11-001150 Office Of Insurance Regulation vs. Guarantee Trust Life Insurance Company Status: Closed Recommended Order on Friday, March 16, 2012.

Summary: A termination letter that misleadingly informed of guaranteed issue policies but not conversion rights violated the Unfair Insurance Trade Practice Act, but other charges were not proved by clear and convincing evidence.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

OFFICE OF INSURANCE REGULATION, )

)

Petitioner, )

)

vs. ) Case No . 11 - 1150

)

GUARANTEE TRUST LIFE )

INSURANCE COMPANY, )

)

Respondent. )

)

RECOMMENDED ORDER

On December 12 , 2011, a duly - noticed hearing was held in

Tallahassee, Florida, b efore F. Scott Boyd, an Administrative Law

Judge assigned by the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Stephen H. Thomas, Jr., Esquire

Ke nneth Tinkham, Esquire

Office of Insurance Regulation

200 East Gaines Street

Tallahassee, Florida 32399 - 4206

For Respondent: Cynthia Tunnicliff, Esquire

Brian A. Newman, Esquire

Pennington, Moore, Wilk i nson

Bell and Dunbar, P.A.

215 Sou th Monroe Street, Second Floor

Post Office Box 10095

Tallahassee, Florida 32302 - 2095

STATEMENT OF THE ISSUE

Whether Respondent has violated section s 627.6675,

626.9541(1)(a)1., 626.9541(1)(a)6., or 626.9541(1)(b), Florida

Statutes, as pled in the A mended Notice and Order to Show Cause ,

and i f so, what is the appropriate penalty.

PRELIMINARY STATEMENT

On January 12, 201 1 , the Office of Insurance Regulation

(Office) filed a n A dministrative C omplaint against Guarantee Trust

Life Insurance Company (GTL) , alleging violations of various

provisions of the Florida Insurance Code, directing GTL to cease

and desist, and ordering GTL to show cause as to why its

c ertificate of a uthority should not be suspended or revoked and

why penalties should not be imposed . GTL requested an

administrative hearing and the matter was referred to the Division

of Administrative Hearings on March 3 , 2011 . The case was

assigned Case Number 11 - 1150 and assigned to Administrative Law

Judge Lawrence P. Stevenson . On August 30, 2011 , the case was

transferred to the undersigned.

The Office filed a Motion for Protective Order on August 30,

2011 , seeking to have any discovery as to the penalties being

sought by the Office barred because discussions as to the

penalties to be sought were conducted between representatives of

the Office and its legal counsel. The Motion for Protective Order

was denied, on the ground that it was overly broad, as only

communications from counsel to client or client to counsel are

privileged, and upon represen tations from GTL that the privilege

would be respected in further discovery.

The Office filed an Unopposed Motion to Amend Notice and

Order to Show Cause on September 1, 2011, which was granted.

Earlier counts alleging failure of GTL to offer converted policies

were amended to allege that GTL issued the termination letter

without offering conversion policies , as discussed further below,

and new counts were added alleging that the termination letter

sent out to covered persons was misrepresentative, decep tive , or

m isleading.

On November 2, 2011, the Office filed a Motion to Compel

Discovery seeking the names and contact information for all

persons covered under the g roup policy t hat had been issued by GTL

to Consumer Benefits Association of America. Th e Motion to Compel

was denied as not being reasonably calculated to lead to the

discovery of evidence relevant to the amended charges of issuing

the termination letter without offering conversion policies or

issuing a termination letter that was misreprese ntative, deceptive

or misleading.

On November 15, 2011, GTL filed a Petition to Challenge

Unadopted Rule against the Financial Services Commission and the

Office of Insurance Regulation alleging that the Amended Notice

and Order to Show Cause contained a policy statement of general

applicability, which was assigned Case Number 11 - 5827RU. GTLÓs

Motion to Consolidate was granted on December 7, 2011.

At hearing, Joint Exhibits J - 1 through J - 5 and J - 7 , J - 8, and

J - 10 were admitted. Two pages of Exhibit J - 9 were excluded as

being beyond the scope of the agreement between the parties to

admit communications regarding the market investigation, and on

grounds of relevancy , but the remainder of Exhibit J - 9 was

admitted. The Office presented the testimony of Mr . Gary

Edenfield for the Office and Mr. Allan Heindl of GTL, and offered

Office Exhibit O - 1 , which was admitted over objection that it was

unduly repetitious, and O - 2 , which was admitted without objection .

Exhibit O - 3 was late - filed by agreement , and was admitted without

objection . GTL presented testimony from Mr. Heindl and offered

two exhibits, G - 2 and G - 3, which were admitted without objection .

The Transcript was filed on January 12, 2012. After G TLÓs

Unopposed Motion to Extend the Deadline to Sub mit Proposed

Recommended and Final Orders was granted , proposed orders were

timely submitted by both parties on February 17, 2012, and were

considered. The Final Order for the unadopted rule challenge and

this Recommended Order were issued concurrently.

