Findings Of Fact Petitioner is a candidate for licensure as a professional engineer. Petitioner took the licensure examination in October, 1992, and received an overall score of 68.10. The minimum passing score for the exam was 70. The examination used by the Department is a nationally recognized test administered and graded by the National Council of Examiners for Engineering and Surveying (NCEES). The scoring plan utilized by NCEES in this case provided, in pertinent part, that the score of 4 would be given where the applicant's response showed more than rudimentary knowledge but was insufficient to demonstrate competence. Petitioner received the score of 4 on problem #120 and felt his answer should have received a higher grade. To receive a score of 6 on problem #120, Petitioner's solution would have shown minimum competence by indicating the required volume of solids taken as the required volume of fill with all other analysis and computations being correct. According to the scoring plan, only "modest" errors in cost analysis or volume analysis computations are permitted to receive a grade of 6. Petitioner admitted that his calculation of volume on problem #120 was incorrect, but felt that since the error was only 10-15 percent, such error was reasonable given that he had correctly analyzed the majority of the problem. Petitioner's calculations for problem #120 were approximately 5900 cubic yards from the correct answer. Since Petitioner's volume calculations were incorrect, no credit was given for the cost analysis. Petitioner's error was not a "modest" miscalculation as set forth by the scoring plan.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Business and Professional Regulation, Board of Professional Engineers, enter a final order denying Petitioner's challenge to the professional engineer examination administered in October, 1992. DONE AND RECOMMENDED this 19th day of August, 1993, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of August, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-2652 Rulings on the proposed findings of fact submitted by the Petitioner: Paragraph a) is rejected as contrary to the weight of the evidence. Paragraph b) is rejected as contrary to the weight of the evidence. Paragraph c) is rejected as irrelevant. Paragraph d) is rejected as irrelevant. Rulings on the proposed findings of fact submitted by the Respondent: 1. Paragraphs 1 through 5 are accepted. COPIES FURNISHED: Ali Khalilahmadi 12755 S.W. 60 Lane Miami, Florida 33183 Vytas J. Urba Assistant General Counsel Department of Business and Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, Florida 32399-0792 Jack McRay Acting General Counsel Department of Business and Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, Florida 32399-0792 Angel Gonzalez Executive Director Board of Professional Engineers 1940 North Monroe, Suite 60 Tallahassee, Florida 32399-0755
Findings Of Fact Geoffrey Pyne, Respondent, was employed by the Alachua County School System on August 19, 1976 as a mathematics teacher. From August, 1976 to January, 1985, Respondent taught mathematics at Mebane Middle School, and served as chairman of the math department at Mebane from August, 1979 to May, 1984. At all times material hereto Respondent was under continuing contract with Petitioner. As reflected in his personnel file, Respondent, is certified in middle school mathematics, and has a masters degree in middle school education which he earned in 1979 from the University of Florida. Terry Steckmiller became principal at Mebane in 1983 and has served in that capacity for the 1983-84, 1984-85 and 1985-86 school years. He informed Respondent in May, 1984 that Respondent would not be continuing as chairman of the math department for the 1984-85 school year, but that his employment would continue as a member of the math department. On January 9, 1985, Respondent was suspended, with pay, by letter from Superintendent D. P. Magann which stated, in pertinent part: This action is taken because of your continuing exhibition of unacceptable behavior in the performance of your responsibilities as a professional employee of the Board. In reaching this decision, I have reviewed with staff the numerous instances of erratic behavior and emotional outbursts directed toward the administrative staff and your peers. Respondent remained suspended, with pay, until May 22, 1985 when he was terminated from the payroll. By letter dated March 4, 1985, Superintendent Magann recommended that Petitioner dismiss Respondent, and notified Respondent as follows: . . . I am charging you with gross insubordination, willful neglect of duty, and violation of the Code of Ethics of the Education Profession in Florida. . . . (because) you intentionally refused, on more than one occasion, to follow clearly defined instructions, reasonable in nature, and given by proper authority, in the manner in which you implemented the pre-algebra curriculum at Mebane Middle School, which manner constituted willful neglect of duty. Further, evidence will be presented that you engaged in unethical behavior in that you harassed and threatened other teachers and administrators in a verbal and near physical manner even after having been given direct orders by the principal to cease such behavior, thereby resulting in gross insubordination. Testimony and documentation will show that this has been a pattern of your behavior over time. In response to a request by counsel for Respondent for a more definite statement of charges, Petitioner provided the following supplement, through counsel, on July 28, 1985: Mr. Pyne is alleged to be guilty of 'gross insubordination,' 'willful neglect of duty' and 'misconduct in office' as defined by Rule 6B, Florida Administrative Code. More specifically, Mr. Pyne, over a continuing period of time, consistently and continually intentionally refused to obey the direct orders, reasonable in nature, given by the Superintendent as well as the Principal and Assistant Principal of Melbane Middle School as follows: Mr. Pyne failed to teach the math curriculum during the 1984-85 school year in accordance with the directives of the Principal; and Mr. Pyne failed to complete the Principal's and Assistant Principal's assignment for properly administering a test during the 1984-85 school year; and Mr. Pyne failed to remain in his assigned classroom during testing as directed by the Principal and Assistant Principal during the 1983-84 school year; and Mr. Pyne failed to avoid involvement in a matter by and between the Principal and Mrs. Choate, a teacher of Melbane, despite the directives of the Principal to remain uninvolved; and Mr. Pyne failed to follow the Principal's directive to support the school's math program and remain uninvolved in a meeting with the 8th grade parents of students at Melbane. The matters set forth in Findings of Fact 3, 4 and 5, above, constitute the complete charges brought by Petitioner against Respondent upon which disciplinary action is sought. The initial allegation of misconduct involved Respondent's failure to remain in his assigned classroom while testing was conducted during the 1983-84 school year. Respondent admits that he left his classroom on two occasions on October 5, 1983 while his students were taking the State Student Assessment Test. On each occasion he asked another teacher to watch his class, but the other teacher did not enter Respondent's classroom and instead attempted to watch over the class from the classroom next door. Respondent indicates he was gone for ten minutes to counsel students on the first occasion, and while returning to his classroom he met Dr. Charles Hall, Assistant Principal at Mebane, who specifically ordered him not to leave his classroom again while his students were taking the test. Nevertheless, Respondent again left his class a short time later and went to see Dr. Hall because he was displeased at the way Dr. Hall had spoken to him. A verbal confrontation and argument between Dr. Hall and Respondent then took place in Dr. Hall's office. This resulted in Respondent receiving a written reprimand from Terry Steckmiller, Principal, on October 27, 1983 (later revised February 9, 1984) which stated, in pertinent part: Your behavior toward Dr. Charles Hall, Assistant Principal, on October 5 is considered insubordinate and will not be tolerated. Deliberately leaving your class during test administration in direct contradiction to Dr. Hall's reasonable request. and continuing to object to Dr. Hall's directions to the point of a physical confrontation, is unacceptable behavior. At the conclusion of the State Student Assessment Test on October 5, 1983, teachers collected the tests and turned them in to Fred Shortsleeve, guidance counselor, who found that one test was missing from Respondent's classroom. However, after a thorough search, the missing test was located in a desk in Respondent's classroom. Respondent contends it was common practice at Mebane for teachers to leave their classroom while students were in class and to ask other teachers to watch over their class. He admits he did this many times. His contention is contradicted by the testimony of Steckmiller, Hall and Shortsleeve, all of whom testified that the standard procedure at Mebane was that teachers were never to leave their classrooms unattended, and were instead to use the intercom system in every classroom to request assistance from the front office when necessary. Further, they testified that his procedure was explained to teachers by Dr. Hall and there was a specific reiteration of this procedure prior to the State Student Assessment Test on October 5, 1983. On December 2, 1983, Respondent received a second written reprimand, which was supported by the evidence, stating: You have consistently failed to comply with the school's policy regarding the normal workday. You have failed to report to work by the designated 8:00 A.M. beginning time. On or about January 3, 1984, Steckmiller called a meeting of teachers and staff at Mebane involved with the math program, as well as Totsye Conner, Math Supervisor for the Alachua County School System. Respondent attended as chairman of the math department. The purpose of this meeting was to review the math curriculum, to discuss Steckmiller's concerns about state assessment scores in math at Mebane, as well as his concern that Mebane was not following district guidelines for the placement of students in advanced math courses. Since becoming principal at the beginning of that school year, Steckmiller had become increasingly concerned that math scores at Mebane had only increased one percent in the previous three or four years, had not risen above 80% in any year, and were consistently among the lowest math scores in the district. Although there was only a general discussion concerning the math program and no decisions were made during this meeting, the next day Respondent told his Algebra I class that the administration had cancelled the class, and he collected the course textbooks from the students. When Steckmiller learned of Respondent's action, he ordered him to redistribute the books and teach the course as designed. Respondent complied on the following day, January 5, 1984. Respondent sought to explain his action through testimony that he was concerned about the possible incorrect placement of students as a result of the meeting on January 3, and he did not want to be held responsible for any breach of county policy concerning student placement. Nevertheless, he made a unilateral decision to tell the students on January 4 that their class had been cancelled by the administration and to collect their text books. Another meeting about the math program at Mebane was called by Steckmiller in May, 1984, which was attended by Respondent, others in the math department, as well as staff. At this meeting Respondent was advised by Steckmiller that there would be no Algebra I course the following school year (1984-85) due to poor student performance on a placement test given in April, and that he would be replaced by Erma Dean Edmond as math department chairman for the next school year. Because of Respondent's concern about the elimination of Algebra I, Steckmiller agreed in August to allow Respondent to prepare a limited number of students for a placement retest to be developed by Totsye Conner to determine if, in fact, they were qualified for Algebra I. This was to be in addition to Respondent's duties as teacher of pre-algebra and advanced pre- algebra in 1984-85. The students eligible for this retest were only those in the advanced pre-algebra class, and new students with teacher approval who had moved into the school's district since the original placement test was given. A total of approximately seventeen students were eligible for this retest. Nevertheless, Respondent disobeyed express instructions and orders regarding the retest and informed all students in his classes that they would be eligible for the retest, and thereupon began to prepare over one hundred students for the retest. According to Respondent, this was a matter of professional ethics involving the issue of equal access to education for all students. He disagreed with the decision to retest only a limited number of students and proceeded in a manner which he felt was best for all students. On or about September 21, 1984, which was approximately one month after school started, it came to Steckmiller's attention that Respondent was preparing all students for the retest, and he ordered Respondent to stop this preparation. Respondent threatened to go to the School Board over the matter, but the following week complied with Steckmiller's order by discontinuing the preparation and informing all students that only seventeen would be able to take the retest. This resulted in confusion and disappointment for the remaining students who would not be retested. Because of this confusion and disappointment, Steckmiller called a conference on October 1, 1984 for the parents of eighth grade math students to explain the changes that had been made in the math curriculum and to clarify any mis-understandings. On or about September 26, 1984, Steckmiller ordered Respondent not to attend the conference and not to become involved with the conference. Ms. Edmond attended as chairperson of the math department. While Respondent did not attend the conference, he did call two parents, Mrs. Cynthia Bevington and Mrs. Pat Maravich, to discuss his concerns about the effect on their children of changes in the math curriculum, the parents' conference, and the fact he had been ordered not to attend. He also asked Mrs. Bevington to ask Steckmiller at the conference why he had been ordered not to attend. This involvement with parents concerning the parents' conference was contrary to Steckmiller's order that Respondent not become involved with the conference. On October 2, 1984, the day after the parents' conference, Respondent began teaching the pre-algebra and advanced pre-algebra courses he was supposed to be teaching. However, instead of teaching these courses as full year courses and using the selected text books for the remainder of the school year, Respondent completed one course and its text book in eight to ten weeks, whereupon he issued a new text and planned to teach Algebra I beginning in January, 1985. This was again directly contrary to Steckmiller's orders and was a unilateral action which Respondent took to alter and accelerate the established curriculum. On or about December 19, 1984, Respondent was ordered to go back to the beginning of the pre algebra course and text and to teach the course according to the established curriculum for the remainder of the school year. During the morning of December 20, 1984, Respondent had a confrontation with a teacher, Debra Choate, concerning her having made a negative report about another teacher, Ed Haley, to Steckmiller. Choate felt threatened and harassed at the way Respondent approached her, and she reported the incident to Steckmiller at noon. Steckmiller then met with Respondent and ordered him not to threaten Choate and to stay away from her. Yet, that afternoon Respondent again confronted Choate and threatened to sue her over her alleged "proselytizing and reading scripture in the classroom." Respondent's action was directly contrary to Steckmiller's express order. A Christmas program was held in the school auditorium on December 21, 1984, which had as its theme and title, "Winter Smorgasbord". When Dr. Hall announced over the intercom that it was time for students to move to the auditorium for the "Christmas program," Respondent proceeded to the auditorium where he met Steckmiller and expressed his displeasure at the reference to a "Christmas program." Steckmiller told Respondent to go into the auditorium and sit with his class. Inside the auditorium before the program began, Respondent hollered at Dr. Hall that he should not have referred to the program as a "Christmas program." Respondent screamed at Dr. Hall in the presence of students and other teachers, forcing Steckmiller to break up the resulting verbal altercation. During the program, Respondent refused to stand with the rest of the teachers and student body when the song "O Holy Night" was sung. After the program, Respondent confronted Steckmiller about these incidents and threatened to go to the School Board about the events of the day. In fact, he did approach two School Board members who were in attendance at the program that day, and asked them to investigate the incidents. The math curriculum changes made by Steckmiller, principal at Mebane Middle School, for the 1984-85 school year were reviewed and approved by the District Math Supervisor, Totsye Conner, who also recommended one of the text books to be used in the pre-algebra classes. The pre-algebra course and text were designed to be taught throughout the entire school year, and in Conner's opinion, they could not have been properly taught in eight to ten weeks, as Respondent did between October and December, 1984. Respondent was a dedicated, highly motivated math teacher at Mebane Middle School with a great deal of parental and student support for his teaching methods and commitment, but whose actions as described above constitute gross insubordination and misconduct in office.
