Volume 3, No. 7 - August 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: A case was opened on a general lines agent based on a complaint stating she collected premium, failed to forward the premium to the insurance company and then issued a fraudulent certificate of liability insurance. An inspection of the agency revealed four additional consumers who also had been issued fraudulent certificates of liability insurance, after she collected their premium and failed to forward to the insurance company.
Disposition: License revoked and permanently barred from the insurance industry. She was arrested by the Division of Insurance Fraud and pleaded guilty to the felony crime of scheme to defraud.

Case: The Department received notification from an insurance company that an employee of a roofing contractor who was licensed as a life and health insurance agent, acted as a public adjuster when he negotiated the insured's roofing claim with the insurance company.
Disposition: License revoked. The Division of Insurance Fraud arrested him for the unlicensed activity.

Case: A life and health agent submitted multiple fraudulent applications in connection to a phony group, using fake clients, and was advanced more than $16,000 in commissions. The company was unable to verify the authenticity of the information on the applications due to invalid information on them. Each application also had phony bank information. The phony group used the name of a corporation that the agent had formed and was paid for with a check from the phony group. The agent bypassed his up-line agent who always reviewed the applications before forwarding them on to the insurer.
Disposition: License revoked. He was arrested and convicted of multiple felony counts making him permanently ineligible for future licensure.

Case: A referral was received alleging a general lines agent and her agency were providing quotes, receiving insurance premium, but issuing fraudulent certificates of insurance. Instead of forwarding the premium funds to the insurance companies as required, she was pocketing the premiums and sending insufficient funds checks to the companies. Due to the diligent efforts of the Bureau of Investigation, restitution in the amount of $42,228.26 was made to the consumers.
Disposition: The agent's license was suspended for 18 months. She was arrested by the Division of Insurance Fraud and is currently charged with multiple felonies. The agency was fined $8,000 and placed on probation for two years; however, it failed to pay the fine and its license was suspended.

Case: The Department received two separate complaints from consumers alleging that a general lines agent failed to forward premiums to their respective homeowner carriers. In both cases payments had been sent to the agency through the consumers' escrow accounts, yet their policies lapsed for nonpayment of premium. In one instance, the consumer suffered a loss which was denied by the carrier due to no insurance being in place. The agent's response to the complaint by the homeowner was to show up at their door with a roofer who started to fix damaged shingles. The agent wanted the homeowner to sign a paper he prepared stating that she would not file a claim, but she refused. When the agent submitted a new application to a second homeowner carrier, the agent indicated on the application that there were no prior losses. Due to the diligent efforts of the Bureau of Investigation, restitution in the amount of $1,203 was made to the consumer.
Disposition: License suspended for six months.

Case: An investigation of a bail bond agent revealed that she failed to ensure that all officers of her bail bond agency were licensed and appointed, as required by law.
Disposition: License suspended for three months.

Case: A referral was received from an insurance company regarding the general lines agent in charge and owner of an insurance agency. The investigation revealed that the agency collected premiums in full on homeowners' polices and would deposit the funds into the agency operating bank account. The funds were then transferred to a personal checking account which belonged to the customer representative and vice president of the agency. Quarterly e-payments were then made to the insurance company from the customer representative's personal bank account. Several agency files were audited and because they were unlawfully diverting premiums that belonged to the insurance company, one insured suffered a lapse in coverage.
Disposition: The agency and the general lines agent were each fined $3,000 and the customer representative was fined $2,500. All three were also placed on probation for one year. The agent had to return overpayments and all impacted consumers received a refund.

Case: An investigation of a life & health agent alleged that while serving in the capacity of an insurance instructor he provided continuing education credits without the person actually taking the class. The agent/instructor would simply request a check payable to him and he would then send a Certificate of Completion.
Disposition: License suspended for six months; fined $500; and his authority to be a course provider, school official, or instructor was revoked.

Case: A referral was received from an insurance company regarding a violation of Florida Statutes by a public adjuster. The public adjuster failed to obtain the signatures of all named insureds on a public adjusting contract, failed to indicate the type of claim on a public adjusting contract, and failed to notify the Department within 30 days of a change in contact information.
Disposition: Fined $2,500.

Case: During the Medicare open enrollment period, a life & health agent decided he needed help selling Medicare products to seniors. The problem was he used unlicensed staff to make the sales. In fact, he allowed his son and several other staff members at his agency to sell insurance without any insurance license whatsoever let alone the fact they did not have sufficient insurance knowledge. This lack of licensure and adequate insurance product knowledge seriously disadvantaged the insurance-buying public.
Disposition: Fined $1,500 and placed on probation for one year. Additionally, he was required to complete an additional three (3) hours of CE on the topic of ethics.