Findings Of Fact For Petitioner: Robert C. Byerts, Esquire Office of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 For Respondent: Michael S. Moreland, Esquire Post Office Box 1992 Fort Myers, Florida 33902 STATEMENT OF THE ISSUES Whether the Respondent committed the alleged multiple violations of Chapter 626, Florida Statutes, as set forth in the Administrative Complaint.
Recommendation Based upon the foregoing, it is RECOMMENDED: That Virginia Louise Williamson be found guilty of nine violations of Section 626.611(9), Florida Statutes, and nine violations of Section 626.21, Florida Statutes, as alleged in the Administrative Complaint. That Respondent's licenses as General Lines Insurance Agent, Life Insurance Agent, and Health Insurance Agent and eligibility for licensure be suspended for a period of one year. DONE and ENTERED this 24th day of July, 1989, in Tallahassee, Leon County, Florida. VERONICA D. DONNELLY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of July, 1989. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-4553 Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO #2. Accepted. See HO #2. Accepted. See HO #3. Accepted. See HO #5. Accepted. Accepted. See HO #17. Accepted. See HO #3 and #18. Accepted. See HO #12 and #13. Accepted. See HO #15. Accepted. See HO #14. Accepted. See HO #8. Accepted. See HO #4. Accepted. See HO #7 Accepted. See HO #6. Accepted. See HO #9. Accepted. See HO #10. Rejected. Improper Summary. Respondent's proposed findings of fact are addressed as follows: Accepted. See HO #2. Accepted. See HO #3. Rejected. See HO #3. (Respondent's answer and prehearing statement.) Rejected. Conclusion of Law. Accepted. See HO #4. Accepted. Accepted. See HO #4. 8.-10. Accepted. Rejected. See HO #5. Rejected. Conclusion of Law. Contrary to existing law. See White v. Allstate Insurance Company, 530 So.2d 967 (Fla. 1st DCA 1988). 13.-16. Accepted. 17.-28. Accepted. See HO #6. 29.-34. Accepted. See HO #7. 35.-36. Rejected. Contrary to fact. See HO #7. 37. - 43. Accepted. See HO #8. 44. Rejected. See HO #8. 45-50. Accepted. See HO #9. 51.-52. Accepted. 53.-64. Accepted. See HO #10 and #11. 65.-76. Accepted. See HO #12 and #13. 77.-83. Accepted. See HO #14. 84.-91. Accepted. See HO #15. COPIES FURNISHED: Robert C. Byerts, Esquire Office of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 Michael S. Moreland, Esquire Post Office Box 1992 Fort Myers, Florida 33992 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol Tallahassee, Florida 32399-0300 Don Dowdell, Esquire General Counsel Department of Insurance The Capitol Tallahassee, Florida 32399-0300
Findings Of Fact At all times pertinent to this proceeding, Respondent was licensed in this state by the Petitioner as an insurance agent. Respondent was licensed, pursuant to the Florida Insurance Code (Chapter 626, Florida Statutes) as a general lines agent, a health insurance agent, and a residential property and casualty joint underwriting association representative. In February 1990, Maria del Carmen Comas, who was subsequently known as Maria del Carmen Diaz (hereinafter referred to as Maria Diaz), was licensed by Petitioner as an insurance agent. By Final Order entered September 20, 1994, the licensure of Ms. Diaz was revoked by the Petitioner. At all times pertinent to this proceeding, Respondent and Ms. Diaz maintained a close personal and professional relationship. On October 12, 1990, an entity known as The First Assurance, Inc., (hereinafter referred to as FIRST) was incorporated under the laws of the State of Florida. At all times pertinent to this proceeding, Respondent was the president and sole officer of FIRST, which is a Florida incorporated general lines insurance agency. FIRST operated out of offices located at 10680 Coral Way, Miami, Florida (hereinafter referred to as the Coral Way location) until June 1994, when Respondent moved the office of FIRST to 8780 Sunset Drive, Miami, Florida. On September 21, 1993, an entity known as The First Assurance of Miami, Inc., (hereinafter referred to as FIRST OF MIAMI) was incorporated under the laws of the State of Florida by Respondent and Maria Diaz. At all times pertinent to this proceeding, Respondent was the president and sole officer of FIRST OF MIAMI, a Florida incorporated general lines insurance agency doing business at 8780 Sunset Drive, Miami, Florida (hereinafter referred to as the Sunset Drive location). Respondent and Ms. Diaz were equal owners of FIRST OF MIAMI until that corporation ceased its operation in February 1995. On August 26, 1994, an entity known as Marlin Insurance Agency, Inc., (hereinafter referred to as MARLIN) was incorporated under the laws of the State of Florida. Respondent was the sole incorporator of MARLIN. At all times pertinent to this proceeding, Respondent was the president and sole officer of MARLIN, a Florida incorporated general lines insurance agency doing business at the Sunset Drive location where Respondent operated FIRST and FIRST OF MIAMI. MARLIN was originally incorporated for the purpose of purchasing the business of Rodal Insurance Agency in Hialeah, Florida. After the purchase of Rodal was rescinded by court order, MARLIN remained dormant until February 1995, when MARLIN began operating as a general lines insurance agency at the Sunset Drive location. At all times pertinent to this proceeding, Respondent was the supervising agent of MARLIN. As long as FIRST and FIRST OF MIAMI maintained separate offices, Respondent managed the day to day affairs of FIRST and Ms. Diaz managed the day to day affairs of FIRST OF MIAMI. After FIRST moved its offices into those of FIRST OF MIAMI, the separation of management became less distinct. At all times pertinent to this proceeding, Carlos Gonzalez was an employee of FIRST or of FIRST OF MIAMI. Mr. Gonzalez was hired and trained by Respondent and worked under his direct supervision. At no time pertinent to this proceeding did Mr. Gonzalez hold any license or appointment under the Florida Insurance Code. At all times pertinent to this proceeding, Alvaro Alcivar was an employee of FIRST OF MIAMI or of MARLIN. Mr. Alcivar acted under the supervision of either Maria Diaz or of Respondent. At no time pertinent to this proceeding did Mr. Alcivar hold any license or appointment under the Florida Insurance Code. At all times pertinent to this proceeding, Respondent had sole signatory authority of the FIRST's account number Number33080870-10 (the FIRST expense account) and of FIRST's account Number0303043975-10, both maintained at Ready State Bank in Hialeah, Florida. At all times pertinent to this proceeding, Respondent had joint signatory authority with Maria Diaz of the FIRST's account number Number33095150-10 maintained at Ready State Bank in Hialeah, Florida. At all times pertinent to this proceeding, Respondent had joint signatory authority with Maria Diaz of the FIRST OF MIAMI's account number Number33095630-10 maintained at Ready State Bank in Hialeah, Florida. At all times pertinent to this proceeding, Respondent had sole signatory authority of the FIRST OF MIAMI's account number Number0303116492-10 maintained at Ready State Bank in Hialeah, Florida. All premiums, return premiums and other funds belonging to insureds, insurers, and others received in transactions under his license were and remain trust funds held by Respondent in a fiduciary capacity. Respondent obtained a power of attorney from his customers as a routine business practice. Respondent has repeatedly issued checks in payment of fiduciary funds that have subsequently been dishonored by the bank because the account on which the checks were drawn had insufficient funds. ARCAMONTE TRANSACTION (COUNT ONE) On or about July 14, 1993, Susan Arcamonte of Miami, Florida, purchased a new car. Susan Arcamonte needed insurance for this automobile and discussed that need with Carlos Gonzalez, who was employed by FIRST. As a result of her discussions with Mr. Gonzalez, Ms. Arcamonte agreed to purchase a policy of insurance that would be issued by Eagle Insurance Company. The annual premium quoted by Mr. Gonzalez for this policy totaled $1,618.00. Mr. Gonzalez advised her that there would be additional charges if the premium was paid by a premium finance company. Because she did not have the funds to pay the lump sum annual premium and did not want to finance the premium, she had her parents, Edmond and Nancy Arcamonte, pay the annual premium. As instructed by Carlos Gonzalez, this check was in the amount of $1,618.00 and was made payable to "The First Assurance, Inc." This check was in full payment of the annual premium for the automobile insurance policy that was to be issued by Eagle Insurance Company. After receiving the check from Mr. and Mrs. Arcamonte, Mr. Gonzalez issued to Susan Arcamonte an insurance card containing the name "The First Assurance, Inc." and binder numbers 12873 and 931374 written across the top. Mr. Gonzalez represented to Ms. Arcamonte that this was a binder of the coverage they had discussed. Mr. Gonzalez thereafter delivered the check and the completed application for insurance to FIRST. Respondent reviewed the application for insurance and signed the application. The Arcamontes' check was thereafter deposited by Respondent into the FIRST expense account at Ready State Bank, Hialeah, Florida. In July 1993, Respondent or some person in his employ at FIRST and acting with his knowledge under his direct supervision and control, affixed the signature of Susan Arcamonte to a Century Premium Insurance Finance Co., Inc. (Century PFC) premium finance agreement and, in the space provided for her address, filled in the office address of FIRST. Ms. Arcamonte's signature was affixed to this agreement without her knowledge or consent. Respondent personally signed the premium fiance agreement that was sent to Century PFC. Because the address of FIRST was inserted on the premium finance agreement, Ms. Arcamonte did not receive payment coupons, cancellation notices, and other correspondence from Century PFC. Consequently, the existence of the premium finance agreement was concealed from Ms. Arcamonte. The original application for insurance signed by Susan Arcamonte contained a power of attorney purporting to grant Respondent the authority to sign Ms. Arcamonte's name to "applications or similar papers including premium finance contracts". There was no disclosure that the signature on the premium finance agreement was not that of Ms. Arcamonte or that FIRST was executing her signature pursuant to a power of attorney. Respondent contends that the premium finance agreement was executed pursuant to the power of attorney because the check from Mr. and Mrs. Arcamonte was inadvertently separated from her application for payment and erroneously deposited into the FIRST expense account. This contention lacks credibility and is rejected. The fact that Respondent deposited the check in his expense account, that the paperwork for the premium finance agreement contained the FIRST address, that Respondent took no action to rectify this alleged error even after receiving correspondence from the finance company, and that Ms. Arcamonte's signature was forged on the application belie Respondent's contention that this was an innocent mistake. On or about September 20, 1993, the Eagle Insurance policy that Ms. Arcamonte purchased was cancelled for nonpayment of premiums because Respondent, or persons acting under his direct supervision and control, failed to make a regular installment payment on the premium finance agreement. Ms. Arcamonte never received the 10 Day Notice of Cancellation Notices that Century PFC mailed to FIRST's address. It was not until October 1993 when she received a Notice of Cancellation from Eagle mailed September 27, 1993, that she learned that her policy had been cancelled effective September 20, 1993. As a result of Respondent's actions and those of Carlos Gonzalez, Susan Arcamonte failed to timely receive automobile insurance, suffered a finance charge for automobile insurance without her knowledge or consent, had her automobile insurance cancelled, and incurred higher premium charges for subsequent coverage because of a gap in her coverage. Following a criminal complaint filed against him by Ms. Arcamonte, Respondent was arrested and placed in a pretrial intervention program. It was only after this action was taken that Respondent made restitution to the Arcamontes for the $1,618.00 premium they paid. At no time during the transaction, did the Arcamontes deal with anyone from the FIRST other than Carlos Gonzalez. Mr. Gonzalez held himself out to be and acted as an insurance agent during this transaction. Specifically, Carlos Gonzalez did the following: Was introduced to the Arcamontes as an insurance agent and did not correct that misidentification. Interviewed Susan Arcamonte to gather the information necessary to determine level of coverage and to quote a premium for that coverage. Discussed coverage options and requirements including whether Ms. Arcamonte needed personal injury protection. Discussed deductible options and answered general questions about insurance. Selected an insurer for Ms. Arcamonte, quoted a premium for that coverage, and made representations as to the quality of the insurer. Offered to bind insurance coverage for the automobile Ms. Arcamonte was in the process of purchasing and sent a binder to her at the automobile dealership via fax. Personally completed the insurance application and related paperwork. Personally completed an insurance identification card, including binder numbers, as proof of insurance, and presented the identification card to Ms. Arcamonte. Presented Ms. Arcamonte with a business card that identified himself as a representative of FIRST. Respondent knew or should have known of the acts of Carlos Gonzalez. Respondent received from Mr. Gonzalez the application for insurance he had completed for Ms. Arcamonte so that all Respondent had to do was sign it. JOHNSON - MOREL TRANSACTION (COUNT TWO) On May 31, 1993, Linda E. Johnson and her husband, Miguel Morel, visited the residence of Wilfreido Cordeiro, an employee of FIRST who was acting on behalf of FIRST. As a result of their conversation with Mr. Cordeiro about their insurance needs, Mr. Morel and Ms. Johnson completed an application for automobile insurance from Armor Insurance Company (Armor) to be issued through FIRST. Mr. Cordeiro, who was not licensed by Petitioner for any purpose, held himself out to be an agent. He represented to these consumers that coverage with Armor was bound and gave them an identification card with the FIRST name on it that purported to be a binder of coverage. The FIRST insurance identification card was issued without authorization from Armor and in violation of the established policies and practices of Armor. Because Mr. Cordeiro was unlicensed, Respondent acted as the agent of record for this transaction. On or about May 31, 1993, Mrs. Linda E. Johnson tendered to Respondent, or persons acting with his knowledge and under his direct supervision and control, a check in the amount of $500.00 payable to FIRST as a premium down payment for the automobile insurance from Armor. On or about June 4, 1993, Respondent, or persons acting with his knowledge and under his direct supervision and control, deposited Mrs. Johnson's check in the FIRST expense account at the Ready State Bank. On or about June 29, 1993, Mrs. Johnson was contacted by her bank and informed that she had no automobile insurance. She immediately contacted Respondent who provided the bank with a certificate of insurance indicating coverage was placed with American Skyhawk Insurance (American Skyhawk) effective June 1, 1993. No authority to bind coverage had been extended by American Skyhawk prior to the submission of the application two and one-half months after the coverage effective date indicated on the certificate of insurance. On or about August 18, 1993, Respondent, or persons acting with his knowledge and under his direct supervision and control, completed a Century PFC and affixed thereto the signature of Mr. Morel without his knowledge or consent. This agreement reflected that Mr. Morel had paid the sum of $400.00 as a downpayment, despite the fact that Mrs. Johnson's check, in the amount of $500.00, had been received and deposited in the Respondent expense account. As a result of Respondent's action, Mrs. Johnson and Mr. Morel failed to timely receive automobile coverage; suffered a finance charge for automobile insurance without their knowledge or consent; and suffered the loss in at least the amount of $100.00. At no time during the transaction with FIRST did Mr. Morel or Mrs. Johnson knowingly execute a power of attorney. HWANG TRANSACTION (COUNT THREE) On August 29, 1992, Mr. Show Ming Hwang of Miami, Florida, purchased via telephone a policy of insurance for a car he was purchasing. Mr. Hwang called from a car dealership and spoke to an employee of FIRST who was acting under Respondent's direct supervision. Mr. Hwang tendered to FIRST a check in the amount of $869.00 as the full premium for this insurance, which was to be issued by an insurer named Security National. Respondent was the agen t of record for this transaction. Security National issued policy NumberSN00127048 providing insurance coverage for Mr. Hwang effective August 29, 1992. On December 22, 1992, Mr. Hwang asked FIRST to cancel his policy with Security National because he had moved and had secured other coverage. On January 15, 1993, Security National cancelled insurance policy NumberSN00127048 in response to Mr. Hwang's request. On January 26, 1993, Security National sent to Respondent its check Number216878 in the sum of $366.35 payable to Mr. Hwang. This check was a refund of the unearned premium for the cancelled policy. In addition to the unearned premium, Mr. Hwang was also entitled to a refund of the unearned commission from FIRST. The amount of the unearned commission was $64.55 and should have been paid by FIRST directly to Mr. Hwang. On February 8, 1993, Respondent, or an employee of FIRST acting under his direct supervision, endorsed the check from Security National in the name of Mr. Hwang and deposited that check in the FIRST expense account at Ready State Bank. Mr. Hwang was unaware that his name had been endorsed on the check and had not authorized such endorsement. This endorsement was not pursuant to a validly executed power of attorney. Mr. Hwang made repeated attempts to obtain the refunds to which he was entitled. Finally, he secured the intervention of the Petitioner. After that intervention, Respondent issued a FIRST check on December 17, 1993, payable to Mr. Hwang in the amount of $431.00 as payment of the refunds. Less than a month later, this check was dishonored because there were insufficient funds in the account on which it was drawn. After further intervention by the Petitioner, Respondent issued a cashier's check in the amount of $431.00 payable to Mr. Hwang. This check, dated March 22, 1994, was thereafter received and deposited by Mr. Hwang. Respondent failed to return the refunds to Mr. Hwang in the applicable regular course of business and converted the refund from Security National to his own use until the intervention of the Petitioner. As a result of Respondent's actions, Mr. Hwang failed to timely receive these refunds. MARIA DIAZ (COUNT FOUR) On September 20, 1994, the Petitioner entered a Final Order that revoked all licenses that it had previously issued to Maria Diaz (who was at that time known as Maria del Carmen Comas). In September 1994, Ms. Diaz, accompanied by Respondent, visited the Petitioner's office in Miami where she was told that the revocation of her license was forthcoming. After that information was given to them, Respondent and Ms. Diaz knew or should have known that the revocation of her licensure was imminent. There was insufficient evidence to establish when Ms. Diaz received a written copy of the order revoking her licensure. Ms. Diaz and Respondent assert that they did not know about the revocation until the end of January, 1995. The order entered in September 1994 prohibited Ms. Diaz from engaging in or attempting to engage in any transaction or business for which a license or appointment is required under the Insurance Code or directly owning, controlling, or being employed in any manner