Volume 5, No. 7 - July 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: Investigators opened a case on a personal lines agent after learning he had been charged with multiple felonies; Use of a Computer to Seduce a Child, Traveling to Meet a Minor, Attempted Lewd Battery on a Child and Unlawful use of a Two-Way Communication Device. The agent entered a plea of guilty to three counts and was sentenced to 44 months in prison, followed by 72 months' probation.
Disposition:
License revoked.

Case: During a routine audit of a bail bond agency, investigators found a number of violations in the bail bond agent's records.  Among the violations were, failing to include the bail bond agent's name, address and phone number on premium receipts.  Further examination of the records revealed the bail bond agent failed to collect premiums on multiple bonds and failed to document the return of collateral. 
Disposition: Fined $2,500 and placed on probation for six months.

Case: Investigators opened a case on a general lines agent after reviewing a complaint from a business owner that that his business' general liability policy had been cancelled for unpaid premium even though he had paid the premium in full to his agent. During the course of the investigation, it was determined the agent failed to remit the premium due to the insurer which resulted in the cancellation.
Disposition: Fined $3,500 and placed on probation for one year.

Case: An investigation was opened after a consumer alleged that a life, health and variable annuity agents failed to provide the consumer with a complete illustration of the product sold to the consumer, and may have withheld or misrepresented other important policy information. The proposals the agent provided to the consumer made bold statements about how purchase of the life policy would provide savings on their mortgage payments and additional money in their pocket. The agent's illustration did not include the name of the product being offered or the name of the insurance company. A disclaimer on one of the illustration's pages indicated the illustration was incomplete without all pages, but when questioned by the consumer, the agent said the other pages were "not important".

During the investigation the insurer confirmed that the documents in question were not created or approved by the insurance company nor did they accurately describe the product the agent sold. Investigators met with the agent who admitted that although he had access to the company-approved documents, he chose to create and present his own without the insurer's approval. The agent also acknowledged he did not provide the consumer with the entire illustration.
Disposition: Fined $3,500 and placed on probation for one year.

Case: The Division of Investigative & Forensic Services' Bureau of Insurance Fraud referred information that a life and variable annuity agent had fraudulently submitted more than a dozen life insurance applications to an insurer. Investigators obtained statements from the consumers for which policies were issued, and determined the agent submitted at least 15 life insurance application on the lives of consumers without their knowledge or consent, and had forged the signatures of the insureds on the applications which contained numerous misrepresentations. The agent earned about $9,300 in commissions from the fraudulent sales. The agent was arrested by the Bureau of Insurance Fraud and charged with an organized scheme to commit fraud.
Disposition: License revoked.

Case: Investigators opened a case after receiving a tip from another licensee that a general lines agent was the subject of a U.S. Postal Inspection Service investigation. The federal investigation alleged the agent was using fraudulent addresses and zip codes on auto insurance applications. Department investigators determined the agent made material misrepresentations on auto insurance applications and submitted fraudulent documents to insurance companies.

The U.S. Attorney's office filed charges against the licensee, who later pleaded guilty to eight federal charges, including bank fraud, wire fraud and mail fraud. The agent was sentenced to 18 months in prison and ordered to repay her employer $150,731 for the theft of bonus and commission checks.
Disposition: Permanently barred from the insurance business in Florida.

Case: Investigators received a complaint from a surety company alleging a bail bond agent had failed to submit premiums, return powers of attorney forms, appearance bonds and other company supplies subsequent to the termination of her appointment with the company. The surety company had also obtained a judgment in Circuit Court against the bail bond agent in favor of the company exceeding $119,500 for the unpaid premium.

During the investigation the bail bond agent told investigators the surety company had seized her files and therefore could not produce a number of documents requested by investigators. Other violations established by investigators included the bail bond agent's failure to maintain regular business hours and lack of appropriate signage to identify the agency.

The Division of Investigative & Forensic Services' Bureau of Insurance Fraud arrested the subject who was charged with Third-Degree Grand Theft, a felony.
Disposition: License revoked. The former agent is prohibited from ever reapplying for a bail bond agent's license.