Recommendation Based upon the foregoing, it is recommended that the School Board of Alachua County dismiss Geoffrey Pyne, effective May 22, 1985. DONE and ENTERED this 1st day of August, 1986 at Tallahassee, Florida. DONALD D. CONN, 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, 1986. COPIES FURNISHED: Douglas P. Magann, Ed.D. Superintendent of Schools 620 East University Avenue Gainesville, Florida 32601 Frank C. Kruppenbacher, Esquire Post Office Box 640 Orlando, Florida 32802 Grafton B. Wilson, II, Esquire Post Office Box 1292 Gainesville; Florida 32602 Thomas L. Wittmer, Esquire 620 East University Avenue Gainesville, Florida 32601 Marguerite H. Davis, Esquire 135 South Calhoun Street Suite 800 Tallahassee, Florida 32301 APPENDIX Rulings on Petitioner's Proposed Findings of Fact: 1,2. Adopted in Finding of Fact 1. 3. Adopted in Findings of Fact 3, 4. 4-8. Adopted in Findings of Fact 7, 8, 9. 9-16. Rejected since these proposed findings were not supported by competent substantial evidence. Adopted in Finding of Fact 19. Rejected as not based on competent substantial evidence. Adopted in Finding of Fact 11. Adopted in Findings of Fact 2, 11. 21-25. Adopted in Findings of Fact 11-16. 26-29. Adopted in Finding of Fact 17. Adopted in Finding of Fact 18. Adopted in Finding of Fact 10. 32,33. Rejected as irrelevant and unnecessary. 34-37. Adopted substantially in Findings of Fact 12, 13, as occurring in 1984. 38-48. Rejected as irrelevant and cumulative. Rulings on Respondent's Proposed Findings of Fact: 1-4. Adopted in Finding of Fact 1. 5. Adopted in Findings of Fact 3. 6,7. Adopted in part in Finding of Fact 22, but otherwise rejected as unnecessary to a determination of genuine issues of material fact involved in this case. 8-13. Rejected based on contrary findings made in Findings of Fact 7, 8 and 9. 14-16. Rejected as a summation of testimony rather than a finding of fact, irrelevant and not based on competent substantial evidence. Rejected based on contrary findings in Findings of Fact 8 and 9. Rejected based on contrary findings in Finding of Fact 19. 19-20. Rejected as irrelevant and unnecessary. Rejected based on contrary findings in Findings of Fact 11 through 18. Rejected based on contrary findings in Finding of Fact 20. 23-26. Rejected as irrelevant and unnecessary to a determination of genuine issues of material fact involved in this case and otherwise not based on competent substantial evidence.
Findings Of Fact Donald A. Moyant, Petitioner, operates a contractors' exam school in Brandon, Florida, at which he preps builders to take the CILB exam for licensure as contractors. Petitioner took the exam given in June 1985 and received a score of 58.60. A score of 70.00 is required to pass this examination. The only answer that Petitioner questions is the answer he supplied to question No. 2, which related to the number of reinforcing bars required in a concrete slab of given dimensions and spacings of the bars. In Petitioner's solution to the problem he dropped the fractional bar that resulted from dividing the length of the slab by the spacing between bars. The correct solution requires the addition of a bar for this fractional spare. Petitioner's purpose in pursuing this proceeding is to obtain information to use in his Contractors Exam School, Inc. Since he would not have passed the examination even if his solution to question No. 2 had been marked correct, Petitioner is without standing to bring this action because he is doing so on behalf of the school he runs and not to allow him to receive a passing grade.
The Issue The issue presented is whether Petitioner's application for licensure by examination as a professional engineer should be granted.
Findings Of Fact Petitioner is an applicant for licensure by examination as a professional engineer. By letter dated February 6, 1991, Respondent notified Petitioner that his education did not meet the criteria for licensure. Specifically, Petitioner's education was not deemed to be equivalent to an accredited engineering degree because it lacked 6 credit hours of mathematics, 24 credit hours of engineering sciences, and 8 credit hours of humanities and social sciences. Further, Petitioner had failed to submit any evidence of possessing computer skills. Petitioner is a graduate of the Indian Institute of Technology in Kharagpur, India. He received a degree styled Bachelor of Technology in Civil Engineering in 1967. Petitioner is not a graduate of Florida's State University System. Further, Petitioner did not notify Respondent before July 1, 1984, that he was engaged in active and responsible engineering work on July 1, 1981. Petitioner had his transcript evaluated by the World Education Service (hereinafter "WES"). WES filed a report, dated September 20, 1985, attesting that Petitioner's education was the equivalent of an engineering technology degree. A second report issued by WES, dated March 14, 1988, is identical. A third report, dated January 7, 1991, is identical to the first two, except that in this latest report, the WES opines that Petitioner has the equivalent of a bachelor's degree in civil engineering. The Board's Education Advisory Committee reviews foreign degree candidates to determine if their education meets the standards established by the Accreditation Board for Engineering and Technology, Inc., (hereinafter "ABET"). The ABET standards for an approved baccalaureate degree in engineering include: 16 hours of mathematics (calculus through differential equations), 16 hours of basic sciences, 32 hours of engineering sciences, 16 hours of engineering design, and 16 hours of humanities and social sciences. There is a major difference between an engineering degree and an engineering technology degree. An engineering technology degree does not require the same number of hours in advanced mathematics (calculus through differential equations) as an engineering degree. Furthermore, an engineering technology curriculum emphasizes the technical aspects of the profession, such as engineering design coursework, but does not stress the underlying engineering sciences. Petitioner's transcript and course titles were typical of an engineering technology curriculum. Petitioner's mathematics courses were not solely at the advanced math level, but also included algebra and geometry. Furthermore, Petitioner's transcript only demonstrated 8 hours of engineering sciences. The title of Petitioner's degree is not dispositive. What is dispositive is that Petitioner's course of study had its emphasis on technical design courses rather than on higher math and engineering sciences courses.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Petitioner's application for licensure by examination. DONE and ENTERED this 24th day of September, 1991, at Tallahassee, Florida. LINDA M. RIGOT 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 24th day of September, 1991. APPENDIX TO RECOMMENDED ORDER Respondent's proposed findings of fact numbered 1-3, 6, and 8-11 have been adopted either verbatim or in substance in this Recommended Order. Respondent's proposed finding of fact numbered 5 has been rejected as being irrelevant to the issues under consideration in this cause. Respondent's proposed findings of fact numbered 4 and 7 have been rejected as not constituting findings of fact but rather as constituting conclusions of law, argument of counsel, or recitation of the testimony. COPIES FURNISHED: Om Prakash Bhola 3600 Khayyam Avenue Apt. #7 Orlando, Florida 32826 Edwin A. Bayo, Esquire Assistant Attorney General Department of Legal Affairs Suite LL04, The Capitol Tallahassee, Florida 32399-1050 Carrie Flynn, Acting Executive Director Department of Professional Regulation Board of Professional Engineers Northwood Centre, Suite 60 1940 North Monroe Street Tallahassee, Florida 32399-0792 Jack McRay, General Counsel Department of Professional Regulation Northwood Centre, Suite 60 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue At issue in this proceeding is whether proposed Florida Administrative Code Rule 69O-125.005 is an invalid exercise of delegated legislative authority.
Findings Of Fact Petitioners AIA is a trade association made up of 40 groups of insurance companies. AIA member companies annually write $6 billion in property, casualty, and automobile insurance in Florida. AIA's primary purpose is to represent the interests of its member insurance groups in regulatory and legislative matters throughout the United States, including Florida. NAMIC is a trade association consisting of 1,430 members, mostly mutual insurance companies. NAMIC member companies annually write $10 billion in property, casualty, and automobile insurance in Florida. NAMIC represents the interests of its member insurance companies in regulatory and legislative matters throughout the United States, including Florida. PCI is a national trade association of property and casualty insurance companies consisting of 1,055 members. PCI members include mutual insurance companies, stock insurance companies, and reciprocal insurers that write property and casualty insurance in Florida. PCI members annually write approximately $15 billion in premiums in Florida. PCI participated in the OIR's workshops on the Proposed Rule. PCI's assistant vice president and regional manager, William Stander, testified that if the Proposed Rule is adopted, PCI's member companies would be required either to withdraw from the Florida market or drastically reorganize their business model. FIC is an insurance trade association made up of 39 insurance groups that represent approximately 250 insurance companies writing all lines of insurance. All of FIC's members are licensed in Florida and write approximately $27 billion in premiums in Florida. FIC has participated in rule challenges in the past, and participated in the workshop and public hearing process conducted by OIR for this Proposed Rule. FIC President Guy Marvin testified that FIC's property and casualty members use credit scoring and would be affected by the Proposed Rule. A substantial number of Petitioners' members are insurers writing property and casualty insurance and/or motor vehicle insurance coverage in Florida. These members use credit-based insurance scoring in their underwriting and rating processes. They would be directly regulated by the Proposed Rule in their underwriting and rating methods and in the rate filing processes set forth in Sections 627.062 and 627.0651, Florida Statutes. Fair Isaac originated credit-based insurance scoring and is a leading provider of credit-based insurance scoring information in the United States and Canada. Fair Isaac has invested millions of dollars in the development and maintenance of its credit-based insurance models. Fair Isaac concedes that it is not an insurer and, thus, would not be directly regulated by the Proposed Rule. However, Fair Isaac would be directly affected by any negative impact that the Proposed Rule would have in setting limits on the use of credit-based insurance score models in Florida. Lamont Boyd, a manager in Fair Isaac's global scoring division, testified that if the Proposed Rule goes into effect Fair Isaac would, at a minimum, lose all of the revenue it currently generates from insurance companies that use its scores in the State of Florida, because Fair Isaac's credit-based insurance scoring model cannot meet the requirements of the Proposed Rule regarding racial, ethnic, and religious categorization. Mr. Boyd also testified that enactment of the Proposed Rule could cause a "ripple effect" of similar regulations in other states, further impairing Fair Isaac's business. The Statute and Proposed Rule During the 1990s, insurance companies' use of consumer credit information for underwriting and rating automobile and residential property insurance policies greatly increased. Insurance regulators expressed concern that the use of consumer credit reports, credit histories and credit-based insurance scoring models could have a negative effect on consumers' ability to obtain and keep insurance at appropriate rates. Of particular concern was the possibility that the use of credit scoring would particularly hurt minorities, people with low incomes, and young people, because those persons would be more likely to have poor credit scores. On September 19, 2001, Insurance Commissioner Tom Gallagher appointed a task force to examine the use of credit reports and develop recommendations for the Legislature or for the promulgation of rules regarding the use of credit scoring by the insurance industry. The task force met on four separate occasions throughout the state in 2001, and issued its report on January 23, 2002. The task force report conceded that the evidence supporting the negative impact of the use of credit reports on specific groups is "primarily anecdotal," and that the insurance industry had submitted anecdotal evidence to the contrary. Among its nine recommendations, the task force recommended the following: A comprehensive and independent investigation of the relationship between insurers' use of consumer credit information and risk of loss including the impact by race, income, geographic location and age. A prohibition against the use of credit reports as the sole basis for making underwriting or rating decisions. That insurers using credit as an underwriting or rating factor be required to provide regulators with sufficient information to independently verify that use. That insurers be required to send a copy of the credit report to those consumers whose adverse insurance decision is a result of their consumer credit information and a simple explanation of the specific credit characteristics that caused the adverse decision. That insurers not be permitted to draw a negative inference from a bad credit score that is due to medical bills, little or no credit information, or other special circumstances that are clearly not related to an applicant's or policyholder's insurability. That the impact of credit reports be mitigated by imposing limits on the weight that insurers can give to them in the decision to write a policy and limits on the amount the premium can be increased due to credit information. No evidence was presented that the "comprehensive and independent investigation" of insurers' use of credit information was undertaken by the Legislature. However, the other recommendations of the task force were addressed in Senate Bills 40A and 42A, enacted by the Legislature and signed by the governor on June 26, 2003. These companion bills, each with an effective date of January 1, 2004, were codified as Sections 626.9741 and 626.97411, Florida Statutes, respectively. Chapters 2003-407 and 2003-408, Laws of Florida. Section 626.9741, Florida Statutes, provides: The purpose of this section is to regulate and limit the use of credit reports and credit scores by insurers for underwriting and rating purposes. This section applies only to personal lines motor vehicle insurance and personal lines residential insurance, which includes homeowners, mobile home owners' dwelling, tenants, condominium unit owners, cooperative unit owners, and similar types of insurance. As used in this section, the term: "Adverse decision" means a decision to refuse to issue or renew a policy of insurance; to issue a policy with exclusions or restrictions; to increase the rates or premium charged for a policy of insurance; to place an insured or applicant in a rating tier that does not have the lowest available rates for which that insured or applicant is otherwise eligible; or to place an applicant or insured with a company operating under common management, control, or ownership which does not offer the lowest rates available, within the affiliate group of insurance companies, for which that insured or applicant is otherwise eligible. "Credit report" means any written, oral, or other communication of any information by a consumer reporting agency, as defined in the federal Fair Credit Reporting Act, 15 U.S.C. ss. 1681 et seq., bearing on a consumer's credit worthiness, credit standing, or credit capacity, which is used or expected to be used or collected as a factor to establish a person's eligibility for credit or insurance, or any other purpose authorized pursuant to the applicable provision of such federal act. A credit score alone, as calculated by a credit reporting agency or by or for the insurer, may not be considered a credit report. "Credit score" means a score, grade, or value that is derived by using any or all data from a credit report in any type of model, method, or program, whether electronically, in an algorithm, computer software or program, or any other process, for the purpose of grading or ranking credit report data. "Tier" means a category within a single insurer into which insureds with substantially similar risk, exposure, or expense factors are placed for purposes of determining rate or premium. An insurer must inform an applicant or insured, in the same medium as the application is taken, that a credit report or score is being requested for underwriting or rating purposes. An insurer that makes an adverse decision based, in whole or in part, upon a credit report must provide at no charge, a copy of the credit report to the applicant or insured or provide the applicant or insured with the name, address, and telephone number of the consumer reporting agency from which the insured or applicant may obtain the credit report. The insurer must provide notification to the consumer explaining the reasons for the adverse decision. The reasons must be provided in sufficiently clear and specific language so that a person can identify