Volume 5, No. 11 - November 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: The Division of Investigative & Forensic Services referred an insurer complaint alleging a general lines agent failed to include a wind mitigation form with an application for homeowners insurance, ultimately resulting in cancellation of the policy. Because the discount was not applied, the consumer was billed for additional premium. The agent told the consumer the policy was not cancelled, the discount would be applied, and blamed the insurance company for making a "clerical error". Based on the agent's guidance, the consumer did not pay the additional premium, resulting in cancellation of the policy.

Investigators determined that the agent signed a reinstatement notice for the customer that was not approved nor produced by the insurance company. Because the policy cancelled due to the agent's actions, the insurer applied the wind mitigation discount and reinstated the policy. Investigators requested documentation from the insurer and found five additional transactions handled the same way by the agent. Investigators determined that most of the polices were quoted with inflated wind mitigation credits to make the premium more affordable.
Disposition: The agent was arrested by the Division of Investigative & Forensic Services and charged with Insurance Fraud, a third-degree felony, and suspended indefinitely awaiting disposition of the criminal case.

Case: A consumer notified the Department that a bail bond premium was paid for a defendant who was never released on bond, and the bail bond agent never refunded the premium. During the course of the investigation, it was found the bail bond agent never forwarded the premium to the surety company. Further, the bail bond agent was conducting business out of his home in a gated community, which violates the Florida Insurance Code. A bail bond agency must provide an entrance that is easily accessible to the public with signage that can be read from a reasonable distance.
Disposition: License suspended for three months.

Case: Investigators opened a case after receiving a complaint that a public adjuster made misrepresentations to the Department on his license application. The complaint alleged the public adjuster's contractor's license was revoked by the Florida Department of Business and Professional Regulation (DBPR) due to fraudulent activity. Investigators determined the DBPR case found that as a contractor, the public adjuster stopped work on a job after receiving payment, resulting in subcontractor liens being placed on the consumer's property. The adjuster also failed to honor a promissory note he gave to the consumer. The customer was awarded a default judgment from a civil case against the adjuster. Had the public adjuster disclosed this information on the original application, the Department would not have issued the license.
Disposition: License revoked.

Case: During a follow-up investigation of a suspended title agent, investigators determined a licensed title agent was aiding and abetting a suspended agent in the transaction of insurance and unlawfully sharing commissions with the suspended agent. Investigators uncovered evidence that the title agent had an arrangement with the suspended agent under which he would share commissions from any business she generated for his agency. The agency inspection revealed the suspended title agent acted as the closing agent for several closings which included the sale of title insurance for the subject's agency.
Disposition: Fined $5,000 and placed on probation for one year.

Case: Investigators conducting a bail bond agency audit discovered a bail bond agent working at the agency did not hold the required appointment to transact bail bond business. In addition, his agency did not have a designated primary bail bond agent in charge on a full-time basis. Both the appointment and primary bail bond agent's designation were cancelled because the bail bond agent had not complied with his Continuing Education (CE) requirements. Licensees who become CE non-compliant immediately lose all appointments.
Disposition: Fined $1,750 and place on probation for one year.

Case: This case was opened when the Financial Industry Regulatory Authority (FINRA) issued a disciplinary action barring a life and variable annuity agent. The action alleged the agent failed to cooperate during the course of complaint investigation in which the agent was accused of misappropriating almost $100,000 from a trust account.
Disposition: Permanently barred from the insurance industry in Florida.