Findings Of Fact Respondent, Gloria Ann Ellwood, is currently licensed and eligible for licensure in the State of Florida as a general lines agent. Ellwood purchased in January 1985 from Pasqualey "Pat" Caliguiri what they both believed to be were shares in two franchises to operate a nonstandard automobile insurance business, Cash Register Auto Insurance of Escambia County and Cash Register Auto Insurance of Okaloosa County. Ellwood paid Caliguiri $10,000 as a down payment and financed $35,000 for 500 of 1,000 shares in the Escambia County agency and approximately $25,000 for 500 of 1,000 shares in the Okaloosa County agency. Ellwood paid Caliguiri approximately one-half the amount financed before the events occurred which are the basis for this case. These two franchises Caliguiri had purchased in 1983, along with another franchise, for nonstandard auto insurance sales offices from Lloyd Register for $5,000 apiece, as evidenced by 500 shares of 1,000 shares common stock in each of the three corporations. Through this purchase, Caliguiri received a reduction in the amount of commission paid on the franchise and the ability to realize a profit from his efforts in building the business. He executed a consulting agreement with Register and had to sign an employment contract with the various corporations. Register provided accounting and similar services, and Caliguiri had to repay to Register all capital expenditures made on the agencies. Register was present at the closing of the sale between Caliguiri and Ellwood. Register was silent at the closing between Ellwood and Caliguiri regarding Ellwood's rights. He was aware of the transfer of Caliguiri's stock to Ellwood for valuable consideration. After the transfer, Ellwood executed a consulting agreement with Register and signed an employment contract with the two corporations which she had purchased. Ellwood was entitled to $500 per week salary from `the corporation. In the case of both Caliguiri and Ellwood, when receipts from the business were low, Register suggested that they take some lesser sum as a salary payment than what they were entitled to under their employment contract. Register demanded payment of all moneys due to Register, although he did extend the time for payment for Caliguiri at one point when business was particularly bad. Both Caliguiri and Ellwood thought that they owned the stores which they had purchased. Ellwood served as general manager, president and director of Cash Register Auto Insurance of Escambia County at all times material to the complaint. Cash Register of Escambia was a Florida corporation engaged in the operation of a nonstandard insurance agency at all times material to the complaint. During 1985 and 1986, Ellwood paid for rent, improvements to property, telephone service, and similar business expenses from her personal account when there insufficient funds in the operating account to cover these expenditures. The total of these loans to the corporation was $14,930.37. Ellwood was charged by Register for the annual state corporate filings with the State of Florida. The Escambia agency had two checking accounts; one for payroll and the other for bills and refunds. The latter account was called the operating account into which deposits and premiums were deposited. Checks for insurance companies, insureds, beneficiaries and all business expenses, except salary, were written on this account. Ellwood wrote or caused to be written all checks for the agency from both accounts. Starting in January 1987 and continuing to June 1988, Ellwood wrote a series of 14 checks on the operating account to fictitious payees which were designated as refund checks to insureds; however, the payees had never paid a deposit to the company. Between January 1987 and July 1988, Ellwood endorsed and cashed these checks keeping $1,897.44. Ellwood described these checks as repayment of the money which she had advanced to the business. Ellwood explained that she wrote these checks to fictitious payees to prevent questions from Register's accountant and from fear Register would want commissions from non-franchise agencies which she owned. During all times material to this complaint, Register provided accounting services as part of his consulting agreement. Register or his accountant was aware that checks had not been drawn on the operating account for payment of rent, advertising, and telephone services and he knew the agency was still in business at the same locale. Register or his accountant was aware of the checks for refunds which ran from $21.89 to $398.99, no two of which were for the same amount. These checks do not appear on their face to be refunds for special high risk automobile insurance although they are annotated as such. Register suggested and was aware that Ellwood and Caliguiri took less salary than they were entitled to take under their employment contracts. Although money received from a client or company for a client or beneficiary is held in a fiduciary capacity, the operating account is not an escrow account and agents are not required to maintain deposits in an escrow account pending transfer of the premiums to an insurer. No evidence was received that Ellwood impaired these accounts by issuing these checks to fictitious clients and cashing them. Ellwood did not question her ownership of the business until late summer 1988 when Register advised Brian Fisher, a potential buyer, that Fisher would not have the rights of ownership if he purchased Ellwood's shares of stock because she held only common stock and control of the corporation was vested in those persons holding preferred stock all of which was owned by Register and his wife.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that the charges be dismissed against the Respondent DONE AND ORDERED this 7th day of March, 1990, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 7th day of March, 1990. APPENDIX A TO RECOMMENDED ORDER 89-4903 The following is a list of the proposed findings which were adopted and those which were rejected and why. Petitioner's Proposed Findings: Paragraph 1 Adopted. Paragraph 2 Adopted. Paragraph 3 Adopted, but reworded & renumbered. Paragraph 4 Adopted, but reworded & renumbered. Paragraph 5 Rejected as contrary to the facts. Paragraph 6 Rejected as contrary to the facts. Paragraph 7 Respondent admitted she used the money for another agency; however, that does not establish that taking the money was fraudulent. Paragraph 8 Rejected as contrary to the facts. Respondent's Proposed Findings: Paragraph 1 Adopted. Paragraph 2 Adopted. Paragraph 3 Adopted, but reworded & renumbered. Paragraph 4 Adopted, but reworded & renumbered. Paragraph 5 Adopted, but reworded & renumbered. Paragraph 6 Adopted, but reworded & renumbered. Paragraph 7 Adopted, but reworded & renumbered. Paragraph 8 Rejected as contrary to the facts. Paragraph 9 Adopted. COPIES FURNISHED: Mr. Tom Gallagher State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Don Dowdell, Esq. General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Roy Schmidt, Esq. Office of the Treasurer Department of Insurance and Treasurer 412 Larson Building Tallahassee, FL 32399-0300 Fletcher Fleming, Esq. Shell, Fleming, Davis & Merige Seventh Floor, Seville Tower P.O. Box 1831 Pensacola, FL 32595
