to question 6 that he had been licensed to sell insurance in Florida before. Even crediting Mr. Morrelle's testimony that he told Mr. Sharrett it was not necessary to list insurance licenses more than five years old, a plain reading of the form would show that question 6 has no time limit on it, whereas question 10 asks for a record of employment "for the past five years" and is time limited. Minimal attention to the questions asked on the form would have put Mr. Sharrett on notice that he was required to disclose all past insurance licenses. This would have brought to light Mr. Sharrett's dispute with his prior employer, Conger Life, which he would be required to explain. Mr. Sharrett stated that he had no insurance experience in answer to question number 14(b). All these answers were simply untrue. The error in the social security number, the failure to list past licenses Mr. Sharrett held in Florida on three applications, the failure to correctly list past licenses on the fourth (amended) application, and the failure to acknowledge any past insurance experience, leads the Hearing Officer to find purposeful misrepresentation of Mr. Sharrett's past. These misrepresentations raise questions about Mr. Sharrett's trustworthiness. Although the dispute Mr. Sharrett had with Conger Life in 1979 can be explained and would not, in itself, disqualify him from licensure, several of the items of misinformation on his licensure applications apparently were designed to impede the Department from learning of the settled dispute with Conger Life. This misrepresentation is disqualifying.
Recommendation It is recommended that the applications of Mr. Sharrett for qualification and for examination as an insurance agent be denied. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 27th day of June, 1988. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 (904) 488-9765 Filed with the Clerk of the Division of Administrative Hearings this 27th day of June, 1988. APPENDIX The following are my rulings on the proposed findings of fact submitted by the petitioner pursuant to Section 120.59(2), Florida Statutes (1987). Covered in finding of fact 5. General covered in finding 6-9, whether the indebtedness was on the payment bond or is general indebtedness is not relevant. Covered in finding of fact 12. [Introduction] The content of the original applications are recounted in findings of fact 1-4. 4(a). Rejected as unnecessary. 4(b). Sentence 1 covered in finding of fact 1, the remainder rejected for the reason stated in findings of facts 17 and 18. 4(c). Rejected for the reason stated in finding of fact 17(a). 4(d). Accepted in finding of fact 16. Rejected as unnecessary. Covered in finding of fact 13. The following are my rulings on the proposed findings of fact submitted by the respondent pursuant to Section 120.59(2), Florida Statues (1987). Covered in finding of fact 5. Covered in finding of fact 6. Covered in finding of fact 8. 4(a). The name used on the application is not a problem. Concerning the social security, see finding of fact 1. 4(b). See finding of fact 1. 4(c). See finding of fact 1. [Appears to be misnumbering] Rejected as unnecessary. Rejected as unnecessary. Covered in finding of fact 11. Covered in finding of fact 12. Covered in findings of facts 1, 2, 3, 4, and 5. Same as previous ruling. Same as previous ruling. Covered in findings of facts 16, 17, and 18. COPIES FURNISHED: Mr. Wallace F. Sharrett 109 Southwest Third Avenue Hallendale, Florida 33009 Hon. William Gunter State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 William W. Tharpe, Jr., Esquire Office of Legal Services 413-B Larson Building Tallahassee, Florida 32399-0300 Don Dowdell General Counsel State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to this proceeding, the respondent Jules Maxwell Hanken was licensed as an ordinary life, including disability, agent in Florida, and was the President of Gulf Health/Life, Inc. in St. Petersburg, Florida. Though some administrative and supervisory duties were delegated to other individuals, respondent was the ultimate supervisor of insurance agents and employees at Gulf Health/Life. Respondent assumed the primary and major responsibility for training, directing and instructing employees to work as insurance salesmen within the agency. COUNTS I and VI The American Benevolent Society, Inc. was formed by the respondent and others in mid-1978, and was incorporated on November 22, 1978. The organization was described as "a society devoted to the welfare and benefit of independent Americans." Among its stated purposes was the provision of information and referral services dealing with medical, legal, benevolent, financial and recreational matters. The ABS also provided a newsletter and discounts to its members from numerous area businesses and dining establishments, as well as travel discounts and information. The membership fee was $15.00 for an individual and $25.00 for a family. New members were advised that one of the functions of the ABS was to solve the problem of high medical costs, and that members having difficulties with insurance claims could receive aid from the ABS. The offices of the ABS were located in the same building as Gulf Health/Life, Inc., but a separate telephone number and listing was maintained for the ABS. Employees of Gulf Health/Life, Inc. who answered the ABS telephone were instructed to not let callers know that the ABS office was in the Gulf Health office and to inform ABS callers that their insurance agent was not located at that office. In the sale of accident and health insurance, which was a major portion of the insurance sold