Volume 4, No. 4 - April 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: Despite being ordered by the Department to pay an administrative penalty of $20,000 and comply with a three-month suspension for misrepresentation, a life and health agent remained undeterred. In fact, it was business as usual until the Department conducted a follow-up inspection of his agency. It was then that the Department learned he was still soliciting insurance business and discussing coverage with clients and underwriters. Those were just a few of the many activities the agent continued to participate in and all required an active license.
Disposition: License was suspended an additional three months.

Case: During an investigation into possible unlicensed activity by an agency owner who applied for an agency license after the original license expired, investigators discovered the designated agent in charge (AIC) had never worked at the agency. The designated AIC was not aware that her name was listed as the AIC of the agency, and confirmed that she had not given authorization to anyone to use her name for that purpose or to transact insurance business. Several consumers confirmed that the person they purchased insurance from at the agency was, in fact, the unlicensed agency owner.
Disposition: License of the agency was revoked. The agency owner has been charged with organized Fraud, Grand theft, acting as an Insurance agent without a license, fraudulently using personal identification and insurance claims fraud, all felonies.

Case: A Customer Representative (CR) misappropriated policyholder premiums and embezzled funds from her employer totaling more than $15,000. The CR was entrusted with making the agency’s bank deposits for a number of years and had possession of three signed blank agency checks to be used for emergencies. The CR became involved in a romance scam with a person from another country and bought him an iPhone and other items. When he needed money for a "short time" the CR used the agency’s petty cash funds, misappropriated customer cash payments, and used the three "emergency" checks to embezzle funds from her employer.
Disposition: License revoked and ordered to pay $16,296 in restitution. She was also arrested by the Division of Insurance Fraud and charged with Grand Theft.

Case: In the course of investigating a complaint against a non-resident life, health and variable annuity agent, investigators discovered the agent had failed to report a prior administrative action taken against him.
Disposition: Fined $3,000 and placed on probation for one year.

Case: A general lines agent operated a nonadmitted surety company, an unlicensed entity. The Florida Insurance Code prohibits the operation of unauthorized entities. The Department found the agent demonstrated a lack of knowledge and technical competence to engage in the insurance business.
Disposition: License revoked.

Case: A general lines agent, who was also an owner and agent in charge of the agency, submitted a homeowners application without the knowledge, consent, or true signatures of the named insureds. The consumer contacted the agency twice to discuss replacement coverage for their non-renewing homeowners policy but never received a satisfactory response so they decided to obtain coverage elsewhere. The consumer's escrow account was debited twice to pay for the policy they purchased and the one the general lines agent procured without their knowledge.
Disposition: Fined $5,000 and placed on probation for one year.

Case: The department became aware that a life, health and variable annuity agent had been barred by the Financial Industry Regulatory Authority (FINRA) for impersonating a customer to obtain access to the customer’s account and making a false statement to his firm to further the impersonation scheme. The customer’s account balance fell from $3 million to $629,000. The agent failed to notify the department of this action being taken against him.
Disposition: License revoked.

Case: A judgment was issued against a bail bond agent after he executed a bond and the defendant failed to appear in court. The bail bond agent failed to pay the judgment when due and continued to execute bail bonds for several weeks before paying the judgment violating Florida Statutes by executing bonds with an unpaid judgement.

Case: A consumer entered into a contract with a public adjuster and her adjusting firm to handle a homeowners insurance claim. When the insurance company issued the settlement check, it was payable to multiple parties, including the adjusting firm. The consumer gave the check to the public adjuster to obtain the required endorsements to allow the consumer to negotiate the check. The public adjuster never returned the check to the consumer. After several fruitless attempts to get the check returned, the consumer contacted the insurance company and was told that the check was cashed. The consumer immediately contacted the public adjusting firm demanding payment and was told the firm had no money to pay her. After the firm learned that the consumer filed a complaint with the Department, the firm paid the settlement.
Disposition: Suspended for three months. The formerly licensed public adjuster can apply for reinstatement following the suspension but is required to retake and pass the pubic adjuster exam first.