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DEPARTMENT OF INSURANCE AND TREASURER vs JOANNE MARIE SHEPHERD, 94-004167 (1994)

Division of Administrative Hearings, Florida Filed:Fort Lauderdale, Florida Jul. 26, 1994 Number: 94-004167 Latest Update: Aug. 19, 1996

The Issue Whether Respondent violated the following sections of the Florida Statutes: 626.041(2), 626.561(1), 626.592(1), 626.611(4), (5), (7)-(10), (13), 626.21(2), (6), (12), 626.9521, 626.9541(1)(a)1, (b), (e)1., (k)1., (o)1., (z)3, 627.739(2), and 627.843. If so, what penalty should be imposed.

Florida Laws (14) 120.57, 120.68, 626.0428, 626.611, 626.621, 626.641, 626.734, 626.911, 626.9521, 626.9541, 627.736, 627.739, 627.839, 627.843

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DEPARTMENT OF INSURANCE vs GLORIA ANN ELLWOOD, 89-004903 (1989)

Division of Administrative Hearings, Florida Filed:Pensacola, Florida Sep. 06, 1989 Number: 89-004903 Latest Update: Mar. 07, 1990

Findings Of Fact Respondent, Gloria Ann Ellwood, is currently licensed and eligible for licensure in the State of Florida as a general lines agent. Ellwood purchased in January 1985 from Pasqualey "Pat" Caliguiri what they both believed to be were shares in two franchises to operate a nonstandard automobile insurance business, Cash Register Auto Insurance of Escambia County and Cash Register Auto Insurance of Okaloosa County. Ellwood paid Caliguiri $10,000 as a down payment and financed $35,000 for 500 of 1,000 shares in the Escambia County agency and approximately $25,000 for 500 of 1,000 shares in the Okaloosa County agency. Ellwood paid Caliguiri approximately one-half the amount financed before the events occurred which are the basis for this case. These two franchises Caliguiri had purchased in 1983, along with another franchise, for nonstandard auto insurance sales offices from Lloyd Register for $5,000 apiece, as evidenced by 500 shares of 1,000 shares common stock in each of the three corporations. Through this purchase, Caliguiri received a reduction in the amount of commission paid on the franchise and the ability to realize a profit from his efforts in building the business. He executed a consulting agreement with Register and had to sign an employment contract with the various corporations. Register provided accounting and similar services, and Caliguiri had to repay to Register all capital expenditures made on the agencies. Register was present at the closing of the sale between Caliguiri and Ellwood. Register was silent at the closing between Ellwood and Caliguiri regarding Ellwood's rights. He was aware of the transfer of Caliguiri's stock to Ellwood for valuable consideration. After the transfer, Ellwood executed a consulting agreement with Register and signed an employment contract with the two corporations which she had purchased. Ellwood was entitled to $500 per week salary from `the corporation. In the case of both Caliguiri and Ellwood, when receipts from the business were low, Register suggested that they take some lesser sum as a salary payment than what they were entitled to under their employment contract. Register demanded payment of all moneys due to Register, although he did extend the time for payment for Caliguiri at one point when business was particularly bad. Both Caliguiri and Ellwood thought that they owned the stores which they had purchased. Ellwood served as general manager, president and director of Cash Register Auto Insurance of Escambia County at all times material to the complaint. Cash Register of Escambia was a Florida corporation engaged in the operation of a nonstandard insurance agency at all times material to the complaint. During 1985 and 1986, Ellwood paid for rent, improvements to property, telephone service, and similar business expenses from her personal account when there insufficient funds in the operating account to cover these expenditures. The total of these loans to the corporation was $14,930.37. Ellwood was charged by Register for the annual state corporate filings with the State of Florida. The Escambia agency had two checking accounts; one for payroll and the other for bills and refunds. The latter account was called the operating account into which deposits and premiums were deposited. Checks for insurance companies, insureds, beneficiaries and all business expenses, except salary, were written on this account. Ellwood wrote or caused to be written all checks for the agency from both accounts. Starting in January 1987 and continuing to June 1988, Ellwood wrote a series of 14 checks on the operating account to fictitious payees which were designated as refund checks to insureds; however, the payees had never paid a deposit to the company. Between January 1987 and July 1988, Ellwood endorsed and cashed these checks keeping $1,897.44. Ellwood described these checks as repayment of the money which she had advanced to the business. Ellwood explained that she wrote these checks to fictitious payees to prevent questions from Register's accountant and from fear Register would want commissions from non-franchise agencies which she owned. During all times material to this complaint, Register provided accounting services as part of his consulting agreement. Register or his accountant was aware that checks had not been drawn on the operating account for payment of rent, advertising, and telephone services and he knew the agency was still in business at the same locale. Register or his accountant was aware of the checks for refunds which ran from $21.89 to $398.99, no two of which were for the same amount. These checks do not appear on their face to be refunds for special high risk automobile insurance although they are annotated as such. Register suggested and was aware that Ellwood and Caliguiri took less salary than they were entitled to take under their employment contracts. Although money received from a client or company for a client or beneficiary is held in a fiduciary capacity, the operating account is not an escrow account and agents are not required to maintain deposits in an escrow account pending transfer of the premiums to an insurer. No evidence was received that Ellwood impaired these accounts by issuing these checks to fictitious clients and cashing them. Ellwood did not question her ownership of the business until late summer 1988 when Register advised Brian Fisher, a potential buyer, that Fisher would not have the rights of ownership if he purchased Ellwood's shares of stock because she held only common stock and control of the corporation was vested in those persons holding preferred stock all of which was owned by Register and his wife.

Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that the charges be dismissed against the Respondent DONE AND ORDERED this 7th day of March, 1990, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 March, 1990. APPENDIX A TO RECOMMENDED ORDER 89-4903 The following is a list of the proposed findings which were adopted and those which were rejected and why. Petitioner's Proposed Findings: Paragraph 1 Adopted. Paragraph 2 Adopted. Paragraph 3 Adopted, but reworded & renumbered. Paragraph 4 Adopted, but reworded & renumbered. Paragraph 5 Rejected as contrary to the facts. Paragraph 6 Rejected as contrary to the facts. Paragraph 7 Respondent admitted she used the money for another agency; however, that does not establish that taking the money was fraudulent. Paragraph 8 Rejected as contrary to the facts. Respondent's Proposed Findings: Paragraph 1 Adopted. Paragraph 2 Adopted. Paragraph 3 Adopted, but reworded & renumbered. Paragraph 4 Adopted, but reworded & renumbered. Paragraph 5 Adopted, but reworded & renumbered. Paragraph 6 Adopted, but reworded & renumbered. Paragraph 7 Adopted, but reworded & renumbered. Paragraph 8 Rejected as contrary to the facts. Paragraph 9 Adopted. COPIES FURNISHED: Mr. Tom Gallagher State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Don Dowdell, Esq. General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Roy Schmidt, Esq. Office of the Treasurer Department of Insurance and Treasurer 412 Larson Building Tallahassee, FL 32399-0300 Fletcher Fleming, Esq. Shell, Fleming, Davis & Merige Seventh Floor, Seville Tower P.O. Box 1831 Pensacola, FL 32595

Florida Laws (4) 120.57, 626.561, 626.611, 626.621

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DEPARTMENT OF FINANCIAL SERVICES vs ADRIAN MATTHEW JAGDEOSINGH, 04-001763 (2004)

Division of Administrative Hearings, Florida Filed:Fort Lauderdale, Florida May 18, 2004 Number: 04-001763 Latest Update: Jul. 25, 2005

The Issue The issues are whether Respondent is guilty of any violations of the Insurance Code, including Chapter 626, Florida Statutes, and, if so, what penalty should be imposed.