by any insurance agent or agency. After Respondent and Ms. Diaz had been told that the revocation of her licensure was imminent, Ms. Diaz engaged in transactions requiring licensure and acting in violation of the order revoking her licensure. This activity included applying to Seminole Insurance Company (Seminole) in December 1994 seeking appointment as a general lines insurance agent by Seminole, the submission of a large number of applications to Seminole, and the mishandling of an insurance transaction with Johannah Rexach in July and August 1995. Ms. Diaz began a business as a travel agent at the MARLIN office and continued to be present in the MARLIN office long after she had received written notice of the revocation of her licensure by Petitioner. At least on one occasion in May 1995, Ms. Diaz answered the MARLIN telephone by saying "insurance". Ms. Diaz continued to greet her former insurance customers and mailed out renewal notices after both she and Respondent had actual knowledge of the revocation of her licensure. Respondent knew or should have known of Ms. Diaz's activities. While there was insufficient evidence to establish that Ms. Diaz was formally on MARLIN's payroll, the evidence is clear and convincing that Respondent permitted Ms. Diaz to share office space while she attempted to develop her travel agency and that, in return, Ms. Diaz helped out at the MARLIN office. Respondent employed the services of Ms. Diaz and he placed her in a position to engage in transactions that required licensure after he knew or should have known that her licensure had been revoked. MARTINEZ TRANSACTION (COUNT FIVE) On April 23, 1994, Mr. and Mrs. Santiago Martinez of Miami, Florida, completed applications for automobile insurance from Fortune Insurance Company (Fortune) and Aries Insurance Company (Aries). The record is unclear as to whether the insurance was to be issued through FIRST or FIRST OF MIAMI. The individual with whom Mr. and Mrs. Martinez dealt was Alvaro Alcivar. This was during the time that FIRST and FIRST OF MIAMI maintained separate offices and it was before Respondent and Ms. Diaz had been told that her licensure was about to be revoked. The greater weight of the evidence established that Mr. Alcivar was, at that time, an employee of FIRST OF MIAMI and that he was working under the supervision of Maria Diaz. Succinctly stated, premiums paid by Mr. and Mrs. Martinez were deposited into a FIRST OF MIAMI bank account that showed First Assurance of Miami, Inc., d/b/a Complete Insurance as the owner of the account. The premium payment was not forwarded to the insurer. Because of this failure, Mr. and Mrs. Martinez did not receive insurance coverage for which they had paid. While Petitioner established that Mr. Alcivar and whoever was his supervising agent mishandled this transaction, there was insufficient evidence to establish that Respondent was aware of this transaction until Mr. and Mrs. Martinez demanded a refund of the premium they had paid. At that juncture, he attempted to resolve the problem. Consequently, it is found that the evidence failed to establish that Respondent was responsible for these violations of the Florida Insurance Code. ZAFRANI TRANSACTION (COUNT SIX) In July 1992, Mr. Issac Zafrani and his son, Ramon, of Miami, Florida, purchased automobile insurance with Oak Casualty Insurance Company (Oak) after dealing with Carlos Gonzalez. The various documents associated with this transaction refer to the agency issuing this policy as FIRST, FIRST OF MIAMI, or Rodal Insurance Agency. Mr. Gonzalez was an employee of FIRST and operated under the direct supervision of Respondent. The entire transaction was completed by Mr. Gonzalez at the automobile dealership where Mr. Zafrani was purchasing an automobile. All subsequent dealings by Mr. Zafrani was through Mr. Gonzalez by telephone or at locations other than the offices of FIRST. Mr. Gonzalez held himself out to be and acted as an insurance agent during this transaction. Specifically, Carlos Gonzalez did the following: Was introduced to the Zafranis as an insurance agent and did not correct that misidentification. Personally completed the insurance application and related paperwork. Discussed coverage and deductible options. Selected an insurer for the Zafranis, deter- mined the premium for the coverage, and accepted the payment for the premium. Personally completed an insurance identifi- cation card, including what purported to be proof of insurance, and presented the identification card to the Zafranis. Presented the Zafranis with a business card that identified himself as a representative of FIRST. The Zafranis paid for the renewal of their policy through FIRST each year on an annual basis. On September 1, 1994, the Zafranis tendered to Mr. Gonzalez their check in the amount of $1,748.00 as payment in full of the annual premium for the policy year 1994-95. This check was made payable to FIRST OF MIAMI and was deposited in the FIRST Expense Account at Ready State Bank ( Number0303080870- 10). Respondent was the only person with authority to sign on this account. On September 30, 1994, an employee of FIRST completed a premium finance agreement that purported to finance the Zafranis' premium for the Oak Casualty insurance and forged Issac Zafrani's signature to that agreement. This false document reflected that the total premium was $1,748.00 and that the Zafranis had made a downpayment of $524.00 and had an unpaid balance of $1,224.00. This action was taken without Issac Zafrani's knowledge or consent. Mr. Zafrani had not executed a power of attorney to authorize these acts. Respondent knew or should have known of this act. On September 30, 1994, Respondent, or an employee of FIRST working under his direct supervision, issued a premium finance draft from Artic to Oak in the amount of $1,485.80 based upon this false application. A few weeks after they paid the renewal premium, the Zafranis complained to Mr. Gonzalez that they had not received their renewal policy from Oak. Mr. Gonzalez advised them that the company had cancelled their policy in error. He promised that he would investigate the matter and take corrective action. On December 23, 1994, Respondent, or an employee of FIRST acting under his direct supervision, submitted an automobile insurance application to Seminole Insurance Company indicating that coverage had been bound for Issac Zafrani. On December 23, 1994, Respondent issued FIRST check Number1196 payable to Seminole in the amount of $1,681.65 in payment of the policy he was attempting to secure on behalf of the Zafranis. On or about December 27 1994, Mr. Gonzalez issued to the Zafranis a FIRST card with what purported to be a binder number from Seminole Insurance Company. No authorization to bind that coverage had been issued by Seminole. On January 3, 1995, Artic issued a cancellation notice on the Oak Casualty policy because of missed payments on the premium finance agreement. The Zafranis did not know about this premium finance agreement and Respondent failed to make the payments. In January 1995, FIRST check Number1196 that had been tendered to Seminole was dishonored by Respondent's bank because the account on which the check was drawn had insufficient funds to pay the check. As a result of these actions, the Zafranis failed to timely receive automobile insurance for which they had fully paid and suffered the loss of the sum of $1,748.00. Respondent knew or should have known of these actions. DEBT TO WORLD PREMIUM FINANCE COMPANY (COUNT SEVEN) On August 29, 1995, a final judgment was entered in a Dade County Court action brought by World Premium Finance Co., Inc. (World PFC) against FIRST OF MIAMI and the Respondent, individually, as defendants. This final judgment awarded damages against FIRST OF MIAMI in the sum of $7,203.03 and awarded damages against both defendants in the sum of $15,000 plus attorney's fees of $1,000. The World PFC complaint was based on worthless checks FIRST OF MIAMI and Respondent had issued in connection with premium finance contracts and included debts for unpaid downpayments and unearned commissions on premium finance contracts that had been cancelled. Respondent's assertion that these debts were the responsibility of Maria Diaz is rejected. While Ms. Diaz initially made the arrangements for FIRST OF MIAMI to finance through World PFC and was the agent responsible for some of these transactions, it is clear that Respondent was the agent for many of these underlying transactions. Further, some, if not all, of these worthless checks were drawn on accounts for which Respondent was the only person with signatory authority. The downpayments and unearned commissions constitute fiduciary funds for which Respondent is responsible. Respondent has failed to pay these fiduciary funds to World PFC after repeated demands for payments. GUTIERREZ TRANSACTION (COUNT EIGHT) On October 11, 1993, Ms. Madalina N. Gutierrez of Miami, Florida, completed an application for automobile insurance. Aries Insurance Company was the insurer for this policy and FIRST was the insurance agency. The premium for this policy was to have been $574.00. The person with whom Ms. Gutierrez dealt with was Carmen "Mela" Babacarris, an employee of FIRST OF MIAMI. Ms. Babacarris has never held any license or appointment under the Florida Insurance Code. Ms. Gutierrez paid to FIRST the sum of $287.00 on October 11, 1993, when she applied for this insurance. On that date, Ms. Babacarris gave to Ms. Gutierrez an insurance card that purported to bind coverage with Aries. She returned on November 1, 1993, and paid to FIRST the balance owed of $287.00. Both of these payments were tendered to and received by Ms. Babacarris on behalf of FIRST. The sums paid by Ms. Gutierrez for this insurance coverage were not remitted by the FIRST to Aries or to any other insurer. As a consequence, Ms. Gutierrez did not receive the insurance coverage for which she had paid. Ms. Gutierrez was unable to obtain a refund of the sums that she had paid to FIRST. Respondent knew or should have known of the acts pertaining to this transaction by Ms. Babacarris since the transaction was processed through the FIRST, the agency for which Respondent was the sole supervising agent. RICO TRANSACTION (COUNT NINE) On June 27, 1994, Mr. Rafael Rico of Miami, Florida, completed an application for automobile insurance from Aries Insurance. It is unclear from the documents whether this insurance was to be issued through FIRST or through FIRST OF MIAMI. This confusion in the record is attributable to the fact that the persons involved in this transaction and associated with these two agencies made little distinction between the two agencies. This application was completed at the automobile dealership from which Mr. Rico was purchasing the vehicle to be insured. The individual with whom Mr. Rico dealt was Alvaro Alcivar. At all times during the transaction with Mr. Rico, Mr. Alcivar held himself out to be and acted as an insurance agent. Specifically, Mr. Alcivar did the following: Personally completed the insurance application and related paperwork. Discussed coverage and deductible options and answered Mr. Rico's general insurance questions. Selected the insurer for Mr. Rico's coverage. Personally completed an insurance identification card, including a policy number, as proof of insurance and provided it to Mr. Rico. Indicated that coverage was bound immediately and gave to him a card that purported to be a Florida Automobile Insurance Identification Card indicating that Mr. Rico had insurance coverage through Aries. Developed the premium and downpayment. Accepted payment from Mr. Rico. Presented Mr. Rico with a business card identifying himself as a representative of FIRST OF MIAMI. Mr. Alcivar was the only representative of the FIRST or of the FIRST OF MIAMI with whom Mr. Rico dealt. On June 27, 1994, Mr. Rico tendered to Mr. Alcivar the sum of $947.00 as payment for this insurance with the sum of $500.00 being paid in cash and the balance being charged to Mr. Rico's Mastercard. This Mastercard entry was processed through the account of the FIRST, not that of the FIRST OF MIAMI. Despite the payments by Mr. Rico, the premium to which Aries was entitled for this coverage was not remitted by FIRST or by FIRST OF MIAMI. As a result of this failure, Aries cancelled the binder that had been issued to Mr. Rico. Mr. Rico was damaged as a result of this failure. He lost the premium he had paid and the lending institution that financed his vehicle placed insurance on the vehicle at a higher premium than that charged by Aries. Based on the relationship between FIRST and FIRST OF MIAMI, the relationship between Respondent and Ms. Diaz, the repeated references to FIRST in the documentation of this transaction, and the deposit of at least $447.00 in the Mastercard account of FIRST, it is concluded that Respondent knew or should have known about this transaction. CHERI TRANSACTION (COUNT ELEVEN) On November 19, 1994, Mr. Dieuseul Cheri of Miami, Florida, completed an application for automobile insurance that was to be issued by Seminole Insurance Company as the insurer. The application for insurance reflects that Maria Diaz was the agent for this transaction, but the name of the agency is FIRST, not FIRST OF MIAMI. Likewise, the premium finance agreement pertaining to this transaction reflects that FIRST is the producing agency. The entire transaction was handled by Alvaro Alcivar at an automobile dealership where Mr. Cheri was purchasing a vehicle and occurred after Ms. Diaz had been told in September that the revocation of her licensure was imminent. Mr. Cheri gave to Mr. Alcivar the sum of $205.00 in cash as the downpayment for the premium for this Seminole policy. At all times Mr. Alcivar held himself out to be and acted as an insurance agent. Specifically, Mr. Alcivar: Was introduced to Mr. Cheri as an insurance agent and did not correct that misidentification. Personally completed the insurance application and related paperwork. Discussed coverage and deductible options and answered Mr. Cheri's general insurance questions. Selected the insurer for Mr. Cheri's coverage. Personally completed an insurance identification card, including a policy number, as proof of insurance and provided it to Mr. Cheri. Completed a named driver exclusion agreement for Mr. Cheri's policy, which had a significant effect on the coverage provided under the policy, and completed a vehicle inspection. Developed the premium and downpayment. Accepted payment from Mr. Cheri on behalf of FIRST OF MIAMI. Presented Mr. Cheri with a business card identifying himself as a representative of FIRST OF MIAMI. Mr. Alcivar was the only representative of the FIRST or of the FIRST OF MIAMI with whom Mr. Cheri dealt. FIRST OF MIAMI failed to bind coverage with Seminole on Mr. Cheri's behalf until November 22, 1994. As a result, there was a lapse in Mr. Cheri's coverage from November 17 until November 22, 1994. On November 19, 1994, FIRST OF MIAMI submitted a premium finance agreement on Mr. Cheri's insurance policy to World Premium Finance Co., Inc. (World PFC). The World PFC contract as well as the application were signed by Maria Diaz. Ms. Diaz never met Mr. Cheri. The premium finance agreement submitted to World PFC by FIRST OF MIAMI indicated that he had made a premium downpayment of only $105.00 despite the fact that Mr. Cheri had made a downpayment of $205.00. The evidence is not clear that Respondent knew or should have known of this transaction because of the involvement of Ms. Diaz. Instead, this is an example of the Respondent permitting Ms. Diaz to continue to participate in insurance transactions that require licensure after Respondent and Ms. Diaz had been told in September 1994 that revocation was imminent. ALVARO ALCIVAR (COUNT TWELVE) Petitioner established by clear and convincing evidence that Alvaro Alcivar performed acts and made representations to consumers that require licensure pursuant to the Florida Insurance Code. Petitioner also established that Respondent knew or should have known of these acts and that he aided and abetted these violations by Mr. Alcivar. CARLOS GONZALEZ (COUNT THIRTEEN) Petitioner established by clear and convincing evidence that Carlos Gonzalez performed acts and made representations to consumers that require licensure pursuant to the Florida Insurance Code. Petitioner also established that Respondent knew or should have known of these acts and that he aided and abetted these violations by Mr. Gonzalez.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order that adopts the findings of fact and conclusions of law contained herein. It is further recommended that Petitioner revoke all licensure and appointment held by Respondent pursuant to the Florida Insurance Code and that it impose against Respondent an administrative fine in the amount of $10,000.00. DONE AND ENTERED this 15th day of April 1996 in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON, 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 15th day of April 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-0317 The following rulings are made as to the proposed findings of fact submitted by Petitioner. The proposed findings of fact in paragraphs 1, 2, 3, 4, 5,6, 7, 8, 9, 11, 12, 13, 14, 15, 16, 18, 19, 20, 21, 22, 23, 27, 25, 27, 28, 29, 30, 31, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 73, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 123, 125, 126, 127, 139, 140, 141, and 142 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 2 are adopted in part by the Recommended Order. The testimony at the formal hearing that the office was moved in June 1994. The proposed findings of fact in paragraphs 10, 17, and 81 are adopted in part by the Recommended Order, but are rejected to the extent they are contrary to the findings made. The proposed findings of fact in paragraphs 26, 32, 72, 74, 75, 76, 83, 129, 130, 131, 136, 137, 143, and 144 are subordinate to the findings made. The proposed findings of fact in paragraphs 46, 61, 82, and 124 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraphs 77, 78, 79, 80, 128, 132, 133, 134, 135, and 136 are rejected as being contrary to the findings made. The following rulings are made as to the proposed findings of fact submitted by Respondent. The proposed findings of fact in paragraphs 1, 3, 4, 5, 7, 8, 9, 13, 15, 17, 18, 19, 20, 23, 26, 32, 33, 34, 35, 36, 37, 40, 41, 49, 50, 53, 54, 55, 64, 72, and 73 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 3 are adopted in part by the Recommended Order, but are rejected in part since Respondent moved the offices of the FIRST from Coral Way to Sunset Drive at a time pertinent to this proceeding. The proposed findings of fact in paragraphs 6 and 52 are adopted in part by the Recommended Order, but are rejected to the extent they are contrary to the findings made. The proposed findings of fact in paragraphs 10, 11, 21 and 27 are rejected as being unsubstantiated by credible evidence. The evidence that supports these proposed findings lacks credibility. The proposed findings of fact in paragraphs 12 and 31 are adopted in part by the Recommended Order, but are rejected to the extent the proposed findings mischaracterize the evidence. The proposed findings of fact in paragraphs 16 are adopted in part by the Recommended Order, but are rejected to the extent they are unnecessary to the conclusions reached. The proposed findings of fact in paragraph 24 are adopted in part by the Recommended Order, but are rejected to the extent they are contrary to the finding that they knew that the revocation of Ms. Diaz's licensure was imminent. The proposed findings of fact in paragraphs 25, 28, 30, 38, 39, 40, 45, 46, 47, 51, 56, 58, 59, 60, 61, 62, 65, 66, 67, 69, 71, 74, 75, 76, 77, and 78 are rejected as being contrary to the findings made. The proposed findings of fact in paragraphs 29 and 57 are subordinate to the findings made. The proposed findings of fact in paragraph 31 are rejected since they contain an inference that Respondent told Ms. Diaz to move as soon as he knew of her interaction with insurance customers. The proposed findings of fact in paragraph 42 are rejected as being a mischaracterization of the evidence. The proposed findings of fact in paragraphs 48, 63, 68, and 70 are rejected as being unnecessary to the conclusions reached. COPIES FURNISHED: John R. Dunphy, Esquire Department of Insurance and Treasurer Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 Charles J. Grimsley, Esquire Charles J. Grimsley and Associates, P.A. 1880 Brickell Avenue Miami, Florida 33129 Honorable Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner, Acting General Counsel Department of Insurance The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint, and, if so, what disciplinary action should be imposed.