The Issue Whether the Respondent properly denied the Petitioner's application for licensure as a Resident All Lines Insurance Adjuster for a material misstatement on her application?
Findings Of Fact The Petitioner, Krista Rose Navarro, filed an application with the Respondent for licensure as a Resident Independent All Lines Insurance Adjuster (05-20) by letter dated December 30, 2004. This application was filed on line. As part of that application the Petitioner answered, "no," to the question: Have you ever been convicted, found guilty, or pled guilty or nolo contendere (no contest) to a felony or crime punishable by imprisonment of one (1) year or more under the law of any municipality, county, state, territory or country, whether or not adjudication was withheld or a judgment of conviction was entered? The Respondent conducted a criminal records file check that revealed that the Petitioner had entered a plea to a count of mail fraud in the Federal District Court for the Central District of California in 1986. The records of this proceeding under the seal of the records custodian of the National Archives and Records Administration were introduced as Department's Composite Exhibit 2. Based upon this information, the Respondent determined that (1) the period an applicant would have to wait to be licensed for the offense involved was 15 years, and that this had run; and (2) the Petitioner's failure to disclose the offense resulted in extending the licensure eligibility date until December 30, 2005. Based upon this latter determination, the Respondent denied the Petitioner's application for licensure. The Petitioner testified that the portion of the question that stated, "pled guilty or nolo contendere (no contest) to a felony or crime punishable by imprisonment of one (1) year or more under the law" was confusing to her. She took the question to require reporting an offense for which one was imprisoned for a year or more, and that she had not intentionally failed to reveal the offense. In support of this contention, the Petitioner pointed out that she was currently a licensed real estate broker and held this license for ten years, and had revealed the subject offense and plea on the application for that license. She also introduced a letter from her child's school, the Petitioner's Exhibit 2, which indicated that the Petitioner had shared the information about her plea with the principal of the school as part of the vetting of parental chaperones. The Petitioner passed that vetting process. Although the underlying facts of the offense to which the Petitioner entered the plea are not relevant to the matters under consideration, they show the Petitioner engaged in a telephone marketing ploy in which businesses and offices were called and copier products were offered for sale at current prices before an anticipated price increase. Although not stated, an impression was given that the salesperson was a representative of the supplier usually used by the office being called, and the "price hike" was not factual, but a sales gimmick. The "handling charges" and similar fees in these transactions were very high, although the products were delivered to the purchasers. Such practices are specifically prohibited today, but were not specifically proscribed at the time. The Petitioner was cooperative with authorities when arrested, and is now remorseful about her conduct at the time considering this is an embarrassing epiphany in her life; however, she has fully disclosed the facts as indicated above when she perceived it was necessary. The Petitioner has her own real estate brokerage; has never been the subject of disciplinary action by those licensing authorities; and is a long-time resident of her community. She is married, has two children, and takes part volunteering at her children's school, as indicated above.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Department of Financial Services issue the Petitioner as a Resident Independent All Lines Insurance Adjuster. DONE AND ENTERED this 2nd day of June, 2005, in Tallahassee, Leon County, Florida. S __ STEPHEN F. DEAN 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 2nd day of June, 2005. COPIES FURNISHED: Krista Rose Navarro 111 Placido Place Panama City Beach, Florida 32413 Dana M. Wiehle, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Carlos G. Muniz, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The central issue in this case is whether the Respondent is guilty of the violations alleged in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: At all times material to allegations of the Administrative Complaint, Respondent, William John Harnett, has been licensed or been qualified for licensure as an insurance agent in the State of Florida. Respondent currently holds licenses for service lines insurance, debit insurance, ordinary life and health insurance, and general lines insurance (which is property, casualty, or surety). The Department is charged with the administration of Chapter 626, Florida Statutes. On December 15, 1975, the Department was appointed to serve as Receiver of Southern American Fire Insurance Company (Southern) . The purpose of this receivership was to seek the rehabilitation of the insurance company. On February 10, 1976, Southern was determined to be insolvent pursuant to Section 631.011(3), Florida Statutes and the Department, as Receiver, obtained an Order of Liquidation. The Department was charged with the responsibility of marshalling the company's assets in order to settle the outstanding claims against it. To this end, the Department filed civil suits against insurance agents and agencies which had allegedly failed to remit premium monies owed to Southern. One such suit was against Harnett, Inc., Respondent, and other individuals associated with Harnett, Inc. From April 9, 1947 until November 14, 1986, Harnett, Inc. was a corporation organized under the laws of the State of Florida whose general business was insurance. Respondent served as the treasurer and a director for Harnett, Inc. Respondent was authorized to and did sign checks and correspondence on behalf of Harnett, Inc. The Department's civil suit against Harnett, Inc. (Case No. 76-23143) was filed in Dade County on July 26, 1976. This suit claimed Harnett, Inc. had failed to remit premium monies owed to Southern and that Respondent, as an officer and director of Harnett, Inc. having direct supervision or control over individuals acting on behalf of Harnett, Inc., was personally liable for the amounts owed. On March 6, 1981, a final judgment (Case No. 76-23143) was entered in favor of the Department as Receiver of Southern. This judgment found against Respondent and Harnett, Inc., jointly and severally, in the sum of $78,617.85. This judgment was affirmed on appeal. 1/ The Department has attempted to collect the funds awarded in this judgment. From October 26, 1962 until November 14, 1986, Franklin Insurance Agency of Miami, Inc. (Franklin) was a corporation organized under the laws of the State of Florida. At all times material to this cause, Respondent was president and a director of Franklin. On October 20, 1976, the Department as Receiver of Southern filed a civil suit against Respondent and Franklin. This suit (Case No. 76-32799) claimed monies were owed to Southern for premiums Franklin had failed td remit. Further, the suit alleged that Respondent, as Franklin's president and director, was personally liable for the refusal and continued refusal of Franklin to pay the premiums. A final judgment was entered for the Department as Receiver of Southern in the Franklin suit on December 9, 1980. This judgment (case No. 76- 32799) provided for recovery against Franklin and Respondent, jointly and severally, in the sum of $35,983.39. The Department has attempted to collect the funds awarded in this judgment. Gables Insurance Agency, Inc. (Gables), organized on November 28, 1967, continues as an active corporation in this state. At all times material to the allegations in the Administrative Complaint, Respondent was the sole officer and director for Gables. Norfolk & Dedham Mutual Fire Insurance Company, Inc. (Norfolk) entered into Agency Agreements with Gables and Harnett, Inc. on February 1, 1976. Subsequently, Norfolk sued Harnett, Inc. (Case No. 84-03815) and Gables (Case No. 84-03816) for premium monies it was claimed to be owed. These suits resulted in final judgments in favor of Norfolk. The suit against Harnett, Inc. (Case No. 84-02815) found the sum of $54,556.00 was owed to Norfolk. The suit against Gables (Case No. 84-03816) found the sum of $18,843.20 was owed to Norfolk. The four judgments identified herein (paragraphs 8, 11, 14 and 15) total $188,000.44 and remain unsatisfied. These judgments represent money damages owed for unpaid insurance premiums. An applicant for licensure with outstanding judgments incurred during the course of doing the business of insurance would not be approved by the Department without a showing of restitution or rehabilitation. The Department deems such an applicant to be untrustworthy, incompetent, and not fit to become qualified and licensed in Florida. Respondent offered no evidence of restitution or rehabilitation. Respondent maintained that no monies were owed by the respective debtor companies or Respondent individually.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That Department of Insurance and Treasurer enter a Final Order revoking the licenses held by Respondent, William John Harnett. DONE and RECOMMENDED this 5th day of July, 1988, in Tallahassee, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of July, 1988.
The Issue Should discipline be imposed by Petitioner against Respondent's insurance agent licenses, life including variable annuity (2-14), and general lines (2-20), pursuant to Chapters 624 and 626, Florida Statutes (2004)?
Findings Of Fact Stipulated Facts Respondent is licensed by Petitioner as a life including variable annuity (2-14) and a general lines (2-20) insurance agent and has been issued license D029506. During the time referenced in the Administrative Complaint, Respondent was licensed as a customer representative (4-40) and a life including variable annuity (2-14) agent. The Department has jurisdiction over Respondent's insurance licenses and appointments. At all times relevant to the dates and occurrences referenced in the Administrative Complaint, Respondent was employed or affiliated with Direct General Insurance Agency, Inc., a Tennessee corporation, doing business in Florida as Florida No-Fault Insurance Agency (Cash Register). Additional Facts: At times relevant to the case Respondent held his life including variable annuity license (2-14) under an appointment with Direct Life Insurance Company. At times relevant to the case Respondent had a customer representative license (4-40) under appointment with Direct General Insurance Agency, Inc. At present Respondent continues to hold the life including variable annuity license (2-14) under an appointment with Direct General Life Insurance Company. At present he has a general lines license property and casualty license (2-20) under appointments with Direct General Insurance Company and American Bankers Insurance Company of Florida. On February 8, 2005, Brandi Dean called Cash Register to receive a quote for the purchase of basic automobile insurance coverage. She was provided a quote at that time. On February 8, 2005, Brandi Dean, went to the Cash Register to purchase basic automobile insurance coverage. She had done business with the insurance agency before. Her policy with Direct General Insurance Company was Policy No. FLCR162714439, as reflected in Petitioner's Exhibit numbered 15, with a scan cover sheet entitled "Renewal Auto." On February 8, 2005, Ms. Dean purchased automobile insurance coverage that would be effective from February 10, 2005 through February 10, 2006. She was charged $316 for property damage liability (PD) and $216 for basic injury protection (PIP) for a total of $532, with a $25 policy fee. The application information within the exhibit reflects the customer's name, signature, and initials in various places. On February 8, 2005, Ms. Dean was provided another form referred to as an Explanation of Policies, Coverages and Cost Breakdown (including non-insurance products). Petitioner's Exhibit numbered 16. She signed that document. It reflected the auto policy coverage information. It also set forth under a category referred to as optional policies, the purchase of Lloyd's Accident Medical Protection Plan for $110. Petitioner's Exhibit numbered 17 is additional information concerning the Accident Medical Protection Plan application by the customer signed by her. It details a $110 annual premium for individual coverage of $1,000 medical expense, and 125/day-365 day hospital coverage. Within that same exhibit there is a form signed by the customer titled 100% certain underwriters @ Lloyd's/London (DB/33) Accident Medical Protection Plan. This reflects $110 cost, $125 daily coverage and the total annual benefit of $45,625. Petitioner's Exhibit numbered 18 is a scan cover sheet entitled Renewal Finance with Premium Finance Agreement Information in association with Direct General Financial Services, Inc., in which the customer Ms. Dean paid $69.63 down, financed $599.82, with a total price of $748.61 when considering the annual percentage rate for financing. This document in totality was initialed and signed by Ms. Dean. Ms. Dean was provided a receipt for her cash down-payment on the purchase. Petitioner's Exhibit numbered 14. Petitioner's Exhibit