04-001763 Department Of Financial Services vs. Adrian Matthew Jagdeosingh Status: Closed Recommended Order on Thursday, November 18, 2004.

Summary: Respondent is guilty of charging ancillary products without consent, signing a premium finance agreement without knowledge of the insured, and failing to designate a primary agent. Recommend one-year suspension of license.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES, )

)

Petitioner, )

)

vs. ) Case No. 04 - 1763

)

ADRIAN MATTHEW JAGDEOSINGH, )

)

Respondent. )

______________________________)

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division

of Administrative Hearings, conducted the final hearing in Fort

Lauderdale, Florida, on August 31, 2004.

APPEARANCES

For Petitioner: Gregg S. Marr

Department of Finan cial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

For Respondent: Charles P. Randall

Charles P. Randall, P.A.

Bank of America Tower, Suite 500

150 East Palmetto Park Road

Boca Raton, Florida 33432 - 4832

STATEMENT OF THE ISSUES

The issues are whether Respondent is guilty of any

violations of the Insurance Code, including Chapter 626, Florida

Statutes, an d, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

By Administrative Complaint dated April 26, 2004,

Petitioner allegedly was a licensed General Lines agent, holding

license number A129688. The Administrative Complaint alleges

that, at all material times, Respondent was employed by America

Auto Security Insurance, Inc. The Administrative Complaint

alleges that, at all material times, Respondent was an officer,

director, or shareholder of America Auto Security Insurance,

Inc.

At the hearing , Petitioner dropped Counts I, II, and IV of

the Administrative Complaint due to the nonappearance of the

witnesses who were allegedly the insurance customers of

Respondent.

Count III of the Administrative Complaint alleges that, on

April 1, 2000, Dionne Jacques paid $468 to Sawgrass Ford of

Pembroke Pines as payment of a premium on an automobile

insurance policy to be purchased from America Auto Security

Insurance, Inc. Although Ms. Jacques allegedly understood that

she was to receive insurance coverage immediately, she did not

obtain such coverage until May 12, 2000. The Administrative

Complaint alleges that Respondent signed Ms. Jacques' name to a

premium finance agreement, without her permission, and America

Auto submitted only $143 to the premium fin ance company. The

Administrative Complaint also alleges that Respondent sold

Ms. Jacques an ancillary product without her informed consent.

Count III of the Administrative Complaint alleges that

Respondent thus transacted business in Florida without comp lying

with the Insurance Code, in violation of Section 624.11(1),

Florida Statutes; willfully misrepresented an insurance policy

or annuity contract, in violation of Section 626.611(5), Florida

Statutes; demonstrated a lack of fitness or trustworthiness to

engage in the business of insurance, in violation of Section

626.611(7), Florida Statutes; demonstrated a lack of reasonably

adequate knowledge and technical competence to engage in

transactions authorized by his license, in violation of Section

626.611(8 ), Florida Statutes; committed fraudulent or dishonest

practices in the conduct of business under his license, in

violation of Section 626.611(9), Florida Statutes;

misappropriated, converted, or unlawfully withheld money of an

insured received in the busi ness authorized by his license, in

violation of Section 626.611(10); willfully failed to comply

with any order or rule of Petitioner or willfully violated any

provision of the Insurance Code, in violation of Section

626.611(13), Florida Statutes; violated any provision of the

Insurance Code in the course of dealing under his license, in

violation of Section 626.621(2), Florida Statutes; violated any

order or rule of Petitioner, in violation of Section 626.621(3),

Florida Statutes; engaged in unfair methods of competition or in

unfair or deceptive acts or practices, or shown himself to be a

source of injury or loss to the public, in violation of Section

626.621(6), Florida Statutes; knowingly aided, assisted,

procured, advised, or abetted any person in the vi olation of any

provision of the Insurance Code or any order or rule of

Petitioner, in violation of Section 626.621(12), Florida

Statutes; represented to an applicant that a specific ancillary

coverage or product in included in the policy without an

additio nal charge when such charge is imposed, in violation of

Section 626.9541(1)(z)2, Florida Statutes; or charged an

applicant for a specific ancillary coverage or product without

the informed consent of the applicant, in violation of Section

626.9541(1)(z)3, Florida Statutes.

Count V of the Administrative Complaint alleges that

America Auto Security Insurance, Inc., has no designated primary

agent. The Administrative Complaint alleges that Respondent

thus transacted business in Florida without complying with the

Insurance Code, in violation of Section 624.11(1), Florida

Statutes; operated an insurance agency without designating a

primary agent for each location and filing the appropriate form

with Petitioner, in violation of Section 626.592(1), Florida

Statut es; violated any provision of the Insurance Code in the

course of dealing under his license, in violation of Section

626.621(2), Florida Statutes; or violated any order or rule of

Petitioner, in violation of Section 626.621(3), Florida

Statutes.