at Gulf Health/Life, Inc., efforts were made by the respondent to offer insurance which would provide a discount in premium to members of the ABS. Apparently, respondent attempted to have the ABS endorse various insurance companies in return for members of the ABS receiving a "group" or "association" premium which would be less than the premium for an individual purchasing the same insurance. CNA did provide such a plan on one of its policies for individual members of the ABS, as well as for other associations, whereby the premiums for ABS members were slightly lower (approximately $10.00 per individual) than for members of the general public purchasing the same insurance. Neither Massachusetts Indemnity and Life Insurance Co. nor Founders Life Assurance Co. offered any group rate or reduction in insurance premiums to members of the ABS. Insurance salesmen employed at Gulf Health/Life, Inc. were instructed and directed by the respondent to also sell membership in the ABS. They received a commission for each membership sold and most sales were made at the same time as sales of insurance policies were made. It is estimated that approximately ninety-five percent (95 percent) of the ABS members also had insurance with a company represented by Gulf Health/Life, Inc. Respondent's insurance salesmen were directed in writing to always explain to the customer the difference between the ABS and the insurance company, to always collect separate checks and give separate receipts for the ABS membership fee and the insurance premium, and to require new ABS members to sign a form whenever they purchased insurance expressly acknowledging that the ABS was not the insurance company and that the endorsement and recommendation of insurance by the ABS did not imply or guarantee any discount in insurance premium. The respondent's agents were also required to place their signature on this form. In addition, the printed application form for membership in the ABS stated, in relevant part, as follows: I . . . am not joining as a prerequisite to obtaining insurance . . . and I realize that the A.B.A. insurance endorsement in no way implies or guarantees any discount or deviation from the ordinary premium established for the policies included. It is understood that the Society is not the insurance company." Respondent's salesmen were directed to obtain from each new ABS member the names of other persons who might be interested in ABS membership, and the amount of the salesman's commission for each ABS sale was dependent upon the number of referrals contained in each application. For example, an individual application for ABS membership with no referrals earned the salesperson a commission of $4.50, while an application with three referrals merited a commission of $7.50. Membership agents for the ABS, who were also licensed insurance agents, were required to sign a document acknowledging their understanding that monies collected for ABS were to be maintained separately from insurance premiums, that no preferential recommendations were to be made for insurance plans endorsed by the ABS over other plans which the agent was licensed to represent and "that solicitation of ABS members is in no way connected to or reliant upon insurance plans, programs, or policies, as no person's ability to obtain any insurance is helped or hindered by ABS membership; however, membership must be established prior to insurance solicita- tion through the American Benevolent Society. In contrast to the above-discussed specific written instructions and disclaimer forms requiring the signatures of agents and new customers, several agents employed by the respondent were of the opinion that those written forms and instructions were not consistent with what agents were verbally directed by respondent to use as a sales presentation. These agents believed that respondent, during the training sessions, was instructing them to blur together the presentations for sales of insurance and ABS membership so that the customer would believe that they could obtain better insurance (either in terms of coverage or lower premiums) through membership in the ABS. The agents were instructed in a sales technique which would begin with an explanation to the customer as to how difficult it is, because of the customer's age and/or physical condition, to obtain proper insurance coverage and then to explain that the ABS was formed for the purpose of solving those problems, could help its members in obtaining better and lower cost insurance, and could ultimately help them in their claims with the various companies. These agents admitted that they were instructed to avoid the term "group insurance," but stated that they were to use other terminology to suggest an association or group. Several former agents and employees testified that they received a "negative commission," or a reduction in their usual insurance commission, if they sold insurance to a customer without simultaneously selling that customer a membership in the ABS. No documentary evidence was offered to substantiate this testimony. Some of the respondent's insurance agents did tell customers that they had to be a member of the ABS before they could obtain certain insurance. These agents did, however, sell insurance without ABS membership and did sell ABS membership without insurance. They also sold ABS memberships simultaneously with the sale of insurance policies with companies which offered no benefits for ABS members. As noted above, CNA did offer a slight discount in premium on one of its policies to members of the ABS. The only three customers called as witnesses by the petitioner in this proceeding did join the ABS in order to acquire what they believed to a be a cheaper, group rate for their CNA policies, and to obtain discounts on other products. These customers did receive the discount provided to ABS members on at least one of the CNA policies purchased through respondent's agents. The agent did not explain the exact amount of the discount to them as compared with the ABS membership fee, nor did the agent compare the premiums with individual, as opposed to group, premiums. No other members of the ABS (which at one time had a membership of 700 or 800 persons) or the general public were called by the petitioner to testify in this proceeding. 