Volume 5, No. 1 - January 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: The case was opened following a health agent's arrest on Federal charges of Conspiracy to Commit Health Care Fraud and Wire Fraud, Health Care Fraud, Conspiracy to Defraud the United States and Make False Statements Related to Health Care Matters, and False Statements Related to Health Care Matters. The former agent pled guilty to Conspiracy to Commit Wire Fraud and Healthcare Fraud, a felony, and was adjudicated guilty.
Disposition: License revoked.

Case: A title agent accused of misappropriating $391,000 was arrested on one count of organized scheme to defraud, a first-degree felony. Investigators found she illegally operated an insurance agency, even though she had previously forfeited her title agency license. Investigators determined the agent defrauded her clients on at least seven separate occasions by keeping their real estate escrow funds and failing to provide the consumers with the title insurance policies they purchased. Of the seven fraudulent transactions, two victims' homes had prior mortgages that were not paid off from the escrow accounts and were facing foreclosure while unpaid federal and county tax liens were not paid off in several of the other victims' real estate closings.
Disposition: Licenses suspended indefinitely.

Case: Investigators opened a case after an insurance company raised allegations in its termination of a general lines agent's appointment that alleged shortages in the premiums collected by the agent. According to the insurer, the agent admitted to his manager that he'd taken the money and voluntarily resigned. An audit revealed 15 policies were affected with a total premium shortage of $1,571. When speaking with investigators, the agent stated that he had taken money from premiums currently being paid by customers to pay premiums past due on other policies so he could meet his performance requirements. The insurance company filed a claim against the agent's surety bond to recoup the shortages.
Disposition: License suspended for 12 months.

Case: An attorney representing a defendant filed a complaint with the Division of Consumer Services alleging a bail bond agent had charged an indemnitor thousands of dollars in fees for the storage of collateral and a $1,000 fee associated with having to pick up the defendant. Department Investigators determined the bail bond agent had charged the unlawful fees.
Disposition: Fined $2,500, ordered to pay $7,364 in restitution.

Case: Investigators performed an agency inspection as the result of an anonymous complaint against a title insurance agency. Review of the agency files revealed the agency had charged fees for preparing and filing various documents. Investigators found the agency was charging more than the promulgated title insurance rates, failed to refund premium overcharges and failed to disburse funds in accordance with the HUD-1 Settlement Statement.
Disposition: Fined $3,500, placed on probation for one year.

Case: A multiple lines-licensed agent failed to report administrative action taken against his license by the Financial Industry Regulatory Authority (FINRA). FINRA suspended the agent for three months and imposed a $5,000 fine.
Disposition: Fined $1,500.

Case: A surplus lines insurance agency employed a creative and lucrative scheme to augment their bottom line. The agency staff systematically charged unsuspecting consumers an inspection fee on nearly every commercial residential policy sold. In almost every instance, the inspections were unnecessary, and not required by the insurance companies to underwrite the coverage applied for.
Disposition: Fined $10,000 and ordered to pay restitution to the consumers who were unlawfully charged for inspection fees.

Case: This case was opened following a multiple lines-licensed agent's arrest on Federal felony charges of Racketeer/Conspire to, Organized Fraud/Scheme to Defraud $50,000 or more, Arson First Degree, Arson Second Degree, Insurance Claims/False/Fraudulent $100K or more, False and Fraudulent Insurance Claims, Grand Theft First Degree, three (3) counts of Grand Theft Second Degree, two (2) counts Grand Theft Third Degree.
Disposition: Licenses suspended indefinitely.