the basis for the insurer's adverse decision. Such notification shall include a description of the four primary reasons, or such fewer number as existed, which were the primary influences of the adverse decision. The use of generalized terms such as "poor credit history," "poor credit rating," or "poor insurance score" does not meet the explanation requirements of this subsection. A credit score may not be used in underwriting or rating insurance unless the scoring process produces information in sufficient detail to permit compliance with the requirements of this subsection. It shall not be deemed an adverse decision if, due to the insured's credit report or credit score, the insured continues to receive a less favorable rate or placement in a less favorable tier or company at the time of renewal except for renewals or reunderwriting required by this section. (4)(a) An insurer may not request a credit report or score based upon the race, color, religion, marital status, age, gender, income, national origin, or place of residence of the applicant or insured. An insurer may not make an adverse decision solely because of information contained in a credit report or score without consideration of any other underwriting or rating factor. An insurer may not make an adverse decision or use a credit score that could lead to such a decision if based, in whole or in part, on: The absence of, or an insufficient, credit history, in which instance the insurer shall: Treat the consumer as otherwise approved by the Office of Insurance Regulation if the insurer presents information that such an absence or inability is related to the risk for the insurer; Treat the consumer as if the applicant or insured had neutral credit information, as defined by the insurer; Exclude the use of credit information as a factor and use only other underwriting criteria; Collection accounts with a medical industry code, if so identified on the consumer's credit report; Place of residence; or Any other circumstance that the Financial Services Commission determines, by rule, lacks sufficient statistical correlation and actuarial justification as a predictor of insurance risk. An insurer may use the number of credit inquiries requested or made regarding the applicant or insured except for: Credit inquiries not initiated by the consumer or inquiries requested by the consumer for his or her own credit information. Inquiries relating to insurance coverage, if so identified on a consumer's credit report. Collection accounts with a medical industry code, if so identified on the consumer's credit report Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the home mortgage industry and made within 30 days of one another, unless only one inquiry is considered. Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the automobile lending industry and made within 30 days of one another, unless only one inquiry is considered. An insurer must, upon the request of an applicant or insured, provide a means of appeal for an applicant or insured whose credit report or credit score is unduly influenced by a dissolution of marriage, the death of a spouse, or temporary loss of employment. The insurer must complete its review within 10 business days after the request by the applicant or insured and receipt of reasonable documentation requested by the insurer, and, if the insurer determines that the credit report or credit score was unduly influenced by any of such factors, the insurer shall treat the applicant or insured as if the applicant or insured had neutral credit information or shall exclude the credit information, as defined by the insurer, whichever is more favorable to the applicant or insured. An insurer shall not be considered out of compliance with its underwriting rules or rates or forms filed with the Office of Insurance Regulation or out of compliance with any other state law or rule as a result of granting any exceptions pursuant to this subsection. A rate filing that uses credit reports or credit scores must comply with the requirements of s. 627.062 or s. 627.0651 to ensure that rates are not excessive, inadequate, or unfairly discriminatory. An insurer that requests or uses credit reports and credit scoring in its underwriting and rating methods shall maintain and adhere to established written procedures that reflect the restrictions set forth in the federal Fair Credit Reporting Act, this section, and all rules related thereto. (7)(a) An insurer shall establish procedures to review the credit history of an insured who was adversely affected by the use of the insured's credit history at the initial rating of the policy, or at a subsequent renewal thereof. This review must be performed at a minimum of once every 2 years or at the request of the insured, whichever is sooner, and the insurer shall adjust the premium of the insured to reflect any improvement in the credit history. The procedures must provide that, with respect to existing policyholders, the review of a credit report will not be used by the insurer to cancel, refuse to renew, or require a change in the method of payment or payment plan. (b) However, as an alternative to the requirements of paragraph (a), an insurer that used a credit report or credit score for an insured upon inception of a policy, who will not use a credit report or score for reunderwriting, shall reevaluate the insured within the first 3 years after inception, based on other allowable underwriting or rating factors, excluding credit information if the insurer does not increase the rates or premium charged to the insured based on the exclusion of credit reports or credit scores. The commission may adopt rules to administer this section. The rules may include, but need not be limited to: Information that must be included in filings to demonstrate compliance with subsection (3). Statistical detail that insurers using credit reports or scores under subsection (5) must retain and report annually to the Office of Insurance Regulation. Standards that ensure that rates or premiums associated with the use of a credit report or score are not unfairly discriminatory, based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence. Standards for review of models, methods, programs, or any other process by which to grade or rank credit report data and which may produce credit scores in order to ensure that the insurer demonstrates that such grading, ranking, or scoring is valid in predicting insurance risk of an applicant or insured. Section 626.97411, Florida Statutes, provides: Credit scoring methodologies and related data and information that are trade secrets as defined in s. 688.002 and that are filed with the Office of Insurance Regulation pursuant to a rate filing or other filing required by law are confidential and exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution.3 Following extensive rule development workshops and industry comment, proposed Florida Administrative Code Rule 69O-125.005 was initially published in the Florida Administrative Weekly, on February 11, 2005.4 The Proposed Rule states, as follows: 69O-125.005 Use of Credit Reports and Credit Scores by Insurers. For the purpose of this rule, the following definitions apply: "Applicant", for purposes of Section 626.9741, F.S., means an individual whose credit report or score is requested for underwriting or rating purposes relating to personal lines motor vehicle or personal lines residential insurance and shall not include individuals who have merely requested a quote. "Credit scoring methodology" means any methodology that uses credit reports or credit scores, in whole or in part, for underwriting or rating purposes. "Data cleansing" means the correction or enhancement of presumed incomplete, incorrect, missing, or improperly formatted information. "Personal lines motor vehicle" insurance means insurance against loss or damage to any motorized land vehicle or any loss, liability, or expense resulting from or incidental to ownership, maintenance or use of such vehicle if the contract of insurance shows one or more natural persons as named insureds. The following are not included in this definition: Vehicles used as public livery or conveyance; Vehicles rented to others; Vehicles with more than four wheels; Vehicles used primarily for commercial purposes; and Vehicles with a net vehicle weight of more than 5,000 pounds designed or used for the carriage of goods (other than the personal effects of passengers) or drawing a trailer designed or used for the carriage of such goods. The following are specifically included, inter alia, in this definition: Motorcycles; Motor homes; Antique or classic automobiles; and Recreational vehicles. "Unfairly discriminatory" means that adverse decisions resulting from the use of a credit scoring methodology disproportionately affects persons belonging to any of the classes set forth in Section 626.9741(8)(c), F.S. Insurers may not use any credit scoring methodology that is unfairly discriminatory. The burden of demonstrating that the credit scoring methodology is not unfairly discriminatory is upon the insurer. An insurer may not request or use a credit report or credit score in its underwriting or rating method unless it maintains and adheres to established written procedures that reflect the restrictions set forth in the federal Fair Credit Reporting Act, Section 626.9741, F.S., and these rules. Upon initial use or any change in that use, insurers using credit reports or credit scores for underwriting or rating personal lines residential or personal lines motor vehicle insurance shall include the following information in filings submitted pursuant to Section 627.062 or 627.0651, F.S. A listing of the types of individuals whose credit reports or scores the company will use or attempt to use to underwrite or rate a given policy. For example: Person signing application; Named insured or spouse; and All listed operators. How those individual reports or scores will be combined if more than one is used. For example: Average score used; Highest score used. The name(s) of the consumer reporting agencies or any other third party vendors from which the company will obtain or attempt to obtain credit reports or scores. Precise identifying information specifying or describing the credit scoring methodology, if any, the company will use including: Common or trade name; Version, subtype, or intended segment of business the system was designed for; and Any other information needed to distinguish a particular credit scoring methodology from other similar ones, whether developed by the company or by a third party vendor. The effect of particular scores or ranges of scores (or, for companies not using scores, the effect of particular items appearing on a credit report) on any of the following as applicable: Rate or premium charged for a policy of insurance; Placement of an insured or applicant in a rating tier; Placement of an applicant or insured in a company within an affiliated group of insurance companies; Decision to refuse to issue or renew a policy of insurance or to issue a policy with exclusions or restrictions or limitations in payment plans. The effect of the absence or insufficiency of credit history (as referenced in Section 626.9741(4)(c)1., F.S.) on any items listed in paragraph (e) above. The manner in which collection accounts identified with a medical industry code (as referenced in Section 626.9741(4)(c)2., F.S.) on a consumer's credit report will be treated in the underwriting or rating process or within any credit scoring methodology used. The manner in which collection accounts that are not identified with a medical industry code, but which an applicant or insured demonstrates are the direct result of significant and extraordinary medical expenses, will be treated in the underwriting or rating process or within any credit scoring methodology used. The manner in which the following will be treated in the underwriting or rating process, or within any credit scoring methodology used: Credit inquiries not initiated by the consumer; Requests by the consumer for the consumer's own credit information; Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the automobile lending industry or the home mortgage industry and made within 30 days of one another; Multiple lender inquiries that are not coded by the consumer reporting agency on the consumer's credit report as being from the automobile lending industry or the home mortgage industry and made within 30 days of one another, but that an applicant or insured demonstrates are the direct result of such inquiries; Inquiries relating to insurance coverage, if so identified on a consumer's credit report; and Inquiries relating to insurance coverage that are not so identified on a consumer's credit report, but which an applicant or insured demonstrates are the direct result of such inquiries. The list of all clear and specific primary reasons that may be cited to the consumer as the basis or explanation for an adverse decision under Section 626.9741(3), F.S. and the criteria determining when each of those reasons will be so cited. A description of the process that the insurer will use to correct any error in premium charged the insured, or in underwriting decision made concerning the insured, if the basis of the premium charged or the decision made is a disputed item that is later removed from the credit report or corrected, provided that the insured first notifies the insurer that the item has been removed or corrected. A certification that no use of credit reports or scores in rating insurance will apply to any component of a rate or premium attributed to hurricane coverage for residential properties as separately identified in accordance with Section 627.0629, F.S. Insurers desiring to make adverse decisions for personal lines motor vehicle policies or personal lines residential policies based on the absence or insufficiency of credit history shall either: Treat such consumers or applicants as otherwise approved by the Office of Insurance Regulation if the insurer presents information that such an absence or inability is related to the risk for the insurer and does not result in a disparate impact on persons belonging to any of the classes set forth in Section 626.9741(8)(c), This information will be held as confidential if properly so identified by the insurer and eligible under Section 626.9711, F.S. The information shall include: Data comparing experience for each category of those with absent or insufficient credit history to each category of insureds separately treated with respect to credit and having sufficient credit history; A statistically credible method of analysis that concludes that the relationship between absence or insufficiency and the risk assumed is not due to chance; A statistically credible method of analysis that concludes that absence or insufficiency of credit history does not disparately impact persons belonging to any of the classes set forth in Section 626.9741(8)(c), F.S.; A statistically credible method of analysis that confirms that the treatment proposed by the insurer is quantitatively appropriate; and Statistical tests establishing that the treatment proposed by the insurer is warranted for the total of all consumers with absence or insufficiency of credit history and for at least two subsets of such consumers. Treat such consumers as if the applicant or insured had neutral credit information, as defined by the insurer. Should an insurer fail to specify a definition, neutral is defined as the average score that a stratified random sample of consumers or applicants having sufficient credit history would attain using the insurer's credit scoring methodology; or Exclude credit as a factor and use other criteria. These other criteria must be specified by the insurer and must not result in average treatment for the totality of consumers with an absence of or insufficiency of credit history any less favorable than the treatment of average consumers or applicants having sufficient credit history. Insurers desiring to make adverse decisions for personal lines motor vehicle or personal lines residential insurance based on information contained in a credit report or score shall file with the Office information establishing that the results of such decisions do not correlate so closely with the zip code of residence of the insured as to constitute a decision based on place of residence of the insured in violation of Section 626.9741(4)(c)(3), F.S. (7)(a) Insurers using credit reports or credit scores for underwriting or rating personal lines residential or personal lines motor vehicle insurance shall develop, maintain, and adhere to written procedures consistent with Section 626.9741(4)(e), F.S. providing appeals for applicants or insureds whose credit reports or scores are unduly influenced by dissolution of marriage, death of a spouse, or temporary loss of employment. (b) These procedures shall be subject to examination by the Office at any time. (8)(a)1. Insurers using credit reports or credit scoring in rating personal lines motor vehicle or personal lines residential insurance shall develop, maintain, and adhere to written procedures to review the credit history of an insured who was adversely affected by such use at initial rating of the policy or subsequent renewal thereof. These procedures shall be subject to examination by the Office at any time. The procedures shall comply with the following: A review shall be conducted: No later than 2 years following the date of any adverse decision, or Any time, at the request of the insured, but no more than once per policy period without insurer assent. The