The Issue This case involves a dispute as to whether the Petitioner underpaid the premiums due on his health insurance coverage and, if so, what action should be taken by the Department of Administration as a result of any premium underpayments. By notice dated March 18, 1988, the Department of Administration notified the Petitioner that the Department records "show a total underpayment of $1,117.81 for the coverage periods 9/86 through 9/87." At the formal hearing, over the objection of the Petitioner, the Department was permitted to offer evidence regarding the Petitioner's premium history (both the amounts due and the amounts actually paid) for the entire period of the Petitioner's employment with the State of Florida, a period which runs from May 1978 until October 1988. At the formal hearing the Department of Administration presented the testimony of one witness and offered several exhibits, all of which were received. The Petitioner did not present any evidence, but did present oral argument on his own behalf. The parties were allowed 10 days from November 3, 1988, within which to file their post-hearing submissions with the Hearing Officer. The Department of Administration timely filed Proposed Findings Of Fact. Those findings are specifically addressed in the appendix to this recommended order. The Petitioner did not file any post-hearing submission.
Findings Of Fact Based on the evidence received at the formal hearing, I make the following findings of fact. From May 1, 1978, until August 1, 1978, the Petitioner requested and received family coverage under the State Group Health Self-insurance Plan. From November 1, 1978, until November 1, 1985, the Petitioner requested and received individual coverage under the State Group Health Self-Insurance Plan. From November 1, 1985, until the date of the hearing, the Petitioner requested and received family coverage under the State Group Health Self-Insurance Plan. From May 1, 198, until July 1, 1984, the Petitioner was a part-time employee of the State of Florida, working .25 of a full-time equivalent position. Accordingly, his premiums for health insurance coverage under the State Group Health Self-Insurance Plan during this period should have been paid on the basis of employment in a .25 full-time equivalent position. From July 1, 1984, until at least the date of the hearing, the Petitioner has been a part-time employee of the State of Florida, working .20 of a full-time equivalent position. Accordingly, his premiums for health insurance coverage under the State Group Self-Insurance Plan during this period should have been paid on the basis of employment in a .20 full-time equivalent position. During the period beginning May 1, 1988, and continuing through October of 1988, the amount by which the Petitioner underpaid his health insurance coverage premiums totals S1,116.36. 1/ During the period beginning March 1, 1986, and continuing through October of 1988, the amount by which the Petitioner underpaid his health insurance coverage premiums totals $861.74. During the thirteen-month period beginning with September 1986 and ending with (but including) September 1987, the amount by which the Petitioner underpaid his health insurance coverage premiums totals $258.36.
Recommendation Based on all of the foregoing, I recommend the entry of a Final Order to the following effect: Finding the Petitioner to be in debt to the State of Florida in the amount of $258.36 by reason of underpayment of premiums during the period of September 1986 through September 1987. Providing that the Petitioner's health insurance coverage under the State Group Health Self-Insurance Plan will be cancelled unless within thirty (30) days following the entry of the final order the Petitioner either pays the full amount of $258.36 or enters into an installment payment program consistent with Rule 22K-1.049(1)(a)2., Florida Administrative Code. DONE AND ENTERED this 23rd day of November, 1988, at Tallahassee, Florida. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of November, 1988.
Findings Of Fact Petitioner became employed by the Department of Transportation, Bureau of Weights, on November 5, 1982. Upon being accepted for employment Petitioner completed and submitted to proper authorities the forms necessary to be covered by the State's group health insurance program and authorized the appropriate deductions from his salary to cover the premiums. On several occasions, he and his wife inquired through the Department of Transportation regarding their failure to receive an insurance card. Each time they were told the insurance card would be forthcoming and only administrative delays in processing the application were causing the delay. During this time no deductions were being taken from Petitioner's pay. In June, 1983 Petitioner incurred two doctor bills for his wife and son (Exhibit 1) in the total amount of $50, of which he paid $10 with the remainder forwarded to Blue Cross and Blue Shield who administers the state's health insurance plan. Blue Cross and Blue Shield had no record of Petitioner's insurance and the claim was denied. Petitioner paid the additional $40 charges. Although evidence was not submitted to show why Petitioner's application was not properly processed or what finally got this application back on track, the proper steps were finally taken and Petitioner was credited with having been covered with health insurance in accordance with his application from December 1982 and billed for premiums due from that date. This resulted in the assessment by the state of $436.14 for back premiums. Since he was not on the Blue Cross register in June 1983, Petitioner contests the assessment as a condition to remaining a participating member in the state health insurance program.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Respondent, the Department of Administration, enter a final order denying coverage for the orthodontia recommended for Sandra Walsh. RECOMMENDED this 18th day of March, 1988, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of March, 1988.
Findings Of Fact Petitioner was employed with the Collier County Health Department, Department of Health and Rehabilitative Services, on March 9, 1973. Petitioner's date of birth is November 26, 1916. On October 1, 1980, Petitioner's medical insurance coverage was entered into the payroll system under the Spouse Program, State of Florida plan. The proper amount of premiums under the Spouse Program were paid to Blue Cross Blue Shield from October 1, 1980, up to and including June, 1983. On November 26, 1981, Petitioner reached the age of 65. Under the State plan, coverage at age 65 is automatically reduced and changed to Medicare Supplement Coverage. In order to have remained fully covered, Petitioner would have had to apply for the Medicare insurance prior to reaching age 65, which he did not do. Due to both spouses being covered, there was no change in policy premium deductions even after Petitioner reached age 65 and his State coverage was reduced. The Blue Cross Blue Shield (State program) paid several claims of Petitioner subsequent to his 65th birthday and through December, 1982. On March 8, 1983, Petitioner was admitted to the hospital and on March 11, 1983, heart bypass surgery was performed. Respondent normally notifies the employee and employing agency of the coverage change prior to the employee's 65th birthday, as required by Rule 22K- 1.16, F.A.C. In this case, Respondent did not do so due to a failure in its computer program. Petitioner could have determined that he was required to apply for Medicare coverage had he read in detail a copy of the plan's benefit booklet furnished to all State employees in 1978.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent direct its insurer to pay Petitioner's claims arising from his March, 1983, hospitalization. DONE and ENTERED this 2nd day of September, 1983, in Tallahassee, Florida. R. T. CARPENTER, 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 2nd day of September, 1983. COPIES FURNISHED: Mr. John H. Adams 2596 Linwood Avenue Naples, Florida 33962 Daniel C. Brown, Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Nevin G. Smith, Secretary Department of Administration Carlton Building Tallahassee, Florida 32301
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.
