Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Ralph Todd Schlosser, was licensed and eligible for licensure as a life and health insurance agent, health insurance agent and general lines agent - property, casualty, surety and miscellaneous lines by petitioner, Department of Insurance and Treasurer (Department). When the events herein occurred, respondent was licensed as a life and health insurance agent for American Sun Life Insurance Company (ASLIC) and Pioneer Life Insurance Company of Illinois (PLICI). On March 2, 1987, respondent met with one Mildred H. Camp, then a resident of Clearwater, Florida, for the purpose of selling her an ASLIC long term care health insurance policy. After discussing the matter with respondent, Camp agreed to purchase a policy. She completed an application and gave respondent a check in the amount of $511.88. The check was deposited into respondent's business account at First Florida Bank in Clearwater the same day. Camp did not testify at hearing. Therefore, the only first hand version of what was discussed by Schlosser and Camp and the nature of any further communications between the two was offered by respondent. That version was not contradicted, and it is accepted as being credible. Within a week after executing the application, Camp contacted respondent by telephone concerning the policy. Pursuant to that telephone conversation, respondent did not process the application or remit the check to the company, but attempted instead to arrange another meeting with Camp to answer further questions about the policy. Although he telephoned Camp "every single Monday", respondent was unable to arrange an appointment with her until April 30, 1987. On April 30 Camp and respondent met for the purpose of him explaining in greater detail the benefits and coverage under the policy. Because two months had gone by since the application was first executed, it was necessary for respondent to update Camp's health information. Accordingly, Camp executed a new application the same date and Schlosser forwarded the check and application to ASLIC shortly thereafter. On May 5, 1987 ASLIC received the April 30 application and premium check, less respondent's commission. The application was eventually denied by ASLIC on the ground of "excessive insurance" and a refund check was forwarded by ASLIC to Camp on June 11, 1987. There is no record of any complaint made by Camp against Schlosser in ASLIC's files nor did ASLIC contact respondent regarding this matter. When Schlosser began representing ASLIC, he executed a general agent contract which contained the terms and conditions pertaining to his appointment as a general agent for the company. As is pertinent here, the contract provided that Schlosser had a responsibility "to promptly remit such funds" received by him to the company. According to a former second vice-president of ASLIC, Joyce Lynch, who worked for ASLIC when the Camp transaction occurred, the company expected in the regular course of business to have checks and applications remitted by agents to the home office within fifteen days after the application was written, and that the above provision in the general agent contract was interpreted in this manner. Lynch added that she knew of no reason why an agent would hold an application and check for sixty days before submitting it to the company, particularly since once an application is completed and signed, it is the "property" of the company and not the agent. She concluded that if a customer desired more information about a policy after an application had been signed, which is not unusual, the agent still had a responsibility to promptly forward the application and check to the company within fifteen days. At that point, the company, and not the agent, would cancel a policy and refund the premium if so requested by a customer. Therefore, Schlosser breached the general agent contract by failing to promptly remit such funds. On July 28, 1987 Schlosser visited one Maxine Brucker, an elderly resident of Sarasota, for the purpose of selling her a PLICI health insurance policy. He had telephoned Brucker the same date to set up an appointment with her. After discussing the matter with respondent, Brucker agreed to purchase a policy, executed an application and gave respondent a check for $680.00. The check was deposited into respondent's bank account the following day. After Schlosser departed, Brucker noted that Scholosser did not leave a business card and she immediately became "worried" about her money and the possibility of not getting the insurance she had paid for. She telephoned the Department the same day to check on his "reputation" and to verify that Schlosser was an insurance agent. On August 4, 1987 she wrote a letter to the PLICI home office in Rockford, Illinois to ascertain if her check and application had been received but she did not receive a reply. She wrote a second letter to PLICI on August 14, 1987 but again received no reply to her inquiry. After telephoning the home office a few days later, Brucker contacted the Department a second time in late August and requested that it assist her in obtaining a refund of her money. At no time, however, did Brucker attempt to contact respondent. In early September, Brucker received by mail a money order from respondent which represented a full refund of moneys previously paid. Brucker acknowledged that she was happy with her policy when it was initially purchased. She also acknowledged that she had never contacted respondent personally to request a refund of her money. It was only after she received no reply from the home office that she made a request for a refund. According to the agency agreement executed by Schlosser when he became a general agent for PLICI, respondent had the responsibility to "immediately remit to (PLICI) all premiums (collected)". Testimony by Ronald F. Bonner, a vice- president of PLICI, established that in the regular course of business an agent