insurer shall notify the named insureds annually of their right to request the review in (II) above. Renewal notices issued 120 days or less after the effective date of this rule are not included in this requirement. The insurer shall adjust the premium to reflect any improvement in credit history no later than the first renewal date that follows a review of credit history. The renewal premium shall be subject to other rating factors lawfully used by the insurer. The review shall not be used by the insurer to cancel, refuse to renew, or require a change in the method of payment or payment plan based on credit history. (b)1. As an alternative to the requirements in paragraph (8)(a), insurers using credit reports or scores at the inception of a policy but not for re-underwriting shall develop, maintain, and adhere to written procedures. These procedures shall be subject to examination by the Office at any time. The procedures shall comply with the following: Insureds shall be reevaluated no later than 3 years following policy inception based on allowable underwriting or rating factors, excluding credit information. The rate or premium charged to an insured shall not be greater, solely as a result of the reevaluation, than the rate or premium charged for the immediately preceding policy term. This shall not be construed to prohibit an insurer from applying regular underwriting criteria (which may result in a greater premium) or general rate increases to the premium charged. For insureds that received an adverse decision notification at policy inception, no residual effects of that adverse decision shall survive the reevaluation. This means that the reevaluation must be complete enough to make it possible for insureds adversely impacted at inception to attain the lowest available rate for which comparable insureds are eligible, considering only allowable underwriting or rating factors (excluding credit information) at the time of the reevaluation. No credit scoring methodology shall be used for personal lines motor vehicle or personal lines residential property insurance unless that methodology has been demonstrated to be a valid predictor of the insurance risk to be assumed by an insurer for the applicable type of insurance. The demonstration of validity detailed below need only be provided with the first rate, rule, or underwriting guidelines filing following the effective date of this rule and at any time a change is made in the credit scoring methodology. Other such filings may instead refer to the most recent prior filing containing a demonstration. Information supplied in the context of a demonstration of validity will be held as confidential if properly so identified by the insurer and eligible under Section 626.9711, F.S. A demonstration of validity shall include: A listing of the persons that contributed substantially to the development of the most current version of the method, including resumes of the persons, if obtainable, indicating their qualifications and experience in similar endeavors. An enumeration of all data cleansing techniques that have been used in the development of the method, which shall include: The nature of each technique; Any biases the technique might introduce; and The prevalence of each type of invalid information prior to correction or enhancement. All data that was used by the model developers in the derivation and calibration of the model parameters. Data shall be in sufficient detail to permit the Office to conduct multiple regression testing for validation of the credit scoring methodology. Data, including field definitions, shall be supplied in electronic format compatible with the software used by the Office. Statistical results showing that the model and parameters are predictive and not overlapping or duplicative of any other variables used to rate an applicant to such a degree as to render their combined use actuarially unsound. Such results shall include the period of time for which each element from a credit report is used. A precise listing of all elements from a credit report that are used in scoring, and the formula used to compute the score, including the time period during which each element is used. Such listing is confidential if properly so identified by the insurer. An assessment by a qualified actuary, economist, or statistician (whether or not employed by the insurer) other than persons who contributed substantially to the development of the credit scoring methodology, concluding that there is a significant statistical correlation between the scores and frequency or severity of claims. The assessment shall: Identify the person performing the assessment and show his or her educational and professional experience qualifications; and Include a test of robustness of the model, showing that it performs well on a credible validation data set. The validation data set may not be the one from which the model was developed. Documentation consisting of statistical testing of the application of the credit scoring model to determine whether it results in a disproportionate impact on the classes set forth in Section 626.9741(8)(c), A model that disproportionately affects any such class of persons is presumed to have a disparate impact and is presumed to be unfairly discriminatory. Statistical analysis shall be performed on the current insureds of the insurer using the proposed credit scoring model, and shall include the raw data and detailed results on each classification set forth in Section 626.9741(8)(c), F.S. In lieu of such analysis insurers may use the alternative in 2. below. Alternatively, insurers may submit statistical studies and analyses that have been performed by educational institutions, independent professional associations, or other reputable entities recognized in the field, that indicate that there is no disproportionate impact on any of the classes set forth in Section 626.9741(8)(c), F.S. attributable to the use of credit reports or scores. Any such studies or analyses shall have been done concerning the specific credit scoring model proposed by the insurer. The Office will utilize generally accepted statistical analysis principles in reviewing studies submitted which support the insurer's analysis that the credit scoring model does not disproportionately impact any class based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence. The Office will permit reliance on such studies only to the extent that they permit independent verification of the results. The testing or validation results obtained in the course of the assessment in paragraphs (d) and (f) above. Internal Insurer data that validates the premium differentials proposed based on the scores or ranges of scores. Industry or countrywide data may be used to the extent that the Florida insurer data lacks credibility based upon generally accepted actuarial standards. Insurers using industry or countrywide data for validation shall supply Florida insurer data and demonstrate that generally accepted actuarial standards would allow reliance on each set of data to the extent the insurer has done so. Validation data including claims on personal lines residential insurance policies that are the result of acts of God shall not be used unless such acts occurred prior to January 1, 2004. The mere copying of another company's system will not fulfill the requirement to validate proposed premium differentials unless the filer has used a method or system for less than 3 years and demonstrates that it is not cost effective to retrospectively analyze its own data. Companies under common ownership, management, and control may copy to fulfill the requirement to validate proposed premium differentials if they demonstrate that the characteristics of the business to be written by the affiliate doing the copying are sufficiently similar to the affiliate being copied to presume common differentials will be accurate. The credibility standards and any judgmental adjustments, including limitations on effects, that have been used in the process of deriving premium differentials proposed and validated in paragraph (i) above. An explanation of how the credit scoring methodology treats discrepancies in the information that could have been obtained from different consumer reporting agencies: Equifax, Experian, or TransUnion. This shall not be construed to require insurers to obtain multiple reports for each insured or applicant. 1. The date that each of the analyses, tests, and validations required in paragraphs (d) through (j) above was most recently performed, and a certification that the results continue to be applicable. 2. Any item not reviewed in the previous 5 years is unacceptable. Specific Authority 624.308(1), 626.9741(8) FS. Law Implemented 624.307(1), 626.9741 FS. History-- New . The Petition 1. Statutory Definitions of "Unfairly Discriminatory" The main issue raised by Petitioners is that the Proposed Rule's definition of "unfairly discriminatory," and those portions of the Proposed Rule that rely on this definition, are invalid because they are vague, and enlarge, modify, and contravene the provisions of the law implemented and other provisions of the insurance code. Section 626.9741, Florida Statutes, does not define "unfairly discriminatory." Subsection 626.9741(5), Florida Statutes, provides that a rate filing using credit reports or scores "must comply with the requirements of s. 627.062 or s. 627.0651 to ensure that rates are not excessive, inadequate, or unfairly discriminatory." Subsection 626.9741(8)(c), Florida Statutes, provides that the FSC may adopt rules, including standards to ensure that rates or premiums "associated with the use of a credit report or score are not unfairly discriminatory, based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence." Chapter 627, Part I, Florida Statutes, is referred to as the "Rating Law." § 627.011, Fla. Stat. The purpose of the Rating Law is to "promote the public welfare by regulating insurance rates . . . to the end that they shall not be excessive, inadequate, or unfairly discriminatory." § 627.031(1)(a), Fla. Stat. The Rating Law provisions referenced by Subsection 626.9741(5), Florida Statutes, in relation to ensuring that rates are not "unfairly discriminatory" are Sections 627.062 and 627.0651, Florida Statutes. Section 627.062, Florida Statutes, titled "Rate standards," provides that "[t]he rates for all classes of insurance to which the provisions of this part are applicable shall not be excessive, inadequate, or unfairly discriminatory." § 627.062(1), Fla. Stat. Subsection 627.062(2)(e)6., Florida Statutes, provides: A rate shall be deemed unfairly discriminatory as to a risk or group of risks if the application of premium discounts, credits, or surcharges among such risks does not bear a reasonable relationship to the expected loss and expense experience among the various risks. Section 627.0651, Florida Statutes, titled "Making and use of rates for motor vehicle insurance," provides, in relevant part: One rate shall be deemed unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the difference in expected losses and expenses. Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as rates reflect the differences with reasonable accuracy. Rates are not unfairly discriminatory if averaged broadly among members of a group; nor are rates unfairly discriminatory even though they are lower than rates for nonmembers of the group. However, such rates are unfairly discriminatory if they are not actuarially measurable and credible and sufficiently related to actual or expected loss and expense experience of the group so as to assure that nonmembers of the group are not unfairly discriminated against. Use of a single United States Postal Service zip code as a rating territory shall be deemed unfairly discriminatory. Petitioners point out that each of these statutory examples describing "unfairly discriminatory" rates has an actuarial basis, i.e., rates must be related to the actual or expected loss and expense factors for a given group or class, rather than any extraneous factors. If two risks have the same expected losses and expenses, the insurer must charge them the same rate. If the risks have different expected losses and expenses, the insurer must charge them different rates. Michael Miller, Petitioners' expert actuary, testified that the term "unfairly discriminatory" has been used in the insurance industry for well over 100 years and has always had this cost-based definition. Mr. Miller is a fellow of the Casualty Actuarial Society ("CAS"), a professional organization whose purpose is the advancement of the body of knowledge of actuarial science, including the promulgation of industry standards and a code of professional conduct. Mr. Miller was chair of the CAS ratemaking committee when it developed the CAS "Statement of Principles Regarding Property and Casualty Insurance Ratemaking," a guide for actuaries to follow when establishing rates.5 Principle 4 of the Statement of Principles provides: "A rate is reasonable and not excessive, inadequate, or unfairly discriminatory if it is an actuarially sound estimate of the expected value of all future costs associated with an individual risk." In layman's terms, Mr. Miller explained that different types of risks are reflected in a rate calculation. To calculate the expected cost of a given risk, and thus the rate to be charged, the insurer must determine the expected losses for that risk during the policy period. The loss portion reflects the risk associated with an occurrence and the severity of a claim. While the loss portion does not account for the entirety of the rate charged, it is the most important in terms of magnitude. Mr. Miller cautioned that the calculation of risk is a quantification of expected loss, but not an attempt to predict who is going to have an accident or make a claim. There is some likelihood that every insured will make a claim, though most never do, and this uncertainty is built into the incurred loss portion of the rate. No single risk factor is a complete measure of a person's likelihood of having an accident or of the severity of the ensuing claim. The prediction of losses is determined through a risk classification plan that take into consideration many risk factors (also called rating factors) to determine the likelihood of an accident and the extent of the claim. As to automobile insurance, Mr. Miller listed such risk factors as the age, gender, and marital status of the driver, the type, model and age of the car, the liability limits of the coverage, and the geographical location where the car is garaged. As to homeowners insurance, Mr. Miller listed such risk factors as the location of the home, its value and type of construction, the age of the utilities and electrical wiring, and the amount of insurance to be carried. 2. Credit Scoring as a Rating Factor In the current market, the credit score of the applicant or insured is a rating factor common to automobile and homeowners insurance. Subsection 626.9741(2)(c), Florida Statutes, defines "credit score" as follows: a score, grade, or value that is derived by using any or all data from a credit report in any type of model, method, or program, whether electronically, in an algorithm, computer software or program, or any other process, for the purpose of grading or ranking credit report data. "Credit scores" (more accurately termed "credit-based insurance scores") are derived from credit data that have been found to be predictive of a loss. Lamont Boyd, Fair Isaac's insurance market manager, explained the manner in which Fair Isaac produced its credit scoring model. The company obtained information from various insurance companies on millions of customers. This information included the customers' names, addresses, and the premiums earned by the companies on those policies as well as the losses incurred. Fair Isaac next requested the credit reporting agencies to review their archived files for the credit information on those insurance company customers. The credit agencies matched the credit files with the insurance customers, then "depersonalized" the files so that there was no way for Fair Isaac to know the identity of any particular customer. According to Mr. Lamont, the data were "color blind" and "income blind." Fair Isaac's analysts took these files from the credit reporting agencies and studied the data in an effort to find the most predictive characteristics of future loss propensity. The model was developed to account for all the predictive characteristics identified by Fair Isaac's analysts, and to give weight to those characteristics in accordance to their relative accuracy as predictors of loss. Fair Isaac does not directly sell its credit scores to insurance companies. Rather, Fair Isaac's models are implemented by the credit reporting agencies. When an insurance company wants Fair Isaac's credit score, it purchases access to the model's results from the credit reporting agency. Other vendors offer similar credit scoring models to insurance companies, and in recent years, some insurance companies have developed their own scoring models. Several academic studies of credit scoring were admitted and discussed at the final hearing in these cases. There appears to be no serious debate that credit scoring is a valid and important predictor of losses. The controversy over the use of credit scoring arises over its possible "unfairly discriminatory" impact "based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence." § 626.9741(8)(c), Fla. Stat. Mr. Miller was one of two principal authors of a June 2003 study titled, "The Relationship of Credit-Based