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 the Respondent committed the violations alleged in the Administrative Complaint dated October 24, 2008, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department is the state agency responsible for licensing, regulating, and imposing discipline on insurance agents in Florida. See §§ 626.016(1); 626.601, Fla. Stat. Ms. Sykes was licensed as a 2-14 "life including variable annuity agent" and as a 2-20 general lines agent in January 1998. At the times pertinent to this proceeding, Ms. Sykes worked at an insurance agency owned by David J. Heiny ("Heiny Agency"). Deena Buell also worked for the Heiny Agency, and Ms. Sykes, Ms. Buell, and Mr. Heiny were the only three employees who were licensed as 2-20 general lines agents. The remaining two employees of Heiny Agency during the times pertinent to this proceeding held 4-40 licenses as customer service representatives. Certificate of Liability Insurance The Heiny Agency marketed the insurance products of the Allstate Insurance Company ("Allstate") and also the products of other insurance companies at the times material to this proceeding. In 2003, Mr. Heiny decided to expand his business to include workers' compensation insurance. In July 2003, he submitted an application to the Florida Workers' Compensation Joint Underwriting Association ("FWCJUA"), the insurer of last resort in Florida for workers' compensation insurance, for authority to submit applications to it for workers' compensation insurance. Mr. Heiny was notified by the FWCJUA in a letter dated July 29, 2003, that he was authorized to submit workers' compensation insurance applications to the FWCJUA until July 29, 2004. Mr. Heiny did not have authority to bind coverage for the FWCJUA, nor did he have authority to issue certificates of liability insurance showing workers' compensation insurance coverage through the FWCJUA. Under his agreement with the FWCJUA, Mr. Heiny was required to meet with and explain the workers' compensation insurance coverage to applicants and to sign all of the application forms. Mr. Heiny was unfamiliar with workers' compensation insurance, and he intended for Ms. Buell to handle all of the workers' compensation insurance business because she had experience at another agency with workers' compensation insurance. Mr. Heiny's office submitted one application for workers' compensation insurance, which was rejected, and he decided that the FWCJUA required too much paperwork. Mr. Heiny decided that he did not want to be involved with workers' compensation insurance, and he did not apply to renew his authorization to submit workers' compensation insurance applications to the FWCJUA. As a result, his authority to submit workers' compensation insurance applications to the FWCJUA expired on July 29, 2004. Mr. Heiny informed both Ms. Sykes and Ms. Buell that he did not intend to renew his authorization with the FWCJUA. Ms. Sykes is fluent in Spanish and was the only licensed agent at the Heiny Agency who spoke Spanish at the times pertinent to this proceeding. Because of her fluency in Spanish, Ms. Sykes worked with the Heiny Agency's Spanish- speaking customers, and most of her business consisted of referrals from these customers. One of Ms. Sykes' long-standing customers was Mayola Campos, who owned Form Construction, Inc. ("Form Construction"), with her husband, Fortino Campos, and Ms. Sykes handled the commercial insurance for Form Construction. Mrs. Campos came into the Heiny Agency's office regularly to pay premiums and to discuss with Ms. Sykes's the corporation's various insurance policies and changes in coverage. As a result, Ms. Sykes and Mrs. Campos were well-acquainted, and Ms. Sykes received a number of referrals from Mrs. Campos. Form Construction was a trim and roofing company working in the construction industry. According to Ms. Sykes, Mrs. Campos came to her in or around July 2004 seeking workers' compensation insurance. Ms. Sykes was not familiar with workers' compensation insurance because she had never sold that type of insurance, and it was not a product normally sold through the Heiny Agency. Nonetheless, she completed an application and submitted it to Ms. Buell for processing. At the time, Ms. Sykes was aware that Mr. Heiny did not intend to renew his authority to submit applications for workers' compensation insurance to the FWCJUA and that the authority would expire at the end of July 2004. Ms. Sykes cannot recall hearing anything further about Form Construction's July 2004 application for workers' compensation insurance. She was going through a particularly difficult divorce proceeding and was not working full-time at the agency. In addition, Ms. Buell was working from her home so she could care for her infant and young daughter, and Ms. Sykes and Ms. Buell were not in regular communication. Without confirming that the FWCJUA had issued workers' compensation insurance to Form Construction, Ms. Sykes signed a Certificate of Liability Insurance for Form Construction and sent it to that company. The certificate, dated October 12, 2004, reflected that, in addition to general liability and automobile insurance, Form Construction had workers' compensation insurance through the FWCJUA that was effective from October 16, 2004, to October 16, 2005. The certificate holder was identified on the certificate as Gold Construction. Ms. Sykes was aware of the purpose of a Certificate of Liability Insurance since she routinely prepared and signed them for insurance companies whose products were marketed by the Heiny Agency. A Certificate of Liability Insurance is used to establish that a person or company has liability, automobile, and/or workers' compensation insurance. Although some insurance companies allow insurance agents to issue certificates of liability insurance, only the FWCJUA issues certificates of liability insurance for the workers' compensation insurance coverage it provides. The only exception to this policy is when an agent requests authority to issue a certificate of liability insurance for a specific insured for a specific purpose. The agent must request this authority in writing and specify the purpose of the certificate; the FWCJUA must give approval in writing to the agent before the agent can issue the certificate. The agent must then send a copy of the certificate to the FWCJUA for its records. In the construction industry, a certificate of liability insurance is presented to a contractor to establish that a company working on a project as a subcontractor has workers' compensation insurance. If a general contractor hires a subcontractor that does not have workers' compensation insurance, the general contractor is responsible for providing workers' compensation insurance for the employees of the uninsured subcontractor who worked on the contractor's job. See § 440.10(a), (b), and (c), Florida Statutes. Form Construction presented the Certificate of Liability Insurance signed by Ms. Sykes to Gold Construction, which was, at the times pertinent to this proceeding, a qualified contractor business. Gold Construction hired general contractors, which, in turn, hired subcontractors to work on its projects. The subcontractors were paid by Gold Construction, and it required all subcontractors to present a certificate of liability insurance