was required to forward the check and application to PLICI no more than twenty-five days after receiving them from the customer. Any application held more than twenty-five days was considered "stale", was presumably invalid and had to be returned to the customer. Even so, Bonner did not contradict respondent's assertion noted in finding of fact 11 that his failure to remit the application and check was based on instructions from the home office, and under those circumstances, was not improper. Respondent readily admitted he did not remit the Brucker application and check because of instructions from the home office received after Brucker had telephoned the home office. After unsucessfully attempting to speak with Brucker by telephone daily for about two weeks, Schlosser voluntarily sent Brucker a money order via mail in early September. A review of respondent's business bank account for the months of March and August 1987 revealed that after the checks from Camp and Brucker had been deposited, the balances in the account thereafter dropped below $511.88 and $680 during those respective months. This raises an inference that those moneys were used for other undisclosed purposes during that time. According to respondent, he submitted applications and premiums checks to the home office approximately two or three times per month. It was also his practice to wait ten days or so after receiving a check from a customer to allow it sufficient time to clear. Schlosser denied having converted insurance moneys to his own personal use. There was no evidence that Schlosser lacked reasonably adequate knowledge and technical competence to engage in insurance transactions authorized by his licenses, a matter requiring conventional factual proof. Similarly, there was no evidence to establish that Schlosser intended to willfully violate the law or that his conduct demonstrated a lack of fitness or trustworthiness to engage in the insurance business.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint filed against respondent be dismissed with prejudice. DONE AND ORDERED this 18th day of January, 1990, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of January, 1990.
Findings Of Fact The Petitioner, at all times pertinent hereto was an employee of the Department of Health and Rehabilitative Services. The Respondent is an agency of the State of Florida charged with administering the group self-insurance health insurance program and other insurance programs such as life insurance and is the agency charged with accepting or rejecting applications for coverage under those programs, such as the application at issue. On January 11, 1980 the Petitioner commenced employment with the State of Florida, Department of Health and Rehabilitative Services as a District Intake Counselor in District eleven of the Department. Shortly after commencing employment the Petitioner attended an orientation meeting during which all insurance benefits and other benefits available for state employees were explained. Ernestine Thurston, the HRS employee who conducted the orientation session on January 11, 1980 informed all employees present at that orientation meeting, including the Petitioner, of the available benefits and the means by which they were to avail themselves by proper application, of those benefits, including the fact that the Petitioner had thirty days to enroll in the State Group Health Insurance Program without the necessity of obtaining medical approval for insurability. A second orientation meeting was held during which insurance benefits were explained for a second time to the employees whose names were depicted on the recruitment log, which names include the Petitioner 's. The Petitioner was present at both orientation sessions. At the first orientation session on January 11, 1980 the Petitioner received an HRS Employee Handbook which included the following language concerning insurance benefits: "Employees may enroll within 30 days of date of employment without evidence of insurability. "Application at a later date requires proof of insurability. Consult your supervisor, personnel manager, or district/central personnel office for additional information." The Petitioner admitted that she signed a receipt on January 11, 1980 acknowledging receipt of a complete copy of that Employee Handbook and which receipt included the following language: "I understand that it is my responsibility to review the pamphlet in detail and request any clarification needed from my supervisor or personnel office." Petitioner conceded that she did not read the pamphlet or handbook, but instead put it in her desk drawer at her office. On January 14, 1980, knowing of the need to apply for insurance benefits within 30 or 31 days of her employment during the open enrollment period, the Petitioner applied for various insurance -overages and submitted the pertinent enrollment forms through her District 11 personnel office. She applied for and received State Supplemental Health Insurance coverage through the Gulf Life Insurance Company (then called the "20/20" plan). This supplemental health insurance coverage was designed to complement the overall state group health insurance program or plan. The Petitioner at that time was covered under the overall state group health insurance plan (The Plan) through her husband's family coverage since he was an employee covered under that plan at the time. The Petitioner also timely applied for and received coverage under the state life insurance program as well. The Petitioner did not submit a new enrollee form requesting to participate in the State of Florida Employee's Group Health Self Insurance Plan within 31 calendar days of January 11, 1980. The Hearing Officer has considered the Petitioner's testimony as well as that of Ms. Thurston and the other evidence surrounding the circumstances of her initial employment, the explanation of insurance coverage benefits, including the time limit for the open enrollment