The Issue Should discipline be imposed by Petitioner against Respondent's insurance agent licenses, life including variable annuity (2-14), and general lines (2-20), pursuant to Chapters 624 and 626, Florida Statutes (2004)?
Findings Of Fact Stipulated Facts Respondent is licensed by Petitioner as a life including variable annuity (2-14) and a general lines (2-20) insurance agent and has been issued license D029506. During the time referenced in the Administrative Complaint, Respondent was licensed as a customer representative (4-40) and a life including variable annuity (2-14) agent. The Department has jurisdiction over Respondent's insurance licenses and appointments. At all times relevant to the dates and occurrences referenced in the Administrative Complaint, Respondent was employed or affiliated with Direct General Insurance Agency, Inc., a Tennessee corporation, doing business in Florida as Florida No-Fault Insurance Agency (Cash Register). Additional Facts: At times relevant to the case Respondent held his life including variable annuity license (2-14) under an appointment with Direct Life Insurance Company. At times relevant to the case Respondent had a customer representative license (4-40) under appointment with Direct General Insurance Agency, Inc. At present Respondent continues to hold the life including variable annuity license (2-14) under an appointment with Direct General Life Insurance Company. At present he has a general lines license property and casualty license (2-20) under appointments with Direct General Insurance Company and American Bankers Insurance Company of Florida. On February 8, 2005, Brandi Dean called Cash Register to receive a quote for the purchase of basic automobile insurance coverage. She was provided a quote at that time. On February 8, 2005, Brandi Dean, went to the Cash Register to purchase basic automobile insurance coverage. She had done business with the insurance agency before. Her policy with Direct General Insurance Company was Policy No. FLCR162714439, as reflected in Petitioner's Exhibit numbered 15, with a scan cover sheet entitled "Renewal Auto." On February 8, 2005, Ms. Dean purchased automobile insurance coverage that would be effective from February 10, 2005 through February 10, 2006. She was charged $316 for property damage liability (PD) and $216 for basic injury protection (PIP) for a total of $532, with a $25 policy fee. The application information within the exhibit reflects the customer's name, signature, and initials in various places. On February 8, 2005, Ms. Dean was provided another form referred to as an Explanation of Policies, Coverages and Cost Breakdown (including non-insurance products). Petitioner's Exhibit numbered 16. She signed that document. It reflected the auto policy coverage information. It also set forth under a category referred to as optional policies, the purchase of Lloyd's Accident Medical Protection Plan for $110. Petitioner's Exhibit numbered 17 is additional information concerning the Accident Medical Protection Plan application by the customer signed by her. It details a $110 annual premium for individual coverage of $1,000 medical expense, and 125/day-365 day hospital coverage. Within that same exhibit there is a form signed by the customer titled 100% certain underwriters @ Lloyd's/London (DB/33) Accident Medical Protection Plan. This reflects $110 cost, $125 daily coverage and the total annual benefit of $45,625. Petitioner's Exhibit numbered 18 is a scan cover sheet entitled Renewal Finance with Premium Finance Agreement Information in association with Direct General Financial Services, Inc., in which the customer Ms. Dean paid $69.63 down, financed $599.82, with a total price of $748.61 when considering the annual percentage rate for financing. This document in totality was initialed and signed by Ms. Dean. Ms. Dean was provided a receipt for her cash down-payment on the purchase. Petitioner's Exhibit numbered 14. Petitioner's Exhibit numbered 19 is an Insurance Premium Financing Disclosure Form signed by the customer, reflecting the cost of the automobile insurance and the hospital indemnity plan, the amount of total cost and includes the policy fee for the automobile insurance, document stamp tax, the down payment, and the total amount financed $599.82. Ms. Dean was left with the impression that she had only purchased automobile insurance. She believed that the monthly payments for the financing were only in relation to automobile insurance. Ms. Dean does not recall having the accidental medical protection plan explained to her as to its terms. She does not recall anyone explaining that it was an optional plan unassociated with automobile insurance. She told the agent that she dealt with that she was only interested in purchasing the state-required automobile insurance coverage. Had she realized that she was purchasing optional accident medical protection, not part of the automobile insurance purchase, she would have declined the optional policy. Ms. Dean does recall that the agent she dealt with made some brief explanation about the documents involved in the transaction but not every page was explained. Ms. Dean recalls explanations about the automobile policy but nothing about optional coverage. Ms. Dean glanced over the documents but did not read every word included in the documents. Ms. Dean does not recall whom she dealt with on February 8, 2005. Otherwise, the record does not reflect the person who sold the automobile insurance and accidental medical protection plan to her at that time. At times relevant, Denise Daley Turnbull worked at Cash Register. She was a customer representative license (4- 40), appointed by Direct General Insurance Agency, Inc. On March 24, 2005, William L. Green, Jr., came to Cash Register to purchase automobile insurance. He dealt with Ms. Turnbull. He made a $170.02 down payment for his purchases, as reflected in Petitioner's Exhibit numbered 4, which is a receipt provided to Mr. Green. A scan cover sheet related to an auto policy purchased, together with the application information for the automobile insurance purchased through Direct General Insurance Company is found within Petitioner's Exhibit numbered Mr. Green purchased automobile insurance for property damage liability (PD) in the amount of $590 and basic personal injury protection (PIP) for $370, with a $25 policy fee, totaling $985. He signed and initialed parts of the forms in association with the automobile insurance. Ms. Turnbull also signed forms in association