The Issue The issue in this case is whether Respondent committed the offenses alleged by the Department of Financial Services in the Administrative Complaint dated May 27, 2009, and, if so, what penalty should be imposed.
Findings Of Fact Petitioner, the Department of Financial Services ("Petitioner" or "the Department") has regulatory responsibility for Chapter 626, Florida Statutes (2009), the insurance licensing procedures law. Respondent, Eileen P. Suarez ("Respondent" or "Suarez"), is a licensed general lines agent transacting in property and casualty insurance, under license number E129078. She operated and was the agent in charge of the Suarez Insurance Agency, Inc. ("Agency"), in Hialeah, Florida. The Agency held a valid state license from 7/21/2006 to 7/27/2009. The Department filed a three-count Administrative Complaint against Respondent alleging that she violated various provisions of Chapter 626, Florida Statutes. COUNT I John Vila is the president of Vila Home Group, Inc., a trucking company that is in the business of hauling sand, soil, and gravel. In April 2005, he purchased a dump truck and, at the suggestion of the dealer, contacted Suarez for insurance. Suarez sold Vila two insurance policies, for the period April 29, 2005 to April 29, 2006, one with AequiCap Insurance Company ("AequiCap") and the other with the Underwriters at Lloyds, London ("Lloyds"). The AequiCap Policy was a commercial liability insurance policy. The Lloyds Policy was a commercial automobile physical damage insurance policy. In March 2006, Vila gave Suarez a check in the amount of $10,876.41, made payable to the Agency to renew the AequiCap and Lloyds policies, for the period April 29, 2006 to April 29, 2007. The AequiCap policy quote was approximately $5,350.00. The Lloyds policy quote was approximately $5,500.00. The check was deposited in the Agency's trust account, but the Lloyds policy was allowed to expire on April 29, 2006, and was not renewed until October 26, 2006, creating a six-month gap in commercial automobile physical damage insurance coverage for Vila. When it was renewed, the Lloyds Policy cost $5,712.03. Vila's AequiCap policy expired on April 29, 2006, and was not renewed because Suarez failed to pay MAI Risk Management, AequiCap's managing general agent. The funds were not returned to Vila. While the March 2006 quotes were pending, the registered driver of the truck, Andres Vila, was involved in an accident and was at fault for hitting a wire. Rather than risk an increase in the pending insurance quotes, Vila paid Bellsouth $2,390.36 in damages. COUNT II On or about October 26, 2006, Suarez provided Vila a Certificate of Liability showing that the truck was insured with AequiCap, under policy number TC012695, and with Lloyds, under policy number R641440/0251, for the period April 29, 2006 to April 29, 2007. Vila was not insured under AequiCap policy number TC012695 from April 29, 2006 to April 29, 2007. The Certificate of Liability was a false document that Suarez created on her computer, printed, and gave to Vila. COUNT III Shelly, Middlebrooks & O'Leary, Inc. ("Shelly Middlebrooks") is a licensed insurance agency, located in Jacksonville, that acts as a general agent for multiple insurance companies. Suarez collected insufficient funds to include the premiums that were intended to be forwarded to Shelley Middlebrooks for policies to insure the following trucking companies: All Nations Logistics, LLC (Policy Number 486865); Jose Veiga, d/b/a JJ Freightways (Policy Number 486885); Gary Castle/Diamond Mine (Policy Number 74APN338354); and Nics Oil, Inc. (Policy Number 74APN401617). For each of the four companies, she requested and received binders for insurance from Shelly Middlebrooks, followed by invoices for the premiums that were to have been paid within ten days of the date the invoices were received. In each instance, Suarez did not pay Shelly Middlebrooks, which cancelled the policies for non-payment of the premium. It also obtained a default judgment in the Circuit Court in and for Duval County, Florida, that requires Suarez to pay it the outstanding balances due for the four policies and a $25 insufficient funds check fee, for a total of $8,335.60, which she has been unable to pay. Instead of paying for insurance, Suarez used most of the funds she collected to pay for various other corporate expenses for the same trucking companies, including state and federal government filings for intrastate or interstate travel that were prerequisites to their becoming insurable. Suarez expected to collect the additional funds needed for insurance later, but the clients, the owners of the trucking companies, did not pay her. Suarez admits that she failed her clients in 2006, after her father's death in February 2006. She realized the Vila errors and tried to correct them in October. The Agency is now closed. Suarez's husband has been unemployed for over a year, and their home is in foreclosure. She is receiving social security disability payments and has insufficient funds to file for bankruptcy.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Department of Financial Services: Finding Respondent guilty of violating Subsections 626.611(7), (8) and (10); Subsection 626.561(1); and Subsections 626.621(2) and (6), Florida Statutes, as charged in Count I of the Administrative Complaint; Finding Respondent guilty of violating Subsections 626.611(7) and (8); Subsection 626.621(6); and Subsection 626.9541 (1)(e)1., Florida Statutes, as charged in Count II of the Administrative Complaint; Finding Respondent guilty of violating Subsections 626.611(7), (8) and (10); Subsection 626.561(1); and Subsections 626.621(2) and (6), Florida Statutes, as charged in Count III of the Amended Complaint; Revoking Respondent's licenses and appointments issued or granted under or pursuant to the Florida Insurance Code; Ordering Respondent to make restitution to John Vila in the amount of $5,164.38; and Ordering Respondent to make restitution to Shelly Middlebrooks & O'Leary in the amount of $8,335.60. DONE AND ENTERED this 16th day of February, 2010, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 16th day of February, 2010.