1/ The only other member of the ABS who testified was called by the respondent, and he testified that he purchased a membership in the ABS after he bought insurance from one of the respondent's agents. He was told membership in the ABS would bring him certain services, benefits and discounts, but was not told he would receive a discount or reduction in his insurance premium. This witness was named in the Administrative Complaint as being one of the victims of the deceptive sales practices directed or authorized by the respondent. Insurance agents at Gulf Health/Life used various titles on their business cards and in reference to themselves. Some utilized the word "counselor," while others were referred to as "Regional Group Director." The purpose of utilizing the term "counselor" was not to disguise the fact that an agent was an insurance salesman, but rather to avoid the often poor public image associated with an insurance salesman. Upon inquiry to the State Insurance Commissioner's Office, the respondent's office was informed by letter dated January 21, 1980, that there was no statutory prohibition against use of the term "counselor" by insurance agents. An Insurance Department rule was referenced which prohibits the representation by an agent that he is a "counselor, advisor or similar designation" for any group or association of medicare eligible individuals, which representation does not reflect the true role of the agent in the solicitation of insurance. Salesmen were encouraged by respondent to avoid discussions with customers regarding the commission they may make on a potential sale. This was emphasized in training sessions for the purpose of illustrating what the proper attitude of an insurance salesman should be; to wit: to sell customers what they need and not what the salesman desires in terms of a commission. Respondent's employees and agents were not instructed to inform customers that they were not insurance salesmen or that they did not receive remuneration by way of commission. COUNT II Some thirty years ago, Earl Jacobs, a professional photographer prior to joining respondent's insurance company, constructed what he calls a "safe light." This is a wooden box which has a lightbulb in it and a glass filter across the face. The light can be openly used in a darkroom while working with light-sensitive photography paper. For some period of time, this device was kept on the premises of Gulf Health/Life, Inc. because the agency was putting together a brochure with each agent's picture. The restroom area was considered to be an ideal darkroom facility for the processing of prints. The "safe light" is referred to as a "light box" in the Administrative Complaint. Former employees and agents observed this device either in the closet of the woman's restroom or under the desk of Lynda C. Rushing, Vice President of Gulf Health/Life, Inc. Five witnesses observed the device in use by Lynda Rushing while either kneeling on the floor near her desk or while in another room. While it appeared to these witnesses that Ms. Rushing was using the device to trace customers' signatures onto insurance documents, no such documents were produced, no insured's name was given, nor did any customer or member of the general public present testimony as to a signature which was not genuine. 2/ Respondent ordered the device removed immediately after he was informed by a secretary that an irate customer had been in the office complaining that a signature on an insurance policy was not his signature. Applications and other insurance documents were frequently returned to respondent's agents for the purpose of obtaining an omitted signature. There was no testimony or other evidence in this proceeding to indicate that respondent Hanken ever used the device known as a "light box," or that he directed other employees to use this device to trace signatures. COUNT III Many, if not most, of the individuals employed by the respondent as insurance agents had no prior insurance experience. Sales techniques and practices were taught them by the respondent through extensive training sessions and the use of a sales manual called Psaleschology, which was primarily authored by the respondent. Agents were instructed to learn and were tested on the concepts expressed in the sales manual. The training sessions involved role- playing between the respondent and an agent, utilizing the concepts expressed in the manual. During the early stages of an agent's training, he was required to complete a form when he did not effectuate a sale, listing which steps in the manual were not followed by the salesman. While some salesmen believed that they were expected to follow the manual "verbatim" in their sales presentation, others, including the respondent, felt that the manual and the concepts expressed therein were simply guidelines or reminders of the principles of the psychology of salesmanship. Respondent considered the manual's purpose to be one of introducing