with the automobile insurance. Petitioner's Exhibit numbered 6 is an explanation of policies, coverages and cost breakdown (including non-insurance products) reflecting the overall purchases by Mr. Green. He signed that form. It relates the automobile insurance purchase. It also relates the purchase of an American Bankers Travel Protection Plan for $60, a Lloyd's Accidental Medical Protection Plan for $110 and life insurance of $98. With fees and other costs the total purchase was $1270.99. Of relevance here, Petitioner's Exhibit numbered 9 is a scan cover sheet in relation to the life policy signed by Ms. Turnbull. It also includes application information to Direct Life Insurance Company with certain questions reflected that were initialed by the purchaser. Mr. Green signed the application. Respondent also signed the application, as well as printing his name and insurance license number on the form. Petitioner's Exhibit numbered 10 is a scan cover sheet for a New Finance with Direct General Financial Services, Inc., which reflects a $162.03 down-payment, $1105.17 in amount financed, with a $129 finance charge. The total sales price for all purchases was $1396.20, to include the life insurance with Direct Life Insurance Company. Mr. Green signed the premium finance agreement. Petitioner's Exhibit numbered 11 is a copy of the Insurance Premium Finance Disclosure Form signed by Mr. Green. Ms. Turnbull has no recollection of the Respondent's participation in the sale of the life insurance policy to Mr. Green. She does recall that Respondent was in the insurance agency office when the life insurance was purchased. She recognizes Respondent's signature in association with the life insurance application and purchase. Mr. Green had no intention of purchasing life insurance when he went to Cash Register on March 24, 2005. He recalls dealing with Ms. Turnbull. No one else sat with Mr. Green and explained policy information to him. Specifically, Respondent did not sit with Mr. Green and offer explanations about the policy. Mr. Green did not see Respondent sit with Ms. Turnbull and Respondent remained silent while she sold the life policy. Had Mr. Green realized that he was purchasing life insurance he would have declined the opportunity.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That Petitioner enter a final order finding a violation under Count I as set forth in the conclusions of law, dismissing Count II and suspending Respondent's license for six months for the violation. DONE AND ENTERED this 7th day of May, 2007, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS 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 7th day of May, 2007. COPIES FURNISHED: William Gautier Kitchen, Esquire Gregg Marr, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0333 L. Michael Billmeier, Jr., Esquire Galloway, Brennan and Billmeier, P.A. 240 East Fifth Avenue Tallahassee, Florida 32303 Michael L. Rothschild, Esquire Larry S. Davis, P.A. 1926 Harrison Street Hollywood, Florida 33020 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Level 11 Tallahassee, Florida 32399-0300 Daniel Sumner, General Counsel Department of Financial Services The Capitol, Level 11 Tallahassee, Florida 32399-0307
The Issue Whether or not Petitioner's application for examination as a general lines agent should be approved.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compiled herein, I hereby make the following relevant factual findings: On or about September 2, 1989, Petitioner, Kimberly L. Strayer, formerly known as Kimberly Lindsay, filed an application for examination as a general lines agent with Respondent, Department of Insurance. Since January 1988, Petitioner has been the sole owner and president of Central Florida Insurance Agency (Central). On or about December 28, 1989, Respondent informed Petitioner, by letter, that her application for examination as a general lines agent was denied for the following reasons: Petitioner operated Central Florida Insurance Agency without a licensed general lines agent in the full-time active charge of that agency from January 1, 1988 through August 31, 1988. During January 1988 Petitioner accepted applications and down payments from the following insureds: Robert Smallwood, Annelle Jones, Mickey Lawson, Donald Johnson, Thomas Jones, Manning O'Callahan and Christopher Stevens. Petitioner issued a binder and an automobile identification card for each insured indicating that coverage was bound with State Farm Mutual Insurance Company, as servicing carrier for the Florida Joint Underwriting Association (FJUA). At the time Petitioner had no authority to accept either applications or premiums on behalf of State Farm. Petitioner failed to forward such applications and premiums to the insurer until April 12, 1988. During January 1988, Petitioner accepted an application and premium payment of $274.00 from Tammy Clay. Petitioner issued a binder indicating that coverage was bound with State Farm and Union American Insurance Companies. Petitioner failed to forward either the application or the premium payment to any insurer. Petitioner issued a fictitious policy number to Ms. Clay and after nearly four months, submitted a money order to State Farm payable to Tammy Clay, on or about May 1989. At the hearing, Petitioner admitted that she did not have a licensed general lines agent in full-time active charge of her agency; that she accepted applications and premium payments from the above-named insureds for auto insurance to be bound with State Farm Mutual Insurance Company and that she accepted an application for premium payment for automobile insurance from Tammy Clay in the amount of $274.00 for coverage to be bound by State Farm Mutual Insurance Company. Petitioner was first employed in the insurance sales industry during the summer of 1987. At the time, she was only seventeen years old and had completed the eleventh grade. Petitioner's first employment in the insurance industry was with Friendly Auto Insurance (Friendly) which had several offices throughout Polk County, Florida. Friendly was owned by Petitioner's now husband, Larry Lindsay when she was hired. Petitioner formed Central during late 1987 and began operating Central on or about January 1, 1988. Petitioner received her supervision and training while employed with Friendly, primarily through on the job experiences. During late 1987, Petitioner's husband encountered problems with one of his business partners which resulted in strained relations. The resultant strained relations