Findings Of Fact Petitioner is the state agency charged with licensing insurance agents of all types, regulating licensure status, and enforcing the practice standards of licensed agents within the powers granted by the Legislature in Chapter 626, Florida Statutes. At all times material to the disciplinary action, Respondent Mahle was licensed as an insurance agent in the following areas: Life and Health Insurance and Health Insurance. During the last quarter of the year 1988, New Concept Insurance, Inc. mailed brochures to residents of Naples, Florida, which stated that representatives of the company were willing to provide information about long- term care insurance, including nursing facility benefits, to interested parties. Those who wanted to learn more about the insurance were asked to return their name, address and telephone number to the company on an enclosed card. Eleanor Drown responded to the advertisement, and an appointment was arranged for Thomas DiBello and Respondent Mahle to meet with her regarding the insurance program. On November 10, 1988, Thomas DiBello and Respondent Mahle met with Ms. Drown and discussed the benefits of a long-term care policy with a nursing facility daily benefit of one hundred dollars ($100.00). After the discussion, Ms. Drown completed an application for the insurance and gave it to Respondent Mahle, along with a check for five thousand one hundred and eighty-three dollars and forty-nine cents ($5,183.49). During the insurance transaction on November 10, 1988, Ms. Drown was given a receipt which states: This receipt is given and accepted with the express understanding that the insurance you applied for will not be in force until the policy is issued and the first premium is paid in full. If your application cannot be approved, we will promptly refund your money. Application is made to the company checked (/) on this receipt. On another area of the receipt, it is clearly written, as follows: If Acknowledgement of Application does not reach you within 20 days, write to: Mutual Protective Insurance Company, 151 South 75th Street, Omaha, Nebraska 68124. The Respondent Mahle did not forward the application and the check completed by Ms. Drown to Mutual Protective Insurance Company. The check issued by Ms. Drown to Mutual Protective Insurance Company was deposited into the account of New Concept Insurance, Inc. A cashier's check for the same amount of money was issued by New Concept Insurance, Inc. to Ms. Drown on March 7, 1989. The letter from New Concept that was mailed with the check represented that the check was the refund of the money paid to Mutual Protective Insurance Company by Ms. Drown. Mitigation An application for long-term care insurance from a different insurance company was sent to Ms. Drown by Respondent Mahle on March 2, 1989. Although this course of conduct was not directly responsive to the duties owed by the Respondent to Mutual Protective Insurance Company or his customer, Ms. Drown, it does demonstrate a concern about the insurance needs requested by the customer. This conduct also reveals that there was no intention to convert the funds received to the Respondent's own use, and it explains some of the delay in the return of the premium funds to the customer. The Respondent has been an insurance agent for twenty years. This was the only complaint against the Respondent the Hearing Officer was made aware of during the proceedings. The allegations in the Complaint involve a single insurance transaction.
Recommendation Accordingly, it is RECOMMENDED: That the Respondent be found guilty of one violation of Section 626.561(1), Florida Statutes, and one violation of Section 626.611(7), Florida Statutes, during a single insurance transaction. That the Respondent pay an administrative penalty of $500.00 for the two violations of the Insurance Code within thirty days of the imposition of the penalty. That the Respondent be placed upon six month's probation. During this probation period, he should file a report with the Department demonstrating the manner in which he intends to keep accurate business records which assure him, the insurance company, and the customer that he is continuously accounting for premium funds and promptly carrying out his fiduciary responsibilities. That the Respondent's requests for licensure dated October 10, 1989 and May 18, 1990, be granted. DONE and ENTERED this 12th day of September, 1990, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY 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 12th day of September, 1990. APPENDIX TO RECOMMENDED ORDER IN CASE No. 89-6040 The Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO #2. Accepted. See HO #2. Accepted. Accepted. See HO #5. Accepted. See HO #5. Accepted. See HO #5. Accepted. See HO #5. Rejected. Conclusion of Law. Rejected. See HO #6. Accepted. See HO #7. Accepted. See HO #7. Accepted. See HO #7. Accept that Ms. Drown's funds remained in the insurance agency's financial accounts for four months. Reject that the interest bearing ability of these funds is relevant in any manner to this case. Respondent's proposed findings of fact are addressed as follows: Accepted. See HO #3 and #4. Accepted. See HO #5. Accepted. See HO #5. Accepted. See HO #5. Accepted. Rejected. This testimony was rejected by the hearing officer as self serving. It was not found to be