The Issue The issue is whether respondent's license as a life and health insurance agent should be disciplined for the reasons stated in the administrative complaint.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Thomas Keith McOwen, was licensed and eligible for licensure as a life and health insurance agent by petitioner, Department of Insurance and Treasurer (Department). When the events herein occurred, respondent was a sales representative for Western and Southern Life Insurance Company (WSLIC), an insurance firm having headquarters in Cincinnati, Ohio. Respondent's contractual agreement with WSLIC began on April 18, 1988. Under the agreement, respondent was required to account for and remit all premiums collected and received on behalf of WSLIC. On March 3, 1993, WSLIC terminated respondent's appointment as a sales representative, thereby cancelling his agent's contract. In August 1988, Ruth Houston, a/k/a Tracy Houston, purchased a WSLIC life insurance policy from respondent. In 1991, respondent collected around $440.00 in cash from Houston as premium payments but remitted only $128.00 to WSLIC. In an affidavit given to petitioner's investigator, respondent acknowledged that he failed to account for the remaining $312.00 and had converted it to his own personal use.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty of violating Subsections 626.561(1), 626.611(4), (7), (9), (10) and (13), and 626.621(2), Florida Statutes, and that his licenses and eligibility for licensure be revoked. The charge as to Subsection 626.611(8), Florida Statutes, should be dismissed. DONE AND ENTERED this 13th day of March, 1995, in Tallahassee, 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 13th day of March, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-4189 Petitioner: 1-4. Partially accepted in finding of fact 1. 5. Partially accepted in finding of fact 2. 6-8. Partially accepted in finding of fact 3. 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. COPIES FURNISHED: Honorable Bill Nelson Insurance Commissioner The Capitol, Plaza Level Tallahassee, FL 32399-0300 Lisa S. Santucci, Esquire Department of Insurance 612 Larson Building Tallahassee, FL 32399-0300 Daniel Y. Sumner, Esquire General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 Mr. Thomas Keith McOwen 2913 Langley Ave., #107 Pensacola, FL 32504
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Ralph Todd Schlosser, was licensed and eligible for licensure as a life and health insurance agent, 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 life and health insurance agent for American Sun Life Insurance Company (ASLIC) and Pioneer Life Insurance Company of Illinois (PLICI). On March 2, 1987, respondent met with one Mildred H. Camp, then a resident of Clearwater, Florida, for the purpose of selling her an ASLIC long term care health insurance policy. After discussing the matter with respondent, Camp agreed to purchase a policy. She completed an application and gave respondent a check in the amount of $511.88. The check was deposited into respondent's business account at First Florida Bank in Clearwater the same day. Camp did not testify at hearing. Therefore, the only first hand version of what was discussed by Schlosser and Camp and the nature of any further communications between the two was offered by respondent. That version was not contradicted, and it is accepted as being credible. Within a week after executing the application, Camp contacted respondent by telephone concerning the policy. Pursuant to that telephone conversation, respondent did not process the application or remit the check to the company, but attempted instead to arrange another meeting with Camp to answer further questions about the policy. Although he telephoned Camp "every single Monday", respondent was unable to arrange an appointment with her until April 30, 1987. On April 30 Camp and respondent met for the purpose of him explaining in greater detail the benefits and coverage under the policy. Because two months had gone by since the application was first executed, it was necessary for respondent to update Camp's health information. Accordingly, Camp executed a new application the same date and Schlosser forwarded the check and application to ASLIC shortly thereafter. On May 5, 1987 ASLIC received the April 30 application and premium check, less respondent's commission. The application was eventually denied by ASLIC on the ground of "excessive insurance" and a refund check was forwarded by ASLIC to Camp on June 11, 1987. There is no record of any complaint made by Camp against Schlosser in ASLIC's files nor did ASLIC contact respondent regarding this matter. When Schlosser began representing ASLIC, he executed a general agent contract which contained the terms and conditions pertaining to his appointment as a general agent for the company. As is pertinent here, the contract provided that Schlosser had a responsibility "to promptly remit such funds" received by him to the company. According to a former second vice-president of ASLIC, Joyce Lynch, who worked for ASLIC when the Camp transaction occurred, the company expected in the regular