The Issue The issue for consideration in this hearing was whether Respondent's license as a life and health debit agent and a general lines, (fire), agent should be disciplined because of the matters alleged in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the issues herein, the Petitioner, Department of Insurance, was the state agency responsible for the licensing of commercial insurance sales agents and the regulation of the insurance industry and profession in Florida. Respondent, Doyle Carlton Newell, was licensed in Florida as a life and health (debit) agent and a general lines agent limited to industrial fire. On April 26, 1991, Respondent entered into an agency contract with United Insurance Company of America, (United), which authorized him to sell authorized insurance policies for the company in Florida within his assigned territory. The terms of the agency contract obligated Respondent to remit to the company, on a weekly basis, all premium money collected by him on the company's behalf. For reasons not stated, United terminated Respondent from employment on May 11, 1992 by use of company form 38A, and Respondent's agency contract was cancelled immediately. The termination was followed by an audit of Respondent's account because for some time, company management had had some concern as to the condition of those accounts. Respondent had admitted to improperly taking money belonging to the company, and the audit was conducted during the period immediately following his termination in May, 1992 through August, 1992. Either prior to or as a part of the audit, Respondent submitted a list of all discrepancies he could recall. The audit revealed an actual deficiency of $3,731.67. After application of the bond submitted by and on behalf of Respondent, the ultimate shortage was $3,257.67. Respondent had, the day he left employment with the company, indicated he would reimburse it for any shortage when he overcame some personal matters and gambling problems. After the exact amount was determined, he was again asked, both orally and, several times through certified mail, to satisfy the obligation but as of the date of hearing, he had made no payments. All policies written by Respondent were honored by the company regardless of the fact he had not remitted the premiums paid therefor.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered finding Respondent guilty of all misconduct and violations alleged except that relating to a lack of knowledge or technical competency, and revoking his license as an insurance agent in Florida. RECOMMENDED this 23rd day of June, 1994, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of June, 1994. COPIES FURNISHED: William C. Childers, Esquire Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0222 Doyle Carlton Newell 8414 Waterford Avenue, T3 Tampa, Florida 33604 Doyle Carlton Newell 2106 Two Lakes Road, Apartment 2T Tampa, Florida 33604 Doyle Carlton Newell 13637 Twin Lakes Lane Tampa, Florida 33624 Doyle Carlton Newell American General Life and Accident Insurance Co. 802 West Waters Avenue Tampa, Florida 33604 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300
The Issue Whether Respondent, a licensed insurance agent, committed the offenses alleged in the Administrative Complaint and the penalties, if any, that should be imposed.
Findings Of Fact At all times material to this proceeding, Respondent has been licensed as a general lines insurance agent (2-20), a life and health insurance agent (2-18), and a health insurance agent (2-40). In June 2000, the statewide prosecutor filed an information against Respondent in the Circuit Court in and for Orange County, Florida, where it was assigned Case No. CR-0-00- 9771/A. The information charged that Respondent was guilty of organized insurance fraud involving $50,000 or more in violation of Section 817.034(4)(a), Florida Statutes, which is a first degree felony and a crime involving moral turpitude. Simon Blank, an investigator employed by Petitioner's Division of Insurance Fraud, participated in the investigation that culminated in the charges being filed against Respondent. Respondent cooperated with Mr. Blank's investigation and candidly answered questions that were put to him. On July 31, 2001, Respondent entered a plea of nolo contendere to the charges against him. At Respondent's plea hearing the prosecutor summarized the facts he expected to be able to prove, including the fact that Respondent engaged in fraudulent activity involving workers' compensation insurance.2 Thereafter, Respondent stipulated that there was a factual basis for his plea. The Court accepted Respondent's plea, but withheld adjudication of guilt. The Court sentenced Respondent to two days in jail with credit for time served and placed him on probation under the supervision of the Florida Department of Corrections for a period of ten years. Respondent was ordered to perform 100 hours of community service and to pay restitution in the total amount of $16,179.00, which included the costs of investigation. As a condition of his probation, Respondent was ordered not to write or renew any policy of workers' compensation for a period of five years. Prior to the filing of the Administrative Complaint against him, Respondent had not notified Petitioner in writing that he had entered a plea of nolo contendere to the criminal charges that had been filed against him. Respondent has been the owner of A Maples Insurance Agency in Pompano Beach, Florida, since 1987. Consistent with his probation, Respondent no longer writes or renews workers' compensation insurance. At the time of the final hearing, Respondent was current with his continuing education classes. Respondent has not been convicted of a felony or a misdemeanor. Respondent testified that his plea in the criminal proceeding was a plea of convenience and that he could not afford to contest the charges. Respondent did not believe the plea would lead to the suspension of his license because the suspension of his license was not a condition of his probation. He mistakenly believed that the entry of his plea in the criminal proceeding would resolve all issues with the Petitioner since Petitioner participated in the investigation of the case. Respondent testified that his attorney said he had received something from the Department of Insurance that gave reason to believe that they already knew about the plea. That correspondence was not admitted into evidence and Respondent's self-serving testimony was not corroborated. Respondent's license was previously disciplined in Case No. 93-L-222JDM, which involved allegations of misappropriation of funds. Petitioner's records reflect that Respondent was placed on probation for one year as a result of that proceeding.
Recommendation Based on the foregoing findings of fact and conclusions of Law, it is RECOMMENDED that Petitioner enter a final order that finds Respondent guilty of violating Section 626.611(14), Florida Statutes, as alleged in Count I of the Administrative Complaint, and guilty of violating Section 626.621(11), Florida Statutes, as alleged in Count II. It is further RECOMMENDED that the final order suspend Respondent's licensure for a period of 24 months for the Count I violation, and for a period of three months for the Count II violation. It is further RECOMMENDED that the final order provide that the periods of suspension shall run concurrently. DONE AND ENTERED this 20th day of February, 2002, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 20th day of February, 2002.
