The Issue Whether Petitioner is entitled to a refund of state group life insurance premiums retroactive to the date she became disabled and continuing through the date of approval of a waiver of premium based on disability.
Findings Of Fact During her entire career with the State, Petitioner was employed by the Department of Corrections (DOC). At all times material, DOC, like all State governmental agencies, had its own personnel office. At all times material, the Division of Retirement (Retirement) handled all governmental agencies’ employees’ retirement issues. At all times material, the State has provided its employees, including Petitioner at DOC, with various types of insurance through Respondent Department of Management Services (DMS), Division of State Group Insurance (DSGI), the Respondent herein. For more than 20 years, ending January 1, 2007, the State of Florida provided state officials, employees and retirees basic life insurance coverage through Prudential Insurance Company of America (Prudential). Although Petitioner retired on full disability in mid- 2000, at all times relevant to these proceedings, Petitioner has continuously participated in the State Group Insurance Program’s (Program’s), life insurance plan (Plan). The Program is authorized by Section 110.123, Florida Statutes. Because of enhanced benefits, employees were required to complete a new life insurance enrollment form during “open enrollment,” conducted in 1999, for coverage beginning January 1, 2000. Petitioner completed the life insurance enrollment form and dated it "10/04/99." Directly below Petitioner's signature on this enrollment form, the following statement appears: Waiver of Premium for Disability If you are totally disabled for a continuous 9 months and are less than 60 years of age at the time disability begins, Prudential will continue your coverage with no premium due, provided you report your disability within 12 months of its start and submit any required proof to Prudential. The second page, last paragraph of the 1999, enrollment form provided an address and a toll-free telephone number for Prudential, and advised participants that the form was intended to provide a summary of benefits, as more completely set out in the certificate. Petitioner produced the enrollment form in response to Respondent's request for production of documents. She identified her signature thereon at hearing, and had the enrollment form admitted in evidence as Exhibit P-1. She also admits in her Proposed Recommended Order that she signed it. Although her testimony waffled in some respects, on the whole, she testified to the effect that she had retained a copy of this form where she had access to it at all times material. She is, therefore, found to have had knowledge of its contents since 1999. Petitioner testified that she never received either a life insurance policy nor a certificate of insurance, from Prudential or from any entity of Florida State Government, and that neither her DOC Personnel Office, Retirement, Florida First,1/ or DMS/DSGI advised her at the time of her retirement in mid-2000, that she could apply to Prudential for a life insurance premium waiver. However, Petitioner also had admitted in evidence as Exhibit P-2, a “Continuation/Termination Form” which she signed on “4-11-00,” stating a retirement date of “3- 10-00.” That form specifies that “. . . the amount of life insurance shall be $10,000 . . .” with a footnote reading, “This [referring to the $10,000, amount] would only apply if Waiver of Premium is not approved.” (Bracketed material supplied.) Also, the credible testimony of Respondent’s witnesses and of exhibits in evidence show that a complete certificate of life insurance was mailed to Petitioner in a timely manner. There is no proof that the insurance certificate varied the substance of the enrollment form as quoted in Finding of Fact 7. Indeed, the certificate provided, in pertinent part: The Policyholder will continue the full premium for continuance of insurance in accordance with item 8 above, [referring to “Total disability commencing before age 60— Unlimited for Employee Term Life Insurance”] provided the employee furnishes written proof of such total disability when and as required by the Policyholder. * * * Period of Extension Protection for a Disabled Employee— one year after receipt by Prudential’s Home Office of written proof that his total disability has existed continuously for at least nine months, provided the employee furnishes such proof no later than one year after the later of (1) the date premium payments for the employee’s insurance under the Group Policy are discontinued or (2) the cessation of any extended death benefit under the provisions for “Extended Death Benefit for Total Disability” above, and successive periods of one year each after the year of extension under (1), provided the employee furnishes written proof of the continuance of the employee’s total disability when and as required by Prudential once each year. Only employees disabled before retirement and under 60 years of age were eligible for the premium waiver. Employees who became disabled during retirement were not eligible for the waiver. By the terms of her enrollment form and certificate, if Petitioner did not notify Prudential before the twelfth month, she could not receive the waiver. When, precisely, Petitioner became “totally disabled” for purposes of her State life insurance certificate’s definition is debatable, because for some time prior to her actual retirement date, she was working off and on while pursuing a “permanent total disability” determination, pursuant to the definition of that term as expressed in Chapter 440, Florida Statutes, The Florida Workers’ Compensation Law. Petitioner ultimately received the workers’ compensation ruling she sought, possibly before March 10, 2000. Petitioner’s last day of work was March 10, 2000, when, she testified, a superior had her forcibly removed from DOC property. Despite her assertion that she was not approved for in-line-of-duty retirement until September 1, 2000, Petitioner also testified that the State granted her retirement upon disability, effective April 1, 2000, and April 1, 2000, is the date put forth by Respondent as Petitioner's disability retirement date, as well. Upon that concurrence, it is found that Petitioner qualified for total disability for State life insurance purposes before retirement and that she qualified for the waiver by age at retirement. When Petitioner retired on disability in 2000, employees of both DOC and of Retirement knew that she was retiring on disability. Retirement provided Petitioner with printed materials referring her to the insurance company and/or DMS/DSGI for insurance questions and stating that Retirement did not administer any insurance programs. There is no evidence Petitioner asked anyone about the waiver in 2000. From her retirement date in mid-2000, until Prudential ultimately granted her a premium waiver in 2007, Petitioner paid the full life insurance premiums to the State Life Trust, either via deduction from her retirement or directly by her own check. From the date of her retirement through December 2006, Petitioner paid $4.20, per month for life insurance, and beginning January 1, 2007, through November 2007, she paid $35.79, per month. According to Petitioner, she only became aware of the availability of the potential waiver of premiums when she received a booklet during open enrollment in October 2007, advising her that beginning January 1, 2008, the State life insurance coverage would be provided through Minnesota Life Insurance. The specific language that caught her eye was: No premium to pay if you become disabled --- If you become totally disabled or as defined in your policy, premiums are waived. Petitioner conceded that there is no substantive difference between the foregoing instruction and the statement on her 1999, enrollment form for Prudential. (See Finding of Fact 7.) Petitioner applied for the Minnesota life insurance, with premium waiver, triggering a series of bureaucratic decisions that maintained her continuous life insurance coverage by Prudential and permitted Petitioner to apply to Prudential for waiver of the life insurance premium as described in her 1999, enrollment form. Although bureaucratic delays occurred through DOC’s personnel office, Prudential accepted Petitioner’s proof of age, disability, etc., and granted the waiver of premiums based on disability. The monthly premiums of $35.79, that Petitioner paid in October and November 2007, were retroactively reimbursed to her by the State, based upon Prudential's receipt of Petitioner's waiver package on October 3, 2007. Beginning in December 2007, Prudential activated the waiver of premium, so that Petitioner has not had to pay any premium since. Adrienne Bowen, a DSGI manager of Prudential contracts for twenty years, testified that, in 1999-2000, Prudential’s waiver did not apply until after nine months of continuous disability and after the participant had reported the disability to Prudential, and after Prudential had approved the waiver of premiums. She further testified that she believed that there was no provision for the waiver to apply retroactively. For this testimony, Ms. Bowen relied upon Exhibit R-11, a “Group Life Administration Manual,” which had been devised so that the State life insurance plan would be consistently administered. On the foregoing issues, The Group Life Administration Manual states, in pertinent part: WAIVER OF PREMIUM When an employee becomes disabled and is unable to work because of a disability, the employee may be eligible to extend the group life coverage without premium payments. In order to extend coverage, the employee must submit proof of disability within the period shown on the Group Contract (generally at least 9 months but less than 12 months after the total disability starts). If the proof is accepted, you may stop the premium on behalf of the employee’s group coverage. We recommend that premium payments continue for that employee until a decision is made regarding the claim. (Emphasis in original.) However, Ms. Bowen also testified that DSGI and Prudential now allow an insured to request the waiver at any time after nine months of continuous disability, without automatic denial if the employee’s first request is not made within 12 months after she first becomes disabled. This was done in Petitioner's situation in 2007. Prudential did not refuse to waive premiums because Petitioner’s application was not made within 12 months of total disability. However, the premiums refunded related back only to the first day of the month in which she made application for waiver. Petitioner seeks a reimbursement for overpayment of premiums from April 1, 2000, to September 30, 2007. Her first request to Respondent for an administrative hearing appears to have been made on or about May 12, 2008. After several levels of internal agency “appeals,” the cause was referred to the Division of Administrative Hearings on or about August 28, 2008.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, enter a final order which calculates the State group life insurance premiums Petitioner paid between May 12, 2006, and October 1, 2007, and orders payment to Petitioner of that amount within 30 days of the final order. DONE AND ENTERED this 23rd day of December, 2008, in Tallahassee, Leon County, Florida. S ELLA JANE P. DAVIS 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 23rd day of December, 2008.