course of business to have checks and applications remitted by agents to the home office within fifteen days after the application was written, and that the above provision in the general agent contract was interpreted in this manner. Lynch added that she knew of no reason why an agent would hold an application and check for sixty days before submitting it to the company, particularly since once an application is completed and signed, it is the "property" of the company and not the agent. She concluded that if a customer desired more information about a policy after an application had been signed, which is not unusual, the agent still had a responsibility to promptly forward the application and check to the company within fifteen days. At that point, the company, and not the agent, would cancel a policy and refund the premium if so requested by a customer. Therefore, Schlosser breached the general agent contract by failing to promptly remit such funds. On July 28, 1987 Schlosser visited one Maxine Brucker, an elderly resident of Sarasota, for the purpose of selling her a PLICI health insurance policy. He had telephoned Brucker the same date to set up an appointment with her. After discussing the matter with respondent, Brucker agreed to purchase a policy, executed an application and gave respondent a check for $680.00. The check was deposited into respondent's bank account the following day. After Schlosser departed, Brucker noted that Scholosser did not leave a business card and she immediately became "worried" about her money and the possibility of not getting the insurance she had paid for. She telephoned the Department the same day to check on his "reputation" and to verify that Schlosser was an insurance agent. On August 4, 1987 she wrote a letter to the PLICI home office in Rockford, Illinois to ascertain if her check and application had been received but she did not receive a reply. She wrote a second letter to PLICI on August 14, 1987 but again received no reply to her inquiry. After telephoning the home office a few days later, Brucker contacted the Department a second time in late August and requested that it assist her in obtaining a refund of her money. At no time, however, did Brucker attempt to contact respondent. In early September, Brucker received by mail a money order from respondent which represented a full refund of moneys previously paid. Brucker acknowledged that she was happy with her policy when it was initially purchased. She also acknowledged that she had never contacted respondent personally to request a refund of her money. It was only after she received no reply from the home office that she made a request for a refund. According to the agency agreement executed by Schlosser when he became a general agent for PLICI, respondent had the responsibility to "immediately remit to (PLICI) all premiums (collected)". Testimony by Ronald F. Bonner, a vice- president of PLICI, established that in the regular course of business an agent was required to forward the check and application to PLICI no more than twenty-five days after receiving them from the customer. Any application held more than twenty-five days was considered "stale", was presumably invalid and had to be returned to the customer. Even so, Bonner did not contradict respondent's assertion noted in finding of fact 11 that his failure to remit the application and check was based on instructions from the home office, and under those circumstances, was not improper. Respondent readily admitted he did not remit the Brucker application and check because of instructions from the home office received after Brucker had telephoned the home office. After unsucessfully attempting to speak with Brucker by telephone daily for about two weeks, Schlosser voluntarily sent Brucker a money order via mail in early September. A review of respondent's business bank account for the months of March and August 1987 revealed that after the checks from Camp and Brucker had been deposited, the balances in the account thereafter dropped below $511.88 and $680 during those respective months. This raises an inference that those moneys were used for other undisclosed purposes during that time. According to respondent, he submitted applications and premiums checks to the home office approximately two or three times per month. It was also his practice to wait ten days or so after receiving a check from a customer to allow it sufficient time to clear. Schlosser denied having converted insurance moneys to his own personal use. There was no evidence that Schlosser lacked reasonably adequate knowledge and technical competence to engage in insurance transactions authorized by his licenses, a matter requiring conventional factual proof. Similarly, there was no evidence to establish that Schlosser intended to willfully violate the law or that his conduct demonstrated a lack of fitness or trustworthiness to engage in the insurance business.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint filed against respondent be dismissed with prejudice. DONE AND ORDERED this 18th day of January, 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 18th day of January, 1990.
