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Volume 5, No. 2 - February 2016

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: An investigation was initiated after a defendant's attorney complained to the Department that a bail bond agent charged the indemnitor fees for the storage of collateral and excessive fees for picking up the defendant. Investigators determined that the bail bond agent charged $5,565 in fees associated with the storage of collateral and charged $1,000 for the surrender of the defendant. The maximum a bail bond agent can charge for fees associated with a pick up is $100 when there is no forfeiture of the bond.
Disposition: Fined $2,500 and ordered to pay $6,465 in restitution to the indemnitor.

Case: A complaint was received from an insurer alleging a contractor was acting as a public adjuster without a license, and an investigation was opened.. The contractor advertised on its website that it was an "insurance replacement specialist that excels in the arena of insurance contracting". The website indicated the company would work with an insurance company for the proper estimation of costs. The investigation revealed an officer of the firm contacted the insurer and attempted to negotiate the overhead and profit expense with their adjuster, on a roofing loss the insurer had previously paid . The company also attempted to collect a supplemental amount for a new roof for the policyholder’s house. The contractor presented the insurer with a signed contract between the policyholder and the roofer that authorized the unlicensed contractor to negotiate the claim and the terms of the homeowners policy.
Disposition: Prohibited by Department Consent Order from acting as a public adjuster or be subject to a fine up to $50,000.

Case: An investigation was opened after review of a title agent's flyer that promoted an open house for a Realtor® and provided food for the event. During an agency inspection investigators reviewed 15 files and determined that the title agent had overcharged for recording fees and failed to secure a prior title policy, even though a reissue rate had been given, and was sponsoring open houses on behalf of a Realtor®, an unlawful inducement to purchase title insurance.
Disposition: Fined $5,000 and placed on probation for one year.

Case: Investigators received referrals from several insurance companies that received public adjusting contracts signed by two public adjuster apprentices. The public adjuster apprentices met with insureds without being accompanied by the primary public adjuster, instructed the insureds sign the contracts and then signed the contracts as licensed public adjusters. The Department conducted an investigation and determined that the primary public adjuster allowed the public adjuster apprentices to effectuate public adjusting contracts without supervision.
Disposition: Fined $3,000, placed on probation for one year.

Case: A title agent engaged in a fraudulent transaction to make a profit by billing a title agency’s escrow account for a consumer’s homeowner’s insurance premium and diverting the funds to himself. To conceal his actions, the agent issued a false homeowner's insurance policy to the consumer.
Disposition: License revoked.

Case: Investigators were informed of an administrative action taken against a life, health and variable annuity agent by the Financial Industry Regulatory Authority (FINRA). Over a five year period, the agent referred several firm customers to an investment in which the customers invested more than $3 million in real estate securities issued by the third party. The agent failed to make the appropriate disclosures to his firm that these customers were purchasing the securities or that he was being compensated for the referrals. The agent was barred by FINRA and failed to inform the Department of the action within 30 days as required.
Disposition: License surrendered.

Case: The investigation of an unlicensed person acting as a public adjuster was opened after the SIU (Special Investigative Unit) of an insurance company advised the Department that the subject was attempting to negotiate the settlement of insurance claims without a public adjuster's license.

One of the claims she unlawfully adjusted was a reopened claim for additional damage which was not paid by the insurer because the insured never had the original roof damage repaired. In another, an insured complained after the subject was unsuccessful in her attempts to reverse a claim denial. The insurer confirmed that the subject attempted to obtain a copy of that consumer's policy to demand an appraisal but was denied access to the policy because she was not a licensed adjuster. The subject contacted the insurer about another claim to ask why it had been paid without agreement from the attorney she was working for and why attorneys' fees were not included.

During the course of the investigation, it was determined that while employed by several different attorneys, the subject had issued the same "contract" which appeared to be pre-signed by the attorney employing her, advising the insurance company that they should deal with the unlicensed adjuster, referred to in the contract as a "loss consultant".
Disposition: Prohibited by Department Consent Order from acting as a public adjuster or be subject to a fine up to $50,000.

Case: Investigators opened a case after receiving a referral from an insurer's SIU (Special Investigative Unit). The insurer alleged that a public adjuster negotiated a contract with a consumer who was under emotional distress at the time the contract was signed. Investigators determined the contract was not signed by the second insured as required and no affidavit was provided to stipulate that the first insured had the authority to enter the contract on behalf of the other; the contract did not specify the type of claim, listed a fee exceeding the 20% allowed, and the right of rescission period was inaccurate, along with other contract violations.

During the course of the investigation, the Department determined the adjuster's representatives used business cards that misrepresented their credentials by displaying the public adjuster's license number on the unlicensed individuals' business cards. Investigators also found the adjuster had failed to return a $10,000 check to another consumer and was allowing an unlicensed person to adjust claims. The claim check was returned to the consumer after the Department intervened.
Disposition: Fined $5,000 and placed on probation for one year.

Case: Investigators opened a case after receiving notification of a Final Judgment issued against a bail bond agent. An audit of the bail bond agent's records found that the bail bond agent continued to execute bail bonds while the judgment remained outstanding for more than 35 days, a violation of Florida Statutes.
Disposition: Fined $875.