showing that they had general liability and workers' compensation insurance at the time the subcontractors were hired. Sometimes, the subcontractor would provide the certificate directly to Gold Construction, and sometimes Gold Construction would call the subcontractor's insurance agency and request that the certificate be sent to it, directly. The Certificate of Liability Insurance signed by Ms. Sykes was presented to Gold Construction as evidence that Form Construction had liability and workers' compensation insurance, and, in November 2004, Gold Construction hired Form Construction to do truss work on two construction projects. Gold Construction was subsequently audited by its workers' compensation insurance carrier, and the auditor determined that that Form Construction did not, in fact, have workers' compensation insurance and that the Certificate of Liability Insurance was bogus. Gold Construction was, therefore, assessed an additional $12,000.00 in workers' compensation insurance premium to add coverage for Form Construction's employees. The only records the FWCJUA has relating to Form Construction is an application for workers' compensation insurance for Fortino and Mayola Campos, d/b/a Form Construction, which was signed by Mr. Heiny and dated August 27, 2003; a date stamp on the application shows that it was received by the FWCJUA on September 17, 2003. In a letter dated October 16, 2003, the FWCJUA notified Mr. Heiny that the application for Form Construction was being returned with no coverage having been bound, and there is nothing in the records of the FWCJUA showing that it received another application for workers' compensation insurance for Form Construction or that it provided compensation insurance for Form Construction. Automobile insurance endorsement The Heiny Agency wrote commercial automobile insurance through Allstate. Ms. Sykes joined the agency in 1995, after having worked for another agency that marketed Allstate insurance products. Ms. Sykes was recommended by one of Allstate's district managers, and her familiarity with the Allstate computer system and her fluency in Spanish were considered by Mr. Heiny to be very important contributions to his agency. Form Construction had commercial automobile insurance coverage with Allstate, which was written through the Heiny Agency. Ms. Sykes was the only agent at the Heiny Agency that worked with Mrs. Campos on insurance matters. Mrs. Campos visited the Heiny Agency's office frequently to pay premiums and to discuss the various insurance policies issued to Form Construction. Mrs. Campos always spoke with Ms. Sykes when she came into the office because none of the other agents or employees of the agency spoke Spanish. Form Construction's commercial automobile insurance policy came up for renewal in April 2005. When Mrs. Campos came in to pay the renewal premium, she and Ms. Sykes discussed raising the policy's bodily injury liability limits from $25,000.00 per person and $50,000 per occurrence. Mrs. Campos told Ms. Sykes that she needed to speak to her husband before she could raise the liability limits. Ms. Sykes did not hear anything from Mrs. Campos until June 2005, when Mrs. Campos came into the office and requested that Ms. Sykes add another vehicle to Form Construction's commercial automobile insurance policy. Ms. Sykes again advised Mrs. Campos that she should consider raising the policy's bodily injury liability coverage limits to at least $250,000. Mrs. Campos asked Ms. Sykes how much such an increase in coverage would cost, and Ms. Sykes went into the Allstate computer system and partially prepared an endorsement to the automobile insurance policy showing the increased limits so she could get a quote for Mrs. Campos on the price. Ms. Sykes did not submit the endorsement at that time, and it remained pending in the Allstate computer system. On or about July 12, 2005, Mrs. Campos visited the Heiny Agency's office and reported to Ms. Sykes that Mr. Campos had been involved in an automobile accident while driving a vehicle owned by Form Construction and that he had hit a person on a bicycle. Ms. Sykes advised her that her commercial automobile bodily injury liability coverage limits were $25,000.00 per person and $50,000.00 per occurrence. Ms. Sykes also reminded Mrs. Campos that she had advised her several times to raise the Form Construction's bodily injury liability limits. Ms. Sykes immediately submitted the claim to the Allstate claims Department, where it was assigned to Thomas Burger. On July 15, 2005, Mrs. Campos contacted Ms. Sykes and told her to raise the bodily injury liability limits in Form Construction's automobile insurance policy to $500,000.00 per person and $500,000.00 per occurrence. Ms. Sykes went into the Allstate computer system and prepared and submitted the endorsement to Allstate. The endorsement submitted by Ms. Sykes on July 15, 2005, carried an effective date of July 10, 2005, two days prior to the date on which Mrs. Campos reported the claim relating to Mr. Campos's automobile accident. A copy of the endorsement was sent to Mrs. Campos on July 16, 2005, and Mrs. Campos visited the Heiny Agency's office several days later with a check for the additional premium attributable to the increase in bodily injury liability limits. The Allstate claims department was, at the times pertinent to this proceeding, separate from the department handling commercial automobile insurance policies. The information available to Mr. Burger at the time the Form Construction claim was submitted showed bodily injury liability limits of $25,000.00 per person and $50,000.00 per occurrence on the Form Construction policy. On July 29, 2005, Allstate tendered a check to the person injured by Mr. Campos for the policy limit of $25,000.00. This check was not cashed. Mr. Burger did not learn until October 2005 that a policy endorsement raising the bodily injury liability limits had been submitted July 15, 2005, with an effective date of July 10, 2005. According to Ms. Sykes, someone from Allstate contacted her in August 2005 to question her about the endorsement, and she explained that the retroactive increase in bodily injury liability limits was a mistake and that the policy limits were $25,000.00 per person and $50,000.00 per occurrence at the time of the accident on July 12, 2005. Mr. Burger interviewed Ms. Sykes and Mr. Heiny on January 13, 2006, regarding the endorsement, and Ms. Sykes told Mr. Burger that she could not recall why she would have back-dated the endorsement. Ms. Sykes told Mr. Burger of the problems she had experienced with endorsements to automobile insurance policies being lost in the Allstate computer system. On January 26, 2006, the attorney representing the person injured by Mr. Campos wrote Allstate demanding disclosure of the policy limits of Form Construction's automobile insurance policy. In a letter dated February 3, 2006, Allstate notified Mr. Heiny and Ms. Sykes that it might seek indemnification from the Heiny Agency because it attributed the back-dated increase in bodily injury liability limits to agent error. Shortly thereafter, Mr. Heiny asked if Allstate could change the limits back to the original $25,000.00 per person and $50,000.00 per occurrence as of the date of the accident, but Allstate had already determined that