Insurance Scores to Private Passenger Automobile Insurance Loss Propensity." This study was commissioned by several insurance industry trade organizations, including AIA and NAMIC. The study addressed three questions: whether credit-based insurance scores are related to the propensity for loss; whether credit- based insurance scores measure risk that is already measured by other risk factors; and what is the relative importance to accurate risk assessment of the use of credit-based insurance scores. The study was based on a nationwide random sample of private passenger automobile policy and claim records. Records from all 50 states were included in roughly the same proportion as each state's registered motor vehicles bear to total registered vehicles in the United States. The data samples were provided by seven insurers, and represented approximately 2.7 million automobiles, each insured for 12 months.6 The study examined all major automobile coverages: bodily injury liability, property damage liability, medical payments coverage, personal injury protection coverage, comprehensive coverage, and collision coverage. The study concluded that credit-based insurance scores were correlated with loss propensity. The study found that insurance scores overlap to some degree with other risk factors, but that after fully accounting for the overlaps, insurance scores significantly increase the accuracy of the risk assessment process. The study found that, for each of the six automobile coverages examined, insurance scores are among the three most important risk factors.7 Mr. Miller's study did not examine the question of causality, i.e., why credit-based insurance scores are predictive of loss propensity. Dr. Patrick Brockett testified for Petitioners as an expert in actuarial science, risk management and insurance, and statistics. Dr. Brockett is a professor in the departments of management science and information systems, finance, and mathematics at the University of Texas at Austin. He occupies the Gus S. Wortham Memorial Chair in Risk Management and Insurance, and is the director of the university's risk management and insurance program. Dr. Brockett is the former director of the University of Texas' actuarial science program and continues to direct the study of students seeking their doctoral degrees in actuarial science. His areas of academic research are actuarial science, risk management and insurance, statistics, and general quantitative methods in business. Dr. Brockett has written more than 130 publications, most of which relate to actuarial science and insurance. He has spent his entire career in academia, and has never been employed by an insurance company. In 2002, Lieutenant Governor Bill Ratliff of Texas asked the Bureau of Business Research ("BBR") of the University of Texas' McCombs School of Business to provide an independent, nonpartisan study to examine the relationship between credit history and insurance losses in automobile insurance. Dr. Brockett was one of four named authors of this BBR study, issued in March 2003 and titled, "A Statistical Analysis of the Relationship between Credit History and Insurance Losses." The BBR research team solicited data from insurance companies representing the top 70 percent of the automobile insurers in Texas, and compiled a database of more than 173,000 automobile insurance policies from the first quarter of 1998 that included the following 12 months' premium and loss history. ChoicePoint was then retained to match the named insureds with their credit histories and to supply a credit score for each insured person. The BBR research team then examined the credit score and its relationship with prospective losses for the insurance policy. The results were summarized in the study as follows: Using logistic and multiple regression analyses, the research team tested whether the credit score for the named insured on a policy was significantly related to incurred losses for that policy. It was determined that there was a significant relationship. In general, lower credit scores were associated with larger incurred losses. Next, logistic and multiple regression analyses examined whether the revealed relationship between credit score and incurred losses was explainable by existing underwriting variables, or whether the credit score added new information about losses not contained in the existing underwriting variables. It was determined that credit score did yield new information not contained in the existing underwriting variables. What the study does not attempt to explain is why credit scoring adds significantly to the insurer's ability to predict insurance losses. In other words, causality was not investigated. In addition, the research team did not examine such variables as race, ethnicity, and income in the study, and therefore this report does not speculate about the possible effects that credit scoring may have in raising or lowering premiums for specific groups of people. Such an assessment would require a different study and different data. At the hearing, Dr. Brockett testified that the BBR study demonstrated a "strong and significant relationship between credit scoring and incurred losses," and that credit scoring retained its predictive power even after the other risk variables were accounted for. Dr. Brockett further testified that credit scoring has a disproportionate effect on the classifications of age and marital status, because the very young tend to have credit scores that are lower than those of older people. If the question is simply whether the use of credit scores will have a greater impact on the young and the single, the answer would be in the affirmative. However, Dr. Brockett also noted that young, single people will also have higher losses than older, married people, and, thus, the use of credit scores is not "unfairly discriminatory" in the sense that term is employed in the insurance industry.8 Mr. Miller testified that nothing in the actuarial standards of practice requires that a risk factor be causally related to a loss. The Actuarial Standards Board's Standard of Practice 12,9 dealing with risk classification, states that a risk factor is appropriate for use if there is a demonstrated relationship between the risk factor and the insurance losses, and that this relationship may be established by statistical or other mathematical analysis of data. If the risk characteristic is shown to be related to an expected outcome, the actuary need not establish a cause-and-effect relationship between the risk characteristic and the expected outcome. As an example, Mr. Miller offered the fact that past automobile accidents do not cause future accidents, although past accidents are predictive of future risk. Past traffic violations, the age of the driver, the gender of the driver, and the geographical location are all risk factors in automobile insurance, though none of these factors can be said to cause future accidents. They help insurers predict the probability of a loss, but do not predict who will have an accident or why the accident will occur. Mr. Miller opined that credit scoring is a similar risk factor. It is demonstrably significant as a predictor of risk, though there is no causal relationship between credit scores and losses and only an incomplete understanding of why credit scoring works as a predictor of loss. At the hearing, Dr. Brockett discussed a study that he has co-authored with Linda Golden, a business professor at the University of Texas at Austin. Titled "Biological and Psychobehavioral Correlates of Risk Taking, Credit Scores, and Automobile Insurance Losses: Toward an Explication of Why Credit Scoring Works," the study has been peer-reviewed and at the time of the hearing had been accepted for publication in the Journal of Risk and Insurance. In this study, the authors conducted a detailed review of existing scientific literature concerning the biological, psychological, and behavioral attributes of risky automobile drivers and insured losses, and a similar review of literature concerning the biological, psychological, and behavioral attributes of financial risk takers. The study found that basic chemical and psychobehavioral characteristics, such as a sensation-seeking personality type, are common to individuals exhibiting both higher insured automobile losses and poorer credit scores. Dr. Brockett testified that this study provides a direction for future research into the reasons why credit scoring works as an insurance risk characteristic. 3. The Proposed Rule's Definition of "Unfairly Discriminatory" Petitioners contend that the Proposed Rule's definition of the term "unfairly discriminatory" expands upon and is contrary to the statutory definition of the term discussed in section C.1. supra, and that this expanded definition operates to impose a ban on the use of credit scoring by insurance companies. As noted above, Section 626.9741, Florida Statutes, does not define the term "unfairly discriminatory." The provisions of the Rating Law10 define the term as it is generally understood by the insurance industry: a rate is deemed "unfairly discriminatory" if the premium charged does not equitably reflect the differences in expected losses and expenses between policyholders. Two provisions of Section 626.9741, Florida Statutes, employ the term "unfairly discriminatory": (5) A rate filing that uses credit reports or credit scores must comply with the requirements of s. 627.062 or s. 627.0651 to ensure that rates are not excessive, inadequate, or unfairly discriminatory. * * * (8) The commission may adopt rules to administer this section. The rules may include, but need not be limited to: * * * (c) Standards that ensure that rates or premiums associated with the use of a credit report or score are not unfairly discriminatory, based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence. Petitioners contend that the statute's use of the term "unfairly discriminatory" is unexceptionable, that the Legislature simply intended the term to be used and understood in the traditional sense of actuarial soundness alone. Respondents agree that Subsection 626.9741(5), Florida Statutes, calls for the agency to apply the traditional definition of "unfairly discriminatory" as that term is employed in the statutes directly referenced, Sections 627.062 and 627.0651, Florida Statutes, the relevant texts of which are set forth in Findings of Fact 18 and 19 above. However, Respondents contend that Subsection 626.9741(8)(c), Florida Statutes, calls for more than the application of the Rating Law's definition of the term. Respondents assert that in the context of this provision, "unfairly discriminatory" contemplates not only the predictive function, but also "discrimination" in its more common sense, as the term is employed in state and federal civil rights law regarding race, color, religion, marital status, age, gender, income, national origin, or place of residence. At the hearing, OIR General Counsel Steven Parton testified as to the reasons why the agency chose the federal body of law using the term "disparate impact" as the test for unfair discrimination in the Proposed Rule: Well, first of all, what we were looking for is a workable definition that people would have some understanding as to what it meant when we talked about unfair discrimination. We were also looking for a test that did not require any willfulness, because it was not our concern that, in fact, insurance companies were engaging willfully in unfair discrimination. What we believed is going on, and we think all of the studies that are out there suggest, is that credit scoring is having a disparate impact upon various people, whether it be income, whether it be race. . . . Respondents' position is that Subsection 626.9741(8)(c), Florida Statutes, requires that a proposed rate or premium be rejected if it has a "disproportionately" negative effect on one of the named classes of persons, even though the rate or premium equitably reflects the differences in expected losses and expenses between policyholders. In the words of Mr. Parton, "This is not an actuarial rule." Mr. Parton explained the agency's rationale for employing a definition of "unfairly discriminatory" that is different from the actuarial usage employed in the Rating Law. Subsection 626.9741(5), Florida Statutes, already provides that an insurer's rate filings may not be "excessive, inadequate, or unfairly discriminatory" in the actuarial sense. To read Subsection 626.9741(8)(c), Florida Statutes, as simply a reiteration of the actuarial "unfair discrimination" rule would render the provision, "a nullity. There would be no force and effect with regards to that." Thus, the Proposed Rule defines "unfairly discriminatory" to mean "that adverse decisions resulting from the use of a credit scoring methodology disproportionately affects persons belonging to any of the classes set forth in Section 626.9741(8)(c), F.S." Proposed Florida Administrative Code Rule 69O-125.005(1)(e). OIR's actuary, Howard Eagelfeld, explained that "disproportionate effect" means "having a different effect on one group . . . causing it to pay more or less premium than its proportionate share in the general population or than it would have to pay based upon all other known considerations." Mr. Eagelfeld's explanation is not incorporated into the language of the Proposed Rule. Consistent with the actuarial definition of "unfairly discriminatory," the Proposed Rule requires that any credit scoring methodology must be "demonstrated to be a valid predictor of the insurance risk to be assumed by an insurer for the applicable type of insurance," and sets forth detailed criteria through which the insurer can make the required demonstration. Proposed Florida Administrative Code Rule 69O-125.005(9)(a)-(f) and (h)-(l). Proposed Florida Administrative Code Rule 69O-125.005(9)(g) sets forth Respondents' "civil rights" usage of the term "unfairly discriminatory." The insurer's demonstration of the validity of its credit scoring methodology must include: [d]ocumentation consisting of statistical testing of the application of the credit scoring model to determine whether it results in a disproportionate impact on the classes set forth in Section 626.9741(8)(c), F.S. A model that disproportionately affects any such class of persons is presumed to have a disparate impact and is presumed to be unfairly discriminatory.11 Mr. Parton, who testified in defense of the Proposed Rule as one of its chief draftsmen, stated that the agency was concerned that the use of credit scoring may be having a disproportionate effect on minorities. Respondents believe that credit scoring may simply be a surrogate measure for income, and that using income as a basis for setting rates would have an obviously disparate impact on lower-income persons, including the young and the elderly. Mr. Parton testified that "neither the insurance industry nor anyone else" has researched the theory that credit scoring may be a surrogate for income. Mr. Miller referenced a 1998 analysis performed by AIA indicating that the average credit scores do not vary significantly according to the income group. In fact, the lowest income group (persons making less than $15,000 per year) had the highest average credit score, and the average credit scores actually dropped as income levels rose until the income range reached $50,000 to $74,000 per year, when the credit scores began to rise. Mr. Miller testified that a credit score is no more predictive of income level than a coin flip. However, Respondents introduced a January 2003 report to the Washington State Legislature prepared by the Social & Economic Sciences Research Center of Washington State University, titled "Effect of Credit Scoring on Auto Insurance Underwriting and Pricing." The purpose of the study was to determine whether credit scoring has unequal impacts on specific demographic groups. For this study, the researchers received data from three insurance companies on several thousand randomly chosen customers, including the customers' age, gender, residential zip code, and their credit scores and/or rate classifications. The researchers contacted about 1,000 of each insurance company's customers and obtained information about their ethnicity, marital status, and income levels. The study's findings were summarized as follows: The demographic patterns discerned by the study are: Age is the most significant factor. In almost every analysis, older drivers have, on average, higher credit scores, lower credit-based rate assignments, and less likelihood of lacking a valid credit score. Income is also a significant factor. Credit scores and premium costs improve as income rises. People in the lowest income categories-- less than $20,000 per year and between $20,000 and $35,000 per year-- often experienced higher premiums and lower credit scores. More people in lower income categories also lacked sufficient credit history to have a credit score. Ethnicity was found to be significant in some cases, but because of differences among the three firms studied and the small number of ethnic minorities in the samples, the data are not broadly conclusive. In general, Asian/Pacific Islanders had credit scores more similar to whites than to other minorities. When other minority groups had significant differences from whites, the differences were in the direction of higher premiums. In the sample of cases where insurance was cancelled based on credit score, minorities who were not Asian/Pacific Islanders had greater difficulty finding replacement insurance, and were more likely to experience a lapse in