without medical approval which the Petitioner did not avail herself of insofar as the group health self-insurance plan is concerned. The Petitioner did not apply for the overall group health self-insurance plan because she was already covered under that plan through her husband's coverage and not because, as Petitioner maintains, that it was never explained that she had 30, or actually 31, calendar days from January 11, 1980 to apply for that plan. Indeed it was explained to her as Ms. Thurston established and Respondent admits receiving the handbook further explaining the time limit to apply for that coverage without medical approval. She signed a receipt acknowledging her responsibility to read that pamphlet or manual and ask for clarification, if needed, concerning coverage benefits and she admitted that she did not read it. Thus it is found that at the time of her initial employment all pertinent insurance benefits and entitlements were explained to the Petitioner both verbally and in writing and she failed to avail herself of the automatic coverage provision referenced above in a timely way, for the reason stated above. In any event, on July 28, 1980 the Petitioner elected to submit a new enrollee form which was submitted with a medical statement form requesting participation in the State Plan. After correspondence with the State Plan administrator requesting additional medical information, on October 22, 1980 the Department of Administration, by letter, advised the Petitioner that she had not been approved by the plan administrator and she was denied coverage for medical reasons. Accordingly, on October 24, 1980 the Petitioner enrolled in the South Florida Group Health, Inc. Plan which is a health maintenance organization plan (HMO) and she was allowed enrollment in that plan without regard to her current medical condition. The Petitioner remained enrolled in the HMO and requested and was granted leave of absence without pay from her employment position commencing May 29, 1981. Her employing agency advised her that it was her individual responsibility to forward premium payments for the HMO health insurance premiums as well as the state life insurance coverage herself. In other words, she was to pay by cash or her own personal check for this coverage during the time she was not being paid by the state, that is, the premiums for that coverage were not being payroll deducted because she was temporarily off the payroll. Her employment with the State did not lapse during this period commencing May 29, 1981, rather she remained employed, but was on leave without- pay status. The Petitioner knew of her responsibility to pay the premiums for the HMO coverage and the state life insurance coverage itself during the period she was on leave of absence without pay as evidenced by the check she and her husband submitted in June 1981 to pay the premiums on her state life insurance coverage. The Petitioner and her husband moved from Miami to Fort Myers during early June 1981 and the Petitioner remained on leave of absence without pay. When her husband changed employment and moved to the Fort Myers area in June 1981 the Petitioner was a covered dependent under the health insurance coverage available to her husband through his new employment. I n August 1981 the South Florida Group Health, Inc., the HMO in the Miami are of which Petitioner was a member, terminated the Petitioner's health insurance coverage effective August 1, 1981 due to the Petitioner's failure to pay the premiums for that coverage. Shortly thereafter the Petitioner interviewed with personnel officials of HRS in District 8 in Fort Myers and obtained an employment position as a district intake counselor for District 8. She became an active payroll employee of HRS in District 8 by transfer in August 1981. Before the effective date of her transfer the Petitioner was interviewed by Judy Graham, an HRS employee assigned to process her transfer from her former active employment in District 11 in Miami. The Petitioner failed to advise Judy Graham at the time of the interview of her HMO coverage, merely inquiring of Ms. Graham concerning the details of continuation of her state life insurance coverage and concerning her credit union membership. Thereafter, more than 31 calendar days after the effective date of her transfer, (August 24, 1981), indeed, in excess of two years later, the Petitioner completed a new enrollee form again and applied for the state employee's group self- insurance plan benefits. The Department of Administration denied the Petitioner participation upon the determination that she was not medically approvable for insurability by the Plan's claims administrator, Blue Cross and Blue Shield of Florida, Inc. In any event, the Petitioner's continuous employment with the state and with HRS had never lapsed since she was initially hired January 11, 1980. She was merely on inactive/leave-without-pay status as a state employee from May 29, 1981 until August 24, 1981, as that relates to any right to a second 31-day open enrollment period.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties it is, therefore, RECOMMENDED that a final order be entered by the Department of Administration denying the Petitioner's requested enrollment in the State Group Health Insurance Plan without medical approval. DONE AND ORDERED this 31st day of December, 1985, in Tallahassee, Florida. P. MICHAEL RUFF 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 31st day of December, 1985. APPENDIX The following specific rulings are made on the Proposed Findings of Facts submitted by the parties: Petitioner's Proposed Findings of Fact Accepted. Accepted, but subordinate and not material to disposition of the issues at bar. Accepted, but subordinate and not material to disposition of the issues at bar. Accepted, but subordinate and not material to disposition of the material issues at bar. Rejected as not being in accordance with the competent, substantial, credible testimony and evidence adduced. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected as not being in accordance with the competent, substantial, credible testimony and evidence adduced. Accepted, but this Proposed Finding of Fact in itself is not dispositive of the material issues of fact and law resolved herein. Accepted. Rejected as not in accordance with the competent, substantial, credible evidence and testimony adduced. Accepted. Accepted. Respondent's Proposed Findings of Facts The Respondent failed to number its Proposed Findings of. Fact, therefore its Proposed-Findings of Fact will be specifically ruled upon in the order the various paragraphs containing its Proposed Findings of Fact were presented. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. COPIES FURNISHED: Gilda Lambert Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Curtright C. Truitt, Esq. Post Office Box 2706 Ft. Myers, Florida 33902 Richard L. Kopel, Esq. Department of Administration 435 Carlton Building Tallahassee, Florida 32301
The Issue Whether Respondent acted as an agent for a membership organization, International Water Safety Foundation (IWSF), and its insurance underwriter, North American Marine (NAM), that had been ordered to cease and desist transacting insurance related business in this state; if so, whether (and what) discipline should be imposed on Respondent's license to transact business as an insurance agent.
Findings Of Fact The Parties Petitioner is the state agency charged with the licensing and regulation of insurance agents in Florida and is responsible for administrating the disciplinary provisions of chapter 626, pursuant to section 20.121(2)(g) and (h), Florida Statutes. At all times material to this case, Respondent was a licensed general lines insurance agent in the state of Florida. Respondent also is a director and officer of the Marta De La Paz Agency, Inc. (MDLPA), which she has co-owned with her daughter, Jenny Mondaca Toledo, since 2000. Respondent was a "captive agent" of Allstate Insurance Company (Allstate) for the period of 2000 to 2010. During this time, pursuant to an agreement with Allstate, Respondent could only sell Allstate insurance products. If Allstate did not carry a particular insurance product line, Respondent was allowed to sell the products of other carriers to her clients if the other carrier was approved by Allstate. The Events Giving Rise to the Recommended Revocation Insurance agents licensed by the State of Florida are only permitted to sell insurance provided by entities which have a "certificate of authority" and which are authorized to sell in Florida. Agents are fiduciaries of the consumers who use their services. Sales of insurance through unauthorized entities place the consumer at risk because unauthorized entities do not participate in the Florida Insurance Guarantee Fund (FIGA), a fund maintained by the State to protect consumers from losses should an authorized insurance carrier become insolvent or unable to pay claims. IWSF is a membership organization which offers various benefits and services to its members, including watercraft insurance through a master policy with NAM. NAM, an unlicensed and unauthorized insurer, through IWSF, solicited Florida consumers to purchase insurance from NAM. On October 15, 2003, the Office of Insurance Regulation issued a cease and desist order (Order) against IWSF and NAM from conducting insurance related activities in Florida, including but not limited to, "transacting any new or renewal insurance business in this state, and from collecting any premiums from Florida insureds." The unlicensed, unauthorized, and, therefore, illegal transaction of insurance by IWSF and NAM was deemed to present an immediate danger to public health, safety, or welfare of Florida residents. On or about April 14, 2009, Carlos Guzman (Guzman), on behalf of himself and his brother-in-law, Jorge Saez (Saez), sought to purchase watercraft insurance for a boat which they co-own. Guzman went to MDLPA and met with employee, Odayls Chiullan (Chiullan). Chiullan, who has held a 2-20 Florida general lines insurance license for approximately 15 years, worked at MDLPA as an agent for approximately three months during the spring of 2009. Respondent, as the principal agent of MDLPA, had the responsibility to supervise Chiullan during the period she worked for MDLPA. In April 2009, Allstate was not providing watercraft insurance for customers in Florida. To determine which carrier, if any, could provide the insurance sought by Guzman and Saez, Chiullan referred to a list maintained in the office of MDLPA. Chiullan found the name of IWSF on the list and assumed that it was approved by Allstate as a licensed entity with which MDLPA could do business. Chiullan was unaware of the 2003 Order against IWSF and NAM. Chiullan contacted IWSF and secured an insurance price quote for Guzman and Saez. Chiullan arranged for Guzman and Saez to become members of IWSF, thereby enabling their boat to become insured under the master policy of IWSF with NAM for the initial period of May 6, 2009, through May 6, 2010, which was subsequently renewed for an additional year. Chiullan contacted Standard Premium Finance Company (Standard) on behalf of Saez and Guzman to assist them in financing the premium payments for their boat insurance. Respondent was on a cruise and not in contact with Chiullan during the period when Chiullan assisted Saez and Guzman with securing boat insurance or the financing for their premium payments. Although correspondence to and from IWSF and MDLPA was on MDLPA letterhead and fax transmittal sheets, Respondent had no contact with Saez, Guzman, IWSF, or NAM regarding this May 2009 transaction. Respondent became aware of the purchase of insurance from IWSF by Saez and Guzman when she was asked by Chiullan to sign the premium finance agreement with Standard as the owner of MDLPA. That was the full extent of Respondent's connection to this particular