the increased limits were effective July 10, 2005, because of the effective date on the endorsement and because of Mrs. Campos's payment of the premium for the additional coverage. In a letter dated February 17, 2006, Mr. Burger advised the attorney representing the injured person of the increase in the bodily injury liability limits, and, on March 2, 2006, Allstate tendered a check to the injured person's attorney in the amount of $500,000.00. Ms. Sykes attributed the back-dating of the endorsement to a glitch in the Allstate computer system by which the endorsement she submitted July 15, 2005, was automatically back-dated to July 10, 2005. Ms. Sykes had complained to Mr. Heiny on numerous occasions about problems with endorsements disappearing from the system, which required her to resubmit the endorsements. Ms. Sykes was not, however, aware of any endorsements being automatically back-dated by the system except for the July 2005 endorsement to Form Construction's commercial automobile insurance policy. Under the Allstate computer system, there are only two ways in which an endorsement's effective date can be established. The usual procedure requires the agent to complete the endorsement and submit it into the system; the system then automatically records on the endorsement the date it was submitted and the effective date of the endorsement. The other alternative is for an authorized agent to manually back-date the effective date of an endorsement and then submit it into the system. Mr. Heiny tested the Allstate computer system repeatedly, trying to determine whether the system would automatically back-date an endorsement. None of the test endorsements prepared by Mr. Heiny was automatically back-dated, and Mr. Heiny is aware of no instance in which an endorsement was automatically back-dated except for the Form Construction endorsement at issue herein. Findings of ultimate fact Certificate of Liability Insurance The evidence presented by the Department is sufficient to establish with the requisite degree of certainty that, when she signed the Certificate of Liability Insurance on October 12, 2004, showing that Form Construction had workers' compensation insurance issued by the FWCJUA with effective dates of October 16, 2004, through October 15, 2005, Ms. Sykes knew that Form Construction did not have workers' compensation insurance placed by the Heiny Agency through the FWCJUA and knew that Gold Construction would rely on the Certificate of Liability Insurance as evidence that Form Construction had workers' compensation insurance. Ms. Sykes' action demonstrates her lack of fitness and trustworthiness to engage in the business of insurance, and Ms. Sykes caused injury to Gold Construction because, as a result of its reliance on the Certificate of Liability Insurance, it was required to pay additional premium to its workers' compensation insurance carrier. Ms. Sykes's testimony regarding the circumstances in which she signed the Certificate of Liability Insurance was replete with inconsistencies and improbabilities and was wholly insufficient to support her contention that, when she signed the Certificate of Liability Insurance, she had a good faith belief that Form Construction had workers' compensation insurance issued by the FWCJUA. Mr. Heiny told Ms. Sykes that he did not intend to renew his authorization to submit workers' compensation insurance applications to the FWCJUA after it expired in July 2004, and, because she was the only agent at the Heiny Agency that dealt with Mrs. Campos, Ms. Sykes would necessarily have known if Form Construction had been issued a workers' compensation insurance policy by the FWCJUA. It is reasonable to infer, therefore, that Ms. Sykes was aware on October 12, 2004, that Form Construction was not, and had never been, covered by workers' compensation insurance issued by the FWCJUA as a result of an application submitted by Mr. Heiny. Finally, Ms. Sykes' testimony that, before signing the Certificate of Liability Insurance, she reviewed the Form Construction file and saw a check and a Federal Express receipt showing that "it all went out to the FWCJUA"2 directly conflicts with her testimony that Form Construction's records were destroyed when the Heiny Agency's office flooded in September 2004.3 Although the evidence presented by the Department is sufficient to establish that Ms. Sykes demonstrated a complete lack of knowledge about workers' compensation insurance, she was not authorized to submit applications to the FWCJUA and did not engage in any transactions involving workers' compensation insurance except for signing the Certificate of Liability Insurance for Form Construction. This act is not sufficient to establish that Ms. Sykes engaged in transactions involving workers' compensation insurance. Automobile insurance endorsement The evidence presented by the Department is sufficient to establish with the requisite degree of certainty that Ms. Sykes' deliberately back-dated an endorsement to Form Construction's commercial automobile insurance policy increasing the bodily injury liability policy limits so that the increased limits were effective two days before Mr. Campos was involved in an accident while driving a vehicle owned by Form Construction. Ms. Sykes' action constitutes willful misrepresentation of the coverage limits actually in effect on the date of the accident, and it demonstrates Ms. Sykes' unfitness and untrustworthiness to engage in the business of insurance. Ms. Sykes' explanation that the endorsement was automatically back-dated by the Allstate computer system is rejected as not credible. The evidence presented by the Department is not sufficient to establish that Ms. Sykes lacked in any respect adequate knowledge of or technical competence in commercial automobile insurance. Finally, the evidence presented by the Department is sufficient to establish by the requisite degree of certainty that, because Ms. Sykes committed misconduct relating to the signing of the Certificate of Liability Insurance, she engaged in dishonest practices while engaging in the business of insurance when she back-dated the endorsement to the Form Construction commercial automobile insurance policy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order Finding Madeline Hernandez Sykes guilty of one count of having violated Sections 626.611(7) and 626.621(6), Florida Statutes; Finding Ms. Sykes guilty of one count of having violated Section 626.611(5), (7), and (9), Florida Statutes; and Suspending Ms. Sykes' license to engage in business as a general lines insurance agent for a period of 15 months. DONE AND ENTERED this 30th day of April, 2009, in Tallahassee, Leon County, Florida. PATRICIA M. HART Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 2009.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the July 20 rate filing of Colonial Penn Insurance Company in Case No. 82-148 be APPROVED. It is further RECOMMENDED that the November 12 rate filing of Colonial Penn Insurance Company in Case No. 82-1048 be APPROVED. DONE and ENTERED this 18th day of August, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER 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 18th day of August, 1982.