insurance while they searched for a new policy. The analysis also considered gender, marital status and location, but for these factors, significant unequal effects were far less frequent. (emphasis added) The evidence appears equivocal on the question of whether credit scoring is a surrogate for income. The Washington study seems to indicate that ethnicity may be a significant factor in credit scoring, but that significant unequal effects are infrequent regarding gender and marital status. The evidence demonstrates that the use of credit scores by insurers would tend to have a negative impact on young people. Mr. Miller testified that persons between ages 25 and 30 have lower credit scores than older people. Petitioners argue that by defining "unfairly discriminatory" to mean "disproportionate effect," the Proposed Rule effectively prohibits insurers from using credit scores, if only because all the parties recognize that credit scores have a "disproportionate effect" on young people. Petitioners contend that this prohibition is in contravention of Section 626.9741(1), Florida Statutes, which states that the purpose of the statute is to "regulate and limit" the use of credit scores, not to ban them outright. Respondents counter that if the use of credit scores is "unfairly discriminatory" toward one of the listed classes of persons in contravention of Subsection 626.9741(8)(c), Florida Statutes, then the "limitation" allowed by the statute must include prohibition. This point is obviously true but sidesteps the real issues: whether the statute's undefined prohibition on "unfair discrimination" authorizes the agency to employ a "disparate impact" or "disproportionate effect" definition in the Proposed Rule, and, if so, whether the Proposed Rule sufficiently defines any of those terms to permit an insurer to comply with the rule's requirements. Proposed Florida Administrative Code Rule 69O-125.005(2) provides that the insurer bears the burden of demonstrating that its credit scoring methodology does not disproportionately affect persons based upon their race, color, religion, marital status, age, gender, income, national origin, or place of residence. Petitioners state that no insurer can demonstrate, consistent with the Proposed Rule, that its credit scoring methodology does not have a disproportionate effect on persons based upon their age. Therefore, no insurer will ever be permitted to use credit scores under the terms of the Proposed Rule. As discussed more fully in Findings of Fact 73 through 76 below, Petitioners also contend that the Proposed Rule provides no guidance as to what "disproportionate effect" and "disparate impact" mean, and that this lack of definitional guidance will permit the agency to reject any rate filing that uses credit scoring, based upon an arbitrary determination that it has a "disproportionate effect" on one of the classes named in Subsection 626.9741(8)(c), Florida Statutes. Petitioners also presented evidence that no insurer collects data on race, color, religion, or national origin from applicants or insureds. Mr. Miller testified that there is no reliable independent source for race, color, religious affiliation, or national origin data. Mr. Eagelfeld agreed that there is no independent source from which insurers can obtain credible data on race or religious affiliation. Mr. Parton testified that this lack of data can be remedied by the insurance companies commencing to request race, color, religion, and national origin information from their customers, because there is no legal impediment to their doing so. Mr. Miller testified that he would question the reliability of the method suggested by Mr. Parton because many persons will refuse to answer such sensitive questions or may not answer them correctly. Mr. Miller stated that, as an actuary, he would not certify the results of a study based on demographic data obtained in this manner and would qualify any resulting actuarial opinion due to the unreliability of the database. Petitioners also object to the vagueness of the broad categories of "race, color, religion and national origin." Mr. Miller testified that the Proposed Rule lacks "operational definitions" for those terms that would enable insurers to perform the required calculations. The Proposed Rule places the burden on the insurer to demonstrate no disproportionate effect on persons based on these categories, but offers no guidance as to how these demographic classes should be categorized by an insurer seeking to make such a demonstration. Petitioners point out that even if the insurer is able to ascertain the categories sought by the regulators, the Proposed Rule gives no guidance as to whether the "disproportionate effect" criterion mandates perfect proportionality among all races, colors, religions, and national origins, or whether some degree of difference is tolerable. Petitioners contend that this lack of guidance provides unbridled discretion to the regulator to reject any disproportionate effect study submitted by an insurer. At his deposition, Mr. Parton was asked how an insurer should break down racial classifications in order to show that there is no disproportionate effect on race. His answer was as follows: There is African-American, Cuban-American, Spanish-American, African-American, Haitian- American. Are you-- you know, whatever the make-up of your book of business is-- you're the one in control of it. You can ask these folks what their ethnic background is. At his deposition, Mr. Parton frankly admitted that he had no idea what "color" classifications an insurer should use, yet he also stated that an insurer must demonstrate no disproportionate effect on each and every listed category, including "color." At the final hearing, when asked to list the categories of "color," Mr. Parton responded, "I suppose Indian, African-American, Chinese, Japanese, all of those."12 At the final hearing, Mr. Parton was asked whether the Proposed Rule contemplates requiring insurers to demonstrate distinctions between such groups as "Latvian-Americans" and "Czech-Americans." Mr. Parton's reply was as follows: No. And I don't think it was contemplated by the Legislature. . . . The question is race by any other name, whether it be national origin, ethnicity, color, is something that they're concerned about in terms of an impact. What we would anticipate, and what we have always anticipated, is the industry would demonstrate whether or not there is an adverse effect against those folks who have traditionally in Florida been discriminated against, and that would be African-Americans and certain Hispanic groups. In our opinion, at least, if you could demonstrate that the credit scoring was not adversely impacting it, it may very well answer the questions to any other subgroup that you may want to name. At the hearing, Mr. Parton was also questioned as to distinctions between religions and testified as follows: The impact of credit scoring on religion is going to be in the area of what we call thin files, or no files. That is to say people who do not have enough credit history from which credit scores can be done, or they're going to be treated somehow differently because of that lack of history. A simple question that needs to be asked by the insurance company is: "Do you, as a result of your religious belief or whatever [sect] you are in, are you forbidden as a precept of your religious belief from engaging in the use of credit?" When cross-examined on the subject, Mr. Parton could not confidently identify any religious group that forbids the use of credit. He thought that Muslims and Quakers may be such groups. Mr. Parton concluded by stating, "I don't think it is necessary to identify those groups. The question is whether or not you have a religious group that you prescribe to that forbids it." Petitioners contend that, in addition to failing to define the statutory terms of race, color, religion, and national origin in a manner that permits insurer compliance, the Proposed Rule fails to provide an operational definition of "disproportionate effect." The following is a hypothetical question put to Mr. Parton at his deposition, and Mr. Parton's answer: Q: Let's assume that African-Americans make up 10 percent of the population. Let's just use two groups for the sake of clarity. Caucasians make up 90 percent. If the application of credit scoring in underwriting results in African-Americans paying 11 percent of the premium and Caucasians paying 89 percent of the premium, is that, in your mind, a disproportionate affect [sic]? A: It may be. I think it would give rise under this rule that perhaps there is a presumption that it is, but that presumption is not [an irrebuttable] one.[13] For instance, if you then had testimony that a 1 percent difference between the two was statistically insignificant, then I would suggest that that presumption would be overridden. This answer led to a lengthy discussion regarding a second hypothetical in which African-Americans made up 29 percent of the population, and also made up 35 percent of the lowest, or most unfavorable, tier of an insurance company's risk classifications. Mr. Parton ultimately opined that if the difference in the two numbers was found to be "statistically significant" and attributable only to the credit score, then he would conclude that the use of credit scoring unfairly discriminated against African-Americans. As to whether his answer would be the same if the hypothetical were adjusted to state that African-Americans made up 33 percent of the lowest tier, Mr. Parton responded: "That would be up to expert testimony to be provided on it. That's what trials are all about."14 Aside from expert testimony to demonstrate that the difference was "statistically insignificant," Mr. Parton could think of no way that an insurer could rebut the presumption that the difference was unfairly discriminatory under the "disproportionate effect" definition set forth in the proposed rule. He stated that, "I can't anticipate, nor does the rule propose to anticipate, doing the job of the insurer of demonstrating that its rates are not unfairly discriminatory." Mr. Parton testified that an insurer's showing that the credit score was a valid and important predictor of risk would not be sufficient to rebut the presumption of disproportionate effect. Summary Findings Credit-based insurance scoring is a valid and important predictor of risk, significantly increasing the accuracy of the risk assessment process. The evidence is still inconclusive as to why credit scoring is an effective predictor of risk, though a study co-authored by Dr. Brockett has found that basic chemical and psychobehavioral characteristics, such as a sensation-seeking personality type, are common to individuals exhibiting both higher insured automobile losses and poorer credit scores. Though the evidence was equivocal on the question of whether credit scoring is simply a surrogate for income, the evidence clearly demonstrated that the use of credit scores by insurance companies has a greater negative overall effect on young people, who tend to have lower credit scores than older people. Petitioners and Fair Isaac emphasized their contention that compliance with the Proposed Rule would be impossible, and thus the Proposed Rule in fact would operate as a prohibition on the use of credit scoring by insurance companies. At best, Petitioners demonstrated that compliance with the Proposed Rule would be impracticable at first, given the current business practices in the industry regarding the collection of customer data regarding race and religion. The evidence indicated no legal barriers to the collection of such data by the insurance companies. Questions as to the reliability of the data are speculative until a methodology for the collection of the data is devised. Subsection 626.9741(8)(c), Florida Statutes, authorizes the FSC to adopt rules that may include: Standards that ensure that rates or premiums associated with the use of a credit report or score are not unfairly discriminatory, based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence. Petitioners' contention that the statute's use of "unfairly discriminatory" contemplates nothing more than the actuarial definition of the term as employed by the Rating Law is rejected. As Respondents pointed out, Subsection 626.9741(5), Florida Statutes, provides that a rate filing using credit scores must comply with the Rating Law's requirements that the rates not be "unfairly discriminatory" in the actuarial sense. If Subsection 626.9741(8)(c), Florida Statutes, merely reiterates the actuarial requirement, then it is, in Mr. Parton's words, "a nullity."15 Thus, it is found that the Legislature contemplated some level of scrutiny beyond actuarial soundness to determine whether the use of credit scores "unfairly discriminates" in the case of the classes listed in Subsection 626.9741(8)(c), Florida Statutes. It is found that the Legislature empowered FSC to adopt rules establishing standards to ensure that an insurer's rates or premiums associated with the use of credit scores meet this added level of scrutiny. However, it must be found that the term "unfairly discriminatory" as employed in the Proposed Rule is essentially undefined. FSC has not adopted a "standard" by which insurers can measure their rates and premiums, and the statutory term "unfairly discriminatory" is thus subject to arbitrary enforcement by the regulating agency. Proposed Florida Administrative Code Rule 69O-125.005(1)(e) defines "unfairly discriminatory" in terms of adverse decisions that "disproportionately affect" persons in the classes set forth in Subsection 626.9741(8)(c), Florida Statutes, but does not define what is a "disproportionate effect." At Subsection (9)(g), the Proposed Rule requires "statistical testing" of the credit scoring model to determine whether it results in a "disproportionate impact" on the listed classes. This subsection attempts to define its terms as follows: A model that disproportionately affects any such class of persons is presumed to have a disparate impact and is presumed to be unfairly discriminatory. Thus, the Proposed Rule provides that a "disproportionate effect" equals a "disparate impact" equals "unfairly discriminatory," without defining any of these terms in such a way that an insurer could have any clear notion, prior to the regulator's pronouncement on its rate filing, whether its credit scoring methodology was in compliance with the rule. Indeed, Mr. Parton's testimony evinced a disinclination on the part of the agency to offer guidance to insurers who attempt to understand this circular definition. The tenor of his testimony indicated that the agency itself is unsure of exactly what an insurer could submit to satisfy the "disproportionate effect" test, aside from perfect proportionality, which all parties concede is not possible at least as to young people, or a showing that any lack of perfect proportionality is "statistically insignificant," whatever that means. Mr. Parton seemed to say that OIR will know a valid use of credit scoring when it sees one, though it cannot describe such a use beforehand. Mr. Eagelfeld offered what might be a workable definition of "disproportionate effect," but his definition is not incorporated into the Proposed Rule. Mr. Parton attempted to assure the Petitioners that OIR would take a reasonable view of the endless racial and ethnic categories that could be subsumed under the literal language of the Proposed Rule, but again, Mr. Parton's assurances are not part of the Proposed Rule. Mr. Parton's testimony referenced federal and state civil rights laws as the source for the term "disparate impact." Federal case law under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2, has defined a "disparate impact" claim as "one that 'involves employment practices that are facially neutral in their treatment of different groups, but that in fact fall more harshly on one group than another and cannot be justified by business necessity.'" Adams v. Florida Power Corporation, 255 F.3d 1322, 1324 n.4 (11th Cir. 2001), quoting Hazen Paper Co. v. Biggins, 507 U.S. 604, 609, 113 S. Ct. 1701, 1705, 123 L. Ed. 2d 338 (1993). The Proposed Rule does not reference this definition, nor did Mr. Parton detail how OIR proposes to apply or modify this definition in enforcing the Proposed Rule. Without further definition, all three of the terms employed in this circular definition are conclusions, not "standards" that the insurer and the regulator can agree upon at the outset of the statistical and analytical process leading to approval or rejection of the insurer's rates. Absent some definitional guidance, a conclusory term such as "disparate impact" can mean anything the regulator wishes it to mean in a specific case. The confusion is compounded by the Proposed Rule's failure to refine the broad terms "race," "color," and "religion" in a manner that would allow an insurer to prepare a meaningful rate submission utilizing credit scoring. In his testimony, Mr. Parton attempted to limit the Proposed Rule's impact to those groups "who have traditionally in Florida been discriminated against," but the actual language of the Proposed Rule makes no such distinction. Mr. Parton also attempted to limit the reach of "religion" to groups whose beliefs forbid them from engaging in the use of credit, but the language of the Proposed Rule does not support Mr. Parton's distinction.
The Issue Whether Respondent should grant Petitioner's request that he be reclassified (for retirement purposes) as "Special Risk Administrative Support," effective January 1, 1994.