prompted Petitioner to organize Central. Central purchased several of Friendly's agencies of which her now husband had an interest, with Petitioner paying a nominal amount for the "book of business" that Friendly had generated. When Central commenced operations during January of 1988, Bob Seese was the licensed insurance agent who was authorized under the rules of the FJUA to accept applications and bind coverage through one of the FJUA servicing carriers, State Farm. Friendly and its successor, Central, generated a substantial volume of so-called high risk auto insurance business for drivers who could not obtain insurance through the regular market. Bob Seese had been associated with and served as the licensed agent for the Friendly agency in Lakes Wales which Central purchased in January 1988. At the time Petitioner commenced operating Central, she hired Bob Seese as the licensed general lines agent. She considered that Central was authorized to accept applications and continue to bind FJUA insurance coverage through State Farm. Petitioner forwarded all of the FJUA insurance applications which were bound by Bob Seese to State Farm within a period ranging from one week to approximately one month. State Farm refused to accept the applications submitted by Petitioner based on its contention that initially, Bob Seese was not authorized to bind coverage through Central, as he had not transferred his license to Central and Seese could only operate out of the Friendly agency of Lake Wales. 1/ Bob Seese was formally authorized by State Farm to conduct business through Central during February 1988. As a result of that authorization, all of the above-named insureds obtained insurance and none of the insureds suffered any monetary loss as a result of Seese's belated authorization. All of the premium payments that Petitioner received were, in time, forwarded to the respective carriers. Petitioner properly gave new insureds binder numbers which were serially dispensed in the order that premium payments were received. During January 1988, Petitioner accepted an application and premium payment for auto insurance from Tammy Clay for coverage to be bound by State Farm. Petitioner submitted Clay's application and premium payment to State Farm and it was returned on one occasion based on the fact that a facsimile stamp was used by the purported licensed agent (Seese). Petitioner resubmitted it and State Farm again returned it based on State Farm's contention that Seese was not authorized to conduct business through Central. Petitioner has now completed the required formal educational courses to demonstrate her eligibility to sit for the general lines agent's examination. Petitioner is now knowledgeable about insurance matters and is aware of the proper procedures for operating as a general lines agent. When Petitioner formed Central, she had less than one year's experience in the insurance business and was ineligible to sit for the general lines agent exam as she was not of majority age.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Respondent enter a Final Order granting Petitioner's application for examination as a general lines insurance agent. DONE and ENTERED this 31st day of October, 1990, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 31st day of October, 1990.
The Issue Whether the Petitioner's application of January 11, 1991, for examination as a general lines agent should be granted.
Findings Of Fact Petitioner Paul L. Kornya was licensed in 1974 as a general lines insurance agent in the State of Florida. Prior to 1984, Respondent Department of Insurance had taken no formal disciplinary action against the Petitioner. In 1983, while licensed as an insurance agent and employed in the capacity of office manager for the Milton Carpenter Insurance Agency, Petitioner established a demand deposit account in the name of "Atlantic Association Insurance" and listed himself as the sole signatory and beneficiary on the account. Petitioner thereafter wrote four unauthorized checks on the Milton Carpenter Agency Account totaling $47,132.14 made payable to Atlantic Association Insurance and deposited them into his demand deposit account. In order to conceal his activity, the Petitioner altered the payee of the checks. In a prior administrative case (Case No. 84-L-4085F), Petitioner admitted misappropriating and converting the funds. In 1983, while licensed as an insurance agent and employed in the capacity of office manager for the Milton Carpenter Insurance Agency, Petitioner wrote two unauthorized checks on the Milton Carpenter Agency Account totaling $3,455 made payable to Blinder, Robinson and Co., Inc., Investment Bankers. In order to conceal his activity, the Petitioner listed an agency account code designated for miscellaneous companies on said checks. In a prior administrative case (Case No. 84-L- 4085F), Petitioner admitted misappropriating and converting the funds which were used for Petitioner's personal stock purchases. In 1984, a judgement in the amount of $52,013.35 was entered against Petitioner in the case styled Milton Carpenter Insurance, Inc., a Florida Corporation, and Cincinnati Insurance Company vs. Paul L. Kornya, Case No. 84-3235 CA(L)A, Fifteenth Judicial Circuit Court, Palm Beach County, Florida. On October 31, 1985, the Department entered a Final Order revoking Petitioner's license qualifications and eligibility for licensure for a period of two years, based upon the misappropriation and conversion of said funds. By application signed December 16, 1987 and filed December 28, 1987, Petitioner submitted an application for examination as a general lines insurance agent. By Insurance Commissioner Bill Gunter's letter to the Petitioner of February 29, 1988, the Department requested that the Petitioner submit certain certificates of employment to verify his prior experience. The letter stated that, "[t]o qualify for this examination through experience you must have completed within the past 4 years, at least 1 year of substantially full-time responsible duties as the bona fide employee of an agent or insurer. Your duties during this time must have been in all lines of property, casualty, surety, health and marine insurance. ... One certificate should be completed by you and the other by your employer." The Petitioner claims to have submitted said employment certificates shortly following the Department's request. However, the Department's files do not contain the documents or any other response to the letter, and there is no evidence