Findings Of Fact The Respondent, William Richard Dobeis, is a Florida licensed life insurance agent, life and health insurance agent, health insurance agent and dental health care contract salesman. In approximately June, 1988, the Respondent was approached by Irene Kyriazis at her place of employment. The Respondent had sold her employer a group health insurance plan in which she participated. She told the Respondent that her husband, Andreas Kyriazis, was dissatisfied with his health insurance and was interested in obtaining coverage through the group policy. This was not possible under the policy terms, but the Respondent told her that the Respondent would be happy to talk to her husband about his insurance and suggested that she make an appointment for the Respondent to meet with her husband for this purpose if her husband so desired. The Kyriazises discussed the matter, and Andreas agreed that his wife should arrange a meeting with the Respondent. The meeting took place on June 23, 1988. At the meeting on June 23, 1988, Andreas stated that his current policy with American States Insurance had a $250,000 lifetime maximum benefit, a $90 maximum daily hospital benefit and a $250 deductible. He wanted a policy with better coverage in those respects. The Respondent asked Andreas to show him the policy. Andreas looked for it but could not find it. Instead, he produced an insurance identification card. Based on what was on the card, and what Andreas had told the Respondent, the Respondent surmised that the policy was an obsolete major medical policy (it was issued in 1977) that probably should be replaced. The Respondent then presented to Andreas a policy with Individual Assurance Company. It was a million dollar policy with only a $150 deductible. The daily hospital bed benefit was higher than the old American States policy. (The evidence was not clear exactly what the daily hospital bed benefit was.) In addition, the Kyriazises could get coverage for their college age son, Nicholas--something they also had under the American States policy and were interested in as well. Andreas was pleased with the policy and decided to submit an application. As the Respondent does routinely, and did in the case of each application Andreas submitted through the Respondent, the Respondent went through the application with the applicant line by line and question by question. The application states, and the Respondent repeats verbally, and it is clear to the applicant, that it is the applicant's duty to answer all questions truthfully, or the policy could be rescinded and benefits not paid. The Respondent carries reference books with him to these meetings so that he can answer virtually any question the applicant might ask the Respondent about the policy or the application. The Respondent completes the application in accordance with the information provided by the applicant, and the applicant signs the application. In the case of the Individual Assurance application, Andreas answered, "no," to the question whether, to his best knowledge, he had been treated for, had been diagnosed as having, or currently was being treated, for heart disease or any other condition related to the heart or circulatory system within the past five (5) years. According to the evidence, this answer was truthful, and there was no reason for the Respondent to have inquired further as to whether the answer would have been different had there not been the five-year qualification to the question. Andreas also stated on his application that he had not been treated for, had not been diagnosed as having, and currently was not being treated for any disorder of the kidneys. According to the evidence, this answer was not truthful. See Finding 17. But there was no reason for the Respondent to have known that it was untrue or to have questioned the answer Andreas gave. Andreas wanted the Respondent to immediately make and leave at the house a copy of the application. The Respondent replied that he could not comply with that request but would mail Andreas a copy as soon as the Respondent got back to the office. The Respondent kept his promise and continued to follow the same procedure in the case of each application Andreas submitted through the Respondent. As the Respondent does routinely, and did in the case of each policy he obtained on behalf of the Kyriazises, the Respondent personally delivered the Individual Assurance policy to the Kyriazises at their home and thoroughly went over the provisions of the policy with them. He told them to let him know if they noticed anything that they did not think was right. He had the same advice stamped on the policy itself. Andreas was completely satisfied with the Individual Assurance policy until he received a letter from the insurance company, addressed to him and dated December 30, 1988, stating that premiums on the policy would be adjusted to reflect a 9.4 percent increase, effective with the February 1, 1989, billing statement. Andreas was irate about the premium increase and insisted that the Respondent find him another policy. The Respondent was reluctant but succumbed to Andreas' angry bluster and pressure. (It was and, as was evident from his demeanor at the final hearing, and apparently from his subsequent dealings with the Department of Insurance, still is Andreas' modus operandi to use angry bluster and pressure tactics to make others bend to his will.) At a meeting on February 1, 1989, the Respondent showed Andreas a policy with Central States Health & Life Co. of Omaha. Like the Individual Assurance policy, the Central States policy had a million dollar maximum lifetime benefit. It paid for a semi-private hospital room with no dollar amount maximum. The deductible was just $100. The son, Nicholas, also could apply for coverage from Central States. It was a good policy and a suitable replacement for the Individual Assurance policy that Andreas no longer wanted. Andreas decided to apply for himself and for his son, Nicholas. The Respondent completed the Central States application in his usual fashion. See Finding 7. One of the questions on the Central States policy was whether Andreas had ever had, among other things, a heart murmur or any disorder of the heart, blood or blood vessels. Andreas falsely answered this question, "no." In fact, Andreas had a heart murmur from the time of his birth. Andreas claims that the Respondent knew of Andreas' history of having a heart murmur. Andreas claims that the Respondent knew this from seeing a copy of Andreas' application to American States which revealed that Andreas had "heart murmur since birth, no complications, no medication." But it has been found that Andreas did not show the Respondent a copy of the American States policy. He had lost it. See Finding 5. Andreas subsequently obtained a duplicate copy from American States that the Respondent saw for the first time at the final hearing. It is found that, notwithstanding Andreas' testimony to the contrary, Andreas did not tell the Respondent about Andreas' heart murmur or any other heart disease or problems on February 1, 1989, or at any time previously. Another question on the Central States application asked whether Andreas had ever had, among other things, sugar or albumin in the urine, kidney stones or any disorder of the kidneys, bladder, prostate, urinary sytem or reproductive organs. Andreas answered this question, "yes," underlining the words "kidney stones," and gave the following details: "Lithotripsy Treatment Performed, Date 10/87, Duration 1 day, Degree of Recovery 100 percent." The coverage on Nicholas was processed as fast as usual, and the Respondent promptly delivered the policy on Nicholas in the