Findings Of Fact Charles Lee Armstrong, a/k/a Jack Armstrong, (hereinafter referred to as Petitioner or Armstrong) is licensed by the Florida Insurance Department as a general lines agent to represent Foremost Insurance Company and Fortune Insurance Company (Exhibit 1). Prior to 1976 Armstrong was an Aetna agent. From February 10, 1968 through February 10, 1977 Luigi Sesti carried homeowners policy with Aetna with Armstrong Agency. Armstrong's designation as an Aetna agent was terminated by Aetna termination notice (Exhibit 8) dated August 21, 1975 for low volume of business. The company practice is to terminate the agency relationship ninety days after notice of termination. Thereafter Respondent continued as a limited company agent for one year, during which he was authorized to renew Aetna policies. (Exhibit 7). After that one year extension, Respondent had no agency relationship with Aetna and, to renew an Aetna policy, he would have to have an Aetna agent process the renewal. Luigi Sesti had dealt with Armstrong as Sesti's Insurance agent since 1968 and had maintained an Aetna home-owner's policy which had last been renewed through Armstrong for the year ending February 10, 1977. Upon receipt of notice from Armstrong that his policy would expire February 10, 1977, Sesti sent Armstrong his check in the amount of $165 (Exhibit 3) for renewal of his policy. Although Armstrong was no longer authorized to renew Aetna policies, he deposited Sesti's check but thereafter failed to provide Sesti with insurance coverage on his house or contents. Armstrong advised Aetna that Sesti's policy had been replaced with an Eastern insurance policy, and Aetna failed to notify Sesti that the Aetna policy was not renewed. In August 1977 Sesti's home was burglarized. He lost a television set, radio, watch, spotlight and a ring, and Sesti contacted Armstrong to report the loss. Armstrong visited the home and suggested Sesti submit no formal claim because to do so would make it difficult for Sesti to renew his insurance. In his own explanation, Armstrong testified that he intended to pay Sesti for his loss but Sesti could never establish the value of the ring or establish a price for which he would settle. Armstrong offered Sesti $250 to settle the claim. During the discussions between Armstrong and Mrs. Sesti, Armstrong said he had authority to settle claims for Aetna up to $500 and that he was an attorney. Neither of these statements was true. When Armstrong was unable to agree on the amount of the claim, Mrs. Sesti contacted Aetna and learned that the policy on her her had expired 10 February 1977 and had not been renewed. Because no valid policy had been issued to Sesti, Aetna initially denied liability. When advised by Sesti that Aetna would not pay their claim, Armstrong returned the premium he had received from Sesti for the policy not renewed in one check for $155 dated 9/7/77 and in another check for $10 dated 11/23/77 (Exhibit 5) which Sesti received with a letter from the Insurance Commissioner's office dated November 29, 1978 (Exhibit 14). After further investigation by Aetna revealed the facts as noted above, Aetna issued a policy (Exhibit 15) which effectively renewed Sesti's homeowners policy for one year from February 10, 1977. They deducted the premium and the $100 deductible from the amount they paid Sesti for the loss sustained. Aetna's Regional Manager testified that Aetna paid for the loss because Sesti had been insured by them for several years and they felt a moral obligation for their former agent's failure to provide coverage and for their failure to notify Sesti he was no longer insured by Aetna. Aetna allowed Sesti approximately $450 for the loss of the ring and approximately $350 for the other things stolen. Roseland S. Wood had insured her mobile home with Foremost Insurance Company since 1953, and with Jack Armstrong as Agent since 1964. Policy No. 101-8498757 covered the period 11/3/74 to 11/3/75 (Exhibit 13). By check dated November 5, 1975 made payable to Armstrong (Exhibit 9) Wood forwarded the premium for renewal of this policy. Unbeknownst to Wood the policy was not renewed until July 28, 1976 by policy No. 8498643 (Exhibit 12). This is the policy that Armstrong forwarded to Foremost. Armstrong was in Europe on vacation when this policy was issued by the woman he had hired to keep his office open during his vacation and he professed no knowledge of why the policy was issued at this particular time. In October 1976 Wood wanted additional coverage and Armstrong came out to assist in providing the additional coverage. After discussing increasing personal property coverage, plus garage and contents and boats, Respondent advised Wood that the additional coverage would cost $326. Wood gave Respondent a check that day (Exhibit 10). Thereafter Armstrong issued policy No. 8498518 (Exhibit 11) for the period 10/28/76 to 10/28/77 but the personal property coverage was less than Wood had asked for and the garage and contents were not included. Neither Exhibit 11 nor the premium for this coverage was ever received by Foremost from Armstrong. They became aware of Exhibit 11 after Wood suffered a burglary in July 1977 and came to the Foremost office to file a claim. The costs of coverage on Exhibit 11 are not correct and had this policy been received by Foremost it would have been rejected by the computer due to inaccurate premium charges, the inclusion of boats on this policy and incorrect comprehensive liability coverage. By failing to renew Wood's coverage in November 1975, Respondent