to the salesman a formal attitude about selling and a demonstrative learning instrument. The sales manual under which the respondent's agents were trained does utilize the concepts of "MID/TIA" (Make It Difficult/Take It Away"); fear and greed, and fabrication. As explained by the respondent, these concepts of reverse psychology, motivation by relating to strong human emotion and demonstrations of risk are common techniques in salesmanship. They can as readily be described as concepts concerning the theory of supply and demand, the recognition of people's concerns and desires as motivating factors and the personalization of real events by fabrication of the characters. During a training session, the respondent related to his salesmen that he had once used the technique of telling an insurance customer who was reluctant to speak with him that he had come there to give the customer a Maas Brothers gift certificate. This was cited as an example of a method to persuade the unreceptive customer to open the door. There was no testimony that any of the respondent's salesmen ever actually used that technique or that respondent ever actually directed his employees to use such a technique. Maas Brothers gift certificates were in fact given to customers by Gulf Life/Health employees for a period of time when the customer gave an agent referrals for other sales. The respondent's manual does contain suggested techniques of reinstating lapsed policies by providing option or adjustment alternatives. One agent, who testified that he followed the respondent's manual literally during his early months with the company, stated that he would tell customers whose policies were about to lapse that they had a specific refund or monetary adjustment due them. This technique was utilized to gain entrance to the customer's home and to resell them insurance. This agent's technique was reported to the respondent by another agent, and respondent directed him to cease using the "refund" approach to reinstate lapsed policies. There was no testimony from any purchaser of insurance, potential insurance customer or other member of the general public that the techniques set forth in the respondent's sales manual or emphasized in his training sessions were actually practiced to the extent that the customer was frightened, coerced or deceived into purchasing insurance from the respondent's agency. 3/ COUNT IV Prior to becoming licensed to sell policies for Massachusetts Indemnity and Life Insurance Company, agent Edmund Shoman solicited and obtained applications for insurance with that company. Vice President Lynda Rushing, who was licensed with that company, signed these applications for him. At the time, Mr. Shoman was licensed to sell insurance with another company. There was no evidence to suggest that respondent had any knowledge that Ms. Rushing signed applications brought into the office by Mr. Shoman, or that Mr. Shoman received any commissions on these sales Bradley Wasserman had never sold insurance prior to being employed by the respondent. After one week of training, and prior to receiving his license, according to Bradley Wasserman, he was given leads, made contacts and sold two insurance policies by himself. He signed his brother Phillip's name to the applications and, according to him, received a commission on the two sales. Bradley's brother, Phillip, was employed as a licensed insurance agent by the respondent, was one of the respondent's top producers, and was also in law school at the time. Phillip recalled that respondent gave his approval to this practice, but could not recall whether he knew in advance that Bradley would be signing his name to the applications. During his first two weeks of employment with the respondent, Bradley Wasserman entered into and signed a "Training Agreement," acknowledging that during his training program he would be given a training allowance for his presence with a licensed instructor during a sale. The specific oral agreement was that Wasserman was to receive $25.00 for each presentation of two or more hours which he observed. Between February 20 and March 6, 1981, three checks were made payable to Bradley Wasserman in the amounts of $150.00, $150.00, and $100.00. Each check bore the words "training remuneration" or "training allowance." These amounts do not correspondent with the amounts claimed by Bradley Wasserman as his commission on the two sales of insurance. COUNT V Howard Cunix, at a time when he was not a licensed life agent, referred a life insurance customer, Mr. Miller, to Phillip Wasserman. Phillip Wasserman, who was licensed to sell life insurance, made the sale, but received only one-half of the commission for that sale. What happened to the remainder of the commission was not known by Mr. Wasserman and was not otherwise established. At that time, Mr. Cunix was a salaried employee and received the same amount of remuneration each week. He did receive one-half a production or referral credit on a board maintained at Gulf Health/Life to illustrate the production level of the various agents.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the Amended Administrative Complaint dated April 29, 1982, be DISMISSED. Respectfully submitted and entered this 8th day of February, 1983, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of February, 1983.
The Issue The issue to be resolved in this proceeding concerns whether the Respondent violated various provisions of the Florida Insurance Code, as alleged in the Amended Administrative Complaint, and if so, what penalty, if any, is warranted.