credible. Rejected for the same reasons given immediately above. Accepted, but not particularly probative. Rejected. Contrary to the testimony of Ms. Drown which was believed by the hearing officer. Accepted. Rejected. Contrary to the testimony of Ms. Drown which was believed by the hearing officer. Accept that an application for Penn Treaty Insurance was sent to Ms. Drown on this date. Accepted. Rejected. Contrary to the testimony of Ms. Drown which was believed by the hearing officer. Rejected. Self serving. Not believed or found to be credible by the hearing officer. Accepted. See HO #9. COPIES FURNISHED: C. Christopher Anderson III, Esquire Department of Insurance Division of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Mark P. Smith, Esquire GOLDBERG, GOLDSTEIN & BUCKLEY, P.A. 1515 Broadway Post Office Box 2366 Fort Myers, Florida 33902-2366 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell, Esquire Department of Insurance The Capitol, Plaza Level Tallahassee, Florida 32399-0300 =================================================================
The Issue The issue in the case is whether the Respondent, an insurance agent, has complied with applicable continuing education requirements.
Findings Of Fact The Respondent is a licensed life insurance and variable annuity insurance agent, holding license number A104253, and has held the license at all times material to this case. The Respondent is required to meet applicable continuing education requirements set forth by statute. Based on the type of license held by the Respondent, he must complete 28 hours of continuing education instruction during each reporting period. The instruction must be related to the type of insurance the Respondent is authorized to sell. During the reporting period from December 1, 1995 through November 30, 1997, the Respondent completed 28 hours of continuing education instruction; however, only 21 hours of the instruction are creditable to life and variable annuity insurance agents for purposes of complying with the continuing education requirement. Because seven of the Respondent’s 28 hours are not related to his licensure status, they are not applicable to his continuing education requirement; accordingly, the Respondent had a deficit of seven hours for the relevant reporting period. One of the courses completed by the Respondent was "LTC Strategies and Laws" (Course ID 30180) on November 25, 1997. Credit for this three-hour course is available only to licensed health insurance agents. The Respondent is not a licensed health insurance agent, and is not entitled to credit for this course. Another of the courses completed by the Respondent was "Senior Citizen Insurance" (Course ID 4301) on November 25, 1997. The credit for this eight-hour course is divided; four hours of credit is applicable to life insurance agents and four hours is applicable to health insurance agents. The Respondent is entitled only to the four hours of credit available to life insurance agents. By Preliminary Notice of Non-Compliance dated June 15, 1999, the Respondent received notice that, according to the Department’s review of the records, he had not completed the continuing education requirement. The Notice included a number of resolution alternatives, ranging from the licensee’s correction of the records by providing additional information, to resolving the matter by payment of a fine and completion of the hours, to a licensee-initiated license termination. The Department sent the Preliminary Notice to all addresses of record on file for the Respondent. The Respondent did not respond to the June 15 Preliminary Notice of Non-Compliance. On August 17, 1997, the Department issued a Final Notice of Non-Compliance, again advising that the continuing education requirement was unmet, again including options for resolving the deficiency, and advising of the right to request a formal administrative hearing. The Department sent the Final Notice by certified mail to the licensee’s permanent address of record. In response to the Final Notice, the Respondent requested a formal administrative hearing. The Respondent also sent additional information to the Department apparently unaware that some of the completed course hours were inapplicable to his licensure.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Insurance enter a final order suspending the licensure of Lannie J. Gregory for not less than one month or until Lannie J. Gregory completes seven additional continuing education hours appropriate to his licensure, whichever is later, and imposing a fine of $1,000. DONE AND ENTERED this 24th day of May, 2000, in Tallahassee, Leon County, Florida. WILLIAM F. QUATTLEBAUM 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 24th day of May, 2000. COPIES FURNISHED: Lannie J. Gregory 2680 West Lake Road Palm Harbor, Florida 34684-3120 Miguel Oxamendi, Senior Attorney Department of Insurance 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Daniel Y. Sumner, General Counsel Department of Insurance and Treasurer The Capitol, Lower Level 26 Tallahassee, Florida 32399-0300 Honorable Bill Nelson State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Should discipline be imposed by Petitioner against Respondent's licenses as a life agent (2-16), life and health agent (2-18), and health agent (2-40), held pursuant to Chapter 626, Florida Statutes (2004)?