transaction which is at issue. Saez and Guzman renewed their policy through MDLPA with IWSF and NAM for the period of May 6, 2010, through May 6, 2011. Saez and Guzman made no claims against the policy or policies in effect from May 6, 2009, through May 6, 2011. Prior to receipt of the Administrative Complaint, Respondent was unaware of the Order against IWSF and NAM. Respondent was also unaware that neither entity was authorized to transact business in Florida. Respondent received no notice of the Order from Petitioner, Allstate, IWSF, NAM, or Standard. While serving as a captive agent for Allstate, Respondent did not receive alerts from Petitioner regarding unauthorized insurers. Although Respondent was aware of her obligations under Florida to stay apprised of which entities were authorized to issue insurance in Florida, she did so by maintaining a list in MDLPA, provided by Allstate, which she presumed was vetted and approved as state-authorized insurers. In fact, Respondent sold her son, Osmany Mondaca, insurance for his boat through IWSF and NAM for the period of November 26, 2007, through November 26, 2008, and this policy was renewed for two additional years. Respondent also sold boat insurance through IWSF and NAM for the coverage period of June 24, 2010, through June 24, 2011, to her boyfriend for a boat which they co-own. Prior to purchasing insurance through IWSF for her boyfriend and son, Respondent checked with Petitioner regarding the status of IWSF and was told there was no problem. As recently as December 2013, Respondent checked again with Petitioner and was advised there was no problem writing insurance through IWSF and NAM. Respondent credibly testified that, had she known about the Order, she certainly would not have sold policies through IWSF and NAM for a boat she co-owns with her boyfriend or for her son's boat. Although Petitioner offered evidence that it regularly provides updates on its website and in newsletters alerting agents to unauthorized insurers attempting to do business in Florida, including but not limited to alerts about IWSF and NAM, no evidence was provided that these communications were sent to, received, or reviewed by Respondent or Chiullan. Further, Respondent's testimony, that this information was not available by telephone from Petitioner, was not contradicted.1/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Insurance Agents and Agency Services, enter a final order which dismisses the Administrative Complaint filed against Respondent. DONE AND ENTERED this 28th day of March, 2014, in Tallahassee, Leon County, Florida. S MARY LI CREASY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of March, 2014.
The Issue Whether Respondent committed the violations alleged in the Amended Administrative Complaint issued against him, as modified at hearing, and, if so, what penalty 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 has been employed by Direct General Insurance Agency, Inc. (Direct General) for the past five years. He is the manager of a Direct General office located at 7558 West Commercial Boulevard, Lauderhill, Florida. This has been Respondent's principal business address since September 2005. Prior to September 2005, Respondent was the manager of a Direct General office located at 8300 West Oakland Park Boulevard, Sunrise, Florida. Respondent did not notify Petitioner of this September 2005 change of his principal business address within 60 days of the change. He assumed, erroneously it turns out, that Direct General's "licensing department" would inform Petitioner of the change. At all times material to the instant case, Respondent, as a licensed agent acting on behalf of Direct General, sold automobile insurance, along with three ancillary or "add-on" products. The three "add-on" products Respondent sold were an accident medical protection plan, a travel protection plan, and a term life insurance policy (hereinafter referred to collectively as the "Add-Ons"). From September 2003 to May 2006, Respondent sold these Add-Ons to approximately 1300 customers, including Ms. Roberts- Hall, Mr. Bentivegna, and Mr. Moore. For his efforts on behalf of Direct General, Respondent was paid an hourly wage, plus a commission for each of the Add- Ons he sold. He did not receive a commission for any automobile insurance policy sales he made. Direct General had sales goals with respect to Add-Ons that it expected its agents to meet. How well an agent did in meeting these goals was an "important factor" in the job performance evaluation the agent received annually from his supervisor (as Respondent was aware). An agent's failure to meet a particular goal, however, did not inevitably lead to the "fir[ing]" of the agent. Nonetheless, it was obviously in the agent's best interest to sell as many Add-Ons as possible. Respondent's supervisor was Sara Silot, a Direct General District Manager. In addition to an annual job performance evaluation, Ms. Silot provided Respondent, as well as her other subordinates, with regular feedback during the course of the year regarding their Add-On sales numbers. Each of the customers (Ms. Roberts-Hall, Mr. Bentivegna, and Mr. Moore, hereinafter referred to collectively as the "Complaining Customers") referenced in Counts I through VII and XV through XVIII of the Amended Administrative Complaint (hereinafter referred to collectively as the "remaining sliding counts") purchased the policies referenced in these counts in person at Respondent's office, where they were given paperwork to review and to then initial, sign, and/or date in numerous places in order to consummate the transaction. This paperwork consisted of, depending on the transaction, as few as 14, and as many as 20, pages of various documents (hereinafter referred to collectively as the "Transactional Paperwork"). The Transactional Paperwork clearly and conspicuously informed the reader, consistent with what Petitioner orally explained at the time of purchase to