numbered 19 is an Insurance Premium Financing Disclosure Form signed by the customer, reflecting the cost of the automobile insurance and the hospital indemnity plan, the amount of total cost and includes the policy fee for the automobile insurance, document stamp tax, the down payment, and the total amount financed $599.82. Ms. Dean was left with the impression that she had only purchased automobile insurance. She believed that the monthly payments for the financing were only in relation to automobile insurance. Ms. Dean does not recall having the accidental medical protection plan explained to her as to its terms. She does not recall anyone explaining that it was an optional plan unassociated with automobile insurance. She told the agent that she dealt with that she was only interested in purchasing the state-required automobile insurance coverage. Had she realized that she was purchasing optional accident medical protection, not part of the automobile insurance purchase, she would have declined the optional policy. Ms. Dean does recall that the agent she dealt with made some brief explanation about the documents involved in the transaction but not every page was explained. Ms. Dean recalls explanations about the automobile policy but nothing about optional coverage. Ms. Dean glanced over the documents but did not read every word included in the documents. Ms. Dean does not recall whom she dealt with on February 8, 2005. Otherwise, the record does not reflect the person who sold the automobile insurance and accidental medical protection plan to her at that time. At times relevant, Denise Daley Turnbull worked at Cash Register. She was a customer representative license (4- 40), appointed by Direct General Insurance Agency, Inc. On March 24, 2005, William L. Green, Jr., came to Cash Register to purchase automobile insurance. He dealt with Ms. Turnbull. He made a $170.02 down payment for his purchases, as reflected in Petitioner's Exhibit numbered 4, which is a receipt provided to Mr. Green. A scan cover sheet related to an auto policy purchased, together with the application information for the automobile insurance purchased through Direct General Insurance Company is found within Petitioner's Exhibit numbered Mr. Green purchased automobile insurance for property damage liability (PD) in the amount of $590 and basic personal injury protection (PIP) for $370, with a $25 policy fee, totaling $985. He signed and initialed parts of the forms in association with the automobile insurance. Ms. Turnbull also signed forms in association with the automobile insurance. Petitioner's Exhibit numbered 6 is an explanation of policies, coverages and cost breakdown (including non-insurance products) reflecting the overall purchases by Mr. Green. He signed that form. It relates the automobile insurance purchase. It also relates the purchase of an American Bankers Travel Protection Plan for $60, a Lloyd's Accidental Medical Protection Plan for $110 and life insurance of $98. With fees and other costs the total purchase was $1270.99. Of relevance here, Petitioner's Exhibit numbered 9 is a scan cover sheet in relation to the life policy signed by Ms. Turnbull. It also includes application information to Direct Life Insurance Company with certain questions reflected that were initialed by the purchaser. Mr. Green signed the application. Respondent also signed the application, as well as printing his name and insurance license number on the form. Petitioner's Exhibit numbered 10 is a scan cover sheet for a New Finance with Direct General Financial Services, Inc., which reflects a $162.03 down-payment, $1105.17 in amount financed, with a $129 finance charge. The total sales price for all purchases was $1396.20, to include the life insurance with Direct Life Insurance Company. Mr. Green signed the premium finance agreement. Petitioner's Exhibit numbered 11 is a copy of the Insurance Premium Finance Disclosure Form signed by Mr. Green. Ms. Turnbull has no recollection of the Respondent's participation in the sale of the life insurance policy to Mr. Green. She does recall that Respondent was in the insurance agency office when the life insurance was purchased. She recognizes Respondent's signature in association with the life insurance application and purchase. Mr. Green had no intention of purchasing life insurance when he went to Cash Register on March 24, 2005. He recalls dealing with Ms. Turnbull. No one else sat with Mr. Green and explained policy information to him. Specifically, Respondent did not sit with Mr. Green and offer explanations about the policy. Mr. Green did not see Respondent sit with Ms. Turnbull and Respondent remained silent while she sold the life policy. Had Mr. Green realized that he was purchasing life insurance he would have declined the opportunity.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That Petitioner enter a final order finding a violation under Count I as set forth in the conclusions of law, dismissing Count II and suspending Respondent's license for six months for the violation. DONE AND ENTERED this 7th day of May, 2007, 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 May, 2007. COPIES FURNISHED: William Gautier Kitchen, Esquire Gregg Marr, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 L. Michael Billmeier, Jr., Esquire Galloway, Brennan and Billmeier, P.A. 240 East Fifth Avenue Tallahassee, Florida 32303 Michael L. Rothschild, Esquire Larry S. Davis, P.A. 1926 Harrison Street Hollywood, Florida 33020 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol, Level 11 Tallahassee, Florida 32399-0307
Findings Of Fact The Respondent is a licensed insurance agent licensed in the State of Florida as a general lines agent. He was the primary agent of Emerald Coast Insurance Agencies, Inc. (Agency) for Pensacola, Florida. The agency at all times pertinent to the events and times treated in the Amended Administrative Complaint was a general lines insurance agency incorporated under the laws of the State of Florida. The Petitioner is an agency of the State of Florida charged with regulating and licensing the entry of insurance agents into the profession of insurance and regulating the practice of agents and other insurance professionals already licensed by the State of Florida, including the imposition of disciplinary measures. The Respondent had been an insurance agent, as of the time of the hearing, for approximately four years. During that time, he has typically written 50-60 applications for automobile insurance and related coverage per week. The owner of the Agency would not allow the Respondent to issue checks from the Respondent's own office. All processing of insurance application files was completed at the Tallahassee, Florida office. The files with client information for insurance applicants, whose business was initiated by the Respondent, was sent by UPS to the Tallahassee, Florida office on the morning following the taking of the applications. The forms, which the Respondent was required to have completed and asked customers to sign, were pre-printed and issued from the Tallahassee, Florida office. The Respondent had no part in the creation of these forms as to content, format, and the disclosures depicted on their face. The Respondent inquired of the Department's local office as to whether the forms comported with pertinent statutes and regulations, and the Department expressed no objection to them. Indeed, the forms in question do make disclosures of the coverage or products which the customer is purchasing and contain an acknowledgment, which the customer is required to sign, indicating that the coverage has been explained to the customer. In particular, the motor club product is depicted on the relevant form as being an optional product and that it has been explained to the customer, with a blank after that pertinent statement for the customer to sign an acknowledgment of that fact. The issue in this case does not involve whether the customer paid for such a product without executing any consent but, rather, whether the customer was misled or whether the products sold were actually, in fact, explained fully to them; whether they were misled in making a decision to buy such coverage in the belief that it was required in order to obtain the insurance they knew they needed. THE TRANSACTIONS AT ISSUE No evidence was submitted as to Count I, concerning Cheryl Ginsterblum nor Count VIII, concerning Joseph Shelton. Therefore, no findings of fact can be made and these counts should be dismissed. Pam Shivers of Gulf Breeze, Florida, required insurance coverage for her 1988 Dodge Caravan. Because the van was still financed with a lender, "full coverage" was required, that is, she needed personal injury protection (PIP), property damage (PD) coverage, comprehensive risk coverage, and collision damage coverage. On March 8, 1993, she went to the Respondent's Agency, and the Respondent handled the requested insurance transaction. She requested "full coverage", and the transaction was handled while she was standing at the counter, in just a few minutes. PIP and PD insurance was placed with Security Insurance Company of Hartford (Security). Comprehensive and collision coverage was placed with Florida International Indemnity Company (FIIC). The premium for Security was $350.00, and the premium for FIIC was $399.00. The purchase of this coverage was financed so that Ms. Shivers would not have to pay the entire $749.00 premium for all of the coverage at one time. In return for the premium financing arrangement, a $187.00 down payment was required for the insurance coverage. During the transaction, Ms. Shivers was quickly presented with approximately six documents to sign. Included in those documents was a document containing a disclosure that the motor club product which she purchased was optional, that is, not required by law; that she had been offered to purchase automobile insurance by the Agency without an optional motor club and chose to purchase that optional coverage of her own free will at an additional cost of $150.00; that she examined the benefits being offered, and that it was her decision to request enrollment as a member of the motor club association. It is true that Ms. Shivers signed these acknowledgments and disclosures, which on their face, would indicate that she had been informed about the nature of the motor club product or coverage and its cost, including the fact that it was not required by law and was optional. In fact, however, her apparent consent was not an actual, knowing and informed consent. She was presented with the six documents to sign hurriedly, with the places to sign simply marked for her to make quick signatures. She did not, in the course of the transaction, have significant time to read the documents or reflect on what she was signing, what her signatures obligated her for, and what specific products she was purchasing. She was not, in actual fact, informed that she was purchasing a motor club membership. She did not request that product, and the Respondent did not give her any actual explanation about it. She was not informed that she had any choice in whether or not to take that product. She later discovered that the product was optional and that it was, therefore, not an integral, unseverable part of the insurance coverage she did want to purchase. Moreover, Ms. Shivers was confused about the $749.00 premium quote and the amount she was actually required to pay. Her confusion involved the $749.00 premium for insurance quoted to her because of the fact that she was actually required to pay an $899.00 purported "premium". The receipt issued at the end of the purchase transaction indicated a total "premium" of $899.00. In fact, however, the actual cost of the insurance was $749.00. The additional $150.00 was for a motor club membership which was hidden in the receipt amount and what was represented on the receipt as a "total premium". The down payment of $337.00 quoted to her was also deceptive because actually, only $187.00 of that was the down payment on the actual insurance coverage premium. This is shown by the premium finance agreement in evidence. The Respondent had concealed the cost of the motor club membership within what was purported to be the total insurance premium amount reflected on the receipt and included the entire $150.00 charge for that membership within the down payment, simply and misleadingly calling the down payment of $337.00 as the down payment on insurance coverage. Thereafter, on March 21, 1993, Ms. Shivers went back to the Agency to cancel her insurance, related to the fact that her vehicle had been involved in an accident. Upon doing that, she left thinking that her insurance had been effectively cancelled. Later, she received notices from the premium finance company but was told by the Respondent to ignore them. On May 7, 1993, however, the Respondent informed her that she had to come back to the Agency and fill out a cancellation request. Thus, 47 days after she had attempted to cancel her coverage, her request was finally processed by the Agency. In the meantime, she was apparently being charged for premiums on the coverage she thought she had cancelled. Thus, from January 21, 1994, the premium finance company turned an amount it claimed was due of $43.26 over to its attorney for collection purposes, which impinged on Ms. Shivers' credit standing. She had already paid the Respondent $190.00 in premiums under the premium financing agreement, with her down payment, but did not receive any returned unearned premium representing the period after she thought