Findings Of Fact At all material times, Respondent has been licensed as a general lines insurance agent, holding license number A129688. At all material times, Respondent has been the sole owner and director of America Security Insurance Agency, Inc., formerly known as America Auto Security Insurance Agency, Inc. (America Security). On April 1, 2000, Dionne Jacques purchased a motor vehicle from Sawgrass Ford in Fort Lauderdale. She did not own a vehicle at the time and testified that she purchased a model that was selected for her by someone at the dealership. In closing on the purchase, Ms. Jacques dealt extensively with a dealer employee named Herbert McKenzie. Ms. Jacques financed the motor vehicle purchase with Ford Credit. In the course of completing the required paperwork at the dealership, Mr. McKenzie referred Ms. Jacques to American Security for motor vehicle insurance. Mr. McKenzie mentioned that he dealt with someone named "AJ" at the insurance agency. According to Ms. Jacques, Mr. McKenzie informed Ms. Jacques that one year's insurance would cost $468 or $468.99. Mr. McKenzie did not testify, but Respondent testified that he spoke with Ms. Jacques on the telephone and explained the relevant features of the policies that were available to her. Although it is unclear who quoted the premium to Ms. Jacques, Petitioner has failed to prove by clear and convincing evidence that Mr. McKenzie did so. Ms. Jacques agreed to purchase the insurance and produced a credit card for the amount due. The testimony of Ms. Jacques suggests that she allowed Mr. McKenzie to charge her credit card for the insurance premium. However, the more definitive testimony of Respondent, which is credited, is that he took her credit card information over the telephone and arranged for the card debit. In return, according to Ms. Jacques, Mr. McKenzie gave her a document that she believed would document her coverage until she received an insurance policy in the mail in about 30 days. It is impossible to determine on this record that Mr. McKenzie attempted to bind coverage on behalf of the insurer. At no time prior to the purchase of the insurance did Respondent, Mr. McKenzie, or anyone else disclose to Ms. Jacques that she was purchasing other ancillary products besides insurance. Likewise, no one informed her that she was financing part of the annual insurance premium. For unclear reasons, Respondent did not obtain insurance coverage for Ms. Jacques until May 2000. At that time, he took the $468 that she had charged and, without her knowledge, applied only $143 of this sum toward the policy premium. Without Ms. Jacques' knowledge, Respondent, or someone at his direction, signed Ms. Jacques' name to a premium finance agreement, evidencing an unpaid premium balance of $504. At the same time, also without Ms. Jacques' knowledge, Respondent used $300 of the initial $468 that Ms. Jacques paid to purchase ancillary coverage that she had not agreed to purchase. This ancillary coverage included towing, supplemental medical coverage, replacement rental car, and emergency cash. These coverages supplemented a $647 personal injury protection policy containing no personal liability or uninsured motorist coverage. At no time has American Security designated a primary agent. By Immediate Final Order entered March 12, 1991, the Florida Department of Insurance, now known as Petitioner, ordered Respondent to cease and desist from the unlicensed sale of insurance. However, Respondent has made substantial restitution to Ms. Jacques, who suffered no significant financial injury as a result of Respondent's misdealings.

Recommendation It is RECOMMENDED that the Department of Financial Services enter a final order suspending Respondent's license for one year. DONE AND ENTERED this 18th day of November, 2004, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 2004. COPIES FURNISHED: Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Pete Dunbar, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Gregg S. Marr Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Charles P. Randall Charles P. Randall, P.A. Bank of America Tower, Suite 500 150 East Palmetto Park Road Boca Raton, Florida 33432-4832

Florida Laws (5) 120.569, 120.57, 624.11, 626.611, 626.621

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DEPARTMENT OF INSURANCE AND TREASURER vs RALPH EDWARD CARTER, 89-006117 (1989)

Division of Administrative Hearings, Florida Filed:St. Petersburg, Florida Nov. 08, 1989 Number: 89-006117 Latest Update: Mar. 13, 1990

Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Ralph Edward Carter, was licensed and eligible for licensure as a life and health insurance agent and general lines agent - property, casualty, surety and miscellaneous lines by petitioner, Department of Insurance and Treasurer (Department). When the events herein occurred, respondent was licensed as a property and casualty insurance agent for Bankers Insurance Company (BIC) and Underwriters Guarantee Insurance Company (UGIC). In March 1987 respondent purchased an insurance franchise and began operating an insurance firm under the corporate name of Mr. Auto of South St. Petersburg, Inc. Records on file with the Department of State reflect that effective June 25, 1988 the name of the corporation was changed to Reliable Insurance of South St. Petersburg, Inc. Since February 1989 the business has been located at 3135 18th Avenue, South, No. C- 3, St. Petersburg, Florida. The corporation was primarily engaged in doing business as a general lines insurance agency. Respondent has been licensed as an agent since 1968, and during his tenure as an agent, has worked in sales with several large insurance companies. In January 1988 Betty Andrews purchased from respondent liability and property damage coverage on her two automobiles, a 979 Ford station wagon and a 1980 Chrysler. The insurance was written through UGIC and was effective for the year beginning January 8, 1988. Shortly after May 16, 1988 Andrews received a notice from UGIC reflecting that she owed an additional $38.90 on her policy. For some undisclosed reason, Andrews did not pay the additional premium owed. On July 6, 1988 Andrews visited respondent's office for the purpose of adding comprehensive and collision coverage on her two automobiles. After respondent quoted a rate, she agreed to purchase the additional coverage, filled out an application, and gave respondent two checks totaling $166. These monies were deposited into respondent's business account. The balance was to be paid in three monthly payments of approximately $55 each month through a finance company. Respondent gave Andrews a document entitled "Receipt and Binder Certificate" reflecting she had comprehensive and collision coverage with "Bankers" effective from July 6, 1988 to January 6, 1989. "Bankers" was in fact Bankers Insurance Company. When Andrews did not receive a policy from BIC, she attempted to contact respondent on several occasions to ascertain its whereabouts. Andrews could not recall when or how many times she telephoned respondent's office but indicated she was never able to reach him. This was probably because respondent operated a one-man office with no clerical help and was frequently absent from his office. In late August 1988 Andrews received a notice from UGIC advising that UGIC intended to cancel her policy effective September 7, 1988 because she failed to pay the $38.90 premium still due. At about this same time Andrews' husband sold the station wagon and purchased a truck. Accordingly, Andrews needed to transfer her insurance to the new vehicle. She went to respondent's office in early September 1988 and asked him why she had never received the new policy. She also asked him to find out why her existing policy was being cancel led and requested him to transfer coverage from the station wagon to the new truck. In Andrews' presence, respondent made a telephone call to UGIC and learned that Andrews' husband had failed to disclose on the insurance application that he had received a traffic ticket. This in turn caused a $38.90 increase in the annual premium, and because that amount had not been paid, the policy was being cancelled. Respondent attempted to persuade UGIC to reinstate the policy but was unsuccessful. Dissatisfied, Andrews told respondent she intended to file a complaint with the Department of Insurance. Respondent then wrote her a check for $166 which represented a full refund of her monies. There is no evidence to establish that respondent intended to defraud Andrews or to evade the requirements of the insurance code. Despite the fact that Andrews did not receive a policy, she was covered until September 1988 by her original policy and respondent's errors and omissions policy. Through testimony by an underwriting manager for BIC, David R. Wardlow, it was established that respondent had entered into a correspondent agreement with an agent of BIC. Wardlow's review of BIC's records reflected that BIC had never received Andrews' application and premium nor was a policy written on her behalf. However, there was no evidence to establish how promptly respondent was required to remit a new application and premium to BIC or whether respondent violated BIC policy by retaining the application and monies for some sixty days until he learned that the existing policy had been cancel led. Respondent readily conceded that he never forwarded the application and premium monies to BIC. He explained his actions by pointing out that after Andrews left his office he decided to secure the coverage from UGIC rather than BIC in order to have the entire coverage with one company at a cheaper rate. When he later learned that UGIC intended to cancel Andrews' policy for nonpayment of premium, he thought he might be able to persuade UGIC to reinstate the policy but was unsuccessful. He offered no excuse except inadvertence as to why he had not promptly followed up on Andrews' application. Petitioner also presented the testimony of Johnnie Ruth Bell who purchased automobile insurance from respondent in October 1988. Although Bell's testimony was often vague and confusing, the following facts were established. On or about October 1, 1988 Bell went to respondent's office to purchase full insurance coverage on her 1987 Toyota Corolla. After discussing various options with respondent, Bell agreed to purchase a policy issued through Redmond-Adams, a Sarasota underwriter for UGIC. Bell gave respondent a check in the amount of $227 as a down payment and agreed to finance the balance through a finance company at a rate of $78 per month for eight months. These monies were deposited into respondent's bank account. Respondent issued a "Receipt and Binder Certificate" reflecting coverage with "Underwriter - Redmond Adams". Because Bell had financed the car with a local bank, it was necessary for respondent to furnish the bank with evidence of insurance. Through inadvertence, but not intentionally or willfully, respondent misplaced the application and never forwarded the application and premium to the insurance company nor did he notify the bank of Bell's insurance coverage. However, Bell was covered during this period of time by respondent's errors and omissions policy. After Bell did not receive a copy of her policy from Redmond-Adams, but received a number of telephone calls and notices from her bank, she met with respondent around December 2, 1988. Respondent accepted an additional $156 in cash from Bell and issued her a new binder effective that date which was identical to the first binder except for the date. It is unknown why the additional money was collected. He then tore up the first binder. When Bell had still not received her policy by April 1989, she filed a complaint with petitioner. After respondent learned that Bell had filed a complaint, he contacted her in May 1989 and refunded all of her monies. There was no evidence to establish how promptly respondent was required to submit applications and premiums to UGIC or how that company construed the term "in the regular course of business" in the context of agents remitting applications and premiums. Respondent blamed his problems on the fact that he is the sole employee of his office and, according to his estimate, services some 500 active clients per year and more than 1,500 accounts. He desires to continue in the insurance profession and points to the fact that, of the many insurance transactions handled by him over the last twenty-two years, the Andrews and Bell transactions are the only two that have spawned any significant problems. Moreover, he has never been disciplined by petitioner during his tenure as an agent. Respondent asks that any penalty be limited to a period of probation during which time he can have the opportunity to improve his management and bookkeeping skills. There was no evidence to establish whether respondent's conduct demonstrated a lack of fitness or trustworthiness to engage in the insurance profession. As to respondent's knowledge and technical competence to engage in the transactions authorized by his licenses, he conceded he lacks training in bookkeeping and management skills, both needed for a general lines agent, but denied that he lacks the necessary skills in the sales part of the business. This was not contradicted. Finally, respondent has taken curative steps to insure that applications are not misplaced and the customer receives the requested insurance.

Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating sections 626.611(8) and 626.734 and that his general lines license be suspended for thirty days. All other charges should be dismissed with prejudice. DONE AND ORDERED this 13 day of March, 1990, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13 day of March, 1990. APPENDIX Petitioner: 1-4. Partially adopted in finding of fact 1. 5-7. Partially adopted in finding of fact 3. 8-11. Partially adopted in finding of fact 6. Note - Where a finding has been partially adopted, the remainder has been rejected as being irrelevant, unnecessary, cumulative, subordinate, not supported by the evidence, or a conclusion of law. Respondent: A Partially adopted in findings of fact 5 and 6. Rejected as being irrelevant. Partially adopted in finding of fact 3. Partially adopted in finding of fact 5. Partially adopted in finding of fact 6. Rejected since respondent did not move his office until February 1989. Partially adopted in finding of fact 4. Partially adopted in finding of fact 6. I. Partially adopted in findings of fact 3 and 8. Partially adopted in findings of' fact 7 and 8. Partially adopted in findings of fact 6 and 7. Partially adopted in finding of fact 10. Partially adopted in finding of fact l. Partially adopted in finding of fact 10. Partially adopted in finding of fact 1. Note - Where a finding has been partially used, the remainder has been rejected as being irrelevant, cumulative, unnecessary, subordinate, not supported by the evidence or a conclusion of law. COPIES FURNISHED: Honorable Tom Gallagher Insurance Commissioner Plaza Level, The Capital Tallahassee, FL 32399-0300 Willis F. Melvin, Jr., Esquire 412 Larson Building Tallahassee, FL 32399-0300 Richard J. DaFonte, Esquire O. Box 41750 St. Petersburg, FL 33743-1750 Donald A. Dowdell, Esquire General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 =================================================================

Florida Laws (8) 120.57, 120.68, 626.561, 626.611, 626.621, 626.641, 626.651, 626.734

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DEPARTMENT OF FINANCIAL SERVICES vs LAURA J. KING, 07-001808PL (2007)

Division of Administrative Hearings, Florida Filed:New Port Richey, Florida Apr. 20, 2007 Number: 07-001808PL Latest Update: Apr. 28, 2008

The Issue The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint, and, if so, what disciplinary action should be imposed.

Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner issue a final order finding Respondent guilty of committing the violation alleged in Count X of the Administrative Complaint, fining her $250.00 for such violation, and dismissing the remaining counts of the Administrative Complaint. DONE AND ENTERED this 8th day of February, 2008, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of February, 2008.

Florida Laws (14) 322.26, 322.27, 324.072, 624.01, 624.307, 626.551, 626.611, 626.621, 626.681, 626.691, 626.692, 626.951, 626.9521, 626.9541

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DEPARTMENT OF INSURANCE AND TREASURER vs. LARRY WAYNE LINDSAY, 87-003046 (1987)

Division of Administrative Hearings, Florida Number: 87-003046 Latest Update: Apr. 08, 1988

Findings Of Fact At all times material hereto Respondent was licensed as an Ordinary Life and General Lines Agent (Exhibit 1) and was the agent for Dixie Insurance Company at the Bartow office. As such, he had the authority to write policies binding the insurer. At all times relevant hereto, Respondent was president and principal stockholder of Friendly Insurance Companies of Bartow, Winter Haven, Lake Wales and Haines City. The corporate records (Exhibit 3 for Polk County) show this to be the same as Friendly Auto Insurance of Lake Wales, Inc. Respondent was the agent for Dixie Insurance Company only at the Bartow office. Dixie Insurance Company qualifies agents, not offices, to sell their policies. Respondent had no authority to act as agent for Dixie Insurance at any of these offices other than the Bartow office as the insurance company has but one agent per office. To support the allegations in count 34 of the Administrative Complaint, Edward Bland testified, and Exhibits 21 through 23 were admitted. Bland applied for automobile insurance at Friendly Auto Insurance at the Winter Haven office, which he paid for by check in the amount of $728 (Exhibit 23) as full payment for the one year premium. Subsequent thereto, a Premium Finance Agreement was prepared on which Bland's signature was forged showing $546 of the premium to be financed. This finance agreement was signed by T. R. Shaw as agent. Upon learning that the finance agreement had been issued on his coverage, Bland contacted the Winter Haven office manager, and after a few weeks of "run around" contacted the Department of Insurance and "got his money back." Bland never saw Shaw or Respondent. Rafael Gomez, M.D. purchased automobile insurance on his three cars from Friendly Auto Insurance of Winter Haven in December 1985 for which he paid $3452.71 for the annual premium. Subsequently thereto, he received a call from the Barnett Bank, which had financed one of the cars, to tell him that the bank needed evidence of insurance on the financed auto. Dr. Gomez contacted Ruth Kent, the office manager at the Winter Haven office, who assured him she would supply the bank with the necessary documentation. When the bank contacted Dr. Gomez later to again demand proof of insurance, Gomez went to the Winter Haven office and demanded to see his file. He made copies of certain documents which he took to the bank. Dr. Gomez subsequently learned that a finance agreement had been entered into on his behalf, but without his knowledge or consent, and that the address shown on the agreement under his name was that of Ruth Kent. Although when accosted by Dr. Gomez with this information, Ms. Kent denied such an intentional act, this would have allowed her to hold the finance coupons and get all information supplied by the finance company to the borrower without Dr. Gomez learning that the policy for which he had paid in full was subsequently financed. After learning of the subterfuge, Dr. Gomez contacted the Department of Insurance. Ruth Judd was office manager at the Friendly Insurance Agency of Haines City for a period of time ending in 1987 when she was terminated by Respondent. Ms. Judd contends she was only the office manager, and Respondent was the boss of the office and hired all employees. During the time she worked in the office, Ms. Judd testified several different people served as the licensed agent for the office, but they spent little time in the office with Donald Leroy Flentke, towards the end of his tenure, coming in only for his weekly paychecks. No evidence was presented from which a determination could be made that for a specific period of time any of the four offices were not being supervised by a licensed agent. Ms. Judd testified she was aware of one policy for which the insured had paid the premium in full being submitted for a premium finance agreement with forged documents. She also was aware that monthly financing payments were made by the Haines City office on some three or four other premium finance agreements. Ms. Judd testified on March 2, 1988, that she was presently unemployed. Respondent called one witness that testified and produced documentary evidence (Exhibits 24 through 26) that on March 2, 1988, this witness purchased insurance from Ms. Judd at New Horizons and was required to buy an accidental death policy in order to obtain PIP coverage. Exhibit 7 shows that an automobile insurance policy was issued to Jackie Bryan, the policy was sold through Friendly Insurance of Winter Haven, Inc., that the premium was financed, the borrower owed an additional $142.66 on the finance agreement, and the policy expired 2-26-86. Respondent acknowledged that his signature appears on the premium finance application. Some 5000 policies are sold by Respondent's agencies per year, and Respondent has no independent recollection of that finance agreement. Dixie Insurance Company issued a policy to Johnny Davis which was also financed through Envoy, but this application was signed by Shaw. Although Dixie Insurance Company had their own premium finance organization and, if the premium is financed, preferred to do the financing, Respondent testified that occasionally, if a client did not want to finance their premium through Dixie, the agency would go through another premium finance company such as Envoy. Exhibits 9, 10, 11 and 12 show premium finance agreements were contracted for on behalf of Raymond Scott, Mark Turner, Kathy Smith and Cathy Phillips, but no auto insurance policies were issued by Dixie Insurance Company to these individuals. Only one of these finance agreements (Exhibit 12) purports to be prepared at the Bartow office, and two of the drafts (Exhibits 9 and 12) purport to be signed by Respondent. Respondent testified he neither signed those drafts nor authorized someone else to sign for him. The forgery on both Exhibits 9 and 12 appear to have been perpetrated by the same person. Cathy Phillips, a friend of Ruth Kent, testified without contradiction that the signature purporting to be hers on Exhibit 12 was forged, that she never entered into a premium finance agreement with Envoy Finance Corporation, and that she had never seen Exhibit 14 until presented to her by the Petitioner's attorney. Ms. Phillips did receive a past-due notice on one occasion and called Ruth Kent who told her not to worry about it, that everything was taken care of. Subsequently, Ms. Phillips' husband wrote a letter to Envoy Finance Corporation denying any knowledge of any insurance policy written by Friendly Insurance of Bartow. Considerable testimony was submitted regarding the activities of Chuck Evans who was, at one time, employed by Respondent at the Winter Haven agency as a non-licensed employee with authority to write checks on the Trust Account. While the statements made by Evans to Department of Insurance officials contributed to the initiation of the investigation of Respondent's agencies, none of this testimony was relevant to the charges here at issue.

