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Volume 6, No. 10 - October 2017

Case Notes

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: An investigation into the practices of a general lines agent was initiated after an insurer referred a complaint from a business alleging the agent charged a "service fee" in addition to workers’ compensation premiums.

Documentation obtained by investigators during an agency Inspection revealed the agent was routinely charging additional, unlawful fees. Statements taken from several agency customers indicated the fees ranged from $250 to $455, and were listed as "consulting fees, notary fees and mailing fees", none of which can lawfully be charged by a Department licensee. The agent told investigators that he performs "different" services for each client and charges additional fees, but was unable to substantiate that any of the services went beyond the usual and customary duties of a licensee and compensated for by lawfully earned commissions.
License suspended 60 days; ordered to pay restitution.

Case: An all lines adjuster will never adjust another claim in Florida following an investigation revealing he filed numerous fraudulent claims for personal financial gain.  Investigators began looking into the adjuster’s activities after receiving a termination for cause letter from a third-party administrator (TPA), alleging the adjuster diverted claim payments for his personal use.  Investigators obtained evidence from the TPA revealing the adjuster issued multiple claim checks payable to himself, his in-laws, and his daughter.   Other checks written from the claims account were used to pay the adjuster’s personal bills. Between 2008 and 2013, investigators identified 68 checks totaling approximately $183,000 in questionable claim payments.  Evidence was turned over to law enforcement and the adjuster was arrested and charged with Scheme to Defraud, five counts of Money Laundering and Aggravated White Collar Crime.
Disposition: Permanent bar from the Florida insurance industry.

Case: The Department’s Division of Consumer Services referred a complaint related to a denied homeowner claim. The claim was denied because the public adjuster employed by the insured allegedly provided the incorrect date of loss and submitted receipts for repair work using invoices from a company that closed years before the alleged work was completed.
The consumer provided a statement to investigators confirming the public adjuster had instructed an unlicensed person to act as a public adjuster and execute the contract in dispute. The unlicensed person admitted to participating in duties that require a license and appointment.
The insurer’s claim file included falsified documents and forensic proof the photographs submitted by the public adjuster were not taken on the date of loss reported and included a fraudulent plumbing receipt submitted by the public adjuster.
Disposition: License suspended six months; the public adjuster was arrested by the Division of Insurance and Forensic Services and charged with one count of Insurance Claims/False/Fraud/Solicitation and Uttering a Forged Instrument. As a result, the suspension was extended indefinitely pending the outcome of the felony charges.

Case: Failing to respond to the Department’s Administrative Complaint doesn’t make it go away, as a life, health and variable annuity agent discovered, when his license was suspended.  The case began with an anonymous tip from the Department’s Division of Insurance and Forensic Services.  The tip alleged an agent was running a call center, staffed with unlicensed employees transacting insurance business.  Department records indicated the agency was not licensed. The agent mentioned in the tip was listed as the owner of another licensed agency.  While conducting an inspection of the location listed in corporate records for the unlicensed agency, investigators found a licensed agent, an administrative assistant and several employees.  Notably, there was no signage or license posted for either agency.  The agent told investigators the business was being used for tax purposes only.  Investigators contacted an insurer the agent was appointed by and obtained applications for health insurance bearing the unlicensed agency name.  The subject failed to respond to the Administrative Complaint.
Disposition: License suspended for 12 months.

Case: When two consumers filed nearly identical complaints against a general lines agent with the Division of Consumer Services, a referral was sent to the Bureau of Investigation.  Both complainants alleged they paid for commercial liability policies, but the policies were later cancelled for nonpayment.  Upon further investigation, four additional consumers were identified who also paid premiums to the subject for policies that later cancelled for nonpayment.  Evidence showed the agent applied the complainant’s premiums to other policies to avoid cancellation and tried to disguise the misappropriation of premiums. In addition to proving the premium diversion, investigators obtained documents from two additional consumers who were sold fraudulent workers’ compensation policies.  Due to the agent’s actions, one business was not paid for a construction job, was unable to solicit new work, and was forced to lay off employees because the company was unable to provide proof of workers’ compensation insurance to prospective customers.
Disposition: Administrative surrender of license; ordered to pay restitution and cannot reapply for a license for five years.