Findings Of Fact At all times material hereto, Respondent was an Ordinary Life, including Disability Agent, and a Disability Agent licensed by the State of Florida. During this period, Respondent was licensed to sell life and health insurance policies for National States Insurance Company, American Guaranty Life Insurance Company, and Old Southern Life Insurance Company. Respondent was employed as an agent by Diversified Health Services, an insurance agency whose office is located in St. Petersburg, Florida. At no time material hereto was Respondent employed by any agency of the State of Florida. As indicated above, there remain viable in the Administrative Complaint ten counts charging Respondent with various violations of provisions of the Florida Insurance Code. For purposes of clarity, the findings of fact with regard to each of those remaining counts will be set forth separately. COUNT I On February 12, 1983, Respondent visited Lucille Shock at her home in Bradenton, Florida. Mrs. Shock had earlier purchased a Medicare supplement policy from National States Insurance Company through another agent, but had decided to cancel that policy. Respondent visited Mrs. Shock's home in response to her notice of cancellation in hopes of persuading her to reinstate coverage. In paragraph three of Count I of the Administrative Complaint, Respondent is charged with having told Mrs. Shock that he was ". . . authorized by the Florida Department of Insurance to investigate the Diversified Health Agency" when, in fact, he was not employed by any state agency. While it is true that Respondent was not at the time of his visit to Mrs. Shock employed by any state agency, the record in this cause is insufficient to establish the foregoing allegation of the Administrative Complaint. Respondent denies having made any c representation to Mrs. Shock that he was employed by the State of Florida. Further, Mrs. Shock's testimony in this regard is inconsistent and conflicting. In a February 21, 1983, letter to a representative of the Florida Department of Insurance, Mrs. Shock stated that at the time of his visit to her home the Respondent represented that he ". . . was an investigator for the Diversified Health Agency. . . . At final hearing, Mrs. Shock testified that Respondent told her that he was an investigator for the "insurance department," but also, on cross-examination, testified that Respondent told her that he was an investigator for Diversified Health. Despite these inconsistencies, it is clear from the record in this proceeding that before the end of Respondent's visit with Mrs. Shock on February 12, 1983, she knew that Respondent was an insurance agent for National States Insurance Company. Because of the inconsistencies in Mrs. Shock's testimony, it is specifically concluded that her testimony concerning Respondent's representation about his employment is unreliable. Other than Mrs. Shock's testimony, there is no other record basis to establish that Respondent represented himself to be an employee of the Department of Insurance as alleged in Count I. Respondent is also charged in paragraph five of Count I of the Administrative Complaint with having "falsely represented the financial condition of several insurance companies licensed to do business in Florida as part of your sales presentation to induce Mrs. Shock to buy insurance policies from you." The record in this cause establishes that Respondent and Mrs. Shock discussed several insurance companies, including Vulcan Insurance Company, Tara Life Insurance Company, and Bankers Life during their visit on February 12, 1983. Respondent reviewed with Mrs. Shock data contained in certain A. M. Best Company reports concerning these insurance companies.Respondent advised Mrs. Shock that Vulcan Insurance Company was "a rather shaky company" and that Tara Life Insurance Company had been experiencing "financial problems." There is, however, nothing of record in this proceeding to establish either that these companies are licensed in Florida or that the representations made by Respondent to Mrs. Shock concerning these insurance companies were false. Accordingly, the allegations contained in paragraph five of Count I have not been established. COUNT II On or about February 10, 1983, Respondent visited Koy B. Cook at his home in Port Orange, Florida. The purpose of Respondent's visit to Mr. Cook was to dissuade Mr. Cook from cancelling a policy with National States Insurance Company whichir. Cook had previously bought from another agent. After buying the National States policy initially, Mr. Cook had attempted to cancel a preexisting policy with Bankers Life Insurance Company, but had been advised by that company that the policy could not be cancelled. Mr. Cook determined that he could not afford duplicated coverage, so he contacted National States Insurance Company and advised them of his desire to cancel his National States policy. Be was advised, in writing, by National States, that his policy had been cancelled and that his premium had been returned to the insurance agency which had sold him the policy for refund. Sometime prior to January 12, 1983, Respondent contacted Mr. Cook by telephone, identified himself by name, and arranged an appointment to visit with Mr. Cook in his home. Mr. Cook understood from the conversation with Respondent that the purpose of their appointment was to return Mr. Cook's refund check from his cancelled National States policy. Immediately prior to Respondent's arrival at Mr. Cook's home, Mr. Cook had been asleep. When Respondent arrived at Mr. Cook's door, Mr. Cook was still in a "daze," having just awakened. This fact is of significance, because at various times in his testimony Mr. Cook testified that Respondent identified himself as . . . an adjuster with Bill Gunter out of Tallahassee, or . . . an adjuster for the insurance company out of Tallahassee." Mr. Cook also testified that Respondent showed him some identification which bore a photograph of Insurance Commissioner Bill Gunter. This photograph was apparently attached to a document, the contents of which were unknown to Mr. Cook. Respondent denies having represented that he was an employee of the Department of Insurance. During the course of their conversation, Mr. Cook advised Respondent that he preferred the coverage offered under the National States policy to that of the Bankers Life policy, but simply could not afford duplicate coverage. Respondent and Mr. Cook discussed the amount of unearned premium outstanding on the Bankers Life policy as compared to the cost of reinstating the National States policy. Mr. Cook had originally paid $630 for the issuance of the National States policy. Respondent returned to Mr. Cook a check in that amount during the course of their visit. Further, by offering to reinstate the National States policy for a $526 annual premium, Respondent demonstrated to Mr. Cook that he would save approximately the amount that remained in unearned premiums on the Bankers Life policy. Mr. Cook agreed to this proposal, Respondent completed an application form, and Mr. Cook gave Respondent a check for approximately $526 to reinstate the National States policy, with the understand- ing that the National States and Bankers Life policies would overlap for some period of time. Upon leaving Mr. Cook's house, Respondent gave Mr. Cook one of his business cards, which identi- fied Respondent as an agent of National States Insurance Company. In Count II of the Administrative Complaint, Respondent is charged with having told Mr. Cook that he was an "insurance adjuster working out of Tallahassee" and that he "worked for the Florida Department of Insurance. Respondent is further charged with having told Mr. Cook that he "had a refund check for a cancelled Bankers Life policy when in fact the] had no such check." The testimony of Mr. Cook and Respondent on the issues alleged in Count II are diametrically oooosed. Viewing the transaction between Mr. Cook and Respondent in its totality, it is concluded that Respondent's version of the transaction is the more credible. Mr. Cook's testimony concerning Respondent's representations about his employment status contained several contradictions