each of the Complaining Customers, that the Add-Ons being purchased were optional policies that were separate and distinct from the automobile insurance policy also being purchased and that these Add-Ons carried charges in addition to the automobile insurance policy premium. In providing his oral explanation to the Complaining Customers, Respondent circled (with a writing utensil) language in the Transactional Paperwork that conveyed this information about the Add-Ons. His purpose in doing so was to bring this language to the attention of the Complaining Customers. In view of the contents of the Transactional Paperwork, including the portions highlighted by Respondent, and what Respondent told the Complaining Customers concerning the Add-Ons, it was reasonable for Respondent to believe that the Complaining Customers were informed about the Add-On products they were being sold and were (by executing the paperwork) consenting to purchase them. The Transactional Paperwork included, among other things, a one-page Accident Medical Protection Plan form; a one- page Accident Medical Protection Plan Application form; a one- page American Bankers Insurance Company Optional Travel Protection Plan form; a one-page Statement of Policy Cost and Benefit Information-One Year Term Life Insurance Policy form; a one-page Explanation of Policies, Coverages and Cost Breakdown form; a multi-page Premium Finance Agreement; and a one-page Insurance Premium Financing Disclosure form. Among the information contained on the top half of the Accident Medical Protection Plan form was the cost of the plan. The bottom half of the form read as follows: THIS IS A LIMITED POLICY. READ IT CAREFULLY. I the undersigned understand and acknowledge that: This Policy does not provide Liability Coverage for Bodily Injury and 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 acknowledgment. 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 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 The Accident Medical Protection Plan Application form indicated what the annual premium was for each of the three categories of coverage offered: individual, husband and wife, and family. The top half of the American Bankers Insurance Company Optional Travel Protection Plan form summarized the benefits available under the plan. The bottom half of the form read as follows: Please Read Your Policy Carefully for a Full Explanation of Benefits 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's Signature Date I HEREBY REJECT THIS VALUABLE COVERAGE: Insured's Signature ____ Date The Statement of Policy Cost and Benefit Information- One Year Term Life Insurance Policy form noted the amount of the "Annual Premium for this policy" and that the "Annual Premium included a $10.00 policy fee that [was] fully earned." On the Explanation of Policies, Coverages and Cost Breakdown form, the Add-Ons were listed under the heading of "optional Policies" and the cost of each Add-On was separately stated. The first page of the Premium Finance Agreement also contained an itemization of the cost of each Add-On, as did the Insurance Premium Financing Disclosure form. On this latter form, the Add-Ons were included in a section entitled "Optional insurance coverage." The form also advised, in its prefatory paragraph, that: Florida law requires the owner of a motor vehicle to maintain Personal Injury Protection and Property Damage liability insurance. Under certain circumstances as provided in Chapter 324, Florida Statutes, additional liability insurance may be required for Bodily Injury liability. Also, additional insurance is usually required by a lienholder of a financed vehicle. Florida law does not require other insurance. The direct or indirect premium financing of auto club membership and other non-insurance products is prohibited by state law. Each of the Complaining Customers was capable of reading the above-described documents and understanding that purchasing the Add-Ons was optional, not mandatory, and involved an additional cost.4 Respondent gave each of them as much time as they wanted to read these documents, and he did not refuse to answer any of their questions. Ms. Roberts-Hall rejected the travel protection plan, and signed and dated the American Bankers Insurance Company Optional Travel Protection Plan form so indicating, in 2004, 2005, and 2006. Mr. Bentivegna rejected the term life insurance policy, as documented by his signature next to the word "Rejected," which was written in by hand at the bottom of the Statement of Policy Cost and Benefit Information-One Year Term Life Insurance Policy form. As noted above, unlike Mr. Bentivegna, Ms. Roberts- Hall and Mr. Moore each signed up for a term life insurance policy. On Mr. Moore's Application for Life Insurance, his three children, Melissa Moore, Kenneth Moore, Jr., and Timothy Brown-Moore, were named as "Beneficiar[ies]." While Kenneth Moore, Jr., and Timothy Brown-Moore were listed as "Members of Applicant's Household" on Mr. Moore's application for automobile insurance, Melissa Moore (who, at the time, was away at college) was not. Elsewhere on Mr. Moore's Application for Life Insurance, in the "Insurability Data" section, the question, "Have you during the past two (2) years had, or been told you have, or been treated for . . . a) Heart trouble or high blood pressure?" was answered, incorrectly, in the negative. Mr. Moore placed his initials next to this answer. Several days after her May 2004 purchases, Ms. Roberts-Hall telephoned Respondent and told him that she was having second thoughts about her accident medical protection plan purchase. Respondent suggested that she come to his office and speak with him in person, which she did. During this follow-up visit, Respondent went over with her the benefits of the plan, after which she told him that she was going to keep the coverage. Ms. Roberts-Hall took no action to cancel either of the Add-Ons (the accident medical protection plan and term life