Florida Laws (10) 120.57, 120.68, 626.561, 626.611, 626.621, 626.730, 626.734, 626.784, 626.830, 626.9541

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DEPARTMENT OF INSURANCE AND TREASURER vs. LLOYD ELDO REGISTER, 82-002048 (1982)

Division of Administrative Hearings, Florida Number: 82-002048 Latest Update: Oct. 30, 1990

Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Insurance enter a Final Order finding Respondent, Lloyd Register, guilty of the violations as set forth above and that his insurance licenses be suspended for a period of one (1) year. That the Department of Insurance enter a Final Order finding Respondent, Shirley Hopkins, guilty of the violations as set forth above and that her license be suspended for a period of 90 days and that she be required to pay a civil penalty of $500. DONE and ENTERED this 1st day of August, 1983, in Tallahassee, Florida. MARVIN E. CHAVIS, 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 1st day of August, 1983. COPIES FURNISHED: Curtis A. Billingsley, Esquire Dennis Silverman, Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32301 Thomas F. Woods, Esquire 1030 East Lafayette Street Suite 112 Tallahassee, Florida 32301 Honorable Bill Gunter Insurance Commissioner and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32301

Florida Laws (10) 624.03, 626.611, 626.621, 626.9521, 626.9541, 627.421, 627.733, 627.736, 627.839, 627.843

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DEPARTMENT OF INSURANCE vs WALTER RUPERT EVERTON, III, 00-002906PL (2000)

Division of Administrative Hearings, Florida Filed:Tampa, Florida Jul. 14, 2000 Number: 00-002906PL Latest Update: Jan. 05, 2025

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DEPARTMENT OF INSURANCE AND TREASURER vs. FLORENCE MOUNTS WILLIAMS, 86-003951 (1986)

Division of Administrative Hearings, Florida Number: 86-003951 Latest Update: May 29, 1987

