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.
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 the Respondent committed the violations alleged in the administrative complaint dated March 22, 1995; and, if so, what penalty should be imposed.
Findings Of Fact Respondent, Mark Edward McKinley, is licensed in Florida as a general lines insurance agent. At all times material to the allegations of the administrative complaint the Respondent was so licensed. The Petitioner, Department of Insurance and Treasurer, has jurisdiction over insurance licenses issued in this state. On or about December 9, 1991, an Order of Liquidation, Injunction and Notice of Automatic Stay was entered in the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida, regarding the receivership of Great Oaks Casualty Insurance Company (Great Oaks). Pursuant to such order all policies written with Great Oaks were cancelled effective January 9, 1992. Subsequent to the order the Department conducted an audit of the Respondent's agent account. The audit consisted of a calculation of the unearned commissions on all Great Oaks policies issued through Respondent. Such unearned commissions were due and owed to the Department as the receiver. On or about June 10, 1992, a statement of the amounts owed together with a letter outlining what the commission statement consisted of was mailed to the Respondent. On or about December 22, 1992, after the Respondent failed to respond to the first letter, the Department mailed a first demand letter to the Respondent. On or about July 2, 1993, when the Respondent failed to respond to the first demand letter, the Department issued, by certified mail, a demand letter to the Respondent requesting remittance of the monies owed to the receiver. The certified receipt was returned to the Department, and it is found the Respondent received the demand letter of July 2, 1993. The Respondent failed or otherwise refused to pay the amount owed. As a result, a Summary Order directing immediate delivery of funds was entered against the Respondent on December 21, 1993. The Respondent failed to pay after entry of the Summary Order and a Final Order was issued on April 8, 1994. The Respondent failed to pay the final judgment within thirty (30) days of entry of the judgment. To the date of hearing the Respondent has failed or otherwise refused to make payment on the amount owed.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Insurance and Treasurer enter a final order revoking Respondent's license as a general lines insurance agent. DONE AND RECOMMENDED this 1st day of November, 1995, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of November, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-2363 Rulings on the proposed findings of fact submitted by the Petitioner: 1. Paragraphs 1 through 13 are accepted. Rulings on the proposed findings of fact submitted by the Respondent: 1. None submitted. COPIES FURNISHED: Mr. Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300 Mr. Dan Sumner Acting General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, FL 32399-0300 Michael K. McCormick, Esq. Department of Insurance Division of Legal Services 412 Larson Building Tallahassee, FL 32399-0300 Mr. Mark Edward McKinley 2641 South University Drive Davie, FL 33314
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: At all times relevant to this proceeding, respondent William J. Hartnett, Sr. was licensed as an ordinary life including disability, general lines, surplus lines and disability insurance agent. He has been in the insurance business since 1942 and was first licensed in 1947. Respondent originally organized the Southern American Fire Insurance Company. For the first year or so, he was its sole employee on a nonsalary basis and was nonsalaried for the first ten years of the company's operation. From 1965 on, respondent did not hold a 220 lines license with Southern American, as he did with other insurance entities. Respondent did not sign policies as agent for Southern American. With Southern American, respondent acted as a general agent and was authorized by the board of directors to receive a five percent override commission on the total volume of business. On or about October 27, 1975, a seizure order was entered by the Circuit Court of Leon County which directed the Florida Department of Insurance to take over the business and financial affairs of Southern American. This company has since gone into liquidation pursuant to Chapter 631, Florida Statutes. The Southern American March 31 and June 30, 1975, quarterly statements were prepared by Mr. R.L. Huard, the then assistant treasurer of Southern American, were signed by the respondent, and were filed with the Department of Insurance. The work papers for those statements had been approved by the respondent. Mr. Huard had been instructed by respondent when he was first hired in 1972 not to show on the quarterly statements the over 90-day old balances because they would all be "cleaned up" at the end of the year. Such balances had, in fact, been paid at the end of each of the two years that Mr. Huard was with the company up until the time the Department took over in 1975. It was the respondent's testimony that had the seizure order not been entered, the