left Wood without coverage until Exhibit 12 was issued providing coverage from 7/28/76. This renewal was written by Armstrong Agency, who had authority from Foremost to write this renewal. As noted above, this policy was written while Armstrong was on vacation. The $145 premium paid by Wood for the renewal of the policy was not remitted to Foremost until after July 28, 1976. At the time of Wood's loss in July 1977 she was covered by this policy. When the existence of the above facts regarding the two policies and dates they were issued to Wood were uncovered, Armstrong refunded to Wood $181 of the $326 premium he collected, Foremost refunded the additional $145 of this premium to Wood, and Wood's claim was settled by Foremost to Wood's satisfaction. Foremost has a claim against Armstrong for this $145 Foremost refunded to Wood. Respondent acknowledged writing Exhibit 11 and assumed that it was mailed to Foremost. He does not remit payment to the company until he is billed. Foremost sends a monthly statement to each agent showing policy numbers received. The agent can readily check this list against the policies he has issued to ascertain if a policy was not received by the company. The company also maintains a policy register where policy numbers are recorded. A copy of this is sent to their agents to check against policies the agents have issued. Failure of the agencies to submit policies in sequential numbers will be picked up on the computer, but only after quite a few numbers have been skipped. There was insufficient volume from Armstrong's agency to trigger this information from the computer. With respect to Charge III, failure to keep office open and accessible to the public during office hours, an insurance investigator visited the office on some six occasions in December 1977 and February and March 1978. At these visits the office was open but neither Armstrong nor a secretary was present. A lady working in an office down the hall from Respondent's office came to the office when the inspector arrived and offered to contact Armstrong. Several telephone calls made to Armstrong's office during March 1978 resulted in the phone being answered by an answering service. Respondent has operated a one-man office for many years and has an answering service cover all calls while he is out of the office. He wears a radio pager and claims his answering service can always contact him. The lady who covers office visits for Respondent during his absence from the office has had several years experience working in a general insurance agency. She fills out applications for clients coming into the office, gives receipts for payments, signs Armstrong's name to applications and other documents; and has done so for 4 or 5 years. She is not on any type of regular salary or otherwise employed by Armstrong. Respondent has been a licensed insurance agent since 1961 and Respondent's testimony was unrebutted. This is the first complaint filed against him in his capacity as a licensed insurance agent.
Findings Of Fact At all times here involved Respondent was licensed by the Florida Insurance Department as a general lines agent to represent Cotton Belt Insurance Company, Inc. and Industrial Fire and Casualty Insurance Co. (Exhibit l). In November, 1977 George Moore, Jr. contacted agent Hopkins to obtain a full coverage policy for his automobile. His previous policy had been cancelled (or would soon be cancelled). The application was filled out by Hopkins and on November 15, 1977 Moore executed the application (Exhibit 2) and gave Hopkins a check as down payment on the premium in the amount of $199.80. This check was negotiated by Hopkins on December 18, 1977. Several weeks later Moore had not received his policy and he asked Hopkins about the delay. Hopkins replied that he (Moore) should have his policy in another two or three weeks. At no time prior to Moore's January 9 automobile accident did Hopkins tell Moore that his application did not include collision coverage or that the application had never been submitted to the carrier. On January 9, 1978 Moore was involved in an automobile accident in which he was the responsible party. Upon informing Hopkins of the accident the latter advised Moore that he was covered. Hopkins later told Moore that he was not covered for collision but he came and took Moore's car to be repaired, stating that the repairs would not have to be paid for by Moore. When Moore contacted Insurance Company of North America (INA) he learned they had no policy covering him. He subsequently had to pay $300 for the repairs to his car. On February 2, 1978 INA received Moore's application from Hopkins with a check for down payment on the premium signed by Hopkins. Because rules of the Florida Joint Underwriters Association require applications be promptly submitted, INA denied Moore's application and so advised Hopkins. In the summer of 1978, Hopkins refunded to Moore the $199.80 payment Moore had made on November 15, 1977. By Order entered 18 January 1973 (Exhibit 4), Respondent was found guilty of six counts involving failure to remit collected premiums to the insurer, and failure to submit applications with premium payments received from clients. As a result thereof he was placed on probation for a period of two years and ordered to make restitution to all parties suffering loss from his unlawful acts.
The Issue Whether Respondent, a licensed insurance agent, committed the offenses alleged in the Amended Administrative Complaint and, if so, the penalties that should be imposed.
