Volume 6, No. 5 - May 2017

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 Investigative and Forensic Services for criminal investigation.

Case: Investigators learned a life, variable annuity and health agent pled Nolo Contendere to one count of child abuse; a third degree felony and opened a case related to the criminal proceedings. Documents obtained by investigators indicated the agent was placed on probation for 18 months by the Court.
Disposition: License revoked.

Case: A case was opened on a life, health and variable annuity agent when the Financial Industry Regulatory Authority (FINRA) barred the agent from associating with any FINRA member in any capacity, which includes holding any type of individual registration.  FINRA's findings concluded the agent converted $15,250 from elderly customers, forged or falsified the signatures of four customers on nine separate documents, and changed the account address of record for three customers from their home addresses to the agent's business address. The agent paid most of the surrender charges a customer incurred as the result of his recommendation to surrender a variable annuity contract, thereby guaranteeing her against loss, a violation of FINRA rules.
Disposition: License revoked.

Case: A case was opened based on a referral from the Department’s Division of Consumer Services indicating that homeowners filed a complaint about coverage they applied for and made a premium down payment on. After time passed and the consumers didn't receive a policy or premium notices, they contacted the Department 's Division of Consumer Services, which quickly determined no coverage had ever been placed, and the agency had gone out of business. Insurer documents proved the agent had provided a fraudulent certificate/evidence of property insurance to the consumers.

A second consumer filed a complaint that the agent failed to adequately insure their home against hurricane damage. The consumer suffered damage by wind driven rain and was not covered due to the negligence of the agent and his agency. As a result, the consumer obtained a Final Judgment in civil court against the agency in the amount of $115,293.17. The agency and its principals have failed to pay any portion of the judgement.

During the course of the investigation the investigator learned that the agent/owner of the agency filed Bankruptcy and the trustee reported to the Department that the bankruptcy proceeding uncovered evidence the agent accepted premium payments from customers and failed to forward the premiums to the insurance companies. The agent used the customer's premiums for vacations for his family members, including a trip to France. The trustee provided the investigator a list of 51 customers whose insurance premiums were never forwarded to insurance carriers.

The investigator contacted the insurance company and it was confirmed that no insurance coverage was placed on the customers identified during the investigation. Investigators obtained affidavits from both consumers, a copy of the order on the Motion for Writ of Garnishment against the agency by the consumer and a copy of the final judgment.

Bank records were obtained and reflected that the agent/owner was the sole signor on the bank account. Bank account records showed $47,000 of insurance premiums were deposited into the agency's bank account, and $20,000 in checks were made payable to the agent and for his personal expenses. An additional $23,000 was withdrawn in cash.
Disposition: Permanently barred from the insurance industry in Florida.

Case: A case was opened by investigators on a general and surplus lines agent who also held an all-lines adjuster license after receiving a complaint from a premium finance company. In its complaint, the premium finance company alleged the licensee had engineered a plot to defraud the company by submitting premium finance contracts to finance non-existent policies. In each instance, the insureds were fabricated by the agent, and the premium draft checks were deposited into a bank account confirmed by investigators to belong to him. By the time the scheme began to unravel, the agent had obtained $1.3 million dollars from the finance company. The investigative steps in this case included an affidavit from the premium finance company, banking records and extensive carrier documentation.
Disposition: License revoked