beyond Petitioner's testimony to support the claim. By letter of March 17, 1988, Department representative Franklin Thompson again requested the experience information cited in the February 29 letter or in the alternative, that Petitioner submit proof that a course of education had been completed. The letter further stated that "we will need a statement from Milton Carpenter Insurance Inc. Agency of Belle Glade, Florida stating that any and all indebtedness you may have had relative to their firm has been satisfied". Both the February 29 and March 17 letters provided that failure to file the information within 30 days from the date of each letter is grounds for denial of the application. Three months passed following the March 17 letter to the Petitioner. According to the records of the Department, no response to either letter was received. On June 17, 1988, the Petitioner's December 1987 application was closed by the Department based upon the failure of Petitioner to submit the previously requested information. By letter of June 23, 1988, the Petitioner advised the Department that the indebtedness was not to the Milton Carpenter Insurance Agency, but was to Cincinnati Insurance Company, which had insured the Carpenter agency against such losses. The letter further stated that approximately $5,000 had been repaid to the Cincinnati Insurance Company. By letter of August 3, 1988, Department representative Thompson wrote, "[t]he information you have furnished has been thoroughly reviewed. It appears that your indebtedness with Milton Carpenter Insurance has been assigned to Cincinnati Insurance Company. Please request that Cincinnati Insurance Company furnish us with a statement indicating that all of your indebtedness to their company has been satisfied". The letter stated that failure to respond within 30 days from the date of the letter was grounds for denial of the application. The evidence does not explain the reason for Mr. Thompson's letter of August 3, 1988. Given the June 17 closure of the pending application based upon the Petitioner's failure to supply additional information, the information furnished apparently consisted of the Petitioner's untimely filed letter of June 23. As of August 3, no pending application existed. In any event, the Petitioner did not respond to the August 3 request. By second application signed October 31, 1989, and filed November 3, 1989, Petitioner submitted an application for examination as a general lines insurance agent. By undated letter, Department representative Thompson again requested Petitioner to submit either certificates of employment to verify his prior experience or proof of completion of certain educational requirements, and further requested a reply to the letter of August 3, 1988 seeking statement from Cincinnati Insurance Company indicating that "all of your indebtedness to their company has been satisfied". Again the letter provides that failure to furnish the requested information within 30 days would result in the file being closed. 1/ The Petitioner, subsequent to the undated letter and prior to February 2, 1990, submitted said certificates of employment. Early in 1990, the Petitioner's application file was assigned to Department representative, Patricia Lehman. On February 2, 1990, Ms. Lehman informed that Petitioner that his certificates of employment were not acceptable, and that he would be required to complete a 240 hour educational requirement. Further, Ms. Lehman's letter provided that, "[i]n addition, you will need to furnish us with a certified letter from Cincinnati Insurance Company that you have made full restitution or a certified copy of the written agreement between you and the party(s) involved that you are making restitution satisfactory to all parties concerned. The information you sent to us is not certified and reflects no signatures". Beginning February 26, 1990, Mr. Kornya took and completed the 240 hour insurance course as identified in the Department's previous communications. The $595 course met for six weeks, five days each week, from 8:00 a.m. to 5:00 p.m. On September 17, 1990, the pending application was closed by the Respondent based upon the failure of Petitioner to submit the previously requested information. There is no evidence that Petitioner submitted evidence of completing the educational requirement. On or about January 8, 1991, Petitioner entered into an restitution agreement with Cincinnati Insurance Company setting forth a payment schedule which requires that Petitioner make a payment of $300 each month to the Cincinnati Insurance Company in order to eventually satisfy the entire $52,013.35 judgement against him. By application signed January 11, 1991, and filed January 16, 1991, Petitioner submitted an application for examination as a general lines agent. By memorandum of February 18, 1991, to her superior, Bob Stewart, Ms. Lehman recommended that the Petitioner's application be denied. Specifically, her memo provides as follows: Mr. Kornya's license qualification and eligibility for licensure were revoked by the Department in 1985 for the mishandling of funds in a fiduciary capacity. It does not appear Mr. Kornya attempted to make restitution until the signed Agreement in 1991. He has demonstrated lack of fitness and trustworthiness to engage in the business of insurance. Therefore pursuant to Sections 626.611(1) (7) , [sic] 626.641(2) and 626.731(1), I recommend his application be denied. Although Ms. Lehman's memo states that "[i]t does not appear Mr. Kornya attempted to make restitution until the signed Agreement in 1991", prior to the January 8, 1991 execution of the restitution agreement, the Petitioner had paid $12,237.94 to Cincinnati Insurance Company realized from the sale of vehicles and real estate. The executed copy of the restitution agreement reflects that such funds were paid, although the agreement fails to indicate when the payment was made. The payment was applied towards interest which had accumulated on the judgement, not towards the $52,013.35 principle judgement amount. At the time of the hearing, the restitution payments were current (although Petitioner did not make the $300 payment due in April, but paid $600 in May.) As of the date of hearing, approximately $49,913 remained to be paid to Cincinnati Insurance Company to satisfy the judgement. Although at the time of the hearing, a letter allegedly from Cincinnati Insurance Company indicated that they had not received documentation of Petitioner's compliance with paragraph five of the restitution agreement (a requirement that Petitioner purchase a life insurance policy naming the insurer as irrevocable beneficiary), said policy was purchased on January 9, 1991. By letter of March 1, 1991, the Department denied the application, based on an application of the statutory sections cited in Ms. Lehman's memo. On June 21, 1991, the Department issued an amended letter of denial. 