Findings Of Fact Petitioner, Marcus Paul, was employed part-time as a dentist by the State of Florida, Department of Health and Rehabilitative Services, Pensacola, Florida. As part of his employment Dr. Paul was enrolled in the State's Employee Health Insurance Plan. The State's Health Plan is a self-insurance plan. Blue Cross and Blue Shield (BCBS) of Florida is the State's agent for administering the Health Plan and is initially responsible for timely and promptly investigating and paying legitimate health claims. Under the State's Health Plan an employee is responsible for the first $1,000 of covered expenses. The Plan pays the balance of any covered expenses incurred by the employee. Covered expenses are defined in the plan. Such expenses are basically limited to reasonably necessary medical treatment or care of some kind. Dr. Paul also carried a direct pay health insurance policy with Blue Cross and Blue Shield of Philadelphia, Pennsylvania. The Pennsylvania policy was a non-coordinating policy with the State's Health Plan. In essence, the Pennsylvania policy paid directly to its insured, Dr. Paul, regardless of the benefits paid by the State's Plan and the State's Plan benefits are not reduced by the Pennsylvania policy's payment of health benefits. Around September 15, 1984, Dr. Paul suffered a pulmonary embolism. He was hospitalized for his condition from September 15, 1984 to September 30, 1984. On admission, the hospital obtained Dr. Paul's health insurance information and had him sign the usual authorizations to allow the hospital to file his insurance claim. The total hospital charge resulting from Petitioner's hospitalization was $10,873.01 of which $10,582.30 was eligible for payment under the State Plan. The hospital filed a claim on both of Dr. Paul's contracts of insurance. Both contracts of insurance paid benefits to the hospital. BCBS of Pennsylvania paid approximately $9,500 and BCBS of Florida paid $9,582.00. The amount paid by BCBS of Florida represents the total covered expenses less the $1,000 the insured is responsible for. Because of the double payment the hospital told Dr. Paul that he was entitled to a refund from it. However, before the hospital refunded the money to Dr. Paul, BCBS of Florida discovered the double payment. No evidence was presented as to how BCBS of Florida discovered the other insurance company's co-payment. BCBS of Florida immediately demanded the hospital refund its payment. The hospital did so. BCBS of Florida mistakenly took the position that it was not the primary payor on the claim and refused to pay the claim. The hospital thereafter looked to the Pennsylvania proceeds for its payment. Dr. Paul was thereby prevented from receiving the monies due him under his Pennsylvania policy at a time when his need for funds was high since, due to his illness, he could not conduct a regular practice. For approximately one year Dr. Paul attempted to correct BCBS of Florida's mistake. However, he ran into a brick wall. Finally, after Dr. Paul retained an attorney to deal with BCBS, BCBS admitted its mistake and paid the hospital as the primary payor of Dr. Paul's claim. BCBS' failure to pay Dr. Paul's claim for over one year was a breach of his contract of insurance and negligent. BCBS' actions caused Dr. Paul not to be able to receive other monies that were rightfully his and at a minimum caused Dr. Paul to incur damages in the amount of attorney's fee he was forced to pay to rectify BCBS' mistake. When BCBS paid the claim the second time the company paid $10,281.93 to the hospital. Dr. Paul's $1,000 deductible was not subtracted from the amount BCBS paid. The hospital then refunded $10,105.70 to Dr. Paul. The discrepancy between the original `84 payment and the second `85 payment is $300.17. Therefore, only $699.83 could be attributable to Dr. Paul. Additionally Dr. Paul did not receive the full BCBS payment from the hospital. The amount he received was $176.23 less than the amount paid by BCBS. Therefore, the amount owed by Dr. Paul, if any, is $523.60. The hospital has possession of the other $176.23. BCBS later discovered its error and attempted to collect the full $1,000 deductible from Dr. Paul. He refused to pay since he had incurred and paid more than $3,000 in attorney's fees when he was forced to hire an attorney to obtain proper payment of his insurance claim. Since Dr. Paul refused to pay, BCBS turned his name over to DOA, its principal, for further collection action. DOA terminated further payment of Dr. Paul's ongoing insurance claims. 1/ Additionally, DOA unsuccessfully attempted to have the comptroller garnish Dr. Paul's wages. These actions were taken even in light of the breach of contract and negligent failure of DOA's agent to properly pay Dr. Paul's claim.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is Recommended: That the Department enter a final order determining that Dr. Paul is liable to it for the $523.60. DONE and ENTERED this 25th day of April, 1989, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER 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 25th day of April, 1989.
The Issue The issue is whether the Petitioner, Amjad Shamim, is eligible for continuation coverage of health insurance and reimbursement, under the State of Florida Employees Group Insurance Plan, for medical care expenses he incurred after he left state employment.