Findings Of Fact Petitioner resigned from State Government on July 23, 1987. At the time of his resignation, Petitioner was covered under the Florida State Group Health Insurance Plan. His wife, who is a diabetic, was also covered under Petitioner's insurance. Upon termination Petitioner was eligible for continuation of coverage benefits under the federal COBRA Act. However, prior to receiving any notice of his COBRA rights, Petitioner elected to continue his State Employees' Insurance for two months from July 1, 1987 and then begin coverage under his new employer's insurance plan. 2/ Petitioner made advance payment on the 2 months additional coverage. The payments carried his State Employees' health insurance through September 1, 1987 when it was terminated. DOA notified Petitioner on August 27, 1987, of his right to elect continuation of coverage under the COBRA Act. This notice complied with the notice requirements under the COBRA Act. COBRA provides continued health insurance coverage for up to (18) months, after a covered employee leaves employment. However, coverage does not continue beyond the time the employee is covered under another group health plan. COBRA simply fills the gap between two different employers group health insurance plans so that an employee's group health insurance does not lapse while the employee changes jobs. Petitioner's new employer's health coverage began around September 1, 1987. After Petitioner had begun coverage under his new insurance plan, he discovered that his wife's preexisting diabetic condition would not be covered. However, no evidence was presented that Petitioner, within 60 days of September 1, 1987 requested the Division of State Employee's Insurance to continue his insurance coverage pursuant to COBRA. Moreover, Petitioner's COBRA rights terminated when he began his coverage under his new employer's health plan.
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 Petitioner's request for continuation of coverage under COBRA. DONE and ENTERED this 5th day of April, 1989, in Tallahassee, 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 5th day of April, 1989.
The Issue Whether the Respondent is responsible to cover Petitioner's husband's medical claims as the primary payer from May 1, 2015, through July 1, 2016; and, if so, the amount Respondent would be required to cover.
Findings Of Fact In 1976, Petitioner became employed with the State of Florida. Since 1995, Petitioner and G.M. were insured under the State Employee's PPO Plan ("PPO Plan"). As a primary payer, the PPO Plan paid 100 percent of all claims incurred, subject to the payment schedule set forth in the PPO Plan. In 2007, G.M. became Medicare-eligible due to a disability. On October 1, 2007, he enrolled in Medicare Part A and Medicare Part B. On November 30, 2007, although he was eligible for Medicare Part B, Husband deferred enrollment in Medicare Part B and terminated Medicare Part B. On December 31, 2012, Petitioner retired from her employment with the State of Florida. During her employment and after retirement, Petitioner received the annual Group Health Insurance Plan Booklet and Benefits Document booklets detailing the PPO Plan. Petitioner did not review the eligibility requirements for Medicaid Part B until 2015. The PPO Plans that were mailed to Petitioner in 2007, 2012, and 2015 all contained identical language on page 13-2, which stated "If the disabled dependent is your spouse, your spouse's coverage under this Plan will continue to be primary, paying benefits first, as long as you are an active employee." The PPO Plan coordination of benefits provision designates DSGI as the primary payer, which pays 100 percent of the benefits for a retiree or her spouse until the retiree or spouse becomes eligible for Medicare Part B. Once the retiree or spouse becomes Medicare-eligible, DSGI becomes the secondary payer and pays 20 percent of benefits, as Medicare-eligible participants are entitled to have 80 percent of their expenses covered by Medicare Part B. The PPO Plan also provides that DSGI will be the secondary payer even if the retiree or spouse is not enrolled in Medicare Part B. Petitioner and G.M. looked at plans annually during open enrollment. They needed health insurance because of G.M.'s health problems. Petitioner would call People First annually to confirm continuance of the PPO Plan because the McVays did not want to be changed to an HMO. From January 1, 2013, to May 1, 2015, Petitioner paid full premiums, which Respondent accepted, and Respondent paid all claims in full as the primary payer. In reliance on this coverage and the representation of Respondent through its actions and inactions, G.M. continued to defer his coverage through Medicare Part B. DSGI contracts Florida Blue as a third-party administrator. Florida Blue conducted a routine audit and discovered the error that Medicare Part B should have been the primary payer for Husband not Respondent. Husband's disability status had slipped through the system when Petitioner retired. On April 13, 2015, Florida Blue notified DSGI by email that G.M. was eligible for Medicare Part B due to disability. On or about April 30, 2015, Florida Blue notified Petitioner by letter of DSGI's intent to assume secondary payer status. The letter provided the audit results and stated: During a recent audit it was discovered that your h[u]sband is enrolled in Medicare Parts A & B and have been for quite some time. Therefore, Medicare should pay your claims as primary and your retiree health coverage will be your secondary coverage. Your current insurance premium will be reduced by $407.16 per month effective May 1, 2015, as described below. You are also due a refund of premium however you can only receive a refund for two years of overpayments. DSGI switched to secondary payer status and changed G.M.'s benefit level to Medicare II tier, effective May 1, 2015. Upon Respondent's discovery that Husband was Medicare- eligible, Respondent prospectively applied the coordination of benefits provision of the PPO Plan. The adjustment reduced