Findings Of Fact The Petitioner is an agency of the State of Florida charged with regulating and licensing the entry of insurance agents into the profession of insurance and with regulating the practice of agents and other insurance professionals already licensed by the State of Florida. The Respondent, at all times pertinent hereto, was and is licensed by the State of Florida as a non-resident life and health insurance agent. The Respondent procured applications for life insurance to be issued from Pacific to the 30 named individuals and entities set forth in the Amended Administrative Complaint in its 25 counts. Pacific was not authorized to transact insurance business in the State of Florida because the company was not yet licensed. However, it was in the process of becoming licensed and licensure was imminent. The company Regional Director, C. Manley Denton, and other company officials, when they recruited the Respondent to sell insurance policies in Florida, assured him that licensure was imminent, that there was no impediment to finalization of the licensure procedures in the very near future, and that the Respondent could legally obtain life insurance policy applications and sell policies in Florida if he took the applications and dated them in and from his Tulsa, Oklahoma, office. He was assured that this procedure would render his activities legal. In reliance on these representations by officials of Pacific, the Respondent undertook to and did obtain the applications for, and sell the insurance policies, referenced above and in the Amended Administrative Complaint. The Respondent, for many years, has transacted insurance business as a general agent of life and health insurance in Oklahoma and in Florida. He is a resident of both states, spending part of each year in each state. Many of the policyholders referenced above and in the Amended Administrative Complaint were clients of the Respondent, who had already had other insurance policies issued by him through companies he represents. In the particular instances involved in this proceeding, many of these clients had been policyholders of the First Capital Life Insurance Company, which had experienced financial difficulties and gone into receivership. Because of his policyholders' concern and his own concern about the possibility of the future inability to pay claims by the company in receivership, the affected clients and the Respondent were desirous of replacing those policies with policies in a different and sounder insurance company. This desire dovetailed neatly with the desire by the executives at Pacific to obtain a large block of insurance policy business in Florida and in other states in the mainland United States. This desire by Pacific executives was due to a recent merger of that company with the Hawaiian Life Insurance Company, a company which was owned by Meiji Mutual Life of Tokyo Japan (Meiji). The resulting merged company, Pacific, was owned by Meiji. The executives at Pacific, which had historically been headquartered in San Jose, California, desired to continue to maintain the company domicile and their own personal residences in California and avoid having to relocate to Hawaii. This was the reason they desired to secure a large block of insurance business very rapidly in order to enhance the sales record of the "stateside branch" of the company. They believed that this would insure that their relocation would not have to be accomplished. With this interest in the forefront of their plans, the executives of Pacific began to search for the best insurance agents in the nation who have a record of successfully writing large volumes of life insurance policy business. The Respondent is such an insurance agent. He had recently achieved a nationally-recognized ranking as one of the highest volume life insurance producer agents in the country. Because the Respondent was desirous of placing a high-dollar volume of life insurance policies for the clients referenced above, who had had policies in the financially-troubled First Capital Life Insurance Company, the Respondent agreed, at the behest of the officials of Pacific, to attempt to write a large block of life insurance business in the State of Florida. The Respondent is a well-respected general life insurance and health insurance agent. He is widely known throughout the insurance profession and industry, throughout the United States, as an ethical, competent and successful life insurance policy producer. He has no blemish on his licensure and practice record as an agent, throughout the approximate 40 years he has engaged in the profession. When the Respondent obtained the insurance policy applications and policies at issue in this proceeding, he engaged in one course of conduct. That is, he contacted the clients and obtained their applications and arranged for the sale of the insurance policy contracts to them, as either new policies and clients, or as replacement policies for his existing clients, as the case might be. He engaged in this essentially-identical transaction with all 30 of these policyholders, in the genuine, good-faith belief that he was legally writing insurance policy business in the State of Florida based upon the circumstances related to him by officials of Pacific, upon which he relied. He candidly acknowledges, through counsel, that, in so relying, he knew that the company was not actually licensed in the State of Florida, but that that eventuality was imminent in the very near future, and that based upon the method the company assured him of writing the policies through the Tulsa, Oklahoma, office, he would be obtaining and transacting this business in a legally acceptable way. He