and inconsistencies. In addition, it is clear that Mr. Cook expected to receive a refund check from National States Insurance Comoany, that Mr. Palesky contacted him by telephone prior to his February 10 visit to advise him that he had his refund check, and that Respondent conducted himself during the entire transaction in a manner which clearly identified him as an insurance salesman. Finally, Respondent furnished Mr. Cook with a business card during the course of their meeting which clearly showed Respondent to be an agent of National States Insurance Company. It is also clear that Mr. Cook was aware during this entire transaction that his Bankers Life policy had not been cancelled, and that as a result of his transaction with Respondent he would be carrying policies with National States and Bankers Life which afforded duclicate coverage, and that he was advised of this fact by Respondent. These facts are clearly inconsistent with Mr. Cook's testimony that Respondent advised him that he had a refund for a cancelled Bankers Life policy in his possession. COUNT IV On or about March 2, 1982, Respondent visited Marjorie Brubaker in her home in Bradenton, Florida. The purpose of Respondent's visit to Mrs. Brubaker was to dissuade her from cancelling an insurance policy with National States Insurance Company which she had previously purchased through another agent and had subsequently cancelled. Mrs. Brubaker testified that, upon arrival at her home, Respondent represented to her that he was an "investigator for the state" or a "state investigator," looking into her cancellation of her policy with National States Insurance Company. Respondent denies having made that representation. The record is clear, however, that shortly after entering Mrs. Brubaker's home, Respondent showed Mrs. Brubaker materials which clearly identified him as an agent of National States Insurance Company, and that Mrs. Brubaker clearly understood within minutes after his entering her home that he was, in fact, a salesman for National States Insurance Company. Under these circumstances, it is specifically found that Respondent's testimony concerning his employment status is more credible. If, as is clear from the record, Respondent intended to sell insurance to Mrs. Brubaker, there is little logic to his having represented himself as a state employee at the door to her home, and within minutes clearly divulging to her that that was indeed not the case. Petitioner also alleges in the Administrative Complaint that Respondent displayed a photograph of Insurance Commissioner Bill Gunter to Mrs. Brubaker to establish his position as an investigator for the state. Mrs. Brubaker, however, was unable to identify the person in the photograph displayed to her by Respondent, other than to assert that the person in the photograph was not the Respondent, but instead a clean-shaven person with light hair and fair, reddish complexion. Those facts, standing alone, are insufficient to establish that the person in the photograph was, in fact, Mr. Gunter. Respondent is alleged in paragraph twenty of Count IV of the Administrative Complaint of having ". . . . falsely represented the status of Medicare coverage in this state in order to induce Mrs. Brubaker to purchase' new insurance policies from you." The only evidence in the record on this issue is Mrs. Brubaker's testimony that Respondent told her that Blue Cross-Blue Shield would soon cease to be the Medicare carrier in Florida, and that there existed a substantial possibility that National States Insurance Company would be designated as the new Medicare carrier in Florida. The record in this cause is absolutely devoid of any evidence that that representation, even if it had been made, was false. Accordingly, Petitioner has failed to establish facts to support the allegations that Respondent has falsely represented the status of Medicare coverage in Florida. Finally, paragraph twenty-one of Count IV of the Administrative Complaint alleges that Respondent falsely told Mrs. Brubaker that her present insurer, Orange State Life Insurance Company, was cancelling its Medicare Supplement policies. . . . It is undisputed that Mrs. Brubaker, at the time she was visited by Respondent, had insurance coverage through Orange State Life Insurance Company. Mrs. Brubaker, it is clear from the record, was under the impression that her policy with Orange State Life Insurance Company was a Medicare supplement policy. Respondent testified that her policy was not a Medicare supplement policy, and, in fact, bore a statement across the top of the policy to the effect that the policy was not a Medicare supplement policy. Petitioner offered no evidence to rebut Respondent's testimony in this regard, and neither party sought to introduce the policy into evidence. The only evidence offered by Petitioner to support the allegation that Respondent's representation that Orange State Life Insurance Company was cancelling its Medicare supplement policv was the fact that Mrs. Brubaker had continued to pay premiums on her policy after the representation was made by Respondent without receiving notice of any cancellation. However, any inference that might be drawn from continued payment of premiums fails if, in fact, the policy held by Mrs. Brubaker was not a Medicare supplement policy. Neither party having offered competent evidence to establish that Mrs. Brubaker's Orange State Life Insurance Company policy was in fact a Medicare supplement policy, the allegations contained in paragraph twenty-one of Count IV of the Administrative Complaint are deemed to be without factual support. COUNT VI In Count VI f the Administrative Complaint, it is alleged that Respondent visited the home of Leila Mueller on October 18, 1979. It is further alleged that at that time Respondent told Mrs. Mueller that he was ". . . from Medicare and that [Respondent] had called at one of [Mrs. Mueller's] neighbor's homes to explain the changes in Medicare coverage." It is further alleged that Respondent ". . . misrepresented [his] actual employment in order to induce Mrs. Mueller to buy insurance policies. The record in this cause establishes that on or about October 18, 1979, Mrs. Mueller was visited in her home by two insurance salesmen whom she believed to be in some way affiliated with Medicare. Mrs. Mueller did not recall the names of either of the two men, was not asked to physically identify the Respondent, and could not recall which of the two men led her to believe that they were affiliated with "Medicare." Mrs. Mueller inquired about whether there existed any written material that she could review to decide whether to purchase insurance coverage. One of the men furnished her a brochure which had the name "Palesky" on it. There is no evidence of record in this proceeding to establish that Respondent was ever in the home of Mrs. Mueller or that he in any fashion ever represented to her or to anyone else that he was a representative of Medicare. The only testi- mony in this record that in any way connects Respondent with Mrs. Mueller was her testimony that she was given a brochure, which was not introduced into evidence, containing Respondent's name. This fact, standing alone, is insufficient to establish the factual allegations contained in Count VI of the Adminis- trative Complaint. COUNT XI On or about March 21, 1982, Respondent visited William F. and Winifred M. Bell in their home in Sarasota, Florida. The purpose of Respondent's visit to the Bells was to sell them a Medicare supplement policy. The Bells had previously purchased a policy from Union Fidelity Insurance Company. During the course of Respondent's visit with the Bells, Respondent advised them that Union Fidelity was "not a good company" and that the policy they had with Union Fidelity was "not a good policy." In addition, Respondent advised the Bells that if anything happened to Mr. Bell that Mrs. Bell would not be insured within two months after Mr. Bell's death. Paragraph fifty-five of Count XI of the Administrative Complaint alleges that Respondent told the Bells ". . . that their present insurance coverage was no good" and that if Mr. Bell died, Mrs. Bell would not be insured when in fact [Respondent] knew that both of those statements were false." The record in this cause contains no evidence that the representations set forth above made by Respondent to the Bells were false. The Bells' insurance policy was not received into evidence because Petitioner failed to respond fully to Respondent's Request for Production of Documents, and had further failed to fully exchange exhibits with Respondent, including a copy of the Bells' policy, as required by the Pre-hearing Order entered by the Hearing Officer approximately two months prior to the date set for final hearing in this cause. Accordingly, there are no facts to substantiate the allegations contained in Count XI of the Administrative Complaint. COUNT XII On or about February 4, 1983, Respondent visited Louise S. Donovan at her home in Daytona Beach, Florida. Respondent visited Mrs. Donovan in response to her cancellation of a previous policy purchased from National States Insurance Company from another agent on or about November 17, 1982. Soon thereafter, she cancelled that policy but on December 22, 1982, reinstated the policy after having available coverages explained to her by the other agent. Sometime thereafter she again can- called the National States policy. By letter dated January 17, 1983, from the home office of National States Insurance Company, Mrs. Donovan was advised that her refund-check had been returned to her agency for refund to her. On February 4, 1983, Respondent visited Mrs. Donovan in her home. Under direct examination, Mrs. Donovan testified as follows concerning that visit: Q So, you showed [the January 27, 1983] letter to Mr. Palesky; and, how did he respond to the letter? A He said sort of -- it's a little vague now after all these months -- that, oh, well, they didn't pay any attention to those things, or some- thing like that, and that the company would not refund any money on the policy. Q Be made the statement to you that the company was not going to refund? A The company would not -- now, I believe his interpretation of that, but it wasn t clear to me, was that there was a certain clause in that policy that I was not satisfied with and that he would not reissue the same policy under the same conditions. Well, I'm a lay person. I don't know all these fine points. And, I under- stood that he meant that the company would not refund any money to me at all... During the course of their discussions, Mrs. Donovan advised Respondent that she had cancel led the policy because she did not have nursing home coverage. Respondent explained to her that, under those circumstances she would have to either add nursing home coverage to the policy she had cancelled, which he was not sure that he could do for her because the so-called "RS 100 feature" was in the process of being discontinued, or she could take out a separate nursing home policy. Resnondent advised her that in order to keep the RS 100 feature she would have to reinstate the policy which she had cancelled, and take out a separate nursing home policy at a later date. This is the option which Respondent recommended to Mrs. Donovan, and the option that she ultimately chose. Accordingly, Mrs. Donovan opted to fill out an application reinstating the cancelled policy. She had originally paid $659 for the policy she took out on December 22, 982, but premium rates had increased since that time. The application filled out by Mrs. Donovan on February 4, 1983, reflects the premium rate increased to $691. Mrs. Donovan testified that she did not recall endorsing a refund check in the amount of $659 from National States Insurance Company and allowing Respondent to submit the endorsed check to National States along with the application dated February 4, 1983. Respondent testified that she did, in fact, endorse that check, which he forwarded to National States Insurance Company with the February 4, 1983, application. According to Respondent's testimony, which is uncontradicted, he submitted the $659 check to National States, notwithstanding the fact that the premium rate had increased to $691, with the understanding that the company had the option of either reinstating the policy for $659 or insisting upon the increased premium rate. Thereafter, Mrs. Donovan again decided to cancel the coverage she received as a result of the February 4, 1983, application submitted through Respondent. Mrs. Donovan signed a sworn statement on March 30, 1983, which provided, in part, as follows: Mr. Palesky has shown me the com- plaint filed against him by the Department of Insurance. I totally disagree with the accusa- tions in the complaint. My only problem with Mr. Pale sky was a misunderstanding concerning the fact that the RS 100 rider could not be refunded and reissued (as it was being discontinued) [sic] I thought he meant the entire policy could not be refunded. . . . Count XII of the Administrative Complaint alleges that Respondent ". . . refused to return [premium] money to Mrs. Donovan. . ., and that ". . . as a result of your refusal Mrs. Donovan felt pressured into applying for a new policy at a higher premium." Further, Count XII alleges that ". . . the new policy was written for a higher premium, that [Resoondent] signed a receipt acknowledging receipt of the higher premium, and that Mrs. Donovan gave [Respondent] no money during [the] visit [of] February 4, 1983." The evidence in this cause does not establish that Respondent refused to return premium money to Mrs. Donovan, nor does the evidence establish that Mrs. Donovan was pressured into applying for a new policy at a higher premium. Finally, the evidence in this cause establishes that Respondent attempted to have National States Insurance Company reinstate Mrs. Donovan's coverage at the premium originally paid in December of 1982, notwithstanding a premium increase that had occurred in the interim, a procedure which has not been shown by the record in this cause to be in any way improper. COUNT XV On or about January 24, 1983, Kenneth E. Fritz bought a National States Insurance Company policy from an agent other than Respondent. On or about February 12, 1983, Mr. Fritz cancelled that policy and asked for a full refund. Mr. Fritz subsequently received a letter dated March 11, 1983, from National States Insurance Company acknowledging his request for cancellation, and advising him that a full refund of his premium was being sent to the agency office which had sold the policy to him, with instructions to deliver the refund to him. On or about March 24, 1983, Respondent visited Mr. Fritz in his home in Largo, Florida, with Mr. Fritz' refund check. In paragraph eighty-eight of Count XV of the Administrative Complaint, Respondent is charged with having ". told Mr. Fritz that [Respondent was] an `investigator with Florida' and that [Respondent] pointed to an emblem on [Respondent's] jacket which gave [Mr. Fritz] the idea [Respondent was] employed by the State of Florida' when in fact [Respondent was] not and are not employed by the Florida Deoartment of Insurance in any capacity." It is further alleged that Resoondent made this representation to influence Mr. Fritz to buy insurance policies, and that Mr. Fritz did not realize that Respondent was not a government employee until reading a newspaper article on or about April 2, 1983, concerning the emergency suspension of Respondent's licensed. Respondent denies ever having represented to Mr. Fritz that he was an employee of the State of Florida. Indeed, Mr. Fritz testified on this issue only that: Mr. Palesky came here, and he had a thing on his coat, and he says[sic] you bought some policies from the -- and he mentioned the name of the company in St. Louis, and he says[sic] I'm here to check on that, and he rattles this thing and give [sic] me the impression that he was the--was from the State of Florida checking this. . . . As mentioned above, Respondent is charged with representing to Mr. Fritz that Respondent was an "investigator with Florida." Nothing contained in the record in this cause establishes that Respondent ever made such a representation to Mr. Fritz. Indeed, Mr. Fritz clearly testified that he could not remember exactly what Respondent said to him to give him the "impression" that