Petitioner's premium payment to correspond with Respondent's status as a secondary payer. Additionally, Respondent refunded all amounts that Petitioner overpaid as a result of previously scheduled automatic deductions. As a secondary payer, the PPO Plan pays only 20 percent of all claims incurred. Upon DSGI's switch from primary payer, Petitioner and G.M. attempted to obtain Medicare Part B for G.M. but were not able to do so until the open enrollment period. As a result, G.M. was exposed to paying 80 percent of all claims that would have otherwise been paid by Medicare had he been enrolled in Medicare Part B. Petitioner and G.M. would have made alternative arrangements for health insurance coverage had they been informed that G.M.'s status would change their primary payer and they would have a lapse in coverage. Petitioner and Husband went to the Social Security Office several times in an attempt to get special enrollment but were unable to obtain coverage. Respondent's decision to drop coverage is not considered a qualifying event by Medicare for special enrollment. Petitioner and Husband also sought private brokers for coverage, but were not able to obtain insurance. For 14 months, May 1, 2015, through July 1, 2016, G.M. did not have a primary payer, only the PPO Plan as a secondary payer. In January 2016, Husband was able to enroll in Medicare Part B during open enrollment with coverage beginning on July 1, 2016. During the time G.M. was uncovered, he had several medical incidents, which incurred medical expenses. On April 4, 2016, the EMT transported Husband to the hospital after his defibrillator went off. Husband also was hospitalized at Aventura Hospital and Medical Center from December 22 through 24, 2015, when blood was seeping into his bone fracture of his left ankle. Husband received health statements ("statements"), Petitioner's Exhibit 12, from Florida Blue summarizing his medical expenses. Each statement contains the language in all capital letters "THIS IS NOT A BILL." The statements to which the Medicare primary was denied also provided language "Resubmit with EOMB." The statements, which indicated a network provider was utilized, also stated, "Therefore no patient responsibility." For the December 2015 hospital stay, claim 8288, the billing statement designates $30,402.03 is owed. However, the statement provides Medicare had not processed the claim. It also states "THIS IS NOT A BILL." Each statement also designated out-of-pocket amounts of $0.00 or indicated that a network provider was used and eliminated member debt by stating "no patient responsibility." Petitioner appealed Respondent's decision to terminate Husband's coverage. She seeks reimbursement for medical expenses G.M. incurred during the 14-month period when the PPO Plan was the secondary payer and G.M. was not enrolled in Medicare Part B from May 1, 2015, through July 1, 2016. Both Petitioner's Level I and Level II appeals were denied because DSGI maintains the termination was proper based on the language of the PPO Plan. Petitioner initially sought relief through extension coverage until Husband would be covered by Medicare Part B. Once the case was transferred to DOAH, Petitioner sought damages in the amount of health-related expenses incurred by Petitioner from the date of DSGI's termination of G.M.'s primary coverage. At the final hearing, Jessica Bonin ("Bonin"), a 12-year employee of Florida Blue who handles appeals and processes PPO Plan payments, explained the provisions of the PPO Plan coordination of benefits. She testified that the PPO Plan pays benefits based on the allowed amount, which represents the rate negotiated between Florida Blue and a network provider. When calculating amounts that are covered under the terms of the PPO Plan, the deductible, coinsurance, and amount allowed for each claim have to be applied. Therefore, not all charges billed by a provider will count toward the deductible or coinsurance maximum or be reimbursed after the deductible or coinsurance maximum is reached when calculating medical expenses. Bonin calculated G.M.'s medical expenses in Respondent's Exhibit 18 and concluded that DSGI owed Petitioner $80.04 for a claim incurred on or about June 11, 2015. The reimbursement amount of $80.04 represents the amount the PPO Plan covers as secondary payer. At hearing, DSGI also stipulated to another reimbursement in the amount of $18.03. Husband testified he was seeking reimbursement for the entire amount of the combined statements regardless of whether charges were covered by Medicare or the PPO Plan's payment schedule. He totaled the statements from the health care providers at $47,056.56. G.M. also testified he did not know what monies were due on what bills. G.M. specifically requested the $30,401.03 for the inpatient hospitalization at Aventura in December 2015. He clarified that the bill that he received from Aventura was $3,455.72. Medicare Part A, in which G.M. was enrolled at all times relevant to this matter, covers inpatient hospital expenses. To date, G.M. has paid $4,415.19 out-of-pocket for medical expenses. Petitioner failed to provide competent evidence to demonstrate a reimbursable amount for G.M.'s medical expenses.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, enter a final order denying the Petition and finding that Petitioner is entitled to reimbursement for Husband's medical expenses in the amount of $98.07. DONE AND ENTERED this 31st day of January, 2017, in Tallahassee, Leon County, Florida. S JUNE C. MCKINNEY 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 31st day of January, 2017.
The Issue The issue is whether Petitioners, as beneficiaries of their deceased father's life insurance policy, are entitled to a payment of $7,500 in addition to the $2,500 benefit already paid. As set forth more fully herein, since Florida's statutory and rule framework do not require that notice provided to the Division of Retirement be shared with the Division of State Group Insurance, Petitioners did not demonstrate that they are entitled to the additional benefit.