Respondent's usual fashion. See Finding 11. But the coverage on Andreas was delayed by the insurance company's investigation of Andreas' medical information. On or about May 17, 1989, Central States finally issued Andreas' policy, effective February 1, 1989, but with a special endorsement requiring Andreas to "waive any benefits for any loss or disability resulting directly or indirectly, in whole or in part from disease or disorder of the heart and/or circulatory system and/or intestinal tract and/or urinary tract." The Respondent promptly delivered the policy on Andreas, with the special endorsement, in the Respondent's usual fashion. See Finding 11. When he explained the special endorsement, Andreas was furious. His anger seemed to be directed both at the insurance company and at his doctors, for whatever they had told the insurance company. In general terms, he adamantly denied that there was any valid reason for the special endorsement. The Respondent tried to calm Andreas down and explain to what Andreas' options were. The Respondent did not know why the special endorsement had been required by the insurance company. The Respondent explained that Andreas could send the company a letter authorizing the company to tell his doctors the reasons for the waiver requirement. The Respondent explained that neither the Respondent, nor even Andreas himself, could get the reasons directly from the insurance company; it would have to go through Andreas' doctors. The Respondent agreed to prepare a letter for Andreas to use to authorize the company to tell his doctors the reasons for the special endorsement. Meanwhile, the Respondent suggested, the Respondent could try to find a temporary policy for Andreas to cover the areas excluded by the special endorsement until the problem was resolved. There was nothing wrong with the Central States policy on Nicholas, and no change was made in that policy. Nicholas' Central States policy remained in effect as of the date of the final hearing, and substantial claims have been paid under the policy due to a serious car accident Nicholas had after obtaining the policy. The Respondent assisted with the claims, and neither Nicholas nor Andreas nor anyone else has complained to the Respondent either about the policy or about the Respondent's service. (Andreas' complaints, voiced for the first time at the final hearing, that he is dissatisfied with the policy because $4,000 of claims were not paid, and Andreas hired an attorney to pursue them, were not proven to be reasonable.) Andreas eventually agreed to the approach suggested by the Respondent and signed the special endorsement waiving the specified coverage. However, probably privately suspecting at least some of the reasons for the special endorsement, Andreas apparently never mailed to the insurance company the authorization letter the Respondent prepared for him. The Respondent never learned from the insurance company, or Andreas' doctors, or from Andreas himself, the reasons for the special endorsement. On or about September 29, 1989, the Respondent met with Andreas for purposes of presenting a United American Insurance Company policy known as "the Golden Rule." This was not a true major medical policy but rather a surgical schedule policy. The purpose of it was not to provide major medical, but just to provide some coverage for the areas excluded by the Central States special endorsement for a few months, until that problem could be resolved. The Respondent completed the "Golden Rule" application in his usual fashion. See Finding 7. One of the questions asked whether Andreas had or had been treated for, among other things, any heart or circulatory disorder in the past two years. This question prompted a discussion of "preexisting conditions," and the Respondent explained that, if Andreas had a medical condition at the time of application, as would be indicated by an affirmative answer to the question, he would not be covered under the policy for six months. When Andreas raised the question what is meant by "having" or "being treated for" a condition, the Respondent answered that if he did not see a physician for treatment, and was not on medication, within the past two years, Andreas could answer, "no." Andreas then answered the question, "no." He also denied any reproductive organ disorder or recurrent urinary tract disorder. There was no reason for the Respondent to question Andreas' answers on the "Golden Rule" application. It was consistent with the way in which Andreas answered the similar questions on the Individual Assurance application. See Findings 8 and 9. The answer on the "Golden Rule" application also would not have been necessarily inconsistent with the special endorsement requirement imposed by Central States. The Respondent still did not know why Central States had required the special endorsement on Andreas' policy. In addition, the answers on the "Golden Rule" application would not have been necessarily inconsistent with an affirmative answer to the question on Andreas' Central States application whether Andreas had ever had, among other things, a heart murmur or any disorder of the heart, blood or blood vessels. Finally, the answers on the "Golden Rule" application were not inconsistent with Andreas' answer on the Central States application that he had had kidney stones but never had sugar or albumin in the urine, or any other disorder of the kidneys, bladder, prostate, urinary sytem or reproductive organs, and that he had lithotripsy treatment in October, 1987, from which he had recovered "100 percent." Cf. Findings 15 and 17. On or about October 16, 1989, the Respondent delivered Andreas' "Golden Rule" policy in the Respondent's usual fashion. See Finding 11. Meanwhile, he continued to look for a major medical policy to replace Andreas' Central States policy. On or about November 20, 1989, the Respondent wrote Andreas to give him "good news." The Respondent had found a major medical policy with United Olympic Life Insurance Company to replace Andreas' Central States policy. As the Respondent wrote, United Olympic policy was a true million dollar major medical policy, with a $150 a year deductible, that paid 80 percent of the next $5,000, after the deductible, and 100 percent of the rest up to the lifetime maximum of a million dollars. There also were other features which the Respondent explained. The Respondent also sent a brochure more fully describing the policy. In addition, the Respondent wrote to Andreas: "If you can answer questions 2 thru 6 no, you qualify." The Respondent completed the United Olympic application in his usual fashion. See Finding 7. Question 2 asked whether Andreas had or had been treated for heart attack, heart disease or disorder, chest pain, stroke, arteriosclerosis, high blood pressure or any other condition related to the heart or cardio-vascular system within the past five years. The Respondent repeated the explanations about the meaning of "preexisting conditions," and the meaning of "having" or "being treated for" a condition, that he had given for the "Golden Rule" application. See Finding 25. After these explanations, Andreas answered the question, "no." Just as with Andreas' answer to the similar question on the "Golden Rule" policy, there was no reason for the Respondent to question Andreas' answer to Question 2 on the United Olympic policy. See Finding 26. Question 1 on the United Olympic application asked whether Andreas had been recommended to receive or was receiving at that time "treatment or medication for any medical condition, including pregnancy." (Emphasis added.) Andreas answered this question, "no." There was no reason for the Respondent to question