Findings Of Fact At all times pertinent to the allegations contained herein, Respondents Richard Elliott Templin, Jr., was qualified for licensure as a general lines agent and as a life and health insurance agent in Florida and represented the Okeechobee Insurance Agency, (OIA), located at 1874 Okeechobee Boulevard, West Palm Beach, Florida. Respondent is currently eligible for licensure as a general lines agent and as a health and life insurance agent in Florida. RAVEN MILLER In March, 1984, Raven Miller applied for and was issued automobile insurance by OIA. She contacted that agency among others and found that it quoted her the cheapest price for the coverage she wanted, coverage sufficient to protect her and the finance company from loss. During the application process, she signed several forms provided to her by the agent who briefly discussed her coverage with her but did not advise her it would include life insurance or accidental death insurance. When she initially went into the office to renew the policy, she asked for coverage on the vehicle but did not desire anything else. The employee with whom she talked indicated understanding of her desires and filled out the required paperwork for her without asking any other questions of her. When the paperwork was completed, Ms. Miller was told that the premium cost would be $347.00 for which she gave a check and received a receipt, plus $110.00 for a term life insurance policy. She was not told that that this latter coverage was separate from the automobile coverage. Ms. Miller filled out nothing during the application process. All the documents were filled out by the clerk. The application form was completely filled out except for her signature when she signed it. It reflected that uninsured motorist coverage was rejected but Ms. Miller was not asked by anyone at the agency if she desired that coverage. When she inquired about deductibles, she was advised there was a mandatory $250.00 deductible and though she is reflected to have rejected bodily injury coverage, this was not discussed with her, either. The only form that Ms. Miller filled out personally was the pink application to Fortune Insurance Company, (Fortune), on which she identified her "beneficiary." This form was not explained to her, however, nor was there any discussion with her of life insurance coverage. Ms. Miller, who works with the Post Office, has $140,000 in life insurance coverage through her job and had she known she was being offered additional life insurance coverage, would have rejected it. When Ms. Miller signed the summary of coverage form, it was completely filled out. The lady with whom she was dealing briefly went over the various items on it but did not discuss them with her or explained anything to her. The confirmation form which she signed was filled out prior to being given to her for signature. The explanation regarding it was brief and she was not advised that life insurance coverage was optional. The life insurance premium was not forwarded by OIA to the company. She did not receive a policy from either Fortune Life or ATA. At no time during her dealings with OIA did she meet or deal with Respondent and she does not know him nor would she recognize him. When she sold her car in March, 1985, Ms. Miller cancelled the policy in person at the agency at which time she was advised that her refund would come in the mail. Even after numerous contacts with the agency to inquire where the refund was, it was not given to her. At no time during her dealings with OIA was she aware of the fact that she was applying for an accidental death policy. All she asked for, all she wanted, and all she thought she was getting was auto insurance sufficient to cover her, her bank, and others with whom she might have an accident in the event of loss. Notwithstanding the fact that Ms. Miller signed an acknowledgment of explanation both at the time of the original policy and and the time of renewal, the explanation in both cases was extremely brief. She asked no questions to speak of and no information was volunteered. In short, at the time of renewal the agency merely renewed the prior coverage. They did not show her what they were comparing with. She assumes that the figures were the same as for the original policy and she assumed that whatever she got was a standard coverage and charge to every applicant. Ms. Miller was satisfied with the coverage she received and the package she purchased. Her complaint to the Department of Insurance related to the failure to receive her refund not to the sale of the insurance to her. In fact, at the time she filed her complaint, she did not even know that she had a life insurance policy. DENNIS AND ALETA NELSON Dennis Nelson, who has worked for the Post Office for approximately 10 years, on or about March 21, 1985 went to the OIA because, having spoken with Respondent over the phone, and having gotten a quote for "full coverage" on his automobiles from him, he liked the price. Mr. Nelson dealt with Respondent who took down the particulars on the cars to be covered, then went to his rate books, and quoted a price to Mr. Nelson which was satisfactory. In doing so, he laid out the explanation of coverage form and indicated what coverage the Nelsons would have. In the course of the application process, there was no discussion of the limits of liability insurance, uninsured motorist Coverage, deductibles, or life insurance. When the paperwork was completed, Mr. Nelson signed the applications for insurance given to him and a premium finance agreement. Respondent explained to Mr. Nelson the application for life insurance and gave him the impression that it was mandatory. It was made mandatory by the company that a customer buy the whole package, but it was not mandatory under the state requirements. The failure to make this distinction is misleading and deceptive. Mr. Nelson never received any policies from any of the companies from whom he was supposed to have received coverage, though he made his premium payments. By the same token, the company did not receive Nelson's premiums from the agency and, therefore, did not issue a policy. Approximately three months after the coverage went into effect, OIA notified the Nelsons that the cost of coverage on their Blazer would be raised by more than $200 for the year. Mr. Nelson made the initial inquiry call to the company writing this coverage but he was poorly treated by company representatives and got no information. Thereafter, Mrs. Nelson went to OIA's Okeechobee Boulevard office and spoke with Respondent who indicated he could not understand it either. Nonetheless, she paid a part of the increase, ($110.00), at the time in cash. The Nelsons checked with other companies and were quoted lower prices. Because OIA could not explain the raise, they went to the Petitioner's local office where they were told that the life insurance coverage they had purchased was not mandatory. As a result, they decided to cancel their coverage with OIA which Mrs. Nelson did in person. When she attempted to fill out the cancellation form, she was told by an agency employee that she could not cancel the life insurance portion only her husband could do that. Mr. Nelson thereafter attempted to reach the Respondent to discuss this situation with him but could never seem to get in touch with him. Mr. Nelson felt he got repeated run arounds from the employees