Findings Of Fact Based upon the evidence adduced at hearing and the record as a whole, the following findings of fact are made: Petitioner is now, and has been since 1972, employed by Miami-Dade County's Correction and Rehabilitation Department. He began work in 1972 as a Correctional Officer. He now is the Assistant Director of General Administration. In 1993, Petitioner held the position of Assistant Director of Corrections and Rehabilitation Services (position number 4594), and was a member of the Special Risk Administrative Support Class within the Florida Retirement System (FRS). Miami-Dade County placed notices in the September 11, 1993, and September 18, 1993, editions of the Miami Herald of its intention to designate Petitioner's position (position number 4594) and others for inclusion in the Senior Management Service Class of the FRS, effective January 1, 1994. Thereafter, Beth Carlton, Miami-Dade County's Employee Benefits Coordinator, issued a two-page memorandum, dated October 13, 1993, on the subject of "[c]hange in [r]etirement [c]lass [d]esignation." The first page of the memorandum read as follows: A recent legislative change allows local government employers to designate certain positions to be included in the Senior Management Service Class (SMSC) of the Florida Retirement System (FRS). As required by statute, a notice of intent was published and the Board of County Commissioners has designated executive positions in groups 1 and 2 as positions to be included in the SMSC. Effective January 1, 1994, your position is designated as one belonging to the SMSC. Attached is a booklet from FRS explaining the SMSC. Senior Management Service Class There are essentially two differences between the Senior Management Service Class and Regular Class under FRS. Under the SMSC you are vested after you have completed 7 years of Senior Management service (or 10 years of any FRS service). You may retire without reduction in benefits due to age if you are 62 and have 7 years of Senior Management service, or 10 years of any FRS service. Each year of creditable Senior Management service earns you a 2% credit. Regular service earns 1.6% credit. Additionally, in accordance with state statutes, the Board of County Commissioners has authorized the County to upgrade to SMSC service any creditable service you may have earned in a designated Senior Management position since February 1, 1987. This means that you will receive the 2% service credit for any upgraded service. This upgrade will take place after January 1, 1994, and will apply only to those employees occupying designated Senior Management positions on January 1, 1994. Lifetime Monthly Annuity Program Employees in positions designated Senior Management may instead elect to withdraw from the Florida Retirement System altogether and participate in a lifetime monthly annuity program. The second page of the memorandum read as follows: Members of the SMSC who elect to withdraw from FRS and participate in the annuity program do not earn additional FRS credit while they are in the annuity program and are not eligible for disability benefits under FRS. Your decision to withdraw from FRS and participate in the annuity program is irrevocable as long as you remain in a Senior Management position. Should anyone occupying a position designated as Senior Management elect the Lifetime Monthly Annuity Program, the County would need to establish and fund a separate supplemental retirement program. The County would contribute 12.62% of the covered compensation of any such employee to the annuity program, and 10.45% to FRS for unfunded actuarial accrued liability (rates set by Florida legislature). For SMSC participants, the County will contribute 23.63% of covered compensation. The annuity program does not guarantee any benefits payable on retirement, but merely guarantees the amount of contributions and actual investment earnings. The health insurance subsidy is not paid for service under the annuity program. Next Steps You will receive an election form from FRS. Forms are still being developed and are not currently available for distribution. On the election form you will elect either to remain in SMSC or to withdraw from FRS. We are automatically preparing paperwork for FRS to upgrade all eligible prior service to SMSC and will notify you of the dates of service that we are requesting to upgrade. FRS will not process any upgrades until after January 1, 1994. Upgrades for those Senior Management employees who are planning to retire early in 1994 will be handled first. If you are planning to retire before June of 1994, please notify us immediately. Once the upgrades are complete, you will be informed of your years of creditable Regular service and SMSC service according to FRS records. Petitioner received a copy of the first page of the memorandum; however, he received neither a copy of the second page of the memorandum, nor a copy of the "booklet from FRS" referenced on the first page of the memorandum (FRS Booklet), which explained, among other things, that, in lieu of participating in the Senior Management Service Class, those in the Special Risk or Special Risk Administrative Support Classes had the option of remaining in these classes. For purposes of benefits and compensation, executive positions in Miami-Dade County government are placed in one of three "Executive Benefit Groups" (Groups 1, 2, and 3). At the time of the issuance of Ms. Carlton's October 13, 1993, memorandum, Petitioner occupied a position (position 4594) in Executive Benefit Group 2. (Earlier, in December of 1991, when his position was reclassified to Assistant Director of Corrections and Rehabilitation Services, a Personnel Change Document was filled out which recommended that his position be included in Executive Benefit Group 3 instead of Executive Benefit Group 2. This recommendation, however, was not acted upon.) The benefits and compensation package received by Petitioner and the other executives in Executive Benefit Group 2 was more generous than those received by executives in Executive Benefit Group 3 and less generous than those received by executives in Executive Benefit Group 1. In January of 1994, Andrea Romisher, Miami-Dade County's Employee Benefits Manager, issued a memorandum, dated January 11, 1994, addressed to "Group 1 and Group 2 Executives," on the subject of "[e]nrollment in the Senior Management Class of the FRS." The memorandum read as follows: You received a memorandum in October which detailed the expansion of the Senior Management Class of the Florida Retirement System as of January 1, 1994. We have received the necessary forms from the Division of Retirement and are in the process of formally designating executive positions in groups 1 and 2. However, prior to our changing your retirement class, you must complete the enclosed FRS M-10. To enroll in the Senior Management Service Class: Complete the top of the form; Attach a copy of your Social Security card on the form; Designate a beneficiary by choosing either section 1, 2, or 3 under the designation of beneficiaries section; Sign and date the form. Return the form to the Office of Labor Management and Employee Benefits, 111 N.W. 1st Street, Suite 2140 no later than January 21, 1994. Please direct the form to me or Beth Carlton. The prior memorandum also explained the provision whereby members of the SMSC may irrevocably elect to withdraw from the Florida Retirement System and participate in an optional annuity program. We have contacted one of our providers and anticipate having the optional annuity program available in the near future. We have been instructed by the Division of Retirement to enroll all eligible executives in the SMSC in the interim. If you are interested in participating in the optional annuity program, please advise either me or Beth Carlton so that we may send you an election form and details of the plan when it has been finalized. Additionally, you may elect to irrevocably withdraw from the Florida Retirement System and participate in the optional annuity program at any time you occupy a position which is covered by the SMSC. If you have any questions, please call us at 375-5633. Petitioner received a copy of the foregoing memorandum. After reading the memorandum, Petitioner was of the view that remaining in the Special Risk Administrative Support Class was not an option available to him. He believed that his only alternatives were to be in the Senior Management Service Class, or "to withdraw from the Florida Retirement System altogether and participate in a lifetime monthly annuity program." On February 4, 1994, Petitioner signed and dated the following Ballot/Enrollment Form for Local Agency Employees (Division Form SMS-3) with which he had been provided: TO BE COMPLETED BY MEMBER: Name Social Security Number Position Title Position Number DATE YOU BEGAN EMPLOYMENT IN CURRENT SMSC POSITION: I understand that I am in a position designated to the Senior Management Service Class (SMSC) or either I am a compulsory member of the SMSC as provided in Section 121.055(1)(b), Florida Statutes. I also understand that in lieu of participation in the SMSC, I may now or at a later date withdraw from the Florida Retirement System (FRS) and participate in a lifetime monthly annuity program which may be provided by my employer. I hereby select the following: I elect to remain in the Florida Retirement System's SMSC, or I elect to withdraw from the FRS and participate in a lifetime monthly annuity program. I understand that my decision to withdraw from the FRS is irrevocable for as long as I hold a position eligible for the membership in the SMSC. I also understand information concerning the annuity program will need to be obtained through my employer. Member's Signature Date TO BE COMPLETED BY EMPLOYER: I certify that the above member's payroll records have been changed effective to reflect the above member's choice of membership. Signature of Personnel Officer Date Name of Employing Agency Reporting Unit Number Inasmuch as he "did not want to leave FRS," Petitioner indicated on the form that he "elect[ed] to remain in the Florida Retirement System's SMSC." Had Petitioner known that he had the option of staying in the Special Risk Administrative Support Class, he would have elected this option instead of the one that he selected. The Miami-Dade County "Personnel Officer" who completed the bottom portion of the form indicated thereon that Petitioner's "pay roll records ha[d] been changed effective 1/1/94 to reflect [Petitioner's] choice of membership." The completed Division Form SMS-3 was sent to the Division of Retirement (Division). The Division also received a form completed by Miami- Dade County which reflected that Miami-Dade County had "published notice of [its] intent to include [Petitioner's position, among others] in the SMSC [Senior Management Service Class] in the Miami Herald on 9/11/93 and 9/18/93," and that the position had been so designated for inclusion in the SMSC in accordance with the requirements of Section 121.055(3) and (7), Florida Statutes. In 1997, after learning that he had to wait another five years to retire with full benefits because of his having been "place[d] . . . in the Senior Management Service Class" in 1994, Petitioner, by memorandum dated December 26, 1997, formally requested Miami-Dade County's Employee Benefits Supervisor, Daniel Gonzales, to "take the appropriate action to accomplish [his] conversion to the [S]pecial [R]isk [A]dministrative [S]upport [Class] for the period [he has been] included in [the] SMSC." Petitioner received the following written response to his request: This memo is in response to your request to change your retirement class from the Senior Management Service Class (SMSC) to the Special Risk Administrative Support Class. In February 1994, Metro Dade designated your position to be included in the Senior Management Service Class. Simultaneously, you completed a FRS-M10 Form [Designation of Beneficiaries form] and Form SMS-3 thereby enrolling in the SMSC. This election enabled you to receive an increase in your annual retirement percentage from 1.6% for Special Risk Administrative Support Class to 2.0% for the Senior Management Service Class. Since 1994, the Employee Benefits Office has been working with the Florida Retirement System (FRS) to upgrade the service time of all executives serving in a position designated as Executive Benefits Level 2 or higher. Based on the elections you made in February 1994, the effective date of your SMSC service is January 1994. On July 3, 1997, you requested that your service from January 1987 through December 1993, not be upgraded until you received a decision from the FRS regarding your Special Risk Service Class. Although you received a determination on the Special Risk Service Class, your memo dated December 26, 1997, indicated that there are still some pending issues with the FRS. Therefore, we will continue to honor your request until all your issues with the FRS are resolved. In regards to changing your retirement class to Special Risk Administrative Support, we are unable to process your request. As specified in the Florida Retirement System Rules Chapter 60S-1.0057(2)(a), a member may elect to remain in the Special Risk Class in lieu of participating in SMSC, however such election must be made in writing and filed with the employer and the Division within 90 days after employment begins in a Senior Management Service Class position. By completing the SMSC enrollment paperwork, you made a decision to join the Senior Management Class. A copy of the Florida Retirement System Rules Chapter 60S-1.0057 has been attached for your review. Further questions on this issue should be directed to Mr. David Ragsdale, Division of Retirement, Bureau of Enrollment and Contributions, 2639-C, North Monroe Street, Tallahassee, Florida, 32399- 1560. Petitioner subsequently requested the Division to change his classification. By letter dated July 31, 1998, which provided in pertinent part as follows, the State Retirement Director notified Petitioner that a final decision had been made that his request could not be granted: This is in response to your June 8, 1998 letter requesting the Division of Retirement reconsider its decision to reclassify your service from the Senior Management Service Class (SMSC) to the Special Risk Administrative Support Class (SRASC). By letter dated April 23 (copy enclosed), we advised you of our determination that there is no provision in the FRS law that would allow the Division to honor your request for reclassification. Enclosed is a copy of Section 60S- 1.0057(2)(a)1., F.A.C. Based on the information provided, it appears you failed to elect to remain in the Special Risk Administrative Support Class within the 90 day period as provided in the law. You indicated an election to remain in the SMSC when you executed a Ballot/Enrollment FORM SMS-3, dated February 4, 1994 (copy enclosed), and are consequently a compulsory member of the SMSC. Therefore, the ruling is now final, and if you do not agree with the decision, you are entitled to an Administrative Hearing.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division issue a final order granting Petitioner the equitable relief described above. DONE AND ORDERED this 9th day of March, 1999, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 9th day of March, 1999.
The Issue The issue is whether Petitioner is eligible to take the Principles and Practices Examination for licensure as a professional engineer.
Findings Of Fact In 1994, Petitioner passed the Secondary School Certificate Examination (a ten-year academic course) in India. Petitioner passed this high school course of study with classes in the core subjects of English, Sanskrit, Hindi, Mathematics, Science, and Social Sciences. In 1996, Petitioner passed the Higher Secondary School Certificate Examination in India. For this two-year high school course of study, Petitioner completed classes in English, Mathematics and Statistics, Physics, Chemistry, and Comprehensive Science. Petitioner completed his undergraduate degree in December 2001. He graduated from the Sardar Patel College of Engineering (SPCE), an affiliate of the University of Mumbai in Mumbai, India, with a Bachelor of Engineering Degree (Civil). The SPCE is accredited by the National Board of Accreditation of the All India Council for Technical Education (NBA-AICTE). At the time of Petitioner's graduation, the SPCE was not accredited by the Engineering Accreditation Commission of the Accreditation Board for Engineering and Technology, Inc. (ABET). For 75 years, ABET has accredited college and university programs in the United States in the following areas: (a) applied science; (b) computing; (c) engineering; and (d) technology. It is a federation of 28 professional and technical societies representing these fields. ABET accredits approximately 2,700 programs at over 550 colleges and universities nationwide. In April 2003, Petitioner passed the Engineer Intern Examination. Petitioner passed this eight-hour written examination in Ohio. In May 2003, Petitioner earned a Master of Science in Civil Engineering at the University of Toledo, Toledo, Ohio. Petitioner worked for a design engineer located in Vicksburg, Mississippi, from July 2003 to April 2004. Since May 2004, Petitioner has worked for an engineering firm located in Jacksonville, Florida. The Washington Accord, signed in 1989, is an international agreement among bodies responsible for accrediting engineering degree programs. It recognizes the substantial equivalency of programs accredited by signatories and recommends that graduates of programs accredited by any signatory be recognized by the other signatories as having met the academic requirements for entry to the practice of engineering. ABET, as a signatory of the Washington Accord, recognizes the substantial equivalency of foreign academic programs accredited by other signatory members; it does not accredit them. Further, ABET only recommends that graduates of programs from the signatories be recognized as substantially equivalent. Respondent does not follow the recommendations of ABET regarding the substantial equivalency of foreign academic programs in part because ABET and the other signatories of the Washington Accord recognize engineering technology degrees. Respondent has statutory authority to recognize engineering technology degrees only if the applicant was enrolled in a state university system prior to July 1, 1979. See § 471.013(1)(a)2., Fla. Stat. In 2007, the Washington Accord members granted provisional membership status to the NBA-AICTE. As a provisional member, the NBA-AICTE must demonstrate that the accreditation system for which it has responsibility, appears to be conceptually similar to those of the other signatories of the Washington Accord. By conferring provisional status, the signatories have indicated that they consider the provisional signatory to have the potential capability to reach full signatory status; however, the awarding of provisional status does not in any way imply a guarantee of the granting of full signatory status. April 2007, Petitioner applied to take the Principles and Practices Examination for licensure as a professional engineer. He specifically sought to be recognized as a civil engineer with proficiency in water resources. In order to show substantial equivalency pursuant to Florida Administrative Code Rule 61G15-20.007(1), Petitioner had his engineering degree from SPCE evaluated by Joseph Silny and Associates, Inc. (Silny). Respondent has approved Silny to conduct the substantial equivalency evaluations required by Florida Administrative Code Rule 61G15-20.007(3). Silny's evaluation showed that Petitioner's degree from SPCE lacked 13.59 semester credit hours of math and basic sciences, and 16 semester credit hours of humanities and social sciences. Silny concluded that Petitioner’s SPCE degree failed to meet the substantial equivalency requirements rule requirements. Petitioner submitted his transcript from the University of Toledo to Respondent for further evaluation. After reviewing the transcript, Respondent gave Petitioner credit for coursework in Numerical Analysis I and Numerical Analysis II, totaling six semester credit hours toward the math and basic science requirements. The credit reduced Petitioner's academic deficiency to 7.59 semester credit hours in math and basic science. During the hearing, Petitioner submitted transcripts and his secondary school certificates as evidence of coursework prior to his Bachelor of Science degree at SPCE. This coursework is not acceptable to meet the substantial equivalency rule requirements because they are college preparatory classes taken in high school for which Petitioner received no college credit. Many of Petitioner's high school courses cover subjects also taken in his undergraduate program, such as physics, chemistry, math, and statistics. Petitioner has already received credit for these courses that cannot be counted twice.