Andreas' answer to Question 1 on the United Olympic application. It was consistent with the way in which Andreas answered the questions on previous applications submitted through the Respondent. Question 6 on the United Olympic application asked whether Andreas had been diagnosed or treated for disease or injury of the kidney, bladder, or genito-urinary or reproductive systems. Andreas also answered this question, "no." Both Andreas and the Respondent should have known that Andreas' answer to Question 6 on the United Olympic application was false. On the Central States application, Andreas had disclosed that he had kidney stones and received lithotripsy treatment in October, 1987. (Andreas stated on the Central States application that he had recovered "100 percent.") On or about January 31, 1990, the Respondent delivered Andreas' United Olympic policy in the Respondent's usual fashion. See Finding 11. The Respondent had no knowledge of any problem with the United Olympic policy until 1991, when Andreas made claims for a kidney condition and for hospitalization and medical services for a heart condition. The Respondent processed the claims in a prompt and appropriate manner, but payment was slow and some claims were not paid. As a result, Andreas began having problems with creditors and was unable effectively to continue his business of buying and selling of property. In July, 1991, the Respondent prepared a State of Florida Insurance Consumer Service Request for Andreas' signature to send to the Florida Insurance Commissioner to get assistance in procuring prompter payment of the claims. The Respondent also prepared a letter for Andreas' signature asking Andreas' creditors for patience in view of the insurance company's slow processing of claims. On or about August 12, 1991, the administrator for United Olympic sent Andreas a letter, with a copy to the Respondent, notifying them that the company was rescinding Andreas' policy. The letter stated that, contrary to the answers Andreas gave on United Olympic application, the company's investigation had obtained information: (1) that Andreas was taking medication for impotency at the time of the application; (2) that he was diagnosed with mitral valve prolapse in July, 1989; and (3) that he also had continuing problems with kidney stones and urinary tract infections since 1987. When Andreas received the rescission letter, he telephoned the Respondent. The Respondent was in the midst of a previously scheduled appointment at the time but offered to accompany Andreas to the Florida Insurance Commissioner's local offices as soon as he finished with the appointment. But, before the Respondent could finish the appointment and call back, Andreas when to the Insurance Commissioner's office himself and registered a complaint against the Respondent for advising Andreas "that it was not necessary to include this medical information on the application to United Olympic Life." As reflected in these Findings of Fact, Andreas' complaint was not true. The only medical information that the Respondent should have known was incorrect was the answer to Question 6 on the United Olympic application. See Finding 33. But Andreas also knew or should have known this. The Respondent had no special duty, greater than Andreas', to realize that the answer was false. At worst, the Respondent may have been guilty of negligent oversight in this respect. It was not proved that the Respondent knew the answer was false, or that he advised Andreas that Andreas did not have to disclose the kidney stones and lithotripsy on the United Olympic application. Finally, United Olympic rescinded Andreas' policy not because of the kidney stones and lithotripsy, but because Andreas allegedly has had "continuing problems with kidney stones and urinary tract infections since 1987." See Finding 38. There is no evidence that the Respondent knew, or that Andreas ever told him, that Andreas was having "continuing problems with kidney stones and urinary tract infections since 1987." To date, no determination has been made as to whether United Olympic properly rescinded Andreas' policy. Andreas contends that the Respondent knew all along that Andreas had a heart murmur since birth. Andreas equates this knowledge with knowledge of mitral valve prolapse, but the evidence did not prove that the two are the same. In addition, knowledge of a heart murmur since birth is not the same as knowledge of a diagnosis of mitral valve prolapse in July, 1989. Andreas did not admit, and the evidence did not establish, that Andreas was diagnosed with mitral valve prolapse in July, 1989. Moreover, it is found that Andreas did not tell the Respondent about a diagnosis for mitral valve prolapse in July, 1989. As reflected in these Findings of Fact, it was not proven that the Respondent ever misrepresented to Andreas, or misled or deceived him, as to the coverage of any of the policies he sold to Andreas.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Insurance Commissioner enter a final order dismissing the Administrative Complaint in this case. RECOMMENDED this 19th day of April, 1993, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 19th day of April, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-2707 To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1.-4. Accepted and incorporated to the extent not subordinate or unnecessary. Rejected that the Respondent's purpose was to "solicit health insurance," except as described in the Findings of Fact. Otherwise, accepted and incorporated. Rejected as not proven and as contrary to facts found. Accepted and incorporated. However, as reflected in the Findings of Fact, he did not give the Respondent the complete information, or at least the information alleged by United Olympic in rescinding Andreas' policy. Rejected as not proven and as contrary to facts found. Rejected as not proven and as contrary to facts found that the application was completed "as a result of the representations of the Respondent." Otherwise, accepted and incorporated. Accepted and incorporated. See 5., above. Rejected as not proven and as contrary to facts found. See 9., above. 14.-15. Accepted and incorporated. 16. Rejected as not proven and as contrary to facts found. Respondent's Proposed Findings of Fact. 1.-4. Accepted and incorporated. 5.-6. Accepted. Subordinate to facts found, and unnecessary. Accepted and incorporated. Accepted and incorporated to the extent not subordinate or unnecessary. COPIES FURNISHED: William C. Childers, Esquire Department of Insurance 612 Larson Building Tallahassee, Florida 32399-0300 William Richard Dobeis Post Office Box 3387 Seminole, Florida 34642 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil, Esquire General Counsel Department of Insurance and Treasurer The Capitol, PL-11 Tallahassee, Florida 32399-0300