also candidly acknowledges that, in fact, he understands, from his contact with the Department since that time, this was not the case and that he was writing the business for a company not legally authorized to do business in the State of Florida. The Respondent has freely admitted these above-found facts and does not dispute that he was in violation of the portion of the charges that do not depend on intent. He has established, however, through the exhibits admitted as explanatory hearsay and the agreed-upon proffer of his counsel, that the transactions at issue, all of which were the result of one essentially-identical course of conduct, were accomplished with no intent to defraud the policyholders, the company, or the Florida Department of Insurance. There was no willful, dishonest or deceitful intent by the Respondent during the course of his engagement in these transactions. There was no such willful wrongful intent in the course of his contact and relations with the company, those policyholders, or the Department of Insurance since that time. No policyholder or company suffered any financial detriment as a result of the Respondent's conduct, nor did any insurance coverage lapse at any time. Although there were some 30 policyholders who were sold insurance by the Respondent, as the agent for a company not actually licensed in the State of Florida, that circumstance had no effect on the validity of the policy coverages involved and there were no actual "victims" of the Respondent's conduct.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Petitioner, Department of Insurance, finding the Respondent, Wayne Harland Creasy, guilty of a violation of Section 626.901(1), Florida Statutes, in the manner found and concluded above and that a penalty of $3,000.00 be imposed, together with the award of $500.00 in attorney's fees. DONE AND ENTERED this 1st day of April, 1996, in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of April, 1996. APPENDIX TO RECOMMENDED ORDER Petitioner's Proposed Findings of Fact 1-32. Accepted. Rejected, as constituting a conclusion of law and not a finding of fact. Accepted, in part, but subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted, in a technical sense, but not in the sense that any overt, intentional effort to circumvent Florida law was committed by the Respondent. Rather, it was a negligent failure to act in a legal way due to being misled by Pacific Guardian Life Insurance Company, Ltd. or its officers or employees. Accepted, as to the factual allegations of the Administrative Complaint, but not as to their legal import, and subordinate to the Hearing Officer's findings of fact on this subject matter. Respondent's Proposed Findings of Fact The Respondent's proposed findings of fact are not ruled upon or considered because they were not timely filed, being approximately one month out of time with no motion for extension of time, during the originally-set time period, being filed. Consequently, the Petitioner's motion to strike the Respondent's proposed findings of fact and conclusions of law is granted. COPIES FURNISHED: Willis F. Melvin, Jr., Esquire Department of Insurance and Treasurer Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 C. Rabon Martin, Esquire Martin and Associates 403 South Cheyenne Avenue Tulsa, Oklahoma 74103 Bill Nelson, State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner, Acting General Counsel Department of Insurance and Treasurer The Capitol, PL-11 Tallahassee, Florida 32399-0300
The Issue Whether Rules 4-6.012(2), 4-6.013(2) and 4-46.003(1), Florida Administrative Code, or any of them, constitute an invalid exercise of delegated legislative authority? The parties' commendably thorough prehearing stipulation has yielded verbatim the first 15 paragraphs of the following
Findings Of Fact First National Life Insurance Company ("First National Life") is an authorized foreign insurer operating under a certificate of authority issued by the Department of Insurance and Treasurer ("Department") pursuant to Section 624.401(1), Florida Statutes. First National Life is subject to the jurisdiction and regulation of the Department pursuant to the Florida Insurance Code. 2. First National Life is an authorized foreign insurer organized under the Laws of Alabama and domiciled in the State of Alabama. First National Life maintains its regional home office in Pensacola, Florida. In 1985, the Florida Legislature passed Chapter 85-305 titled An Act Relating to the Florida Retirement System; authorizing the Department of Administration to select a State Licensed Insurance Company to offer and administer a Medicare Supplement Policy to eligible retirees of a state or local public employer; authorizing health insurance coverage; providing an appropriation; providing for health insurance coverage for certain retired persons and their spouses; providing a retroactive effective date. Pursuant to this act under Section 1, Sub-Section 1: The Department of Administration shall solicit competitive bids from state licensed insurance companies to provide and administer a fully insured Medicare Supplement Policy for all eligible retirees of a state or local public employer. Such Medicare Supplement Policy shall meet the provisions of ss. 627.671-627.675 Florida Statutes. For the purpose of this sub-section, "eligible retirees" means any public employee who is retired from a state or local public employer who covered by Medicare, Parts A and B. The Department of Administration shall authorize one company to offer the Medicare Supplement Coverage to all eligible retirees. All premiums shall be paid by the retiree. Said