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Volume 4, No. 12 - December 2015

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 case originated when investigators learned of an indictment of a health agent by the Securities and Exchange Commission (SEC) indicating the agent allegedly made false and misleading statements to clients and prospective clients concerning the amount of assets under management and his experience as an investment advisor. It was further alleged that he wrongfully charged and then deducted fees from client accounts without the authorization of the clients. Additionally, the agent was improperly registered with the SEC, failed to maintain required books and records, and published a purported client testimonial that concerned the advice and other services rendered by the agent. The SEC barred the agent from registration.
Disposition: License revoked.

Case: Investigations into the activities of a life, health an annuity agent and his business partner, an unlicensed person, were opened after three senior consumers filed complaints about misrepresentations made to them during annuity sales. In each case, the consumers attended seminars presented by the unlicensed person. The consumers said surrender penalties were not disclosed, and one consumer was not told that the death benefits would be annuitized and not paid in a lump sum to the designated beneficiary. The licensed agent signed the applications, but his unlicensed partner actually discussed the terms and benefits of the annuities and sold them. The unlicensed person obtained his license before the consumers complained to the Department.
Disposition: The licensed agent was fined $15,000. The previously unlicensed agent was fined $50,000.

Case: For a couple of years, a general lines agent employed a "creative" method to get premium discounts for his clients. He devised a scheme to defraud the insurer by falsifying vehicle garaging zip codes and bank account numbers for his clients. The clients had no knowledge of his actions because the agent submitted the erroneous information to the insurer electronically. This scheme to provide cheaper premiums than his competitors gave the agent an unfair competitive advantage, and placed the insurance company and the consumers at risk.
Disposition: Suspended for one year, fined $3,500.

Case: Staff received notice a life and annuity agent had been barred by the Financial Industry Regulatory Authority (FINRA) for investing in illiquid securities for a fund he managed and was part owner of. The agent misrepresented the value of the customer’s interest and inflated the values by several hundred percent, and also misrepresented the value in soliciting additional investors.
Disposition: Permanently revoked and barred.

Case: Investigators learned that a Final Judgment was entered against a bail bond agent in county court due to the forfeiture of a bond he executed. The judgment was not satisfied in a timely manner. Investigator review of documentation from the involved surety company revealed the agent continued to execute bail bonds while the judgment remained unpaid for more than 35 days. The agent also failed to provide the Department with access to his records or to maintain a location open and accessible to the public during reasonable business hours.
Disposition: Fined $2,500 and placed on probation for one year; agent was subsequently suspended for 60 days for failure to pay the fine on a timely basis.

Case: During the course of a revocation follow up on a revoked bail bond agent, investigators determined another bail bond agent was aiding and abetting the revoked agent, allowing him to illegally continue to work in the bail bond business. The bail bond agent was working at the revoked agent’s agency at the time the revoked agent was permanently barred from the bail bond industry. Business continued as usual at the agency and the only change that was made was changing the agency name and the appointment of the licensed bail bond agent as the new primary bail bond agent for the new agency. Investigation revealed the primary bail bond agent had no ownership in the agency, was not on the checking account and worked at the direction of the revoked agent. All financial transactions of the agency were in the revoked agent’s name. The bail bond agent told the Department that only a couple of months after the set up of the new agency, he had a falling out with the revoked agent and realized what he was doing was illegal. He said he walked away from the agency, setting up at another location under the same name, as the actual owner of the new agency in all respects.
Disposition: License suspended for six months.

Case: The investigation was opened after a consumer complained that a bail bond agent failed to return collateral. The agent was fined $3,900 and placed on probation for one year. Investigators subsequently learned the agent had been arrested on multiple federal charges related to identity theft and pled guilty, resulting in a two year prison sentence.
Disposition: License revoked.

Case: Investigators arrived at a bail bond agency to conduct a routine agency audit and found the bail bond agency closed when by law, it should have been open. A sign on the door provided a telephone number to call for services. The agent was contacted and asked to come to the agency and allow access to the records. As a result of the agency audit, the agent was charged with failing to maintain records containing information for bail bonds she had executed or countersigned, and for failing to include the agency address on an advertisement.
Disposition: Fined $3,000 and placed on probation for one year.