Volume 3, No. 6 - June 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: The Department received notification from an insurance carrier that it had terminated a life & health agent for cause. The termination stemmed from allegations that the agent represented himself as various applicants during verification calls on electronic applications, which were submitted by him. He also posed as applicants to move their policy effective dates and request cancellations as though he was the insured. The investigation showed that these persons did not exist.

A former employee of the agent contacted the carrier and questioned why her bank account had been drafted when she didn't even have a policy with them. Further, the unauthorized draft was done with the same bank account that the agent used to direct deposit her pay when she worked for him. It was this call that prompted the insurance carrier to perform its internal investigation.

It was determined that there were six fraudulent applications placed using the phone or work phone of the agent. On three applications he used the banking information of previous applicants. The policies that were mailed to proposed insureds were returned by the post office as undeliverable.
Disposition: License revoked.

Case: The Department received notification that a nonresident life & health agent had an action filed against him by the Financial Industry Regulatory Authority (FINRA). The agent was barred from associating with any FINRA member in any capacity. FINRA stated the agent made materially false and misleading statements in recommending the purchase of variable annuity products to at least nine consumers. In addition, the agent failed to inform the Department of this action within 30 days of the final disposition and failed to notify the Department of a change in contact information.
Disposition: License revoked.

Case: The Bureau of Investigation received notification from the Division of Rehabilitation and Liquidation stating a final judgment was issued against an insurance agency for unearned commissions due to the receivership of Northern Capital Insurance Company (Northern). The Receiver was due $682.76 plus pre-judgment interest of $35.19 and post-judgment interest. The general lines agent and president of the insurance agency was held responsible for the monies and/or unearned commissions owed by the agency to Northern.
Disposition: License revoked.

Case: The Department received notification that a nonresident life agent had an action filed against him by the Financial Industry Regulatory Authority (FINRA) wherein the agent was suspended from association with any FINRA member for five months and fined $30,000. The action was taken based on the agent's participation in selling unregistered securities in the form of life settlements. According to department records the agent had also not licensed his agency. During the investigation it was determined that the subject's business, mailing and email addresses were invalid. The agent also failed to inform the Department of this action within 30 days of the final disposition.
Disposition: License surrendered and cannot re-apply for two years.

Case: An investigation revealed that a limited customer representative wrote three commercial lines polices using forged signatures, falsified banking information to complete the applications, and submitted them without the consumers' knowledge or consent. It appeared the customer representative was trying to achieve a production goal sponsored by one of the companies the agency did business with. The agency fired the customer representative as soon as it found out about the improper activity.
Disposition: License suspended 18 months.

Case: A referral was received from an insurance company indicating that a general lines agent submitted 26 automobile insurance applications with incorrect garaging addresses, causing the policies to be issued with a lower premium. Once the 26 policies were endorsed with the correct garaging addresses, this resulted in additional premiums of more than $6,000 being owed to the insurance company. The agent was terminated by the company and the additional premiums are being deducted from his commissions earned until the debt is paid in full.
Disposition: License suspended for 18 months. If approved for reinstatement following the suspension, his license will be placed on probation for one year.

Case: The Department received notification from an insurance company that a general lines agent forged a consumer's signature on a change of coverage form for his homeowner's policy. The Department conducted an investigation and alleged the agent submitted an insurance-related document to the insurer with false signatures and failed to update her contact information with the Department.
Disposition: License suspended for one year.

Case: An investigation of a life & health agent revealed a struggle to complete the sale of an annuity. The agent decided to move forward without consulting his client. The agent proceeded to forge the consumer's name to a form that transferred nearly $10,000 from her life policy to the annuity. The Department successfully intervened and reversed the funds transfer for the consumer and nullified the transaction.
Disposition: License suspended for six months.

Case: An investigation revealed a bail bond agent executed bail bonds while a judgment remained unpaid for more than 35 days. The agent was ordered to pay an administrative penalty of $2,000, which he failed to pay the administrative fine within the specific time limit.
Disposition: License suspended for 60 days.

Case: An investigation revealed a surety company premium was collected by a bail bond agent, but in this case, the agent failed to transmit the monies in compliance with their contractual agreement. The surety company was owed and although the agent stated to the investigator that he hoped to set up a payment plan, no written confirmation of any arrangement was ever received. Through the Department's efforts, restitution was made in the amount of $10,515.90.
Disposition: Fined $2,500 and placed on probation for one year.

Case: The Department received notification from an insurance company that a public adjuster had no current appointments. The public adjuster was given a courtesy call by the Department and advised he needed to log onto his MyProfile account and self-appoint, as he was currently not in compliance with Florida law requiring a proper appointment. The public adjuster was advised he was in violation for conducting business without an appointment and was advised he could not transact public adjusting business without one. A follow-up revealed he was still adjusting without an appointment.
Disposition: Fined $1,500, placed on one year probation, and required to secure an appointment.