Findings Of Fact Mr. Shamim became a full-time employee of the Department of Health and Rehabilitative Services (HRS) in September, 1986, and worked at the Palm Beach County Health Department. Effective August 1, 1987, Mr. Shamim was insured with family coverage under the State of Florida, Employee Group Health Insurance Program. His enrollment continued until his insurance termination effective date of January 1, 1989. On November 15, 1988, Mr. Shamim met with Martina L. Walker, Personnel Technician I for HRS at the Palm Beach County Health Department, in connection with his decision to leave the Department's employ on November 18, 1988. At that meeting he executed the documents required by HRS to discontinue his health insurance coverage. As part of that November 15, 1988, conference, Martina Walker informed Mr. Shamim of his rights to continued health insurance coverage after his termination of employment. Mr. Shamim advised Ms. Walker that he no longer needed the State coverage because his new employer offered a health insurance plan to its employees. Ms. Walker, nonetheless, cautioned Mr. Shamim that any pre-existing conditions are usually not covered by new employer policies. Ms. Walker's notification of Mr. Shamim's right to continued health insurance coverage for up to 18 months was not in writing. Mrs. Walker never told Mr. Shamim orally the specifics of continuation coverage, i.e., that he had 60 days to elect continuation coverage from the coverage effective date of January 1, 1989, that his application and premium were required to be postmarked by March 1, 1989; or that he could continue his family coverage for 18 months at monthly premium of $273.01 per month. In addition to disclosures when an employee leaves, all employees of the Palm Beach County Health Department are advised of their opportunity to elect continuation coverage under the State Plan at the time of their employment, by means of a notice furnished by HRS. Mr. Shamim received a general notice of benefits, including the availability of post employment continuation coverage, at the time of his employment. The termination form completed by Ms. Walker was processed routinely, and caused the Division of State Employee Insurance to mail Mr. Shamim written notification by first class mail of the availability of continuation coverage in a letter dated December 1, 1988. Due to the appearance of the handwritten address on the notice mailed to Mr. Shamim, it is more likely than not that this notice failed to arrive at Mr. Shamim's home address. The portion of the address for the apartment number could be read as D201 or 2201, which would account for misdirection of the notice in the mail. Mr. Shamim's claim that he did not receive the notification is accepted. Had the notice been properly addressed and had he received it, Mr. Shamim would have had the opportunity to decide whether to exercise his legal right to continue his health insurance. On January 27, 1989, Mr. Shamim had surgery to his hand. He had been treated for that condition while he was employed with the Palm Beach County Health Department. Because it was deemed to be a pre-existing condition, the expense he incurred of almost $4,000 was not covered under the health insurance policy of his new employer. There is no evidence of the length of time the pre- existing condition exclusion in the policy offered by Mr. Shamim's new employer lasts. Mr. Shamim first notified HRS of his desire for post termination health insurance coverage on September 19, 1989. A second request was made on November 7, 1989. Finding no success with HRS, Mr. Shamim contacted the Respondent on December 29, 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered accepting the request of Mr. Shamim for continuation coverage, accepting his premiums and processing his claim. DONE and ENTERED this 11th day of November, 1990, at Tallahassee, Florida. WILLIAM R. DORSEY, JR. 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 11th day of November, 1990.
The Issue The issue is whether Respondent properly denied Petitioner's application for licensure as a nonresident life and health insurance agent.
Findings Of Fact On or about January 9, 1996, Petitioner went to a testing site in Jacksonville, Florida to take the licensure examination for health insurance agents. He had an appointment card to take the examination at that place and time. When Petitioner completed the examination, he took his paper to one of the test site workers to have it scored. While his examination paper was being graded, another test proctor advised Petitioner that his examination could not be scored because his name was not on the roster. Petitioner inquired how he could find out if he had passed the examination. The test proctor in charge told him to call Respondent’s office in Tallahassee. The following day, Petitioner called Respondent’s office and was told that his test paper could not be graded because he had taken the test the maximum number of times. At that point, Petitioner apologized and offered to pay for taking the examination in question because he had taken it in error. There is no competent evidence to support the following factual allegations: (1) Petitioner offered money to Debra Bell, a test proctor, to say that he had passed the test; (2) After taking the test and failing it, Petitioner asked Ms. Bell to put his score under someone else’s name; and (3) Petitioner discussed this matter with another test proctor, Jewel Armstead, and offered her money if she would help him pass the test. Petitioner applied for a nonresident life and health license on or about March 8, 1996. He has passed the life portion of the examination. He admits that he has not passed the health portion of the examination. Petitioner was licensed as a health agent in Florida in 1970. However, he allowed his license to expire in 1973 when he became a general insurance agent in Georgia.
Recommendation For the reasons set forth above in the Findings of Fact and Conclusions of Law, it is recommended that Respondent enter a Final Order denying Petitioner’s application for licensure as a nonresident life and health insurance agent. DONE AND ENTERED this 22nd day of January, 1997, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of January, 1997. COPIES FURNISHED: James Levi Roberson Post Office Box 943 Brunswick, GA 31520 James Levi Roberson 303 Old Mill Road Woodstock, GA 30188 Marc S. Nash, Esquire Department of Insurance Division of Legal Services 612 Larson Building Tallahassee, FL 32399-0333 Bill Nelson, Commissioner Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 Daniel Y. Sumner, Esquire Department of Insurance The Capitol, LL-26 Tallahassee, FL 32399-0300
The Issue The issues for determination in this proceeding are whether Respondent committed the acts alleged in the Amended Notice And Order To Show Cause and, if so, what, if any, penalty should be imposed.
