Volume 5, No. 8 - August 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: A case was opened based on an anonymous tip from the Division of Investigative and Forensic Services alleging a general lines agent was issuing fraudulent Certificates of Insurance (COI). An agency inspection was performed and several files were randomly selected and reviewed. The investigator contacted the insurance companies named in the COIs, which confirmed the COI’s were issued by the agent when no coverage was in effect. However, when the investigator contacted consumers regarding the COIs, the consumers advised the investigator they were no longer insured with the agency and had taken their business elsewhere. The investigation revealed the agent had issued COIs for consumers at renewal without confirming they wanted to renew their policy. The agent did not collect any premiums prior to issuing the COIs and did not benefit financially.
Disposition: License suspended for six months followed by one year's probation.

Case: An investigative case was opened on a life, health and variable annuity agent based on a referral from the Division of Investigative and Forensic Services alleging the agent was involved in a scheme of forgery, rebating, misrepresentation, and providing false underwriting information. During the course of the investigation, evidence was obtained that proved the agent submitted applications for coverage and altered the terms of the coverage which the insurer did not authorize. The applications also contained falsified signatures of the applicants.
Disposition:
License suspended for 12 months.

Case: A case was opened after investigators receive an allegation of fraud from two health insurers, indicating suspected fraud by a life, health and variable annuity agent. The insurance companies conducted internal investigations and found 1,300 suspicious enrollments by the agent for fully subsidized government health exchange plans without the insureds' knowledge or consent.

Investigators requested documentation from the companies including the agent's agreement and production runs. The investigators' review of the agent’s production report and related applications found many insured addresses were not valid addresses according to the United States Postal Service. One group of irregularities found indicated the agent used a single address on 27 separate applications.
Disposition: License revoked.

Case: Investigators received a complaint from our Division of Consumer Services alleging that an agency owner licensed as a life, health, variable annuity and general lines agent was allowing an unlicensed person to transact insurance. Investigators found the unlicensed employee's Customer Representative's license had expired because he was never properly appointed. The unlicensed employee purchased the agency but never applied for a general lines license. Investigators determined that the licensed agent was only coming into the agency briefly during the day, allowing the unlicensed owner to operate the agency in his absence, and that the agency phone was forwarded to the unlicensed owner's home phone line when the agency was closed. Although the general lines agent sold the agency to the unlicensed person, he continued to act as the agent in charge as all of the agency's insurer appointments were in his name.
Disposition: Agent's license suspended for 12 months, agency license suspended for three months.

Case: The source of this complaint was a referral from the Division of Investigative and Forensic Services. The complaint alleged that a life, health, variable annuity and general lines agent fraudulently submitted more than 15 bogus certificates of insurance for workers compensation insurance. Investigators obtained statements from consumers and insurance carrier documentation, and also interviewed the subject of the investigation.

Investigators proved the agent failed to place workers compensation coverage for a business that applied for coverage, and disseminated multiple invalid certificates to a number of unsuspecting municipal government entities throughout Palm Beach County and the Treasure Coast. The certificates contained numerous misrepresentations including fabricated insurance company names and policy numbers.

The agent was arrested by the Division of Investigative and Forensic Services and charged with 16 counts of uttering a forged instrument.
Disposition: Permanently barred from the insurance business in Florida.

Case: An investigation was opened on a life, health and annuity agent after Investigators received information from an insurer alleging the agent altered applications and related documents for a life insurance policy. Investigators met with the affected consumer, who advised she received a statement of policy values from the agent that reflected approximately $100,000 in her policy, but she was suspicious because the printing on the statement didn't line up. The insured contacted the insurer, and found her policy value was only $4,700.
Disposition: Fined $3,000, suspended six months.

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