she had cancelled her policy but, instead, was billed the additional $43.26 directly due to the Respondent's 47-day delay in processing her cancellation request. Count III In June, 1993, Laura O'Donohue of Pensacola, Florida, purchased her first vehicle, a 1993 Chevrolet Cavalier. The automobile dealership, where she purchased the vehicle, gave her a card for the Respondent's insurance agency. Therefore, never having established a relationship with an insurance agency, she went to that Agency to purchase insurance. Her mother, Lynn O'Donohue, accompanied her to the Agency. Before coming to the Agency while at the automobile dealership, she had received a quote for the insurance she wanted from the Agency. When she arrived at the Agency, she informed Donald Grubb, an employee of the Agency and the Respondent, that she just wanted "basic coverage". This was the first time she had purchased insurance, and she relied entirely for her decisions regarding that upon the representations of the Respondent and his colleague. Therefore, in a transaction, which took approximately 20 minutes, the Respondent and/or Mr. Grubb assisted her in filling out the paperwork required to place the insurance coverage she requested. During the course of the brief insurance purchase transaction, Ms. O'Donohue learned that she would be required to pay a higher premium amount than the quote she had received from the Agency while she was at the automobile dealership earlier that day. This is consistent with the Agency's custom and practice, established by former agent, James Self's, testimony to the effect that motor club coverage was typically added to the normal insurance coverage requested by customers, which resulted in higher purported "premium" quotes and charges than had initially been quoted to the customer, typically by telephone, before a customer came to the Agency office. When Ms. O'Donohue and her mother arrived at the Agency after having received the lower quote earlier, they were thus not prepared to pay the higher amount of the so-called premium. Ms. O'Donohue did not need a motor club because, through her mother, she was covered by AAA Motor Club for towing and other benefits. She had no knowledge that she had purchased a motor club product from the Respondent. All of the documents were presented to her, in response to her request for just basic insurance coverage, in the context that this was what the law required her to have and what she needed. She totally relied, as did her mother, upon the representations of the Respondent and his agent or employee, Mr. Grubb, concerning what the law required and what she needed in the way of insurance coverage. The testimony of Ms. O'Donohue's mother, Lynn O'Donohue, confirms the fact that they had no intent to purchase towing coverage or "auto club" because they already had a membership with AAA and wanted to pay nothing extra other than the basic insurance coverage. The Respondent or his agent or employee, Mr. Grubb, indicated, as shown on page 91 of the transcript, that "towing was all part of it", that is, they meant that the basic insurance package sought by Ms. O'Donohue included towing as part of its coverage. In fact, that was not the case, and the motor club product was clearly optional, at extra cost, and not legally required. Ms. O'Donohue purchased it unknowingly, based upon the representations and business practice used by the Respondent in connection with her transaction, in spite of the presence of her signatures on the disclosure portion of the application documents for the reasons referenced with regard to the Shivers transaction. The insurance requested was placed with two insurance companies. The PIP and PD were issued by Security at a premium of $223.00. The comprehensive and collision coverage was placed with General Insurance Company (General) at a premium of $411.00. Thus, the premiums for actual insurance coverage, which is all Ms. O'Donohue wanted, totaled $634.00. That was financed by the ETI Premium Finance Company (ETI) on periodic installment payments, with a required down payment of $127.00. The Respondent, however, required Ms. O'Donohue to make a down payment of $277.00 on a purported total premium due of $784.00. This amount, unbeknownst to Ms. O'Donohue, happened to include a motor club purchase (Atlantic Travel Association), which cost $150.00, thus, the difference between the $634.00 actual insurance premium and the $784.00 purported premium due. The $150.00 fee for motor club benefits was concealed in the "total premium" amount falsely represented to the customer by the Respondent. The deceptive and misleading nature of this transaction is further pointed out by the form of the receipt issued to Ms. O'Donohue upon consummating the transaction. That receipt indicates that the "total premium" is $784.00. Actually, the cost of the insurance was only $634.00, as referenced above, and the additional $150.00 of that purported total premium amount was the motor club fee. Likewise, the down payment quoted to her of $277.00 was deceptive because only $127.00 of that was applied to the actual insurance coverage. The remaining amount was the motor club fee which the agent collected in its entirety at the beginning of the transaction, as part of the down payment, while the insurance premiums, in excess of the $127.00 actual down payment for insurance, were financed through ETI. The Respondent did this because, by collecting all of the motor club fee in a lump sum at the outset of the transaction, he could get his entire commission immediately. His motor club sales commission was at a considerably higher rate than the commission he earned on the sale of insurance itself. In fact, his commission was 90 percent of the $150.00 motor club fee. Since Ms. O'Donohue did not have the entire $277.00 at the time of the transaction, because she had been relying on the lower quote for the insurance given to her over the telephone, she only paid $200.00 down payment at the time of the transaction, with a balance owed of $79.00, as reflected on her receipt. Her mother had reservations concerning the purchase of this insurance from the Respondent and told her daughter that she thought that because the insurance she purchased involved financing the premium, she could save money by going to GEICO insurance company. Therefore, the following day, she went to GEICO and secured new coverage at a lower premium rate and then called the Respondent's Agency to confirm that she could cancel her policy, with no penalty. They replied that she could cancel her policy just so long as she brought them proof that she had secured new insurance, since the law presently does not allow them to cancel the coverage until they are shown proof that the insured has obtained other coverage. Ms. O'Donohue, therefore, went to GEICO, purchased new insurance for her vehicle, and then brought proof to the Agency and requested that the Respondent cancel her insurance. This request was made on June 19, 1993. At that time, she requested a refund of the $200.00 down payment which she had made two days before and was assured that she would receive it within 60 days. In fact, she never received a refund and continued to receive past-due and delinquency notices from ETI, the premium finance company. She notified the Agency of this problem on numerous occasions to no satisfaction. Due to ETI's belief that her coverage was still in force and that they were still owed the premium payments, her credit was endangered. This was all directly related to the Respondent's failure to properly and timely process her cancellation request. On June 20, 1993, Terre Thompson of Pensacola, Florida, also went to the Respondent's Agency to purchase insurance for her 1993 GEO Metro automobile. The Respondent met her at the automobile dealership, where she purchased the vehicle. He had already prepared documents for the purchase of insurance to be underwritten by Security and General, along with a premium financing agreement and other documents. He had marked X's where Ms. Thompson was supposed to sign all contracts and disclosure forms. The Respondent filled out all of the information on the documents and merely told her, in effect, to "sign here, here and here". The transaction was conducted very quickly and with little or no explanation of coverage or benefits. Although Ms. Thompson needed full coverage for her vehicle, because it was financed, she did not want towing and rental benefits. The Respondent, however, gave her to understand that it was required in the coverage package she purchased. Accordingly, on June 20, 1993, she made a down payment of $100.00, with an additional amount due of $51.00 by June 27, 1993. Although the receipt was dated June 20, 1993, Ms. Thompson did not actually receive it until June 27, 1993, when she returned to the Respondent's Agency to pay the $51.00 owed. The receipt falsely depicts that the "total premium" was $834.00. Actually, the cost of the insurance was only $754.00. The additional $80.00 was for a motor club product, although the $80.00 was buried in and represented to be part of the total insurance premium for the transaction. The down payment of $231.00 quoted, likewise, was deceptive because only $151.00 of that was actually applied to insurance coverage, which was all of the coverage that Ms. Thompson had requested. The Respondent collected the $100.00 on June 20, 1993 and entered into a financing arrangement with the customer, Ms. Thompson, for the $51.00 to be paid on June 27, 1993. In fact, this was only enough to cover the down payment for the actual insurance coverage because the Respondent forgot to include the fee for the motor club coverage on the "front end" or in the down payment, as was his normal practice. This is why Ms. Thompson became upset when she learned she owed an additional $71.00 when she returned on June 27, 1993, when she thought she had only owed approximately $60.00. In any event, the receipt finally received by her reflected payments of $100.00, $60.00, and $71.00, which totals $231.00. This amount includes the $151.00 down payment for actual insurance coverage and the remaining $80.00 for motor club membership, which Ms. Thompson did not know she had purchased at the time and did not desire to purchase. Indeed, Ms. Thompson, and the other customers referenced in the Amended Administrative Complaint, who testified, signed the disclosure in the standard package of documents presented to them by the Respondent. It indicated that they acknowledged that the motor club benefit or the "nations safe driver" medical benefit was an optional coverage, not required by law and that, after explanation of it, they had elected to purchase it. In fact, they signed those documents, albeit imprudently, without actual knowledge that they were obtaining that coverage and without explanation that it was not legally required. No disclosure was made to them that the purported "total premium" amount actually included payment for the motor club benefit, which was not actually part of the insurance premium and which, at least in the case of those customers with AAA memberships, was totally unnecessary. Timothy Malden of Jacksonville, Florida, purchased a vehicle on or about August 31, 1993. He needed full coverage because the vehicle was financed, that is, he needed PIP, PD, comprehensive coverage, and collision coverage. He went to the Respondent's Agency on that date to purchase coverage on his 1986 Pontiac Fiero. During the course of the transaction, handled by the Respondent, Mr. Malden was asked if he had motor club coverage or benefits and he told the Respondent that he had AAA membership and showed the Respondent his AAA card. The Respondent and Mr. Malden entered into a transaction to sell Mr. Malden insurance. The transaction involved approximately seven different documents and took a total of about 15 to 20 minutes. Mr. Malden merely signed the documents. The Respondent told him that he just needed his signature on the documents and the Respondent did not explain the coverage. The procedure seemed rushed or hurried to Mr. Malden. Although Mr. Malden signed the disclosure (inadvertently, because apparently he did not read it) stating, in effect, that the motor club coverage was optional, not required and that after having it explained to him, he had decided to purchase it, he, in fact, did not know at the time that he had purchased the motor club coverage and it had not been explained to him. Moreover, as stated above, he had explained to the Respondent that he did not need it because he already had AAA motor club coverage. Nevertheless, the Respondent, knowing that Mr. Malden had AAA, still sold him the motor club coverage with the Atlantic Travel Association for an additional fee of $150.00. Mr. Malden made no informed consent to purchase that benefit. The PIP and PD coverage was placed with Security at a premium of $395.00. The comprehensive and collision coverage was placed with Continental American Insurance Company (Continental) for a premium of $525.00. The total premium for "insurance" was $920.00, with a $230.00 down payment. The premiums were financed by ETI. Mr. Malden, however, was required to pay a "down payment" of $380.00. The receipt issued to him reveals a "total premium" of $1,070.00. The actual cost of insurance was only $920.00. The additional $150.00 was for motor club coverage, and the charge for that was hidden in what was represented on the receipt as "total premium". Likewise, the down payment of $380.00 was deceptive in nature because only $230.00 of it was actually a down payment for