Findings Of Fact Charles Lee Armstrong, a/k/a Jack Armstrong, (hereinafter referred to as Petitioner or Armstrong) is licensed by the Florida Insurance Department as a general lines agent to represent Foremost Insurance Company and Fortune Insurance Company (Exhibit 1). Prior to 1976 Armstrong was an Aetna agent. From February 10, 1968 through February 10, 1977 Luigi Sesti carried homeowners policy with Aetna with Armstrong Agency. Armstrong's designation as an Aetna agent was terminated by Aetna termination notice (Exhibit 8) dated August 21, 1975 for low volume of business. The company practice is to terminate the agency relationship ninety days after notice of termination. Thereafter Respondent continued as a limited company agent for one year, during which he was authorized to renew Aetna policies. (Exhibit 7). After that one year extension, Respondent had no agency relationship with Aetna and, to renew an Aetna policy, he would have to have an Aetna agent process the renewal. Luigi Sesti had dealt with Armstrong as Sesti's Insurance agent since 1968 and had maintained an Aetna home-owner's policy which had last been renewed through Armstrong for the year ending February 10, 1977. Upon receipt of notice from Armstrong that his policy would expire February 10, 1977, Sesti sent Armstrong his check in the amount of $165 (Exhibit 3) for renewal of his policy. Although Armstrong was no longer authorized to renew Aetna policies, he deposited Sesti's check but thereafter failed to provide Sesti with insurance coverage on his house or contents. Armstrong advised Aetna that Sesti's policy had been replaced with an Eastern insurance policy, and Aetna failed to notify Sesti that the Aetna policy was not renewed. In August 1977 Sesti's home was burglarized. He lost a television set, radio, watch, spotlight and a ring, and Sesti contacted Armstrong to report the loss. Armstrong visited the home and suggested Sesti submit no formal claim because to do so would make it difficult for Sesti to renew his insurance. In his own explanation, Armstrong testified that he intended to pay Sesti for his loss but Sesti could never establish the value of the ring or establish a price for which he would settle. Armstrong offered Sesti $250 to settle the claim. During the discussions between Armstrong and Mrs. Sesti, Armstrong said he had authority to settle claims for Aetna up to $500 and that he was an attorney. Neither of these statements was true. When Armstrong was unable to agree on the amount of the claim, Mrs. Sesti contacted Aetna and learned that the policy on her her had expired 10 February 1977 and had not been renewed. Because no valid policy had been issued to Sesti, Aetna initially denied liability. When advised by Sesti that Aetna would not pay their claim, Armstrong returned the premium he had received from Sesti for the policy not renewed in one check for $155 dated 9/7/77 and in another check for $10 dated 11/23/77 (Exhibit 5) which Sesti received with a letter from the Insurance Commissioner's office dated November 29, 1978 (Exhibit 14). After further investigation by Aetna revealed the facts as noted above, Aetna issued a policy (Exhibit 15) which effectively renewed Sesti's homeowners policy for one year from February 10, 1977. They deducted the premium and the $100 deductible from the amount they paid Sesti for the loss sustained. Aetna's Regional Manager testified that Aetna paid for the loss because Sesti had been insured by them for several years and they felt a moral obligation for their former agent's failure to provide coverage and for their failure to notify Sesti he was no longer insured by Aetna. Aetna allowed Sesti approximately $450 for the loss of the ring and approximately $350 for the other things stolen. Roseland S. Wood had insured her mobile home with Foremost Insurance Company since 1953, and with Jack Armstrong as Agent since 1964. Policy No. 101-8498757 covered the period 11/3/74 to 11/3/75 (Exhibit 13). By check dated November 5, 1975 made payable to Armstrong (Exhibit 9) Wood forwarded the premium for renewal of this policy. Unbeknownst to Wood the policy was not renewed until July 28, 1976 by policy No. 8498643 (Exhibit 12). This is the policy that Armstrong forwarded to Foremost. Armstrong was in Europe on vacation when this policy was issued by the woman he had hired to keep his office open during his vacation and he professed no knowledge of why the policy was issued at this particular time. In October 1976 Wood wanted additional coverage and Armstrong came out to assist in providing the additional coverage. After discussing increasing personal property coverage, plus garage and contents and boats, Respondent advised Wood that the additional coverage would cost $326. Wood gave Respondent a check that day (Exhibit 10). Thereafter Armstrong issued policy No. 8498518 (Exhibit 11) for the period 10/28/76 to 10/28/77 but the personal property coverage was less than Wood had asked for and the garage and contents were not included. Neither Exhibit 11 nor the premium for this coverage was ever received by Foremost from Armstrong. They became aware of Exhibit 11 after Wood suffered a burglary in July 1977 and came to the Foremost office to file a claim. The costs of coverage on Exhibit 11 are not correct and had this policy been received by Foremost it would have been rejected by the computer due to inaccurate premium charges, the inclusion of boats on this policy and incorrect comprehensive liability coverage. By failing to renew Wood's coverage in November 1975, Respondent left Wood without coverage until Exhibit 12 was issued providing coverage from 7/28/76. This renewal was written by Armstrong Agency, who had authority from Foremost to write this renewal. As noted above, this policy was written while Armstrong was on vacation. The $145 premium paid by Wood for the renewal of the policy was not remitted to Foremost until after July 28, 1976. At the time of Wood's loss in July 1977 she was covered by this policy. When the existence of the above facts regarding the two policies and dates they were issued to Wood were uncovered, Armstrong refunded to Wood $181 of the $326 premium he collected, Foremost refunded the additional $145 of this premium to Wood, and Wood's claim was settled by Foremost to Wood's satisfaction. Foremost has a claim against Armstrong for this $145 Foremost refunded to Wood. Respondent acknowledged writing Exhibit 11 and assumed that it was mailed to Foremost. He does not remit payment to the company until he is billed. Foremost sends a monthly statement to each agent showing policy numbers received. The agent can readily check this list against the policies he has issued to ascertain if a policy was not received by the company. The company also maintains a policy register where policy numbers are recorded. A copy of this is sent to their agents to check against policies the agents have issued. Failure of the agencies to submit policies in sequential numbers will be picked up on the computer, but only after quite a few numbers have been skipped. There was insufficient volume from Armstrong's agency to trigger this information from the computer. With respect to Charge III, failure to keep office open and accessible to the public during office hours, an insurance investigator visited the office on some six occasions in December 1977 and February and March 1978. At these visits the office was open but neither Armstrong nor a secretary was present. A lady working in an office down the hall from Respondent's office came to the office when the inspector arrived and offered to contact Armstrong. Several telephone calls made to Armstrong's office during March 1978 resulted in the phone being answered by an answering service. Respondent has operated a one-man office for many years and has an answering service cover all calls while he is out of the office. He wears a radio pager and claims his answering service can always contact him. The lady who covers office visits for Respondent during his absence from the office has had several years experience working in a general insurance agency. She fills out applications for clients coming into the office, gives receipts for payments, signs Armstrong's name to applications and other documents; and has done so for 4 or 5 years. She is not on any type of regular salary or otherwise employed by Armstrong. Respondent has been a licensed insurance agent since 1961 and Respondent's testimony was unrebutted. This is the first complaint filed against him in his capacity as a licensed insurance agent.