Findings Of Fact Petitioner is a licensing and regulatory agency of the State of Florida charged with the responsibility and duty to enforce the provisions of the Florida Insurance Code, which consists of Chapters 624-632, 634, 635, 641, 642, 648, and 651, Florida Statutes. See Section 624.307(1), Florida Statutes. Respondent has been continuously licensed in the State of Florida as a life insurance agent (a 2-16 license) and a general license agent (a 2-20 license) since March 1974, and continuously as a RPCJUA insurance agent (a 00-17 license) since March 1993. On November 4, 1996, Respondent was charged with possession of cocaine in violation of Section 893.13(6)(a), Florida Statutes. This charge, filed in Palm Beach County Circuit Court and assigned Case Number 96-12206 CFA02, is a third degree felony. On May 14, 1997, Respondent entered a plea of nolo contendere to the charge of possession of cocaine, which was accepted. Adjudication of guilt was withheld and Respondent was placed on probation for a period of 18 months. The terms and conditions of Respondent's probation included working at a lawful occupation, intensive drug and alcohol evaluation, successful completion of any recommended treatment, payment of a fine in the amount of $250.00 and court costs in the amount of $461.00, performance of 100 hours of community service, random testing for the use of alcohol and drugs, six months' suspension of driver's license, and DUI school. Respondent successfully completed his probation on November 13, 1998. Respondent continued to work as an insurance agent during the term of his probation. Respondent voluntarily reported the incident to State Farm shortly after its occurrence. As a result, State Farm placed Respondent on probation and conducted a series of random alcohol and drug tests, which Respondent satisfactorily completed. Section 626.621(11), Florida Statutes, provides that the following constitutes grounds for the discretionary discipline of an agent's licensure: (11) Failure to inform the department in writing within 30 days after pleading guilty or nolo contendere to, or being convicted or found guilty of, any felony or a crime punishable by imprisonment of 1 year or more under the law of the United States or of any state thereof, or under the law of any other country without regard to whether a judgment of conviction has been entered by the court having jurisdiction of the case. Respondent failed to report to Petitioner within 30 days of doing so that he entered a plea of nolo contendere to a third degree felony charge of possession of cocaine in Case Number 96-12206 CFA02 on May 14, 1997. On or about March 18, 1998, Respondent applied for licensure as a Variable Annuity Insurance Agent (a 2-19 license). That application contained Question 18, which provides as follows and to which Respondent answered "yes": Have you ever been convicted, found guilty, or pleaded guilty or nolo contendere (no contest) to a felony under the laws of any municipality, county, state, territory or country, whether or not a judgment of conviction has been entered. As a result of his answer to Question 18, Petitioner started an investigation, with which Respondent fully cooperated. As a result of that investigation, Petitioner learned the details of Respondent's plea in the criminal proceeding. Respondent testified, credibly, that he did not timely report the entry of his plea in the criminal proceeding because he did not know he was required to do so. 1/ Respondent has continuously worked as an insurance agent licensed by Petitioner in the State of Florida since March 1974. Respondent has been continuously appointed by State Farm and has built up a successful insurance business. This proceeding is the first disciplinary proceeding brought against Respondent's insurance licenses. There have been no other complaints filed by anyone in this state against Respondent's insurance licenses. Respondent's insurance licenses have not been previously disciplined in the State of Florida. The testimony of Respondent's witnesses established that he enjoys a good reputation for honesty, trustworthiness, truthfulness, and integrity in his community. He has engaged in charitable works, including work with the food bank, the Guardian Ad Litem Program, and Brazilian Indians. Respondent's witnesses also established that they had been pleased with their business dealings with Respondent, and that he has the ability and trustworthiness to successfully engage in the business of insurance. Respondent testified that State Farm will terminate his appointment as an agent if his license is suspended. Respondent testified that he will lose his business and his employees will lose their employment.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Respondent guilty of violating Section 626.621(8), Florida Statutes, as alleged in Count I of the Amended Administrative Complaint, and guilty of violating Section 626.621(11), Florida Statutes, as alleged in Count II of the Amended Administrative Complaint. It is further recommended that Respondent's licensure as an insurance agent be suspended for two months for the violation of Count I and for three months for the violation of Count II, to run concurrently. DONE AND ENTERED this 30th day of June, 2000, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of June, 2000.
The Issue The issue in this case is whether, for the reasons alleged in the Administrative Complaint dated February 10, 1984, the Petitioner should revoke the Respondent's license and eligibility for licensure as an insurance agent or impose some lesser penalty authorized by statute.