insurance coverage. The remainder of it, as explained above with regard to the other customers, was actually full payment for the unnecessary, unwanted motor club benefit. On March 8, 1994, Karen Sigler of Pensacola, Florida, went to the Agency to purchase automobile insurance for a 1990 Plymough Voyager. She stated to the Respondent that she only wanted the minimum automobile insurance required by Florida law. She told the Respondent that she needed new insurance because her previous insurance company had gone out of business. The Respondent handled the transaction for her and she specified that she wanted only that coverage which the State of Florida required. Ms. Sigler had been originally quoted a $324.00 premium amount. When she actually entered into the insurance transaction, however, an additional $65.00 was added on to that amount because the Respondent sold her an additional "Nations Safe Drivers, Inc." enrollment. This is not an insurance product but, rather, is a form of supplemental medical benefit. Ms. Sigler had not requested this and did not understand the nature of it, believing that it was unnecessary because she was already qualified as a "safe driver" based upon her driver's record. She was given no explanation as to what that enrollment form, and benefit was nor that there was an extra charge for it. Even as reflected on the enrollment form, Ms. Sigler merely thought that the Nations Safe Drivers membership was a part of the required insurance purchase package. This is not true, in fact, since only PIP and PD coverages are required by law. Ms. Sigler was thus sold a product she did not request, which was not required by law and which was not explained to her. The entire transaction took approximately one- half hour. The receipt issued to Ms. Sigler shows that the "total premium" was $324.00. In fact, however, the actual cost of insurance was a $259.00 premium. The additional $65.00 of the $324.00 amount was the fee for the Nations Safe Drivers membership, which was hidden in what was represented as a "total premium". Moreover, the down payment she paid of $98.00 was deceptive because only a part of it was applied to automobile insurance coverage and the remainder was the fee for the Nations Safe Drivers membership. The Respondent's business practice in this regard resultingly misled Ms. Sigler into believing that Nations Safe Drivers, Inc. was required by State law and that it was an insurance product, which it was not. Here, again, in spite of the disclosure she signed and the documents that she was hurriedly urged to execute by the Respondent, the clear and convincing evidence shows that she did not actually, knowingly consent to purchase the extra non-insurance product referenced above. The Respondent's business practice, the way he represented the nature of her insurance coverage and in the manner in which he conducted the transaction did not involve an actual explanation of the non-insurance product he misled her into purchasing. Thus, there was no informed consent to purchase that product. Rosa Johnson went to the Respondent's Agency on March 21, 1994. She wanted to purchase the "minimum" automobile insurance required by State law for her 1971 Plymouth. She dealt with the Respondent and another gentleman who worked under the Respondent's direction and control. She told them she only wanted the basic, legally-required coverage. PIP and PD coverage was issued through Security. Ms. Johnson was also sold the Nations Safe Drivers product. This product was not actually explained to her, in spite of the fact that she may have signed a written disclosure that it had been, including the fact that it was an optional benefit and not part of the legally-required insurance coverage. She did not request this product nor was it explained to her so that its meaning and coverage was understood by her. Upon conclusion of the transaction, Ms. Johnson had purchased PIP and PD coverage from Security for a premium of $248.00, plus an unrequested enrollment in Nations Safe Drivers, Inc. for a fee of $35.00. All of this amount was financed by ETI. Here, again, as with the other customers, the receipt furnished to Ms. Johnson indicates a total "premium" of $283.00. The actual cost of insurance or true premium was $248.00. The additional $35.00 of the $283.00 amount was the cost of the Nations Safe Drivers, Inc. product, which was hidden in what was represented to her on the receipt as the "total premium". Likewise, the purported down payment of $85.00 was deceptive in the manner in which it was presented and required of Ms. Johnson, because only part of it was applied to insurance coverage, the remainder being the $35.00 fee for the added non- insurance product referenced above. The Respondent's authority to bind coverage with Security Insurance Company had been terminated on March 14, 1994 due to excessive late submissions of insurance applications to the carrier. The problem was later alleviated and his authority to bind insurance for Security was restored by that company. However, during the period of time his binding authority had been terminated, the Respondent kept taking applications and binding policies. This caused the insureds to believe that they had coverage when, in fact, they did not, because the carrier, Security, through its managing agent, U.S. Underwriters, did not, for a period of time, allow the Respondent to obligate that company for coverage. Accordingly, in due course, Ms. Johnson was notified by U.S. Underwriters, on behalf of Security, that she had no coverage. She became upset and filed a complaint with the Insurance Commissioner because she had understood that as soon as the transaction with the Respondent was completed, her coverage had been bound and timely filed and processed with the underwriting insurance carrier. Charles Meadows of Gulf Breeze, Florida, required insurance on his 1986 Chrysler LeBaron. He wanted to purchase the minimum amount of legally- required coverage and went to the Respondent's Agency for that purpose on May 17, 1994. He needed the minimum amount of legally-required insurance so that he could obtain a tag for his automobile from the county tag office. He was in a hurry because he had taken leave from work and needed to get his insurance transaction consummated, as well as to obtain his automobile tag before 4:30 p.m. He conferred with a lady who was employed by the Respondent at the Agency who handled his transaction. She completed all of the documents, spread them across the counter, and marked and told him the places to sign to effect the binder of the coverage that day. The transaction occurred quickly, lasting only approximately 15 minutes. He received no effective explanation of any of the coverages. Rather, he relied on her representations that he was getting what he had asked for, that is, the minimum legally-required Florida insurance coverage. The coverage he obtained was placed with Security as to the PIP and PD coverage. The premium for that coverage was $321.00. The total premium quoted to him was $421.00, which included a $100.00 membership in the Gulf Coast Travel Association, a motor or travel club. Mr. Meadows was not aware that he had this extra amount of coverage or membership until he conferred with Mr. Spencer of the Department at a later time, who informed him of such. If he had known that the agreements he was signing during the hurried, unexplained transaction with the Respondent's employee included the motor club coverage, he would have declined it because his wife already had coverage with AAA for towing and related benefits. Mr. Meadows made a down payment of $190.00 on May 17, 1994. The receipt issued to him revealed a "total premium" of $421.00. The actual cost of insurance was $321.00, with the additional $100.00 being for the motor club, although the total amount was represented as "total premium". Additionally, the down payment of $190.00, which he paid, was deceptive in that only $90.00 was actually applied to insurance coverage and the remaining $100.00 was the total up-front fee for the motor club coverage, although it was represented to Mr. Meadows as being the $190.00 down payment on the insurance premium itself. Later, Mr. Meadows learned that he had the motor club benefits which he did not want or need and so he demanded a refund of his money from the Respondent. He spoke to the Respondent personally about this but did not receive immediate satisfaction. There was a substantial delay in receiving his refund after the Respondent told him that he would receive one. The Respondent justified this by stating to him that it had to come from "another office" and that it would not come from his Agency itself. Dorothy Weber of Pensacola, Florida, required automobile insurance for her 1986 Chevrolet Blazer and a 1978 Chevrolet Caprice. She went to the Respondent's Agency on June 15, 1994 and indicated to one of his employees that she was interested in the cheapest coverage available. She wanted nothing extra, except that required by law. She received very little explanation of the coverages and benefits, other than in response to questions she asked. The transaction of insurance was conducted in a similar manner to those referenced earlier in these Findings of Fact. The PIP and PD coverage was placed with the Florida Joint Underwriting Association. It carried a premium of $787.00. Despite Ms. Weber's request for only the minimum, legally-required insurance, she was also sold a motor club (Gulf Coast Travel Association) unbeknownst to her at the time at an additional fee of $150.00. In spite of the fact that Ms. Weber signed the disclosure concerning the optional nature of the motor club and related fee and so forth, as described in further detail in the above Findings of Fact, in actual fact, it was not explained to her. The fact that the fee for it was separate from the insurance premium for the insurance coverage was not explained to her and she effectively was not informed that she was purchasing that product. During the transaction, she was informed that if her vehicle broke down, she could obtain wrecker service. Nothing was mentioned to her, however, about Gulf Coast Travel Association or that the $150.00 was an extra fee. She merely had all of the forms presented to her in rapid fashion and was asked to sign them. The explanation simply was that the "total policy" cost $937.00, and there was a down payment of $318.00 supposedly for premium only. The entire transaction took approximately one-half hour. Later, Ms. Weber discovered that she had been misinformed and complained to the Department and the Respondent's Agency, specifically indicating that she had not been informed that the $150.00 for the motor club was separate nor that she had purchased motor club coverage. The receipt furnished to Ms. Weber concerning the amounts she paid to secure her coverage is misleading. It indicates a total premium of $937.00, when the actual cost of the insurance was $787.00. The additional $150.00 was for the undisclosed motor club coverage hidden in what was represented on the receipt as a "total premium". The down payment of $308.00 was deceptive or misleading in that only $158.00 of it was actually a down payment on insurance coverage. Barry and Deeana Walker of Pensacola, Florida, needed automobile insurance for a 1990 Plymouth Laser. They wanted the cheapest coverage legally required and available to them. The Respondent dealt with the Walkers and was their agent of record. Mr. Walker remembers nothing being mentioned about a motor club, but Mrs. Walker remembers that the agent mentioned "Nations Safe Drivers, Inc."; however, she specifically informed him that she did not want it. In fact, Nations Safe Drivers is a non-insurance membership plan which includes a medical supplement coverage benefit. It is not a motor club. The PIP and PD and bodily injury coverages were placed with Underwriters Guaranty Insurance Company (UGIC) for a premium of $641.00. The premium was originally financed by Underwriters Financial. Also executed on May 4, 1994 was another premium finance agreement with ETI. It provided for an insurance premium of $441.00 for a policy issued by UGIC and the financing of a Nations Safe Drivers enrollment for $100.00. This document was not signed by the Walkers. On May 4, 1994, the Walkers paid $150.00 by check and were required to pay an additional $143.00 by May 20, 1994. The $143.00 was paid; and subsequently, the Walkers received a notice of additional premium of $190.00 due and they paid an additional down payment of $76.00. The Walkers made payments on the ETI premium financing agreement up until October, 1994, even though it had never actually been signed. They made down payments of $369.00 and monthly payments totaling $333.63, for a total of $702.63. Sometime in October of 1994, they received a letter from the Department of Highway Safety and Motor Vehicles, Division of Drivers Licenses in Tallahassee, Florida, stating that Mr. Walker's driver's license was suspended because his insurance had been cancelled, effective July 16, 1994. The Walkers had received a notice from the insurance company of cancellation (because apparently that company would not insure co-owned vehicles) and had gone to the Respondent to see what to do about that problem. The Respondent told them to fill out a form which he gave them and that everything would be taken care of. They filled out the form at his behest so as to indicate that Mr. Walker's father, the co-owner, would not be a driver of the vehicle. Accepting the Respondent's representation, they believed that