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Volume 4, No. 5 - May 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: Investigators visited a bail bond agent to conduct a routine audit of her agency only to find the bail bond agency closed with a sign on the door and a telephone number to call for service. Investigators called the owner/designated primary bail bond agent, and were told it would take her an hour to drive to the agency from her home. The agent had previously been fined $1,000, charged Department investigate costs, been placed on probation for one year, and ordered to complete additional continuing education courses for failing to have her agency open and accessible during reasonable business hours. As a result of the audit, investigators determined the agent had failed to maintain the required documentation for bail bonds she 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.

Case: The Department received notice from an insurance company that it had terminated an agent based on its investigation. The insurance company determined the agent had mishandled and diverted premiums for six applications. In addition, the agent failed to submit the applications in a timely manner which caused all six policies to lapse. The agent received the premiums by wire transfers then diverted the funds by making transfers to her daughter’s personal bank account. The daughter then made partial payments for the policies to the insurer. Department investigators proved the agent failed to forward the premiums, submitted an application for property insurance without the knowledge, consent or true signature of the insured, and unlawfully diverted premium monies and failed to maintain required records in the agency.
Disposition: License suspended for six months.

Case: A licensed 4-40 Customer Representative (CR) failed to follow through on the duties she performed for an agency. The CR gave out quotes for homeowner’s insurance, took the application and collected the premium, but failed to submit either to the insurance company; in doing so, the CR demonstrated a lack of reasonable and adequate knowledge to engage in the transaction of insurance business.
Disposition: License revoked.

Case: A complaint that a call center was being managed by a convicted felon led Department investigators to look into the agency’s activities. In its application for a license, the agency failed to list the individual who was determined to have been convicted of conspiracy to commit securities fraud and commercial bribery, while he was acting as an agency principle. Investigators confirmed the allegations when it visited the call center and met the manager in question who answered questions and gave a tour of the operation, which sells health insurance in multiple states.
Disposition: The agency principle who completed the application was fined $3,000, the agency was fined $5,000, and both were ordered to cease any direct or indirect association with the felon and placed on probation for one year.

Case: The Department received notification from an all-lines adjuster of an action taken against her license by an insurance department in another state. The action stated the agent was acting or holding herself out as an adjuster in the state without the proper license to do so. Investigators confirmed the adjuster failed to report the action within the 30 days required by statute.
Disposition: Fined $1,000.

Case: The Office of Financial Regulation (OFR) notified the Department of administrative action taken against an agent permanently barring him from engaging as a dealer, associated person or issuer in the offer or sale of any security, providing investment advisory services, or submitting an application for a license or registration with the OFR.
Disposition: Licensee was permanently barred.

Case: An investigation was initiated into the activities of the owner/agent in charge of an insurance agency after the Department received a complaint from an insurance company that comprehensive coverage had been added to an automobile policy after a reported loss. In addition to substantiating the original allegation, investigators discovered that at least three of the agency employees were transacting insurance without a license or appointment. Investigators witnessed an unlicensed agency employee replacing coverage at a customer’s request.
Disposition: The agent in charge was suspended for six months; the agency was fined $3,500 and placed on probation for two years.

Case: Department investigators conducted a follow-up on a revoked Customer Representative (CR). The former CR's license was revoked after she pled guilty to a felony crime. The former CR answered the agency’s telephone and offered an insurance quote to an investigator; later, investigators found the former CR working and interacting with customers at the agency. Several agency customers stated they purchased insurance directly from the former CR. The agency’s agent in charge was responsible for allowing the revoked CR to continue to work in his agency in violation of the Florida Insurance Code.
Disposition: A Cease and Desist Order was issued to the former CR and the Agent in Charge was fined $5,000.