he was an employee of the State of Florida. It is, however, clear from the record in this cause that the allegation of the Administrative Complaint that Mr. Fritz did not know that Respondent was not a state employee until reading of Respondent's emergency suspension in a newspaper article on or about April 2, 1983, is false. What is clear is that Respondent made a sales presentation to Mr. Fritz which resulted not only in Mr. Fritz' reinstating the policy he had earlier purchased from another agent and cancelled, but in fact buying another policy from Respondent at the same time. It is also clear that Respondent gave Mr. Fritz a business card during the course of their conversation which clearly identified Respondent as a salesman for National States Insurance Company. In short, this record does not establish that Respondent ever represented himself as an employee of the State of Florida during the course of his sales presentation to Mr. Fritz, nor did Mr. Fritz reinstate his cancelled policy and purchase a second policy based upon any such representation. COUNT XVII On April 15, 1981, Esther Huddleson purchased two Medicare supplement policies issued by National States Insurance Company from agent Michael Frye. On April 16, 1901, she requested a refund on the National States policies. On June 1, 1981, she was visited in her home by Respondent. Count XVII alleges that Respondent falsely advised Mrs. Huddleson that he was an "insurance investigator" and an "investigator for the State." It is also alleged that Respondent was not an "investigator" for National States Insurance Company and that his status with the company had always been that of a sales representative. Further, it is alleged that Respondent ". . . falsely told Mrs. Huddleson her statutory `free look' had expired and so persuaded her to sign a conservation notice." It is clear from the record in this proceeding that Respondent never advised Mrs. Huddleson that he was an "investigator for the State" or in any other manner employed by the State of Florida or the Department of Insurance. A sworn statement signed by Mrs. Huddleson upon which she was closely interrogated by counsel and the Bearing Officer during the course of this proceeding clearly reflects that Respondent identified himself either as "an investigator from National States Insurance Company" or "States Insurance Company." Fur ther, there is no evidence in the record in this cause from which it can be concluded that this representation by Respondent was in any way false. Finally, the only testimony in the record in this cause concerning Mrs. Huddleson's statutory "free look" period occurred on the direct examination of Mrs. Buddleson as follows: Q Did [Respondent] lead you to believe that your 30-day period had passed? A yes. At least, that was in my mind. Mrs. Buddleson's testimony in this regard is, at best, equivocal, and does not persuasively establish that Respondent did, in fact, advise her that her "free look" period had expired as alleged in the Administrative Complaint. There is, accordingly, insufficient evidence of record in this proceeding to establish the allegations against Respondent contained in Count XVII of the Administrative Complaint. The Bearing Officer feels constrained, further, to note with concern the failure of Petitioner's counsel to deal with both Mrs. Huddleson's sworn statement and direct testimony concerning the fact that Respondent never represented himself to her to be an employee of the State of Florida. In fact, to say that Petitioner's counsel failed to deal with those issues is most charitable. It would perhaps be more accurate to say that the proposed findings submitted by Petitioner's counsel on this particular issue have absolutely no factual basis in this record, despite citations to a portion of the transcript purportedly supporting the allegations of the Administrative Complaint. COUNT XXI In December of 1982 Mary Ellen Stapleton purchased a Medicare supplement policy from an agent, other than Respon- dent, representing National States Insurance Company. After reviewing the policy and deciding that she did not want to retain it, Mrs. Stapleton returned the policy on or about February 8, 1983, to National States Insurance Company, and requested a refund of her premium. Through a series of correspondence with National States Insurance Company, Mrs. Stapleton's cancellation request was acknowledged, and she was advised that her premium refund had been returned to the office of the agency selling the policy, with instructions to make immediate delivery to her. On or about March 8, 1983, Respondent telephoned Mrs. Stapleton at her home and advised her that he was an investigator for National States Insurance Company and that he was investigating a Mr. Buffer, who had sold Mrs. Stapleton her National States policy. Count XXI, in pertinent part, alleges: That on or about March 8, 1983, you, JOSEPH MICHAEL PALESKY, telephoned Mrs. Stapleton at her home in Lakeland, Florida, and told her you were "an investigator for National States and [that you were] investi- gating Mr. Buffer" when in fact you were not and are not an investigator for National States Insurance Company but were and are only a salesman. That at no time did you tell Mrs. Stapleton that you represented Diversified Health Services of St. Petersburg, Florida. That you, JOSEPH MICHAEL PALESKY, created the false impression of your employ- ment status in order to induce Mrs. Stapleton to keep the [cancelled] policy. . Respondent did not tell Mrs. Stapleton that he represented Diversified Health Services of St. Petersburg, Florida. It is undisputed that Respondent was, on March 8, 1983, a salesman for National States Insurance Company. Petitioner has not established by any evidence whatsoever that Respondent was not an investigator for National States Insurance Company with authority to investigate Mr. Buffer. Neither has it been shown in this record that Respondent was under any obligation to identify the insurance agency by whom he was employed after having first clearly identified himself as being affiliated with National States Insurance Company. It is, therefore, specifically concluded that there are no facts of record to establish the violations alleged in Count XXI of the Administrative Complaint. COUNT XXII On September 24, 1980, Respondent visited John Capers Smith and Lillian H. Smith in their home in Bradenton, Florida. Respondent went to the Smiths' home in response to the Smiths having sent a card to National States Insurance Company requesting information concerning Medicare supplement policies. Upon his arrival at the Smiths' home, Respondent was advised by Mrs. Smith initially that she did not wish to speak with him further on that day because her husband had recently undergone surgery and was still recuperating. However, uoon Respondent's insistence, he was admitted to the Smiths' home at approximately 1:00 p.m. Respondent remained in the Smiths' home until approximately 8:00 p.m. on September 24, 1980. When he first arrived in the Smiths' home, Respondent told the Smiths that he worked for the State of Florida and that Bill Gunter was his boss. In the course of discussing National States Insurance Company policies, Respondent advised the Smiths that this type of policy was something that Mr. Gunter was attempting to do to assist elderly Floridians. During the course of his conversation with the Smiths, Respondent displayed a photograph of Mr. Gunter to the Smiths as proof of his affiliation with the State of Florida, and offered to call Mr. Gunter on the telephone to verify his credentials. After a long period of discussion, the Smiths purchased an insurance policy from Respondent, and gave him a check for $694. The Smiths' purchase of the policy was due in large part to Respondent's representation that he was an employee of the State of Florida, and that Mr. Gunter approved of the policy. Respondent denies having made any representation to the Smiths concerning his employment by the State of Florida, but, under the circumstances here present, it is specifically concluded that the Smiths' versions of the transaction occurring on September 24, 1980, are more credible.