that would take care of the cancellation of coverage problem, and they continued to make their monthly payments on their premium financing agreement until October of 1994 based upon what the Respondent told them. In fact, the coverage was cancelled effective July 16, 1994; and soon thereafter, Mr. Walker's driver's license was suspended due to failure to carry valid insurance on his automobile. If the Respondent had acted with promptness in correcting the underwriting error, upon being apprised of the situation by the Walkers, the lapse in coverage and suspension of the driver's license need not have occurred and the payments on the original coverage need not have been made until October 11, 1994, when new coverage was finally obtained by the Respondent at the Walkers' behest. Although, on November 11, 1994, ETI credited the Respondent and the Walkers for $169.41 of unearned premium, the damage had already been done by that point in terms of the lapse of coverage and the suspension of Mr. Walker's driver's license, with attendant financial risk and inconvenience to Mr. Walker. Moreover, the receipt issued to the Walkers in the original insurance transaction indicates a total premium of $741.00. As in the other situations, the actual insurance cost was $641.00, and the additional $100.00 was for the Nations Safe Drivers non-insurance medical payment product, wrapped up in what was represented as "total premium". The down payment of $293.00 was similarly misleading because only $193.00 of that applied to actual insurance coverage. The Respondent received his fee of $100.00 for the added-on product mentioned above entirely out of the up-front, down payment amount. Thus, the Respondent received the entire fee for the Nations Safe Drivers product within a purported "premium receipt" amount described to the customer as an insurance down payment. On January 26, 1995, Ms. Betty Cook of Walnut Hill, Florida, needed to purchase insurance for her 1994 Thunderbird and her 1993 Chevrolet C1500 pickup truck. She went to the Respondent's Agency to accomplish her insurance renewal transaction. A lady by the name of Sonya handled the transaction for her that day. The Cooks' insurance was placed with UGIC for a premium of $1,123.00. The premium was financed through Underwriters Financial of Florida, Inc. The transaction was initiated on January 26, 1995 but ultimately concluded on January 28, 1995, after Mrs. Cook had received and signed all of the paperwork. Mrs. Cook made a premium down payment of $339.00 and mailed her first payment when it was due. She thereupon was sent a notice stating that no policy existed. She called the Agency to see what was wrong and someone at the Agency indicated to her that it would taken care of immediately. A lienholder on the pickup truck sent a notice to her that they had not been notified that the insurance had been renewed. Mrs. Cook became very concerned and the Respondent offered to refund her premium; however, three months had evidently elapsed since she first renewed her insurance or thought she had. Thus, Mrs. Cook, without knowing at the time, was driving her automobiles without insurance coverage for approximately a three-month period. Mrs. Cook contacted the Department and got her insurance reinstated and placed with another servicing agent. The policy was issued by UGIC, without requiring the payment of a premium down payment by the Respondent. The Respondent had still not forwarded the $339.00 down payment originally received from Mrs. Cook as of April 19, 1995. This lapse or failure to forward the insurance down payment obviously resulted in the coverage never being bound with the company. Therefore, the company had not issued and had no record of coverage for Mrs. Cook's vehicles. The agent for this company was required to account for and promptly forward insurance premium down payments, such as this, to the insurer he represented and on behalf of the insured he also represented in the transaction. Christopher Camus of Pensacola, Florida, went to the Respondent's Agency to purchase insurance for a 1983 Oldsmobile Cutlass. He went to the agency on August 25, 1993, and the Respondent placed his coverage with Security. The total premium was quoted as $274.00. Mr. Camus signed an application on that date and paid the full amount to the Respondent. The Respondent failed to forward the application and premium to the insurance carrier, and the policy of insurance was not actually issued until November 30, 1993. Mr. Camus was thus left without coverage for approximately two months. He made repeated telephone calls to the Agency to no avail. Agency personnel maintained that the problem was occurring with the insurance company itself and was not the fault of the Respondent's Agency. The Respondent deposited Mr. Camus' check in August of 1993, but the application for his insurance was never received by Security until December 23, 1993. The Respondent thus did not promptly and appropriately handle the insurance premium funds in question and forward the application so as to promptly bind the coverage for the customer. Indeed, it is noteworthy that this company revoked the Respondent's authority to bind coverage for customers on March 14, 1994 due to an excessive amount of such late submissions of insurance applications and premiums. In 1993, of the 1,299 applications taken by the Respondent and his Agency, only 58 percent reached the insurer's office within the required time period. In summary, the evidence presented in this case indicates that the Respondent engaged in the general business practice of selling ancillary products to insureds without truly obtaining "informed consent" of those insureds. The pattern running through the testimony of the above-described witnesses, none of whom were shown to have any motive to falsify their testimony, was that, although they signed the various disclosures on the insurance underwriting or binding documents, indicating that they understood that the ancillary products were optional, were not insurance, and were not required to be purchased. They did not receive any significant explanation of the optional nature of those products concerning the advisability of their purchase (particularly as to those customers who had AAA coverage), nor the extra cost attributable to those products. Each insured witness consistently maintained that he or she had not read the numerous documents presented to them. Certainly, they should have, in an abundance of caution, read the documents and attempted to understand them. Their failure to do so, however, does not absolve the Respondent of his duty to specifically explain to each customer the exact nature of the coverage being offered, whether or not it was legally optional, particularly, as to those customers who stated definitely that they only wanted the bare minimum coverage required by law, and the fact that it was optional at an extra cost, and was not included in the basic insurance coverage being sold. It is clear from these witnesses' testimony that none had requested motor club benefits or any other ancillary product and yet, in effect, these were automatically added to the policies involved in this proceeding in each transaction and were clearly not explained to the customers. The general business practice of the Respondent involved in the sale of the motor club and ancillary products belies the existence of "informed consent" on the part of the customers. Mr. James Self is a former agent for the Respondent, who testified regarding the Respondent's business practices. He was trained by the Respondent and worked for the Agency from August, 1993 to June, 1994. The Agency had a policy of giving telephone quotes for insurance premiums, without including the amount represented by motor club or other add-on optional products. The Agency would then add such products to the insurance package when the customer came in to purchase insurance. According to Mr. Self, any sort of explanation or disclosure of these add-on products to the customer would be merely to the effect that the insurance "quote" included towing or rental. There was little else explained about it. In many of the situations with witnesses in this case, the insureds only requested the minimum coverage and, therefore, no optional or ancillary products were justified without full explanation to the customer. Mr. Self described how the Respondent specifically trained him in "clubbing", which meant adding motor club coverage to the insurance coverage requested by customers. The Respondent's own testimony shows the economic necessity for the pervasive sale of such motor club benefits to as many customers as possible, when he stated: It's really the only way to exist . . . Q: So you're telling me that the only way for you to exist is to sell motor clubs? A: Financially, it's -- really for most businesses in this market it's the only way to be able to survive. Transcript, page 175. The Respondent further acknowledged the pecuniary interest he had in selling travel or motor clubs since he described his average commission as being 90 percent of the fee for writing that coverage, which is higher than the commission on insurance products. Moreover, he recovered all of that money from the down payment the customers were making, supposedly for their insurance coverages. Therefore, his incentive was multiplied because he was getting the high commission percentage rate, plus he was getting all of it in cash on the initial portion of the transaction, the down payment. Mr. Self also explained that salesmen would never tell the insured exactly how much the motor club cost. On occasions, when Mr. Self would try to partially disclose the motor club, the Respondent would tell him to "hurry up", that he was taking too much time in effecting the transaction. It was Mr. Self's experience that approximately 99 percent of the customers coming into the Agency for insurance left having purchased motor club benefits. Eventually, Mr. Self was terminated because he did not sell enough motor club products. The overall gravamen of his testimony shows that he attempted to make some disclosure or explanation of the motor club and other ancillary products but was discouraged from doing so by the Respondent, with the implication being that this ultimately resulted in his termination from employment with the Respondent's Agency. The evidence thus establishes that, for the most part, the insureds in question did not really know what "minimum coverage" or "full coverage" really consisted of when they came in to purchase such insurance. In making this lay description of the coverage they desired, they then relied on the agent, the Respondent or his employees, to sell them coverage which comported with their wishes and needs, since they were not schooled in the insurance business and related laws themselves. Since they were not so schooled, they almost totally relied on any explanation given to them by the Respondent or his agents or employees. In spite of the signing of the disclosure documents referenced in the above Findings of Fact, the reality of the situation, as a continuing, consistent pattern throughout the testimony adduced from these insureds, and from Mr. Self, reveals that no regular business practice of obtaining an informed consent from customers, such as these, was carried out by the Respondent.
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 RECOMMENDED that the Respondent, Daniel Lee Alison, be found guilty of the violations set forth and discussed above, that his license as an insurance agent in the State of Florida be revoked for a period of two years and that he be ordered to pay a fine in the amount of $9,000.00, within a time to be set by the Department. DONE AND ENTERED this 2nd day of October, 1996, in Tallahassee, Florida. P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of October, 1996. APPENDIX TO RECOMMENDED ORDER CASE NO. 95-2690 Petitioner's Proposed Findings of Fact 1-35. Accepted, except to the extent that they do not comport with the Administrative Law Judge's findings of fact on these subject matters to which they are subordinate. Rejected, as being subordinate to the Administrative Law Judge's findings of fact on this subject matter. Rejected, as being subordinate to the Administrative Law Judge's findings of fact on this subject matter and because of the editorial comment. Accepted, in part, but subordinate to the Administrative Law Judge's findings of fact on this subject matter and rejected, as to the editorial comment. 39-40. Rejected, as being subordinate to the Administrative Law Judge's findings of fact on this subject matter. 41-44. Accepted, in part, but rejected, as subordinate to the Administrative Law Judge's findings of fact on this subject matter. Respondent's Proposed Findings of Fact 1-13. Accepted, but not as materially dispositive of the issues presented for resolution. Accepted, in part, but rejected, as subordinate and somewhat contrary to the Administrative Law Judge's findings of fact on this subject matter. Accepted, but not itself materially dispositive to the issues presented for resolution in this case. 16-17. Accepted. 18. Rejected, as subordinate to the Administrative Law Judge's findings of fact on this subject matter. 19-25. Accepted, but not themselves materially dispositive to the resolution of the issues presented to the Administrative Law Judge. 26. Accepted. 27-29. Rejected, as subordinate to the Administrative Law Judge's findings of fact on this subject matter. 30-32. Accepted. 33-36. Accepted, in part, but rejected, as to the overall material import and as subordinate to the Administrative Law Judge's findings of fact on this subject matter. 37-43. Rejected, as subordinate to the Administrative Law Judge's findings of fact on this subject matter and to some extent, as immaterial. 44. Accepted, as technically correct, but witness Self, a former employee and a witness who purchased insurance, did establish in his testimony that purchase of an ancillary product was a pre-condition to premium financing by Agency policy. 45-47. Accepted, in part, but otherwise rejected, as subordinate to the Administrative Law Judge's findings of fact on this subject matter. 48. Accepted. 49-52. Accepted, but not in and of themselves dispositive of the material issues presented concerning this witness' transaction(s). Rejected, as immaterial. COPIES FURNISHED: Michael K. McCormick, Esquire Department of Insurance Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0300 Charles J. Grimsley, Esquire Charles J. Grimsley & Associates, P.A. 1880 Brickell Avenue Miami, Florida 33129 Bill Nelson Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner, Acting General Counsel Department of Insurance and Treasurer The Capitol, PL-11 Tallahassee, Florida 32399-0300