Findings Of Fact Based on the testimony of the witnesses and the exhibits admitted into evidence, I make the following Findings of Fact: 1/ On June 16, 1982, the Respondent, Shelby Dewey Blackman, executed an Application for Qualification as Nonresident Life Agent, which application he thereafter caused to be filed with the Petitioner, Department of Insurance and Treasurer. In that application Mr. Blackman stated that his residence address and his business address in his state of residence were both "2549 New York Avenue, Pascagoula, Miss. 39567." (Pet. Ex. 1; Tr. 12-13) The Department of Insurance and Treasurer does not issue Nonresident Life Agent licenses to people who are in fact residents of the State of Florida. Such licenses are only issued to people who are nonresidents of this state. Applicants for Resident Life Agent licenses are required to take an examination prior to licensure. Applicants for Nonresident Life Agent licenses are not required to take an examination prior to licensure. The Department would not have issued a Nonresident Life Agent license to Mr. Blackman if the Department had known that Mr. Blackman was a Florida resident. (Tr. 14) As a result of the filing of the application described above, the Department issued to Mr. Blackman a license as a Nonresident Life and Health Agent for the American Sun Life Insurance Company, which was the only company he was authorized to write insurance for in the State of Florida. When Mr. Blackman received his license, the license listed the name of the the only company he was authorized to write insurance for in this state. Licensees who are authorized to represent more than one insurance company in this state receive a separate license for each company they are authorized to represent. Mr. Blackman had only the one license to represent one company. (Pet. Ex. 1 and 2; Tr. 14-18) At all times material to this case, Mr. Blackman was a resident of Santa Rosa County, Florida. Specifically, Mr. Blackman was a resident of Santa Rosa County, Florida, at the time he applied for and was issued a Nonresident Life and Health Agent license and at the time of writing the four insurance applications which are described hereinafter. (Pet. Ex. 3; Tr. 20-21, 53) Continental Bankers Life Insurance Company of the South does not currently hold, and has never held, a Certificate of Authority to write insurance in the State of Florida. In November of 1982 Continental Bankers Life Insurance Company of the South was licensed to write insurance in the State of Alabama and Mr. Blackman was authorized by Continental to write insurance for Continental in the State of Alabama. (Pat. Ex. 8; Tr. 24-25) During November of 1982, Mr. Blackman wrote four applications for health insurance policies to be issued by the Continental Bankers Life Insurance Company of the South. One was an application dated November 2, 1982 from Mr. Thomas J. Barrow. Another was an application dated November 4, 1982, from Mr. Jimmie R. Williams. The last two were applications dated November 12, 1982, from Mr. Henry E. Marshall and Mr. Ercy L. Henderson, respectively. All four of the applications were written and signed in Jay, Florida. No part of the transactions which culminated in the writing of the four applications took place in the State of Alabama. On three of the applications Mr. Blackman wrote that the application was written and signed in Brewton, Alabama, and on one of the applications Mr. Blackman wrote that the application was written and signed in Flomaton, Alabama. The statements that the applications were written and signed in Alabama were false statements that Mr. Blackman knew to be false statements. (Pet. Ex. 4, 5, 6, 7; Tr. 37-38, 42, 49, 53-54) The false statements written on the four applications described above were relied upon by the Continental Bankers Life Insurance Company of the South and were, therefore, material misrepresentations. If Mr. Blackman had truthfully written on the applications that they were written and signed in the State of Florida, Continental would not have issued policies on the basis of those four applications because Continental was not licensed to write insurance in the State of Florida. The MM-6 policy is an insurance policy that Continental markets in Alabama and the false statements on the applications which indicated that the policies were applied for and completed in Alabama induced Continental to issue the policies. (Tr. 25-27, 32, 34-35)
Recommendation For all of the reasons set forth above, and particularly because of Mr. Blackman's demonstrated disregard for the truth, I RECOMMEND that the Department of Insurance and Treasurer enter a Final Order revoking Mr. Blackman's license and eligibility to hold a license. DONE AND ORDERED this 31st day of July, 1984, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 904/488-9575 Filed with the Clerk of the Division of Administrative Hearings this 31st day of July, 1984.
