Volume 6, No. 2 - February 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 looking into a revoked bail bond agent's activities discovered a licensed bail bond agent had aided and abetted the revoked agent by executing a transfer bail bond for the revoked agent.
Disposition: License suspended for 90 days.

Case: The investigation was opened when investigators conducting a review of another licensee located evidence that a customer representative was transacting general lines insurance without the proper license.

The customer representative, an officer of the insurance agency at which the policies were sold, signed insurance applications with a rubber stamp bearing the signature of a general lines agent without his knowledge or consent. In fact, the general lines agent was not even employed at the subject's agency. Investigators established the violations from witness and customer affidavits and documentation from the involved insurance companies. In addition to the fraudulent use of the general lines agent's signature stamp, investigators found the subject also signed customer's names on the applications.
Disposition: License revoked.

Case: An investigation was opened on an agency after an investigative follow-up on a revoked customer representative found the agency appeared to have aided the revoked licensee in transacting insurance while revoked. Investigators determined the former licensee transacted 133 policies at automobile dealerships while revoked. In addition, the sales were conducted without supervision by a licensed and appointed general lines agents.

Investigators visited each dealership to determine who represented the agency at each location and to confirm a general lines agent had been designated as agent in charge for each. The agency operated 12 locations throughout a tri-county area within automobile dealerships, and were open an average of 12 hours a day. The investigation revealed the agency rotated 57 customer representatives to different locations on a daily basis to ensure they were properly staffed.

Investigators later received a complaint that a licensed customer representative employed by the agent sold an automobile policy that did not offer commercial use coverage to a consumer who used their vehicle for business. The policyholder had an accident and the claim was denied by the insurance company.

A condominium association alleged the agency failed to forward the annual renewal premium it paid for its director and officers' policy. The agency never placed the coverage with the insurer, although it was confirmed the association’s funds had been deposited into the agency’s bank account. The association first became aware of the issue when it received collection letters from the insurer for unpaid premium. The agency failed to offer an adequate response to the association when questioned about the premium and the non-renewed policy. The association received a refund check from the agency a year later.
Disposition: Agency fined $35,000. The revoked customer representative was arrested by the Department's Division of Investigative & Forensic Services for transacting general lines insurance without a license.

Case: An investigation was opened after the Department received a complaint from a county's contractor certification division. The county alleged that an Agent in Charge (AIC) of an agency had allowed her staff to create and disseminate fraudulent certificates of liability insurance. During the course of the investigation 14 fraudulent certificates of liability insurance were identified along with a falsified loss run and a non-renewal notice of a policy that did not exist. The Florida Insurance Code holds an agency's AIC accountable for violations committed by staff, regardless of whether he or she handles the specific transactions.
Disposition: The Agent in Charge was fined $7,500 and placed on probation for one year.

Case: An investigation was opened on a life/health/variable annuity and industrial fire or burglary agent after the Department received a complaint from an insurance company that the agent had failed to forward $2,242 in premiums received from policyholders. Investigators determined the agent collected the premium from 24 policyholders in a three week period. The agent had a cash bond with the insurance company which repaid all but $318 in premiums.
Disposition: The agent was initially suspended for 90 days and ordered to pay $318 in restitution to the insurance company. After failing provide proof to the Department that restitution was made within the 90 days, the agent's license was suspended for an additional 60 days. .

Case: An investigation was opened after policyholders who contracted with a public adjuster to assist with their claim alleged the adjuster cashed a settlement check from the insurance company and refused to release funds to the policyholders. The public adjuster advised the policyholders he would drop off the check for their endorsement but never did. During the course of the investigation, a copy of the negotiated check with the "policyholder's endorsement" was obtained from the insurance carrier by investigators and shown to the consumers. The consumers denied the signatures endorsing the check were their's. When the investigators questioned the public adjuster about the signatures, he said he'd used a "third-party" independent adjuster to deliver $6,400 in cash to the consumers, but was unable to provide proof of delivery.
Disposition: License suspended for 12 months and ordered to pay $6,400 in restitution to the consumers. The licensee is required to pay the restitution in full before applying for reinstatement of his license.

Case: This case was opened by investigators when the Department received notice from a clerk of county courts of a Final Judgment issued against a bail bond agent. He had failed to resolve the judgment within 35 days as required, but continued to issue new bonds. Investigators audited the agent's records and determined he executed 49 bail bonds while the judgment was outstanding.
Disposition: Fined $2,000.

Case: Investigators opened a case on a life/health/annuity and general lines agent after learning of her arrest by the Department's Division of Investigative & Forensic Services (DIFS). The agent was charged with nine (felony) counts of “False and Fraudulent Insurance Claim – Less than $20,000”. DIFS' detectives alleged the agent filed multiple fraudulent insurance claims on behalf of herself and members of her family. The agent entered a plea of nolo contendere to all counts.
Disposition: License revoked.

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