2/ In the amended letter of denial, the Department cites the prior misappropriation of funds, the unsatisfied judgement, and the 1985 revocation of licensure and eligibility for licensure, which "circumstances surrounding that revocation still exist". The letter cites Sections 626.611(1), (4), (7), (9), (10) and (13), section 626.641(2), and section 626.731(1) Florida Statutes, as the statutory basis for the denial. The evidence fails to establish that any representative of the Department of Insurance, at any time, informed or assured the Petitioner that, upon his completion of the course of education and upon the execution of the restitution agreement between Cincinnati Insurance Company and the Petitioner, his application for examination for licensure as a general lines insurance agent would be approved. The Petitioner has been acquainted with his current employer, Samuel Jokich, for approximately six years. Mr. Jokich employs the Petitioner as a "Colorado Prime" freezer beef salesman. According to Mr. Jokich, the Petitioner is "extremely trustworthy" and of good character. The Petitioner had not disclosed to Mr. Jokich, and Mr. Jokich was not otherwise aware, that the Petitioner had taken approximately $52,000 from the Milton Carpenter Insurance Agency. Mr. Jeffrey Hooker, an independent insurance agent in Belle Glade and childhood friend of the Petitioner's, is aware of the Petitioner's misappropriation and conversion of approximately $52,000 from the Milton Carpenter Insurance Agency. However, Mr. Hooker stated that he would trust the Petitioner and "try to help him any way I could". Mr. Hooker desires to become partners with the Petitioner in a proposed insurance agency in Ft. Myers. Mr. Kenneth Snyder, a field representative for CNA Insurance Company, has known the Petitioner for approximately eight years. He believes the Petitioner to be of "good character" with "solid morals". Although Mr. Snyder was aware that the Petitioner had taken some funds from the Milton Carpenter Insurance Agency, he was unaware of the amount of said funds. Mr. Snyder stated that he would be willing to enter into a business relationship were the Petitioner to become licensed as a general lines agent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Insurance enter a Final Order denying the application of Paul L. Kornya to sit for examination for licensure as a general lines insurance agent. DONE and RECOMMENDED this 23rd day of January, 1992, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of January, 1992.
The Issue The issue is whether Respondent is guilty of transacting insurance business in violation of Sections 626.611 and 626.621, Florida Statutes, and, if so, what penalty should be imposed.
Findings Of Fact Respondent is licensed as a general lines insurance agent, holding license number A274461. He has been so licensed for over 20 years. The record discloses no previous discipline. Respondent bought L.N.V., Inc., d/b/a Federal Insurance (Federal Insurance), when he first became licensed in Florida. Respondent has retained ownership control of Federal Insurance since its purchase, except for a one-year period starting in June 2002, when Federal Insurance sold its assets to an unrelated party. However, after the party defaulted on its purchase obligations, Federal Insurance recovered the assets. Prior to June 2002, Respondent was, at all material times, the sole shareholder, the president, and a director of Federal Insurance. The acts and omissions alleged in Counts I, II, IV, and VII took place during this time period. After June 2003, Respondent's formal roles with Federal Insurance became less clear, although he continued to run the daily operations of the business and control the corporation. At minimum, though, Respondent was the Agency Owner from May 20, 2003, through November 7, 2003, and November 25, 2003, through December 29, 2003, according to the Agency Location Report, which is part of Petitioner Exhibit 2. The acts and omissions alleged in Counts V and VI took place, at least in part, during these time periods. Without doubt, regardless of his formal roles after June 2003, Respondent personally committed the acts and omissions that are the subject of Counts V and VI. Michael Smith is a licensed property and casualty insurance agent. He is also licensed to sell life and health insurance. He has held insurance licenses since 1983. Mr. Smith has been employed by Federal Insurance twice: from the late 1980s to the mid-1990s and 1999-2001. At all material times, Nicholas Polyviou, d/b/a Polyviou Corporation, was a self-employed manufacturer of office furniture. Mr. Polyviou did his insurance business at Federal Insurance where he dealt with Michael Smith. On October 13, 1999, Mr. Polyviou visited Michael Smith at Federal Insurance to purchase workers' compensation and liability insurance. Mr. Polyviou completed an application for workers' compensation insurance and delivered four Notices of Election to be Exempt, which had already been filled out and signed by Mr. Polyviou and the other three employees who were the subjects of the notices. The notices represented elections by qualified persons not to be covered by workers' compensation. To process the Notices of Election to Be Exempt and file them with the Division of Workers' Compensation, Federal Insurance charged Mr. Polyviou $75 per form, for a total of $300. The $75 fee per form consisted of a $50 fee charged by the Division of Workers' Compensation to file the notices and a $25 fee charged by Federal Insurance to process the notices and send them to the Division of Workers' Compensation. However, Federal Insurance never sent these notices to the Division of Workers' Compensation. Eventually, following an audit, Mr. Polyviou was assessed about $20,000 in unpaid workers' compensation premiums for these four individuals. Mr. Polyviou's injury was considerably less than $20,000 because the other three employees were ineligible to elect out of coverage in the first place. At all material times, David Wagner was self-employed in landscape maintenance. On August 21, 2000, Mr. Wagner visited Mr. Smith at