Volume 3, No. 3 - March 2014

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 SIU department of an insurance company filed a complaint with the Department's Division of Insurance Fraud that a life agent was allegedly forging consumer's signatures on applications for life insurance as well as impersonating 24 senior clients by making phone calls from his home to complete a required telephone application process. The agent claimed that he was providing this service to his clients without their knowledge or consent in order to expedite the underwriting process and help them obtain coverage.
Disposition: License revoked.

Case: An agency inspection and audit was performed on a title insurance agency after the Department received information from a title insurance company that the agency had discrepancies in their operating and escrow accounts. A prior forensic audit of the title agency's books and records, by the title insurance company, revealed multiple closings where ledgers did not completely match transactions on the settlement statements, shortages in the main escrow account, transfer of escrow funds between files, evidence of the agent servicing loans for hard money lenders, and disbursing non-closing construction files out of the escrow account. It was determined in the audit that for over four years, a title insurance agent had misappropriated more than $366,000. Later, the agent admitted in order to cover the shortages, he withheld payoffs, receipted funds into the escrow account and mismatched ledgers to balance the trial balance.
Disposition: Licenses of the agent and agency were revoked. The agent was arrested by the FBI, however, the case has not yet been settled.

Case: An investigation was opened after an insurance company alleged a life agent was terminated for underwriting infractions. Upon investigation it was revealed that the agent submitted applications with invalid bank account numbers or routing numbers where the initial premiums were to be drafted. Because the bank determined that the account and routing numbers were invalid, the bank rejected the initial draft request. The agent's pattern of submitting applications with invalid bank account numbers and routing numbers prompted the insurance company to conduct an internal audit. The internal audit revealed that three of the four consumers contacted indicated that they did not authorize the transactions. In addition, the agent had been awarded compensation credits for bonus, conference, and ranking as a result of the transactions. During the investigation, it was also determined that the agent failed to update his contact information with the Department within thirty days of the change.
Disposition: License suspended for 12 months.

Case: A bail bond agent was investigated for failing to forward premiums to her managing general agent, failing to account for all powers and pay forfeitures, and issuing some NSF checks.
Disposition: License suspended for six months, ordered to pay restitution to her surety for the forfeitures, and to honor all of her contractual obligations to her managing general agent.

Case: An investigation of a life & health agent revealed that he demonstrated a lack of fitness and trustworthiness to engage in the business of insurance after he submitted 326 fraudulent insurance applications using fictitious identities, resulting in unearned commissions of $47,864.
Disposition: License revoked and he was arrested by the Division of Insurance Fraud.

Case: The Department received a Consent Order from the State of South Carolina, which fined a nonresident general lines agent $2,000 for failure to remit money to either the insurer or insured in a timely fashion. Additionally, the agent's nonresident license was revoked in another state and he failed to notify the Department within thirty days after a change of address.
Disposition: License surrendered.

Case: The Department received a complaint from an insurance company alleging a life & health agent created a fraudulent business for the sole purpose of establishing a group rate for herself, husband, and child. The agent also signed four additional non-employee members up for the insurance benefits under the same group.
Disposition: License suspended for nine months.

Case: A bail bond agent was photographed at a jail wearing a hat inscribed with the name of the bail bond agency and the words "Bounty Hunter." An agency inspection revealed that the agent was found with a similar hat having the same advertisement in a different color.
Disposition: Fined $5,000 and license placed on probation for one year.