Findings Of Fact The Division of State Group Insurance (DSGI) is an administrative unit located within the Department of Management Services (DMS), and pursuant to Section 110.123(3), Florida Statutes, is designated as the agency responsible for the administration of the State Group Insurance Program (Program). The life insurance program at issue in these proceedings is a part of the Program. DMS has contracted with Northgate Arinso, formerly Convergys, Inc., to provide human resources management services, including assisting in the administration of employee benefits. Convergys primarily performs these tasks through an online system known as "People First." The term "employee benefits" refers to insurance, but not to retirement benefits. People First became the system of record for DSGI benefits data, including addresses, on January 1, 2005. Petitioners Martha L. Kenerson and David R. Kenerson, Jr., are the daughter and son of David R. Kenerson (Mr. Kenerson), a retired employee of the State of Florida, and the beneficiaries of the life insurance that was provided through the Program. Mr. Kenerson died a resident at 156 56th Street South, St. Petersburg, Florida, on March 31, 2009. Since Mr. Kenerson's retirement, the State of Florida, through DSGI, has maintained a Group Life Insurance Policy (the Policy) covering the individual lives of its former employees who elected to be covered. The Policy is a benefit available to retirees of the State of Florida which Mr. Kenerson, as a retiree, accepted. The Insured, Mr. Kenerson, was entitled to inclusion in the group of State of Florida retirees who were covered under the Policy that was offered by the State of Florida to its retirees. Mr. Kenerson received a pension for life from the State of Florida. Beginning January 1, 2000, and subsequently, the life insurance coverage was $10,000. It was changed beginning in Plan Year 2007, as to all retirees, due to DSGI's determination of the impending loss of the Advanced Premium Account. As to Mr. Kenerson, it was reduced from $10,000 to $2,500 beginning in Plan Year 2007 for the following reasons: He defaulted in responding to the Open Enrollment Notice; Neither Mr. Kenerson nor anyone on his behalf submitted any notification of election pursuant to such Open Enrollment Notice; and DSGI determined that it was necessary to change the coverage for death benefits because of such impending loss of the Advanced Premium Account. On April 10, 2009, Minnesota Life Insurance Company claims examiner Latrice S. Tillman contacted Petitioner Martha L. Kenerson regarding the death of Mr. Kenerson, asking for the death certificate of the Insured and the Preference Beneficiary Statements from both Petitioners. On April 17, 2009, Petitioners filed the appropriate documents with the Minnesota Life Insurance Company as beneficiaries of Mr. Kenerson's life insurance policy. On May 20, 2009, Petitioners each received a check in the amount of $1,257.59, constituting $1,250 of insurance proceeds (totaling $2,500) and the balance of interest on the $2,500 insurance proceeds. On May 24, 2009, Petitioner Martha L. Kenerson wrote a letter to DSGI requesting an appeal. On June 9, 2009, Ms. Kenerson received a letter dated July 9, 2009, from Michelle Robleto, the Director of DSGI, denying Petitioners' Level II Appeal and informing Petitioners of their right to request a hearing. On June 26, 2009, Ms. Kenerson timely petitioned for an evidentiary hearing regarding Mr. Kenerson's policy. Approximately 29,391 State of Florida retirees were covered under the Policy in Class A (i.e., with initial $10,000 coverage excluding Classes having such initial coverage) at the time when Respondent sent the Change Notice of the proposed changes in coverage that applied also to Mr. Kenerson's Policy. Approximately 5,921 State of Florida retirees were covered under Class A of the Policy and elected, in response to the Change Notice, to increase the premium in order to retain the coverage at $10,000. None of the State of Florida retirees in Class A under the Policy who failed to respond in writing to the Change Notice was contacted by Respondent prior to the effective date of coverage change. Respondent never attempted to call retirees regarding their wishes as to the Change Notice. Respondent has no proof that it spoke with the Insured to explain the proposed change of coverage and/or premium in January 2007. Respondent did not mail the Open Enrollment Notices to retirees by a method that required affirmative identification of the recipient, such as by certified return receipt or other postal proof of delivery. The premiums for the Policy were paid by the State of Florida from Mr. Kenerson's pension as a deduction from the payment of the gross pension payments. From at least January 1, 2003, to the end of the Open Enrollment Period for Plan Year 2007, the Department of Financial Services (DFS) never communicated to Respondent the address that DFS was using for Mr. Kenerson. DFS has a separate and independent data base from that used by Respondent. At no time did DMS send to the Insured c/o Petitioner David R. Kenerson, Jr., any Open Enrollment Notice for any plan year before the 2008 plan year relating to the terms of the Policy. As administrator of the Policy, it is and has been DMS's responsibility to maintain a database of addresses for contacting retirees who are eligible for coverage under the Policy. In August 2002, DMS contracted with Convergys as a third party service provider to perform administrative functions, including the maintenance of the retirees "address of record" database for insurance purposes and for recordkeeping relating to retirees whose lives were insured under the Policy. With respect to the July 31, 2006, mailing to retirees, DMS retained direct control of the stuffing, sending, and addressing of the letters, as well as the collection of mail that was returned as undeliverable. In 2004, DMS delivered to Convergys a copy of the retiree address of record contained in the Cooperative Personnel Employment System (COPES), previously maintained only by DMS. Tom Lockridge, Respondent's Benefits Team Manager in 2005, noted his confusion with how many different databases exist that cover retirees of the State of Florida. He was aware that DSGI and the Division of Retirement Services (DRS) each has its own databases. Retirees entitled to enroll in the Policy managed by DSGI are also entitled to pension eligibility or other post- retirement activities managed by DMS, DRS, or the State University System. Since the inception of the DMS website, www.myflorida.com, two separate databases, the People First database and the DRS database, have been maintained. At all times since 2000, Mr. Kenerson was listed as a retiree of the State of Florida in the databases of DSGI and DRS. During the Open Enrollment period for Plan Year 2007 for the Policy, DMS records maintained by Convergys in the "address of record" database showed that Mr. Kenerson lived at 1737 Brightwaters Boulevard, St. Petersburg, Florida. DMS, through its agent Convergys, sent the Open Enrollment Notice for Plan Year 2007 for the Policy to Mr. Kenerson at the Brightwaters Boulevard address. In 2001, Mr. Kenerson sent to