Federal Insurance to purchase workers' compensation insurance. Mr. Wagner completed an application for workers' compensation insurance and delivered a Notice of Election to be Exempt, which had already been filled out and signed by Mr. Wagner. Respondent notarized the Notice of Election to be Exempt. To process the Notice of Election to Be Exempt and file them with the Division of Workers' Compensation, Federal Insurance charged Mr. Wagner $75. The $75 fee consisted of a $50 fee charged by the Division of Workers' Compensation to file the notice and a $25 fee charged by Federal Insurance to file the notice. However, Federal Insurance never filed the notice with the Division of Workers' Compensation. Eventually, an audit uncovered the absence of a filed notice, but the workers' compensation insurer and Petitioner were able to give effect to the notice, as of the date that it should have been filed, so that Mr. Wagner was not subject to any fines, fees, or penalties. Mr. Smith and other Federal Insurance employees described the office procedures at the time of the Polyviou and Wagner transactions. After completing the applications and notices and collecting the customers' checks, Mr. Smith typically placed the documents and checks in a basket where employees not performing other tasks would process the notices and payments, prepare checks for deposit, prepare money orders, and mail completed packages to the Division of Workers' Compensation. Because the Division of Workers' Compensation required the payment of filing fees by money order, not corporate check, Federal Insurance would not know if the Division of Workers' Compensation had received a package. On August 28, 2000--one week after the Wagner transaction--Evelyn Grenyer visited Mr. Smith at Federal Insurance to purchase renter's insurance. She informed Mr. Smith that all correspondence had to be mailed to a post office box, not her street address. Mr. Smith agreed to do so. Ms. Grenyer paid Federal Insurance a premium of $242.17. Over the next several days, Mr. Smith called Ms. Grenyer with questions about her residence, but he consistently assured her that she had insurance. In May 2001, Ms. Grenyer's home was robbed of property worth $2000. When she called Federal Insurance, she learned that she had not been insured because they had been unable to find her residence. Someone at Federal Insurance explained that they had sent mail to her residence, rather than, as instructed, her post office box, and the mail had been returned. Mr. Smith testified that Federal Insurance submitted the premium of $202.64 to the renter's insurance company. He thought that the difference may have been a charge to inspect the house. When the insurer required additional information, Federal Insurance attempted to contact Ms. Grenyer through her street address, rather than, as instructed, by her post office box. When she did not respond, the insurer canceled coverage, as of October 18, 2000, and refunded $149.53 of the premium to Federal Insurance, by check dated November 14, 2000. Federal Insurance deposited the check to its account. Only after Ms. Grenyer contacted Federal Insurance about the loss did it issue a check, in the same amount and dated May 10, 2001, to Ms. Grenyer. Obviously, no one at Federal Insurance visited the residence or tried calling Ms. Grenyer, whose phone number had not changed for five years and was in the records of Federal Insurance. Ms. Grenyer never recovered any insurance proceeds for the $2000 loss that she suffered. From 1995-1998, Federal Insurance employed Juan C. Montoya as an insurance agent. On January 22, 1998, Federal Insurance designated Mr. Montoya as the primary agent of Federal Insurance. In May 1998, Mr. Montoya's employment with Federal Insurance terminated. Federal Insurance failed to designate a new primary agent until July 9, 2001. For nearly three years, Federal Insurance operated without a designated primary agent. A few months after selling the insurance business, Respondent filed a notice with Petitioner, on September 25, 2002, identifying JEMS Services, 4207 Lake Avenue, West Palm Beach, as his new principal business address. When filing the notice, Respondent knew that he did not intend to transact insurance business at the JEMS Services address. In fact, Respondent used the JEMS Services address without the consent of the insurance agent conducting insurance business at that address. JEMS Services is an insurance agency owned by Janet Travieso-Otero, a friend of Respondent and his wife. Ms. Travieso-Otero never gave Respondent permission to use her address as his principal business address. Respondent has never been employed by JEMS Services, nor has he ever transacted business from this address, which has never been the principal business address of Respondent or any insurance business that he has owned or operated. Respondent accused Ms. Travieso-Otero of lying when she testified that she had never told Respondent that he could use her business as his principal place of business. To the contrary, Respondent is lying, and, even if he were not lying, Respondent intentionally provided Petitioner an incorrect business address. With Mr. Montoya and Ms. Travieso-Otero, Respondent has used friends and business associates, without their knowledge, to satisfy regulatory requirements. At all times during which Mr. Montoya was designated as the primary agent, including while he was employed by Federal Insurance, Respondent was the primary agent because Respondent, not Mr. Montoya, was responsible for the supervision of the insurance agents and their hiring and firing. The common thread in both situations is that Respondent, not someone on his behalf, has intentionally filed false information with Petitioner. Petitioner's expert witness, Wilford Ghioto, testified about Respondent's obligations. Mr. Ghioto, who has considerable relevant experience in the retail property-and- casualty insurance business, described the procedures that his office followed when processing and filing Notices of Election to be Exempt from workers' compensation insurance coverage. In particular, the insurance agent, but not the supervising agent, was responsible to ensure that the completed package was mailed to the proper location, and the supervising agent, if aware of any problems with an insurance agent, opened all of the insurance agent's mail to discover any problems. The supervising agent also ensured that the office routinely ran account receivable reports to find any money due an insured.