Findings Of Fact Parties Petitioner is the state agency responsible for regulating insurance and insurance related activities in Florida. Petitioner is the agency responsible for regulating any licensed or unlicensed person or entity engaged in unfair insurance trade practices within the meaning of Section 626.951, Florida Statutes. 1/ Respondent, Leroy Preston, is licensed to sell life and health insurance in Florida. The other Respondents are not licensed to transact insurance in Florida and are not otherwise licensed by Petitioner pursuant to Chapters 624 through 632, 634, 635, 637, 638, 641, 648, and 651 (the "Florida Insurance Code"). Respondent, American Family Benefits Group, Incorporated ("AFBG, Inc.") is a Florida corporation wholly owned by the four individual Respondents. Respondent, Roy L. Beach, is an officer and director of AFBG, Inc., and is an attorney licensed to practice law in Florida. Respondents, Preston, Kenneth King, and Robert King, are officers and directors of AFBG, Inc. The individual Respondents comprise American Family Benefits Group ("AFBG") and the board of directors for AFBG, Inc. (the "Board"). Background Respondents designed a marketing program for the sale of memberships in AFBG, Inc. Promotional materials describing the benefits of membership were reviewed and approved by each member of the Board and mailed to thousands of prospective customers in 50 states. Memberships were offered to individuals at a price of $99 per membership. The benefits of membership included: life insurance up to $350,000 at no cost to members; a certificate of deposit of $5,000; a major bank credit card, regardless of credit history, secured by the certificate of deposit; non- qualifying mortgage loans; non-qualifying automobile leases; discounted long distance service; and discounted catalog prices. Respondents received approximately 140,000 applications for membership. Approximately 600 applications included payment of the $99 membership fee. Petitioner issued a Notice And Order To Show Cause on February 10, 1994. The marketing program for the sale of memberships in AFBG, Inc. was terminated by Respondents. Respondents returned the membership fee paid by approximately 300 applicants. On May 6, 1994, Petitioner issued an Amended Notice And Order To Show Cause ("Amended Notice"). The Amended Notice charges that Respondents violated Sections 626.9521, 626.9541(1)(a), (b), (h), (l), and (n). The Amended Notice charges that Respondents violated Section 626.9541(1)(a) by making misrepresentations for the purpose of effecting an assignment or pledge of insurance policies to secure a loan. Respondents allegedly violated Section 626.9541(1)(b) by representing that insurance policies obtained on the life of members would be used to secure a loan that would fund membership benefits. Respondents allegedly violated Section 626.9541(1)(h) by offering the payment of money to induce customers to enter into an insurance contract. The Amended Notice charges that Respondents violated Section 626.9541(1)(l) by inducing customers to pledge, assign, borrow on insurance policies, convert insurance policies, or to take out an insurance policy with another insurer ("twisting"). Finally, the Amended Notice charges that Respondents violated Section 626.9541(1)(n) by offering free insurance as an inducement for the purchase or sale or services directly or indirectly connected with real or personal property. Pledge Or Assignment To Effect A Loan: Section 626.9541(1)(a) Respondents knowingly issued and circulated a statement or sales presentation (the "promotional materials") that was a misrepresentation. The misrepresentation was made for the purposes of: effecting a pledge or assignment of an insurance policy; and effecting a loan against an insurance policy. Payment of the $99 membership fee did not entitle a new member to any of the benefits of membership. A new member was not required to elect any membership benefit, including the insurance benefits. Such a member could simply pay Respondents $99 and choose to receive none of the benefits of membership. A new member who wished to elect any of the benefits of membership was in substantially the same position as a new member who chose to receive no benefits. A new member who desired any one of the benefits of membership was first required to elect the insurance benefits. Insurance benefits entitled a new member to five universal life insurance policies on the life of the new member. Each policy was to be issued for $70,000. 2/ No life insurance policies were available unless a new member applied for and obtained all five policies and assigned four of the five policies to a bank. The bank must then make a loan in an amount and terms that were sufficient to fund all of the benefits of membership. 3/ A loan in the gross amount of $84,000 was needed to fund the benefits of membership. The net loan proceeds were to be used to purchase an annuity, a certificate of deposit to secure the credit card for the new member, pay Respondents a profit of $5,000, pay commissions and referral fees to independent parties up to $3,000, pay administrative costs, and fund the other benefits of membership. 