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Volume 5, No. 3 - March 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: The original source of the complaints against a life, health and variable annuity agent was a combination of referrals from the Department's Division of Consumer Services and another agent. The investigation included an agency inspection, agent and agency staff interviews, affidavits from consumers and meetings with the IRS investigative services division in Miami.

Investigators determined that over a period of months during open enrollment with the Affordable Care Act Marketplace (a/k/a “Obamacare"), the agent devised a unique way to increase sales - she stole the identities of numerous unsuspecting consumers from tax preparation services through a business owned by a family member. The agent then systematically enrolled the individuals in health insurance plans within the Marketplace without their knowledge or consent. The scheme began to unravel when the agent was identified as the producing agent for the fraudulent enrollments.
Disposition: Permanently barred.

Case: An investigation was conducted on a property and casualty insurance agency after investigators received notification from a homeowners insurance company that it had received duplicate payments from both the mortgage company and a premium finance company for three separate homeowners' policies. The insurer refunded premiums to the premium finance company, which applied the credits to the agency's account for refund to the consumers.  During the course of the investigation to confirm that the three consumers had not received the correct refund, investigators discovered five additional consumers who did not receive a refund of unearned premium. 
Disposition: Fined $3,500, ordered to pay $7,573 in restitution and placed on probation for one year.

Case: A referral was received from an insurance company indicating an audit it conducted at an insurance agency determined the Agent in Charge collected the full homeowners premium of $1,655 in cash from a senior insured, but rather than forwarding the full annual premium to the insurer, the agency made four quarterly premium payments. The agency inspection conducted by investigators proved the unpaid premium funds were diverted. During the course of the investigation, investigators also found that a former Customer Representative working at the agency, who was originally appointed by the Agent in Charge, had lost her license because the Agent in Charge failed to reappoint her. The files scanned during the inspection did not contain a record of which method the insureds had used to pay premiums, and the agency could not provide an explanation to investigators.
Disposition: Fined $7,500 and placed on probation for one year.

Case: Investigators received a complaint from an insurance company alleging a general lines agent had failed to forward premiums paid by a commercial insured. Investigators determined the agent was was operating an insurance agency from her home and had only one client, a large petroleum hauler company. The agent billed premiums to the hauling company each month, which submitted premium checks payable to the agency. In an attempt to deflect suspicion, the agent intermittently remitted premiums to the insurer then skipped a few payments then start paying them again. This payment/non-payment cycle allowed her to conceal the theft for a period of time. Investigators proved the agent had withheld premium payments from the insurer 97 times over the course of several years, resulting in the misappropriation of $62,826 in insurance premiums.
Disposition: The agent's and agency's licenses were revoked.

Case: A bail bond agent contacted the Department to advise that another bail bond agent had failed to return cash collateral to an indemnitor. Investigators determined that the bail bond agent failed to return the $1,400 in cash collateral even though the defendant remained incarcerated. The bail bond agent admitted to investigators that he'd used the money to pay for personal attorney fees.
Disposition: Fined $3,900 and placed on probation for one year.

Case: Investigators received notice that a life and variable annuity agent had failed to pay an estimated $57,000 in court-ordered child support. Investigators determined the agent was more than $66,000 in arrears.
Disposition: License suspended for three months and ordered to comply with the child support enforcement program.

Case: Investigators opened an investigation following the felony arrest of a bail bond agent on 11 counts of Grand Theft, one count of Schemes to Defraud and 11 counts of Criminal Use of Personal Identification Information, and the bail bond agent's license was suspended indefinitely pending the outcome of the criminal case. At the conclusion of the criminal case, the bail bond agent pled guilty to nine counts of Criminal Use of Personal Identification Information and one count of Scheme to Defraud, all felonies.
Disposition: License revoked.

Case: A case was opened against a title insurance agency after it failed to pay the Title Administrative Surcharge. During the course of the investigation, it was noted that the agency had also failed to timely pay the surcharge in 2010, or to notify the Department of a change in phone number and e-mail address within 30 days as required. The agency failed to respond to the Department about the charges.
Disposition: License suspended for 12 months.

Case: A County Clerk of Courts' office notified investigators that multiple Final Judgments had been issued against a bail bond agent for forfeiture of multiple bail bonds executed on behalf of numerous defendants. None of the judgments were satisfied within the 35 day time frame required by the Florida Statutes. Investigators conducted an audit of the bail bond agent's records and found she had continued to execute bail bonds while the judgments remained outstanding for more than 35 days. During the course of the investigation, it was also discovered that the bail bond agent failed to remit a total of $78,644.82 in forfeiture payments and premiums to her Managing General Agent.
Disposition: License revoked.