legislation empowered the Florida Department of Administration to authorize one company to offer the Medicare Supplement Coverage to all eligible retirees, with premiums to be paid by the retirees. As a result of the aforementioned competitive bidding process, pursuant to Section 110.1234, Florida Statutes, the Department of Administration authorized First National Life Insurance Company to be the one insurance company to offer Medicare Supplement Coverage to all eligible public employee retirees as defined in the act. The First National Life Insurance Company has sent printed or published material and descriptive literature of First National Life through the United States mail to eligible retirees under the statute. Rule 4-6.012 cites as its specific authority Chapters 624.308 and 626.9611 and recites implementation of Chapter 626.9541(1), (2), Fla. Stat. Rule 4-6.013 recites as its specific authority Chapter 624.308 and 626.9611 Fla. Stat. It recites implementation of Chapter 626.9541(1), (2) Fla. Stat. Rule 4-46.003 recites as its specific authority Chapter 624.308(1), 626.9611, 626.9641 Fla. Stat. It recites implementation of Chapter 626.830 and 626.9541(1), (2), (3), (5), (11), (12), and Chapter 626.9641 (1)(a), (c), (e), (h). The Retired Public Employee Group Medicare Supplement Plan authorized by chapter 85-305 Laws of Florida, constitutes one of the "State Group Health Insurance Plans" as defined in chapter 110.123 Fla. Stat. (1987). First National Life Insurance Company in the above- described group plan, its financial condition or status, or the payments of its claims, or the merits, desirability, or advisability of its policy forms or kinds of plans of insurance, are approved, endorsed, or accredited by a division or agency of the State of Florida. The solicitations of group coverage for the above- described group plan are in some manner connected with an agency of state government. The Medicare Supplemental Insurance Plan offered by First National Life Insurance Company is affiliated with or authorized by a governmental agency. The rule provisions under challenge are set out in Petitioner's Exhibit No. 4, together with the history notes as they appear in the Florida Administrative Code: 4-6.012 Jurisdictional Licensing and Status of Insurer. (2) An advertisement shall not create the impression directly or indirectly that the insurer, its financial condition or status, or the payment of its claims, or the merits, desirability, or advisability of its policy forms or kinds of plans of insurance are approved, endorsed, or accredited by any division or agency of this State or the United States Government. Specific Authority 624.308, 626.9611 FS. Law Implemented 626.9541(1), (2) FS. History - Revised 1-19-73, Repromulgated 12-24-74, Formerly 4-6.12 4-6.013 Identity of Insurer. (2) No advertisement shall use any combination of words, symbols, or physical materials which by their content, phraseology, shape, color or other characteristics are so similar to combination of words, symbols, or physical materials used by agencies of the federal government or of this State, or otherwise appear to be of such a nature that it tends to confuse or mislead prospective insureds into believing that the solicitation is in some manner connected with an agency of the municipal, state or federal government. Specific Authority 624.308, 626.9611 FS. Law Implemented 626.9541(1), (2) FS. History - Revised 1-19-73, 7-20-73, Repromulgated 12-24-74, Formerly 4-6.13 4-46.003 Unfair or Deceptive Acts or Practices Defined. It shall be deemed an unfair or deceptive act or practice in the direct solicitation or sale of Medicare supplemental insurance policies, to: Make any verbal or written statement which implies or conveys the impression that any Medicare supplemental insurance plan, by use of promotional materials, titles, initials or trade names being offered or used by a company or agent, is affiliated with or authorized by the Federal Government, the Medicare Program, the Social Security Administration or any other governmental agency. Specific Authority 624.308(1), 626.9611, 626.9641 F.S. Law Implemented 626.830, 626.9541(1), (2), (3), (5), (11), (12) 626.9641(1)(a), (c), (e), (h) F.S. History - New 7-1-79, Formerly 4-46.03 Each of these provisions is cited in the administrative complaint respondent filed against petitioner on December 2, 1987. Petitioner's Exhibit No. 5.
Findings Of Fact The Petitioner is an agency of the State of Florida charged with licensing insurance agents of all types, regulating the licensure status and enforcing the practice standards of licensed agents within the ambit of the powers granted it by the Legislature in Chapter 26, Florida Statutes. The Respondent at times pertinent hereto was a licensed health insurance agent in the State of Florida licensed and regulated as to her insurance agency practice by the Petitioner in accordance with the provisions of Chapter 626, Florida Statutes, and related rules. The Respondent, Ms. Blair, at times pertinent hereto was employed as a licensed health insurance agent by National Health Agency Associates, Inc. On June 25, 1985, Ms. Blair went to the home of Marguerite J. Kozloski in Gainesville, Florida, ostensibly for the purpose of delivering a United General Life Insurance Company hospital indemnity policy (number 0981039). That policy had been sold to Ms. Kozloski by a former National Health Agency Associates, Inc. agent, Mr. Donald Johnson. In the course of meeting with Ms. Kozloski, Ms. Blair informed her that she did not really need the particular policy that the Respondent had come to deliver (policy number 0979258) which