Findings Of Fact Respondent in accordance with Chapter 626, Florida Statutes (2005), currently holds licenses as a life agent (2- 16), life and health agent (2-18), and a health agent (2-40). On June 24, 2003, in an Administrative Complaint brought by Petitioner against Respondent, also under Case No. 64776-03-AG, accusations were made concerning violations of Chapter 626, Florida Statutes (2003). On October 4, 2004, the parties resolved the earlier case through a settlement stipulation for Consent Order. On October 20, 2004, the Consent Order was entered. In pertinent part the Consent Order stated: The Settlement Stipulation for Consent Order dated October 11, 2004, is hereby approved and fully incorporated herein by reference; * * * (c) Respondent agrees that he has a continuing obligation for claims, which may not have arisen or otherwise be known to the parties at the time of the execution of the Settlement Stipulation for Consent Order and this Consent Order Respondent shall be responsible for satisfying claims that were covered under the Plans sold by Respondent, up to the amount covered by such Plan, less any applicable deductibles or co-payments. Respondent may attempt to negotiate with the providers for compromised amounts, but any such compromise must result in the release of the consumer from any responsibility for the amounts that would have been covered under the terms of such Plan, less any applicable deductibles or co-payments; * * * (f) Within ninety (90) days following the issuance of this Consent Order, the Respondent shall complete the Section 626.2815(3)(a), Florida Statutes, continuing education requirement relative to unauthorized entities; * * * Within thirty (30) days of the issuance of this Consent Order, Respondent agrees to pay to the Department, a fine, in the amount of ONE THOUSAND AND 00/100 ($1,000.00) DOLLARS. Within ninety (90) days following the issuance of this Consent Order, Respondent shall satisfy any unpaid claims for persons insured under the Local 16 Plans he sold, including claims which may not have arisen or otherwise be known to the parties at the time of the execution of the Settlement Stipulation for Consent Order and this Consent Order. Respondent shall only be responsible, however, for satisfying claims that were covered under the Plans sold by Respondent, up to the amount covered by such Plan, less any applicable deductibles or co- payments. Respondent may attempt to negotiate with the providers for compromised amounts, but any such compromise must result in the release of the consumer from any responsibility for the amounts that would have been covered under the terms of such Plan, less any applicable deductibles or co- payments; Within one hundred (100) days following issuance of this Consent Order, the Respondent shall provide proof to the Department that the full amount of claims or losses under all contracts or health plans solicited or sold by Respondent on behalf of Local 16 have been paid or satisfied. Failure of the Respondent to comply with this paragraph shall constitute a material breach of this Consent Order, unless otherwise advised in writing by the Department; Respondent in the future shall comply with all the terms and conditions of this Consent Order; and, shall strictly adhere to all provisions of the Florida Insurance Code, Rules of the Department, and all other laws of the State of Florida. The Respondent shall give the Department full and immediate access to all books and records relating to the Respondent's insurance business, upon request; If, in the future, the Department has good cause to believe that the Respondent has violated any of the terms and conditions of this Consent Order, the Department may initiate an action to suspend or revoke the Respondent's license(s) or appointments, or it may seek to enforce the Consent Order in Circuit Court, or take any other action permitted by law; Respondent paid the $1,000.00 administrative fine required by the Consent Order, but the payment was 20 days late. Respondent completed the continuing education on unauthorized entities. He completed the course on June 3, 2005, beyond the deadline called for in the Consent Order by a number of months. Respondent took the course at Florida Community College in Jacksonville, Florida, an institution that he was familiar with. He took the course to be completed on June 3, 2005, because it was the earliest course available at that school. Respondent was unfamiliar with other schools who may have offered the course at a time that would meet the due date set forth in the Consent Order. Consistent with the expectations in the Consent Order, Petitioner's employees have reviewed their files to determine whether Respondent has satisfied unpaid insurance claims in relation to the insurance plan for Local 16. Those employees involved in that review are Kerry Edgill, a legal assistant in the Legal Division in charge of complaint settlements and Pamela White who works with the Division of Consumer Services as a senior management analyst. Neither employee