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the extensive factual stipulations set forth in the parties' Statement of Facts Admitted3: Respondent works as the manager of a Cash Register Insurance ("Cash Register") office in New Port Richey. Cash Register is owned by Direct General Insurance Agency, Inc. ("Direct General"). Respondent sells automobile insurance to individual customers. During the relevant period, Respondent also sold four ancillary products: a vehicle protection plan, an accident medical protection plan, a travel protection plan, and a term life insurance policy.4 Respondent is paid a salary, and receives no commission on the sale of automobile insurance. Respondent does receive a ten percent commission on the sale of ancillary products. Respondent received 34 percent of her overall income from the sale of ancillary products during the relevant time period. Respondent deals with at least 50 customers per day, six days per week. She sells between seven and ten automobile insurance policies per day, on average. Given her customer volume, Respondent cannot remember each customer to whom she has sold insurance. Respondent frankly testified that she had no specific recollection of selling the policies to the individuals named in the Statement of Facts Admitted. However, Respondent also testified that she sells insurance according to a script, and that in light of this unvarying practice she could state with confidence whether she had or had not engaged in the specific sales techniques alleged by the Department and its witnesses. Respondent testified at length as to her sales routine. When talking to potential customers on the telephone, Respondent must follow the script provided by Direct General. Respondent testified that agents are not required to follow the script when customers come in to the office, but that she generally adheres to the format provided by her employer. All of the sales at issue in this proceeding were generated via in-person sales at Respondent's Cash Register office. Respondent first obtains basic information from the customer: name, address, date of birth, Social Security number, whether there are persons over age 14 in the household and whether those persons will drive the insured vehicle. She then asks the type of vehicle and the type of coverage the customer wants to purchase. Respondent enters the information into her computer, which generates a price quote. If the customer wants only basic personal injury protection ("PIP") and property damage coverage, Respondent informs the customer that the quoted price includes PIP with an optional deductible of $1,000, a coverage limit of $10,000, and property damage coverage of $10,000. The price quote includes a down payment and monthly payments. The quoted amounts vary depending on whether the customer chooses to make 10 or 12 payments. During her presentation, Respondent mentions that the price quoted for the monthly payments includes the ancillary products. Once the customer has agreed to the price quote, Respondent makes a computer inquiry to obtain the customer's driving record. While waiting on these records, Respondent goes over a "pen sale" document with the customer. The pen sale document is a handwritten sheet that Respondent draws up in the presence of the customer to explain the policies. Respondent's pen sale sheets for Mr. Gatlin, Ms. Johnson, Mr. Hansen, and Mr. Dossantos (hereinafter referred to collectively as the "Complaining Customers") were admitted into evidence. At the top of the page, under the heading "Mandatory," Respondent outlined the PIP and property damage coverages, with the customer's options regarding deductibles. Lower on the page, under the heading "Optional," Respondent outlined the details of the ancillary coverages included in the price quote. Respondent testified that she sits with the customer and uses the pen sale sheet to explain the mandatory coverages in detail. She explains that Florida law requires that she offer bodily injury liability coverage, but that the customer has the option to reject it, and she indicates the customer's decision on the pen sale sheet. She explains the ancillary policies, and indicates on the pen sale sheet which of these policies the customer accepts and which ones the customer rejects. The customer is asked to sign the bottom of the sale sheet. When shown the pen sale sheet for each Complaining Customer, Respondent was able to state with confidence which ancillary policies each of them has accepted or rejected. None of the Complaining Customers denied having been shown the pen sale sheet, though none of them appeared to grasp its significance. Each of the Complaining Customers conceded that the signature at the bottom of his or her respective pen sale sheet was genuine. After Respondent obtains the customer's signature on the pen sale sheet, and has received the customer's driving records, she prints out the policy paperwork and goes over it with the customers. The earliest of the Complaining Customers was James Gatlin (Counts I, II, and III of the Administrative Complaint), who purchased insurance from Respondent on October 7, 2005.5 Mr. Gatlin's signed pen sale sheet indicated that he accepted the accident medical protection plan, the travel protection plan, and the term life policy. It also indicated that he rejected optional uninsured motorist, medical payment, accidental death, and comprehensive and collision policies offered by Respondent. Mr. Gatlin's policy paperwork was admitted into evidence. After explaining the automobile policy, Respondent explained the ancillary products that Mr. Gatlin had initially accepted on the pen sale sheet.6 Respondent first showed Mr. Gatlin a spreadsheet titled, "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)." Under the subheading "Auto Policy Coverages," the spreadsheet set forth the amount and type of coverage for each of the two cars for which Mr. Gatlin was buying insurance, as well as a premium estimate for each vehicle. Under the subheading "Optional Policies," the spreadsheet set forth the following: "American Bankers Travel Protection Plan," "Lloyds Accident Medical Protection Plan," and "Life Insurance." A monthly premium amount was set forth next to each of the three optional coverages. The subheading "Optional Policies," the list of the optional policies, the premium amounts for each optional policy, and the total estimated cost of all products are separately circled by hand on the spreadsheet. Respondent testified that it is her practice to circle these items as she explains them to the customer. Mr. Gatlin's initials appear above the list of optional policies. Below the grids of the spreadsheet is the following text (emphasis added): I, the undersigned, acknowledge that: The above premiums are estimates and that the actual premium charged to me will be determined by the Insurance Company issuing the policy. Further, I am responsible for the amount of the premium charged at the time the policy is issued. I agree that if my down payment or full payment check is returned by the bank for any reason, coverage will be null and void from the date of inception. I acknowledge that I have been advised of and understand the above coverage(s), and cost breakdowns, including non-insurance products, if any, and further [sic] that I have received a complete copy of this product. This document is only an explanation of insurance coverage and other products, if applicable—it is not a contract. The policy, if issued, will contain the terms and conditions of coverage. The level of coverage illustrated above is based on preliminary information which I have supplied. My eligibility for coverage is subject to the acceptance of my application in accordance with the Insurance Company's underwriting requirements. Customer Signature Date The signature line was signed by "James D. Gatlin" and dated October 7, 2005. At the hearing, Mr. Gatlin conceded the authenticity of his initials and signature on the spreadsheet. Respondent next explained the details of the accident medical protection plan to Mr. Gatlin. She explained the coverage options (individual, husband and wife, or family), and the annual premium for each. On the application, Respondent circled the "Individual Coverage Only" option. Mr. Gatlin placed his initials in the space provided to indicate his choice of coverage, and signed the application on the line provided. A second page, titled "Accident Medical Protection Plan," detailed the coverage provided and the method of filing a claim under the policy. The following text is provided at the bottom of the page (emphasis added): THE ACCIDENT MEDICAL PLAN IS A LIMITED POLICY. READ IT CAREFULLY. I, the undersigned, understand and acknowledge that: The Accident Medical Plan does not provide Liability Coverage insurance for bodily injury or property damage, nor does it meet any financial responsibility law. I am electing to purchase an optional coverage that is not required by the State of Florida. My agent has provided me with an outline of coverage and a copy of this acknowledgement. If I decide to select another option, or cancel this policy, I must notify the company or my agent in writing. I agree that if my down payment or full payment check is returned by the bank for any reason, coverage will be null and void from the date of inception. Insured's Signature Date I hereby REJECT this valuable coverage: Insured's Signature Date Mr. Gatlin signed and dated the form on the first line provided, indicating his acceptance of the accident medical protection plan. Respondent next explained the travel protection plan. The two forms associated with this plan set forth the coverages provided, the limits of those coverages, and the premium associated with the plan. The first form was titled, "American Bankers Insurance Company Optional Travel Protection Plan." After listing the coverages and their limits, the form read as follows: Purchasing the Optional Travel Protection Plan is not a condition of purchasing your automobile liability policy. I hereby acknowledge I am purchasing an Optional Travel Protection Plan, and that I have received a copy of this acknowledgement. Insured Signature Date I HEREBY REJECT THIS VALUABLE COVERAGE: Insured Signature Date Mr. Gatlin signed and dated the first line of the form, indicating his acceptance of the policy. The second form, titled "Travel Protection Plan—Florida Declarations," listed the effective dates of the policy, the premium, the automobile covered, repeated the coverages and their limitations, and gave notice to the insured of his 30-day right to examine the policy and return it for a full refund provided no loss has occurred. Mr. Gatlin signed and dated the "Applicant's Signature" line. Respondent next went over the documents relating to the term life policy that Mr. Gatlin accepted on the pen sale sheet. The policy named Carol Burinskas, with whom Mr. Gatlin lived, as the beneficiary on the $10,000 policy, and stated an annual premium of $276.00. Mr. Gatlin initialed his "no" answers to six standard insurability questions dealing with recent medical history and exposure to HIV. Mr. Gatlin signed and dated his acceptance of the policy on the signature line provided. After completing her explanation of the various policies and obtaining Mr. Gatlin's acceptance, Respondent next explained the premium finance agreement. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the four policies accepted by Mr. Gatlin, totaling $1,363.00, plus $4.55 in documentary stamp tax, less a down payment of $151.00, for a total amount financed of $1,216.55. The page disclosed the finance charge ($139.99) and the annual percentage rate of the loan (24.37%). Mr. Gatlin opted to make 10 monthly payments of $135.65, and initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate his acceptance of the loan terms. Finally, Respondent showed Mr. Gatlin a document titled "Insurance Premium Financing Disclosure Form," which redundantly set forth in a simplified form exactly what Mr. Gatlin was purchasing and a breakdown of what each element of his purchase contributed to the total cost of the loan. The itemization read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $578 Property Damage Liability (PD) $314 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)7 $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $0 Medical Payments $0 Uninsured Motorist $0 Comprehensive $0 Collision $0 Accidental Death $0 Towing $0 Travel Protection Plan $60 Rental $0 Hospital Indemnity $110 Life Insurance $266 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $1,363 Document Stamp Tax, if applicable $4.55 Less Down Payment applied $151.00 AMOUNT FINANCED (loaned to you) $1,216.55 I, James Gatlin, have read the above and understand the coverages I am buying and how much they cost. _ Signature of Named Insured Date Mr. Gatlin signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. As noted above, Carol Burinskas lives with Mr. Gatlin and was named as the beneficiary in the term life policy the Respondent sold to Mr. Gatlin. Ms. Burinskas testified that she went into Respondent's Cash Register office on Mr. Gatlin's behalf a day or two before he completed the transaction. Ms. Burinskas had obtained quotes from several agencies in the course of doing the legwork for Mr. Gatlin's insurance purchase. Ms. Burinskas testified that she told Respondent that she was shopping for Mr. Gatlin, and was seeking quotes on the bare minimum insurance, "just what we needed to get a tag for the car." Based on information provided by Ms. Burinskas, Respondent provided a price quote, which Ms. Bruinskas showed to Mr. Gatlin at home that evening. Mr. Gatlin looked over the quote and pronounced it acceptable. He told Ms. Burinskas that he would stop in at the Cash Register office the next day and complete the paperwork for the policy. Mr. Gatlin testified that he believed the Cash Register quote offered the most reasonable price he had seen, but he was unaware that Respondent's quote included the ancillary policies discussed above. When he went into Respondent's office, he reiterated to her that he wanted only "the bare minimum insurance." Mr. Gatlin owned his vehicles outright and saw no need to carry extra coverage on them. Mr. Gatlin testified that Respondent asked him if he wanted life insurance, and he declined. Mr. Gatlin already had a $250,000 life insurance policy through his employer, Pasco County, for which Mr. Gatlin's sister is the beneficiary. He testified that if he had known he was purchasing a life insurance policy from Respondent, he would have made his sister the beneficiary. As noted above, Ms. Burinskas is the stated beneficiary of the term life policy Respondent sold to Mr. Gatlin. Mr. Gatlin testified that Respondent "was speaking very quickly and putting the papers in front of me just as fast as she was talking, so I was busy signing and dating." By the end of the process, "there was a stack of papers, rather thick" in front of Mr. Gatlin. Mr. Gatlin never heard Respondent say that some of the items he was purchasing were optional. In fact, he could not remember much at all about the content of Respondent's presentation. He remembered that Respondent talked while he initialed and signed in the places where she pointed. On cross-examination, Mr. Gatlin conceded that Respondent may have explained the ancillary policies, but so fast that he could not understand. He even conceded that he had allowed Respondent to talk him into buying the policies, though he later amended his answer to assert that he had been "bamboozled." Mr. Gatlin made no effort to slow down Respondent's presentation, and he had no questions about anything Respondent was saying. Mr. Gatlin stated that his only concern was how much he was paying, and that he was satisfied with the price quoted by Respondent at the time he bought the policies. Mr. Gatlin stated that it should have been obvious to Respondent that he was not reading the documents he was signing. He trusted Respondent to treat him the right way, and not sell him products without his knowledge. Respondent denied that she ever rushes anyone through the sales process, or has ever sold a customer a policy the customer did not agree to purchase. Ms. Burinskas discovered the ancillary policies only after reading a newspaper article about Direct General and the practice of sliding. She asked Mr. Gatlin if he had purchased any policies mentioned in the article, and he said that he had not, "as far as he knew." Ms. Burinskas pulled out the insurance paperwork, and in short order was able to ascertain that Mr. Gatlin had purchased the ancillary products described above. The next Complaining Customer was Gabriella Jungling, now known by her married name of Johnson (Counts IV and V). On August 17, 2006, Ms. Jungling and her future husband, Jeremy Johnson, were at a Division of Highway Safety and Motor Vehicles ("DHSMV") office. Mr. Johnson was attempting to have his suspended license reinstated, but was informed that he must obtain the SR-22 form before his license could be issued. A DHSMV employee gave Ms. Jungling the names of several insurance companies that could immediately write a policy. Ms. Jungling noted that Respondent's Cash Register office was near the DHSMV office. Ms. Jungling and Mr. Johnson drove to Respondent's office. Ms. Jungling testified that she handled all the transactions that occurred at Respondent's office. She and Mr. Johnson intended to obtain "full coverage," whatever they needed to fulfill the SR-22 requirement and satisfy the bank that financed Mr. Johnson's truck, which was the only vehicle on the resulting policy. Ms. Jungling told Respondent that she wanted full coverage for a financed truck. Respondent made her standard sales presentation to Ms. Jungling. She gathered the basic information described in Finding of Fact 7 above, then gave Ms. Jungling a price quote that included the amount of the down payment and monthly payment amounts. Included in the price quote were the optional vehicle protection plan and a term life insurance policy. Respondent explained to Ms. Jungling that the optional vehicle protection plan included $125 per day for hospitalization resulting from an accident and $25 per day for a rental car if the insured car is in an accident or is stolen. Ms. Jungling agreed to the price quote. Respondent next went over a pen sale sheet with Ms. Jungling. As noted in the general pen sale findings above, Ms. Jungling did not deny having seen the pen sale sheet and admitted that she signed it. The pen sale document was different from that shown to Mr. Gatlin because Direct General had ceased offering the travel protection plan and instead offered the vehicle protection plan. See footnote 4, supra. The signed pen sale sheet indicated that Ms. Jungling accepted the vehicle protection plan and the term life insurance policy. It also indicated that she rejected optional uninsured motorist, medical payment, accidental death, comprehensive and collision policies. Respondent next printed the policy paperwork and reviewed it with Ms. Jungling. Ms. Jungling signed the vehicle protection plan application on the signature line, directly beneath the following language: "The purchase of this plan is optional and is not required with your auto insurance policy. I hereby request that the above coverages be placed in effect on the date and for the term indicated." The application indicated that Ms. Jungling was opting for a "family plan"8 with a term of one year. Ms. Jungling also signed a separate page titled, "Optional Vehicle Protection Plan Summary & Acknowledgement." This form listed the coverages and limitations provided under the vehicle protection plan. Below this listing, in bold type, was the statement, "Please Read Your Policy Carefully For A Full Explanation of Benefits." Beneath the bold type was the following language: Purchasing the Vehicle Protection Plan is not a condition of purchasing your automobile policy. I hereby acknowledge that my agent has fully explained to me and I understand: the coverage provided under the Vehicle Protection Plan; that the Vehicle Protection Plan is an optional insurance product that is separate from my automobile insurance policy; that purchasing this optional Vehicle Protection Plan is not a condition of purchasing my automobile insurance policy; I have made an informed decision to purchase the Vehicle Protection Plan, and I have received a copy of my signed acknowledgement. Insured Signature Date I HEREBY REJECT THIS VALUABLE COVERAGE: Insured Signature Date Ms. Jungling signed the first signature line, indicating her acceptance of the policy. Respondent went over the documents relating to the term life policy that Ms. Jungling accepted on the pen sale sheet. The policy named Mr. Johnson as the beneficiary on the $10,000 policy, and stated an annual premium of $108.00. Ms. Jungling initialed her "no" answers to the standard insurability questions, and signed and dated her acceptance of the policy on the signature line provided. Respondent showed Ms. Jungling an "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)" spreadsheet identical in form to that shown Mr. Gatlin. The "Optional Policies" subheading listed the optional policies, their premium amounts, and the total estimated cost of all products. These optional items were individually circled by Respondent and initialed by Ms. Jungling. The spreadsheet contained language identical to that set forth in Finding of Fact 18 above. Ms. Jungling signed and dated the sheet in the spaces provided. Respondent presented the premium finance agreement to Ms. Jungling in the same fashion described in Finding of Fact 26 above. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the three policies (auto, life, and vehicle protection) accepted by Ms. Jungling, totaling $3,052.00, plus $9.80 in documentary stamp tax, less a down payment of $295.00, for a total amount financed of $2,766.80. The page disclosed the finance charge ($308.35) and the annual percentage rate of the loan (23.51%). Ms. Jungling opted to make 12 monthly payments of $256.26, and initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate her acceptance of the loan terms. Finally, Respondent showed Ms. Jungling the Insurance Premium Financing Disclosure Form. The itemization for Ms. Jungling's policies read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $491 Property Damage Liability (PD) $405 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)[9] $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $782 Medical Payments $0 Uninsured Motorist $0 Comprehensive $131 Collision $830 Accidental Death $20 Towing $0 Rental $0 Life Insurance $98 Accident Medical Plan $0 Vehicle Protection Insurance $260 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $3,052 Document Stamp Tax, if applicable $9.80 Less Down Payment applied $295.00 AMOUNT FINANCED (loaned to you) $2,766.80 I, Gabriella N. Jungling, have read the above and understand the coverages I am buying and how much they cost. Signature of Named Insured Date Ms. Jungling signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. Ms. Jungling testified that she already has a life insurance policy through her employer, Wells Fargo, and that she told Respondent that she was not interested in buying more. She admitted that the initials and signatures on the life insurance policy were hers, but had no recollection of Respondent's explanation of the policy. Ms. Jungling believed that she would have recalled an explanation had one been given by Respondent, and stated that she would have rejected the policy had Respondent told her it would cost $108.00 over and above the amount she was paying for auto insurance. However, Ms. Jungling conceded that Respondent did not rush her through the signing process. Ms. Jungling was in a hurry to purchase insurance and get back to her job. She admitted that Respondent presented the paperwork page by page, and that nothing prevented her from reading the paperwork. Ms. Jungling had no problem with the price quoted by Respondent. The life insurance paperwork plainly states, in bold lettering above Ms. Jungling's signature, that the annual premium for the policy is $108.00. The price of the policy is also stated on the Explanation of Policies, Coverages and Cost Breakdown page and on the Insurance Premium Financing Disclosure Form, both of which were signed by Ms. Jungling. Ms. Jungling also did not recall the explanation given to her by Respondent of the vehicle protection plan paperwork. She testified that she would have rejected the policy if Respondent had told her that it was separate and apart from the automobile insurance required by law. However, as noted above, the Optional Vehicle Protection Plan Summary & Acknowledgement page clearly stated that the vehicle protection plan was not a condition of purchasing an automobile policy and was an optional product separate from the automobile insurance policy. Ms. Jungling acknowledged that she signed this page. Ms. Jungling testified that she did not really read her insurance paperwork until she received a call from a Department investigator, who asked if she had knowingly purchased life insurance and the vehicle protection plan. Ms. Jungling gave a statement to a Department investigator in February 2007. On March 16, 2007, she went to Respondent's office and signed the paperwork to cancel the term life and vehicle protection policies, for which she received a pro-rated refund. The next Complaining Customer was Bruce Hansen (Counts VI and VII). On August 19, 2006, Mr. Hansen entered Respondent's Cash Register office to purchase insurance. Mr. Hansen testified that he has done business with Cash Register for years, but this was the first time he had done business with Respondent's office. Mr. Hansen stated that he had never bought anything other than basic auto coverage from Cash Register, and had no intention of buying anything else when he walked into Respondent's office. Mr. Hansen was purchasing new insurance, not renewing an existing policy. In fact, his driver's license had been suspended for lack of insurance coverage. Mr. Hansen testified that he told Respondent he wanted the most basic insurance that would get his license reinstated. He owned his car outright, and therefore was unconcerned about satisfying a financing entity. Respondent made her standard presentation to Mr. Hansen. She gathered the basic information described in Finding of Fact 7 above, then gave Mr. Hansen a price quote that included the amount of the down payment and monthly payment amounts. Included in the price quote were the optional vehicle protection plan and a term life insurance policy. Mr. Hansen agreed to the price quote. Respondent next went over a pen sale sheet with Mr. Hansen. As noted in the general pen sale findings above, Mr. Hansen did not deny having seen the pen sale sheet and admitted that he signed it. The pen sale document was identical to that shown to Ms. Jungling. Respondent used the pen sale sheet to explain to Mr. Hansen that the optional vehicle protection plan included a $1,000 medical expense that could be used toward his PIP deductible, hospital coverage of $125 per day, and rental car reimbursement of $25 per day if the insured car is in an accident or is stolen. Respondent also used the pen sale sheet to explain the term life insurance offered in the price quote. The signed pen sale sheet indicated that Mr. Hansen accepted the vehicle protection plan and the term life insurance policy. It also indicated that he rejected optional uninsured motorist, medical payment, accidental death, comprehensive and collision policies. Respondent next printed the policy paperwork and reviewed it with Mr. Hansen. The paperwork for the vehicle protection plan application was identical to that described in Findings of Fact 45 and 46 relating to Ms. Jungling. Mr. Hansen opted for the "individual plan" with a term of one year. He signed on the signature line of the application page, and signed the "Optional Vehicle Protection Plan Summary & Acknowledgement" page indicating his acceptance of this optional policy. Respondent went over the documents relating to the term life policy. The policy named Mr. Hansen's mother, who lived with Mr. Hansen, as the beneficiary on the $10,000 policy, and stated an annual premium of $108.00. Mr. Hansen initialed "no" answers to the standard insurability questions, and signed and dated his acceptance of the policy on the signature line provided. Respondent showed Mr. Hansen an "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)" spreadsheet identical in form to that shown Mr. Gatlin and Ms. Jungling. The "Optional Policies" subheading listed the optional policies, their premium amounts, and the total estimated cost of all products. These optional items were individually circled by Respondent and initialed by Mr. Hansen. The spreadsheet contained language identical to that set forth in Finding of Fact 18 above. Mr. Hansen signed and dated the sheet in the spaces provided. Respondent presented the premium finance agreement to Mr. Hansen in the same fashion described in Finding of Fact 26 above. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the three policies (auto, life, and vehicle protection) accepted by Mr. Hansen, totaling $833.00, plus $2.80 in documentary stamp tax, less a down payment of $92.00, for a total amount financed of $743.80. The page disclosed the finance charge ($93.36) and the annual percentage rate of the loan (26.56%). Mr. Hansen opted to make 10 monthly payments of $83.72, initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate his acceptance of the loan terms. Finally, Respondent showed Mr. Hansen the Insurance Premium Financing Disclosure Form. The itemization for Mr. Hansen's policies read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $311 Property Damage Liability (PD) $219 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)[10] $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $0 Medical Payments $0 Uninsured Motorist $0 Comprehensive $0 Collision $0 Accidental Death $0 Towing $0 Rental $0 Life Insurance $98 Accident Medical Plan $0 Vehicle Protection Insurance $170 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $833 Document Stamp Tax, if applicable $2.80 Less Down Payment applied $92.00 AMOUNT FINANCED (loaned to you) $743.80 I, Bruce K. Hansen, have read the above and understand the coverages I am buying and how much they cost. Signature of Named Insured Date Mr. Hansen signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. Mr. Hansen testified that he left Respondent's office believing he had bought only basic automobile insurance. He did not recall Respondent's explanations of the optional policies, and conceded that he was in a hurry to complete the transaction and spent a total of a half-hour in Respondent's office that day. Mr. Hansen testified that "I was flipping page after page, just signing my name to get out of there . . . I was trusting the person I was working with." Mr. Hansen testified that he did not recall Respondent explaining that the vehicle protection plan was a separate optional policy that would cost him an extra $170. He did recall Respondent asking the insurability questions related to the life insurance policy, but he thought they were just "procedure." Mr. Hansen conceded that Respondent might have explained every page of the paperwork to him, but that he was not paying attention. Mr. Hansen left Respondent's office with a copy of all the paperwork on his policies. He never looked at the paperwork until he was contacted by a Department investigator in February 2007. Mr. Hansen gave a statement to the Department investigator and agreed to testify in order to "stop stuff like this from happening," as well as try to obtain a full refund for the vehicle protection and term life policies. On March 3, 2007, he went to Respondent's office and signed the paperwork to cancel the term life and vehicle protection policies, for which he received a pro-rated refund. The final Complaining Customer was Sidney Dossantos (Counts VIII and IX). On July 20, 2006, Mr. Dossantos entered Respondent's Cash Register office to purchase insurance. Mr. Dossantos was renewing his policy with Direct General, though this was the first time he had done business with Respondent's office. In August 2005, Mr. Dossantos had purchased auto insurance plus an optional accident medical protection plan, a travel protection plan, and a term life insurance policy. Mr. Dossantos testified that he told Petitioner that he wished to purchase only basic automobile insurance, and that he rejected the optional term life and vehicle protection policies when Petitioner offered them. Respondent testified that her initial procedure is different with a renewing customer. She looks up the customer on her computer to verify the existing policies and determine if any money is owed. She verifies the customer's name, address and phone number. Respondent testified that the address is important because the customer's zip code is partially determinative of the rates offered on auto insurance. Respondent stated that the computer also lists the optional policies that are also due for renewal, and that it is her practice to go over these and inquire whether the customer wants to renew them. Mr. Dossantos' case was complicated by the fact that Direct General no longer offered the travel protection plan as a separate product. In these cases, Respondent would explain the vehicle protection plan, which was the current equivalent of the accident medical protection and travel protection plans that Mr. Dossantos purchased in 2005. See footnote 4, supra. Respondent testified that, after the customer verifies the information on file and states which policies he wishes to renew, she goes over a pen sale sheet with the customer. As noted in the general pen sale findings above, Mr. Dossantos did not deny having seen the pen sale sheet and admitted that he signed it. The pen sale document was identical to those shown to Ms. Jungling and Mr. Hansen. The signed pen sale sheet indicated that Mr. Dossantos accepted the vehicle protection plan and the term life insurance policy. It also indicated that he rejected optional uninsured motorist, medical payment, accidental death, comprehensive and collision policies. Respondent next printed the policy paperwork and reviewed it with Mr. Dossantos. The paperwork for the vehicle protection plan application was identical to that described in Findings of Fact 45 and 46 relating to Ms. Jungling. Mr. Dossantos opted for the "individual plan" with a term of one year. He signed on the signature line of the application page, and signed the "Optional Vehicle Protection Plan Summary & Acknowledgement" page indicating his acceptance of this optional policy. Respondent went over the documents relating to the term life policy. The policy named Mr. Dossantos' parents as the beneficiaries on the $10,000 policy, and stated an annual premium of $108.00. Mr. Dossantos was not asked the standard insurability questions, because this was a renewal of an existing policy. Mr. Dossantos signed and dated his acceptance of the policy on the signature line provided. Respondent showed Mr. Dossantos an "Explanation of Policies, Coverages and Cost Breakdown (Including Non-Insurance Products)" spreadsheet identical in form to that shown to Mr. Gatlin, Ms. Jungling, and Mr. Hansen. The "Optional Policies" subheading listed the optional policies, their premium amounts, and the total estimated cost of all products. These optional items were individually circled by Respondent and initialed by Mr. Dossantos. The spreadsheet contained language identical to that set forth in Finding of Fact 18 above. Mr. Dossantos signed and dated the sheet in the spaces provided. Respondent presented the premium finance agreement to Mr. Dossantos in the same fashion described in Finding of Fact 26 above. On the first page of the agreement, under the heading, "Itemization of Amounts Financed," was stated the type of policy, the insurance company, and the annual premium for each of the three policies (auto, life, and vehicle protection) accepted by Mr. Dossantos, totaling $913.00, plus $3.15 in documentary stamp tax, less a down payment of $80.00, for a total amount financed of $836.15. The page disclosed the finance charge ($102.47) and the annual percentage rate of the loan (25.93%). Mr. Dossantos opted to make 10 monthly payments of $93.86, initialed the bottom of the first sheet of the premium finance agreement, then signed the second page to indicate his acceptance of the loan terms. Finally, Respondent showed Mr. Dossantos the Insurance Premium Financing Disclosure Form. The itemization for Mr. Dossantos' policies read as follows: Insurance you are REQUIRED by law to have: Personal Injury Protection (PIP) $368 Property Damage Liability (PD) $242 Other insurance which you MAY be required by law to have: Bodily Injury (if an SR-22 has been issued)[11] $0 OPTIONAL insurance coverage: Bodily Injury (if an SR-22 has NOT been issued) $0 Medical Payments $0 Uninsured Motorist $0 Comprehensive $0 Collision $0 Accidental Death $0 Towing $0 Rental $0 Life Insurance $98 Accident Medical Plan $0 Vehicle Protection Insurance $170 Life Policy Fee $10 SR-22 Fee $0 Recoupment Fee, if applicable $0 Policy Fee, if applicable $25 TOTAL INSURANCE PREMIUMS $913 Document Stamp Tax, if applicable $3.15 Less Down Payment applied $80.00 AMOUNT FINANCED (loaned to you) $836.15 I, Sidney Dossantos, have read the above and understand the coverages I am buying and how much they cost. Signature of Named Insured Date Mr. Dossantos signed and dated the Insurance Premium Financing Disclosure Form on the spaces indicated. As noted above, Mr. Dossantos testified that he told Respondent he only wanted basic automobile insurance. Mr. Dossantos, a 25-year-old college student at the time he purchased insurance from Respondent, acknowledged having purchased the optional policies the previous year, when he was still living with his parents. However, in July 2006 he was living in an apartment with his girlfriend and money was tighter. He received life insurance through his employer, Publix Supermarkets, and did not want more. Mr. Dossantos conceded that his policy paperwork clearly stated that the vehicle protection plan was optional, but that he did not read it during the sale. Mr. Dossantos simply signed whatever papers Respondent placed in front of him. Mr. Dossantos testified that when he walked out of Respondent's office on July 20, 2006, he believed that he had bought basic auto insurance and nothing else. Like Ms. Jungling and Mr. Hansen, he learned otherwise only after being contacted by the Department's investigator in February 2007. Unlike Ms. Jungling and Mr. Hansen, Mr. Dossantos did not later cancel the optional policies. All four of the Complaining Customers credibly testified that the Department made no promises that they would obtain full refunds of the premiums paid on the optional policies in exchange for their written statements or their testimony in this proceeding. On or about August 9, 2006, Respondent changed her principal business street address from 6318 U.S. Highway 19 North, New Port Richey, Florida, to 5116 U.S. Highway 19 North, New Port Richey, Florida, but did not notify the Department of this change in principal business street address until on or about March 3, 2007.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner issue a final order finding Respondent guilty of committing the violation alleged in Count X of the Administrative Complaint, fining her $250.00 for such violation, and dismissing the remaining counts of the Administrative Complaint. DONE AND ENTERED this 8th day of February, 2008, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of February, 2008.
The Issue Whether Respondent violated the following sections of the Florida Statutes: 626.041(2), 626.561(1), 626.592(1), 626.611(4), (5), (7)-(10), (13), 626.21(2), (6), (12), 626.9521, 626.9541(1)(a)1, (b), (e)1., (k)1., (o)1., (z)3, 627.739(2), and 627.843. If so, what penalty should be imposed.