Findings Of Fact Petitioner is the state agency charged with licensing insurance agents of all types, regulating licensure status, and enforcing the practice standards of licensed agents within the powers granted by the Legislature in Chapter 626, Florida Statutes. At all times material to the disciplinary action, Respondent Mahle was licensed as an insurance agent in the following areas: Life and Health Insurance and Health Insurance. During the last quarter of the year 1988, New Concept Insurance, Inc. mailed brochures to residents of Naples, Florida, which stated that representatives of the company were willing to provide information about long- term care insurance, including nursing facility benefits, to interested parties. Those who wanted to learn more about the insurance were asked to return their name, address and telephone number to the company on an enclosed card. Eleanor Drown responded to the advertisement, and an appointment was arranged for Thomas DiBello and Respondent Mahle to meet with her regarding the insurance program. On November 10, 1988, Thomas DiBello and Respondent Mahle met with Ms. Drown and discussed the benefits of a long-term care policy with a nursing facility daily benefit of one hundred dollars ($100.00). After the discussion, Ms. Drown completed an application for the insurance and gave it to Respondent Mahle, along with a check for five thousand one hundred and eighty-three dollars and forty-nine cents ($5,183.49). During the insurance transaction on November 10, 1988, Ms. Drown was given a receipt which states: This receipt is given and accepted with the express understanding that the insurance you applied for will not be in force until the policy is issued and the first premium is paid in full. If your application cannot be approved, we will promptly refund your money. Application is made to the company checked (/) on this receipt. On another area of the receipt, it is clearly written, as follows: If Acknowledgement of Application does not reach you within 20 days, write to: Mutual Protective Insurance Company, 151 South 75th Street, Omaha, Nebraska 68124. The Respondent Mahle did not forward the application and the check completed by Ms. Drown to Mutual Protective Insurance Company. The check issued by Ms. Drown to Mutual Protective Insurance Company was deposited into the account of New Concept Insurance, Inc. A cashier's check for the same amount of money was issued by New Concept Insurance, Inc. to Ms. Drown on March 7, 1989. The letter from New Concept that was mailed with the check represented that the check was the refund of the money paid to Mutual Protective Insurance Company by Ms. Drown. Mitigation An application for long-term care insurance from a different insurance company was sent to Ms. Drown by Respondent Mahle on March 2, 1989. Although this course of conduct was not directly responsive to the duties owed by the Respondent to Mutual Protective Insurance Company or his customer, Ms. Drown, it does demonstrate a concern about the insurance needs requested by the customer. This conduct also reveals that there was no intention to convert the funds received to the Respondent's own use, and it explains some of the delay in the return of the premium funds to the customer. The Respondent has been an insurance agent for twenty years. This was the only complaint against the Respondent the Hearing Officer was made aware of during the proceedings. The allegations in the Complaint involve a single insurance transaction.
Recommendation Accordingly, it is RECOMMENDED: That the Respondent be found guilty of one violation of Section 626.561(1), Florida Statutes, and one violation of Section 626.611(7), Florida Statutes, during a single insurance transaction. That the Respondent pay an administrative penalty of $500.00 for the two violations of the Insurance Code within thirty days of the imposition of the penalty. That the Respondent be placed upon six month's probation. During this probation period, he should file a report with the Department demonstrating the manner in which he intends to keep accurate business records which assure him, the insurance company, and the customer that he is continuously accounting for premium funds and promptly carrying out his fiduciary responsibilities. That the Respondent's requests for licensure dated October 10, 1989 and May 18, 1990, be granted. DONE and ENTERED this 12th day of September, 1990, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY 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 12th day of September, 1990. APPENDIX TO RECOMMENDED ORDER IN CASE No. 89-6040 The Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO #2. Accepted. See HO #2. Accepted. Accepted. See HO #5. Accepted. See HO #5. Accepted. See HO #5. Accepted. See HO #5. Rejected. Conclusion of Law. Rejected. See HO #6. Accepted. See HO #7. Accepted. See HO #7. Accepted. See HO #7. Accept that Ms. Drown's funds remained in the insurance agency's financial accounts for four months. Reject that the interest bearing ability of these funds is relevant in any manner to this case. Respondent's proposed findings of fact are addressed as follows: Accepted. See HO #3 and #4. Accepted. See HO #5. Accepted. See HO #5. Accepted. See HO #5. Accepted. Rejected. This testimony was rejected by the hearing officer as self serving. It was not found to be credible. Rejected for the same reasons given immediately above. Accepted, but not particularly probative. Rejected. Contrary to the testimony of Ms. Drown which was believed by the hearing officer. Accepted. Rejected. Contrary to the testimony of Ms. Drown which was believed by the hearing officer. Accept that an application for Penn Treaty Insurance was sent to Ms. Drown on this date. Accepted. Rejected. Contrary to the testimony of Ms. Drown which was believed by the hearing officer. Rejected. Self serving. Not believed or found to be credible by the hearing officer. Accepted. See HO #9. COPIES FURNISHED: C. Christopher Anderson III, Esquire Department of Insurance Division of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Mark P. Smith, Esquire GOLDBERG, GOLDSTEIN & BUCKLEY, P.A. 1515 Broadway Post Office Box 2366 Fort Myers, Florida 33902-2366 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell, Esquire Department of Insurance The Capitol, Plaza Level Tallahassee, Florida 32399-0300 =================================================================
The Issue Whether Respondent's insurance license should be suspended or revoked or otherwise disciplined because Respondent violated the Florida Insurance Code.