insurance policy) she had purchased in May 2004. In fact, she renewed these coverages in May 2005 and again in May 2006 (along with her automobile insurance policy). Prior to these renewals, in February 2005, when contacted by one of Petitioner's investigators who was conducting an investigation of possible "sliding" by Respondent, Ms. Roberts-Hall had expressed her displeasure that Respondent had "given her these additional products." Mr. Bentivegna and Mr. Moore were also contacted by Petitioner's investigative staff to discuss the Add-On purchases they had made from Respondent. Mr. Moore was contacted approximately ten months after his May 2004 purchases. The three Add-Ons he had purchased were still in effect at the time, but he took no action to cancel any of these policies. He did not renew them, however; nor did he do any other business with Respondent following his May 2004 purchases. Petitioner's policy is have its investigators "make it very clear from the beginning," when interviewing aggrieved consumers, that no promises are being made that these consumers will be "getting their money back" if they cooperate in the investigation. It does not appear that there was any deviation from this policy in Petitioner's investigation of Respondent. The investigation of Respondent led to the charges against him that are the subject of the instant case.
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 of Section 626.551, Florida Statutes, alleged in Count X of the Amended Administrative Complaint, fining him $250.00 for such violation, and dismissing the remaining counts of the Amended Administrative Complaint. DONE AND ENTERED this 29th day of March, 2007, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 29th day of March, 2007.
The Issue Whether the Respondent committed the violations alleged in the Amended Administrative Complaint filed with the Division of Administrative Hearings on September 15, 2000, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department of Insurance is the state agency responsible for licensing insurance agents in Florida and with regulating their conduct. Section 624.307 and Chapter 626, Part I, Florida Statutes (1999). At the times material to this proceeding, Ingrid Machado was Florida-licensed insurance agent. In March 1999, Teresita Baldor was interested in purchasing health insurance. Ms. Baldor had previously owned a private school and had been insured through the school's group health insurance policy. After she sold the school and began teaching mathematics at Miami-Dade Community College and Saint Thomas University, she no longer had health insurance coverage. On or about March 10, 1999, Ms. Machado met with Ms. Baldor at Ms. Baldor's home. Ms. Baldor knew Ms. Machado only as an insurance agent and did not know whether Ms. Machado was affiliated with an insurance agency. Ms. Machado told Ms. Baldor during the March 10, 1999, visit that she would try to place Ms. Baldor in a group for health insurance purposes but that she did not know at that time the group Ms. Baldor would be placed in or the name of the insurance company that would provide the health insurance coverage. Ms. Machado told Ms. Baldor during the visit that she would let Ms. Baldor know the name of the company providing her coverage and that she would send Ms. Baldor the coverage information. During her March 10, 1999, visit to Ms. Baldor's home, Ms. Machado asked Ms. Baldor for general identification information, such as her name and social security number, and for other information, such as her weight. Ms. Baldor did not sign any document during this visit and cannot recall if Ms. Machado completed any form during their conversation. Ms. Machado asked Ms. Baldor to make out two checks, one in the amount of $175.00 and one in the amount of $100.00, but Ms. Baldor does not remember Ms. Machado's telling her the reason she needed two separate checks. Ms. Machado asked Ms. Baldor to leave the line for the name of the payee blank, again telling Ms. Baldor that she did not yet know which insurance company would ultimately provide health insurance coverage to Ms. Baldor. Ms. Machado told Ms. Baldor that the name of the company would be filled in on the checks at a later time. Ms. Machado told Ms. Baldor that she would have health insurance coverage effective March 15, 1999. On or about March 20, 1999, Ms. Baldor telephoned Ms. Machado because Ms. Baldor had not received any information regarding health insurance coverage. Ms. Machado told Ms. Baldor that she was having complications with her pregnancy and could no longer handle Ms. Baldor's insurance matters. Ms. Machado gave Ms. Baldor the telephone number of the "Durey Agency," told her that this agency would work with her to obtain health insurance coverage, and gave her Ray Gonzalez's name. Ms. Machado had no further contact with Ms. Baldor after the telephone conversation on or about March 20, 1999, during the times material to this proceeding. At some point, Ms. Baldor called the telephone number Ms. Machado had given her to find out why she had not received any information regarding her health insurance coverage. Ms. Baldor told the person who answered the phone, a woman named Maria, that she wanted her checks back if she could not give her any information "right then." Later the same day, Maria called Ms. Baldor and told her that she had been placed in a group for health insurance purposes. A Neighborhood Health Partnership Enrollment Form was submitted to the Neighborhood Health Partnership on behalf of Ms. Baldor. On the form, Ms. Baldor was identified as an employee of "International Marketing." A signature appeared on the bottom of the form purporting to be that of Ms. Baldor, and the date next to the signature was "5/10/99." Ms. Baldor never saw the Neighborhood Health Partnership Enrollment Form. A few weeks after Maria told Ms. Baldor that she had been placed in a group for health insurance purposes, Ms. Baldor received a package