The Issue Whether Respondent committed the offenses described in the administrative complaint? If so, what punishment should he receive?
Findings Of Fact Based on the record evidence the Hearing Officer makes the following Findings of Fact: Respondent is now, and has been for approximately the past 20 years, licensed by Petitioner as a general lines insurance agent. On July 3, 1986, Petitioner received a complaint concerning Respondent from Elsa Garcia. Garcia reported that she had purchased automobile insurance through Dixie Insurance Brokers and had been given a temporary insurance binder bearing the signature of a "Paul J. Lovelace" reflecting that her coverage was to be effective March 11, 1985. According to Garcia, however, she had subsequently discovered, after having been involved in an automobile accident on March 23, 1985, that her insurance coverage had not taken effect until after the accident. Garcia's complaint was assigned to one of Petitioner's employees, Burton Powell, to review and investigate. As part of his investigation, Powell contacted Alan D. Kruger, Garcia's attorney. Kruger supplied Powell with Garcia's affidavit and other pertinent documents, including a copy of Garcia's automobile insurance application and the temporary insurance binder she had been given by Dixie Insurance Brokers. The application reflects that Garcia was seeking coverage for the period from April 2, 1985, to October 2, 1985. The binder, on the other hand, indicates that it was to be effective for one month commencing, not April 2, 1985, but March 11, 1985. Someone other than Respondent signed his name to both the application and the binder. 1/ On various occasions prior to December 18, 1987, Respondent was the general lines insurance agent of record for Dixie Insurance Brokers. 2/ On these occasions he never personally signed any insurance applications, nor did he otherwise play any role in the operation and control of the agency. By his own admission, he simply allowed the agency to use his license, without any restrictions imposed by him, in exchange for monetary consideration. In so doing, he willfully engaged in a scheme designed to circumvent the licensing requirements of the Florida Insurance Code.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner enter a final order (1) dismissing Count I of the administrative complaint; (2) finding Respondent guilty of Count II of the administrative complaint; and (3) revoking Respondent's general lines insurance agent license for his having engaged in the conduct specified in Count II of the administrative complaint. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of November, 1989. STUART M. LERNER 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 2nd day of November, 1989.
Findings Of Fact At all times material hereto, Respondent, Ralph Steven Carmona, was licensed as an insurance agent by Petitioner, Department of Insurance. On October 25, 1989, Respondent was eligible for licensure and licensed as a Life and Health Insurance Agent. From April 7, 1967 to April l, 1989, Respondent was licensed as a General Lines - Property, Casualty, Surety and Miscellaneous Lines Insurance Agent and is currently eligible for such licensure. From January 21, 1985 through April 1, 1987, Respondent was licensed as a Surplus Lines - Property, Casualty, Surety and Miscellaneous Lines Insurance Agent and remained eligible for such licensure until March 31, 1989. Respondent also served as an officer and director of the Greater Miami Insurance Agency, Inc., an incorporated general lines and life and health insurance agency in Miami. At the time of the incident at issue, Respondent, also, was associated with and conducted insurance transactions in the name of Greater Miami Insurance Agency. In August of 1987, Dr. Lucien Armand, a medical general surgeon, approached Respondent about the possibility of obtaining medical malpractice insurance. Dr. Armand was in the process of establishing his practice with Lawnwood Regional Medical Center in Fort Pierce, Florida. As a condition for employment at Lawnwood Regional Medical Center, Dr. Armand was required to obtain medical malpractice insurance from an insurer authorized to do the business of insurance in Florida. At Dr. Armand's request, Respondent made several inquiries about the possibility of insuring Dr. Armand. Since Dr. Armand had suffered at least four medical malpractice insurance claims from the period of 1982 through 1986, obtaining coverage for him was difficult. However, Respondent gathered several quotations from various medical malpractice insurance companies including the Florida Medical Malpractice Joint Underwriting Association (FMMJUA) which quoted a premium of between $75,000 to $80,000, annually. Dr. Armand rejected each of the plans offered by Respondent as too expensive and requested Respondent to continue his search for a less expensive coverage. Sometime prior to the time he was approached by Dr. Armand, Respondent had been contacted by a company with an address in the Bahamas, International Med Trust Fund (IMTF). Respondent called IMTF and requested additional information concerning their offerings and financial status. In response to his request, Respondent received a letter from a G.L.J. Wilson written on the letterhead of Paramount Insurance Broker & Agents Limited. Respondent represented that Mr. Wilson was the broker and agent for IMTF. The letter was dated February 2, 1987 and, as quoted from the letter, made the following apparent representations pertinent to IMTF: * * * International Ned Trust Fund has been doing business in the State of Florida for over three years. The Fund has retained the services of Melsar Ltd, Inc., a Florida Corporation that are Financial and General Consultants to the Insurance Industry whose job it is to advise us on strategy and regulations of the Insurance Agency. We have not been authorized to write business in the state of Florida simply because up until now authorization was not required. We are however, advised that the office of The Insurance commissioner does not object to our writing business in Florida so long as we state our intent to defend all claims and actions within the state. This we have done. We do have the services of a Florida Lawyer whose job it is to co-ordinate the legal defence of the fund, should action