Findings Of Fact At all times pertinent to this proceeding Respondent, HOWARD P. HAUSER, was eligible for licensure and licensed in this state by the Florida Department of Insurance as a Life and Health Insurance Agent; General Lines Insurance Agent - Property, Casualty, Surety, and Miscellaneous Lines; and Legal Expense Insurance Agent. At all times pertinent hereto, Respondent was the registered agent and an officer or director of Hauser and Associates Insurance Agency, Incorporated of 7770 Davie Road Extension, Hollywood, Florida. Beginning on or about January 1, 1986, and continuing through August 31, 1987, Respondent represented to one of his clients that he had obtained insurance coverage for that client's three restaurants. This representation of coverage was false. Respondent received from the client insurance premium payments of $56,550.00, more or less, for the insurance of the client's three restaurants. These funds were obtained by Respondent under false pretenses. Respondent provided the mortgagee of one of the restaurants owned by his client with a document purporting to be a certificate of insurance on that restaurant from Scotsdale Insurance Company insuring the restaurant for the period December 11, 1985, to December 11, 1986. Respondent further provided the mortgagee with a declaration sheet stating that Protective Insurance Company would insure the restaurant from January 1, 1987, to January 1, 1990. Respondent falsified these declaration sheets. Respondent's client suffered no loss, other than the loss of his premium dollars, because of Respondent's misrepresentations as to coverage. Respondent was charged with one count of Grand Theft of the Second Degree, a second degree felony, based on the dealings with his client. Respondent entered a plea of nolo contendere to the charge of Grand Theft of the Second Degree. The Circuit Court, in and for Broward County, Florida, placed Respondent on probation for a period of three years and withheld adjudication of guilt. As a condition of the Order of Probation, the court required that Respondent make restitution to his client in the amount of $56,550.00 and further required that $15,000.00 be paid toward restitution on October 24, 1988, the date Respondent entered his plea of nolo contendere and the date the court entered the Order of Probation. Respondent made a restitution payment of $15,000.00 on October 24, 1988. Respondent has been licensed by Petitioner since April 1972. Although Petitioner has received other complaints about Respondent, no formal action has been previously taken against him. Respondent has been a good citizen, except for this misconduct, and a good family man. Respondent regrets his misconduct. Respondent timely requested a formal hearing after the Administrative Complaint was served upon him.
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 revokes all licenses issued by the Department of Insurance to Respondent, Howard Paul Hauser. DONE and ENTERED this 21st of July, 1989, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 21st day of July, 1989. APPENDIX The proposed findings addressed as follows: of fact submitted on behalf of Petitioner are 1. Addressed in paragraph 1. 2. Addressed in paragraph 2. 3. Addressed in paragraph 6. 4. Addressed in paragraph 3. 5. Addressed in paragraph 4. 6. Addressed in paragraphs 3-4. The proposed findings of fact submitted on behalf of Respondent are addressed as follows: Addressed in paragraph 9. Addressed in paragraph 6. Addressed in paragraph 6. Rejected as being unnecessary to the conclusions reached. Addressed in paragraph 7. Addressed in paragraph 5. Addressed in part in paragraph 7. Rejected in part as being speculative. Rejected as being a conclusion of law and not a finding of fact. COPIES FURNISHED: Robert G. Gough, Esquire, (at the hearing) and Charles Christopher Anderson, Esquire, (on the proposed recommended order) Office of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Gary D. Weiner, Esquire, Glendale Federal Building Suite 209 901 Southeast 17th Street Fort Lauderdale, Florida 33316 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300 Don Dowdell, General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300
The Issue Whether Respondent's insurance license should be suspended or revoked or otherwise disciplined because Respondent violated the Florida Insurance Code.
Findings Of Fact The Department is the agency with jurisdiction over licensing insurance agents pursuant to Chapter 626, Florida Statutes. Respondent applied for a license with the Department as a non-resident life, health, and variable annuity agent by submitting an application which he signed on July 4, 1999. He was awarded nonresident insurance License No. D008927 on July 12, 1999. Question seven on the July 4, 1999, application for licensure, inquired, "Has anyone ever obtained a judgement, or is there currently pending, any type of civil action against you individually or against any entity in which you are or were an officer, director, partner, or owner based upon allegations of fraud, misrepresentation or conversion or which in any way involved the subject of insurance?" Respondent checked a box which indicated a negative answer. Because the application submitted by Respondent appeared to be correct, Respondent was issued the aforementioned license. On July 4, 1999, when Respondent answered question seven, a judgment by default had been entered against Respondent by the Circuit Court of Maryland for Montgomery County, in a case styled Paley, Rothman, Goldstein, Rosenberg & Cooper, Chartered, v. Daniel D. Manoff. The judgment was in the amount of $7,590.36 and was filed with the Clerk on July 6, 1994. The complaint which resulted in the judgment alleged that Respondent had failed to pay for legal services received. This complaint involved the breach of a contract. Therefore, Respondent's answer to question seven was correct, insofar as the unrevealed judgment is concerned, because the judgment did not involve a matter "based upon allegations of fraud, misrepresentation or conversion or which in any way involved the subject of insurance." A complaint was filed against Petitioner on May 18, 1998, in the Circuit Court of Maryland for Montgomery County, styled First Financial Group, et al., v. Daniel Manoff, et al., v. The Guardian Life Insurance Company of America, et al. Respondent was a defendant in that case. The suit which was the subject of the complaint was unresolved on July 4, 1999, when Respondent answered question seven. The complaint in the First Financial Group case alleged that Respondent committed fraud. Because of this, Respondent incorrectly answered question seven. When Respondent signed the application for an insurance license on July 4, 1999, he was aware, or was provided ample opportunity to be aware, that a truthful application was expected by the Department. This is because immediately above the signature line are the words, "Final Statement," and below those words are explicit warnings as to the hazards of signing the application when the person providing the imprimatur has not provided correct information. The warnings include one which informs that signing a false statement is a second degree misdemeanor and another that states that the signature is made under penalties of perjury. In addition to the foregoing, the "Final Statement" contains an oath which avers that, ". . . I have not withheld any information on myself that would in any way affect my qualifications." The information sought by question seven is material to the decision as to whether the Department considered Respondent to be qualified to hold an insurance license. Had the information requested been timely supplied, Respondent would not have been awarded a license absent further inquiry into his experiences with the legal system in Montgomery County, Maryland. Respondent worked for Agency 10 of the Berkshire Life Insurance Company in Rockville, Maryland, at the time he submitted the application for licensure which is the subject of this proceeding. The person charged with carrying out administrative duties at that agency was Kathy Cody. Among other duties, she was responsible for obtaining licenses and appointments for agents and managers in the Rockville field office. When processing applications, Ms. Cody, and sometimes another administrator in the office, typically would solicit information from the agent, broker or manager requiring a license and would prepare an application. She did this for many people for many states. Respondent was licensed in a number of states and Ms. Cody assisted Respondent in obtaining some of those licenses. She does not specifically remember the application at issue. It was Ms. Cody's practice to submit completed application forms to the home office in Pittsfield, Massachusetts. If the paperwork was in order, the home office would send the applications to the appropriate state licensing agency. Ms. Cody, or in any event, someone in the office other than Respondent, sent his Florida application to the home office. Respondent did not complete the entire application. He did, however, sign the application which meant that he swore to the accuracy of its contents. Sue Carter processes license applications for the Department. She has engaged in this work since 1984. According to Ms. Carter, if an application is received which reveals an unsatisfied judgment, then further inquiry is made. According to Ms. Carter, it is the policy of the Department to refuse to license someone with a pending complaint alleging fraud. Therefore, she stated, if Respondent's application had revealed the existence of the First Financial Group complaint, the Department would not have issued a license to Respondent.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered which finds that Respondent violated on one occasion, Section 626.611(1), (2) and (7), and Section 626.211(1), Florida Statutes, and which requires Respondent to surrender his non-resident life, health, and variable annuity insurance agent license. DONE AND ENTERED this 8th day of April, 2002, in Tallahassee, Leon County, Florida. HARRY L. HOOPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of April, 2002. COPIES FURNISHED: Daniel Dwight Manoff Post Office Box 267 Poolesville, Maryland 20837 Richard J. Santurri, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Plaza Level 26 Tallahassee, Florida 32399-0307
The Issue The issue to be resolved in this proceeding concerns whether the Petitioner Donna Danzis is a retired state employee and is entitled to reinstatement of her policy of State Life Insurance Plan.
