Titular de Insurance Insights
Volume 1, No. 5 - October 2012

Notas de Casos

Oficina de Investigaciones

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 División de Fraude de Seguros for criminal investigation.

Case: An agent perpetrated a complex financial scheme to defraud numerous consumers and a major homeowners insurance company. After a thorough investigation, it was uncovered that the agent's scheme was two-fold. The first phase involved the agent's systematic practice of charging his customers for wind mitigation inspections and four-point inspections on their dwellings that were never actually performed. In numerous cases, the four-point inspections were not even required and contained consumer signatures that were forged by the agent. The second phase of the scheme involved the agent's routine practice of manipulating underwriting information for consumers on numerous homeowners’ insurance applications that were then submitted to an insurance company. The false information included incorrect years that the dwellings were built to further justify the inclusion of the bogus inspection forms.
Disposition: License revoked. He was arrested by the Division of Insurance Fraud and charged with Organized Fraud in excess of $50,000. He was later sentenced to a four-year prison term, followed by 20 years of probation, and ordered to pay restitution totaling more than $100,000.

Case: A life, health, and variable annuity agent was investigated and alleged to have submitted more than 100 fraudulent insurance applications using fictitious identities, resulting in her receiving advanced commissions. Premium payments were never received by the insurance company, which led to policy cancellations and the discovery of the fraud. She also failed to license her insurance agency and failed to update her addresses with the Department.
Disposition: License revoked and is permanently ineligible for licensure. She was arrested by the Division of Insurance Fraud and is currently facing felony charges of Organized Scheme to Defraud as well as False and Fraudulent Insurance Claim.

Case: An investigation centered on an agent's transactions with an 87-year-old widowed consumer. The agent worked the scam in tandem with her husband, also an agent. The wife, who was also a loan officer, convinced the consumer to take out a loan against her paid-for home, and to use $175,000 of the proceeds to purchase an annuity. This transaction netted the agent commissions and caused the consumer to incur a large debt in the form of a new mortgage. Later, the agent again approached the consumer and convinced her to surrender the annuity for its cash value and to sign the proceeds over to the agent's husband's insurance agency. The check was notated as a "business loan". The surrender of the annuity incurred more than $30,000 in surrender charges. The multiple transactions left the consumer with new mortgage debt, no income stream other than social security and her net worth severely depleted.
Disposition: The wife's license was revoked and she is permanently ineligible for licensure. The husband's license was suspended for one year.

Case: A title agent's agency escrow account was closed by a title insurance company when about $400,000 in premium funds went missing. The agent allegedly claimed medical problems caused her to overlook acts by others in her agency, in a transparent attempt to deflect responsibility for the money she took from consumers. The agent pretended to cooperate with the insurer when she signed a promissory note to pay back the missing funds. The agent did not keep her "promise" and did not pay back the misappropriated money. The insurance company was successful in obtaining a judgment against the agent and her agency in an amount totaling more than $300,000.
Disposition: License revoked.

Case: An investigation of an automobile warranty and service warranty firm licensee alleged it knowingly collected premiums for motor vehicle service agreements for which were cancelled. The licensee failed to refund the premiums to the consumers and failed to pay a final judgment rendered against itself in the state within 90 days after the judgment became final. In addition, they failed to respond to the Department's administrative complaint.
Disposition: License revoked.

Case: A public adjuster was overcharging on Citizen's Property Insurance Corporation claims despite Florida law. Florida law restricts a public adjuster to 10% of any payments above the initial offer by Citizens. The public adjuster was charging 20% on the entire claim.
Disposition: License suspended for three months and required to reimburse the consumer the overpayment on the claim.

Case: An investigation of a life, health and variable annuity agent alleged that he failed to report an administrative action taken against him by the Florida Office of Financial Regulation (OFR), which fined him $10,000. The OFR received a complaint on the agent filed on behalf of an estate. The complainant alleged that after the death of a consumer the agent liquidated the eight remaining options without prior written discretionary authority.
Disposition: Fined $1,500 and placed on probation for one year.