4/ Respondents' pro forma projections of economic feasibility for the membership program showed an annual interest rate of six per cent, an amortization period of 20 years, and level periodic payments of principal and interest. Respondents' pro formal projections were based, in relevant part, on three assumptions. First, the insurance policies would be used as part of the collateral securing the loan needed to fund the benefits of membership. Second, Respondents were to be personally liable for each loan. Third, an annuity would secure the loan, pay the debt service on the loan, and pay the premiums for the insurance policies assigned to the lender. The insurance policies that new members were required to assign to the lender to secure the purported loan had no loan value. Respondents represented to prospective members that the life insurance policies were universal life policies. However, the policies were "skeleton" universal life policies that had de minimis cash value and no loan value. The loan to value ratio of any loan secured by the insurance policies would necessarily exceed 100 percent. Respondents' personal liability for loans to new members lacked economic substance. Capital contributions to AFBG, Inc. and Respondents' individual assets were inadequate to secure individual loans of $84,000 to 140,000 members. The annuity needed to pay the debt service on the loan and the insurance premiums on the policies securing the loan was not economically feasible. 5/ The membership fee of $99 was inadequate to pay the first year insurance premium on one $70,000 policy, much less the other four policies required to fund any of the benefits of membership. The economic reality of the membership program required a new member to pay Respondents $99 and to apply for and obtain five insurance policies from independent insurance agents. There was little or no probability of receiving any of the benefits of membership because the loan needed to fund those benefits had little or no economic reality. Thus, the membership program required a new member to pay $99 to Respondents for no benefits of membership. If $99 had been paid by all 140,000 applicants, Respondents would have received $13,860,000 in return for illusory promises of membership benefits. Insurance Policies To Secure Loan: Section 626.9541(1)(b) Respondents knowingly published, circulated, disseminated, and placed before the public an untrue statement concerning the business of insurance. Respondents represented that the universal life insurance policies obtained by individual members would be used as collateral to secure the loan needed to fund their insurance benefits. Respondents knew that the insurance policies were skeleton policies with little or no cash value and no loan value. The untrue statements issued by Respondents concerned the business of insurance. Respondents used economic incentives to induce prospective members to obtain life insurance policies. Without life insurance policies, new members were not entitled to any of the other benefits of membership including, a certificate of deposit, a credit card, non-qualifying mortgages, and non- qualifying car leases. The purchase and assignment of life insurance policies was an integral part of the business conducted by Respondents. The economic incentives used by Respondents were designed to effectuate a contract of insurance. Respondents effectuated approximately five contracts of insurance. The subsequent assignment of insurance policies to a lender also constituted the business of insurance. Those assignments constituted the transaction of matters subsequent to the insurance contract and arising out of the insurance contract. Unlawful Rebates: Section 626.9541(1)(h) 27. Respondents knowingly offered an indirect rebate of an insurance premium to prospective members as an inducement to enter into an insurance contract. Respondents' offer to pay the insurance premiums on members' insurance policies was a valuable consideration intended to induce new members to enter into insurance contracts. Twisting: Section 626.9541(1)(l) 28. Respondents knowingly made misleading representations with respect to insurance policies for the purpose of inducing or tending to induce new members to pledge, assign, borrow on, or convert an insurance policy or to take out a policy of insurance in another insurer. Respondents representations were misleading. 29. Respondents' representations led prospective members to believe that a pledge, assignment, or conversion of their insurance policies could be used to secure a loan needed to fund other membership benefits. The representation that a loan could be obtained by new members upon assignment of their insurance policies had no economic reality. Free Insurance: Section 626.9541(1)(n) Respondents offered to provide free insurance as an inducement for new members to purchase real or personal property. The benefits of membership included non-qualifying mortgages in real property, non-qualifying car leases, and non-qualifying bank credit cards. None of those benefits were available to new members unless they obtained life insurance policies and assigned those policies to a lender. The insurance policies were free to new members. There was no cost to new members. The insurance premiums were to be paid out of the annuity to be purchased from the net loan proceeds.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondents guilty of all of the charges in the Amended Notice and ordering Respondents to permanently cease and desist the marketing of memberships in AFBG, Inc. It is further recommended that a fine of $4,000 should be imposed on each of the Respondents, not to exceed the aggregate amount of $20,000, and that the license of Respondent, Leroy Preston, should be suspended for 30 days. RECOMMENDED this 28th day of March, 1995, in Tallahassee, Florida. DANIEL MANRY 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 28th day of March, 1995.