The Issue The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint, and, if so, what disciplinary action should be imposed.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the extensive factual stipulations set forth in the parties' Statement of Facts Admitted3: Respondent works as the manager of a Cash Register Insurance ("Cash Register") office in New Port Richey. Cash Register is owned by Direct General Insurance Agency, Inc. ("Direct General"). Respondent sells automobile insurance to individual customers. During the relevant period, Respondent also sold four ancillary products: a vehicle protection plan, an accident medical protection plan, a travel protection plan, and a term life insurance policy.4 Respondent is paid a salary, and receives no commission on the sale of automobile insurance. Respondent does receive a ten percent commission on the sale of ancillary products. Respondent received 34 percent of her overall income from the sale of ancillary products during the relevant time period. Respondent deals with at least 50 customers per day, six days per week. She sells between seven and ten automobile insurance policies per day, on average. Given her customer volume, Respondent cannot remember each customer to whom she has sold insurance. Respondent frankly testified that she had no specific recollection of selling the policies to the individuals named in the Statement of Facts Admitted. However, Respondent also testified that she sells insurance according to a script, and that in light of this unvarying practice she could state with confidence whether she had or had not engaged in the specific sales techniques alleged by the Department and its witnesses. Respondent testified at length as to her sales routine. When talking to potential customers on the telephone, Respondent must follow the script provided by Direct General. Respondent testified that agents are not required to follow the script when customers come in to the office, but that she generally adheres to the format provided by her employer. All of the sales at issue in this proceeding were generated via in-person sales at Respondent's Cash Register office. Respondent first obtains basic information from the customer: name, address, date of birth, Social Security number, whether there are persons over age 14 in the household and whether those persons will drive the insured vehicle. She then asks the type of vehicle and the type of coverage the customer wants to purchase. Respondent enters the information into her computer, which generates a price quote. If the customer wants only basic personal injury protection ("PIP") and property damage coverage, Respondent informs the customer that the quoted price includes PIP with an optional deductible of $1,000, a coverage limit of $10,000, and property damage coverage of $10,000. The price quote includes a down payment and monthly payments. The quoted amounts vary depending on whether the customer chooses to make 10 or 12 payments. During her presentation, Respondent mentions that the price quoted for the monthly payments includes the ancillary products. Once the customer has agreed to the price quote, Respondent makes a computer inquiry to obtain the customer's driving record. While waiting on these records, Respondent goes over a "pen sale" document with the customer. The pen sale document is a handwritten sheet that Respondent draws up in the presence of the customer to explain the policies. Respondent's pen sale sheets for Mr. Gatlin, Ms. Johnson, Mr. Hansen, and Mr. Dossantos (hereinafter referred to collectively as the "Complaining Customers") were admitted into evidence. At the top of the page, under the heading "Mandatory," Respondent outlined the PIP and property damage coverages, with the customer's options regarding deductibles. Lower on the page, under the heading "Optional," Respondent outlined the details of the ancillary coverages included in the price quote. Respondent testified that she sits with the customer and uses the pen sale sheet to explain the mandatory coverages in detail. She explains that Florida law requires that she offer bodily injury liability coverage, but that the customer has the option to reject it, and she indicates the customer's decision on the pen sale sheet. She explains the ancillary policies, and indicates on the pen sale sheet which of these policies the customer accepts and which ones the customer rejects. The customer is asked to sign the bottom of the sale sheet. When shown the pen sale sheet for each Complaining Customer, Respondent was able to state with confidence which ancillary policies each of them has accepted or rejected. None of the Complaining Customers denied having been shown the pen sale sheet, though none of them appeared to grasp its significance. Each of the Complaining Customers conceded that the signature at the bottom of his or her respective pen sale sheet was genuine. After Respondent obtains the customer's signature on the pen sale sheet, and has received the customer's driving records, she prints out the policy paperwork and goes over it with the customers. The earliest of the Complaining Customers was James Gatlin (Counts I, II, and III of the Administrative Complaint), who purchased insurance from Respondent on October 7, 2005.5 Mr. Gatlin's signed pen sale sheet indicated that he accepted the accident medical protection plan, the travel protection plan, and the term life policy. It also indicated that he rejected optional uninsured motorist, medical payment, accidental death, and comprehensive and collision policies offered by Respondent. Mr. Gatlin's policy paperwork was admitted into evidence. After explaining the automobile policy, Respondent explained the ancillary products that Mr. Gatlin had initially accepted on the pen sale sheet.6 Respondent first showed Mr. Gatlin a spreadsheet titled, "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)." Under the subheading "Auto Policy Coverages," the spreadsheet set forth the amount and type of coverage for each of the two cars for which Mr. Gatlin was buying insurance, as well as a premium estimate for each vehicle. Under the subheading "Optional Policies," the spreadsheet set forth the following: "American Bankers Travel Protection Plan," "Lloyds Accident Medical Protection Plan," and "Life Insurance." A monthly premium amount was set forth next to each of the three optional coverages. The subheading "Optional Policies," the list of the optional policies, the premium amounts for each optional policy, and the total estimated cost of all products are separately circled by hand on the spreadsheet. Respondent testified that it is her practice to circle these items as she explains them to the customer. Mr. Gatlin's initials appear above the list of optional policies. Below the grids of the spreadsheet is the following text (emphasis added): I, the undersigned, acknowledge that: The above premiums are estimates and that the actual premium charged to me will be determined by the Insurance Company issuing the policy. Further, I am responsible for the amount of the premium charged at the time the policy is issued. I agree that if my down payment or full payment check is returned by the bank for any reason, coverage will be null and void from the date of inception. I acknowledge that I have been advised of and understand the above coverage(s), and cost breakdowns, including non-insurance products, if any, and further [sic] that I have received a complete copy of this product. This document is only an explanation of insurance coverage and other products, if applicable—it is not a contract. The policy, if issued, will contain the terms and conditions of coverage. The level of coverage illustrated above is based on preliminary information which I have supplied. My eligibility for coverage is subject to the acceptance of my application in accordance with the Insurance Company's underwriting requirements. Customer Signature Date The signature line was signed by "James D. Gatlin" and dated October 7, 2005. At the hearing, Mr. Gatlin conceded the authenticity of his initials and signature on the spreadsheet. Respondent next explained the details of the accident medical protection plan to Mr. Gatlin. She explained the coverage options (individual, husband and wife, or family), and the annual premium for each. On the application, Respondent circled the "Individual Coverage Only" option. Mr. Gatlin placed his initials in the space provided to indicate his choice of coverage, and signed the application on the line provided. A second page, titled "Accident Medical Protection Plan," detailed the coverage provided and the method of filing a claim under the policy. The following text is provided at the bottom of the page (emphasis added): THE ACCIDENT MEDICAL PLAN IS A LIMITED POLICY. READ IT CAREFULLY. I, the undersigned, understand and acknowledge that: The Accident Medical Plan does not provide Liability Coverage insurance for bodily injury or property damage, nor does it meet any financial responsibility law. I am electing to purchase an optional coverage that is not required by the State of Florida. My agent has provided me with an outline of coverage and a copy of this acknowledgement. If I decide to select another option, or cancel this policy, I must notify the company or my agent in writing. I agree that if my down payment or full payment check is returned by the bank for any reason, coverage will be null and void from the date of inception. Insured's Signature Date I hereby REJECT this valuable coverage: Insured's Signature Date Mr. Gatlin signed and dated the form on the first line provided, indicating his acceptance of the accident medical protection plan. Respondent next explained the travel protection plan. The two forms associated with this plan set forth the coverages provided, the limits of those coverages, and the premium associated with the plan. The first form was titled, "American Bankers Insurance Company Optional Travel Protection Plan." After listing the coverages and their limits, the form read as follows: Purchasing the Optional Travel Protection Plan is not a condition of purchasing your automobile liability policy. I hereby acknowledge I am purchasing an Optional Travel Protection Plan, and that I have received a copy of this acknowledgement. Insured Signature Date I HEREBY REJECT THIS VALUABLE COVERAGE: Insured Signature Date Mr. Gatlin signed and dated the first line of the form, indicating his acceptance of the policy. The second form, titled "Travel Protection Plan—Florida Declarations," listed the effective dates of the policy, the premium, the automobile covered, repeated the coverages and their limitations, and gave notice to the insured of his 30-day right to examine the policy and return it for a full refund provided no loss has occurred. Mr. Gatlin signed and dated the "Applicant's Signature" line. Respondent next went over the documents relating to the term life policy that Mr. Gatlin accepted on the pen sale sheet. The policy named Carol Burinskas, with whom Mr. Gatlin lived, as the beneficiary on the $10,000 policy, and stated an annual premium of $276.00. Mr. Gatlin initialed his "no" answers to six standard insurability questions dealing with recent medical history and exposure to HIV. Mr. Gatlin signed and dated his acceptance of the policy on the signature line provided. After completing her explanation of the various policies and obtaining Mr. Gatlin's acceptance, Respondent next explained the premium finance agreement. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the four policies accepted by Mr. Gatlin, totaling $1,363.00, plus $4.55 in documentary stamp tax, less a down payment of $151.00, for a total amount financed of $1,216.55. The page disclosed the finance charge ($139.99) and the annual percentage rate of the loan (24.37%). Mr. Gatlin opted to make 10 monthly payments of $135.65, and initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate his acceptance of the loan terms. Finally, Respondent showed Mr. Gatlin a document titled "Insurance Premium Financing Disclosure Form," which redundantly set forth in a simplified form exactly what Mr. Gatlin was purchasing and a breakdown of what each element of his purchase contributed to the total cost of the loan. The itemization read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $578 Property Damage Liability (PD) $314 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)7 $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $0 Medical Payments $0 Uninsured Motorist $0 Comprehensive $0 Collision $0 Accidental Death $0 Towing $0 Travel Protection Plan $60 Rental $0 Hospital Indemnity $110 Life Insurance $266 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $1,363 Document Stamp Tax, if applicable $4.55 Less Down Payment applied $151.00 AMOUNT FINANCED (loaned to you) $1,216.55 I, James Gatlin, have read the above and understand the coverages I am buying and how much they cost. _ Signature of Named Insured Date Mr. Gatlin signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. As noted above, Carol Burinskas lives with Mr. Gatlin and was named as the beneficiary in the term life policy the Respondent sold to Mr. Gatlin. Ms. Burinskas testified that she went into Respondent's Cash Register office on Mr. Gatlin's behalf a day or two before he completed the transaction. Ms. Burinskas had obtained quotes from several agencies in the course of doing the legwork for Mr. Gatlin's insurance purchase. Ms. Burinskas testified that she told Respondent that she was shopping for Mr. Gatlin, and was seeking quotes on the bare minimum insurance, "just what we needed to get a tag for the car." Based on information provided by Ms. Burinskas, Respondent provided a price quote, which Ms. Bruinskas showed to Mr. Gatlin at home that evening. Mr. Gatlin looked over the quote and pronounced it acceptable. He told Ms. Burinskas that he would stop in at the Cash Register office the next day and complete the paperwork for the policy. Mr. Gatlin testified that he believed the Cash Register quote offered the most reasonable price he had seen, but he was unaware that Respondent's quote included the ancillary policies discussed above. When he went into Respondent's office, he reiterated to her that he wanted only "the bare minimum insurance." Mr. Gatlin owned his vehicles outright and saw no need to carry extra coverage on them. Mr. Gatlin testified that Respondent asked him if he wanted life insurance, and he declined. Mr. Gatlin already had a $250,000 life insurance policy through his employer, Pasco County, for which Mr. Gatlin's sister is the beneficiary. He testified that if he had known he was purchasing a life insurance policy from Respondent, he would have made his sister the beneficiary. As noted above, Ms. Burinskas is the stated beneficiary of the term life policy Respondent sold to Mr. Gatlin. Mr. Gatlin testified that Respondent "was speaking very quickly and putting the papers in front of me just as fast as she was talking, so I was busy signing and dating." By the end of the process, "there was a stack of papers, rather thick" in front of Mr. Gatlin. Mr. Gatlin never heard Respondent say that some of the items he was purchasing were optional. In fact, he could not remember much at all about the content of Respondent's presentation. He remembered that Respondent talked while he initialed and signed in the places where she pointed. On cross-examination, Mr. Gatlin conceded that Respondent may have explained the ancillary policies, but so fast that he could not understand. He even conceded that he had allowed Respondent to talk him into buying the policies, though he later amended his answer to assert that he had been "bamboozled." Mr. Gatlin made no effort to slow down Respondent's presentation, and he had no questions about anything Respondent was saying. Mr. Gatlin stated that his only concern was how much he was paying, and that he was satisfied with the price quoted by Respondent at the time he bought the policies. Mr. Gatlin stated that it should have been obvious to Respondent that he was not reading the documents he was signing. He trusted Respondent to treat him the right way, and not sell him products without his knowledge. Respondent denied that she ever rushes anyone through the sales process, or has ever sold a customer a policy the customer did not agree to purchase. Ms. Burinskas discovered the ancillary policies only after reading a newspaper article about Direct General and the practice of sliding. She asked Mr. Gatlin if he had purchased any policies mentioned in the article, and he said that he had not, "as far as he knew." Ms. Burinskas pulled out the insurance paperwork, and in short order was able to ascertain that Mr. Gatlin had purchased the ancillary products described above. The next Complaining Customer was Gabriella Jungling, now known by her married name of Johnson (Counts IV and V). On August 17, 2006, Ms. Jungling and her future husband, Jeremy Johnson, were at a Division of Highway Safety and Motor Vehicles ("DHSMV") office. Mr. Johnson was attempting to have his suspended license reinstated, but was informed that he must obtain the SR-22 form before his license could be issued. A DHSMV employee gave Ms. Jungling the names of several insurance companies that could immediately write a policy. Ms. Jungling noted that Respondent's Cash Register office was near the DHSMV office. Ms. Jungling and Mr. Johnson drove to Respondent's office. Ms. Jungling testified that she handled all the transactions that occurred at Respondent's office. She and Mr. Johnson intended to obtain "full coverage," whatever they needed to fulfill the SR-22 requirement and satisfy the bank that financed Mr. Johnson's truck, which was the only vehicle on the resulting policy. Ms. Jungling told Respondent that she wanted full coverage for a financed truck. Respondent made her standard sales presentation to Ms. Jungling. She gathered the basic information described in Finding of Fact 7 above, then gave Ms. Jungling a price quote that included the amount of the down payment and monthly payment amounts. Included in the price quote were the optional vehicle protection plan and a term life insurance policy. Respondent explained to Ms. Jungling that the optional vehicle protection plan included $125 per day for hospitalization resulting from an accident and $25 per day for a rental car if the insured car is in an accident or is stolen. Ms. Jungling agreed to the price quote. Respondent next went over a pen sale sheet with Ms. Jungling. As noted in the general pen sale findings above, Ms. Jungling did not deny having seen the pen sale sheet and admitted that she signed it. The pen sale document was different from that shown to Mr. Gatlin because Direct General had ceased offering the travel protection plan and instead offered the vehicle protection plan. See footnote 4, supra. The signed pen sale sheet indicated that Ms. Jungling accepted the vehicle protection plan and the term life insurance policy. It also indicated that she rejected optional uninsured motorist, medical payment, accidental death, comprehensive and collision policies. Respondent next printed the policy paperwork and reviewed it with Ms. Jungling. Ms. Jungling signed the vehicle protection plan application on the signature line, directly beneath the following language: "The purchase of this plan is optional and is not required with your auto insurance policy. I hereby request that the above coverages be placed in effect on the date and for the term indicated." The application indicated that Ms. Jungling was opting for a "family plan"8 with a term of one year. Ms. Jungling also signed a separate page titled, "Optional Vehicle Protection Plan Summary & Acknowledgement." This form listed the coverages and limitations provided under the vehicle protection plan. Below this listing, in bold type, was the statement, "Please Read Your Policy Carefully For A Full Explanation of Benefits." Beneath the bold type was the following language: Purchasing the Vehicle Protection Plan is not a condition of purchasing your automobile policy. I hereby acknowledge that my agent has fully explained to me and I understand: the coverage provided under the Vehicle Protection Plan; that the Vehicle Protection Plan is an optional insurance product that is separate from my automobile insurance policy; that purchasing this optional Vehicle Protection Plan is not a condition of purchasing my automobile insurance policy; I have made an informed decision to purchase the Vehicle Protection Plan, and I have received a copy of my signed acknowledgement. Insured Signature Date I HEREBY REJECT THIS VALUABLE COVERAGE: Insured Signature Date Ms. Jungling signed the first signature line, indicating her acceptance of the policy. Respondent went over the documents relating to the term life policy that Ms. Jungling accepted on the pen sale sheet. The policy named Mr. Johnson as the beneficiary on the $10,000 policy, and stated an annual premium of $108.00. Ms. Jungling initialed her "no" answers to the standard insurability questions, and signed and dated her acceptance of the policy on the signature line provided. Respondent showed Ms. Jungling an "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)" spreadsheet identical in form to that shown Mr. Gatlin. The "Optional Policies" subheading listed the optional policies, their premium amounts, and the total estimated cost of all products. These optional items were individually circled by Respondent and initialed by Ms. Jungling. The spreadsheet contained language identical to that set forth in Finding of Fact 18 above. Ms. Jungling signed and dated the sheet in the spaces provided. Respondent presented the premium finance agreement to Ms. Jungling in the same fashion described in Finding of Fact 26 above. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the three policies (auto, life, and vehicle protection) accepted by Ms. Jungling, totaling $3,052.00, plus $9.80 in documentary stamp tax, less a down payment of $295.00, for a total amount financed of $2,766.80. The page disclosed the finance charge ($308.35) and the annual percentage rate of the loan (23.51%). Ms. Jungling opted to make 12 monthly payments of $256.26, and initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate her acceptance of the loan terms. Finally, Respondent showed Ms. Jungling the Insurance Premium Financing Disclosure Form. The itemization for Ms. Jungling's policies read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $491 Property Damage Liability (PD) $405 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)[9] $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $782 Medical Payments $0 Uninsured Motorist $0 Comprehensive $131 Collision $830 Accidental Death $20 Towing $0 Rental $0 Life Insurance $98 Accident Medical Plan $0 Vehicle Protection Insurance $260 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $3,052 Document Stamp Tax, if applicable $9.80 Less Down Payment applied $295.00 AMOUNT FINANCED (loaned to you) $2,766.80 I, Gabriella N. Jungling, have read the above and understand the coverages I am buying and how much they cost. Signature of Named Insured Date Ms. Jungling signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. Ms. Jungling testified that she already has a life insurance policy through her employer, Wells Fargo, and that she told Respondent that she was not interested in buying more. She admitted that the initials and signatures on the life insurance policy were hers, but had no recollection of Respondent's explanation of the policy. Ms. Jungling believed that she would have recalled an explanation had one been given by Respondent, and stated that she would have rejected the policy had Respondent told her it would cost $108.00 over and above the amount she was paying for auto insurance. However, Ms. Jungling conceded that Respondent did not rush her through the signing process. Ms. Jungling was in a hurry to purchase insurance and get back to her job. She admitted that Respondent presented the paperwork page by page, and that nothing prevented her from reading the paperwork. Ms. Jungling had no problem with the price quoted by Respondent. The life insurance paperwork plainly states, in bold lettering above Ms. Jungling's signature, that the annual premium for the policy is $108.00. The price of the policy is also stated on the Explanation of Policies, Coverages and Cost Breakdown page and on the Insurance Premium Financing Disclosure Form, both of which were signed by Ms. Jungling. Ms. Jungling also did not recall the explanation given to her by Respondent of the vehicle protection plan paperwork. She testified that she would have rejected the policy if Respondent had told her that it was separate and apart from the automobile insurance required by law. However, as noted above, the Optional Vehicle Protection Plan Summary & Acknowledgement page clearly stated that the vehicle protection plan was not a condition of purchasing an automobile policy and was an optional product separate from the automobile insurance policy. Ms. Jungling acknowledged that she signed this page. Ms. Jungling testified that she did not really read her insurance paperwork until she received a call from a Department investigator, who asked if she had knowingly purchased life insurance and the vehicle protection plan. Ms. Jungling gave a statement to a Department investigator in February 2007. On March 16, 2007, she went to Respondent's office and signed the paperwork to cancel the term life and vehicle protection policies, for which she received a pro-rated refund. The next Complaining Customer was Bruce Hansen (Counts VI and VII). On August 19, 2006, Mr. Hansen entered Respondent's Cash Register office to purchase insurance. Mr. Hansen testified that he has done business with Cash Register for years, but this was the first time he had done business with Respondent's office. Mr. Hansen stated that he had never bought