At the he aring, Petitioner called three witnesses and

offered into evidence seven exhibits: Petitioner Exhibits 2,

34, 43, 59, and 61 - 63. Respondent called no witnesses and

offered into evidence six exhibits: Respondent Exhibits 1 and

2 - 7. All exhibits were adm itted except Respondent Exhibits 1

and 3 - 4, which were proffered. Petitioner Exhibit 63 was

admitted, but only for the purpose of determining a penalty.

Respondent Exhibit 5 was admitted, but not for the truth of its

contents.

The court reporter filed t he transcript on September 17,

2004. The parties filed proposed recommended orders on

October 14, 2004.

FINDINGS OF FACT

1. At all material times, Respondent has been licensed as a

general lines insurance agent, holding license number A129688. At

all materi al times, Respondent has been the sole owner and

director of America Security Insurance Agency, Inc., formerly

known as America Auto Security Insurance Agency, Inc. (America

Security).

2. On April 1, 2000, Dionne Jacques purchased a motor

vehicle from Sawgras s Ford in Fort Lauderdale. She did not own a

vehicle at the time and testified that she purchased a model that

was selected for her by someone at the dealership. In closing on

the purchase, Ms. Jacques dealt extensively with a dealer employee

named Herbe rt McKenzie. Ms. Jacques financed the motor vehicle

purchase with Ford Credit.

3. In the course of completing the required paperwork at the

dealership, Mr. McKenzie referred Ms. Jacques to American Security

for motor vehicle insurance. Mr. McKenzie menti oned that he dealt

with someone named "AJ" at the insurance agency. According to

Ms. Jacques, Mr. McKenzie informed Ms. Jacques that one year's

insurance would cost $468 or $468.99. Mr. McKenzie did not

testify, but Respondent testified that he spoke wit h Ms. Jacques

on the telephone and explained the relevant features of the

policies that were available to her. Although it is unclear who

quoted the premium to Ms. Jacques, Petitioner has failed to prove

by clear and convincing evidence that Mr. McKenzie did so.

4. Ms. Jacques agreed to purchase the insurance and produced

a credit card for the amount due. The testimony of Ms. Jacques

suggests that she allowed Mr. McKenzie to charge her credit card

for the insurance premium. However, the more definitive tes timony

of Respondent, which is credited, is that he took her credit card

information over the telephone and arranged for the card debit.

In return, according to Ms. Jacques, Mr. McKenzie gave her a

document that she believed would document her coverage un til she

received an insurance policy in the mail in about 30 days. It is

impossible to determine on this record that Mr. McKenzie attempted

to bind coverage on behalf of the insurer.

5. At no time prior to the purchase of the insurance did

Respondent, Mr. M cKenzie, or anyone else disclose to Ms. Jacques

that she was purchasing other ancillary products besides

insurance. Likewise, no one informed her that she was financing

part of the annual insurance premium.

6. For unclear reasons, Respondent did not obtai n insurance

coverage for Ms. Jacques until May 2000. At that time, he took

the $468 that she had charged and, without her knowledge, applied

only $143 of this sum toward the policy premium. Without

Ms. Jacques' knowledge, Respondent, or someone at his di rection,

signed Ms. Jacques' name to a premium finance agreement,

evidencing an unpaid premium balance of $504.

7. At the same time, also without Ms. Jacques' knowledge,

Respondent used $300 of the initial $468 that Ms. Jacques paid to

purchase ancillary c overage that she had not agreed to purchase.

This ancillary coverage included towing, supplemental medical

coverage, replacement rental car, and emergency cash. These

coverages supplemented a $647 personal injury protection policy

containing no personal liability or uninsured motorist coverage.

8. At no time has American Security designated a primary

agent.

9. By Immediate Final Order entered March 12, 1991, the

Florida Department of Insurance, now known as Petitioner, ordered

Respondent to cease and de sist from the unlicensed sale of

insurance. However, Respondent has made substantial restitution

to Ms. Jacques, who suffered no significant financial injury as a

result of Respondent's misdealings.

CONCLUSIONS OF LAW

10. The Division of Administrative Hearin gs has jurisdiction

over the subject matter. §§ 120.569 and 120.57(1), Fla. Stat.

(2004).

11. Section 626.611(9), Florida Statutes, provides:

The department shall deny an application

for, suspend, revoke, or refuse to renew or

continue the license or appoint ment of any

applicant, agent, title agency, adjuster,

customer representative, service

representative, or managing general agent,

and it shall suspend or revoke the

eligibility to hold a license or appointment

of any such person, if it finds that as to

the applicant, licensee, or appointee any

one or more of the following applicable

grounds exist:

(9) Fraudulent or dishonest practices in

the conduct of business under the license or

appointment.