Findings Of Fact Respondent, Joanne Marie Shepherd (Shepherd), is currently and was at all times pertinent to this proceedings licensed in Florida as an authorized joint underwriter, association representative, life agent, life and health agent, general lines-property casualty, surety and miscellaneous lines agent, health insurance agent, independent adjuster, and dental health care service contract salesman. At all times relevant to this proceeding, Shepherd was the president, secretary, and treasurer of Coral Springs Auto Tag and Insurance Agency, Inc. (Coral Springs Agency). Coral Springs Agency is an insurance agency incorporated and existing pursuant to the laws of the state of Florida. At all times relevant to this proceeding Shepherd would be present at the Coral Springs Agency office during approximately 90 percent of the operating hours of the business. In early 1992, Shepherd organized an automobile club, Quality Motoring Association (QMA). At all times relevant to this proceeding, Shepherd was the vice president, secretary, treasurer, director, and resident agent of QMA. QMA provides one or more of the following services: coverage for automobile towing and road service, rental reimbursement, emergency travel expense, and theft reward. Shepherd's employees were paid a commission for each QMA contract which they sold. Contracts for QMA services were on a printed form and contained the following language: THIS CONTRACT IS NOT AN INSURANCE POLICY AND DOES NOT COMPLY WITH THE FINANCIAL RESPONSI- BILITY OR NO-FAULT LAWS OF ANY STATE OR TERRITORY. Jo Ann Jones and Kelly Conley were employed by Coral Springs Agency beginning in 1987 and 1991, respectively. They worked under the direct control and supervision of Shepherd. On February 26, 1993, Ms. Jones received a limited customer representative license for automobile insurance. She received her 220 license in December, 1994. During 1993, Ms. Conley spent approximately 60 to 70 percent of her work time performing tag and title work for Coral Springs Agency. In addition, her other duties included filing, answering the telephone, assisting in preparing correspondence concerning late payments and intentions to cancel, and selling QMA services. Her duties did include giving quotes for renewals and specific coverage requests, taking applications and receiving premium payments; however the evidence did not establish that Ms. Conley spent more than ten percent of her time performing these duties. She received her 220 license in October, 1994. On October 26, 1994, Shepherd originally filed the name of the primary agent for Coral Springs Agency as Kelly Gorton. This filing was amended on December 15, 1994, to change the name of the primary agent to Jo Connors. The records of the Department do not show that Shepherd filed the name of the primary agent for Coral Springs Agency for 1990 through 1993. Shepherd did not file the name of the primary agency for Coral Springs Agency for 1990, 1991, 1992 and 1993. In 1992, Andrew Coombs came to Coral Springs Agency to procure an automobile insurance policy. Shepherd explained the coverages to him. Mr. Coombs was issued a policy for PIP and property damage. Based on Respondent's Exhibit No. 8, Mr. Coombs was also issued comprehensive and collision coverage with Executive Insurance Company for a policy period of July 5, 1992 through July 5, 1993. The declaration sheet for the Executive Insurance Company policy showed that Mr. Coombs had a conviction for DUI/DWI on 6-11-90. In 1992, Mr. Coombs signed a contract with QMA for towing and rental services. However, Mr. Coombs was under the impression that the rental and towing services were included as part of his insurance policy. The contract which he signed did not indicate the fee amount for the contract. In June, 1993, Mr. Coombs called and discussed with Jo Ann Jones his need for a policy renewal and received a written quote from her on June 17, 1993, which stated: As per your request, please see the following renewal quote. 25,000 property damage, basic PIP w/a 2000 ded. Comp and coll. w/a 500 ded each. Your annual premium is 1278. w/a down payment of 302.62 and 6 months payments of 170.56. If you have any questions please call me. Thank you. The following Saturday, Mr. Coombs went to the Coral Springs Agency and gave Ms. Jones $200 in cash and a check for $1,078. He received a receipt from Ms. Jones for that amount showing that it was for "ins. paid in full." Mr. Coombs was in a hurry on that day and he executed a power of attorney appointing Coral Springs Auto Tag and Insurance Agency as his attorney-in-fact and authorizing the Coral Springs Agency to sign and execute applications for automobile insurance. The power of attorney did not authorize Coral Springs Agency to execute a contract with QMA for Mr. Coombs. Jo Ann Jones witnessed the execution of the power of attorney and dated it 7-3-93. The power of attorney was used on July 3, 1993 to execute a contract with QMA for towing and rental services. The charge for these automobile club services was $100 and was so indicated on the contract. Mr. Coombs did not know that the power of attorney would be used to purchase towing and rental services with QMA. The power of attorney was used also to execute Mr. Coombs' application for an insurance policy with Progressive. The application showed that the total premium with Progressive was $1,178. The policy with Progressive was for property damage, PIP, comprehensive and collision. In completing the application, it was the understanding of the Coral Springs Agency that the latest conviction that Mr. Coombs had was the DUI in June, 1990. However, Mr. Coombs had confused the date of the occurrence of the violation with the date of conviction and had not revealed that in October, 1990, his license had been revoked because of the DUI violation. When Progressive learned of the revocation, it notified Mr. Coombs that an additional $98 premium would be due. As a result of the notification from Progressive, Mr. Coombs learned that Progressive had received $1,178 instead of the $1,278 which he had given Coral Springs Agency and that he had been charged $100 for QMA's towing and rental services. Surprised and upset by this revelation, Mr. Coombs contacted the Department of Insurance and made a complaint. On July 24, 1993, Wayne LeBlanc went to the Coral Springs Agency to purchase automobile insurance. His current policy was with Allstate and he told Ms. Conley that he wanted similar coverage. The Allstate policy included towing and rental coverage for approximately eight dollars. Ms. Conley gave Mr. LeBlanc a quote. Ms. Conley filled out Mr. LeBlanc's application for insurance with Progressive and a contract with QMA for rental and towing services. She placed "X's" on the documents indicating where Mr. LeBlanc should sign and he signed the documents. Mr. LeBlanc did not know that he was purchasing towing and rental services from an automobile club. Ms. Conley did not explain the QMA contract to Mr. LeBlanc. The Progressive application showed that the total premium for the insurance was $512. The QMA contract showed the amount of the fee for QMA services as $100. Mr. LeBlanc gave Ms. Conley a check for $228. Ms. Conley applied $128 for payment of the insurance coverage and $100 for the QMA coverage. A short time later, Mr. LeBlanc received a statement from Progressive indicating that his insurance premium had increased from $512 to $702 because he had failed to show proof of insurance for the six months prior to the purchase of the Progressive policy. Mr. LeBlanc cancelled his policy with Progressive. He received a check from QMA dated January 19, 1994 for $100 as a refund on his QMA coverage. In August, 1993, Eric Henry called Coral Springs Agency for a quote for automobile insurance for his 1984 Nissan. He wanted the minimum coverage which was legally required. Mr. Henry was given a quote of between $480 and $490. He, along with his father, went to Coral Springs Agency to purchase the insurance. Mr. Henry signed a Progressive insurance application. The Progressive application showed a total premium of $410 in two different locations on the contract as well as a breakdown of the premium by coverage. Additionally the application showed a $103 down payment with the remainder of the premium to be paid in installments. Mr. Henry signed a contract with QMA. The contract showed a fee of $80 as well as the benefits he was receiving under the contract. Ms. Jones did not explain the QMA contract to Mr. Henry. He did not know that he was purchasing towing and rental services from an automobile club. He did not ask for the automobile club services and did not want them. He had never had towing and rental coverage before. Mr. Henry gave Ms. Jones $183, of which $103 was applied to the insurance premium and $80 to QMA for towing and rental services. Mr. Henry was given a receipt by Ms. Jones that described the money as "DP on ins." Mr. Henry learned that he had purchased QMA coverage from a representative from the Department. He contacted the Coral Springs Agency and requested a refund for the QMA coverage because he did not want and had not asked for the QMA services. QMA refunded his money. Mr. Henry has continued to do business with Coral Springs Agency. On Saturday, August 21, 1993, JoAnne Strader called Coral Springs Agency for a quote for insurance on her automobile. Shepherd gave her a quote by telephone for coverage by Fortune Insurance Company. Ms. Strader wanted the minimum coverage required by law and nothing else. Coral Springs closed at one that afternoon so Ms. Strader hurried to the agency to purchase the insurance. When she arrived at the agency, Ms. Conley pulled up the quote from the computer. Ms. Strader signed the application for the Fortune Insurance, a contract with QMA for towing and rental services, and an agreement for financing the insurance premiums. The application stated that the total insurance premium was $207. The QMA contract showed that the fee for the QMA services was $55 for six months. Ms. Jones did not explain the QMA contract. The financing agreement showed that the total premium was $207 with $102 being applied as the down payment. Ms. Strader gave Ms. Conley a check for $157 of which $102 was applied as a down payment for the insurance coverage and $55 for QMA services. The finance agreement provided that Ms. Strader would make three payments of $42.95 beginning on September 21, 1993. Ms. Strader was given a copy of the finance agreement on August 21, 1993. Ms. Strader later called Coral Springs Agency and advised Ms. Conley that she had misplaced her insurance documents. Ms. Conley sent Ms. Strader a duplicate set, including a copy of the finance agreement, in October, 1993. Ms. Strader was unaware at the time she purchased the insurance that she had also purchased automobile club services from QMA. She learned for the first time that she had purchased such services when a representative from the Department contacted her in January, 1994 and told her. In February, 1994, Ms. Strader made a claim to QMA for reimbursement of towing expenses. She received a check dated February 18, 1994 from QMA. On November 9, 1993, Daniel Link went to the Coral Springs Agency to purchase minimum automobile insurance coverage for his two vehicles. He was given a written quote by Jo Ann Jones. Mr. Link asked Ms. Jones to prepare the application and stated that he would come back later in the day to sign the application. When he returned to the agency the application was prepared and he signed it. The application showed that the total insurance premium was $1023 with a breakdown by vehicle of the costs for the coverages. Mr. Link gave Coral Springs Agency a check for $356, which he thought would be applied to the insurance premium; however only $256 was applied toward the insurance premium. Mr. Link signed an agreement to finance the outstanding premium balance. The finance agreement showed that the total premium was $1023 with a down payment of $256 with the remainder to be paid in eight payments. His testimony was not clear whether he received a copy of the finance agreement on the day that he signed the agreement. Mr. Link did not want to purchase towing and rental coverage. When he came into the agency to sign the application, he also signed a contract with QMA for automobile club services which showed a fee of $100. The blanks in the contract had been filled out by someone at Coral Springs Agency, and he signed where an "X" was placed. Ms. Jones did not explain the QMA contract to Mr. Link. He did not know that he had purchased such services. Of the amount which Mr. Link paid the Coral Springs Agency, $100 went to pay for QMA coverage. In November, 1993, Andrew Prisco and his father went to the Coral Springs Agency to purchase insurance for a 1985 Nissan. Mr. Prisco's father had transferred the title to the car to Mr. Prisco. The vehicle has previously been insured through the Coral Springs Agency. Mr. Prisco's father handled the transaction for Mr. Prisco and discussed the coverage with Ms. Jones. Mr. Prisco signed an application for Progressive Insurance. Jo Ann Jones had filled out a portion of the application. The application showed that the total premium was $410. Mr. Prisco gave the Coral Springs Agency a check for $490, thinking it was for insurance premiums. Mr. Prisco did not want towing and rental services, but he signed a contract with QMA. Ms. Jones filled out the QMA agreement and put an "X" where Mr. Prisco was supposed to sign. Mr. Prisco signed where Ms. Jones indicated; however he was unaware that he was purchasing automobile club services. Ms. Jones did not explain the QMA contract to Mr. Prisco. The QMA contract showed that the fee for the services was $80. Of the $490 which he paid Coral Springs Agency, $80 was for QMA. Mr. Prisco learned from a Department representative that he had purchased QMA services. Mr. Prisco and his father requested a refund from QMA. QMA refunded the fee paid by Mr. Prisco. Mr. Prisco has continued to do business with Coral Springs Agency. Shepherd has been a licensed insurance agent in Florida since 1982. Other than the instant proceeding, Shepherd has never had a disciplinary action taken against her insurance agent license.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing Counts III, VI, and VII of the Administrative Complaint; finding that Joanne Shepherd violated Section 626.592(1), Florida Statutes; finding that Shepherd violated Sections 626.9541(1)(x)3., 626.611(5), (7), and (9), Sections 626.621(2)(6), and 626.9521, Florida Statutes, as set forth in Counts II, IV, V, VIII and IX of the Administrative Complaint; and suspending Joanne Shepherd's license for two years. DONE AND ENTERED this 16th day of October, 1995, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 16th day of October, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-4167 To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Paragraphs 1-4: Accepted in substance. Paragraph 5: Rejected as constituting a conclusion of law. Paragraphs 6-7: Accepted in substance. Paragraph 8: The first sentence is accepted in substance. The remainder is rejected as subordinate to the facts found. Paragraph 9: Accepted in substance that Ms. Jones was employed as an employee of Coral Springs Agency during the time period relevant to this proceeding. Paragraph 10: Rejected as not supported by the evidence. Ms. Jones was a limited customer representative. Paragraphs 11-19: Accepted in substance. Paragraph 20: Accepted in substance that Progressive asked for an additional $98 but denied that the reason for the additional premium was because Shepherd failed to send Progressive $1,278. The reason of the increase was because Coomb's license had been either suspended or revoked in 1990. Paragraph 21: Accepted in substance. Paragraph 22: The first sentence is accepted in substance to the extent that Ms. Conley took an application from Mr. Leblanc but not that she solicited or procured the application. The last sentence is rejected as not supported by clear and convincing evidence. Paragraph 23: Accepted in substance. Paragraph 24: The first sentence is rejected as to soliciting. The remainder is accepted in substance. Paragraphs 25-32: Accepted in substance. Paragraph 33: The first sentence is accepted in substance that Ms. Conley took an application from Ms. Strader for automobile insurance with Fortune but rejected that she solicited or procured the application. The last sentence is accepted in substance. Paragraph 34: Accepted in substance. Paragraph 35: The first sentence is accepted in substance except as to soliciting. The remainder is accepted in substance. Paragraph 36: The first sentence is accepted in substance. The remainder is rejected as not supported by clear and convincing evidence. Paragraphs 37-39: Accepted in substance. Paragraph 40: Rejected as not supported by the evidence. Paragraphs 41-42: Accepted in substance. Paragraph 43: The first sentence is accepted in substance. The remainder is rejected as not supported by clear and convincing evidence. Paragraphs 44-49: Accepted in substance. Respondent's Proposed Findings of Fact. Paragraph 1: Accepted in substance except as to Mr. Coombs. He did not sign the application. Paragraph 2: Accepted in substance. Paragraph 3: Rejected as not supported by the evidence. Paragraph 4: Accepted in substance. Paragraphs 5-6: Accepted in substance. Paragraph 7: Rejected as not supported by the evidence. Paragraph 8: Rejected as constituting a conclusion of law. Paragraph 9: Rejected as irrelevant. Paragraph 10: Accepted in substance. Paragraphs 11-12: Accepted in substance. Paragraphs 13-17: Rejected as not supported by the evidence. Paragraph 18: Accepted in substance. COPIES FURNISHED: Allen R. Moayad, Esquire Department of Insurance Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Thomas F. Woods, Esquire Gatlin, Woods, Carlson and Cowdery 1709-D Mahan Drive Tallahassee, Florida 32308 Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner Acting General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399
Findings Of Fact At the time of the hearing, and at all times relevant to the allegations contained in the Administrative Complaint, Alan David Cottrill was licensed as a general lines property, casualty, surety and miscellaneous lines agent by the Department of Insurance. The Department of Insurance regulates general lines-property, casualty, surety and miscellaneous lines agents pursuant to Chapters 626 and 627, Florida Statutes. Lloyd Register, III, and his son, Lloyd Register, IV, operate directly or indirectly a number of insurance agencies specializing in the sale of nonstandard insurance. These agencies generally employ an agent, who is an officer of a separate corporation in which one or both of the Registers is also an officer; and the Registers own a controlling interest in the corporation or otherwise have the capacity to terminate each corporation. Alan David Cottrill started his employment with Cash Register of Arlington, Inc. in July, 1992. He was designated as the primary agent at Cash Register of Jacksonville, Inc. at the end of July, 1992, at which time he was president of the corporation. In February of 1993, he became vice president and president of Cash Register of Westside, Inc. In March of 1993, the Mr. Cottrill was again employed by Cash Register of Arlington, Inc., and was an officer of that corporation and primary agent of that insurance agency. He was the primary agent and general manager of Cash Register of Palatka, Inc., from November of 1993 until October of 1994. From February of 1993 until October of 1994, Mr. Cottrill was general manager of all Cash Register Offices in Jacksonville and Orange Park, Florida. The Respondent was again employed full time by Cash Register of Westside, Inc. in March of 1994, and became the primary agent for that agency in May of 1994. All of the Cash Register Auto Insurance agencies with which the Respondent was employed, as indicated in Paragraph 4, above, were insurance agencies regulated under the laws of Florida. Lloyd Register, IV, was an officer and director of the foregoing Cash Register Auto Insurance agencies. Colonial Touring Association, Inc., is an automobile club providing accidental death and dismemberment as an ancillary product. COUNT I, II, and III The Petitioner did not present any evidence on the allegations of Counts I, II, III, VI, VII, IX, and X in the Administrative Complaint. COUNT IV Cassie Reimer contacted Cash Register Auto Insurance of Orange Park, Inc., at 203 Blanding Boulevard, Jacksonville, Florida, on January 8, 1993, regarding the purchase of automobile insurance. At the time Ms. Reimer purchased insurance from Cash Register Auto Insurance of Orange Park, Inc., the Respondent admitted he was the manager of the Orange Park office. The application executed by Ms. Reimer indicates that the Agency's name is "Cash Register Auto Insurance of Jax, Inc., 5631 University Blvd. W., Jacksonville, FL 32216," and the agent's number is 8009. Prior to going the Orange Park office of Cash Register Auto Insurance, Ms. Reimer had called and had obtained a quote for liability, collision, and personal injury protection for her automobile. Ms. Reimer advised the individual with whom she spoke on the phone that she wanted the minimum coverages necessary to satisfy the lien-holder of her automobile loan and the Florida law. Based upon the quote which she received, she went to the Orange Park office of Cash Register Auto Insurance. When Ms. Reimer arrived at the office, she was assisted by Andrew Voshell, who she knew as "Andy" and who helped her fill out the insurance applications (Petitioner's Exhibits 1 & 2) for liability, collision, and personal injury protection from American Union Insurance Company. Mr. Voshell helped her fill out the premium financing agreement, accepted a down payment in the amount of $83 from Ms. Reimer, and presented Ms. Reimer an application which she executed for Colonial Automobile