at OIA and was repeatedly referred to the Lake Worth office. When they ultimately received the refund from OIA, it was dishonored and thereafter, the Nelsons were reimbursed for it in cash. ROBERT M. ANDERSON Mr. Anderson, an employee of Pratt and Whitney Aircraft Corporation in West Palm Beach, purchased automobile insurance from OIA in July, 1985. He selected that agency because they offered him the best price for the coverage which he had told them he wanted, which was "the minimum necessary to satisfy state and bank requirements." During the course of his negotiations with the agency, he dealt with an individual known to him as "Rich" but though Respondent looks familiar to him, he cannot identify Respondent as that individual. He advised the individual with whom he dealt what kind of car he had, (a Porche 911), his age, and that he wanted the best deal he could get. In response, the individual gave him a quotation for a 12 month policy which was too high for his budget. He asked for a quote on the rate for 6 months which was quoted to him as $1,816.00, for which he wrote a check. Mr. Anderson thereafter filled out an application package for coverage. The summary of coverage form was not discussed with him in detail. For example, the $2,000 deductible of PIP coverage was not discussed nor were any details or deductibles on other coverages. Accidental death coverage was not discussed with him nor did he request it. He recognizes his signature on certain documents and does not dispute having signed them. However, he does not recall any discussion about them nor does he recall signing a power of attorney form or even discussing the need to have one signed. There was no discussion with Mr. Anderson regarding life insurance coverage and in fact, he would have declined it had it been discussed because he was fully covered through his company's group policy. Mr. Anderson was not prevented from asking questions but did not do so because he did not know what questions to ask. He was given the opportunity to read the forms but did not review them in detail because he did not understand them then and does not understand them now. He did not, however, indicate that he did not understand. Because he had 9 points on his driver's record, he did not ask many questions. He was grateful to get any coverage and did not feel it was appropriate to take the time, as busy as Respondent appeared to be, to ask questions. It was his understanding that everything he got was a part of the "total package" that he requested. Mr. Anderson had no complaint about the coverage that he received. His complaint to the Petitioner was based on his failure to secure a prompt refund from the agency at the time he desired to cancel the coverage, and it was at this time, in discussing the matter with the Commissioner's office, that he first learned he had life and other undesired coverages as a part of his auto insurance package. He has, however, subsequently received the refund requested. All of the individuals referenced above received and paid for as a part of their insurance coverage, membership in an automobile motor club. On policies of this nature, the selling agency retains 90 percent of the premium and remits only 10 percent to the insurer. The motor club membership included a life insurance policy issued by Fortune Life. None of the persons involved with Respondent here knew they were buying either life insurance, accidental death insurance, or motor club membership. All had asked for "total" coverage, desiring thereby only that coverage necessary to operator a motor vehicle legally in this state. Neither life insurance, accidental death insurance, nor motor club coverage is a requirement of the state for the operation of a motor vehicle. It is not unlawful for an insurance agency to make those coverages a necessary part of a package and condition the issuance of liability, property damage, and PIP coverage upon the purchase of a total package including the other. What is improper, however, is a failure on the part of the agency to disclose that the life, accidental death, and motor club coverages are not a part of the insurance requirements of the state and the failure to disclose this is the nexus of the offense alleged.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is, therefore: RECOMMENDED that the Respondent's licenses and eligibility for licensure be placed on probation for a period of two years and that he be ordered to pay an administrative fine of $2,500.00. RECOMMENDED this 27th day of July, 1987, at Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of July, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0093 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. For Petitioner 1-4 Accepted and incorporated herein. 5-7 Accepted and incorporated herein. 8 Accepted and incorporated herein. 9 Accepted and incorporated herein. 10-16 Accepted and incorporated herein. 17-18 Accepted and incorporated herein. 19 Accepted and incorporated herein. 20 Accepted but irrelevant. 21 Accepted and incorporated herein. 22 Accepted. 23-26 Accepted and incorporated herein. 27 Accepted and incorporated herein. 28 Accepted and incorporated herein. 29 Accepted but irrelevant. 30 Accepted and incorporated herein. 31&32 Accepted and incorporated herein. 33 Accepted and incorporated herein. 34 Rejected as unproven. Witness never identified Respondent as the individual with whom he dealt. In the remaining paragraph rulings, it is assumed only that Respondent was involved. 35&36 Accepted and incorporated herein. 37-39 Accepted and incorporated herein. 40&41 Accepted and incorporated herein. 42&43 Accepted. For Respondent Accepted and incorporated herein. Accepted not as a Finding of Fact but as a recitation of the evidence, Accepted in substance. Paragraph is long and involved. See 3 above. See 3 above. COPIES FURNISHED: William Gunter, Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 William W. Tharpe, Jr., Esquire Office of Legal Services Larson Bldg. Tallahassee, Florida 32399-0300 David W. Spicer, Esquire Tammy J. Kissell, Esquire NCNB Tower, Suite 910 1555 Palm Beach Lakes Boulevard West Palm Beach, Florida 33401-2363 =================================================================
The Issue Should discipline be imposed by Petitioner against Respondent’s insurance license held pursuant to Chapter 626, Florida Statutes? Although Respondent was unlicensed at the time of the specific insurance transactions enumerated in the Administrative Complaint, she since has become licensed. It is the existing license of Respondent that Petitioner seeks to discipline in this action.