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent enters a final order denying Petitioner's application to take the second part of the professional engineer examination. DONE AND ENTERED this 14th day of April, 2008, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD 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 14th day of April, 2008. COPIES FURNISHED: Rahul Parab 496 Monet Avenue Ponte Vedra, Florida 32081 Michael T. Flury, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Nancy S. Terrel, Hearing Officer Office of the General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Paul J. Martin, Executive Director Patrick Creehan, Esquire Board of Professional Engineers Department of Business and Professional Regulation 2507 Callaway Road, Suite 200 Tallahassee, Florida 32303-5267 Ned Luczynski, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Respondent holds Florida teaching certificate number 339068, covering the area of elementary education which is valid through June 30, 1993. The Respondent was employed as a teacher by the Broward County School Board through January 1983. In June 1981, the Respondent misrepresented her credit and bankruptcy history, and submitted an erroneous Social Security number and birth date to the Broward Schools Credit Union. After obtaining an account under false pretenses, the Respondent made application and received loans from the Credit Union. The Respondent also applied for and received a Master Card credit card from the Credit Union. The Respondent failed to make adequate payments on these obligations. On February 1, 1983, a default final judgement was entered against the Respondent in the amount of $12,274.22 in the Broward County Circuit Court. The judgment resulted from her failure to honor the obligations of two promissory notes and a Master Card Agreement between the Respondent and the Credit Union. On June 27, 1983, a final judgment as to unliquidated damages was entered against the Respondent in Broward County Circuit Court. The Court found that the Respondent intentionally misrepresented her credit status and other information to the Credit Union for the purposes of obtaining credit. The Court held: The facts and circumstances reflect consistency in a scheme or artifice on the part of the defendant to prepare and publish to Plaintiff materially false written statements as to her creditworthiness with wrongful intent and for purposes of misleading Plaintiff Credit Union in the extension of monies and credit. Such actions were willful, wanton, and do outrage this Court by the clear reflection of an obvious disregard for any intent to repay the indebtedness reflected under the various credit transactions herein with Plaintiff Credit Union. A punitive judgment award of $100,000 was entered against the Respondent. On September 30, 1987, the Petitioner filed an Administrative Complaint against the Respondent. The complaint charged that the Respondent fraudulently obtained membership with the Broward Schools Credit Union and submitted false statements in order to obtain credit. The complaint further alleged that the Respondent issued a worthless check to a merchant. The September 1987 Administrative Complaint further alleged that the Respondent's conduct violated Section 231.28, Florida Statutes, and Rule 6B-1.006, F.A.C., in that she had been guilty of an act of moral turpitude; had been involved in conduct which seriously reduced her effectiveness as an employee of the school board; had failed to achieve the highest degree of ethical conduct; and had failed to maintain honesty in all professional dealings. The Respondent received the complaint, but failed to file an Election of Rights form. The EPC declared the Respondent to be in default and heard the case on August 25, 1988. The EPC's Final Order of September 4, 1988, adopted the findings of fact and conclusions of law set forth in the complaint. The EPC revoked the Respondent's teaching certificate for one year and further ordered that the Respondent be placed on two years probation. The terms of probation required that the Respondent submit quarterly reports of her teaching performance, and that she make restitution to the Broward Schools Credit Union. The Respondent subsequently filed a Motion to Vacate and set aside the Final Order, claiming that she did not receive the Administrative Complaint. The EPC denied the Respondent's Motion to Set Aside. In its February 11, 1988 order, the EPC found that the Respondent had received the complaint as evidenced by her signature on the certified mail receipt. The Education Practices Commission is authorized by law to take disciplinary action against a teaching certificate. The EPC is further authorized to impose probation upon a certificate holder and may report an individual for a violation of the Florida Administrative Code for failure to comply with probation. Karen Wilde is the Executive Director of the Education Practices Commission. As part of her duties she administers the probationary terms imposed upon educators by the EPC. In her position as administrator of the EPC, Dr. Wilde stated that the EPC's order required full restitution of the debt owed to the credit union within the period of probation. Following the period of revocation, the Respondent became employed at Rochelle Elementary School in the Polk County School District in September 1989. By letters dated November 1, 1989 and February 28, 1990, Dr. Wilde advised the Respondent that her probationary period would begin upon her employment date of September 12, 1989 and continue through September 12, 1991. The letters further informed the Respondent that her conditions of probation required her to submit reports of her teaching performance, and make full restitution to the Broward Schools Credit Union. The Respondent initially failed to submit her performance reports as required. The EPC reported the Respondent to Professional Practices Services for investigation of her noncompliance. The Respondent subsequently complied with EPC's request and submitted her performance reports. On April 17, 1991, Respondent was notified that she must submit written verification of restitution to the Broward Schools Credit Union. The letter informed the Respondent that her probation could not be terminated until all of the requirement of the probation had been satisfied. On September 20, 1991, the Respondent was again notified that her probation requirements would not be completed until the Respondent submitted written verification of her full restitution to the Credit Union, and that failure to submit proof of restitution by October 12, 1991, would result in a report of her noncompliance being submitted to the Professional Practices Services. The Respondent failed to submit any proof of restitution to the EPC by October 12, 1991. As of this date, Respondent has not submitted any evidence of her complete or partial payment of the obligation. Between 1985 and 1991, the Respondent had no contact with the Credit Union nor did she attempt to make payments on the final judgment. The Credit Union refused to accept Respondent's offer of payments which was made in 1991, because of the amount of the judgment. The Respondent and the Credit Union eventually agreed to a payment plan. The Respondent made a down payment of $200.00 on December 10, 1991, and agreed to make monthly payments of $125.00. Since then, the Respondent has made payments of $125.00 in January, March, April, July, August, November, and December of 1992. As of January 12, 1993, the Respondent has paid approximately $1,000 toward the $12,000 compensatory damage portion of the judgment.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent, Janice Anderson, be found guilty of violating Section 231.28(1)(h), Florida Statutes, and Rules 6B-1.006(5)(o), F.A.C. It is further, RECOMMENDED that the Education Practices Commission revoke the Respondent's teaching certificate for two (2) years. If at the end of the two year period the Respondent has made complete restitution of the compensatory damages portion of the final judgment to the Credit Union, she shall be eligible to reapply for certification. If the Respondent has not made complete restitution to the Credit Union, the period of revocation shall remain in effect until the restitution is complete. It is further, RECOMMENDED that if and when recertified, the Respondent shall be placed on ten (10) years probation with the EPC under such terms as the Education Practices Commission deems appropriate. DONE and ENTERED this 25th day of February, 1993, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 1993.
Findings Of Fact C. T. "Pete" Knowles, III, was ,a student in Western Civilization, HY102, at Seminole Community College. This course was instructed by Leonard Zilles. Zilles established a grading format for HY102 which was announced orally to the class. The establishment of this system and its oral publication to the students was within his discretion under the college's policy handbook, although instructors are encouraged to publish course requirements in writing. The course, HY102, was an eight (8) week summer course presented in four, two week segments. There were four noncumulative examinations, one after each two week segment. Each examination consisted of two parts, a multiple choice portion and an essay portion. A total of six course points could be earned on each examination, two points maximum for the multiple choice portion and four points for the essay portion. One course point was earned for obtaining a numerical score between sixty and eighty-three on the multiple choice portion, or the equivalent of a letter grade of "D". Two points were earned for a numerical score of eighty-four points or higher on the multiple choice portion of the examination, or the equivalent grade of "C". No student could earn more than two points, or a "C", on the multiple choice portion of the examination. Letter grades were assigned to the essay portion of the examinations and three course points were earned for a "B" and four course points for an "A". No credit was received by the student on the essay portion of the examination for performance determined by the instructor to be below a grade of "B". A student who received less than a numerical grade of sixty on the multiple choice portion of the examination could still be awarded points for his performance on the essay portion. Final grades for the course were determined upon the accumulation of course points by a student. For the accumulation of four points a student received a grade of "D" in the course, for eight points a grade of "C," for sixteen points a grade of "B," and for twenty points a grade of "A." Attendance in the course was not mandatory and no statement was made regarding whether examinations were mandatory. Paul Jenkins, the only student in this course who made an "A," stated that a discussion was held during a class break immediately preceding the fourth examination in the course concerning whether students could skip the last examination and based their final grade upon the number of course points they had accumulated. This question was not raised in class and the matter clarified. There is no indication that Knowles was a party to this discussion; however, both Knowles and Frederick Norris testified that Zilles never stated that taking all examinations was a course requirement. Knowles arranged with his Health instructor, John Panatallis, to take his final examination in Health early so that Knowles could begin his vacation with his family. Panatallis inquired of Knowles when he came to take the Health examination how Knowles stood in Zilles' class, and Knowles advised Panatallis that he had enough points to ensure a "C." Pantallis stated that he did not require attendance at examinations but averaged a zero for a missed examination in his grading system. Knowles was aware that he had accumulated eight points on the basis of a discussion with Zilles one week before the fourth examination, at which time Zilles told Knowles that he had made a "B" on the essay portion of the third examination giving Knowles a total of eight points for the course. Knowles did not take the fourth examination because he did not believe that the examination was mandatory and in accordance with the professor's grading process, Knowles could not improve his course grade even if he earned a maximum of six course points. Zilles gave Knowles an "F" based upon Knowles' failure, in Zilles' opinion, to complete the course by taking the fourth examination. The director of academic affairs, Dr. Anita Harrow, stated that the college's handbook required that instructors be responsible for identifying course objectives and for making grading procedures clear to students. Instructors were urged, but not required, to present course objectives and grading procedures to the students in writing. In accordance with the college's policy, instructors were free to choose from any recognized standard of evaluation in grading the performance of their students, and attendance at examinations was not a uniform requirement for course completion. In response to a hypothetical question based upon the facts presented regarding the grading procedures and the information presented to the students in HY102 by Mr. Zilles, Dr. Harrow stated that in her opinion she would deem the course grade to be based upon the points accumulated by the students without regard to completion of all the examinations in the course. Mr. Zilles' grade sheet for the course, HY102, was introduced as Exhibit 1. Examination of this exhibit reveals that of the eleven students who finished the course and took the fourth examination, only four students received grades in accordance with the grading format which Zilles had announced. Grades of "B" were reported for Laplant and McDonald who had accumulated only eleven points. Rios accumulated a total of ten points, four of which were earned on the fourth examination, but received a grade of "D." Only two students, Bland and Laplant who could not improve their grades by taking the fourth examination took it. Lastly and most importantly, Pagan, who received no credit for the final examination, received a grade of "D" in the course based upon his accumulation of five course points for his previous work. Analysis of Exhibit 1 shows no consistency in the assignment of grades based upon the stated criteria.
Recommendation During the hearing process Mr. Knowles made the counsel for the College and the Hearing Officer aware of the fact that a determination on his petition was necessary for his continued enrollment in junior college. Mr. Milwee, the representative of the College, advised that if the Trustees of the College did not obtain a recommendation in time to consider it on the evening of the hearing, that it would be a month before the recommendation of the Hearing Officer could be considered. After the conclusion of the hearing, a posthearing conference was held in which the parties, having been advised of their procedural rights under Section 120.57, requested and agreed to the Hearing Officer making an oral recommendation for consideration by the Trustees to be followed by a formal written recommended order as required by the statute. After deliberation, the Hearing Officer's recommendation was announced to the parties. This written order is based upon the notes prepared by the Hearing Officer during his deliberations on the question. The following recommendation is essentially that presented to the parties in the posthearing conference. Based upon the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that Seminole Community College adjust the grade received by C. T. "Pete" Knowles in Western Civilization, HY102, from a "F" to a "C" based upon the course points accumulated by Knowles through the third examination. DONE and ORDERED this 13th of January, 1978, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: C. T. "Pete" Knowles 712 Eagle Avenue Longwood, Florida 32750 O. H. Eaton, Esquire Winter Park Federal Building 355 East Semonian Boulevard Altamonte Springs, Florida 32701
The Issue Whether Petitioner is entitled to be licensed by endorsement as a professional engineer in the State of Florida, pursuant to Section 471.015, Florida Statutes (1989).
Findings Of Fact Petitioner Gerardo A. Marquez is an applicant for licensure by endorsement as a professional engineer. By letter dated May 30, 1990, Petitioner was informed by the Board that his education did not meet the criteria for licensure by examination under Section 471.013(1)(a)1, Florida Statutes, because the engineering program he completed was not accredited by the Accrediation Board for Engineering and Technology (ABET). Petitioner is a graduate of the Polytechnic University of Puerto Rico, with a degree in civil engineering. This program is not accredited by ABET. Section 471.013(1)(a)2, Florida Statutes, provides that graduates of an approved engineering technology curriculum of four years or more in a school, college or university within the state university system, having been enrolled or having graduated prior to July 1, 1979, shall be entitled to take an examination to determine if he is qualified to practice as an engineer. Petitioner does not qualify pursuant to this provision. Petitioner was enrolled for one semester in 1977 at the University of Puerto Rico in the engineering program. This first semester consisted of basic general studies such as humanities, English, biology and math. Petitioner resumed his college education in the summer of 1980 at the Polytechnic University of Puerto Rico. Petitioner testified that the criteria for licensure in Puerto Rico was "substantially identical" to the criteria in Florida at the time of his licensure since Puerto Rico requires that the University granting the degree be approved by the Middle States Association of Colleges as well as the Commission of Higher Education of Puerto Rico. ABET is the sole agency in the United States to accredit engineering programs. ABET does not accredit schools, but only specific programs. Since 1981 when Chapter 471 underwent sunset review, Florida has required an ABET approved degree, and the Board has considered that any state that has the same experience and examination requirements as Florida, but does not require an ABET approved engineering degree, is not substantially equivalent to Florida under the statute.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that a Final Order be entered denying Petitioner's application for licensure by endorsement under Section 471.015, Florida Statutes. RECOMMENDED this 14th day of January, 1991, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-5778 The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner did not file proposed findings of fact. Respondent's proposed findings of fact. Accepted in substance: paragraphs 1 - 8. COPIES FURNISHED: Edwin A. Bayo, Esquire Assistant Attorney General Suite LL04, The Capitol Tallahassee, FL 32399-1050 Gerardo A. Marquez Reef Tower Apartment 16B Isla Verde, Puerto Rico 00913 Rex Smith Board of Professional Engineers Northwood Centre 1940 North Monroe Street Suite 60 Tallahassee, FL 32399-0792 Kenneth Easley General Counsel Northwood Centre 1940 North Monroe Street Suite 60 Tallahassee, FL 32399-0792
