Volume 5, No. 6 - June 2016

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: Investigators received a referral from a life insurance company alleging that a life, variable annuity and legal expense agent had fraudulently obtained the personal information of 131 consumers.

Investigators interviewed consumers and audited insurance company documents, and determined that most of the stolen information was obtained by the agent through his tax preparation business. The agent used the information to systematically enroll unsuspecting consumers in life insurance policies without their knowledge or consent. In at least one instance, the agent misrepresented to a consumer that he was providing free life insurance through the U.S. government.
Disposition: License revoked.

Case: Investigators opened a case after an insurance company alleged that a public adjuster had violated conflict of interest laws by acting as both a public adjuster and contractor on the same claim. Investigators determined that the public adjuster, who owned the contracting firm, first contracted with the consumer for repairs. When issues arose in the settlement of the consumer's claim with the insurer, he would then contract with the consumers to assist them in settling the claim as a public adjuster.

During the investigation, additional consumers were discovered who were having problems getting repairs done because the public adjuster was withholding claim funds from both the consumers and other contractors. In a review of property records, investigators determined that the public adjuster had filed liens against two properties, one for $25,000 for the $7,500 adjusting fee actually due to him, and the other, a construction lien in excess of $23,000 for unpaid services valued at $9,200. An audit of the public adjuster's contracts found he had failed to obtain all required signatures from insureds.
Disposition: License suspended for nine months.

Case: The Miami-Dade Bail Association filed a complaint about an advertisement that was unlawfully displayed by a bail bond agency on the grounds of a jail. In addition, the advertisements didn't name the bail bond agent or her address, and used the word "free" in the advertisement, which is prohibited.

Investigators conducted an inspection of the surroundings of the jail and located advertisements posted on an electrical box and light poles at the front of the jail, and took photographs. The investigator was able to track down the responsible agent and agency by researching the advertisements.
Disposition: License suspended for six months.

Case: A complaint was filed with the Department’s Division of Consumer Services questioning the "fitness" of a life agent. The complainant invested $490,000 in a Viatical offered by the agent, and filed a complaint when she disputed an invoice issued to her for an additional $1,260 for "administrative costs", which she refused to pay.

Investigators looking into the transaction determined the entity the agent used to invest the funds was not authorized to do business in Florida. As a result, enforcement action was taken against the agent for aiding and abetting an unlicensed entity.
Disposition: Fined $2,000.

Case: A case was opened after investigators reviewed the license records of a general lines agency and noticed the home and mailing addresses listed for the designated general lines Agent in Charge were three hours of travel time from the agency. An agency inspection was performed to determine if the Agent in Charge was present and actually worked from the agency address. Upon arrival at the agency, the only employee present was one customer representative, who stated the owner of the agency came into the office a couple of times each week.

Further investigation revealed the owner owned a second agency closer to her home and was the designated Agent in Charge for that location as well. Investigators determined the customer representative at the first location was allowed to transact insurance business without the full-time supervision of a general lines agent. A random selection of files were scanned and reviewed, and audit of the files indicated the agency was charging an unlawful $25 "agency fee" to customers in addition to the actual premium. The agency was charged with Illegal Dealings in Premium, Fraudulent and Deceptive Practices, and Primary Agent Violations.
Disposition: The agent was suspended for twelve months, and the agency was fined $7,500.

Case: Investigators opened a case after receiving notification from the Department's Division of Insurance Fraud that it had arrested a customer representative for acting as an insurance agent without a license and organized fraud. The felony criminal case alleges that the customer representative transacted insurance using applications containing forged signatures of another licensee without that licensee’s knowledge or consent.
Disposition: License suspended indefinitely pending the outcome of the criminal case.

Case: A case was opened when a complaint was received from an indemnitor who surrendered a principal but did not receive a timely return of collateral. During the course of the investigation it was determined the bail bond agent had also recommended a particular attorney to the indemnitor, failed to provide a surrender form to the defendant, and did not notify the Department of a change in her demographic information within 10 business days as required.
Disposition: Fined $3,000 and required to complete five hours of Continuing Education in Law and Ethics. The bail bond agent was suspended two months later for 60 days for failing to pay the $3,000 fine.

Case: This case was opened on a life, variable annuity and health agent, after investigators became aware of an administrative action taken against the agent by the Financial Industry Regulatory Authority (FINRA). FINRA found the agent negligently misrepresented to a customer that the liquidation of her variable annuity would not result in a significant tax liability. However, because the liquidation resulted in a substantial capital gain, the customer incurred a tax liability of approximately $20,000. FINRA suspended the agent from associating with any FINRA-registered firm in any capacity for a period of 30 calendar days and he was fined $7,500. The agent also failed to report this action to the Department within 30 days as required.
Disposition: License revoked.

Case: An investigation was opened on a title insurance agency that failed to comply with the 2015 Office of Insurance Regulation's title data call requirements.
Disposition: License suspended for six months.

Case: An investigative case was opened on a life, health and variable annuity agent arrested on a felony charge, Scheme to Defraud. The agent pleaded nolo contendere (no contest) to one count of Fraudulent Use of a Personal Identification Form, also a felony.
Disposition: License revoked.