Volume 4, No. 10 - October 2015

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: The investigation was initiated after a Department licensee reported that an agency's agent in charge (AIC) allowed a surplus lines agent to export insurance coverage for risks that were procurable from authorized insurers. The surplus lines agent also failed to provide proof that a diligent effort was made prior to procuring the surplus lines coverage.
Disposition: Agency fined $45,000.

Case: Investigators looked into the actions of a general lines agent who was the source of a complaint regarding alleged misappropriation by a Customer Representative (CR) she was responsible for as the agent in charge of the agency. As a result of the original investigation, the CR was arrested by the Division of Insurance Fraud for misappropriation of funds and transacting insurance without a license. While investigating the CR, investigators determined that during the time of the misappropriation, the agent in charge failed to properly supervise the Customer Representative by failing to properly appoint the CR to her agency, which resulted in the CR's license being cancelled.
Disposition: Fined $5,000 and six months probation.

Case: The Florida Office of Financial Regulation (OFR) issued a Final Order against a life, health and variable annuity agent for allegedly engaging in fraudulent transactions and creating falsified documents relating to no less than 15 client securities accounts.  OFR ordered the agent to Cease and Desist from violations of Chapter 517 of the Florida Statutes, and any rule or order promulgated by OFR.  Additionally, the agent was ordered to pay OFR an administrative fine in the amount of $110,000. The agent failed to report this action to the Department within 30 days as required by the Florida Statutes.
Disposition: Licenses revoked.

Case: An investigation into the business activities of a life, health and variable annuity agent who is also a licensed dentist was conducted after a tip was received through the Department's Division of Insurance Fraud. The investigation determined the agent made material misrepresentations on Department license applications to obtain agency licenses for three call centers, and by doing so, aided and abetted the transaction of insurance by an unlicensed person. Investigators established that the agent was employed full time as a practicing dentist, not as an insurance agent, and had set up the agencies to allow his father, a convicted felon, to unlawfully operate the agencies and place business under his license and appointments. The father served a sentence in federal prison for wire and securities fraud, and was working with a partner who was barred by FINRA. Both men's backgrounds would have made them ineligible for any type of licensure with the Department.
Disposition: License revoked.

Case: An investigation was initiated against a general lines agent after receiving a complaint from the owner and agent in charge (AIC) of the insurance agency where the agent worked. Investigators determined the agent was accepting cash premium payments from an agency customer and depositing the cash into her personal checking account rather than forwarding the premium to the insurance company. To cover up the misappropriation, the agent created false Certificates of Insurance for the general liability and building coverage for the customer's business. The agent knew there was no coverage in force to protect the business from liability or for any type of property damage. The investigation also revealed the subject was depositing commission checks payable to the agency into her personal bank account. At its conclusion, the investigative case was referred to the Division of Insurance Fraud and the agent was arrested. The agent pled guilty to one count of Grand Theft and five counts of Uttering and was sentenced to 18 months probation and ordered to pay restitution.
Disposition: Permanently barred.

Case:. An investigation was conducted after a consumer complained that an agent falsified information about mobile homes she owned which resulted in the termination of her policies by the insurance company. Further review of applications taken by the same agent found the agent had misrepresented information about risks on several dozen additional applications. Strikingly, investigators found the applications were not signed by the "agent" the consumers did business with, but with a rubber stamp bearing the name of another licensed agent, the spouse of the agent in charge. Investigators determined only the AIC's spouse had the necessary appointments to write the mobile home insurance business and the signature stamp was used without the supervision or oversight of the AIC. The agency was also charged with failing to supervise an agent in its employ.
Disposition: The agent and agency were fined $2,500 each, and the agent was placed on probation for one year.

Case: Investigators became aware of numerous felony charges pending against a life, health and variable annuity agent including Conspiracy to Commit Health Care Fraud and Wire Fraud, Health Care Fraud, and Conspiracy to Defraud the United States. The agent was ultimately adjudicated guilty of one count of Conspiracy to Commit Health Care Fraud and Wire Fraud.
Disposition: License revoked.

Case: For nearly a year, a bail bond agent defiantly refused to return $3,000 in premium for a bail bond that was posted on behalf of a defendant by reasoning that the premium refund was not owed since she had "done the work" - collected the premium and completed the paperwork; however, the defendant was never released from custody and the bail bond agent was required by law to return the premium to the indemnitor. During an agency inspection conducted during the course of the investigation, the agent was found to have continued to transact bail bond business after losing her appointment due to Continuing Education non-compliance and failed to properly maintain the agency's records.
Disposition: Fined $2,500, placed on probation for one year.

Case: Investigators were advised by a surety company that a bail bond agent had failed to remit premiums for executed bail bonds. An audit by investigators determined the premiums were due and unpaid by the bail bond agent.
Disposition: Fined $2,500 and placed on probation for one year. As the result of the Department’s Bureau of Investigation's efforts, restitution of $10,516 was paid to the surety company by the agent.

estitution to multiple defendants charged for the monitoring, and to attend a five-hour Bail Bond Law and Ethics course.