had previously been sold to her by agent Johnson. Instead, the Respondent indicated to Ms. Kozloski that she really needed a different health insurance policy or program and took a new application for that insurance from Ms. Kozloski, a different policy. Upon taking the application for the new policy which she was selling to Ms. Kozloski, the Respondent collected Ms. Kozloski's check payable to "National Health Agency" in the amount of $781. That check represented the initial annual premium payment for the policy the Respondent was selling to Ms. Kozloski. Upon concluding this arrangement, Ms. Blair informed Ms. Kozloski that she would have policy number 0979258 and number 0981039 cancelled (the policies sold to Ms. Kozloski by agent Johnson) and would have the full premiums for those policies refunded to Ms. Kozloski. Later that same day the Respondent returned to her office and attempted to submit the application for the policy she sold to Ms. Kozloski to the insurer. Upon attempting to submit the application to the insurer, she was informed by an official of National Health Agency Associates, Inc. that the application could not be submitted to the insurer because it duplicated coverage on Ms. Kozloski. After being informed that the application would not be accepted, the Respondent filled out and executed, without Ms. Kozloski's knowledge or consent, two applications for supplemental medical-surgical expense insurance to be issued by the insurer, Atlantic American Life Insurance Company. She forged Ms. Kozloski's signature on these applications. The Respondent also indicated on these applications certain representations including that Ms. Kozloski did not have existing coverage and that the applied-for policy was not intended to replace existing insurance. These representations were false and the Respondent knew at the time of making them that they were false. She was also aware that in forging Ms. Kozloski's signature on the applications that Ms. Kozloski had no knowledge and had not consented to her placing her name on the applications for insurance, nor consented to the alternative applications being filled out and submitted. Ms. Blair never returned any refund or return premium to which they were entitled to the Kozloskis. She engaged in this scheme to seek to have the policies originally sold by Donald Johnson cancelled and to have the policies she attempted to sell to the Kozloskis replace the outstanding coverage in order for her to obtain the sales commissions attributable to them. The second "Kozloski application" was executed and forged by the Respondent when she learned from the insurer, (on July 8, 1985), that a second application to Atlantic American Life Insurance Company would be necessary to obtain the coverage requested in the first "replacement application" which had been completed by the Respondent and forged on June 25. The Respondent again falsely represented on that application that Ms. Kozloski had no existing or pending applications for Medicare supplement, hospital, medical or surgical insurance although the Respondent knew that to be a false representation. The Respondent also falsely represented, as to that second application, that the policy applied for would not replace any accident or sickness insurance presently applied for or already in force, although she knew that to be a false statement. Further, the Respondent failed to request that the original United General Life Insurance Company policy number 0979258 originally sold by Donald Johnson, be cancelled despite her representation to Ms. Kozloski that she would make such a request, which event would have entitled the policy holder to a refund of premium, which Ms. Kozloski never received. On April 5, 1985, the Respondent went to the home of George A. and Jewel C. Terwilliger in High Springs, Florida, for the purpose of selling Ms. Terwilliger a nursing home care insurance policy. On that occasion, Ms. Terwilliger informed the Respondent that she could not afford to buy more insurance and that her husband refused to pay for any more insurance. The Respondent, after discussing the matter with the Terwilligers, nevertheless obtained an unsigned check from George A. Terwilliger (check number 1314) and persuaded Ms. Terwilliger to sign an application for insurance. Thereafter, without the Terwilligers' knowledge or consent, the Respondent forged George A. Terwilliger's signature on that check and made the check out in the amount of $678. The Respondent thereafter submitted the check, together with Jewel C. Terwilliger's application, to National Health Agency Associates, Inc. The Respondent engaged in this scheme and transaction for the purpose of monetary benefit in the form of a sales commission she expected to earn for selling the Terwilligers the insurance policy based upon her misrepresentations.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, it is, therefore RECOMMENDED that a Final Order be entered by the State of Florida, Department of Insurance and Treasurer revoking the Respondent's licensure. DONE and ORDERED this 7th day of October, 1987, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 FILED with the Clerk of the Division of Administrative Hearings this 7th day of October, 1987 COPIES FURNISHED: Wilbur W. Anderson, Esquire Richard E. Turner, Esquire Office of Legal Services Department of Insurance and Treasurer 413-B Larson Building Tallahassee, Florida 32399-0300 Theresa Gerarda Blair 4390 Northeast Second Court Ocala, Florida 32670 Honorable William Gunter Commissioner Department of Insurance and Treasury The Capitol, Plaza Level Tallahassee, Florida 32399-0300