Findings Of Fact At all times relevant to these proceedings, the Petitioner was an applicant for licensure as a life including variable annuity and health insurance agent. On or about February 2, 1994, the Petitioner was scheduled to take the life including variable annuity and health insurance agent examinations at Florida Technical College in Orlando, Florida. On February 2, 1994, the Petitioner chose to take only the life including variable annuity examination. He did not receive a passing grade on this examination. On February 4, 1994, the Petitioner returned to the Florida Technical College after the test had started. He attempted to use another test admittance authorization card to be able to re-test. At that time, the Petitioner was advised by Tom Bastedo, Test Site Computer Operator, that he could not use the authorization card to gain admittance to the examination since the Petitioner had already taken the life including variable annuity examination and the computer scoring system would report that the examination had already been scored. The Petitioner became angry and tore up the card. The Petitioner then discussed his personal situation with Tom Bastedo, which included a reference to some "emeralds" that the Petitioner owned. The Petitioner removed from his briefcase what appeared to be real emeralds and offered them as a bribe to Mr. Bastedo if he would make it look like the Petitioner had passed the examination which he had previously failed on February 2, 1994. Mr. Bastedo refused the offer and advised the Petitioner that he must reapply to be tested. The Petitioner hung around the testing site for awhile and then left the area. This incident was reported immediately by Mr. Bastedo to his supervisors. On or about March 9, 1994, the Petitioner's application for license as a life including variable annuity and health insurance agent was denied because of the events which had occurred at the Florida Technical College on February 4, 1994. Petitioner's explanation of the events that occurred on February 4, 1994 is not credible.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance and Treasurer enter an Order denying the license application of Dario Albert Alvarez for licensure as a life including variable annuity and health insurance agent. DONE AND ENTERED this 27th day of September, 1994, in Tallahassee, Florida. DANIEL M. KILBRIDE 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 27th day of September, 1994. APPENDIX Petitioner did not submit proposed findings of fact. Respondent's proposed findings of fact. Accepted in substance: paragraphs 1-7. COPIES FURNISHED: Dario Albert Alvarez 13329 Laver Lane Orlando, FL 32824 John R. Dunphy, Esquire Division of Legal Services 612 Larson Building Tallahassee, FL 32399-0333 Tom Gallagher State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Bill O'Neil, Esquire General Counsel Department of Insurance and Treasurer The Capitol, PL-11 Tallahassee, FL 32399-0300
The Issue The issue is whether Brian T. Kidd is entitled to additional reimbursement of medical care expenses under the State of Florida Employees' Group Insurance Plan.
Findings Of Fact Mr. Kidd is a state employee and has been diagnosed as having Amyotrophic Lateral Sclerosis (ALS), commonly known as Lou Gehrig's Disease. When the disease was diagnosed, Mr. Kidd was covered by Capital Health Plan (CHP). CHP refused to cover the expenses of testing and treatment at the ALS clinic in Houston, Texas. During the October, 1989, open enrollment period, Mr. Kidd opted to change his medical insurance coverage to the State of Florida Employees' Group Insurance Plan (the State Plan). He made the change hoping to get coverage for the testing and treatment at the ALS clinic in Texas. The effective date of his coverage under the State Plan was January 1, 1990. Prior to leaving for the ALS clinic, Mr. Kidd talked to Lee Peacock and William Seaton in the Department's Division of State Employee Insurance. Mr. Kidd was told that the only way to determine the extent of coverage for the testing and treatment was to get prior approval from the Department's prior approval program. Mr. Kidd did not file a claim under the prior approval program. Instead, on January 29, 1990, Mr. Kidd sent a letter to William Seaton, together with a copy of a letter from Bernard. M. Patten, M.D., a doctor with the Baylor College of Medicine in Houston, Texas. Mr. Kidd's letter advises that he wants a predetermination regarding tests he is having from January 31 to February 8, 1990. Knowing that his letter requesting a predetermination could not have even been received by the Department, Mr. Kidd left for Texas and the scheduled tests and treatment. Mr. Peacock responded to the January 29, 1990, letter on February 13, 1990, advising that prior approval could not be given because the letter contained inadequate information and a prior approval claim had not been filed. Mr. Kidd did receive medical testing and treatment from January 31 to February 8, 1990. The State Plan paid approximately $8,400 of the total bills. Mr. Kidd believes that the State Plan should have paid more. Mr. Kidd offered no credible evidence to show entitlement to greater payment of benefits. While he did place numerous benefit payment schedule forms into evidence, he did not identify a single unpaid charge and show that it should have been paid. Further, his testimony in this regard is not entitled to great weight because some of his statements are plainly inaccurate. For example, Mr. Kidd identified a benefit payment schedule bearing a number of 00731581300 in which payment for $85.00 was excluded. He claimed that this charge should have been paid. On cross-examination, Mr. Kidd had to acknowledge that this charge was in fact paid on benefit payment schedule number 01271871300 except for $20.00 which was an ineligible expense. Mr. Kidd was unclear on and unable to identify those charges which had not been paid and the reasons he believed he was entitled to the benefits. The State Benefit Document limits payments for hospital services for non-PPC services at 80% of the hospital's average rate, not to exceed $152.00 per day. The Plan also requires a deductible of $200.00 per hospital admission. For example in this case Mr. Kidd had 9 days of hospitalization and was charged $230.00 per day. The eligible expenses were only $190.00 per day or $1710 leaving a total of $360 of ineligible expenses. Further, The Plan pays only 80% of eligible expenses (.80 x 1710=1368), leaving $342 or 20% as the patient's responsibility. Adding the ineligible expenses and the patient's responsibility leaves a total of $702 of the hospital room and board not paid under the Plan. The amount paid was correct. While there are other examples such as this where the Plan clearly paid the proper amount, there is no evidence to show one single example where the Plan did not pay all that was owed. All of Mr. Kidd's claims were properly paid under the Plan in accordance with the Benefit Document.