Volume 3 Number 37
September 11, 2006

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GALLAGHER SUSPENDS AGENT FOR MISLEADING PARENTS TRYING TO SAVE FOR THEIR CHILDREN’S COLLEGE

Chief Financial Officer Tom Gallagher has suspended the licenses of an agent who misrepresented insurance policies to consumers, making them think they were saving money for their children’s college funding.

Franz Caville Wallace III, 54, of Jacksonville, agreed to a one-year suspension and restitution to settle a 13-count administrative complaint that found he had misled a dozen consumers into buying life insurance policies by telling them the policy was a “savings-type account “ that could later be used in its entirety to pay for college expenses. He failed to disclose that the only way to access the money was through an interest-bearing loan.

“These parents were looking for a way to invest in their children’s future, and this individual sought to steal their children’s dreams,” said Gallagher, who oversees the Department of Financial Services which conducted the investigation that led to the charges.

Gallagher also ordered Wallace to serve a year on probation following the one-year suspension and to pay $10,000 in restitution to the victims.

Investigators with the department’s Bureau of Investigation said Wallace induced customers to buy a so-called “flexible life accumulator” insurance policy, issued by the Southern Security Life Insurance Company. Wallace told the consumers that this product constituted a college savings plan for their children. In addition to failing to disclose that the only way to access the money was through a loan, Wallace also failed to disclose that a portion of their monthly premiums was being applied as premium for life insurance policies on their children.