found any evidence that Respondent had satisfied the unpaid insurance claims as called for in the Consent Order. In correspondence from Respondent to Petitioner's counsel in this case, dated December 6, 2004, there is no indication that the unpaid insurance claims have been satisfied. Respondent in his testimony explained the extent to which he had attempted to determine who had outstanding unpaid insurance claims. Respondent went to the location where Local 16 union members were employed. His contact with union members had to be outside the building proper. He spoke to several members at that time. This contact took place on June 1, 2005. Respondent identified the persons contacted as James, Luther, Gregory, and Michael. Michael's last name may have been Williams, as Respondent recalls. Of the persons Respondent spoke with on June 1, 2005, none of them had an unpaid insurance claim which needed to be satisfied. Respondent provided correspondence to a person or persons whose name(s) was or were not disclosed in the testimony. The June 6, 2005, correspondence was addressed to the Amalgamated Transit Union, in reference to insurance claims for Local 16. Respondent's Exhibit Numbered 17 is a copy of that correspondence. In the body of the correspondence it stated: June 6, 2005 Amalgamated Transit Union Local 1197 P.O. Box 43285 Jacksonville, FL 32203 Re: Claims for Local 16 To union members and trustees, This letter is to follow up me meeting members at the station on June 1, 2005 to discuss any issues or concerns that you may be or have had relating to the unpaid claims with Local 16 National Health Fund. Although, I feel I am not responsible for the issue I would gladly help assist with resolving any problems or concerns that you may have. Should any members have any correspondents that need immediate attention please forward them to me at: David Bright, P.O. Box 441963, Jacksonville, FL 32222. Should you need to speak to me I can be reached at 904-207-0141. Thanks for your cooperation in this long due matter! In relation to what Respondent refers to as accounts for Local 16 which he was servicing, that refers to insurance coverage, it involved a couple of hundred insureds. Respondent in his testimony acknowledged that union members had insurance claims that were unpaid.
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 Sections 626.611(7) and (13), and 626.621(2) and (3), Florida Statutes (2004), finding no violation of Section 626.611(9), Florida Statutes (2004), or 626.9521, Florida Statutes (2004), and suspending Respondent's respective licenses as a life agent (2-16), life and health agent (2-18), and health agent (2-40), for a period of six (6) months. DONE AND ENTERED this 7th day of October, 2005, 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 7th day of October, 2005.
Findings Of Fact At all times material hereto, Respondent, Ralph Steven Carmona, was licensed as an insurance agent by Petitioner, Department of Insurance. On October 25, 1989, Respondent was eligible for licensure and licensed as a Life and Health Insurance Agent. From April 7, 1967 to April l, 1989, Respondent was licensed as a General Lines - Property, Casualty, Surety and Miscellaneous Lines Insurance Agent and is currently eligible for such licensure. From January 21, 1985 through April 1, 1987, Respondent was licensed as a Surplus Lines - Property, Casualty, Surety and Miscellaneous Lines Insurance Agent and remained eligible for such licensure until March 31, 1989. Respondent also served as an officer and director of the Greater Miami Insurance Agency, Inc., an incorporated general lines and life and health insurance agency in Miami. At the time of the incident at issue, Respondent, also, was associated with and conducted insurance transactions in the name of Greater Miami Insurance Agency. In August of 1987, Dr. Lucien Armand, a medical general surgeon, approached Respondent about the possibility of obtaining medical malpractice insurance. Dr. Armand was in the process of establishing his practice with Lawnwood Regional Medical Center in Fort Pierce, Florida. As a condition for employment at Lawnwood Regional Medical Center, Dr. Armand was required to obtain medical malpractice insurance from an insurer authorized to do the business of insurance in Florida. At Dr. Armand's request, Respondent made several inquiries about the possibility of insuring Dr. Armand. Since Dr. Armand had suffered at least four medical malpractice insurance claims from the period of 1982 through 1986, obtaining coverage for him was difficult. However, Respondent gathered several quotations from various medical malpractice insurance companies including the Florida Medical Malpractice Joint Underwriting Association (FMMJUA) which quoted a premium of between $75,000 to $80,000, annually. Dr. Armand rejected each of the plans offered by Respondent as too expensive and requested Respondent to continue his search for a less expensive coverage. Sometime prior to the time he was approached by Dr. Armand, Respondent had been contacted