Volume 4, No. 7 - July 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: An investigation found a general lines agent systematically overcharged her clients for homeowners insurance premiums, resulting in numerous unsuspecting clients paying hundreds of dollars in fraudulent charges. To conceal the overcharges, the agent falsified a variety of insurance documents to reflect the fraudulently increased premiums.
Disposition: Suspended six months, ordered to pay restitution to the consumers and complete 10 hours of coursework in ethics.

Case: During an agency inspection, investigators found 89 entries made in a binder log by an unlicensed agency employee, whose Customer Representative's license had expired eight years earlier. The entries corresponded to multiple consumers, policies, and policy transactions over a period of six months. Documents obtained during the investigation confirmed the employee had requested insurance quotes, uploaded endorsements, and submitted new insurance business to insurance companies while unlicensed to do so. Consumers contacted by investigators confirmed the unlicensed employee had provided quotes, wrote their insurance applications, and explained insurance coverage to them.
Disposition: Immediately and permanently removed from the insurance business in the state of Florida. The Division of Insurance Fraud arrested the employee for transacting insurance without a license and appointment, a third-degree felony.

Case: An investigation determined a life, health, and variable annuity agent failed to report administrative action taken against him by the Financial Industry Regulatory Authority (FINRA), in which he was barred from associating with any FINRA member in any capacity.
Disposition: License surrendered.

Case: An investigation into “termination for cause” of an agent by an insurance company determined a life, health and variable annuity agent had unlawfully paid insurance premiums for a client and rebated part of the commission to the client. The agent sold life insurance to a consumer, and after two years, instructed the consumer to name a partnership as the owner and beneficiary of the policy. The agent had previously convinced the client to set up the partnership with him. The agent owned 90% of the partnership and the client, 10%. The agent also facilitated the purchase of an immediate annuity by the partnership to fund the life insurance premium, and unlawfully designated himself as the beneficiary for the life insurance policy.
Disposition: License surrendered.

Case: An investigation initiated due to consumer complaints determined an agency owner failed to ensure premiums were remitted to insurers on a timely basis resulting in the lapse or non-issue of insurance coverage, failed to return unearned premiums to consumers, and allowed an unlicensed person to transact insurance business. The agency owner also failed to properly designate an agent in charge for all agencies.
Disposition: Fined $7,500, placed on probation for one year.

Case: An investigation into a bail bond agent's records revealed he failed to remit $7,216 in bail bond premiums to a surety company, to provide records to the surety company for audit, and failed to notify the Department he had closed his bail bond agency.
Disposition: Suspended for 18 months and ordered to remit the unpaid premiums. The agent must show proof the unpaid premiums were remitted to be eligible to reapply for his license after 18 months.

Case: An investigation into the activities of a School Official and course Instructor found he developed and distributed unauthorized course manuals to teach the state required pre-licensing courses for the Life, Health and Variable annuity license.
Disposition: Fined $1,500, required to pay department investigative costs of $1,000 and $750 in restitution.

Case: An investigation into administrative action taken against a life, health and variable annuity agent by his home state determined the agent failed to report the action within 30 days of the action to the department or the National Insurance Producer Registry (NIPR). 
Disposition: Fined $750. The agent failed pay the fine in 30 days as agreed and was automatically suspended for 60 days. 

Case: An investigation was initiated related to an agency's advertising. Investigators determined the agency had obtained an approved advertisement from an insurer, but made changes to the ad that violated insurance laws. During the course of the investigation, it was determined the agency was not properly licensed.
Disposition: Fined $1,500 each and placed on probation for one year