from a claim commence. * * * Respondent also received a letter from Gulf Union Bank (Bahamas) Ltd. dated February 4, 1987 which stated that the "dollar value" of IMTF was in the moderate seven figure bracket. To verify the allegations in Mr. Wilson's letter, Respondent called Petitioner and spoke with someone whom Respondent believed to be a representative of Petitioner. Respondent understood the alleged spokesperson to say that the Petitioner had no jurisdiction over IMTF and from that assumed that IMTF was not required to be licensed by Petitioner before doing business in Florida. Feeling assured that IMTF need not be licensed from his understanding of the alleged representation by Petitioner, that IMTF had adequate financial resources from the representation made by Gulf Union Bank and that IMTF had previously transacted business in Florida from Mr. Wilson's letter, Respondent ended his inquiries about the status of IMTF to conduct insurance business in Florida. Respondent prepared to offer policies for IMTF. Respondent solicited for IMTF under his General Lines - Property, Casualty, Surety and Miscellaneous Lines agent's license. Although medical malpractice insurance can be written under the license, existent law requires that the insurer, itself, must be authorized by Petitioner and an agent must hold an appointment with the insurer which is registered with Petitioner. As of August 20, 1987, IMTF was also not an authorized insurer. Further, Respondent was not authorized to solicit insurance in Florida on behalf of International Med Trust Fund. When Dr. Armand rejected coverage by the FMMJUA, Respondent gave Dr. Armand an application for IMTF and quoted him a premium of $24,500, a substantial decrease from the $75,000 to $80,000 premium quoted by the FMMJUA. Respondent also shared with Dr. Armand the information he had received concerning IMTF. Dr. Armand paid the deposit of $7,500 by tendering $5,000 in cash and financing the remainder with Respondent. Dr. Armand was then given a one month binder from Greater Miami Insurance Agency for coverage by IMTF dated August 20, 1989. Later, Respondent received the Certificate of Insurance from IMTF dated November 3, 1987 for the indemnity period of August 20, 1987 through August 20, 1988. Respondent copied the certificate and forwarded it to Dr. Armand. Dr. Armand's policy was the first and only policy which Respondent has written for IMTF. However, Respondent's reliance on the representations he obtained about the status of IMTF and his failure to have adequate knowledge about the insurers for which he was authorized to solicit under his general lines license clearly demonstrate a lack of reasonable knowledge about the transactions for which he was licensed. Between October 28, 1987 and March 7, 1988, Dr. Armand paid four premium installments totaling $6,674.00 to Greater Miami Insurance Agency in addition to the deposit. The funds were deposited, in trust, in the corporate account of Greater Miami Insurance Agency. In the regular course of business, the monies, minus Respondent's commission and approximately $1,500, were forwarded to IMTF. Sometime in early 1988, the hospital questioned the validity of the IMTF policy and contacted Petitioner. Petitioner responded with a letter dated April 6, 1988 stating that IMTF was not approved or authorized to write any kind of coverage in Florida. Dr. Armand was informed by the hospital about Petitioner's letter and its contents and that he must obtain substitute insurance to remain on staff there. Dr. Armand then informed Respondent about the letter from Petitioner. Respondent offered to return Dr. Armand's money, but Dr. Armand, having confidence that Petitioner's letter was in error, requested Respondent to clarify the matter with the hospital. During the months of April and May, 1988, Dr. Armand repeatedly tried to contact Respondent concerning the status of Respondent's efforts to clarify the matter. Failing to reach him by telephone, Dr. Armand wrote Respondent on June 11, 1988 and requested a refund of the amount of premium paid to IMTF. Then, on June 15, 1988, Dr. Armand again wrote to Respondent requesting assurance that IMTF would indemnify Dr. Armand for claims arising from acts occurring during the period of time which Dr. Armand thought he was covered by IMTF. Dr. Armand made this request although he had requested that the premium be refunded to him. The proof was unclear as to whether the funds were, or were not, refunded to Dr. Armand and no competent, substantial evidence was presented to show whether IMTF would, or would not, honor a claim against Dr. Armand. Respondent attempted to satisfy Dr. Armand's requests. He telephoned IMTF and requested it to submit its Bahamian license certificate to the hospital. He, also, sought substitute coverage for Dr. Armand by again contacting the FMMJUA and secured a one month binder with FMMJUA. The proof is unclear as to what funds Respondent used as the deposit for the binder. However, the premium quoted for the coverage by the FMMJUA, in this instance, was $125,000 which Dr. Armand rejected. Although alternate insurance was available to Dr. Armand, he terminated his staff privileges at Lawnwood Regional Medical Center. The reasons for his departure from Lawnwood are unclear. Dr. Armand currently practices in Broward County, Florida. Respondent still holds some of the remaining premium funds in trust, and a balance on the premium is owing IMTF. The amount of these funds, in addition to the amount of commission paid to Respondent, were not proven by competent, substantial evidence. The instant claim represents the first and only complaint filed with Petitioner against Respondent since Respondent was first licensed by Petitioner in 1967.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Insurance enter a final order which finds that Respondent committed the multiple violations of the Florida Insurance Code as set forth in the Conclusions of Law portion of this Recommended Order, imposes a an administrative fine of five hundred dollars ($500) on Respondent and places Respondent on probation for a period of three (3) months. DONE AND ENTERED this 10th day of January, 1990, in Tallahassee, Leon County, Florida. JANE C. HAYMAN Hearing Officer The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of January, 1990.