by a company with an address in the Bahamas, International Med Trust Fund (IMTF). Respondent called IMTF and requested additional information concerning their offerings and financial status. In response to his request, Respondent received a letter from a G.L.J. Wilson written on the letterhead of Paramount Insurance Broker & Agents Limited. Respondent represented that Mr. Wilson was the broker and agent for IMTF. The letter was dated February 2, 1987 and, as quoted from the letter, made the following apparent representations pertinent to IMTF: * * * International Ned Trust Fund has been doing business in the State of Florida for over three years. The Fund has retained the services of Melsar Ltd, Inc., a Florida Corporation that are Financial and General Consultants to the Insurance Industry whose job it is to advise us on strategy and regulations of the Insurance Agency. We have not been authorized to write business in the state of Florida simply because up until now authorization was not required. We are however, advised that the office of The Insurance commissioner does not object to our writing business in Florida so long as we state our intent to defend all claims and actions within the state. This we have done. We do have the services of a Florida Lawyer whose job it is to co-ordinate the legal defence of the fund, should action from a claim commence. * * * Respondent also received a letter from Gulf Union Bank (Bahamas) Ltd. dated February 4, 1987 which stated that the "dollar value" of IMTF was in the moderate seven figure bracket. To verify the allegations in Mr. Wilson's letter, Respondent called Petitioner and spoke with someone whom Respondent believed to be a representative of Petitioner. Respondent understood the alleged spokesperson to say that the Petitioner had no jurisdiction over IMTF and from that assumed that IMTF was not required to be licensed by Petitioner before doing business in Florida. Feeling assured that IMTF need not be licensed from his understanding of the alleged representation by Petitioner, that IMTF had adequate financial resources from the representation made by Gulf Union Bank and that IMTF had previously transacted business in Florida from Mr. Wilson's letter, Respondent ended his inquiries about the status of IMTF to conduct insurance business in Florida. Respondent prepared to offer policies for IMTF. Respondent solicited for IMTF under his General Lines - Property, Casualty, Surety and Miscellaneous Lines agent's license. Although medical malpractice insurance can be written under the license, existent law requires that the insurer, itself, must be authorized by Petitioner and an agent must hold an appointment with the insurer which is registered with Petitioner. As of August 20, 1987, IMTF was also not an authorized insurer. Further, Respondent was not authorized to solicit insurance in Florida on behalf of International Med Trust Fund. When Dr. Armand rejected coverage by the FMMJUA, Respondent gave Dr. Armand an application for IMTF and quoted him a premium of $24,500, a substantial decrease from the $75,000 to $80,000 premium quoted by the FMMJUA. Respondent also shared with Dr. Armand the information he had received concerning IMTF. Dr. Armand paid the deposit of $7,500 by tendering $5,000 in cash and financing the remainder with Respondent. Dr. Armand was then given a one month binder from Greater Miami Insurance Agency for coverage by IMTF dated August 20, 1989. Later, Respondent received the Certificate of Insurance from IMTF dated November 3, 1987 for the indemnity period of August 20, 1987 through August 20, 1988. Respondent copied the certificate and forwarded it to Dr. Armand. Dr. Armand's policy was the first and only policy which Respondent has written for IMTF. However, Respondent's reliance on the representations he obtained about the status of IMTF and his failure to have adequate knowledge about the insurers for which he was authorized to solicit under his general lines license clearly demonstrate a lack of reasonable knowledge about the transactions for which he was licensed. Between October 28, 1987 and March 7, 1988, Dr. Armand paid four premium installments totaling $6,674.00 to Greater Miami Insurance Agency in addition to the deposit. The funds were deposited, in trust, in the corporate account of Greater Miami Insurance Agency. In the regular course of business, the monies, minus Respondent's commission and approximately $1,500, were forwarded to IMTF. Sometime in early 1988, the hospital questioned the validity of the IMTF policy and contacted Petitioner. Petitioner responded with a letter dated April 6, 1988 stating that IMTF was not approved or authorized to write any kind of coverage in Florida. Dr. Armand was informed by the hospital about Petitioner's letter and its contents and that he must obtain substitute insurance to remain on staff there. Dr. Armand then informed Respondent about the letter from Petitioner. Respondent offered to return Dr. Armand's money, but Dr. Armand, having confidence that Petitioner's letter