DRS, but not to DSGI, a written notice of change of address showing his new address as 156 56th Street South, Villa 37, St. Petersburg, Florida. DMS never received an affirmative notice from Mr. Kenerson electing to either adopt the $2,500 coverage; increase to $10,000 in coverage; or terminate his enrollment altogether. In connection with the Open Enrollment notice, DMS contract with Convergys did not require Convergys to seek data from other Florida agencies or divisions to update the database of retirees' addresses and contact information. In connection with the Open Enrollment notice, DMS records management policies did not require DMS personnel to obtain data from other Florida agencies or divisions to update the DMS database of retirees' addresses and contact information. In designing the offered choices on the Open Enrollment notice, DMS allocated $6.33 per month from the Advance Premium Account to subsidize each retiree's premium for Plan Year 2007. Approximately 80 percent of the then-current retirees elected, or were deemed to have elected by default, to reduce their coverage from $10,000 to $2,500 as a result of the Open Enrollment process conducted by DMS. As of October 2006, 24,488 retirees elected the $2,500 life insurance policy for Plan Year 2007, while 4,769 retirees elected the $10,000 coverage. The Open Enrollment notice did not explain why those electing the $10,000 in coverage were required to pay almost eight times the amount of premium charged for $2,500 of coverage ($35.79 per month versus $4.20 per month). A "positive enrollment" means an individual must affirmatively elect each and every benefit or a certain type of benefit. A "passive enrollment" is where, by taking no action, the individual continues to have the same benefit level as previously. Respondent used the "passive enrollment" system for Plan Year 2008, when the life benefit premium changed due to the fact that Convergys would have charged a significant fee (seven figures) to conduct a "positive enrollment." DMS elected not to incur the additional expense. Since the state has designated People First as the system of record for its retirees relating to their benefits and information regarding Open Enrollment, any changes in address are made through the People First system. The agreement between DMS and Convergys does not require Convergys to communicate with other agencies regarding updating of the address of record database for retirees. Convergys, as the contractor to DMS, routinely destroys mail returned as undeliverable after 90 days. Neither DMS nor Convergys maintains a list of "bad addresses," those to which mail has been returned as undeliverable. DMS told Convergys not to synchronize their address database with the Florida Retirement System (FRS) database. DMS was aware that there were retirees who sent address changes to DRS and not to People First. DMS was aware that its address of record database for retirees contained at least some addresses that were not current for some customers. DMS was aware that some number of Open Enrollment packages was returned every year as undeliverable due to incorrect addresses. DMS does not maintain a record of returned Open Enrollment packages. DMS has adopted no rules to record the names and addresses of retirees whose Open Enrollment packages have been returned as undeliverable. DMS has adopted no rules to compare or synchronize the DMS address of record used for Open Enrollment packages with other databases maintained by DMS, DFS, the Florida Department of Revenue, the Florida Department of Highway Safety and Motor Vehicles, local voter registration, or any other State of Florida address lists. DMS has adopted no rules to update the address of record database used by DMS for notices to retirees relating to group term life insurance policies such as the one at issue here. DMS has adopted no rules to create, preserve, or update records, and to destroy names of retirees whose notices are returned by the U.S. Postal Service as undeliverable due to no forwarding address. The ultimate custodian of the State of Florida database containing addresses of record for retirees' insurance benefits is Convergys, Inc. At all times from January 1, 2001, to April 30, 2009, the FRS, administered by DMS, has maintained a database of State of Florida retirees that includes their address records in connection with pension and retirement income and expense matters. This FRS database is separate from the address of record database maintained by Convergys/People First for the same period. The letter dated July 31, 2006, relating to the 2007 plan year, advised State of Florida retirees that they could change their election of life insurance benefit up to and including January 19, 2007. Mike Waller, an employee of DSGI, maintains benefits data for People First/DSGI. In July 2006, Mr. Waller was asked to prepare a file containing the names and addresses of all retirees who were covered by life insurance. He created a file used in a mail merge program to send all retirees a copy of the July 31, 2006, letter. In preparing the file containing the mailing addresses of retirees covered by life insurance in July 2006, Mr. Waller used the addresses of record from the benefits data he maintained. The DSGI address of record for Mr. Kenerson in July 2006 was 1737 Brightwaters Boulevard, St. Petersburg, Florida 33704, and was included in the mailing addresses file. Mr. Waller prepared the file and delivered it to Dick Barnum and Thomas Lockridge on July 3, 2006. Thomas Lockridge delivered the file to Laura Cutchen, another employee of DSGI. DSGI contracted with Pitney Bowes, a mailing system company, to mail the July 31, 2006, letter to all State of Florida retirees. After obtaining copies of the letter from the DSGI print shop, Ms. Cutchen delivered the letters and the file containing the names and addresses of the retirees to Pitney Bowes to assemble. The letters were assembled by Pitney Bowes and delivered to the U.S. Post Office, accompanied by Ms. Cutchen, and the State of Florida first class mailing permit had been applied to each envelope. The letter dated July 31, 2006, was mailed to Mr. Kenerson at the Brightwaters address, by first class mail, using the State of Florida permit for DSGI. The return address on the envelope containing the July 31, 2006, letter was DSGI, 4050 Esplanade Way, Suite 215, Tallahassee, Florida 32399-0949. Any letters returned to DSGI as undeliverable were processed by Janice Lowe, an employee of DSGI. Each letter returned to DSGI was handled in one of two ways: If the envelope showed a different address on the yellow sticker applied by the U.S. Postal Service, the letter was re-mailed to that address; or If the returned envelope did not provide a different address, a manual search of the database of DRS was made; a copy of the print screen showing the address in the DRS database was made, if different from the address on the database of DSGI; and the original envelope and letter were placed in another envelope and mailed to the address from the DRS database. A copy of each DRS print screen that was accessed by Ms. Lowe was printed and inserted in alphabetical order in a binder. There was a DRS print screen for