Club which included additional insurance for accidental death and dismemberment (ADD) which cost $80. The transaction was memorialized in Petitioner's Exhibit 3 (the premium financing agreement), Petitioner's Exhibit 4 (cash receipt from Voshell), Petitioner's Exhibit 5 (Colonial Touring Association, Inc. designation of beneficiary), and Petitioner's Exhibit 6 (confirmation of coverage). The Confirmation of Coverage form (Petitioner's Exhibit 6) indicates that there were $2,000, $1,000, $500, and $250 deductibles for bodily injury; and that ADD coverage from Colonial was optional and cost $80. Ms. Reimer signed each of the spaces on the Confirmation of Coverage, indicating she had read and understood the policy. The Premium Financing Agreement (Petitioner's Exhibit 3) indicates that the total amount financed was $551, which included the $80 premium for Colonial Touring Association (CTA) for ADD and the $471 premium for American Union (AIB) for property damage and personal injury protection. Ms. Reimer was not advised by Mr. Voshell that she was purchasing an optional automobile club membership, and that the cost thereof was being added to her premiums and financed. Andrew Voshell was not a licensed agent at the time he dealt with Ms. Reimer. It was Mr. Voshell who acted as the agent presenting the applications and obtaining Ms. Reimer's signature and accepting payment from her; however, Alan David Cottrill knew about the transaction because he signed Ms. Reimer's applications outside her presence. COUNT V On December 10, 1992, Curtis Newton bought automobile insurance at the University Boulevard office of Cash Register Auto Insurance of Jacksonville, Inc. The Respondent was employed at that office as the primary agent at that time. Mr. Newton called the office and obtained a quote for the minimum liability and PIP coverage required by law. The Respondent completed most of Mr. Newton's application for insurance while speaking with him on the telephone. Because Mr. Newton wanted to finance the premiums, the Respondent included an auto club membership with ADD coverage in the quote. When Mr. Newton came to the agency, he dealt with Linda Palmer, an unlicensed individual, exclusively. Ms. Palmer worked at the office from September, 1992 until August, 1993 under the supervision of the Respondent. Ms. Palmer did not hold a license to transact any type of insurance business during her employment with Cash Register Auto Insurance. The Respondent permitted Ms. Palmer to take applications and receive money. The Respondent required that Ms. Palmer explain to the customer the Confirmation of Coverages form which the customer signed. This was the only explanation provided to customers of the insurance they were buying, and constituted an explanation of policies. Mr. Newton advised Ms. Palmer that he did not want to join an auto club and did not want ADD coverage. Ms. Palmer crossed off the ADD coverage on the Premium Financing Agreement; however, she had Mr. Newton execute the Coverage Confirmation which indicated $4,000 coverage for ADD, but which did not state a premium amount. There is no place under ADD to indicate "no coverage" as there is for the other optional coverages. Mr. Newton also executed a designation of beneficiary form for Auto Accidental Death Coverage, and paid a down payment of $91 to Ms. Palmer. Ms. Palmer did not advise Mr. Newton that he had executed the paperwork for ADD coverage. Ms. Palmer was required by Respondent to sell auto club and ADD coverage. The inclusion of the forms for auto club and ADD coverage was intentional. The premium financing agreement was for the amount of the liability and PIP coverage, $256, and this coverage was provided. However, the premium financing agreement indicates the down payment was $51, not $91. There is no evidence that Mr. Newton was provided with ADD coverage, which he did not want, but the $40 difference between the $51 down payment and the $91 which Mr. Newton tendered to Ms. Palmer was not refunded to Mr. Newton. There was no evidence that Mr. Newton ever made demand for this overpayment. Had the Respondent handled Mr. Newton's application, the Respondent would have known that Mr. Newton did not desire ADD coverage, and that the down payment tendered was excessive and inconsistent with the insurance being provided and the amount being financed. In filling out the applications, explaining the forms, and accepting the money from Mr. Newton, Ms. Palmer engaged in activities restricted to agents with the knowledge and consent of the Respondent. COUNT VI and VII The Department did not present any evidence regarding Counts VI and VII. COUNT VIII On October 22, 1992, Rosa Coleman bought automobile insurance at the 3796 Blanding Boulevard office of Cash Register Auto Insurance of Westside, Inc. from the Respondent who was employed at that office at that time. Ms. Coleman advised the Respondent that she wanted the minimum required coverages. Ms. Coleman came into the office on her lunch hour and executed an application (Petitioner's Exhibit 7) for bodily injury, property damage, and PIP insurance to Union American Insurance Company. Ms. Coleman executed various forms, among which were a Confirmation of Coverage form and Designation of Beneficiary form which indicated she was obtaining auto club and ADD coverage. The Respondent did not explain that there was a separate charge for auto club membership which included the ADD coverage, or that she did not have to have this coverage. The total insurance premium for the liability and PIP coverage was $291 and the charge for the auto club was $30, for a total of $321. The handwriting makes it difficult to read the two amounts; however, the ADD was for $3,000, and the premium was $10 per thousand of coverage. The receipt indicates the Respondent received $40 down payment. The remainder of the premium was financed by Ms. Coleman with Equity Premium, Inc. The application (Petitioner's Exhibit 7) the receipt (Petitioner's Exhibit 8) and designation of beneficiary form (Petitioner's Exhibit 11) indicate that insurance company was Cash Register Auto Insurance, 5631 University Blvd. West, Jacksonville, FL 32216. Although the Respondent was not the agent for the Blanding Boulevard office at the time Ms. Coleman purchased her insurance, the Respondent, who personally sold Ms. Coleman her insurance, was the primary agent for the agency listed on the application and receipt which she received from the Respondent. COUNT IX AND X The Department did not present any evidence on these two counts. COUNT XI On or about December 22, 1993, Dennis Hurlburt went into the Palatka office of Cash Register Auto Insurance of Putnam County, Inc., in Palatka, Florida, and purchased liability and PIP on his truck. At that time, the Respondent was the primary agent in the Palatka office. (Volume III, Page 345, line 19.) Mr. Hurlburt completed an application for property damage and PIP insurance from Security Insurance Company of Hartford with the assistance of Andrew Voshell, an unlicensed employee of Cash Register Auto Insurance of Putnam County, Inc. in Palatka, Florida, who was under the supervision of the Respondent. Mr. Hurlburt's premium for the coverages he applied for was $229, and he paid Andrew Voshell $75. Mr. Hurlburt financed the balance of the premiums which included PIP, property damage, automobile club, and ADD. Mr. Voshell receipted for the down payment, and signed Respondent's name on Mr. Hurlburt's application as brokering agent. The Respondent denied that he was aware of Mr. Voshell's actions; however, he was primary agent in that office during the time in question and is charged with the supervision of the office. Money was received and receipted for by Mr. Voshell, who the Respondent admits was authorized to see customers, review applications, make deposits, and keep books. At this time, the Respondent was also actively engaged as primary agent in another office. Based upon the record as a whole and credibility of the various witnesses, the Respondent's denial is rejected. GENERAL FINDINGS ON THE CONDUCT OF RESPONDENT'S BUSINESS Most purchasers of nonstandard automobile insurance who finance their premiums do not complete payment of the premiums; whereupon, the finance company notifies the insurance company which cancels the insurance and cancels the commission earned by the selling agent after deducting for the coverage provided. By selling the auto club memberships, which included ADD coverage, the agent receives 90 percent of the premium which protects the agent against the loss of unearned premiums charged back by insurance companies. It is for this reason that the owners and management of Cash Register had the employees of their outlets include auto club memberships in insurance contracts, particularly those with premium financing. In those cases in which a customer declines auto club membership, the Cash Register agencies refuse to finance premiums, or increase the charges for financing. The Respondent and his employees sell between 80-140 automobile insurance policies per month. The average premium has increased over time, but varied between $250 and $550 for the counts presented. The Respondent receives a commission between 15 and 17.5 percent on automobile insurance. The commission for an auto club ADD contract is 90 percent which means that the agency receives $54 of a $60 premium. This is a "guaranteed" commission because there is no refund on the auto club membership, and this permits the agency to risk the loss of unearned commission which occurs when an insured defaults on his or her premium financing agreement. The customers made a down payment, which was received by the agency, and the balance of the amount owed was financed by the customer. According to the premium financing contract, the down payment was subtracted from that total due for PIP, property damage, and ADD insurance; and the balance due was financed. Under the terms of the contract, the customer financed a portion of the ADD coverage. In actuality, the down payment was applied first to the auto club membership, which included ADD coverage, and only PIP and property damage coverages were financed. The contract for the premium financing and the explanations of what was being financed do not accurately reflect this reality. Government Employees Insurance Company markets its automobile insurance through the mail, and sends applications to the customers through the mail, which are subsequently executed by the agent when returned by the customer by mail. Prior to October 12, 1993, the Department had no rule proscribing the practice of unlicensed persons giving quotes on behalf of a licensed agent. The Department has no rule defining "solicit" and "procure" with respect to the sale of insurance. The Department has no rule which requires an agent sign an application in the presence of the insured.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That the Department revoke the license of the Respondent for violation of Section 626.611(5) and (9), Florida Statutes, by aiding others to act as agents as alleged in Count V, and That the Department revoke the license of the Respondent for violation of Section 626.611(5) and (9), Florida Statutes, by aiding others to act as agents as alleged in Count VIII, and That the Department revoke the license of the Respondent for violation of Section 626.621(12), Florida Statutes, by aiding others to act as agents as alleged in Count IV, and That the Department revoke the license of the Respondent or impose a fine of $2,500 for violation of Section 626.621(12), Florida Statutes, by aiding others to act as agents as alleged in Count V, and That the Department revoke the license of the Respondent or impose a fine of $2,500 for violation of Section 626.621(12), Florida Statutes, by aiding others to act as agents as alleged in Count XI, and That the Department impose a $2,500 fine for Respondent's violation of Section 627.8405, Florida Statutes, by including ADD coverage in a premium financing agreement as alleged in Count XI, and That the Department impose a $500 fine for violation of Section 627.4085(1), Florida Statutes, for improperly identifying the agency's address as alleged in Counts IV, and That the Department impose a $500 fine for violation of Section 627.4085(1), Florida Statutes, for improperly identifying the agency's address as alleged in Counts VIII. DONE and ENTERED this 11th day of January, 1996, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of January, 1996. APPENDIX CASE NO. 94-5460 Both parties submitted proposed findings of fact which were read and considered. The following states where their findings were adopted or why they were rejected: Petitioner's Recommended Order Findings Paragraph 1,2 Paragraph 1 Paragraphs 3-10 Paragraph 4 Paragraph 11 Paragraph 5 Paragraphs 12,13 Paragraph 6 Paragraph 14,15 Paragraph 14 Paragraphs 16,17 Paragraph 18 Paragraph 18 Paragraph 6 Paragraph 19 Irrelevant and unnecessary. Paragraph 20 Paragraph 8 Paragraph 22,23 Paragraph 11 Paragraph 24 Paragraph 15 Paragraph 25 Contrary to better evidence. Paragraph 26 Paragraph 12 Paragraphs 27,28 Paragraphs 12,13,15 Paragraph 29 Paragraph 16 Paragraph 30 Subsumed by paragraph 15. (S-15.) Paragraph 31,32 Paragraph 28 Paragraph 33 Paragraph 29 Paragraph 34 Unnecessary. Paragraph 35 Paragraph 31 Paragraph 36 Contrary to better evidence. Paragraph 37 Paragraph 31 Paragraph 38 Contrary to better evidence. Paragraph 39,1st sent. Paragraph 30 Paragraph 39,remainder Contrary to better evidence. Paragraph 40 Contrary to better evidence. Paragraph 41 Paragraph 33 Paragraphs 42,43 Paragraph 34 Paragraphs 44-47 Paragraph 35 Paragraph 48 Paragraph 18 Paragraph 49 Subsumed in Paragraph 19. Paragraph 50 Subsumed in Paragraph 22. Paragraph 51 Paragraph 21 Paragraphs 52-55,57 Paragraph 24 Paragraph 56 Paragraph 22 Paragraph 57 Subsumed in Paragraph 24. Paragraphs 58,59 Paragraph 21 Paragraph 60 Paragraph 22 Paragraphs 61,63,64 Unnecessary. Paragraph 62 Subsumed in Paragraph 23. Paragraph 65 Subsumed in Paragraph 36. Paragraphs 66,67 Paragraph 38 Paragraph 68 Contrary to better evidence. Paragraph 69 Irrelevant. Paragraph 70 Paragraph 39 Paragraph 71 Irrelevant. Paragraph 72 Contrary to better evidence. Paragraph 73 Subsumed in Paragraph 33. Paragraph 74 Irrelevant. Paragraph 75 Paragraph 37 Respondent's Recommended Order Findings Paragraph 1 Paragraph 2 Paragraph 2 Paragraph 1 Paragraph 3 Irrelevant as to time. Paragraph 4 Irrelevant. Paragraph 5 Subsumed in Paragraph 17. Paragraph 6-8 Subsumed in Paragraph 7. Paragraph 9 Paragraphs 8,11 Paragraph 10 Paragraph 9 Paragraph 11 Subsumed in Paragraph 8. Paragraph 12 Subsumed in Paragraph 11. Paragraph 13 Subsumed in Paragraph 13 and second application is irrelevant. Paragraph 14 Subsumed in Paragraph 14. Paragraph 15 Contrary to Reimer's testimony: Vol I, pg 118. Paragraph 16 Subsumed in Paragraph 14. Paragraph 17 Subsumed in Paragraph 13. Paragraph 18 Subsumed in Paragraph 14. Paragraph 19 Irrelevant. Paragraph 20 Paragraph 20 Paragraph 21,22 Contrary to better evidence. Paragraph 23 Paragraph 18 Paragraph 24 Subsumed in Paragraph 19. Paragraph 25 Paragraph 19 Paragraphs 26,27 Subsumed in Paragraphs 20,21. Paragraphs 28,29 Subsumed in Paragraph 22. Paragraph 30 Subsumed in Paragraph 24. Paragraph 31 Rejected because Respondent's failure to perform the acts required of the agent lead to his mistaken belief. Paragraph 32 Paragraph 22 Paragraphs 33-35 Irrelevant. Paragraphs 36,37 Paragraph 27 Paragraph 38 Paragraph 28 Paragraph 39 True, but Respondent was the agent who dealt with Coleman and was directly responsible for his own acts. Paragraph 40 Subsumed in Paragraph 30. Paragraph 41 Rejected as contrary to better evidence. Paragraphs 42,43 Subsumed in Paragraph 30. Paragraphs 44,45 Irrelevant. Paragraphs 46,47 Paragraph 32 Paragraph 48 Paragraph 33 Paragraph 49 Rejected as contrary to better evidence. Paragraphs 50-52 Irrelevant. Paragraphs 53,54 Paragraphs 34,35 Paragraph 55 Rejected as contrary to better evidence. Paragraph 56 Subsumed in various paragraphs. Paragraph 57,58 Paragraph 36 Paragraph 59-69 Irrelevant or not necessary to resolution of the issues. Paragraph 70 Rejected as contrary to better evidence. Paragraph 71 Irrelevant. Paragraph 72 Not necessary to resolution of the issues. Paragraph 73,74 Rejected as contrary to better evidence. Paragraph 75-79 Irrelevant. Paragraph 80 While true, the fact asserted is contrary to the financing paper work. This is part of the misleading activities by Respondent and his employees. Paragraph 81-84 Irrelevant. Paragraph 85 Recites Hearing Officer's ruling. Paragraph 86,87 Not necessary to resolution of the issues. Paragraph 88,89 Irrelevant. Paragraphs 90,92 Paragraphs 43,44 Paragraphs 91 Irrelevant. Paragraph 93,94 Paragraph 45 COPIES FURNISHED: Allen R. Moayad, Esquire Department of Insurance Division of Legal Services 612 Larson Building Tallahassee, FL 32399-0333 Jed Berman, Esquire Infantino and Berman Post Office Drawer 30 Winter Park, FL 32790 Bill Nelson, State Treasurer and Insurance Commissioner Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 Dan Sumner, Acting General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, FL 32399-0300
The Issue Whether petitioner should take action against respondent for the reasons alleged in the administrative complaint?
Findings Of Fact The parties stipulated that respondent Kenneth E. Schneider has been a general lines agent and so licensed by respondent, at all pertinent times. He has been doing business in Pensacola, Florida, as Friendly Auto Insurance of Pensacola, Inc. (Friendly). Mr. Schneider was "agent for Friendly," Petitioner's Exhibit No. 16, and he and his wife ran the office (T. 124) with the help of a clerical assistant. Respondent was the licensed agent who "waited on customers." (T. 125) At the time of the final hearing, he was licensed to represent Protective Casualty Insurance Company, and Allied Fidelity Insurance Company. Petitioner's Exhibit 20. Additionally, and "only during 1982," petitioner was licensed to represent Dixie Insurance Company, Kenilworth Insurance Company, Colonial Insurance Company of California, and Fortune Insurance Company. Petitioner's Exhibit No. 19. When Mr. Schneider wrote policies for insurance companies other than those he was licensed to represent, he did so by agreement with "a managing general agency." (T. 141). Not all of these agreements he had with managing general agencies were in writing and the Department of Insurance was apprised of none of them. (T. 142, 143). Respondent "broker[ed] . . . business through a general agency in the State of Florida . . . [or] in Atlanta." (T. 141). Time Premium Company (TPC) of Hollywood, Florida, finances insurance premiums. TPC supplies Friendly (and other insurance agencies) with form contracts and blank drafts. Customers of Friendly wanting to borrow money to pay part of their insurance premiums sign a form contract filled in by a Friendly employee obligating the customer to repay TPC the portion of the premium it finances, on an installment basis. Among other things, the form contract provides: That in consideration of the payment by TIME to the respective insurance companies, or their agents, of the balance of the premiums upon the policies of insurance hereinbefore described, the assured agrees with TIME as follows: The assured hereby assigns to TIME as security for the total amount payable hereunder, any and all unearned return premiums and dividends which may become payable under the policies listed in the schedule and loss payments under said policies which reduce the unearned premiums. . . . 