was in error, requested Respondent to clarify the matter with the hospital. During the months of April and May, 1988, Dr. Armand repeatedly tried to contact Respondent concerning the status of Respondent's efforts to clarify the matter. Failing to reach him by telephone, Dr. Armand wrote Respondent on June 11, 1988 and requested a refund of the amount of premium paid to IMTF. Then, on June 15, 1988, Dr. Armand again wrote to Respondent requesting assurance that IMTF would indemnify Dr. Armand for claims arising from acts occurring during the period of time which Dr. Armand thought he was covered by IMTF. Dr. Armand made this request although he had requested that the premium be refunded to him. The proof was unclear as to whether the funds were, or were not, refunded to Dr. Armand and no competent, substantial evidence was presented to show whether IMTF would, or would not, honor a claim against Dr. Armand. Respondent attempted to satisfy Dr. Armand's requests. He telephoned IMTF and requested it to submit its Bahamian license certificate to the hospital. He, also, sought substitute coverage for Dr. Armand by again contacting the FMMJUA and secured a one month binder with FMMJUA. The proof is unclear as to what funds Respondent used as the deposit for the binder. However, the premium quoted for the coverage by the FMMJUA, in this instance, was $125,000 which Dr. Armand rejected. Although alternate insurance was available to Dr. Armand, he terminated his staff privileges at Lawnwood Regional Medical Center. The reasons for his departure from Lawnwood are unclear. Dr. Armand currently practices in Broward County, Florida. Respondent still holds some of the remaining premium funds in trust, and a balance on the premium is owing IMTF. The amount of these funds, in addition to the amount of commission paid to Respondent, were not proven by competent, substantial evidence. The instant claim represents the first and only complaint filed with Petitioner against Respondent since Respondent was first licensed by Petitioner in 1967.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Insurance enter a final order which finds that Respondent committed the multiple violations of the Florida Insurance Code as set forth in the Conclusions of Law portion of this Recommended Order, imposes a an administrative fine of five hundred dollars ($500) on Respondent and places Respondent on probation for a period of three (3) months. DONE AND ENTERED this 10th day of January, 1990, in Tallahassee, Leon County, Florida. JANE C. HAYMAN Hearing Officer The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of January, 1990.
The Issue The issue at the hearing was whether Petitioner is entitled to a premium refund of her health insurance premium.
Findings Of Fact The Petitioner, Mildred Daw, is a retired State employee. She is enrolled in the State of Florida, State Employees Group Health Self Insurance Plan (the Plan). Prior to retiring, Petitioner amended her coverage in the Plan, changing from single coverage to family coverage. Petitioner modified her coverage so that her husband would be covered under the Plan. Petitioner's husband was under age 65 and qualified for Medicare Parts A and B. Petitioner was not qualified for Medicare coverage. The premium for family coverage was $178.44 per month. Petitioner began paying this amount shortly before she retired in December 1984. By letter dated, July 8, 1985, the Division of State Employees' Insurance notified retirees that: If you are under age 65 and eligible for Medicare Part A and B because of disability, you may now be eligible for Medicare Coordination coverage at the reduced rate. Please notify our office if you are eligible and send a copy of your Medicare card. Your premium will be reduced the month following our receipt of your notice and the copy of your Medicare card. The letter was sent to retirees and made no mention of surviving spouses or that a current spouse, who fit within the Medicare category, could qualify the insured for Medicare Coordination coverage. The Medicare Coordination coverage is the only program that the State offers in which it is the spouse of the insured/retiree who can qualify the insured for new benefits or different coverage. In this case, the different coverage or new benefit was solely a reduction in premium. Otherwise, the benefits under the family coverage and the Medicare Coordination coverage were the same. An ordinary person reading the letter would not have been placed on notice and would not have assumed that anyone other than the retiree was covered by the letter. If Petitioner had immediately elected the Medicare Coordination coverage, her premium would have been reduced by $42.76 a month, beginning with the August 1985, payment. The July 8, 1985, letter was mailed by first class mail to all retired State employees in the Plan. The business practice of the Division is to mail any such letters to the address of the retiree listed with the Division of Retirement and given to the Division of State Employees' Insurance or to