Recommendation It is RECOMMENDED that the Department of Financial Services enter a final order dismissing Counts I-IV, finding Respondent guilty of Counts V-VII, imposing an administrative fine of $1250, and suspending Respondent's license for six months. DONE AND ENTERED this 20th day of July, 2004, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of July, 2004. COPIES FURNISHED: Gregg S. Marr David J. Busch Division of Legal Services Department of Financial Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Orrin R. Beilly Law Office of Orrin R. Beilly Citizens Building, Suite 705 105 South Narcissus Avenue West Palm Beach, Florida 33401 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capital, Plaza Level 11 Tallahassee, Florida 32399-0300 Pete Dunbar, General Counsel Department of Financial Services The Capital, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether Petitioner should be licensed as a life, variable annuity and health agent by the Department of Financial Services?
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, the following findings of fact are made: Petitioner is 51 years old; has Associate of Arts degrees from Seminole Community College, Sanford, Florida, and Davenport University, Grand Rapids, Michigan; will soon acquire a bachelor of business administration degree from Belhaven College; and is applying for a doctoral program at the University of Central Florida. Petitioner holds a real estate sales associate license issued by the Department of Business and Professional Regulation, Division of Real Estate. The effective date of the license is September 29, 2003; it will expire on September 30, 2005. On November 28, 2001, Petitioner applied to Respondent for a license classified as a "life and variable annuity and health insurance agent." One of the screening questions on the license application was the following: "[H]ave you ever had any professional license subjected to any of the following actions by any state agency or public authority in any jurisdiction?" In response, Petitioner circled "Yes." The screening question was then followed by the following "actions": suspension, revocation, placed on probation, administrative fine or penalty levied, cease and desist order entered. In response, Petitioner circled "suspension." On July 17, 1997, a Final Order was entered in Department of Business and Professional Regulation, Division of Real Estate v. David Nelson Weiker, Case No. 95-85173, which reads, in part, as follows: . . . the Commission finds the Respondent guilty of violating ss 475.25(1)(c) and 475.42(1)(j), Florida Statutes, as charged in the Administrative Complaint. Therefore the Commission ORDERS that the license of David Nelson Weiker be suspended until the liens are removed. At the conclusion of the period of suspension, the Respondent is directed to contact the Records Section of the Division of Real Estate . . . to secure proper forms for reinstatement of Respondent's suspended license. The Commission further ORDERS that the Respondent pay a $1000 administrative fine and investigative costs of $768 within 30 days of the filing date of this order or the Respondent's license shall be suspended until such time as the fine and costs are paid in full. In Weiker, Case No. 95-85173, Petitioner, David N. Weiker, Sr., initially requested a formal hearing, then failed to respond to a request for admissions. As a result, he admitted being a licensed real estate salesperson who, as an employee of a builder, Mercedes Homes, Inc., filed 14 liens in a total amount of $23,301 against homes owned by Mercedes Homes, Inc., in an attempt to collect sales commissions he deemed he was owed. The administrative fine of $1,000, in Weiker, Case No. 95-85173, was paid by a check dated August 5, 1998, drawn on the account of David S. Piercefield, P.A. On August 13, 1998, an Amended Final Order was entered in Department of Business and Professional Regulation, Division of Real Estate v. David Nelson Weiker, Case No. 96-83238 (DOAH Case No. 97-4742), which reads, in part, as follows: . . . the Commission finds the Respondent guilty of violating s.475.25(1)(b) and (c), Florida Statutes, as charged in the Administrative Complaint. The Florida Real Estate Commission therefore ORDERS that the Respondent pay a $1,000.00 administrative fine. . . . Therefore the Commission ORDERS that the Respondent be placed on probation for a period of ninety days . . . In Weiker, Case No. 96-83238 (DOAH Case No. 97-4742), the Real Estate Commission adopted the Recommended Order of the Administrative Law Judge. In that Recommended Order, the Administrative Law Judge found that "he [Weiker] furthered a scheme of misrepresentation, false promises, and dishonest dealing." The administrative fine of $1,000, in Weiker, Case No. 96-83238 (DOAH Case No. 97-4742), was paid by a SouthTrust Bank check dated October 14, 2003. The remitter was Irene L. Weiker. On several occasions, in correspondence with representatives of Respondent, and while testifying at the final hearing, Petitioner testified that his real estate license had not been suspended. He also maintained, without substantive evidence or reasonable explanation, that the two administrative fines had been paid several times or by the wrong individuals. His attempts to explain the facts and circumstances of the two administrative actions disciplining his real estate license were unreasonable and not credible.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent's decision to deny Petitioner's application for a life, variable annuity and health insurance agent license is well-founded; Petitioner's license application should be denied. DONE AND ENTERED this 22nd day of December, 2003, in Tallahassee, Leon County, Florida. S JEFF B. CLARK 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 22nd day of December, 2003. COPIES FURNISHED: R. Terry Butler, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0399 David N. Weiker, Sr. 1506 Elfstone Court Casselberry, Florida 32707 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The issue to be determined in this case is whether Petitioner's application for licensure as a Resident Customer Representative insurance agent should be granted.