4. The assured hereby appoints TIME his attorney in fact to cancel and give notice of cancellation of said policies for non-payment of any amounts due hereunder, and said insurance companies are hereby authorized and directed, upon the demand or request of TIME, to cancel said policies and to pay TIME the unearned return premiums pursuant to the assignment contained in paragraph 1 about thereon without proof of default hereunder or breach thereof or of the amount owning hereunder. In the event that the unearned return premiums are not sufficient to pay the total amount due hereunder, the assured shall pay the deficiency with interest at the highest allowable rate. Petitioner's Exhibit No. 1. A Friendly employee consummates the loan by drawing on TPC and forwarding the draft to the insurance company (or agency) for whom Friendly is writing the insurance. In the event that a company fails to repay TPC, TPC causes the insurance coverage to be cancelled and applies return premiums against the outstanding indebtedness, including, when received, unearned commissions in Friendly's hands at the time of cancellation. TPC notifies Friendly of any shortfall, once it has received return premiums from the insurance companies (or agencies), and Friendly forwards all or part of its unearned commission to TPC, as appropriate. By print-out mailed four times monthly, TPC notifies Friendly of unearned commissions Friendly owes TPC. If return premiums, including unearned commissions, do not satisfy the debt, TPC duns the customer. Friendly is under an obligation to return to the customer any part of an unearned commission it does not owe to TPC or some other premium finance company. BARAHONA On November 29, 1982, Victor Barahona bought insurance from Friendly. Friendly wrote policy No. FAP508054 on Horizon Insurance Company (Horizon) on behalf of Guaranteed Insurance Underwriters (Guaranteed) for liability coverage; and, for comprehensive and collision coverage, policy No. SPP0401130 on Southern Insurance Company (Southern), on behalf of Florida General Agency. Mr. Barahona made a downpayment of $159.00 and Friendly effected a loan to him from TPC in the amount of $386.00 for the remainder of the combined premiums. Together with the finance charge and documentary stamps, Mr. Barahona's obligation to TPC aggregated $437.60, which he was to repay in eight monthly installments of $54.70 each, the first being due on December 30, 1982. On January 6, 1983, TPC notified Mr. Barahona that it had not received an installment payment, and that the policies would be cancelled if the payment was not received within ten days. On January 17, 1983, TPC requested cancellation of both policies. Later TPC notified Mr. Barahona that the policies were cancelled effective February 25, 1983. As a result of the cancellation of the Barahona policies, TPC received a total of $311.63 in return premiums, $127.95 from Florida General Agency and $183.68 from Horizon or Guaranteed. As of September 2, 1983, Barahona still owed TPC $114.78, and TPC had not received any part of the unearned commission on Barahona's policies from Friendly, but it was not until August that TPC had received the last insurance company return premium. Some time thereafter it billed Friendly on the entire unearned commission. In July of 1984, Friendly paid TPC the money it owed TPC on account of the cancellation of the Barahona policies. TAYLOR December 6, 1982, Friendly wrote policy No. SPP0401329 on Southern on behalf of Florida General Agency and policy No. 389868 on Protective Casualty Insurance Company (Protective) on behalf of Specialty Insurance Underwriters (Specialty) for James M. Taylor. Mr. Taylor made a down payment of $97.00, and Friendly effected a loan to him from TPC in the amount of $226.00 for the remainder of the combined premiums. Together with the finance charge and documentary stamps, Mr. Taylor's obligation to TPC aggregated $264.43, which he was to repay in eight equal monthly installments of $33.06, the first being due January 7, 1983. On January 12, 1983, TPC notified Mr. Taylor that it had not received an installment payment, and that the policies would be cancelled if the payment was not received within ten days. At TPC's behest, both policies were cancelled effective February 28, 1983, leaving an outstanding balance of $274.48. As a result of the cancellation of the Taylor policies, TPC received a total of $185.62 in return premiums, $88.02 from Florida General Agency and $97.60 from Protective in March of 1983. A notice of cancellation was sent to Friendly as well as to Protective and Southern, but Friendly did not pay the unearned commission it owed TPC until July of 1984. (T. 19). BIVINS On November 29, 1982, Friendly wrote policy No. 0401124 on Southern on behalf of Florida General Agency for Walter L. Bivins. Of the $159.00 total premium, Delores T. Bivins paid $99.00 as a cash downpayment, and Friendly effected a loan to her from TPC in the amount of $60.00 for the remainder of the premium. Together with the finance charge and documentary stamps, Mr. Bivins' obligation to TPC aggregated $81.93, which he was to repay in three equal installments of $27.31, the first of which was due December 30, 1982. Delores T. Bivins mailed TPC a check for $30.31 ($27.31 plus a $3.00 late charge) dated December 31, 1982. TPC deposited this check, but it was returned unpaid. As a result TPC assessed a $10.00 delinquency charge, and an additional $10 charge, because the check was returned, and caused the cancellation of Mr. Bivins' policy, effective March 2, 1983, claiming a balance due of $104.93. TPC received a return premium from Southern or Florida General Agency later the same month. TPC received the $12.80 unearned commission Friendly owed it in July of 1984. GORECKI On January 6, 1983, Friendly wrote policy No. SPP0403316 on Southern on behalf of Florida General Agency and policy No. 031555 on Allied Fidelity Insurance Company on behalf of Specialty Insurance Underwriters, Inc. for James T. Gorecki. The combined premiums amounted to $481.00. Mr. Gorecki made a down payment of $144.00 and financed the remaining $337.00 through TPC. Friendly effected the loan from TPC. Together with the finance charge and documentary stamps, Mr. Gorecki's total obligation to TPC aggregated $384.56, which he was to repay in eight equal monthly installments of $48.07, the first being due February 6, 1983. Mr. Gorecki sold his car and requested cancellation of both insurance policies in February of 1983. He executed documents at Friendly's office to effect the cancellation. Mr. Gorecki made no payment to TPC and TPC requested cancellation of both policies as a result, although at least one of them had already been cancelled. The Southern policy, No. SPP0403316, was cancelled March 3, 1983, and on March 17, 1983, a check for Southern's return premium, in the amount of $145.33, was sent to TPC, and TPC received it shortly thereafter. The return premium check for Allied Fidelity's policy No. 031555 reached TPC no later than May of 1983. (T. 26). On June 21, 1983, Mr. Gorecki's mother filled out an "insurance consumer service request" complaining that "[t]hey have been telling us since February they would send us a check for the unearned premium." After applying both return premium checks against Mr. Gorecki's indebtedness, a balance of $45.16 remained. TPC notified Friendly by written statement mailed June 23, 1983, that unearned commissions up to $45.16 should be forwarded to TPC. Unearned commissions in excess of $45.16, if any, should have been returned to Mr. Gorecki. (T. 41). BOURGEOIS On January 5, 1983, Friendly wrote policy No. SPP0403324 on Southern on behalf of Florida General Agency and policy No. 031572 on Allied Fidelity Insurance Company on behalf of American Underwriters, Inc. for Edward Bourgeois. The combined premiums amounted to $397.00. Mr. Bourgeois made a down payment of $119.00 and financed the remaining $278.00. Friendly effected the loan from TPC. Together with the finance charge and documentary stamps, Mr. Bourgeois' total obligation to TPC aggregated $320.64, which he was to repay An eight equal monthly installments of $40.08, the first being due February 8, 1983. Mr. Bourgeois made no payments to TPC and TPC caused the cancellation of both policies, effective March 29, 1983, as a result. Notice of cancellation went to both insurance companies and Friendly. On April 27, 1983, TPC received an insurance company return premium of $135.29 and the other insurance company return premium arrived in May of 1983. (T. 27). Friendly paid TPC the unearned commission in July of 1984. A YEAR BEHIND TPC deals with some four or five hundred insurance agencies in Florida. TPC normally receives unearned commissions from agencies within 45 to 60 days after billing, although a TPC employee testified that 90 days was "acceptable." (T. 30). TPC bills the agencies with a computer printout, representing an accumulation of accounts. Possibly one other agency has taken longer than a year to repay moneys owed under similar circumstances. (T. 29). When respondent Schneider fell behind in forwarding unearned commissions, TPC telephoned to discuss the problem. He began sending money to reduce his indebtedness and continues to do so. TPC "would like him to do better, but . . . [is] working with him on this." (T. 31-32). Respondent Schneider sent TPC checks for $800.00 on April 26, 1983, for $500.00 on July 21, 1983, for $400.00 on May 25, 1983, for $400.00 on June 15, 1983, and for $500.00 on July 21, 1983. At the time of the hearing, he was paying $3,000.00 a month "[a]gainst old accounts that . . . [TPC needs] money on on the unearned commissions," (T. 42) but TPC has "asked him to raise it to four or five." (T. 38). TPC applies money it gets from respondent to the oldest accounts first, and Mr. Schneider was aware of this. (T. 38). The money TPC received in 1983 was applied to "possibly `81 or `82 files." (T. 32). A TPC employee testified without contradiction that unearned commissions insurance agencies like Friendly owed it would be TPC's money in the hands of the agent. LE On September 9, 1982, Hang Thi Le purchased Allied Fidelity Insurance Company's policy No. 09-104802 from Friendly for automobile liability, property damage and personal injury protection coverage. She paid Friendly $123.00 on September 9, 1982. Friendly forwarded $104.55 to Allied Fidelity and retained the balance as its commission. On January 26, 1983, Ms. Le made a written request that coverage be cancelled, by executing a form which stated, "I have sold my car." Petitioner's Exhibit No. 12. Allied Fidelity Insurance Company cancelled the policy and, on April 22, 1985, mailed Friendly a check "in the amount of $532.10 with a notation on the bottom of the check indicating that this involved return premium[s] . . . for two policyholders, one being Hang Thi Le . . . indicating the amount of return [for Ms. Le] to be $50.15." (T. 51). Ms. Le was due a total return premium of $59.00, of which $8.85 was unearned commission still in respondent's hands. After she had telephoned Friendly three times and been told at least once that Mr. Schneider was not in, Ms. Le received a refund check in the amount of $50.15 dated July 21, 1983. The check bore the notation "returned premium" and was signed by respondent Schneider, Petitioner's Exhibit No. 12, but did not include the $8.85 respondent owed Ms. Le. In a separate transaction with Friendly, Ms. Le bought insurance and financed the premium. She "put a down payment and . . . ma[d]e a[nother] payment," (T. 69) before deciding to cancel her insurance and stop payment on a check. LOGOS On March 29, 1982, Edward T. Logos went to Friendly's office because he had seen an advertisement on the back of the Pensacola News-Journal's "TV Tab", to wit: [Graphic image of Petitioner's Exhibit 16, as displayed on page 16 of the original Recommended Order, has been omitted. To view this portion of this document, please contact the Clerk's Office.] Mr. Logos "told the lady [in Friendly's office that he] wanted to buy PIP and that's all. [He] assumed they were honorable enough that they would sell [him] what [he] asked for." (T. 91). He was quoted $52.00 and complained about the price. He had waited an hour and a half or two for his turn to buy insurance and signed multiple documents where a woman in respondent's employ had marked them with "x"s. Among the papers he signed was an application for membership in Nation Motor Club, Inc., even though he never asked to join and would have declined an offer to purchase a membership. He also signed the following document: [Graphic image of Petitioner's Exhibit 15, as displayed on pages 17-18 of the original Recommended Order, has been omitted. To view this portion of this document, please contact the Clerk's Office.] The premium for the PIP policy with its $8,000 deductible, was $17.00. The $35.00 difference between the PIP premium and what Mr. Logos paid was apparently the cost of the motor club membership. More than a month later Mr. Logos received his policy in the mail, along with papers indicating he was a member of the Nation Motor Club. Mr. Logos never asked to join Nation Motor Club and would not knowingly have paid to do so. He made inquiries, then complained to the Insurance Commissioner. Respondent refunded the entire $52.00 by check dated August 27, 1982.
The Issue The issue posed for decision herein is whether or not the Respondent's license and eligibility for licensure as an Ordinary Life, Disability and a General Lines agent should be revoked, suspended, or otherwise disciplined for reasons set forth hereinafter by the Administrative Complaint filed by the Petitioner on September 24, 1982. EXHIBITS The following exhibits were made part of the record: An Insurance Binder dated October 7, 1980, issued to Colon Aveiga by Center Insurance Agency, Inc., and signed by Jon Scott Robbins evidencing payment of $554 for an auto insurance policy issued by Dixie Insurance Company (Petitioner's Exhibit 53). An application for a Fireman's Fund auto insurance policy, dated October 10, 1980, signed by Colon Aveiga and Jon Scott Robbins evidencing payment of $514 (Petitioner's Exhibit 44). An Insurance Binder dated April 20, 1981, issued to Colon Aveiga and signed by Jon Scott Robbins evidencing payment of $767 credit for premiums paid and $299 for premiums due (Petitioner's Exhibit 56). A copy of a cancelled personal check (numbered 128) written by Colon Aveiga, dated April 20, 1981, made payable to Metro Insurance Agency in the amount of $299 for payment of premiums due (Petitioner's Exhibit 57). A Notice of Cancellation of a Fireman's Fund auto insurance policy dated March 25, 1981, and issued to Colon Aveiga for nonpayment of premiums due (Petitioner's Exhibit 52). An Amended Fireman's Fund Auto Insurance Policy dated February 6, 1981, issued to Colon Aveiga and showing a premium adjustment of $271 due (Petitioner's Exhibit 49). A Fireman's Fund Interoffice Memo dated March 23, 1981, written by Albert Sons, FJUA Underwriting Manager for Fireman's Fund Insurance Companies, discussing Colon Aveiga's insurance policy application (Petitioner's Exhibit 42). A Fireman's Fund FJUA Underwriters Request for Information from Metro Insurance Agency regarding Colon Aveiga, dated December 1, 1980 (Petitioner's Exhibit 46) A Fireman's Fund Underwriting memo dated January 14, 1981, requesting information about Colon Aveiga from Metro Insurance Agency and containing a new address for Colon Aveiga (Petitioner's Exhibit 47). A Florida Department of Highway Safety and Motor Vehicles' transcript of Gaston Aveiga's certified driving record, dated September 16, 1981 (Petitioner's Exhibit 43). An Insurance Binder dated October 2, 1980, issued to Marc Gavidia by Metro Insurance Agency and signed by Jon Scott Robbins, evidencing a payment of $140 for an auto insurance policy issued by Fireman's Fund (Petitioner's Exhibit 97). An Insurance Premium Finance Agreement dated October 23, 1980, issued to Marc Gavidia by the Metro Insurance Agency and signed by Jon Scott Robbins (Petitioner's Exhibit 98). A Florida Department of Highway Safety and Motor Vehicles' transcript of Marc Gavidia's certified driving record, dated September 16, 1981 (Petitioner's Exhibit 99). An application for a Fireman's Fund auto insurance policy, dated October 9, 1980, signed by Marc Gavidia and Jon Scott Robbins (Petitioner's Exhibit 101). A Policy Change Request for a Fireman's Fund auto insurance policy, dated February 10, 1981, issued by Metro Insurance Agency, signed by Jon Scott Robbins, concerning Marc Gavidia's policy and listing his address as 5361 S.E. 11th Street, Tallahassee, Florida (Petitioner's Exhibit 111). A Notice of Cancellation of Marc Gavidia's auto insurance policy, dated February 27, 1981, issued by Fireman's Fund and citing material misrepresentation as the grounds for the cancellation (Petitioner's Exhibit 112). A copy of a cancelled personal check (No. 1726) written by Juana Perez, dated March 12, 1981, made payable to Metro Insurance Agency in the amount of $299 for payment of premiums due (Petitioner's Exhibit 62). An Insurance Binder dated March 12, 1981, issued to Rogelio Perez by Metro Insurance Agency and signed by Jon Scott Robbins, evidencing auto insurance coverage by Utah Home Insurance Company (Petitioner's Exhibit 63). An Insurance Premium Finance Agreement dated March 12, 1981, issued to Rogelio Perez by Metro Insurance Agency, and signed by Jon Scott Robbins (Petitioner's Exhibit 78). An application for a Fireman's Fund auto insurance policy, dated March 12, 1981, signed by Rogelio Perez and Jon Scott Robbins (Petitioner's Exhibit 65). A Declarations Form for auto insurance coverage by Rogelio Perez by Fireman's Fund showing a premium due of $978 (Petitioner's Exhibit 75). A Declarations Form for auto insurance coverage by Rogelio Perez by Fireman's Fund showing a premium due of $881 (Petitioner's Exhibit 66). A receipt from Luby's Chevrolet of Miami, Florida, showing $1,084 received from Luis G. Capon (Petitioner's Exhibit 80). An Insurance Binder dated January 26, 1981, issued to Luis Capon by Metro Insurance Agency, signed by Jon Scott Robbins and evidencing auto insurance coverage provided by Utah Home Insurance Company (Petitioner's Exhibit 81). An application for a Fireman's Fund auto insurance policy dated January 28, 1981, signed by Jon Scott Robbins (Petitioner's Exhibit 84). A Policy Change Request for a Fireman's Fund auto insurance policy stating that Luis Capon's address had been changed to 2560 S.W. 34th Street, Gainesville, Florida, and signed by Jon Scott Robbins (Petitioner's Exhibit 86). A Florida Department of Highway Safety and Motor Vehicles' transcript of Luis Capon's certified driving record, dated September 12, 1981 (Petitioner's Exhibit 79). A cancelled policy advisal dated July 8, 1981, regarding Luis Capon's Fireman's Fund auto insurance policy (Petitioner's Exhibit 90). A letter from Albert M. Sons, dated September 22, 1981, in his capacity as FJUA Manager stating that an inspection by Fireman's Fund established that Luis Capon had not moved to Gainesville, Florida, and that in fact he lived in Miami and was therefore in a higher rating zone (Petitioner's Exhibit 89). An Interoffice Memo from the file of Fireman's Fund dated March 23, 1981, in reference to Luis Capon questioning certain inconsistencies in that individual's application for insurance (Petitioner's Exhibit 83). An application for a Fireman's Fund auto insurance policy, dated September 10, 1980, issued to Javier Alvarez, showing a signature of "Javier Alvarez" and signed by Jon Scott Robbins (Petitioner's Exhibits 3 and 4). A Declarations Form for auto insurance coverage of Javier Alvarez by Fireman's Fund showing a premium due of $737 (Petitioner's Exhibit 5). A Return to Sender letter from Fireman's Fund to Javier Alvarez bearing the address of 4902 S.W. 84th Street, Plantation, Florida (Petitioner's Exhibit 6). A Fireman's Fund FJUA Underwriters request for Javier Alvarez' correct address, issued to Metro Insurance Agency, dated November 14, 1980 (Petitioner's Exhibit 7). An Insurance Premium Finance Agreement allegedly signed by Javier Alvarez, issued by Metro Insurance Agency, and signed by Jon Scott Robbins (Petitioner's Exhibit 19). A letter from the National Insurance Finance Company to Javier Alvarez, 251 Crandon Boulevard, Miami, Florida, informing Alvarez of dates and terms of due payments (Petitioner's Exhibit 20). Deposition of A. M. Beverly, taken February 22, 1983 (Petitioner's Exhibit 1). FJUA Rating Manual (Petitioner's Exhibit 2). Fireman's Fund FJUA Rating Examination (Petitioner's Exhibit 3). The following witnesses testified on behalf of the Petitioner: Gaston Aveiga, Albert M. Sons, Peter Gavidia, Marc Gavidia, Juana Perez, Luis Capon, and Javier Alvarez. The Respondent testified on his own behalf. Based upon my observation of the witnesses and their demeanor while testifying, post-hearing memoranda, documentary evidence received, pre-hearing stipulations and the entire record compiled herein, I hereby make the following relevant:
Findings Of Fact The Respondent, Jon Scott Robbins, was, during times material herein, licensed as an Ordinary Life, Disability and General Lines agent. By its Administrative Complaint filed herein dated September 24, 1982, Petitioner, Department of Insurance, charged that the Respondent engaged in the following acts and/or conduct (in summary fashion) which amounts to conduct violative of Chapter 626, Florida Statutes, to wit: Respondent failed to account for or pay to the insurer, insured, or other persons entitled to premiums or other funds received belonging to insurers or others in transactions under his license in a fiduciary capacity, in violation of Section 626.561(1), Florida Statutes. Respondent diverted or appropriated such funds or portions thereof for his own use, in violation of Section 626.561(2), Florida Statutes. Respondent collected a sum as premium or charge for insurance in excess of or less than the premium or charge applicable to such insurance, in violation of Section 626.9541(15)(b), Florida Statutes. Respondent misappropriated, converted, or unlawfully withheld monies belonging to insurers, insureds, beneficiaries, or others received in the conduct of business under his license, in violation of Section 626.611(10), Florida Statutes. Respondent knowingly filed with a supervisor or other public official, or made, published, disseminated, circulated, delivered to any person, or placed before the public, or caused directly or indirectly to be filed with a supervisor, or other public official, or made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement, in violation of Section 626.9541(d), Florida Statutes. Respondent knowingly made a false material statement, in violation of Section 626.9541(5)(a)2, Florida Statutes. Respondent knowingly made a false entry of material fact in a book, report, or statement of any person, or knowingly omitted to make a true entry of a material fact pertaining to the business of such person in a book, report, or statement of such person, in violation of Section 626.9541(5)(b), Florida Statutes. Respondent made false or fraudulent statements or representation on, or relative to, an application for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from an insurer, agent, broker or individual, in violation of Section 626.9541(11)(a), Florida Statutes. Respondent knowingly made a false or fraudulent statement or representation in or with reference to an application or negotiation for insurance, in violation of Section 626.9541(11)(b), Florida Statutes. Respondent willfully violated a provision or provisions of the Insurance Code, in violation of Section 626.611(13), Florida Statutes. Respondent demonstrated a lack of fitness or trustworthiness to engage in the business of insurance, in violation of Section 626.611(7), Florida Statutes. Respondent engaged in fraudulent or dishonest practices, in violation of Section 626.611(9), Florida Statutes. Respondent engaged in unfair methods of competition or in unfair or deceptive acts as prohibited under Part VII of Chapter 626, Florida Statutes, in violation of Section 626.621(6), Florida Statutes. Respondent violated a provision of the Insurance Code, in violation of Section 626.611(10), Florida Statutes. Respondent has shown himself to be a source of injury or loss to the public, or detrimental to the public interest, in violation of Section 626.621(6), Florida Statutes. During times material herein, Respondent served as a General Lines agent and represented Fireman's Fund Insurance (Fireman's Fund). The complaint allegations, in summary fashion, may be grouped in two classifications; (1) that Respondent knowingly filed false statements of material facts concerning insureds in an attempt to attract more insureds by offering lower rates and (2) Respondent received premiums from insureds in excess of the actual premiums he submitted to Fireman's Fund and thereby unlawfully appropriated the excess monies to his own use. Albert Sons is the underwriting manager for the Florida Joint Underwriters Association (FJUA) in his capacity for Fireman's Fund and is a direct contact for Fireman's Fund with the Respondent. All FJUA premium rates are identical given the same variables such as age, type of vehicle, use and territory. Any variation of these factors changes the rate in a uniform manner and that change is uniform throughout the industry. As an example, Miami is a substantially higher rated territory than Gainesville (TR 31-32). An insured who cancels his insurance coverage is charged the amount of premium based on the amount of time that the coverage remained in effect plus a service charge exacted by the company for processing the application. Pursuant to negotiations for the purchase of auto insurance, Gaston Aveiga, speaking on behalf of his father Colon Aveiga, informed Respondent of his Florida driver's license number and date of birth. The same information was provided to the Respondent on behalf of Colon Aveiga. Gaston advised the Respondent that he would be the principal driver of the car to be insured. Colon Aveiga purchased an auto insurance policy from the Respondent on October 7, 1980 and was quoted a premium of $544. Colon received an insurance binder from Respondent reflecting his correct address: 1215 NE 110th Street, Miami, Florida (Petitioner's Exhibit No. 53). Approximately three days later, an application was made to Fireman's Fund on October 10, 1980, reflecting that Colon Aveiga's address is 1534 SW 34th Street, Gainesville, Florida. The Aveigas have never lived in Gainesville nor have they indicated any intention of moving to Gainesville (TR 15). The insurance application further provides that Colon Aveiga is the only driver of the car and that he had an international drivers license whereas the Aveigas only have Florida driver's licenses; they specifically informed the Respondent of the same and that Gaston would be the principal driver of the insured car. The application submitted to Fireman's Fund on behalf of the Aveigas reflects a total premium of $514 which is, of course, $30 less than the premium quoted and collected from Colon Aveiga. On October 2, 1980, Marc Gavidia, and his father, Peter, purchased an auto insurance policy from the Respondent, doing business as Metro Insurance Agency. 2/ Respondent provided the Gavidias an insurance binder containing their correct address: 10441 SW 50th Street, Miami, Florida and evidencing a payment of $140 towards the balance due (Petitioner's Exhibit No. 97). The insurance was purchased to insure Marc Gavidia's Dodge van of which he was the principal driver. Marc Gavidia purchased the auto insurance from Respondent because of the cheaper rate (TR pp. 41-45). On October 4, 1980, an auto insurance application was tendered to Fireman's Fund on behalf of Marc Gavidia reflecting that he was self-employed (Petitioner's Exhibit No. 101). Marc Gavidia did not list himself as self- employed on the application (TR 49). Marc Gavidia gave Respondent his Florida driver's license which reflected a birth date of February 7, 1960 whereas the application submitted by Respondent on behalf of Marc Gavidia reflects a birth date of February 14, 1950 with a different driver's license number (Petitioner's Exhibit No. 101). On February 14, 1981 Respondent sent a policy change request for Florida auto insurance stating that the insured, Marc Gavidia, transferred schools to Tallahassee and now lives at 5361 SE 11th Street, Tallahassee, Florida (petitioner's Exhibit No. 111). Marc Gavidia has never lived in Tallahassee nor has he communicated to the Respondent any intent of moving to Tallahassee. (TR pp. 49-50). Juana Perez and her husband, Rogelio Perez purchased auto insurance from the Respondent based on the low rate quoted by Respondent. Ms. Perez wrote a check in the amount of $275 payable to Metro Insurance and received an insurance binder (TR pp. 53-54). Ms. Perez gave David Einhorn (a salesman of a local automobile dealership who was representing Respondent) Mr. Perez's Florida driver's license and Mr. Einhorn made a copy of the license (TR p. 56). An application for insurance was submitted to Fireman's Fund on behalf of the Perezes and reflects a total premium of $893. The application states further that the applicant has an international drivers license whereas Mr. Perez has never had an international drivers license (TR p. 59). The application reflects further that Mr. Perez was unemployed whereas he was employed at the time of his application for insurance (TR pp. 59, 63 and 65). An insurance premium finance agreement dated December 30, 1981, entered into by Mr. Perez shows $978 as a total amount of premiums minus the $275 downpayment leaving $704.20 as the amount to be financed (Petitioner's Exhibit No. 78). This represents approximately eighty-five ($85.00) dollars more than the premium sent to Fireman's Fund. On January 28, 1981, Luis Capon, purchased auto insurance from the Respondent and an application was submitted to Fireman's Fund reflecting a total premium of $789. At that time, Luis Capon paid $1,084 in cash to the Metro Insurance Company (TR p. 68). The application submitted by Respondent reflected further that Luis Capon had an international drivers license No. 1581934 and was born on January 15, 1944. At the time Luis Capon made application with the Respondent for auto insurance, he provided his Florida Drivers license which reflected his correct address: 419 NW 15th Avenue, Miami, Florida and his birth date, November 28, 1956 (TR p. 71). A policy change request for Fireman's Fund issued to Luis Capon states that Capon changed his address to 2560 SW 34th Street, Gainesville, Florida. The policy change request form was signed by Respondent. Luis Capon has never lived in Gainesville nor has he evidenced to Respondent any intent of living in Gainesville. Further, Luis Capon has never received any refund from Respondent and in fact had to pay additional premiums (TR p. 73). The additional premium seems to have stemmed from additional violations as reflected by a DMV Driving Report. Javier Alvarez purchased an auto insurance policy from Respondent and was advised that the total cash premium for the policy was $830. Javier Alvarez paid $250 and financed the remaining $580 (Petitioner's Exhibit No. 19). An application submitted on behalf of Mr. Alvarez reflects a total premium of $730 which was submitted with the application. Mr. Alvarez has not received a refund of the difference in the amount quoted i.e. $830 and the amount $730 actually paid to Fireman's Fund by Respondent. When negotiating for the purchase of the auto insurance policy from the Respondent, Javier Alvarez gave the Respondent his Florida driver's license which contained his license number, birth date and address. The application submitted on behalf of Mr. Alvarez shows a Plantation, Florida address and reflects that Javier Alvarez has a Massachusetts driver's license and a birth date of August 16, 1940 whereas his correct birth date is February 22, 1961 and his address is 251 Crandon Boulevard, Apartment 342, Key Biscayne, Florida (TR p. 106). Mr. Alvarez has never had any address other than the Key Biscayne, Florida address and has never possessed a Massachusetts driver's license. On April 2, 1981, Respondent sent an endorsement request to Fireman's Fund advising that Javier Alvarez had transferred schools and was living in Gainesville, Florida (Petitioner's Exhibit No. 2). Javier Alvarez has never attended any school in Gainesville, Florida nor has he indicated to Respondent any intent to do so (TR p. 110). THE RESPONDENT'S POSITION The Respondent testified on his own behalf and has been licensed since 1978. Respondent was first employed as a managing agent and as an underwriter for several years with another agency. During that employment, Respondent did not have the guidance and/or the assistance of a tutor. Respondent acknowledged that there were indeed numerous errors in addresses but he attributes same to the fact that he was a new agent without proper checks and balances in his office at the time, and that he, more than anyone else, was the victim of such mistakes. Respondent points to the fact that he earns commissions based on the amount of premiums and that the lower premiums quoted result in lower commissions to him. Finally, Respondent points to the fact that other agencies such as the chief complaining party in this case, Fireman's Fund, had a greater error ratio than the Respondent in the conduct of its insurance agency and that these errors were the result of sloppy clerical work and language barriers more than any intentional act on Respondent's part. 3/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Respondent's insurance license as referred to herein be suspended for a period of two (2) years. It is further RECOMMENDED that eighteen (18) months of the subject suspension be suspended during which time the Respondent's license shall be placed on probation. RECOMMENDED this 2nd day of September, 1983 in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of September, 1983
Findings Of Fact The Respondent, Jeffrey Allan Azis, is licensed by the Florida Department of Insurance as a General Lines Agent and did business as the American Automobile Insurance Agency, Inc., 603 NW 10th Avenue, Gainesville, Florida, during the period of time delineated in the Amended Administrative Complaint. The Respondent transacted the sale of motor vehicle insurance and an automobile club membership to the persons identified in Counts I, II, IV and V of the Administrative Complaint. Each of the persons identified in Counts I, II, IV and V of the Amended Administrative Complaint was charged for membership in an automobile club by the Respondent or his employees. With respect to Counts I through VI of the Amended Administrative Complaint, the following findings are made: Count I James E. Rippy, Jr., purchased automobile insurance directly from the Respondent at the American Auto Insurance Agency, Inc., Gainesville, Florida, on or about June 10, 1979. He requested the minimum coverage necessary to insure his vehicle to obtain a license tag. (Vol. 1, T-35) Mr. Rippy did not request motor club coverage and was not aware of what a motor club covered. (Vol. 1, T- 32) Sometime after purchasing insurance from the Respondent, Mr. Rippy discovered that his coverage included membership in a motor club. (Vol. 1, T- 33-34) At the Respondent's office, Mr. Rippy and his wife Norma, signed documents which included a membership application in Nation Motor Club with a membership fee of $25.00 [Respondent Exhibit 2(1)] and an application for coverage which included the following disclosure statement also signed by Mr. Rippy in addition to the application form: I understand the Nation Motor Club (NMC) membership applied for this date 6/30/79, through the American Auto Insurance Agency, Inc. is a separate item, that pays in addition to my auto insurance policy. I understand the additional charge for this coverage is included with my down payment. Applicant (signed) Mr. Rippy was not pressured by the Respondent to sign these documents and could have taken additional time to read and ask questions if he had desired. (Vol. 1, T-49-50) write and do mathematics at a basic level. Count II On or about December 4, 1979, Deborah M. Zapp purchased automobile insurance from American Auto Insurance Agency, Inc. Gainesville, Florida, from an employee of the Respondent's identified as "Judy". (Vol. 1, T-17) Ms. Zapp was unclear regarding the coverage she requested from Judy, but was sure that she would not have purchased motor club membership since she regarded it as an "extra". (Vol. 1, T-18-20) While at the agency on December 4, 1979, Ms. Zapp was asked to sign various papers which she read before signing. (Vol. a, T-20) These included a membership application in Nation Motor Club (Respondent's Exhibit 1) and an application form which contained the following disclosure statement: I understand the Nation Motor Club membership applied for this date 12/4/79, though the American Auto Insurance Agency, Inc. is a separate item, that pays in addition to my auto insurance policy. I understand the additional charge for this coverage is included in my down payment. Applicant (signed) (Respondent's Exhibit 1) Ms. Zapp was not rushed while reading the documents presented to her for signing and could have taken as much time as she wanted to go over them. (Vol. 1, T-20) However, notwithstanding reading and signing the membership application and disclosure statement regarding the motor club, Ms. Zapp did not know she had purchased motor club coverage when she left the Respondent's office. (Vol. 1, T-21) Ms. Zapp is a graduate of Sante Fe Community College and attended a university for one year following her graduation. (Vol. 1, T-16) At the hearing on February 5, 1981, she appeared bright and fairly assertive. Count III In Count III, Petitioner alleges that the Respondent in the conduct of business under his license violated various provisions of the Insurance Code. The allegations of Count III requires an application of the facts found in Counts I and II to Sections 626.9521, 626.9541(11)(a), 626.9541(5)(a), 626.9541(15)(b), and 626.621(b), Florida Statutes. Count III is duplicated by Count VI and calls for legal conclusions which will be discussed in the conclusions of law section of this Recommended Order. Count IV The deposition of Charles D. Smith was admitted into evidence as Petitioner's Exhibit 10. Mr. Smith currently holds an insurance license and has a bachelor's degree. (Petitioner's Exhibit 10 at 4) Mr. Smith purchased automobile insurance from the American Auto Insurance Agency, Inc. on or about May 1, 1980 (Petitioner's Exhibit 10 at Appendix) Mr. Smith thought he was purchasing only Personal Injury Protection (PIP). (Petitioner's Exhibit 10 at 4) In order to get an auto tag, Mr. Smith requested the minimum coverage. (Petitioner's Exhibit 10 at 5) Like Mr. Rippy and Ms. Zapp, Mr. Smith signed an application for motor club membership and disclosure statement stating he understood he was purchasing motor club coverage at the time of his application for insurance. (Petitioner's Exhibit 10 at 7) Mr. Smith intended to purchase the minimum amount of insurance at the lowest price but did not require of either the Respondent or his employees whether motor club coverage was included in the price quoted. (Petitioner's Exhibit 10 at 8,9) Neither the Respondent nor his employees orally explained motor club coverage to Mr. Smith. At the bottom of Mr. Smith's insurance application the following disclosure statement was signed by him: I understand the interstate membership applied for this date 5/1/79, through the American Auto Insurance Agency, Inc. is a separate item that pays in addition to my auto insurance policy. I understand the additional charge for this coverage is included in my down payment. Applicant (signed) (Petitioner's Exhibit 10 at Appendix) Mr. Smith's decision to purchase from the Respondent was based solely on cost and not on any information provided by the Respondent or his employees. (Petitioner's Exhibit 10 at 13). Count V The deposition of Richard B. Divins was admitted into evidence as Petitioner's Exhibit 11. Mr. Divins' testimony parallels the other witnesses in that he also signed an application for motor club membership and a disclosure statement acknowledging the purchase and price. (Petitioner's Exhibit 11 at 11, 15, 16, 26) He purchased insurance and motor club coverage on July 13, 1979, from an employee of the Respondent at American Auto Insurance Agency, Inc., 603 NW 10th Avenue, Gainesville, Florida. (Petitioner's Exhibit 11 at 4,5) Mr. Divins thought he was purchasing only minimum liability insurance and was unaware that he had also purchased motor club coverage. (Petitioner's Exhibit 11 at 7,8) Mr. Divins is a senior in the School of Architecture at the University of Florida. (Petitioner's Exhibit 11 at 4. Count VI In Count VI, Petitioner alleges that the Respondent in the conduct of business under his license violated various provisions of the Insurance Code. Count VI requires an application of the facts found in Counts IV and V to Sections 626.9521, 626.9541 (11)(a), 626.9541(5)(a), 626.9541(15)(b) and 626.621(b), Florida Statutes. Count VI duplicates Count III and calls for legal conclusions and will therefore, be discussed in the legal conclusion section of this Recommended Order. Assuming that the witnesses who testified at the final hearing were representative of the Respondent's customers, his business was generally directed at persons who desired minimum automobile insurance coverage at the lowest possible price. (Vol. 1, T-17 and 31, Petitioner's Exhibit 11 at 7-8, Petitioner's Exhibit 10 at 8,9) An economic incentive existed to sell motor club memberships among agents whose customers desired minimum coverage due to the high commission rates associated with motor club policies. (Petitioner's Exhibit 9, Vol. 1, T-94-95, 97) Mr. Andrew Beverly was qualified as an expert witness on insurance matters and testified on behalf of the Respondent. (Vol. 1, T-29) Mr. Beverly owns the Florida Insurance School, serves as a consultant for several hundred insurance agencies and is a member of the Advisory Committee on Insurance Education of the Florida Insurance Department. (Vol. 1, T-78-79) A study by Mr. Beverly completed in 1979 for the Professional Insurance Agents Association of Florida demonstrated that insurance agents have been contacted by claimants or attorneys for claimants for failure to provide coverage or what is known in the industry as "errors and omissions." (Vol. 1, T-81-82) The Respondent is the first agent that Mr. Beverly has ever encountered who had difficulties arising from selling too much coverage. (Vol. 1, T-82-83) Mr. Beverly's conclusion concerning the value of motor club coverage and supplemental coverage generally is shared by Dr. Ronald T. Anderson, a colleague of Mr. Beverly's on the national faculty of the Society of Certified Insurance Counselors and an Insurance Commissioner of Colorado. (Vol. 1, T-83-85) In particular regard to this case, Mr. Beverly examined the application and disclosure statement signed by the witnesses for the Petitioner and responded to questions from counsel as follows: Q. Now, these documents -- if you would just take a look through those, you'll see in Respondent's Exhibits 3 and 4, I believe -- Respondent's Exhibit 1, for example, where in boldface type, the applicant for the insurance signs a statement regarding Motor Club. is that a common practice in the industry? A. It's a practice that is becoming extremely common with the careful and appropriate insurance agents to have a thorough documentation of each coverage, accepted or rejected by an injured. Q. And why is that? A. Partially because of the high incidents (sic) of Errors and Omissions insurance, claims coming in against insurance agents, and then partly so that the client himself will be completely aware of what it is that he's throwing away when he rejects a coverage so he'll know he hasn't bought that. Q. Does the type of procedure meet the standards of the industry in Florida for fire and casualty agents? A. It exceeds them. Q. Okay. What else, in your opinion, could Mr. Azis do in this type of situation other than have him sign the statements and advise him as he has testified to. A. Mr. Woods, there's nothing an insurance agent could possibly do, in my opinion, beyond explaining the coverage to the insured and then having him sign in his own handwriting. I can't believe that there is anything else that he could do. He's being as cautious as he possibly can. Q. You're not aware of any other practices or procedures that might even be better than this? A. I can't think of anything that you could do that could add to this great amount of documentation of the insurers election of what they purchased. Q. In your experience, is it common for people who have bought insurance to come back and question coverages? A. Yes, sir, it happens all the time. I have more than a hundred insurance agencies under contract at this hour, and I am constantly receiving long distance calls from agents: What do you do with this? What's the answer to it? Q. So, that's why they require the need for this documentation? A. Yes, sir. (Vol. 1, T-85-87) Mr. Beverly's testimony was not rebutted by the Petitioner and is accepted as credible. Although Respondent's license as a general lines agent in Florida expired as of August 30, 1980, he retains eligibility to become licensed for a period of two years from the date of licensure. Section 626.221(3)(f), Florida Statutes. (Petitioner's Exhibit 8)
Recommendation It is therefore RECOMMENDED that the Amended Administrative Complaint filed against the licensee, Jeffrey Allan Azis, be dismissed. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 3rd day of June, 1981. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of June, 1981. COPIES FURNISHED: Richard P. Harris, Esquire Department of Insurance 428-A Larson Building Tallahassee, Florida 32301 David Yon, Esquire Department of Insurance 428-A Larson Building Tallahassee, Florida 32301 Thomas F. Woods, Esquire 1030 East Lafayette Street Suite 112 Tallahassee, Florida 32301 =================================================================