agencies' lines of credit would still have been open and that all balances could have been collected through September of 1975. The March 31, 1975, and June 30, 1975, quarterly statements of Southern American filed with the Department of Insurance reflected a substantial amount of agents' balances that at the time of reporting were over 90 days old. The elimination of such balances from those two statements would have left Southern American impaired under usual insurance accounting practices as reflected in the Florida Statutes. The over-90 day old agents' balances were due from agencies in which respondent had an interest as an officer, director or stockholder. In 1969, various officials of the Department of Insurance had discussions with the respondent regarding agents' balances which were over ninety days old. On or about December 28, 1973, respondent did deposit the proceeds of certain reinsurance treaties in the amount of $13,218.98 into the account of Southern American. This findings is determined from the testimony of respondent and from a copy of the check and a deposit slip received into evidence as Exhibit M. The deposit slip illustrates that the $13,218.96 check was one of two checks comprising a total deposit of $30,857.12. As a result of information made available to the parties shortly before the hearing, it was stipulated that there never was a direct reinsurance treaty between Southern American and Cottonbelt Insurance Company. It was further stipulated that Southern American did submit single risk policies on a facultative basis through General Aviation Insurance Brokers for Southern American to D.O. Howell and Company, Ltd., in London, England, which in turn placed policies so submitted with Cottonbelt through other brokers. The Department offered no other evidence concerning the checks amounting to $16,600.00 referred to in Count V. As noted above, respondent was authorized by the board of directors to receive as general agent for Southern American a five percent override on all premiums. He was also authorized to receive an annual salary and certain bonuses. For the years 1974 and 1975, respondent did not receive his total annual salaries. The total premium written in Southern American through North Star Insurance Agency from 1968 through 1975 was approximately $700,000.00. Monies owed Southern American by North Star were paid by checks made payable to the respondent, as agent. In his capacity as general agent of Southern American, respondent did receive funds in the approximate amount of $45,000.00 from subagent North Star in payment of premiums due Southern American on policies of insurance issued by Southern American through North Star. Such funds were not deposited into the account of Southern American by respondent, but were instead retained by respondent as an offset against commissions end salary due him from Southern American. This occurred in 1975. When the seizure order was entered in October of 1975, the monies due Southern American from North Star were carried on the books of Southern American as accounts receivable.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is RECOMMENDED that the licenses of respondent to engage in the business of insurance be suspended for a period of six (6) months. Respectfully submitted and entered this 10th day of July, 1979, in Tallahassee, Florida. COPIES FURNISHED: Honorable William Gunter State Treasurer and Insurance Commissioner The Capitol Tallahassee, Florida 32301 S. Strom Maxwell, Esquire Department of Insurance Suite 428-A, Larson Building Tallahassee, Florida 32301 Robert J. Kelly, Esquire Rogers, Towers, Bailey, Jones and Gay Post Office Box 1872 Tallahassee, Florida 32302 DIANE D. TREMOR 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 10th day of July, 1979.
Findings Of Fact Introduction At all times relevant hereto, respondent, Charles Lee Anderson, was licensed as a general lines insurance agent by petitioner, Department of Insurance and Treasurer. Respondent presently resides at 2291 Northwest 12th Court, Pompano Beach, Florida. He has been licensed by petitioner since 1968, and, prior to this proceeding, had no blemishes on his record. When the events herein occurred, Anderson was the president and director of Payless and Save Insurance Underwriters Corporation (Payless), an insurance agency located and doing business at 2401 Northwest 21st Avenue, Fort Lauderdale, Florida. Anderson was also the general lines agent of record for the corporation. Count I In early January, 1984 Anderson was working from midnight until 8:00 a.m. as a security guard. Because of this, he hired one Mamie Baugh as an independent contractor to operate his insurance agency. Anderson authorized Baugh to sell policies and sign his name on insurance applications and other documents. Anderson would drop by his office two or three times a week to "check on (Baugh)" and "look at the paperwork." On or about January 3, 1984 Blanche Jones went to Payless to purchase an automobile insurance policy. She chose Payless because it was located just around the corner from her home in Fort Lauderdale, and was more convenient than her former insurance agent in Hallandale. Because Anderson was not present, Jones met with Baugh and discussed her insurance