every person whose letter was returned and for which there was not another address. The absence of a DRS print screen indicates that the initial letter was not returned. No DRS print screen exists for Mr. Kenerson, an indication that the letter to him dated July 31, 2006, was not returned to DSGI. Prior to Convergys assuming responsibility for the administration of benefits, DSGI maintained benefits information in COPES. When Convergys assumed responsibility for the management of benefits on January 1, 2005, the benefits information from COPES was imported into the Convergys/People First system. People First and DRS do not share databases and each maintains its own database of names and addresses. In addition to the letter discussed at length above, each year, DSGI must hold an "Open Enrollment" period for the health program. Open Enrollment is the period designated by DMS during which time eligible persons, not just State of Florida retirees, may enroll or change coverage in any state insurance program. Prior to Open Enrollment each year, DSGI provides employees and retirees a package that explains the benefits and options that are available for the next plan year. The 2006 Open Enrollment period for the 2007 plan year ran from September 19, 2006, through October 18, 2006. During Open Enrollment for Plan Year 2007, the People First Service Center was charged with the responsibility of sending Open Enrollment packages to State of Florida retirees and other employees. People First mailed Mr. Kenerson's Open Enrollment package to the Brightwaters Boulevard address on September 3, 2006. The mailing of Open Enrollment packages is noted on the Open Enrollment screen by the Item Code "FSAE." The Open Enrollment packages, like the July 31, 2006, letter to retirees, were mailed by People First through the U.S. Post Office, first class prepaid postage. The Open Enrollment package mailed to Mr. Kenerson on September 3, 2006, contained Mr. Kenerson's Benefits Statement; a letter from John Mathews, former Director of DSGI; Information of Note; a Privacy Notice; a Notice Regarding Prescription Coverage; and the 2007 Benefits Guide. The Information of Note included a detailed description of the reduction in life insurance benefits from $10,000 to $2,500 unless an affirmative election was made to pay a higher premium. Neither Mr. Kenerson nor anyone on his behalf affirmatively elected to continue $10,000 in life insurance coverage during the enrollment period in 2006 for Plan Year 2007. Because the $10,000 life insurance option was not affirmatively made by the Insured or anyone on his behalf, upon his death, Respondent determined that he was entitled to $2,500 in death benefit. For those retirees who did not make a timely election pursuant to the Open Enrollment notice sent in 2006 for Plan Year 2007, the death benefit automatically became $2,500, effective January 1, 2007, for a monthly premium of $4.20. As of Open Enrollment 2005, the People First Service Center was charged with the responsibility of sending Open Enrollment packages to State of Florida retirees and other employees. The letter contained in the Open Enrollment package for 2006 for Plan Year 2007 stated as follows: The State conducts a "passive enrollment." If you want to keep the same insurance and benefits plans indicated, you do not have to do anything. Your Flexible Spending Account will be continued at the same annual amounts if no charges are made during Open Enrollment. The reverse side of this letter contains important information regarding changes, new offerings, and reminders regarding processes necessary to ensure a successful enrollment. Please review these items of note. Included in the Open Enrollment package was an "Information of Note" which set forth the reduction in life insurance benefit as well as the amounts to be charged for either the $2,500 or $10,000 benefit. Prior to January 1, 2007, funds in the Advanced Premium Account were applied to payment of costs of life insurance premiums under the policy for retirees. Once the funds in the Advanced Premium Account were depleted, the monthly premium for the $10,000 policy increased significantly to $35.79. DSGI has consistently mailed Open Enrollment packages, including Benefits Guides, to the addresses of record for all retirees, including Mr. Kenerson. Prior to May 1999, Mr. Kenerson actually resided at the Brightwaters Boulevard address, which had been his address of record since at least 1988. DSGI had mailed all correspondence to that address for Mr. Kenerson. In the past, DSGI had mailed, from time to time, newsletters to retirees. These newsletters were mailed to the addresses of record for the retirees. The newsletter for January-March 1999 contains the telephone number and address for DSGI and the following notice under the heading "Reminder Tidbits": "Notify both the Division of Retirement and the Division of State Group Insurance in writing if your mailing address changes." The newsletter for July-September 1999 contained the following: "Q. What if I do not receive my Open Enrollment package? A. If you do not receive the Open Enrollment package by September 17, contact the Division of State Group Insurance. You should also confirm your mailing address when you call." Prior to Mr. Kenerson moving from the Brightwaters Boulevard address, notices mailed to him there included notification that retirees were required to update any changes in address with DSGI. Throughout the years, the Benefits Guides that are included in the Open Enrollment packages have informed all program participants of their responsibility to maintain a current address with DSGI. Even if Mr. Kenerson had changed his address with DRS, such update would not have been provided to DSGI. Neither DSGI nor DRS notifies the other of receipt of a change of address. A change of address with one division of DMS does not automatically change the address in another since the two divisions have separate databases. Within DMS there is no centralized database of records containing addresses of record for all DMS functions. Retirees and active employees of the State of Florida are not required to have one address of record for all functions and services received through DMS. In fact, many State of Florida employees have different addresses for different DMS division functions. DSGI and DRS serve different functions and do not share databases. DRS consists of all retirees who participate in FRS, including local governments. The total number of individual participants is over 300,000. The synchronization of databases would be an expensive undertaking and no funding has been provided to synchronize DSGI with DRS or any other state agency or public entity. No evidence demonstrated that Mr. Kenerson informed DSGI in any way that he desired to maintain his $10,000 life insurance benefit, or that DSGI assumed or accepted that responsibility.