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Volume 2, No. 7 - September 2013

Case Notes

Bureau of Investigation

The following are instances in which licensees or other persons violated the Florida Insurance Code and the administrative action the Department has taken against them. Note: All administrative investigations are subject to referral to the Division of Insurance Fraud for criminal investigation.

Case: A revoked general lines agent was found continuing to work at her former insurance agency despite having a revoked license. The revocation was ordered after she pleaded guilty to charges of unlawfully manufacturing identification cards, and after investigators alleged that she sold a fake driver license to an undercover informant. At the time, the Division of Insurance Fraud was investigating the agency after receiving information that employees were selling fake driver licenses, fake insurance cards and immigration papers to undocumented citizens. Following her license being revoked, an investigator went to the insurance agency to conduct a follow-up inspection. The investigator found the revoked agent in her office and asked why she was there. She stated that she knew she wasn't supposed to be there, but she needed to process payments from customers and earn money to pay bills. Investigators returned to the agency another time and found her again working in her office. The investigators discovered a check signed by her and written to an underwriting company. Several other checks issued by the agency had her signature.
Disposition: She was arrested by the Division of Insurance Fraud for the felony charge of transacting insurance without a license.

Case: A life, health & variable annuity agent entered into a Letter of Acceptance, Waiver and Consent with the Financial Industry Regulatory Authority (FINRA) barring him against association with any FINRA member in all capacities for alleged misuse of customers' securities and failed to update his contact information within 30 days to the Department.
Disposition: License revoked.

Case: An investigation of a title agency alleged that it failed to remit the 2010 and 2012 annual title administrative surcharges. The agency failed to answer the Administrative Complaint or request a proceeding.
Disposition: License suspended for 90 days.

Case: An insurance agency and three agents specializing in surplus lines risks were found to be charging their clients fees over and above the standard commission they were earning on commercial surplus lines accounts.
Disposition: The agency cooperated with the Department's investigation, repaid $699,198.07 in restitution to 123 clients, and was fined $7,500.The three agents involved were fined: $10,000 (agent in charge, wholesale agency), $3,500 (agent, wholesale agency), and $7,500 (agent in charge, retail agency).

Case: A general and surplus lines agent allowed another agent and agency to use his surplus lines license to place business and file the taxes and fees for him with the Florida Surplus Lines Service Office. He was administratively charged with failing to correctly calculate the taxes and fees owed, report all transactions, maintain complete records in his office, overcharging on fees, and to make a proper diligent effort to determine the eligibility of risks being exported.
Disposition: Fined $5,000, placed on probation for one year, and ordered to pay restitution of $6,377.64.

Case: A life and health agent signed a life application to insure a consumer, which he never met. Furthermore, the agent utilized a second agent to convince the unsuspecting consumer to surrender his existing annuity to purchase a life insurance policy with the proceeds. Compounding matters, the consumer was falsely assured there would be no tax consequences due to the transaction.
Disposition: Fined $3,500.

Case: An investigation of an insurance agency, its officers, agents, and customer representative alleged that they had sold boat insurance policies issued by an unauthorized entity, International Water Safety Foundation (IWSF). The transactions included providing quotes, accepting premium payments and receiving commissions. Additionally, some of the individuals at the agency were not licensed and appointed when the bogus insurance was transacted, but later obtained the proper licenses and appointments.
Disposition: The agent in charge (also an officer of the agency) was fined $12,000 and placed on two years of probation; the other agent and officer was fined $10,000 and placed on two years of probation; the agency was fined $7,500 and placed on one year of probation; and the customer representative was fined $7,500 and placed on one year of probation.