12. Section 626.9541(1)(z)3, Florida Statutes, provides that

it is an unfair method of competition and unfair or deceptive act

or practice for a licensee to engage in the act or practice of

sliding, which is defined, in part, as:

Charging an applicant for a specific

ancillary coverage or product, in addition

to the cos t of the insurance coverage

applied for, without the informed consent of

the applicant.

13. Section 626.592(1), Florida Statutes, provides:

Each person operating an insurance agency

and each location of a multiple location

agency shall designate a primary age nt for

each insurance agency location and shall

file the name of the person so designated,

and the address of the insurance agency

location where he or she is primary agent,

with the department, on a form approved by

the department. The designation of the

primary agent may be changed at the option

of the agency, and any change shall be

effective upon notification to the

department. Notice of change must be sent

to the department within 30 days after such

change.

14. Section 626.621(2) and (6), Florida Statu tes, provides:

The department may, in its discretion, deny

an application for, suspend, revoke, or

refuse to renew or continue the license or

appointment of any applicant, agent,

adjuster, customer representative, service

representative, or managing genera l agent,

and it may suspend or revoke the eligibility

to hold a license or appointment of any such

person, if it finds that as to the

applicant, licensee, or appointee any one or

more of the following applicable grounds

exist under circumstances for which such

denial, suspension, revocation, or refusal

is not mandatory under s. 626.611:

(2) Violation of any provision of this code

or of any other law applicable to the

business of insurance in the course of

dealing under the license or appointment.

(6) In the conduct of business under the

license or appointment, engaging in unfair

methods of competition or in unfair or

deceptive acts or practices, as prohibited

under part IX of this chapter, or having

otherwise shown himself or herself to be a

source of in jury or loss to the public or

detrimental to the public interest.

15. Petitioner must prove the material allegations by clear

and convincing evidence. Department of Banking and Finance v.

Osborne Stern and Company, Inc. , 670 So. 2d 932 (Fla. 1996) and

Fer ris v. Turlington , 510 So. 2d 292 (Fla. 1987).

16. As to Count III, Petitioner has proved that Respondent

has violated Section 626.611(9), Florida Statutes, by the

commission of fraud or dishonest practices in connection with the

execution of the premium fin ance agreement in the name of

Ms. Jacques without her knowledge. Petitioner has also proved

that Respondent has violated Section 626.9541(1)(z)3, Florida

Statutes, and, thus, Section 626.621(6), Florida Statutes, by

charging Ms. Jacques for ancillary prod ucts without her informed

consent.

17. As to Count V, Petitioner has proved that Respondent has

violated Section 626.592(1), Florida Statutes, and, thus, Section

626.621(2), Florida Statutes, by failing to designate a primary

agent for his insurance agency.

18. F lorida Administrative Code Rule 69B - 231.080(9) provides

a nine - month suspension for a violation of Section 626.611(9),

Florida Statutes. Florida Administrative Code Rule

69B - 231.100(26) provides a six - month suspension for a violation of

Section 626.9541( 1)(z)3, Florida Statutes. Florida Administrative

Code Rule 69B - 231.040(1)(a) limits Petitioner to the single

highest penalty for multiple violations pleaded in a single count.

For Count III, then, the penalty guideline is a nine - month

suspension.

19. Florida Administrative Code Rules 69B - 231.110(12) and

69B - 231.090(2) provide for a three - month suspension for a

violation of Section 626.592(1) and 626.621(2), Florida Statutes.

For Count V, then, the penalty guideline is a three - month

suspension.

20. Under the p enalty guidelines, the total penalty is thus

a one - year suspension. Florida Administrative Code Rule

69B - 231.160 identifies aggravating and mitigating factors.

Aggravating factors include the willfulness of the violations and

the existence of a prior vi olation of the Insurance Code.

Mitigating factors include the restitution and absence of any

substantial injury. On balance, then, the penalty guideline is

appropriate.

RECOMMENDATION

It is

RECOMMENDED that the Department of Financial Services enter

a final order suspending Respondent's license for one year.

DONE AND ENTERED this 18th day of November, 2004, in

Tallahassee, Leon County, Florida.

S

___________________________________

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 18th day of November, 2004.

COPIES FURNISHED:

Honorable Tom Gallagher

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0300

Pete Dunbar, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0300

Gregg S. Marr

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 3239 9 - 0333

Charles P. Randall

Charles P. Randall, P.A.

Bank of America Tower, Suite 500

150 East Palmetto Park Road

Boca Raton, Florida 33432 - 4832

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this recommended order. Any exceptions to

this recommended order must be filed with the agency that will

issue the final order in this case.