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, enter a final order dismissing the petition in its entirety. DONE AND ENTERED this 10th day of November, 2010, in Tallahassee, Leon County, Florida. S ROBERT S. COHEN 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 10th day of November, 2010. COPIES FURNISHED: Sonja P. Mathews, Esquire Department of Management Services Office of the General Counsel 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399 Martha Lynne Kenerson, Esquire Bierce & Kenerson, P.C. 420 Lexington Avenue, Suite 2920 New York, New York 10170 William B. Bierce, Esquire Bierce & Kenerson, P.C. 420 Lexington Avenue, Suite 2920 New York, New York 10170 John Brenneis, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Department is the state agency responsible for the licensure and discipline of persons holding or those eligible to hold various insurance licenses. At all times material to this case, Respondent was licensed and eligible for licensure in this state as a health insurance agent. For all policies described below, Respondent was eligible to receive a sales commission and a bonus package which provided Respondent incentive to complete sales of insurance policies. At all times material to this case, Respondent acted as a sales agent for the following insurance companies: Diversified Health Services, National States Insurance Company, Penn Treaty, and Transport Life. Respondent sold health insurance policies, Medicare supplements, home nursing-care policies, nursing home policies, and booster plans to supplement additional coverage under Part B of Medicare. On or about April 20, 1988, Respondent went to the home of Martha and Sam Klingensmith in Port St. Lucie, Florida. Respondent's visit was in response to an information lead card that Mrs. Klingensmith had mailed to an insurance company. Mr. Klingensmith had had surgery in January, 1988, on a malignant brain tumor. Mrs. Klingensmith was anxious for her husband to receive the best care possible and hoped to obtain insurance benefits to help with the costs associated with that care. Mrs. Klingensmith told Respondent about her husband, who was too sick to be interviewed by Respondent (he was bedridden in another room). At that time Mrs. Klingensmith advised Respondent that she and her husband had Medicare supplement policies through a group policy from AARP. Respondent did not review that policy. On or about April 20, 1988, Respondent completed insurance applications for Mr. and Mrs. Klingensmith for nursing home insurance policies. The application form provided, in part, the following questions: Is the insurance being applied for intended to replace any accident or sickness insurance, health service or health maintenance contract? * * * Complete the following for each person named above who now has insurance in force or pending: * * * Does any person above have or ever had any of the following: (Underline condition) A. Tumor, cancer, malignancy or growth of any kind? * * * g. Disease of the rectum or intestine, stomach, kidney, prostate, urinary bladder, liver, gall bladder? * * * 7.a. Has any person named above consulted or been treated by any physician or practitioner in the last five years? b. Has any person named above been confined in a hospital in the last five years? * * * 9.a. List conditions for which medication has been taken or doctor consulted within the past six months: * * * 10. If any part of questions 6 or 7 was answered YES give details--otherwise--answer question by stating "NONE" On the application form for Mr. Klingensmith, Respondent wrote the following responses: as to question 4, "No" was entered; as to question 5, "NONE" was entered; as to 6.a. "Yes" was checked; as to questions 7a. and 7b., "Yes" was checked; as to question 9, only medications not conditions were listed; and under question 10, the remaining effects were indicated as "Good Health." The answers given by Respondent to questions 5, 9, and 10 were incorrect and contrary to the information Mrs. Klingensmith had given Respondent. Mrs. Klingensmith signed the application for her husband. On Mrs. Klingensmith's application form completed by Respondent on April 20, 1988, the answer to question 5 was incorrect and contrary to the information Mrs. Klingensmith had given Respondent. On or about May 17, 1988, Respondent returned to the Klingensmith home and completed an application for Mr. Klingensmith for an extended care insurance policy. The application for that policy was identical to the one described above. Respondent completed the form and gave the same responses that are indicated above. Respondent knew that Mr. Klingensmith had the National States policy from April, 1988, and he failed to include that information on the application. Further, since Mr. Klingensmith remained bedridden, the response of "good health" to question 10 continued to be false and contrary to the information supplied by Mrs. Klingensmith. On August 17, 1988, Respondent went to the Klingensmith home and completed two applications for Mr. 5 Klingensmith: one for a Medicare supplement insurance policy and one for a hospital confinement indemnity insurance policy; both to be issued by National States. On September 14, 1988, Respondent went to the Klingensmith home and completed an application for Mr. Klingensmith to receive a medical/surgical insurance policy from National States. That application did not disclose any of the prior policies sold by Respondent, was again signed by Mrs. Klingensmith (her husband continued to be gravely ill), and falsely stated that Mr. Klingensmith was in good health. At all times material to the sales of the five policies described above for Mr. Klingensmith, Respondent knew or should have known that Mr. Klingensmith was terminally ill. Respondent either did not report the information given by Mrs. Klingensmith or chose not to inquire further based upon the answers she gave him. Mr. Klingensmith died, at home, in October, 1988. In connection with the Klingensmith policies Respondent was required to complete a certification form pursuant to Rule 4-46.004, Florida Administrative Code. That form is to be signed by the insurance applicant. Without Mrs. Klingensmith's prior consent or knowledge, Respondent executed certification forms on behalf of the Klingensmiths. In August, 1988, Mrs. Klingensmith asked Respondent to examine a cancer insurance policy issued by Bankers Fidelity Life Insurance Company covering the Klingensmiths. Respondent failed to disclose that policy on the applications completed in August and September, 1988. Further, Respondent failed to accurately disclose the benefits of that policy to Mrs. Klingensmith. The cancer policy would provide additional benefits which the Respondent should have known could be helpful since Mr. Klingensmith had been diagnosed with a malignant tumor. In September, 1988, Respondent sold a medical/surgical policy to Charles Areni. Subsequently, in April, 1989, Mr. Areni asked Respondent to assist him in the completion of claims forms. Respondent went to Mr. Areni's home, helped him complete the claims forms, and sold him a National States Medicare supplement insurance policy. At that time, Respondent knew Mr. Areni had been hospitalized since a cancerous prostate problem had reoccurred, and that Mr. Areni was taking medication for pain associated with his most recent surgery. The application completed by Respondent for Mr. Areni was the same form described in paragraph 6 above. Respondent submitted the following false responses to the questions