Findings Of Fact Introduction At all times relevant hereto, respondent, Florence Mounts Williams (Williams or respondent), was licensed as an insurance agent by petitioner, Department of Insurance and Treasurer (Department or petitioner). When the events herein occurred, Williams was an officer and director of Mr. Auto Insurance of Okeechobee, Inc. (Mr. Auto), an incorporated general lines insurance agency located in Okeechobee, Florida. She was also an officer and director of Florida Insurance Agency, Inc. (FIA), an insurance agency doing business in the same city. Respondent sold insurance to the public through both businesses. Williams is charged with violating the Florida Insurance Code while dealing with nine customers during the period between 1984 and 1986. These business transactions were made either through Mr. Auto or FIA, and, with certain exceptions, generally relate to Williams accepting a premium for a policy and then failing to procure a policy for the customer, or falling to refund the premium after the customer cancelled the policy. Some of these customers eventually filed complaints with the Department, and after an investigation was conducted, the administrative complaint, as amended, was issued. That prompted this proceeding. The State of the Industry and Williams in 1984-86 Before discussing the specific charges, it is appropriate to describe the industry conditions and practices as they existed in 1984-86. These were established without contradiction by expert witness Beverly. It is within this broad framework that Williams operated when the transactions in question occurred. The expert's bottom line conclusion, after reviewing the nine customers' files, was that no impropriety had occurred. The agent-customer interface normally begins when a customer visits an insurance agent to purchase a policy. The agent will generally get a rate quotation by telephone from a managing general agent (MGA) who brokers policies on behalf of various insurance companies. An MGA may more accurately be described as a branch office of the insurance company under contract. If the rate quoted by the MGA to the agent is acceptable to a customer, the agent has the applicant complete an application and pay the quoted premium, or at least make a down payment on the same. The application and premium are then forwarded by the agent to the MGA for risk review to determine if the applicant meets underwriting requirements. At the same time, the agent will issue a binder to the customer which evidences temporary coverage until the application is accepted or rejected by the insurance company. In the event coverage is later declined, industry practice dictates that the agent obtain coverage with another company as soon as possible since the agent has the responsibility to maintain coverage on a customer. However, what constitutes a reasonable period of time to do so was not disclosed. In obtaining new coverage, the agent need not have the customer execute a new application since the validity of the original application is not affected. The customer should, however, be notified at the earliest convenient time that coverage is with a different company. In some cases, a customer may choose to finance his premium through a premium finance company. If he does, the finance company pays the entire premium to the MGA or insurer when application is made, and the customer pays the amount owed (plus a finance charge) to the finance company through installment payments over an agreed period of time. If for some reason an application is not accepted by the insurer, it is the responsibility of the MGA or insurer to so notify the premium finance company and return the money. The finance company must then refund any money paid by the insured. When the events herein occurred, it was established through expert testimony that the Florida insurance marketplace was in a "chaotic" condition and could be described as a "zoo." During this time, a small agent such as Williams might find herself doing business with as many as fifteen different MGAs, each with a different set of rules. Thus, it was common for an agent to be confused as to her binding authority with a particular MGA and whether the proper amount of coverage was obtained. Moreover, because of the chaotic marketplace, it became increasingly difficult to find companies who would write coverage on certain types of policies. It was further established that in 1984-1986 the MGAs were "overflowed with work" thereby causing delays of up to "months" for an agent to learn from an MGA if the risk had been accepted and a policy issued. Applications and checks were also lost or misplaced by the MGA and carrier during this time period. Consequently, the agent would think that coverage had been obtained, and so advise the customer, but would later learn that the application had been rejected, or the company had no record of one ever being filed. There were also lengthy delays in MGAs and insurance companies returning unearned premiums to the agent for repayment to the customers. According to industry practice, once a refund is received by an agent, checks to customers would typically be issued only once a month. In Williams' case, she made refunds on the twenty-fifth day of each month. A further prohibition on an agent is that a refund can be paid to a customer only after the agent receives the refund check from the insurance company or MGA. In other words, refunds from an agent's own funds are prohibited. As a result of this confusion, the number of occasions when an agent was cited for an error or omission (E&O) went up "astronomically." Indeed, industry statistics tell us that one in six insurance agents has a claim filed against his E&O policy for failure to provide coverage as promised. For this reason, no reasonable agent, including Williams, would do business without an E&O policy. When the policies in question were sold, Williams had approximately 4,000 active and inactive files in her office. Her office help was mainly persons with no prior training in insurance, and who only stayed on the job for a matter of weeks or months. Consequently, there was some confusion and disarray in her two offices. Even so, Williams was responsible for the conduct of her employees. At the same time, however, it was not unreasonable for Williams to assume that, due to the overload of work on the MOAs, an agent could expect no action on an application to be taken by an MGA or carrier for many months, and that applications and checks might be misplaced or lost. Count I This count involves an allegation that Williams violated nine sections of the Insurance Code in conjunction with the sale of a boat insurance policy to David and Margaret Copeland on September 19, 1984. The evidence reflects that Margaret Copeland applied for insurance on her boat with Mr. Auto on or about September 19, 1984. Copeland had previously been turned down for insurance by several other local agents. After Williams received a telephonic quote of $168 per year from an MGA, and relayed this advice to Copeland, Copeland gave a $30 check as a down payment on her policy. The remaining premium was paid by two partial payments made on October 6 and November 7, 1984, respectively. Copeland was issued a binder to evidence her insurance coverage, and a receipt for the $30 down payment. The binder indicated that Barnett Bank was the loss payee and that coverage was with "Professional." In actuality, "Professional" was Professional Underwriters Insurance Agency, Inc. (Professional), an MOA in Altamonte Springs for various insurance companies doing business in the state. According to Williams, the application and check were forwarded to Professional shortly after the application was executed. Because the boat was being financed with Barnett Bank, and the lender required evidence of insurance, Copeland instructed Mr. Auto to furnish a copy of the policy to the bank. A copy of the binder was furnished by Williams to the bank on November 19, 1984, and again on December 7, 1984. However, after Margaret Copeland did not receive a copy of a policy, she contacted Mr. Auto on several occasions to obtain a copy but was given "excuses" why one had not been issued. At this point Williams simply believed Professional was "dragging its feet" since past experience had taught her Professional typically took three to four months to forward a copy of the policy. Nonetheless, in response to Copeland's requests, Williams wrote Professional on December 3, 1984, asking that it "please check on the (Copelands') boat policy which was written 9-19-84" because the lienholder needed a copy. Professional did not respond to Williams' request. After no policy was received, Margaret Copeland contacted Professional's office in Altamonte Springs by telephone and learned no policy had been issued by that firm. The Copelands then requested Mr. Auto to cancel their policy on March 12, 1985, and demanded a full refund of their premium. After having the Copelands execute a notice of cancellation, the same was forwarded by Williams to Professional with a note reading "Karen, check this out and see what is happening," together with a copy of her previous request that Professional check on the whereabouts of the policy. Again, Professional did not respond to this inquiry. Williams then telephoned Professional and spoke to its office manager seeking advice on the amount of refund due the Copelands. She was told to make a proration. On May 19, 1985, Williams offered David Copeland a partial refund ($89) of his premium but he declined. This amount of refund was based on Williams' belief that coverage existed from September 18, 1984, when she received a quotation, until March 12, 1985, or for approximately six months, and $59 represented the remaining unearned premium. Given the climate of the industry at that time, it was reasonable for Williams to make such an assumption. After Copeland declined her offer, Williams wrote Professional seeking further assistance and stating that "Insured was in here today, wanted his refund. I tried to prorate it and give it to him." Again, Williams received no formal reply from the MGA. To date, a policy has not been produced. Williams eventually refunded the entire premium to the Copelands in February 1987. Through testimony from a Professional representative, it was established that Williams had no binding authority with Professional except on homeowners and dwelling fire policies. On all others, including the type the Copelands desired, it was necessary for the agent to first telephone Professional and receive a "telephone bind" from a Professional representative. In a letter to petitioner dated August 7, 1985, Professional acknowledged that there was "a possibility this risk may have been quoted," but it could find no record of an application having been filed or verification of coverage bound through a binder number or cashed check. It did acknowledge receiving the Copelands' request to cancel their policy in March 1985. If a binder had been authorized, it would have been recorded in a binder book with a number assigned to that binder unless the company lost the policy or otherwise inadvertently failed to record this information. The representative also confirmed that Professional routinely brokered this type of policy in 1984, and that it binds several thousand policies per year. Given this volume of work, the representative acknowledged it was possible that Williams or an employee of her firm may have been given a telephone quote for the Copeland policy, or that the application could have been misplaced. C. Count III On June 19, 1985, William C. Norton, a retired railroad conductor, went to Mr. Auto to purchase an insurance policy for two automobiles. After being quoted an annual premium of $315 by an MGA (Jergen & Roberts), Williams gave this advice to Norton who then gave her a check in that amount. Norton was given a receipt and a binder to evidence his coverage. The binder reflected Norton's application had been placed with "Foremost," which is Foremost Insurance Company (Foremost) in Grand Rapids, Michigan. Williams forwarded the application to the MGA but it was later returned unbound because of several traffic violations by Norton. She then "shopped" the application around and was able to procure a policy from Orion Insurance Company (Orion) through Standard Underwriters, an MGA, at an estimated cost of $528.70 instead of the previously quoted rate of $315 per year. It should be noted that during this period of time, Norton was covered through binders executed by Williams. After Williams paid the amount ($528.70) due the MGA, a policy number (PA-102390) was issued. However, through "neglect" Williams never billed Norton for the difference between the originally quoted premium and the $528. After Orion reviewed Norton's driving record, it increased the annual premium to $622. When Williams received a bill for $622 per year, she sent Norton a notice on October 24, 1985, requesting an additional $144. 2/ When he refused, the policy was cancelled by the company for nonpayment in February 1986. By this time, Norton had gone to another company to obtain coverage. He had also requested from Williams a copy of his policy on four or five occasions but one was never produced. Norton also demanded a full refund of his money even though he had been covered by binders and a policy from June 1985 until February 1986, and was not entitled to a refund. When Williams refused, Norton filed an action in small claims court in February 1986, and won an uncontested judgment for $315. Williams stated she did not contest the matter because of several stressful events then occurring (e.g., a divorce and an employee theft) and the expense of hiring legal counsel. Mobile Home Division of Florida (MHD) is an MGA in Fort Lauderdale that reviews applications for automobile insurance with Foremost (and others), and determines if the applicant meets Foremost's underwriting requirements. It is one of five MGAs in the State representing Foremost. A representative of MHD reviewed his firm's records, and found no evidence of having received the Norton application. However, this was not surprising since Williams had not used MHD to obtain Norton's policy. Count VI Terryl J. Wisener is a college student with numerous traffic violations on his record. Because of this, he was forced to obtain automobile insurance through the Florida Joint Underwriters Association (FJUA), a small group of companies who write policies for high risk drivers such as Wisener. Insurance agents are "assigned" to one of the companies writing policies, even though they are not a regular agent of that company. Allstate Insurance Company (Allstate) happened to be a servicing carrier for FJUA in 1986, and Williams accordingly filed FJUA applications with that carrier when seeking insurance for high-risk customers. Under then existing rules, Williams could temporarily "bind" Allstate by writing a binder on a policy, but approval of the application and issuance of permanent coverage rested with Allstate. Until the application was rejected by Allstate, the driver was insured through the binder. During this same time period, it was "commonplace" for an FJUA carrier to return an application because of an "insignificant error" to avoid having to write a policy on a high-risk customer. On December 30, 1985, Wisener purchased a six-month automobile insurance policy through Williams. When the policy was due to expire on June 30, 1986, he returned seeking a renewal. Williams attempted to place the liability coverage with Allstate and the physical damage coverage through "Coastal," an MGA for Adriatic Insurance Company. She was quoted premiums of $996.70 and $814.70, respectively, for the two policies. After accepting a down payment of $552 from Wisener, she issued a binder and mailed the application to Allstate and Coastal with drafts for the entire premiums due. Because Wisener's Chevrolet Camaro was an eight-cylinder automobile, Coastal rejected the application in October 1986. Williams then attempted to replace the physical damage coverage with Allstate in November 1986. By virtue of Williams' binding authority, Wisener had coverage with Allstate until it rejected his application. The application, along with about fifty or sixty others, was eventually rejected by Allstate on February 27, 1987, because of a lack of "information." Until this occurred, Williams properly assumed that Wisener was covered and that Allstate was reviewing his application. In the meantime, and apparently without advising Williams, Wisener decided in October 1986 to purchase a policy through his parents' Allstate insurance agent in Port St. Lucie. He did so because he "believed" he had no insurance. However, he never made inquiry with Williams to confirm or deny this, or asked for a refund of his money. A representative of Allstate searched his firm's records and could find no evidence that a policy was ever written for Wisener through Williams. The company does acknowledge that it received Wisener's application and that it eventually returned the same "unbound" almost four months later. It gave no explanation for the delay. Although Wisener had not received a refund as of the time of hearing, this responsibility rests with Allstate (and not Williams) since it has never refunded to Williams the money paid by her for Wisener's policy. Count VII This count concerns a mobile home insurance policy purchased by Samuel and Mary Jo Moore in June 1985 from FIA. On June 25, 1985, Mary Jo Moore made application to renew her insurance policy on the mobile home. The policy had been in force for some ten years. Moore paid Williams $118 by check which was deposited and cashed by Williams. A check for $23 was also paid at a later date due to a premium increase. Williams issued Moore a binder evidencing coverage with Mobile Home Insurance Association (MHIA), an MGA in Gainesville, Florida. Shortly afterward, Williams learned from the MGA that the Moores' previous carrier, American Pioneer, had gone bankrupt and that there was a limited market for the Moores' application. Williams thereafter forwarded the application to another MGA, Jerger & Sons, Inc. (Jerger), in early August 1985. Temporary coverage was eventually issued by Jerger on August 23, 1985. However, the application was deemed to be incomplete because information regarding the number of spaces in the Moores' trailer park was lacking. This was not surprising since the Moores lived on private property and not in a trailer park. The application was returned to Williams with a reminder that unless the missing information was submitted to Jerger by September 6, 1985, coverage would be terminated. When no information was filed by that date, Jerger cancelled its coverage and returned the unbound policy on September 12, 1985. The Moores were not notified of this lapse in coverage. By allowing the coverage to lapse, and not notifying the Moores, Williams was negligent in her duties as an agent. After Jerger returned the application to Williams in late August 1985, Williams attempted to get the Moores to furnish photographs of the trailer site, and to sign the new application. Because both worked at jobs during business hours, Williams claimed she was unable to reach them prior to September 6, 1985. Williams continued her efforts to place the insurance and eventually filed the application with Foremost in March 1986. Although Williams concedes a lapse in coverage did occur, there is no evidence that this was an intentional or debilitate act on her part. After having the application returned twice, coverage was finally obtained for $201 in July 1986, or almost a year after the Moores first approached her concerning a renewal of their policy. This policy is effective through July 1987. Williams paid out of her own funds the difference between the original premium ($141) and the $201. In view of the original premium being applied to the 1986-87 premium, the Moores are not due a refund. On October 31, 1985, a tornado struck in the Okeechobee area causing damage to the Moores' trailer. The Moores contacted respondent who, at her own expense, had an adjuster from Vero Beach survey the damage in November. The adjuster learned no coverage was in force. The Moores then contacted respondent who, for some reason, had Jerger search for a policy. As might be expected, none was found, and Jerger would not agree to cover the loss. Williams instructed the Copelands to proceed against her E&O carrier for payment of their claim. At the time of final hearing, the claim had not yet been resolved. Count VIII On or about February 19, 1986, William A. McClellan, a retiree, purchased an automobile insurance policy from FIA. He paid $201 by check to Williams and received from her a receipt and binder evidencing coverage with "AIB" (Associated Insurance Brokers), the MGA for Balboa Insurance Company in Newport Beach, California. After the application was forwarded to AIB, it was initially returned because the agency check was drawn on insufficient funds. Thereafter, the check was made good (with no lapse in coverage) and Williams subsequently received a bill from