Findings Of Fact The Parties Petitioner was created in accordance with Section 20.13, Florida Statutes. Petitioner has been conferred general power by the Legislature to regulate the insurance industry in Florida, in accordance with Section 624.307, Florida Statutes, and Chapter 626, Florida Statutes, grants Petitioner the authority to license and discipline insurance agents doing business in Florida. At times relevant to the inquiry, Respondent was not licensed by Petitioner to transact insurance. (Pet. Ex. 2) Respondent was employed by Beck-De Pratter, Inc., a Florida Corporation, doing business as William Dye Insurance, Inc./Brentwood (hereinafter referred to as the “Agency”) from 1996 until 2004. Count I: Aaron Curtis On August 16, 2000, Aaron Curtis came into the Agency to re-new the insurance on his vehicle. Respondent took down the information necessary for Curtis to re-new his insurance. The company that had insured Curtis' vehicle was no longer writing coverage in Florida, and the Agency placed Curtis' coverage without significant alternation with another carrier. John Beck signed this application as agent. Count II: Stacy Collier On October 7, 2002, Collier came into the Agency to re-new his automobile insurance. Respondent took down the information necessary for Collier to re-new the insurance. The company that had insured Collier's vehicle was no longer writing coverage in Florida, and the Agency placed Collier's coverage without significant alternation with another carrier. John Beck signed this application as agent. Count III: Ruby Hubbard On October 11, 2002, Ruby Hubbard came into the Agency to re-new his automobile insurance. Respondent took down the information necessary for Hubbard to re-new the insurance. The company that had insured Hubbard's vehicle was no longer writing coverage in Florida, and the Agency placed Hubbard's coverage without significant alternation with another carrier. John Beck signed this application as agent. Count IV: Mary Kennedy On March 6, 2002, Mary Kennedy came into the Agency to re-new his automobile insurance. Respondent took down the information necessary for Hubbard to re-new the insurance. The company that had insured Kennedy's vehicle was no longer writing coverage in Florida, and the Agency placed Kennedy's coverage without significant alternation with another carrier. John Beck signed the related vehicle inspection report. Count V: Charles Howard On September 10, 2001, Charles Howard came into the Agency to re-new his automobile insurance. Respondent took down the information necessary for Hubbard to re-new the insurance. The company that had insured Kennedy's vehicle was no longer writing coverage in Florida, and the Agency placed Kennedy's coverage without significant alternation with another carrier. John Beck signed the related vehicle inspection report. Count VI: Not appointed as Customer Representative Petitioner’s official records reveal that Respondent was not appointed as customer representative by any insurance agency at the time the preceding transactions occurred. Respondent’s employer, John Beck, testified that he never appointed Respondent as a customer representative. Count VII: John Kennedy On March 2, 2001, John Kennedy came into the Agency to re-new his automobile insurance. Respondent took down the information necessary for Hubbard to re-new the insurance. The company that had insured Kennedy's vehicle was no longer writing coverage in Florida, and the Agency placed Kennedy's coverage without significant alternation with another carrier. John Beck signed this application as agent.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That a final order be entered dismissing the allegations contained in the administrative complaint against Respondent, Sharon G. Taylor. DONE AND ENTERED this 2nd day of November, 2004, in Tallahassee, Leon County, Florida. S __ STEPHEN F. DEAN 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 2nd day of November, 2004. COPIES FURNISHED: Greg S. Marr, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0333 Jed Berman, Esquire Infantino and Berman Post Office Box 30 Winter Park, Florida 32790 Pete Dunbar, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Tom Gallagher, Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether Respondent committed the violations alleged in the Amended Administrative Complaint issued against him, as modified at hearing, and, if so, what penalty 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 has been employed by Direct General Insurance Agency, Inc. (Direct General) for the past five years. He is the manager of a Direct General office located at 7558 West Commercial Boulevard, Lauderhill, Florida. This has been Respondent's principal business address since September 2005. Prior to September 2005, Respondent was the manager of a Direct General office located at 8300 West Oakland Park Boulevard, Sunrise, Florida. Respondent did not notify Petitioner of this September 2005 change of his principal business address within 60 days of the change. He assumed, erroneously it turns out, that Direct General's "licensing department" would inform Petitioner of the change. At all times material to the instant case, Respondent, as a licensed agent acting on behalf of Direct General, sold automobile insurance, along with three ancillary or "add-on" products. The three "add-on" products Respondent sold were an accident medical protection plan, a travel protection plan, and a term life insurance policy (hereinafter referred to collectively as the "Add-Ons"). From September 2003 to May 2006, Respondent sold these Add-Ons to approximately 1300 customers, including Ms. Roberts- Hall, Mr. Bentivegna, and Mr. Moore. For his efforts on behalf of Direct General, Respondent was paid an hourly wage, plus a commission for each of the Add- Ons he sold. He did not receive a commission for any automobile insurance policy sales he made. Direct General had sales goals with respect to Add-Ons that it expected its agents to meet. How well an agent did in meeting these goals was an "important factor" in the job performance evaluation the agent received annually from his supervisor (as Respondent was aware). An agent's failure to meet a particular goal, however, did not inevitably lead to the "fir[ing]" of the agent. Nonetheless, it was obviously in the agent's best interest to sell as many Add-Ons as possible. Respondent's supervisor was Sara Silot, a Direct General District Manager. In addition to an annual job performance evaluation, Ms. Silot provided Respondent, as well as her other subordinates, with regular feedback during the course of the year regarding their Add-On sales numbers. Each of the customers (Ms. Roberts-Hall, Mr. Bentivegna, and Mr. Moore, hereinafter referred to collectively as the "Complaining Customers") referenced in Counts I through VII and XV through XVIII of the Amended Administrative Complaint (hereinafter referred to collectively as the "remaining sliding counts") purchased the policies referenced in these counts in person at Respondent's office, where they were given paperwork to review and to then initial, sign, and/or date in numerous places in order to consummate the transaction. This paperwork consisted of, depending on the transaction, as few as 14, and as many as 20, pages of various documents (hereinafter referred to collectively as the "Transactional Paperwork"). The Transactional Paperwork clearly and conspicuously informed the reader, consistent with what Petitioner orally explained at the time of purchase to each of the Complaining Customers, that the Add-Ons being purchased were optional policies that were separate and distinct from the automobile insurance policy also being purchased and that these Add-Ons carried charges in addition to the automobile insurance policy premium. In providing his oral explanation to the Complaining Customers, Respondent circled (with a writing utensil) language in the Transactional Paperwork that conveyed this information