posed by that questionnaire: in response to question 5, "None" was entered; to question 6a. Respondent checked "No" when he knew or should have known (based upon Mr. Areni's answers) that the prostate condition was cancerous; and "None" to question 9. Further, Respondent provided that Mr. Areni was in good health in response to question 10. At that time Mr. Areni was not in good health, and, while his prognosis was uncertain, it was apparent that he was in poor health. On or about January 19, 1989, Respondent went to the home of Ruth Stone in Fort Pierce, Florida. That visit was 7 in response to Mrs. Stone's mailed in lead card. At that time, Mrs. Stone was insured by American Life Assurance Corporation with whom she had a Medicare supplement policy. Mrs. Stone told Respondent about her policy but did not show it to him. Without reviewing the existing policy, Respondent advised Mrs. Stone that a policy he could offer her through National States would be a better buy. Based upon Respondent's representations, Mrs. Stone elected to apply for a policy through Respondent. To that end, Respondent completed the application described in paragraph 6 for Mrs. Stone. Respondent answered question 5 incorrectly since he knew that Mrs. Stone had a current policy. Later, after speaking with her other agent, Mrs. Stone cancelled the National States policy by stopping payment on her check. She later gave a sworn statement to the Department. After Respondent found out about Mrs. Stone's complaint to the Department, he asked her to change her statement since he might lose his job. On or about February 17, 1988, Respondent went to the home of Edward and Julia Whitham in Fort Pierce, Florida. Respondent sold the Whithams Medicare supplement policies to be issued by National States. The policies sold to the Whithams did not cover dental or optical services. At the time they purchased the policies, the Whithams were under the impression that optical and dental services were covered. Respondent signed the certifications required by Rule 4-46.004, Florida Administrative Code, for the Whithams without their prior consent or approval.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Insurance, Office of the Treasurer enter a final order revoking the Respondent's health care insurance license. DONE and ENTERED this 7th day of August, 1990, 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 7th day of August, 1990. COPIES FURNISHED: Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Nancy S. Isenberg and Dennis Silverman Department of Insurance Division of Legal Services Room 412, Larson Building Tallahassee, Florida 32399-0300 Kelli Hanley Crabb Battaglia, Ross, Hastings & Dicus, P.A. 980 Tyrone Boulevard St. Petersburg, Florida 3371014 APPENDIX TO CASE NO. 89-4986 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 through 35 are accepted. Paragraph 36 is rejected as irrelevant. Paragraph 37 is rejected as contrary to the weight of the evidence. Paragraph 38 is accepted. Paragraphs 39 through 48 are accepted. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: Paragraph 1 is accepted. Paragraph 2 is accepted. Paragraph 3 is accepted. Paragraph 4 is rejected as contrary to the weight of credible evidence. Paragraph 5 is rejected as contrary to the weight of the evidence. Paragraph 6 is accepted as to the fact that the Whithams purchased policies from Respondent; otherwise, rejected as irrelevant. Paragraph 7 is rejected as unsupported by the record. Paragraph 8 is accepted. With regard to paragraph 9, it is accepted that the Whithams asked that their policies be reinstated; otherwise rejected as unsupported by the record or irrelevant. Paragraph 10 is rejected as unsupported by the record. The first sentence of paragraph 11 is accepted. The remainder of the paragraph is rejected as contrary to the weight of the evidence. Paragraph 12 is accepted but is irrelevant. Paragraph 13 is accepted but is irrelevant. Paragraph 14 is accepted as to their complaint against the company but is irrelevant. The first sentence of paragraph 15 is accepted. The remainder of the paragraph is accepted with the notation that Mrs. Stone did advise Respondent that she had a policy in effect. She was shopping for a cheaper policy that offered as good or better benefits. Respondent made no effort to review Mrs. Stone's policy. Paragraph 16 is rejected as irrelevant. With regard to paragraph 17, it is accepted that based upon Respondent's representations, Mrs. Stone purchased a national States policy; otherwise rejected as irrelevant. Paragraph 18 is rejected as contrary to the weight of the evidence. With regard to paragraph 19, it is accepted that Mrs. Stone spoke with her agent and decided to stop payment on the check to National States; otherwise rejected as irrelevant. Paragraph 20 is not supported by the record and is, therefore, rejected. Paragraph 21 is rejected as-irrelevant. Paragraph 22 is accepted. With regard to paragraph 23, it is accepted that the application disclosed a prostate condition; otherwise rejected as not supported by the record. Paragraph 24 is accepted. Paragraph 25 is accepted. Paragraph 26 is accepted with the notation that Respondent did not complete the application with all of the pertinent information that Mr. Areni gave him; consequently, Respondent was attempting to have the policy issued when he knew or should have known that Mr. Areni's cancer would preclude him from being eligible. Paragraph 27 is rejected as contrary to the weight of the evidence; see the notation to paragraph 26 above. Paragraph 28 is rejected as irrelevant. Paragraphs 29 through 31 are accepted. The first sentence of paragraph 32 is accepted. With regard to the second sentence, it is accepted that Respondent was not supposed to write insurance for cancer patients, however, the overwhelming evidence in this case established that Respondent did just that. The first sentence of paragraph 33 is accepted. It is further accepted that Mrs. Klingensmith executed the applications on behalf of herself and her husband; otherwise the paragraph is rejected as either unsupported by the record or contrary to the weight of the evidence. The first sentence of paragraph 34 is accepted. The remainder is rejected as contrary to the weight of the evidence since the comment was only made in relation to Mr. Klingensmith's day-to-day behavior. He undoubtedly had some good days relative to his more severe days. It is further concluded that Mr. Klingensmith was never seen by any visiting insurance person other than as a bedridden person. Mr. Bessimer's comment that Mr. Klingensmith could have been napping was not credible in light of the total circumstances known to Respondent. Paragraph 35 is accepted but is irrelevant. The second sentence of paragraph 36 is accepted. With regard to the first sentence of that paragraph, it is rejected as contrary to the weight of the evidence. Mrs. Klingensmith's account of the conversation has been deemed more credible than the Respondent's. Paragraphs 37, 38, and the first sentence of paragraph 39 are accepted. With regard to the remainder of paragraph 39, it is rejected as contrary to the weight of the credible evidence. Paragraph 40 is accepted but is irrelevant.