needs. Baugh filled out an application on behalf of Jones for automobile insurance with Industrial Fire and Casualty Insurance Company (Industrial) in Hollywood, Florida. Anderson was a licensed agent with Industrial, and authorized to act as a brokering agent for that company. Baugh signed Anderson's name on the application as brokering agent. Jones then gave Baugh a check for $456 as payment for the policy and was given a receipt. In February Jones had not received her policy or any evidence that she was insured. Her husband decided to visit the Payless office and obtain an insurance identification card in the event they had an accident. He met with Anderson who promised to give him a card. The following day, Anderson went to Jones' house and dropped off a business card. 1/ While there, Jones told Anderson she had paid for a policy but had never received anything. Anderson promised to "check into the particulars." After not hearing from Anderson for two months, Jones' husband went to Payless' office and found it closed. Jones thereafter went to her old insurance agent in Hallandale, and then to Public Insurance Agency (Public) in Hollywood. Public was the managing general agent for Industrial, the insurance company with whom Jones thought she had a policy. Public had no record of having received Jones' application or the $456 premium paid to Anderson. It also had no record of Anderson having telephoned Public on its "application telephone", a procedure that Anderson should have followed in order to have a binder issued on the policy. Consequently, Public never issued a policy insuring Jones. In late 1985 Jones was reading a copy of the Hollywood Sun Tattler, a local newspaper, and noticed an article about Anderson, who was then running for chief of police in Dania. She contacted the reporter who wrote the story who in turn contacted Anderson. Respondent telephoned Jones the next day and promised to return her money. A week later (January 10, 1986) Jones received a $456 money order from Anderson. A representative of Public established that Anderson was given a copy of an underwriting guide which contained explicit instructions on how to bind coverage and fill out applications. Among other things, the guide required that Anderson, and not his surrogate, sign all applications. Therefore, he was not authorized to allow Baugh to sign in his stead. Count II On or about December 20, 1983 Joseph V. Baxter visited Payless for the purpose of purchasing insurance coverage on various rental properties he owned. Baxter met with Anderson who prepared six "Homeowners Application for Quotation Only" with International Bankers Insurance Company (IBIC). Baxter gave Anderson a check for $818 as payment for the coverage. Anderson later endorsed the check. On January 11, 1984 Baxter returned to Payless and made application for a seventh insurance policy on another rental property. He gave Anderson a $318 check which Anderson subsequently endorsed. At that time Baxter was given a certificate of insurance indicating coverage with Great Southwest Fire Insurance Company (GSFIC). Several months later Baxter received a telephone call from a representative of the lending institution which held the mortgages on his property. Baxter then instructed Anderson to contact the institution and certify that Baxter had coverage on his properties. Anderson telephoned the institution in Baxter's presence and told the representative that Baxter was insured. Sometime later Baxter was again contacted by the mortgagee concerning his insurance coverage. Baxter attempted to visit Anderson but found Payless had closed its offices and gone out of business. Baxter then filed a complaint with petitioner. He never received insurance policies from IBIC or GSFIC. On January 10, 1986 Anderson repaid Baxter $1,136, the amount received by Anderson some two years earlier. A representative of IBIC established that Anderson never remitted the premiums or mailed the six quotation forms to the home office. It was further established that although GSFIC quoted a rate for Anderson on Baxter's seventh piece of property, it never received the follow-up application or premium. Respondent's Case Respondent blamed the Jones mishap on Baugh, who he claimed may have misplaced the application and taken the money. According to Anderson, she now lives in California and was unable to attend the hearing. However, he had no explanation for failing to follow up on Baxter's applications. Anderson said he closed his business in February, 1984 after a series of break- ins at his office, and left a note on the door giving a telephone number where he could be reached. However, he made no effort to personally contact those persons who held policies. Anderson further stated that he was unaware of the Jones and Baxter complaints until contacted by the newspaper reporter and petitioner, and then promptly repaid all monies due.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of the violations set forth in the Conclusions of Law portion of this order, and that his license and eligibility for licensure be REVOKED. DONE and ORDERED this 10th day of September, 1986, in Tallahassee, Florida. DONALD R. ALEXANDER 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 10th day of September, 1986.