anything other than basic auto coverage from Cash Register, and had no intention of buying anything else when he walked into Respondent's office. Mr. Hansen was purchasing new insurance, not renewing an existing policy. In fact, his driver's license had been suspended for lack of insurance coverage. Mr. Hansen testified that he told Respondent he wanted the most basic insurance that would get his license reinstated. He owned his car outright, and therefore was unconcerned about satisfying a financing entity. Respondent made her standard presentation to Mr. Hansen. She gathered the basic information described in Finding of Fact 7 above, then gave Mr. Hansen a price quote that included the amount of the down payment and monthly payment amounts. Included in the price quote were the optional vehicle protection plan and a term life insurance policy. Mr. Hansen agreed to the price quote. Respondent next went over a pen sale sheet with Mr. Hansen. As noted in the general pen sale findings above, Mr. Hansen did not deny having seen the pen sale sheet and admitted that he signed it. The pen sale document was identical to that shown to Ms. Jungling. Respondent used the pen sale sheet to explain to Mr. Hansen that the optional vehicle protection plan included a $1,000 medical expense that could be used toward his PIP deductible, hospital coverage of $125 per day, and rental car reimbursement of $25 per day if the insured car is in an accident or is stolen. Respondent also used the pen sale sheet to explain the term life insurance offered in the price quote. The signed pen sale sheet indicated that Mr. Hansen accepted the vehicle protection plan and the term life insurance policy. It also indicated that he rejected optional uninsured motorist, medical payment, accidental death, comprehensive and collision policies. Respondent next printed the policy paperwork and reviewed it with Mr. Hansen. The paperwork for the vehicle protection plan application was identical to that described in Findings of Fact 45 and 46 relating to Ms. Jungling. Mr. Hansen opted for the "individual plan" with a term of one year. He signed on the signature line of the application page, and signed the "Optional Vehicle Protection Plan Summary & Acknowledgement" page indicating his acceptance of this optional policy. Respondent went over the documents relating to the term life policy. The policy named Mr. Hansen's mother, who lived with Mr. Hansen, as the beneficiary on the $10,000 policy, and stated an annual premium of $108.00. Mr. Hansen initialed "no" answers to the standard insurability questions, and signed and dated his acceptance of the policy on the signature line provided. Respondent showed Mr. Hansen an "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)" spreadsheet identical in form to that shown Mr. Gatlin and Ms. Jungling. The "Optional Policies" subheading listed the optional policies, their premium amounts, and the total estimated cost of all products. These optional items were individually circled by Respondent and initialed by Mr. Hansen. The spreadsheet contained language identical to that set forth in Finding of Fact 18 above. Mr. Hansen signed and dated the sheet in the spaces provided. Respondent presented the premium finance agreement to Mr. Hansen in the same fashion described in Finding of Fact 26 above. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the three policies (auto, life, and vehicle protection) accepted by Mr. Hansen, totaling $833.00, plus $2.80 in documentary stamp tax, less a down payment of $92.00, for a total amount financed of $743.80. The page disclosed the finance charge ($93.36) and the annual percentage rate of the loan (26.56%). Mr. Hansen opted to make 10 monthly payments of $83.72, initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate his acceptance of the loan terms. Finally, Respondent showed Mr. Hansen the Insurance Premium Financing Disclosure Form. The itemization for Mr. Hansen's policies read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $311 Property Damage Liability (PD) $219 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)[10] $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $0 Medical Payments $0 Uninsured Motorist $0 Comprehensive $0 Collision $0 Accidental Death $0 Towing $0 Rental $0 Life Insurance $98 Accident Medical Plan $0 Vehicle Protection Insurance $170 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $833 Document Stamp Tax, if applicable $2.80 Less Down Payment applied $92.00 AMOUNT FINANCED (loaned to you) $743.80 I, Bruce K. Hansen, have read the above and understand the coverages I am buying and how much they cost. Signature of Named Insured Date Mr. Hansen signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. Mr. Hansen testified that he left Respondent's office believing he had bought only basic automobile insurance. He did not recall Respondent's explanations of the optional policies, and conceded that he was in a hurry to complete the transaction and spent a total of a half-hour in Respondent's office that day. Mr. Hansen testified that "I was flipping page after page, just signing my name to get out of there . . . I was trusting the person I was working with." Mr. Hansen testified that he did not recall Respondent explaining that the vehicle protection plan was a separate optional policy that would cost him an extra $170. He did recall Respondent asking the insurability questions related to the life insurance policy, but he thought they were just "procedure." Mr. Hansen conceded that Respondent might have explained every page of the paperwork to him, but that he was not paying attention. Mr. Hansen left Respondent's office with a copy of all the paperwork on his policies. He never looked at the paperwork until he was contacted by a Department investigator in February 2007. Mr. Hansen gave a statement to the Department investigator and agreed to testify in order to "stop stuff like this from happening," as well as try to obtain a full refund for the vehicle protection and term life policies. On March 3, 2007, he went to Respondent's office and signed the paperwork to cancel the term life and vehicle protection policies, for which he received a pro-rated refund. The final Complaining Customer was Sidney Dossantos (Counts VIII and IX). On July 20, 2006, Mr. Dossantos entered Respondent's Cash Register office to purchase insurance. Mr. Dossantos was renewing his policy with Direct General, though this was the first time he had done business with Respondent's office. In August 2005, Mr. Dossantos had purchased auto insurance plus an optional accident medical protection plan, a travel protection plan, and a term life insurance policy. Mr. Dossantos testified that he told Petitioner that he wished to purchase only basic automobile insurance, and that he rejected the optional term life and vehicle protection policies when Petitioner offered them. Respondent testified that her initial procedure is different with a renewing customer. She looks up the customer on her computer to verify the existing policies and determine if any money is owed. She verifies the customer's name, address and phone number. Respondent testified that the address is important because the customer's zip code is partially determinative of the rates offered on auto insurance. Respondent stated that the computer also lists the optional policies that are also due for renewal, and that it is her practice to go over these and inquire whether the customer wants to renew them. Mr. Dossantos' case was complicated by the fact that Direct General no longer offered the travel protection plan as a separate product. In these cases, Respondent would explain the vehicle protection plan, which was the current equivalent of the accident medical protection and travel protection plans that Mr. Dossantos purchased in 2005. See footnote 4, supra. Respondent testified that, after the customer verifies the information on file and states which policies he wishes to renew, she goes over a pen sale sheet with the customer. As noted in the general pen sale findings above, Mr. Dossantos did not deny having seen the pen sale sheet and admitted that he signed it. The pen sale document was identical to those shown to Ms. Jungling and Mr. Hansen. The signed pen sale sheet indicated that Mr. Dossantos accepted the vehicle protection plan and the term life insurance policy. It also indicated that he rejected optional uninsured motorist, medical payment, accidental death, comprehensive and collision policies. Respondent next printed the policy paperwork and reviewed it with Mr. Dossantos. The paperwork for the vehicle protection plan application was identical to that described in Findings of Fact 45 and 46 relating to Ms. Jungling. Mr. Dossantos opted for the "individual plan" with a term of one year. He signed on the signature line of the application page, and signed the "Optional Vehicle Protection Plan Summary & Acknowledgement" page indicating his acceptance of this optional policy. Respondent went over the documents relating to the term life policy. The policy named Mr. Dossantos' parents as the beneficiaries on the $10,000 policy, and stated an annual premium of $108.00. Mr. Dossantos was not asked the standard insurability questions, because this was a renewal of an existing policy. Mr. Dossantos signed and dated his acceptance of the policy on the signature line provided. Respondent showed Mr. Dossantos an "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)" spreadsheet identical in form to that shown to Mr. Gatlin, Ms. Jungling, and Mr. Hansen. The "Optional Policies" subheading listed the optional policies, their premium amounts, and the total estimated cost of all products. These optional items were individually circled by Respondent and initialed by Mr. Dossantos. The spreadsheet contained language identical to that set forth in Finding of Fact 18 above. Mr. Dossantos signed and dated the sheet in the spaces provided. Respondent presented the premium finance agreement to Mr. Dossantos in the same fashion described in Finding of Fact 26 above. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the three policies (auto, life, and vehicle protection) accepted by Mr. Dossantos, totaling $913.00, plus $3.15 in documentary stamp tax, less a down payment of $80.00, for a total amount financed of $836.15. The page disclosed the finance charge ($102.47) and the annual percentage rate of the loan (25.93%). Mr. Dossantos opted to make 10 monthly payments of $93.86, initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate his acceptance of the loan terms. Finally, Respondent showed Mr. Dossantos the Insurance Premium Financing Disclosure Form. The itemization for Mr. Dossantos' policies read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $368 Property Damage Liability (PD) $242 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)[11] $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $0 Medical Payments $0 Uninsured Motorist $0 Comprehensive $0 Collision $0 Accidental Death $0 Towing $0 Rental $0 Life Insurance $98 Accident Medical Plan $0 Vehicle Protection Insurance $170 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $913 Document Stamp Tax, if applicable $3.15 Less Down Payment applied $80.00 AMOUNT FINANCED (loaned to you) $836.15 I, Sidney Dossantos, have read the above and understand the coverages I am buying and how much they cost. Signature of Named Insured Date Mr. Dossantos signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. As noted above, Mr. Dossantos testified that he told Respondent he only wanted basic automobile insurance. Mr. Dossantos, a 25-year-old college student at the time he purchased insurance from Respondent, acknowledged having purchased the optional policies the previous year, when he was still living with his parents. However, in July 2006 he was living in an apartment with his girlfriend and money was tighter. He received life insurance through his employer, Publix Supermarkets, and did not want more. Mr. Dossantos conceded that his policy paperwork clearly stated that the vehicle protection plan was optional, but that he did not read it during the sale. Mr. Dossantos simply signed whatever papers Respondent placed in front of him. Mr. Dossantos testified that when he walked out of Respondent's office on July 20, 2006, he believed that he had bought basic auto insurance and nothing else. Like Ms. Jungling and Mr. Hansen, he learned otherwise only after being contacted by the Department's investigator in February 2007. Unlike Ms. Jungling and Mr. Hansen, Mr. Dossantos did not later cancel the optional policies. All four of the Complaining Customers credibly testified that the Department made no promises that they would obtain full refunds of the premiums paid on the optional policies in exchange for their written statements or their testimony in this proceeding. On or about August 9, 2006, Respondent changed her principal business street address from 6318 U.S. Highway 19 North, New Port Richey, Florida, to 5116 U.S. Highway 19 North, New Port Richey, Florida, but did not notify the Department of this change in principal business street address until on or about March 3, 2007.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner issue a final order finding Respondent guilty of committing the violation alleged in Count X of the Administrative Complaint, fining her $250.00 for such violation, and dismissing the remaining counts of the Administrative Complaint. DONE AND ENTERED this 8th day of February, 2008, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of February, 2008.