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Administration enter a Final Order denying Brian T. Kidd's request for additional reimbursement and dismissing Mr. Kidd's petition for relief. DONE and ENTERED this 19th day of October, 1990, in Tallahassee, Florida. DIANE K. KIESLING 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 October, 1990. APPENDIX TO THE RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Brian T. Kidd The proposed findings of fact submitted by Petitioner are in a format which combines findings of fact, conclusions of law and argument. The proposed findings of fact cannot be separated in such a way as to allow specific rulings on each proposed finding of fact. Hence the only ruling that can be made is that the proposed findings of fact are subordinate to the facts actually found in this Recommended Order. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Administration Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1-5(1-7) and 9(12). Proposed finding of fact 6 is subordinate to the facts actually found in this Recommended Order. Proposed findings of fact 7 and 8 are unnecessary. COPIES FURNISHED: Brian T. Kidd Route 3, Box 4381 Quincy, Florida 32351 Augustus D. Aikens General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Aletta Shutes, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to the allegations of the First Amended Administrative Complaint, respondent Dennis Victor Daniels was licensed as an Ordinary Life including Disability Agent in Florida and was employed by Gulf Health/Life, Inc. in St. Petersburg, Florida. On or about January 14, 1980, Julie Stratton (then Julie Marzec) contacted respondent at the offices of Gulf Health/Life, Inc. for the purpose of purchasing health insurance. She and respondent discussed different insurance policies, and respondent informed her that if she joined the American Benevolent Society (ABS) she could obtain a lower rate for her policy and obtain the best policy for her money. Mrs. Stratton could not remember if respondent informed her of the exact amount of money she would save on her insurance if she joined the ABS. She was informed that other benefits and discounts from area businesses would be available to her as a member of the ABS. Mrs. Stratton joined the ABS in order to obtain less expensive insurance. She wrote two checks -- one in the amount of $15.00 payable to the ABS and the other in the amount of $54.26 payable to CNA Insurance Company. She obtained two insurance policies. The form numbers on these policies were 51831 and 52176. Based upon a referral from an agent with Allstate Insurance Company, John Valentine and his wife went to the offices of Gulf Health/Life in order to obtain hospitalization and surgical insurance coverage. Before moving to Florida, Mr. Valentine was covered by a group policy through his place of employment. Respondent informed Mr. Valentine that members of the ABS could obtain a policy at group rates which entailed a lesser premium than individual rates. Mr. Valentine wrote two checks -- one in the amount of $178.73 payable to CNA Insurance Company and the other in the amount of $25.00 payable to the ASS. Mr. Valentine received two policies from CNA -- one bearing form number 51831 and the other bearing form number 52176. He also received a brochure listing the places of business from which he could receive discounts as a member of the ABS. Gulf Health/Life, Inc. was a general agent for CNA. During the relevant time periods involved in this proceeding, CNA had different policies for health insurance. Policies with a form number of 51831 required the policyholder to be a member of an organization endorsing CNA in order to purchase that policy. Form 51831 policyholders paid a lesser premium for their policies. The difference in premiums between the group or organization policy and an individual policy with the same coverage is approximately $10.00. To obtain the policy bearing form number 52176, there is no requirement that the policyholder be a member of a group or an organization. Ms. Watkins, a secretary employed with Gulf Health/Life, Inc. between December of 1978 and June of 1979 observed a device known as a "light box" on the premises of Gulf Health/Life. This was a square-shaped plywood box with a slanted glass top and a high-intensity lightbulb within the box. On from a half-dozen to a dozen occasions on Fridays between January and April, 1979, Ms. Watkins observed respondent bent over the light box with a pen in his hand tracing a signature onto an insurance application. She could not produce any documents or recall any names of any insurance applicant whose signature was traced or copied by the respondent.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the First Amended Administrative Complaint filed against the respondent on April 29, 1982, be DISMISSED. Respectfully submitted and entered this 10th day of September, 1982, in Tallahassee, Florida. DIANE D. TREMOR 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, 1982. COPIES FURNISHED: Curtis A. Billingsley, Esquire Franz Dorn, Esquire 413-B Larson Building Tallahassee, Florida 32301 William A. Patterson, Esquire Masterson, Rogers, Patterson and Masterson, P. A. 447 Third Avenue North St. Petersburg, Florida 33701 Honorable Bill Gunter Insurance Commissioner The Capitol Tallahassee, Florida 32301