about the Add-Ons. His purpose in doing so was to bring this language to the attention of the Complaining Customers. In view of the contents of the Transactional Paperwork, including the portions highlighted by Respondent, and what Respondent told the Complaining Customers concerning the Add-Ons, it was reasonable for Respondent to believe that the Complaining Customers were informed about the Add-On products they were being sold and were (by executing the paperwork) consenting to purchase them. The Transactional Paperwork included, among other things, a one-page Accident Medical Protection Plan form; a one- page Accident Medical Protection Plan Application form; a one- page American Bankers Insurance Company Optional Travel Protection Plan form; a one-page Statement of Policy Cost and Benefit Information-One Year Term Life Insurance Policy form; a one-page Explanation of Policies, Coverages and Cost Breakdown form; a multi-page Premium Finance Agreement; and a one-page Insurance Premium Financing Disclosure form. Among the information contained on the top half of the Accident Medical Protection Plan form was the cost of the plan. The bottom half of the form read as follows: THIS IS A LIMITED POLICY. READ IT CAREFULLY. I the undersigned understand and acknowledge that: This Policy does not provide Liability Coverage for Bodily Injury and 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 acknowledgment. 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 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 The Accident Medical Protection Plan Application form indicated what the annual premium was for each of the three categories of coverage offered: individual, husband and wife, and family. The top half of the American Bankers Insurance Company Optional Travel Protection Plan form summarized the benefits available under the plan. The bottom half of the form read as follows: Please Read Your Policy Carefully for a Full Explanation of Benefits 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's Signature Date I HEREBY REJECT THIS VALUABLE COVERAGE: Insured's Signature ____ Date The Statement of Policy Cost and Benefit Information- One Year Term Life Insurance Policy form noted the amount of the "Annual Premium for this policy" and that the "Annual Premium included a $10.00 policy fee that [was] fully earned." On the Explanation of Policies, Coverages and Cost Breakdown form, the Add-Ons were listed under the heading of "optional Policies" and the cost of each Add-On was separately stated. The first page of the Premium Finance Agreement also contained an itemization of the cost of each Add-On, as did the Insurance Premium Financing Disclosure form. On this latter form, the Add-Ons were included in a section entitled "Optional insurance coverage." The form also advised, in its prefatory paragraph, that: Florida law requires the owner of a motor vehicle to maintain Personal Injury Protection and Property Damage liability insurance. Under certain circumstances as provided in Chapter 324, Florida Statutes, additional liability insurance may be required for Bodily Injury liability. Also, additional insurance is usually required by a lienholder of a financed vehicle. Florida law does not require other insurance. The direct or indirect premium financing of auto club membership and other non-insurance products is prohibited by state law. Each of the Complaining Customers was capable of reading the above-described documents and understanding that purchasing the Add-Ons was optional, not mandatory, and involved an additional cost.4 Respondent gave each of them as much time as they wanted to read these documents, and he did not refuse to answer any of their questions. Ms. Roberts-Hall rejected the travel protection plan, and signed and dated the American Bankers Insurance Company Optional Travel Protection Plan form so indicating, in 2004, 2005, and 2006. Mr. Bentivegna rejected the term life insurance policy, as documented by his signature next to the word "Rejected," which was written in by hand at the bottom of the Statement of Policy Cost and Benefit Information-One Year Term Life Insurance Policy form. As noted above, unlike Mr. Bentivegna, Ms. Roberts- Hall and Mr. Moore each signed up for a term life insurance policy. On Mr. Moore's Application for Life Insurance, his three children, Melissa Moore, Kenneth Moore, Jr., and Timothy Brown-Moore, were named as "Beneficiar[ies]." While Kenneth Moore, Jr., and Timothy Brown-Moore were listed as "Members of Applicant's Household" on Mr. Moore's application for automobile insurance, Melissa Moore (who, at the time, was away at college) was not. Elsewhere on Mr. Moore's Application for Life Insurance, in the "Insurability Data" section, the question, "Have you during the past two (2) years had, or been told you have, or been treated for . . . a) Heart trouble or high blood pressure?" was answered, incorrectly, in the negative. Mr. Moore placed his initials next to this answer. Several days after her May 2004 purchases, Ms. Roberts-Hall telephoned Respondent and told him that she was having second thoughts about her accident medical protection plan purchase. Respondent suggested that she come to his office and speak with him in person, which she did. During this follow-up visit, Respondent went over with her the benefits of the plan, after which she told him that she was going to keep the coverage. Ms. Roberts-Hall took no action to cancel either of the Add-Ons (the accident medical protection plan and term life insurance policy) she had purchased in May 2004. In fact, she renewed these coverages in May 2005 and again in May 2006 (along with her automobile insurance policy). Prior to these renewals, in February 2005, when contacted by one of Petitioner's investigators who was conducting an investigation of possible "sliding" by Respondent, Ms. Roberts-Hall had expressed her displeasure that Respondent had "given her these additional products." Mr. Bentivegna and Mr. Moore were also contacted by Petitioner's investigative staff to discuss the Add-On purchases they had made from Respondent. Mr. Moore was contacted approximately ten months after his May 2004 purchases. The three Add-Ons he had purchased were still in effect at the time, but he took no action to cancel any of these policies. He did not renew them, however; nor did he do any other business with Respondent following his May 2004 purchases. Petitioner's policy is have its investigators "make it very clear from the beginning," when interviewing aggrieved consumers, that no promises are being made that these consumers will be "getting their money back" if they cooperate in the investigation. It does not appear that there was any deviation from this policy in Petitioner's investigation of Respondent. The investigation of Respondent led to the charges against him that are the subject of the instant case.
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 of Section 626.551, Florida Statutes, alleged in Count X of the Amended Administrative Complaint, fining him $250.00 for such violation, and dismissing the remaining counts of the Amended Administrative Complaint. DONE AND ENTERED this 29th day of March, 2007, in Tallahassee, Leon County, Florida. S STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of March, 2007.