from the Neighborhood Health Partnership that contained an identification card indicating that she was enrolled in the "International Marketing Group" and indicating that her insurance coverage with the Neighborhood Health Partnership was effective as of June 15, 1999. During Ms. Baldor's conversations with Ms. Machado, Ms. Machado never mentioned the Neighborhood Health Partnership or International Marketing Group. The checks Ms. Baldor provided to Ms. Machado were made payable to the Durey Insurance Group and were processed by the bank on or about May 17, 1999. In addition, Ms. Baldor wrote checks to the Durey Insurance Group dated July 10, 1999, and August 9, 1999, as payment for her health insurance premiums. Ms. Baldor's insurance coverage with the Neighborhood Health Partnership was eventually cancelled. It was Ms. Baldor's understanding that it was cancelled because the Durey Insurance Group did not remit her premium to the Neighborhood Health Partnership and because the "International Marketing Group" in which she was placed by the Durey Insurance Group did not exist. Summary The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that Ms. Machado's actions with respect to her dealings with Ms. Baldor demonstrated a lack of fitness or trustworthiness or demonstrated that Ms. Machado lacked reasonably adequate knowledge and technical competence to engage in the transaction of insurance. The Department presented no evidence to establish any standards of skill, ability, knowledge, or competence by which Ms. Machado's acts or omissions can be judged to determine if she committed any of the violations with which Ms. Machado is charged. It is not possible to determine from the evidence presented if Ms. Machado's actions deviated from a standard of fitness or trustworthiness which a reasonably prudent insurance agent would be expected to exhibit under the circumstances or if Ms. Machado's conduct fell below a standard establishing the degree of knowledge and technical competence which a reasonably prudent insurance agent would be expected to exhibit under the circumstances. 2/ The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that Ms. Machado engaged in any unfair method of competition or deceptive practices or knowingly made any misrepresentations to Ms. Baldor regarding health insurance coverage. The uncontroverted evidence establishes that Ms. Machado took some minimal information from Ms. Baldor and told her she would place her in a group for health insurance coverage. The uncontroverted evidence further establishes that Ms. Machado did not represent to Ms. Baldor that she would place Ms. Baldor in any specific group, that she would place Ms. Baldor with any particular insurance company, 3/ or that Ms. Baldor would be provided with any specific coverage or benefits. The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that Ms. Machado knowingly collected from Ms. Baldor any sums in excess of premium because, at the time Ms. Machado collected the two checks from Ms. Baldor, Ms. Machado did not know which insurance company would write health insurance coverage for Ms. Baldor and, therefore, did not know what the premium would be. The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that Ms. Machado knowingly collected from Ms. Baldor any premium for insurance that was not, in due course, provided. The uncontroverted evidence establishes that Ms. Machado initially agreed to procure health insurance coverage for Ms. Baldor; however, because of her pregnancy, Ms. Machado referred Ms. Baldor to the Durey Insurance Group approximately ten days after Ms. Machado's only meeting with Ms. Baldor and advised Ms. Baldor that the Durey Insurance Group would assist Ms. Baldor in obtaining health insurance. There is no persuasive evidence establishing that Ms. Machado knew or should have known that Durey Insurance Group would not, in due course, provide legitimate health insurance coverage to Ms. Baldor. The evidence presented by the Department is not sufficient to establish that Ms. Machado had any involvement, directly or indirectly, in the transaction in which the Durey Insurance Group identified Ms. Baldor as an employee of "International Marketing" and obtained health insurance for Ms. Baldor with the Neighborhood Health Partnership as a member of the "International Marketing Group." 4/ Furthermore, the evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that Ms. Machado's actions made her a source of injury to Ms. Baldor or anyone else. As noted above, the uncontroverted evidence establishes that, soon after Ms. Machado's visit with Ms. Baldor on March 10, 1999, Ms. Machado advised Ms. Baldor that she could not act as Ms. Baldor's agent in placing her with a health insurance company, that she had sent Ms. Baldor's information and checks to the Durey Insurance Group, and that Ms. Baldor should contact the Durey Insurance Group for further assistance. Ms. Baldor's contacts subsequent to the latter part of March 1999 with respect to her health insurance coverage were exclusively with personnel who purported to be affiliated with the Durey Insurance Group. A representative of the Durey Insurance Group notified Ms. Baldor that her health insurance would be provided by the Neighborhood Health Partnership, and Ms. Baldor's premium checks were made payable to the Durey Insurance Group. Finally, the Neighborhood Health Partnership Enrollment Form identifying Ms. Baldor as an employee of International Marketing is dated approximately two months after Ms. Machado's last contact with Ms. Baldor, and the Department failed to present any evidence tending to establish that Ms. Machado had any involvement in the preparation of this form.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance issue a final order dismissing the Amended Administrative Complaint against Ingrid Machado. DONE AND ENTERED this 15th day of November, 2000, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of November, 2000.