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, Barrett Chambers Miller, was licensed as an agent with Independent Life and Accident Insurance Company in the State of Florida. On March 11, 1981, Respondent signed a Combination Agent's Contract Form 1-7759 with the Independent Life and Accident Insurance Company. Part I, Article 2, of the contract requires the agent to "pay over all monies collected to the manager of the district" or to his representative and forbids the agent to retain any monies collected for any purpose. Part I, Article 1, of the contract requires the agent to "keep true records of the business on the books [and] to forward to the company on company forms a true account each week of his business. Among the "company forms" routinely used by agents in the conduct of their business are: (1) the Premium Receipt Book, (2) the Collection Book, (3) the Ordinary Remittance Report, (4) the Field Accounting Route List, and (5) the Balance Due Account Deficiency Sheet. The Premium Receipt Book is used to record the premium paid by the policyholder; is annotated whenever a premium is paid; and bears the premium paid, the date paid, and the signature or initials of the agent receiving the payment. The Collection Book page bears the name and address of the premium payer, the policy number(s), the type of plan, some statistics as to the insured, the death benefit, and the date on which the premium is paid each month. The Ordinary Remittance Report carries, as to each policy on the agent's debit (list of policyholders to be serviced), an account of the periodic premium collections recorded during the week covered by the report. The Field Accounting Route List is used by the agent to indicate weekly collections on weekly premium payments, and the Balance Due Account Deficiency Sheet is used to charge back deficiencies to the agent's account that are found in his collections turned in weekly. Count I: On May 26, 1981, Annie McKibben, owner of Policies A 39189 on the life of Carol L. Cox, A 39190 on the life of Ronny Cox, Jr., and A 39191 on the life of Stacey Cox, paid to the Respondent by check payable to Independent Life the amount of $13.96, total premium for the three policies listed. The premium card for that policy reflects an altered payment of $13.98 with the signature "B. C. Miller" for the May 1981 payment on the 26th of that month. The Collection Book page reflects collection on May 26, 1981. The Ordinary Remittance Report for the week of May 25, 1981, shows collection of $13.96. There is no Field Accounting Route List in evidence for this account, but the Balance Due Account Deficiency Sheet for the week of August 17, 1981, reflects deficiencies for money not turned in for all three policies for the collections made thereon on May 26, 1981. The check with which Mrs. McKibben paid the premiums in question was subsequently deposited to the account of Independent Life at the Florida First National Bank of Jacksonville. Respondent denies any wrongful withholding on this account. Count II: On some date in June, 1981, Wilma L. Robinson, owner of Policies B 03628 and A 67660, both in her name, wrote Check No. 348 on the Flagship Bank of Jacksonville in the amount of $48.68, payable to Independent Life Insurance and reflecting the notation "Ins. June." Someone, she is not sure who, gave that check to a representative of the company. Her payment book reflects a payment of $23.03 received by B. C. Miller on June 16, 1981. The Collection Book reflects collection on June 16, 1981. The Remittance Report reflects collection on June 16, 1981. The Deficiency Account Sheet, however, reflects a deficiency for money not turned in in the total amount of $23.03. Mrs. Robinson is not sure to whom her check was given. She was sick during that period, and it may be that her husband actually delivered the check; and in early 1981, she began mailing her payment checks in. However, to the best of her knowledge, she had never seen Respondent until he came to her home on January 4, 1983. Count III: In June, 1981, Mrs. Evelyn Reynolds had four policies with Independent Life: 017872 on Debbie Spivey, A0037496 on Angela Reynolds, A0010351 on Sherry D. Reynolds, and A14776 on Robert Reynolds. Though she cannot identify to whom she made her payment that month, her routine practice was to make the payment monthly, sometimes by check and sometimes by cash. On some occasions, Respondent and a Mr. McGroarty from the company both came to get her payment. On some occasions, she left the payment with her mother and does not know to whom it was made. Mrs. Reynolds' payment book shows a payment of $24.02 made on June 9, 1981, with the initials "BCM" reflected in the block for the signature of the agent. The Collection Book page shows collection on June 9, 1981; and the Remittance Report does as well, but the Deficiency Sheet shows a deficiency of $24.02 for monies not turned in but collected that date. Mr. Miller unequivocally denies the initials in the payment book were put there by him, nor was any entry on the Collection Book page relating to this account put there by him. Count IV: Mrs. Evie Bennett does not recognize the Respondent. She has only seen him once before in her life, on New Year's Day, 1983, when he came to her house. She did not meet with him on August 4, 1981, and did not make any payments to him. Her payment book for Policy No. B0000499 in her name reflects a premium payment in the amount of $9.51 made on August 4, 1981; and the entry in the block for the signature of the agent reads "Receipt Miller." The Collection Book page for this account reflects a collection on August 4, 1981, of $9.51. Other pertinent documents reflect a deficiency by reason of monies not turned in of $9.51 for this collection. Mr. Miller denies the entries in both the Payment Receipt Book and the Field Report were made by him. Mr. Edward Cooper owned Policies 05 18285A on Edward Thomas; and 0536115A and 0536115B, both on Mary Cooper. He normally paid his premiums by check once a month to whatever agent came to collect. He does not know to whom he made the payment on July 7, 1981, nor does he know whether he paid on that day by check or cash, notwithstanding his written statement on November 24, 1981, witnessed by Mr. Pat McGroarty, indicates he paid the payments on his Premium Receipt Book to the Respondent. The payment card for these policies reflects that on July 7, 1981, an individual who used the signature "B. C. Miller" received payment of $20.80, representing premiums of $4.16 for each of five weeks including June 29, 1981; July 6, 1981; July 13, 1981; July 20, 1981; and July 27, 1981. The Field Accounting Route List for this Respondent in the period in question reflects a remittance of $16.64 with a shortage of $4.61, which shortage is also reflected on the