Findings Of Fact The Petitioner was an employee of the Florida Department of Children and Family Services (DCF) through October 28, 2005. On October 28, 2005, she voluntarily terminated her employment. At the time she terminated employment she had been covered under the Plan. The Plan is made available to state employees and retirees through the DSGI, in accordance with Section 110.123, Florida Statutes (2006). The terms and conditions of employee participation in the plan are provided for in Florida Administrative Code Rule Chapter 60P-3. The Petitioner was a cancer patient at times pertinent hereto and that may have played a role in her decision to terminate her employment. In any event, her employment termination was voluntary and occurred during a time apparently when she was undergoing chemical therapy concerning her cancer issues. Prior to the time she terminated her employment on October 28, 2005, the Petitioner did not discuss her plans to retire with DCF Human Resources Personnel. She had, however, apparently applied for disability retirement, although that disability retirement status had not yet been determined or granted at the time she terminated her employment. After termination of employment, on or about November 24, 2005, the Petitioner contacted DCF personnel office and spoke with Mr. Harvey Whitesides. During that conversation, Mr. Whitesides determined that the Petitioner had had deductions from her paycheck to cover premiums for three types of insurance coverage: state health insurance, a group life insurance plan, as well as state security insurance. The later type of insurance is an optional supplemental life insurance that is not a part of the Plan. In that November 24, 2005, conversation with Mr. Whitesides, the Petitioner told him that she had terminated her employment with the state but did not inform him that she had applied for disability retirement. During their conversation she told Mr. Whitesides that she wanted refunds that she was entitled to from the state health insurance and group life insurance plans. Mr. Whitesides was supervisor of payroll for DCF and its predecessor agency from 1993 through 2002. In that position his duties included management of the benefit section and retirement operations within the DCF. While her performed his duties as supervisor he would commonly assist employees in their preparation of the forms necessary to affect retirement. Mr. Whitesides retired in 2003, but returned to DCF as an employee in March 2004. Beginning in June 2004, he assumed the duties of DCF personnel services specialist. In July 2005, his position and duties were transferred to the Agency for Persons With Disabilities. Since returning to state employment in March 2004, Mr. Whitesides duties have been substantially the same as those he performed from 1993 through 2002. These included the processing of benefits and retirement requests submitted by employees. In the course of performing those operations he has always assisted employees in the completion of the form required to apply for retirement. Since 1993, Mr. Whitesides has used a "continuation/termination form," for retiring employees who upon retirement wished to continue their state group life insurance. Beginning in March 2004 when he returned to state employment, Mr. Whitesides had access to and used that same continuation/termination form. He did not offer the form to the Petitioner during their conversation on November 24, 2004, however, because the Petitioner did not then inform him that she had applied for retirement. Mr. Whitesides did not learn that the Petitioner had applied for retirement until he received a letter from the Division of Retirement (DMS) dated December 14, 2005, which asked that the DCF provide information and data necessary to calculate Ms. Danzis retirement benefits. Mr. Whitesides provided the date requested by DMS, including the "Florida Retirement System Pension Plan Salary Certification." Prior to the receipt of the letter dated December 14, 2005, the Petitioner had not informed anyone in the DCF personnel office that she had applied for disability retirement. Florida Administrative Code Rule 60P-3.014 requires that an employee who retires and is covered under the life insurance plan must elect one of the following options: (1) submit a request to continue coverage during retirement accompanied by a personal check or money order for one full month's premium, which must be received by the employee's former agency and forwarded with the original application no later than 31 calendar days after the last day of employment; or (2) that the retiring employee must submit a request to terminate coverage under the life insurance plan no later than 31 calendar days after the employee's last day of employment. That rule goes on to provide that an employee who applies for disability retirement and has not received approval of that prior to his last day of employment but who is covered under the life insurance plan on that last day of employment has the option to continue coverage in the life plan pending such retirement disability approval or rejection by submitting a request to continue coverage in accordance with Florida Administrative Code Rule 60P-3.014(1)(a) and by paying the full premium for each month's coverage by personal check or money order to his or her former personnel office. Concerning employees or retirees off the payroll, if it is determined that none of the required contribution by the end of the coverage month the coverage will be cancelled and the retirees coverage will be terminated effective the first day of that month. A retired employee whose coverage is terminated in accordance with subsection (1) or (2) of Rule 60P-3.010 may not re-enter the Plan. The Petitioner did not submit a continuation/termination form within 31 days of the date of her termination of employment stating that she wished to continue her participation in the plan, and provide the other information required by Florida Administrative Code Rule 60P-3.014(1)(a). The Petitioner did not submit a month's premium for life insurance within 31 days after the last date of her employment. The only notice that Ms. Danzis gave, or attempted to give, was notice that she was voluntarily terminating her employment and that her last date of work would be October 28, 2005. Because she did not elect to continue her participation in the life insurance plan through the proper procedure and filing, the Agency canceled her life insurance, thus generating the subject dispute.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Management Services, Division of State Group Insurance determining that the Petitioner failed to properly elect to remain a covered retiree of the State Life Insurance Plan, and that the Petition be dismissed. DONE AND ENTERED this 4th day of April, 2007, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 Clerk of the Division of Administrative Hearings this 4th day of April, 2007. COPIES FURNISHED: Donna Danzis 7744 State Road 100 Keystone Heights, Florida 32656 Sonja P. Mathews, Esquire Department of Management Services Office of the General Counsel 4050 Esplanade Way, Suite 260 Tallahassee, Florid 32399-0950 Sarabeth Snuggs, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32315-9000 John Brenneis, General Counsel Division of Retirement Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
The Issue This is a license discipline proceeding in which the Respondent has been charged in a one-count administrative complaint with violation of the following statutory provisions: Sections 626.561(1), 626.611(7), 626.611(9), 626.611(10), 626.611(13), 626.621(2), 626.621(6), 626.9521, and 626.9541(1)(o)1., Florida Statutes.