the most current address the Division of Employees Insurance has for that particular retiree. In this case, the address which the Division of Retirement would have had on Petitioner in 1985 was her old address in Jacksonville. However, by July 1985, Petitioner had mailed the Division of State Employees' Insurance a change of address card with her new Pensacola address. She did not mail the Division of Retirement a change of address. There is no evidence as to which address the Respondent mailed the July 8, 1985, letter. Without such evidence Respondent is not entitled to a presumption of proper notice when a letter is mailed to a party with the correct address. Petitioner does not remember receiving the July 8, 1985, letter. She would have elected the Medicare Coordination coverage had she been aware of its availability. Petitioner became aware of her eligibility for reduced premiums in October 1987, when she received an informational bulletin from the Division of State Employees' Insurance. The bulletin stated the premium rates for various types of insurance coverage, including the reduced premiums for family coverage with members of the family who are qualified for Medicare benefits. Petitioner telephoned the Division and was instructed by Division personnel to send in a copy of her husband's Medicare card in order to establish her eligibility for the reduced premium. Petitioner sent a copy of her husband's Medicare card to the Division in October 1987. On November 6, 1987, Petitioner requested a refund of excess insurance premiums paid from July 1985, through November 1987. On December 28, 1987, Petitioner was informed by the Respondent that the earliest date a change in coverage could become effective was October 1987, because Petitioner had not applied for a change of coverage prior to that time. Petitioner was awarded an excess premium refund for the premium paid for November coverage. The Rules governing the Plan are found in Chapter 22I-1, Florida Administrative Code. This Chapter generally requires that an employee or retiree perform an affirmative act, by completing an informational form and sending it to the Department, before any change in coverage can be effectuated. The reason for such a requirement is that the Department has no way of knowing the number of eligible employees or retirees, without being supplied that information from the insureds, so that the Plan's administrator can better manage the Plan's funds to provide an adequate amount for the payment of claims. However, competing with this Rule is the Respondent's policy that a retiree who is otherwise eligible for certain benefits, but did not receive any notice of such eligibility is entitled to retroactive benefits. This policy is based on the Division's duty to administer the State's health plan, including notifying retirees of the availability of new types of coverage or benefits. The evidence showed that this policy takes precedence over the Rule when the Division has failed to notify an eligible retiree. In this case the Division failed to notify Petitioner of her eligibility for Medicare Coordination coverage due to her spouse's qualifications. Petitioner is therefore entitled to retroactive benefits beginning July 1985. Since the benefit of the Medicare Coordination coverage is a reduced premium, Petitioner is entitled to a refund of the excess premium of $42.76 a month from July 1985, through October 1987. The refund for that time period totals $1,154.52.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Administration enter a Final Order refunding to Petitioner excess premiums paid to the Department in the amount of $1,154.52. DONE and ENTERED this 18th day of July, 1989, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 18th day of July, 1989. APPENDIX TO RECOMMENDED ORDER CASE NO. 89-301 The facts contained in paragraphs a, b, c, d, e, f, g, h, i, j and k of Petitioner's Proposed Findings of Fact are adopted in substance, in so far as material. The facts contained in paragraphs l, m, and n of Petitioner's Proposed Findings of Facts are subordinate. The facts contained in paragraph p of Petitioner's Proposed Findings of Facts were not shown by the evidence. The facts contained in paragraph o of Petitioner's Proposed Findings of Fact are rejected. The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 8, 9, 10, 11 and 12 of Respondent's Proposed Findings of Fact are adopted in substance, in so far as material. The facts contained in paragraphs 13 and 14 of Respondent's Proposed Findings of Fact are subordinate. The facts contained in paragraph 7 of Respondent's Proposed Findings of Fact were not shown by the evidence except for the fact relating to the letter being mailed first class mail. COPIES FURNISHED: Karren Lessard 15 West La Rua Street Pensacola, Florida 32521 Larry D. Scott Senior Attorney Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Andrew McMullian III Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Augustus D. Aikens, Jr. General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