Findings Of Fact The Department is the agency with jurisdiction over licensing insurance agents pursuant to Chapter 626, Florida Statutes. Respondent applied for a license with the Department as a non-resident life, health, and variable annuity agent by submitting an application which he signed on July 4, 1999. He was awarded nonresident insurance License No. D008927 on July 12, 1999. Question seven on the July 4, 1999, application for licensure, inquired, "Has anyone ever obtained a judgement, or is there currently pending, any type of civil action against you individually or against any entity in which you are or were an officer, director, partner, or owner based upon allegations of fraud, misrepresentation or conversion or which in any way involved the subject of insurance?" Respondent checked a box which indicated a negative answer. Because the application submitted by Respondent appeared to be correct, Respondent was issued the aforementioned license. On July 4, 1999, when Respondent answered question seven, a judgment by default had been entered against Respondent by the Circuit Court of Maryland for Montgomery County, in a case styled Paley, Rothman, Goldstein, Rosenberg & Cooper, Chartered, v. Daniel D. Manoff. The judgment was in the amount of $7,590.36 and was filed with the Clerk on July 6, 1994. The complaint which resulted in the judgment alleged that Respondent had failed to pay for legal services received. This complaint involved the breach of a contract. Therefore, Respondent's answer to question seven was correct, insofar as the unrevealed judgment is concerned, because the judgment did not involve a matter "based upon allegations of fraud, misrepresentation or conversion or which in any way involved the subject of insurance." A complaint was filed against Petitioner on May 18, 1998, in the Circuit Court of Maryland for Montgomery County, styled First Financial Group, et al., v. Daniel Manoff, et al., v. The Guardian Life Insurance Company of America, et al. Respondent was a defendant in that case. The suit which was the subject of the complaint was unresolved on July 4, 1999, when Respondent answered question seven. The complaint in the First Financial Group case alleged that Respondent committed fraud. Because of this, Respondent incorrectly answered question seven. When Respondent signed the application for an insurance license on July 4, 1999, he was aware, or was provided ample opportunity to be aware, that a truthful application was expected by the Department. This is because immediately above the signature line are the words, "Final Statement," and below those words are explicit warnings as to the hazards of signing the application when the person providing the imprimatur has not provided correct information. The warnings include one which informs that signing a false statement is a second degree misdemeanor and another that states that the signature is made under penalties of perjury. In addition to the foregoing, the "Final Statement" contains an oath which avers that, ". . . I have not withheld any information on myself that would in any way affect my qualifications." The information sought by question seven is material to the decision as to whether the Department considered Respondent to be qualified to hold an insurance license. Had the information requested been timely supplied, Respondent would not have been awarded a license absent further inquiry into his experiences with the legal system in Montgomery County, Maryland. Respondent worked for Agency 10 of the Berkshire Life Insurance Company in Rockville, Maryland, at the time he submitted the application for licensure which is the subject of this proceeding. The person charged with carrying out administrative duties at that agency was Kathy Cody. Among other duties, she was responsible for obtaining licenses and appointments for agents and managers in the Rockville field office. When processing applications, Ms. Cody, and sometimes another administrator in the office, typically would solicit information from the agent, broker or manager requiring a license and would prepare an application. She did this for many people for many states. Respondent was licensed in a number of states and Ms. Cody assisted Respondent in obtaining some of those licenses. She does not specifically remember the application at issue. It was Ms. Cody's practice to submit completed application forms to the home office in Pittsfield, Massachusetts. If the paperwork was in order, the home office would send the applications to the appropriate state licensing agency. Ms. Cody, or in any event, someone in the office other than Respondent, sent his Florida application to the home office. Respondent did not complete the entire application. He did, however, sign the application which meant that he swore to the accuracy of its contents. Sue Carter processes license applications for the Department. She has engaged in this work since 1984. According to Ms. Carter, if an application is received which reveals an unsatisfied judgment, then further inquiry is made. According to Ms. Carter, it is the policy of the Department to refuse to license someone with a pending complaint alleging fraud. Therefore, she stated, if Respondent's application had revealed the existence of the First Financial Group complaint, the Department would not have issued a license to Respondent.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered which finds that Respondent violated on one occasion, Section 626.611(1), (2) and (7), and Section 626.211(1), Florida Statutes, and which requires Respondent to surrender his non-resident life, health, and variable annuity insurance agent license. DONE AND ENTERED this 8th day of April, 2002, in Tallahassee, Leon County, Florida. HARRY L. HOOPER 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 April, 2002. COPIES FURNISHED: Daniel Dwight Manoff Post Office Box 267 Poolesville, Maryland 20837 Richard J. Santurri, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Plaza Level 26 Tallahassee, Florida 32399-0307