Balboa for $247, or $46 more than she had previously quoted McClellan. When McClellan was presented the bill for an additional premium on May 1, 1986, McClellan told Williams to cancel his policy and to refund the unearned premium. She relayed this request to AIB and coverage was cancelled effective June 13, 1986. Thereafter, McClellan visited Williams' office at least seven or eight times seeking his refund, but was always told it was still being processed. This was a correct representation by Williams since AIB was less than diligent in processing a refund check. McClellan also filed a complaint with petitioner. Upon inquiry by petitioner, Williams advised the Department that McClellan would be paid as soon as AIB issued her a check. On or about July 29, 1986, AIB finally cut a check in the amount of $91.22 payable to Williams, and eventually issued a second check in the amount of $25.38 on October 1, 1986. The delay in issuing the checks was attributable to AIB and not Williams. After Williams received the first check, she offered McClellan a partial refund of $91.22 but he declined the offer. On October 10, 1986, or the day after Williams received the second check by mail, a representative of AIB flew by private plane to Okeechobee and obtained $133 in cash from Williams, who by then had received the second check from AIB. 3/ The representative paid McClellan the same day. Count IX On or about March 16, 1985, Luther B. Starnes purchased an insurance policy for his two automobiles from Mr. Auto for which he paid $473 by four installments over the next few months. After Williams received a telephone bind, Starnes was issued a binder evidencing insurance with a company called "Integrity." He also received a "Florida Vehicle Identification Card" evidencing PIP and liability coverage on his vehicles. In this case, Williams placed the coverage by telephone with AIB, the MGA for Integrity, which authorized her to temporarily bind the coverage. The application and check were thereafter sent by Williams to the MGA. After not receiving a policy by the fall of 1985, Starnes telephoned a district office of Integrity and learned his name was not on its computer. However, he did not contact Williams after that, or ask for a refund of his premium. Despite the accusation that Williams had no basis to believe that a policy had ever been issued by Integrity, an AIB representative confirmed at hearing that Starnes' application and premium had been received by AIB, and that AIB had issued a policy number covering Starnes. Indeed, respondent's exhibit 10 reflects that Integrity cashed the check, and simultaneously placed a sticker on the check which read "Integrity Insurance Co. Private Passenger Auto 100-FAB- 0206809." This indicated that AIB had assigned a policy number on behalf of Integrity and that Starnes' coverage was in effect. Indeed, Williams properly relied upon her cancelled check in believing that Starnes was insured. Moreover, it was appropriate for Starnes to pay for this coverage until Integrity formally rejected his application. Although Starnes never received a copy of a policy, the responsibility to issue one rested upon MGA or Integrity, but not Williams. Count X On or about July 11, 1986, David and Carolyn Douglas purchased an insurance policy for two trucks owned by David. The policy cost $1300 per year and Carolyn paid Williams this amount by check. A binder was given to Carolyn reflecting coverage through Dana Roerig and Associates (Roerig), an MGA in St. Petersburg for Canal Insurance Company (Canal). Under the MGA's then existing policy, it was necessary for Williams to forward the application to Roerig and request a rate quotation. After receipt of the application Roerig would normally telephone the agent, quote a rate, and then bind if the rate was acceptable. In this case, the quoted rate was unsatisfactory, and Roerig returned the application unbound on August 10, 1986. Williams then attempted to place the coverage through an MGA in Lakeland (E&S Agency). However, Williams was quoted a rate on September 25 which she knew was too expensive. After obtaining the second excessive quote, Williams immediately bound coverage with Allstate and forwarded the Douglas application to that carrier with an agency check on September 25, 1986. Because Allstate accepted only money orders or cashiers checks, and the application was undated, the application and check were returned by Allstate to Williams on October 7. Williams then sent Allstate a dated application and a money order in the amount of $1500, or $200 more than the original Douglas policy required. Although Allstate did not formally issue a policy, it assigned the Douglas application a policy number on December 15, 1986, and simultaneously issued a refund check for $121 to Douglas, since the policy cost $1,179 and not $1,300 as had been originally quoted to Carolyn Douglas. Therefore, at that point the coverage remained in effect. On December 23 Allstate issued another refund check to Douglas in the amount of $776 and advised it was cancelling coverage effective February 6, 1987. Allstate later returned the remainder of the $1,300 owed David and Carolyn Douglas. Therefore, even though they had coverage for some six months through various binders and the policy itself, the Douglases paid no premium. Although Carolyn Douglas made several attempts to obtain a copy of the policy, Williams could not produce one since the two MGAs and Allstate had held the application almost continuously for six months. It is noted that Allstate has never repaid Williams the $1500 sent by her with the Douglas application in October, 1986. Count XI Francis Carr is a locktender on Lake Okeechobee whose duties require him to open and close the locks. The job is subject to bids, and all bidders must have evidence of general liability insurance. Desiring to submit a bid, Carr purchased a one-year general liability policy from Mr. Auto on September 20, 1985, and paid Williams $540.75 for the coverage. Carr received a copy of a policy from Scottsdale Insurance Company (Scottsdale) on a later date. On April 15, 1986, Carr asked that his policy be cancelled. This was done the next day. Carr was due a $181 refund as unearned premium. Through no fault of Williams, the refund check was not issued by Scottsdale until October 21, 1986, or some six months later. Williams later endorsed the check without recourse to a local dress shop. In July 1986, Carr again bid on the locktender job, and, through his wife, made application on July 7 for a new policy so that he could submit a bid. Although the annual premium had now increased to approximately $1,500 per year, Mrs. Carr paid only a $215 down payment. Under this type of policy, Carr was responsible for thirty-five percent of the entire year's premium even if he cancelled the policy after one day. Therefore, the policy had a minimum cost of $525 regardless of its term. Because he had not paid this minimum amount, Williams applied Carr's $181 refund check from the prior year to the minimum amount owed. This was consistent with the industry practice of agents applying credit refunds to new policies of this nature. She also paid $85 from her own funds in early October 1986 to meet the thirty-five percent threshold amount. By then, however, Carr had instructed another employee to cancel his policy since his bid had not been accepted. When he didn't get a refund from the prior year, Carr filed a complaint with petitioner. However, Carr is not entitled to a refund from either year since he still owes Williams $85 for the 1986-87 policy, even after the 1985-86 refund is applied to the second policy. I. Count XII Frank I. Henry and Margaret J. Henry (no relation) lived together in a rented mobile home in 1984. Margaret purchased a policy on the mobile home contents from Mr. Auto in July 1984. She paid Williams a $40 premium, and then made three payments of $47.28 each to Envoy Finance Corporation (Envoy), a Deerfield Beach finance company which financed the balance of the amount owed. Margaret received a binder from Williams reflecting coverage with Mobile Homes Division (MHD), an MGA in Fort Lauderdale Envoy submitted a check for $118.50 to MHD on July 16, 1984, reflecting full payment for the policy. After forwarding the application to MHD, Williams assumed Henry had coverage through American Fidelity Company (AFC), a company which later went out of business that fall. According to MHD, however, the application should have been returned to Williams a few days after it was received because it had no insurance company writing those types of policies. Williams denied receiving the application, and MHD had no record of the application being returned. Williams' version is corroborated by the fact that MHD never advised Envoy that the policy had been returned, something MHD should have done if coverage was rejected. Moreover, MHD has never refunded the $118.50 paid by Envoy in July 1984. According to uncontradicted expert testimony, it is the responsibility of the MGA or carrier to advise the finance company of a coverage denial, and to make a refund to the finance company, which then makes a refund to the customer. Therefore, MHD or AFC, but not Williams, is at fault for not refunding Henry's money. Around April 20, 1985, Frank's mobile home was damaged by a fire. His claim was rejected by MHD since it had no record of coverage. Prior to this time, no request for a copy of the policy had been made by Henry, and Williams properly assumed that Henry's coverage was in effect. Williams has since notified her E&O carrier of a possible liability. As of the time of hearing, Henry's claim was still unpaid and he has not received a refund of his premium from MHD, AFC or Envoy.

Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of a single violation of Subsection 626.621(6), Florida Statutes (1985), and that all other charges be dismissed. Respondent should be given a reprimand for this violation. DONE AND ORDERED this 29th day of May 1987, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 29th day of May 1987.

Florida Laws (10) 120.57, 120.68, 626.561, 626.611, 626.621, 626.691, 626.734, 626.9521, 626.9561, 627.381

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DEPARTMENT OF INSURANCE vs DANIEL LEE ALISON, 95-002690 (1995)

Division of Administrative Hearings, Florida Filed:Pensacola, Florida May 26, 1995 Number: 95-002690 Latest Update: Nov. 26, 1996

Florida Laws (10) 120.57, 120.68, 626.561, 626.611, 626.621, 626.641, 626.951, 626.9521, 626.9541, 626.9561

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