Findings Of Fact The Petitioner is a receptionist for an insurance agency and is seeking licensure as a Florida Resident Customer Representative from the Department of Financial Services. The Department is an agency of the State of Florida responsible for the licensing of insurance agents and customer representatives in the State of Florida, in accordance with the provisions of Chapter 626, Florida Statutes. On October 22, 2003, the Petitioner filed a license application (electronically) with the Department seeking licensure as a Resident Customer Representative insurance agent. On her application for licensure, the Petitioner answered the following question in the negative: Have you ever been convicted, found guilty, or pled guilty or nolo contendere (no contest) to a crime punishable by imprisonment of one year or more under the laws of any municipality, county, state, territory or country, whether or not adjudication was withheld or a judgment of conviction was entered? When the Petitioner signed her application for licensure she signed an "Applicant Affirmation Statement" and mailed it to the Department. In that statement, she swore that all the answers on the questions on the application were true and correct to the best of her knowledge and belief. She knew of the requirement to be truthful and honest on the application and that had been stressed to her by her instructor for the insurance pre-licensing course which she attended. On March 16, 1995, the Petitioner entered a plea of nolo contendere to one count of forgery and one count of uttering a forged instrument, both felonies. The related arrest had occurred on November 10, 1994. The Petitioner was sentenced to three years probation, required to make restitution, pay court fines and costs and to perform fifty hours of community service. She was to write a letter of apology to the victim and to have no contact with the victim. Adjudication of guilt was withheld. She performed all of the requirements of her sentence. She was excused by the court from providing the fifty hours of community service because she was pregnant at the time. The Petitioner acknowledges that she answered the question incorrectly and had made a mistake, because she felt the phrase "punishable by one year or more" meant that she had been imprisoned for one year or more, which she had not. She testified that she intentionally answered the question in the negative because she was not aware that her felony crimes were potentially punishable by one year or more. She signed the 1995 plea agreement, which indicated that it was then her understanding that the offenses could carry a maximum sentence of ten years imprisonment. At the time she answered the relevant question on her application, however, she did not have a present understanding or recollection that that would be the case. The point is, she answered in good faith. She did not intentionally answer the question untruthfully but rather due to a mistaken impression, after some nine or so years had elapsed, concerning the nature and effect of the punishment or potential punishment her crimes carried. The Petitioner has not had a criminal history since her 1995 plea, with the exception of a June 7, 2000 arrest in Hernando County, Florida, after her return to Florida from Tennessee, for purported violation of probation with regard to the 1995 felony case. The Petitioner's testimony demonstrates in a credible way that indeed she had fulfilled the requirements of her probation. The judge had released her from her community service requirement and the reason for the arrest, because she was believed to have failed to pay relevant costs and restitution, apparently was a mistake. She established that at or around the time of her moving to Tennessee she had paid the relevant monetary sums required with two cashiers checks. The court terminated her probation. It is found that this arrest was based upon a mistake. The Petitioner's supervisor corroborated the testimony of the Petitioner and established that the circumstances and mental impression leading to the Petitioner's negative answer show no intent to be untruthful or to defraud. The Petitioner and her witnesses (her supervisors) established that she has been fit and trustworthy in her work with the insurance agency. Petitioner has routinely handled sums of money for the agency and for insurance clients, always with proper accounting and never with any funds being missing or mis-appropriated. The Petitioner's employment provides her family's only livelihood for her and her child. Her employment is dependent on her being granted licensure as a Customer Representative. Denial of the license application will create a hardship for her. She was nineteen years of age at the time of the arrest and plea, made full restitution and complied with the terms of her probation.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department granting the licensure applied; or granting it for a probationary period of two years under reasonable terms and conditions specified by the Department in that final order. DONE AND ENTERED this 2nd day of December, 2004, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 December, 2004. COPIES FURNISHED: Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Pete Dunbar, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Tanya C. Lollie 4732 Elwood Road Spring Hill, Florida 34608 Elizabeth Penny, Certified Legal Intern Ladasiah Jackson, Esquire Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0333