Findings Of Fact The Respondent, John Joseph Devins, is currently licensed in the State of Florida as a life insurance agent, as a life and health insurance agent, as a general lines insurance agent, and as a health insurance agent. The Respondent is currently, and was at all times relevant and material to this proceeding, a stockholder and officer of Devins-Varady Insurance Agency, Inc., of Stuart, Florida. Devins-Varady Insurance Agency, Inc., is an insurance agency incorporated under and existing by virtue of the laws of the State of Florida. The complaining consumer in this case, Ms. Louise Shellhammer, had carried homeowner's insurance with American Professional Insurance Company (hereinafter referred to as "American Professional") from 1986 until 1990. The agency of record for Ms. Shellhammer's American Professional homeowner's policy was the Devins-Varady Agency, Inc. Ms. Shellhammer's homeowner's insurance policy was scheduled to lapse on or about November 25, 1990. In September of 1990, the Respondent sent a letter to Ms. Shellhammer informing her that her homeowner's insurance policy was up for renewal and that the Respondent had a new carrier that he thought Ms. Shellhammer should switch to. The letter requested that Ms. Shellhammer come into the Devins-Varady Insurance Agency, Inc., and fill out a replacement application for her new insurance policy. Ms. Shellhammer failed to respond to the Respondent's letter because at the time she received the letter, she intended to change her homeowner's insurance to State Farm. Ms. Shellhammer did not follow through on her intentions in that regard and did not obtain replacement homeowner's insurance from State Farm in 1990. On or about November 15, 1990, the escrow department of Harbor Federal Savings and Loan (hereinafter referred to as "Harbor Federal"), the loss payee and holder of the mortgage on Ms.Shellhammer's home, sent a request to the Respondent for a bill for the renewal of Ms. Shellhammer's policy with American Professional. The premium for this policy was to be paid from escrowed funds held by Harbor Federal. The Respondent thereafter sent Ms. Shellhammer's renewal bill for her American Professional homeowner's policy to Harbor Federal. At the time of sending the bill to Harbor Federal, the Respondent did not attempt to bind renewal coverage with American Professional for Ms. Shellhammer. On or about November 28, 1990, the escrow department of Harbor Federal mailed a premium payment check to the Respondent in the amount of $263.00. That amount represented the renewal premium for Ms. Shellhammer's homeowner's policy with American Professional. The check was mailed three days after the lapse of the insurance policy it was intended to renew. The Respondent received that check a few days later. Upon receipt of the check, the Respondent deposited the proceeds of the check into the premium trust account of the Devins-Varady Insurance Agency, Inc. The Respondent failed to forward the renewal premium to American Professional or to any other insurer. The Respondent also failed to take any other action to obtain a renewal insurance policy for Ms. Shellhammer. These failures occurred primarily because of an oversight at the time the check from Harbor Federal was deposited for collection. At the time of depositing the check, there was an apparent failure to make a notation that follow-up action was necessary to procure an insurance policy for Ms. Shellhammer, and the follow-up action was simply overlooked. The Respondent did not become aware of the fact that he had failed to obtain insurance for Ms. Shellhammer until on or about June 12, 1991, when Ms. Shellhammer contacted him to report a burglary loss. When the Respondent pulled Ms. Shellhammer's file to process the loss claim he first discovered that she did not have insurance. Upon looking into the matter and discovering what had happened, the Respondent admitted to Ms. Shellhammer that he had made a mistake and that it was his fault that she did not have insurance. The Respondent told Ms. Shellhammer to make a list of her losses and told her that he would reimburse her for her losses. The Respondent and Ms. Shellhammer have since had some differences of opinion about the extent of Ms. Shellhammer's losses. Early in July of 1991, the Respondent repaid Harbor Federal the $263.00 that he had received from them for Ms. Shellhammer's insurance premium. The repayment was received by Harbor Federal on or about July 12, 1991. Ms. Shellhammer did not make any inquiry of the Respondent as to the status of her homeowner's insurance policy at any time between the date of the Respondent's letter in September of 1990 and the date she reported the burglary loss in June of 1991. Harbor Federal did not make any inquiry of the Respondent as to the status of Ms. Shellhammer's homeowner's insurance policy between November 28, 1990, the date it mailed a premium check, and the date of the burglary loss report in June of 1991. American Professional did not make any inquiry of the Respondent as to the status of Ms. Shellhammer's homeowner's insurance policy between November 25, 1990, the date the policy lapsed without being renewed, and the date of the burglary loss report in June of 1991. American Professional has done business with the Respondent and with the Respondent's agency for a number of years. With the exception of the incident that forms the basis for this proceeding, American Professional has never had any problems in its business relations with the Respondent or with the Respondent's agency.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that a Final Order be issued in this case dismissing all charges against the Respondent. DONE AND ENTERED this 26th day of July, 1993, at Tallahassee, Leon County, Florida. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of July, 1993. COPIES FURNISHED: Joseph D. Mandt, Esquire Department of Insurance and Treasurer Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0330 Mr. John Joseph Devins, pro se 5573 Southeast Federal Highway Stuart, Florida 34997 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil, General Counsel Department of Insurance The Capitol, Plaza Level II Tallahassee, Florida 32399-0300
The Issue The issue for consideration in this hearing was whether Respondent's license as a life and health debit agent and a general lines, (fire), agent should be disciplined because of the matters alleged in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the issues herein, the Petitioner, Department of Insurance, was the state agency responsible for the licensing of commercial insurance sales agents and the regulation of the insurance industry and profession in Florida. Respondent, Doyle Carlton Newell, was licensed in Florida as a life and health (debit) agent and a general lines agent limited to industrial fire. On April 26, 1991, Respondent entered into an agency contract with United Insurance Company of America, (United), which authorized him to sell authorized insurance policies for the company in Florida within his assigned territory. The terms of the agency contract obligated Respondent to remit to the company, on a weekly basis, all premium money collected by him on the company's behalf. For reasons not stated, United terminated Respondent from employment on May 11, 1992 by use of company form 38A, and Respondent's agency contract was cancelled immediately. The termination was followed by an audit of Respondent's account because for some time, company management had had some concern as to the condition of those accounts. Respondent had admitted to improperly taking money belonging to the company, and the audit was conducted during the period immediately following his termination in May, 1992 through August, 1992. Either prior to or as a part of the audit, Respondent submitted a list of all discrepancies he could recall. The audit revealed an actual deficiency of $3,731.67. After application of the bond submitted by and on behalf of Respondent, the ultimate shortage was $3,257.67. Respondent had, the day he left employment with the company, indicated he would reimburse it for any shortage when he overcame some personal matters and gambling problems. After the exact amount was determined, he was again asked, both orally and, several times through certified mail, to satisfy the obligation but as of the date of hearing, he had made no payments. All policies written by Respondent were honored by the company regardless of the fact he had not remitted the premiums paid therefor.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered finding Respondent guilty of all misconduct and violations alleged except that relating to a lack of knowledge or technical competency, and revoking his license as an insurance agent in Florida. RECOMMENDED this 23rd day of June, 1994, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of June, 1994. COPIES FURNISHED: William C. Childers, Esquire Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0222 Doyle Carlton Newell 8414 Waterford Avenue, T3 Tampa, Florida 33604 Doyle Carlton Newell 2106 Two Lakes Road, Apartment 2T Tampa, Florida 33604 Doyle Carlton Newell 13637 Twin Lakes Lane Tampa, Florida 33624 Doyle Carlton Newell American General Life and Accident Insurance Co. 802 West Waters Avenue Tampa, Florida 33604 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300
