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Volume 6, No. 1 - January 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 & Forensic Services for criminal investigation.

Case: A case was opened on a customer representative after an insurance company reported the customer representative had submitted a life insurance application on a consumer. Customer representatives are prohibited from transacting life insurance under the Florida Insurance Code. The insurance company stated the application was allegedly submitted without without the consumer's knowledge or consent.

Investigators obtained a statement from the consumer who acknowledged speaking with the customer representative, but denied discussing life insurance or authorizing the purchase of a life insurance product. Investigation determined the life application was submitted electronically under the license number of the Agent in Charge, a general lines agent, also without her knowledge or consent. Investigators conducted an agency inspection but found no additional fraudulently submitted applications.
Disposition: License suspended for 12 months.

Case: The original source of this complaint was the Bureau of Licensing. This licensee had applied for a 21-05 agency license. The investigation of this case included extensive research on the agency’s licensing history and prior administrative action of the corporate officers/owner.

A corporate officer of the agency applied for an agency license. However the majority of answers on the application were not answered accurately, particularly the questions dealing with the disclosure of the agency owner's prior administrative actions. The application failed to disclose any reference to prior actions taken by the Indiana or Nebraska insurance Departments. Equally troubling, the application failed to disclose all corporate officers.
Disposition: Fined $2,500 for misrepresentations made on the licensing application.

Case: The Department was notified that a licensed insurance agent had consented to an Acceptance, Waiver and Consent entered by the Financial Industry Regulatory Authority (FINRA). Findings of fact and legal conclusions in the order included violations related to the sale of more than $750,000 in private securities. A fine in excess of $50,000 was imposed by FINRA and the agent's registration was suspended. An investigator took affidavits from consumers who were harmed due to the acts of this agent. The agent violated one or more of the provisions of the Florida Statutes and caused financial harm to consumers.
Disposition: License revoked.

Case: The Bureau of Investigation opened a case into the activities of a health insurance "call center" after receiving a number of complaints from former employees. Individuals who previously worked at the call centers alleged the call center was conducting activities that require an insurance license. Investigators conducted an inspection and discovered the agency did employ some licensed individuals, but they were not appointed to the insurance companies they were selling for. The call center owner claimed the company's function was to refer callers to licensed agents.
Disposition: Fined $5,000.

Case: This case originated after a Final Judgment was entered against a bail bond agent in the Hillsborough County Court. Judgment was entered due to the forfeiture of a bond executed by the subject agent. Satisfaction of the judgment was not paid within the required time period. It was alleged that the bail bond agent continued to execute bonds while the judgment remained unsatisfied for more than 35 days.

The bail bond agent was contacted and copies of bonds executed during the time the judgment remained unsatisfied were requested. The subject agreed to provide the requested documents, but they were never received. Multiple attempts were made to conduct an agency inspection but the agency was closed each time. Investigators obtained the needed documentation from the Surety Company and confirmed the bail bond agent did execute multiple bonds while the judgment remained unpaid for more than 35 days. The subject was was found to have executed bail bonds while a judgment remained unpaid and failed to maintain a place of business that was open and accessible to the public during normal business hours.
Disposition: The bail bond agent was fined $2,500 and placed on probation for one year. When the subject failed to pay the fine within 30 days, his license was suspended for 60 days. The subject is still required to pay the $2,500 fine before the license can be reinstated and placed on probation

Case: This case was a referral that was received from a title insurance company indicating they had discovered shortages in the escrow account of a title agency. The shortages totaled $241,510, and $34,427 of that amount had been transferred from the escrow account to the operating account of the agency and subsequently disbursed to pay agency expenses. The insurance company attempted to conduct an audit and the owner of the title agency would not allow them access to the files.

The reconciliation records from the insurance company and the bank records were obtained for all of the bank accounts belonging to the title agency. The bank accounts disclosed $34,427 was transferred from one escrow account to an operating account with no explanation. The bank records showed a payment of $1,475.18 from the escrow account to make a payment on a Master Card credit account. In addition, the reconciliation records revealed shortages totaling $241,510.

After the owner was made aware of the on-going investigation by the insurance company, two payments were made to the escrow account in the amounts of $34,000 and $150,000. The owner of the title agency did attempt to surrender the agency’s license and indicated they were no longer conducting title insurance transactions. However, the surrender was not accepted due to the active investigation. Several attempts were made to conduct an agency inspection, but the owner said the records were no longer available.

When the owner of the title agency was formally notified of the Department’s investigation, the shortages were funded in full and the insurance company confirmed the amounts paid. The allegations in this case were the title agency misappropriated escrow funds, failed to remit the statutorily mandated 2016 Administrative Surcharge to the Department and failed to submit the statutorily mandated 2016 Title Data Call filing to the Office of Insurance Regulation.
Disposition: License revoked.

Case: This case was opened based on information received from the Office of Insurance Regulation (OIR) that a title agency had not completed the statutorily mandated 2016 Title Data Call filing. When investigators visited the agency, the Agent in Charge (AIC) was not there. The AIC insisted that she had completed this requirement and was in fact speaking with the OIR to complete the filing. In mid-August investigators confirmed that the data call had still not been submitted so the investigative report was submitted possible administrative action against the agency.

Investigators made every effort to encourage this AIC to allow them to " walk her through" the process, but she was not cooperative. This case could  have been easily resolved but developed into an administrative action against the agency.
Disposition: License suspended for three months.