deficiency page. Mr. Miller admits the signature on the payment card is his, but contends the card was altered. Mr. Kerry Fossett is a field auditor for Independent Life Insurance Company and in November, 1981, was requested to conduct an audit of Respondent's agency. As a part of the audit, he checked policyholders' receipt books and compared them to the agent's account. His audit showed discrepancies on 19 premium receipt cards for a total shortage of $141.75, of which amount the sum of $100.98 occurred when Respondent had the agency. The remainder of the shortage occurred either before or after Mr. Miller was in the job. During the course of the audit, Mr. Fossett found at least one instance where Mr. McGroarty made a collection on Mr. Miller's account and failed to turn it in. In the opinion of the auditor, the shortages in the account of $30 before Mr. Miller took over, when it was handled by Mr. McGroarty, were theft. Mr. McGroarty was discharged from employment with Independent Life and Accident Insurance Company approximately one week after the audit was completed. Mr. Baucom, assistant vice president of the company and custodian of the personnel records, indicated the audit done on Respondent's records revealed a shortage of $361.50. This was subsequently adjusted to $126.18 as a result of the company withholding commissions due Respondent. On February 4, 1983, Mr. Baucom wrote to the Department of Insurance, State of Florida, requesting to withdraw a charge of deficiency against Respondent previously submitted on December 7, 1981, on the basis that the company was not satisfied with the documentation of the alleged deficiency. Thereafter, on April 5, 1982, he again wrote the Department of Insurance reinstating the charge based upon subsequent receipt of "satisfactory documentation" and Mr. Miller's "attitude." Gracie Williams, a policyholder with Independent Life, experienced somewhat of a problem with the company when she and her husband tore down a house on which they had been paying premiums. When the house was removed, they mentioned the fact to Mr. McGroarty, but he did nothing about it. As a result, they paid several months' premiums on property that did not exist. In fact, when Respondent complained about this to Mr. McGroarty, he was told to collect the money or McGroarty would take it from another policy. Jennie L. Wilder also had difficulties on her policy with Independent Life's agent named "Alligood" (sic). She had paid her premiums for six months in advance, but because the agent delayed remitting the premium, she got credit for only three months. On the other hand, Catherine C. DiPerna and her husband have been insured with Independent Life for quite a while. Part of that time, the Respondent was her agent/collector. On June 16, 1981, just about the time of the other alleged shortages in Respondent's remittances, she paid her premium payment to Mr. Miller by check. The check was cashed, she did not receive a notice of lapsed policy, nor did she have any problem with her policy, even though on the Ordinary Remittance Report for the same period used by the Petitioner in the allegations relating to Mrs. Robinson shows no money received from the DiPernas. On March 11, 1981, upon the recommendation of Mr. R. Brenner, an investigator with the Department of Insurance, Respondent went to work for Independent Life as a debit agent in Jacksonville, Florida, under the supervision of Mr. Pat McGroarty, who, also, had had the debit (account) before. After the basic company indoctrination course, Respondent underwent on-the-job training under McGroarty. He never, during the entire time he worked for the company, accepted total responsibility for the account because, in his opinion, there were large discrepancies between the premium receipt cards and the company records when he was assigned the account. Respondent discussed these difficulties with McGroarty and other officials of the company, such as Mr. Ivanoski, Mr. Tharpe, and Mr. Baucom. In April, 1981, Miller saw that his signature as agent was forged on a policy owned by the Petitioner's witness Cooper on the life of Cooper's nephew, Edward Thomas, who, at all times pertinent, was an inmate in the state penitentiary. When Respondent mentioned this to McGroarty, McGroarty told him that Cooper had forged the names and Respondent was with McGroarty when he delivered the policy to Cooper. This is one of the policies which form the allegation in Count V of the Complaint and about which there is an obvious alteration on the Premium Receipt Book showing an increase in the weekly premium of one cent because of a change from a health policy to a life policy. Other difficulties with this particular account were brought by Miller to the attention of the district manager who forced McGroarty to make up the shortage from his own pocket. During a part of the time Respondent worked with the company, he also handled fire policies on a temporary license. He found so many irregularities and such out-and-out corruption, he states, that he intentionally failed the state examination for an industrial fire license. Even after instructions came from the home office terminating Respondent's work in fire insurance, the district manager instructed him to continue to collect fire premiums and turn them over to McGroarty. As a result of all of this, deficiencies show up on his fire accounts for periods after the time he ceased fire business. In fact, documents show collections by Miller on his accounts, even after he left the employ of the company. Respondent unequivocally denies any wrongdoing with regard to his accounts.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law stated above, it is RECOMMENDED: That the Administrative Complaint against the Respondent dated August 27, 1982, and amended on September 24 and December 28, 1982, be DISMISSED. RECOMMENDED this 28th day of February, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings Department of Administration 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of February, 1983. COPIES FURNISHED: Rhoda Smith Kibler, Esquire David Yon, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32301 S. Perry Penland, Esquire Penland, McCranie & Shad, P.A. Suite 1103, Blackstone Building Jacksonville, Florida 32202 The Honorable Bill Gunter State Treasurer and Insurance Commissioner The Capitol Tallahassee, Florida 32301