FINDINGS OF FACT

1. The Office of Insurance Regulation of the Financial

Services Commission (the Office) is responsible for enforcing the

provisions of the Florida Insurance Code with respect to licensees

of the Office .

2 . Guarantee Trust Life Insurance Company (GTL) is a foreign

insurer, domiciled in Illinois, which holds a c ertificate of

a uthority to transact business as a life and health insurer in

Florida. GTL offers insurance products nationwide, except for New

York, including Medicare long - term ca re, supplemental, cancer,

college student, accident , and sickness policies.

3 . GTL is subject to the jurisdiction of the Office under

the Florida Insurance Code , is subject to fines and disciplinary

action s , and is substantially affected by the administ rative

complaint filed against it.

4 . On or about April 3, 2000, GTL entered into an agreement

with Celtic Life Insurance Company . Celtic agreed to make medical

expense conversion insurance available to eligible participants

whose coverage under GTL grou p medical expense insurance was

terminated. However, t he agreement with Celtic specifically

excluded coverage if GTL discontinued the group medical expense

insurance plan in its entirety, or in a particular state. This

exclusion was consistent with Celti cÓs normal rules and both

parties to the agreement knew of the exclusion. Any suggestion on

the part of GTL that it was confused about CelticÓs obligations

under this provision of the contract is not credible.

5 . A conversion policy is a form of repla cement insurance

coverage for which certificate holders in a group policy may be

e ligible when their coverage under a group policy is terminated.

6 . On or about June 21, 2006, GTL submitted filing number

06 - 08141, an out - of - state group major medical pol icy (Policy) , to

the Office . The letter transmitting the Policy to the Office

noted that the Policy include d a conversion provision and stated

that GTL had a conversion policy available through Celtic

Insurance Company. The letter did not state that the conversion

policies to be provided by Celtic would not be available if

coverage by GTL was terminated as part of its withdrawal from an

individual market or state.

7 . The Policy provisions regarding conversion provid ed in

relevant part :

Health Insuran ce Conversion. A covered person

may convert his or her health insurance

coverage under the policy to another form of

insurance issued by us if such insurance or

any portion of it ends, provided the covered

person is entitled to convert and within 63

days after such coverage ends the covered

person:

1. applies in writing to us at our home

office; and,

2. pays the first premium.

We will provide the covered person the

required notice within 14 days of the person

informing us of their interest in makin g

application for a conversion policy. No

evidence of insurability will be required if

the covered person converts under this

provision. The effective date of the

converted policy shall be the day following

the termination of insurance under the policy.

The Policy went on to define covered persons entitled to convert

as those w ho had been covered continuously for at least 3 months

prior to termination of the policy . The Policy set forth some

exceptions. The Policy made no mention that GTL could contrac t

with another insurer to issue the individual converted policy .

8 . A group health insurance product is issued to an

association or employer. Individual certificates of health

insurance are then issued to the members of the group. Under the

Policy, for ms were issued to Consumer Benefits Association of

America. Certificates of health insurance coverage were then

issued to at least 216 Florida residents who were members of the

Consumer Benefits Association of America (Members) as evidence of

their insura nce under the Policy. These certificates advised

M embers of their conversion privilege in the event that coverage

shown by the certificate was terminated, in language substantially

identical to that in the Policy. The certificate s met the

statutory requi rement for notification of the conversion

privilege. The certificates of health insurance coverage made no

mention that GTL could contract with another insurer to issue the

individual converted policy .

9. The Policy was never profitable for GTL. GTL i nstituted

significant increases in the premium, but losses were still too

high, and GTL made decision s to terminate the Group Plan and exit

the Florida market entirely.

10 . On April 26, 2010, GTL notified the Office that it

would be terminating all medic al expense health insurance

coverage in the individual market in Florida . The notice

stated that the Uniform Termination of Coverage would affect

286 insureds in Florida . GTL was not required to file a copy

of the letter ( Termination Letter ) that it plan ned to mail to

Florida residents whose coverage would be terminated, but it

did submit a copy to the Office.

11 . The Termination Letter was reviewed by Mr. Gary

Edenfield , who at the time was a Senior Management Analyst

Supervisor in the Division of Life and Health , Office of Forms and

Rates . Mr. Edenfield requested that GTL make two changes to the

Termination Letter : first, he asked that the reference to a 90 - day

notice be changed to say 180 - day notice ; and second, he asked GTL

to include a referenc e to a website listing companies that could

be contacted to provide individual replacement coverage on a

guaranteed - issue basis.

12 . GTL made the requested changes to the Termination L etter

and provided a revised copy to Mr. Edenfield, who then advised GTL

that it had listed an incorrect website.

13 . Mr. EdenfieldÓs advice on each occasion was based upon

his understanding that the policies involved were all individual

major medical policies, because that was the way GTL had entered

the filing in Ð I - Fi le ,Ñ the OfficeÓs electronic filing s ystem .

He was unaware at this time that the Termination Letter would be

going to Members under the group Policy as well.

14 . On or about May 5, 2010, GTL sent the Te rmination

Letter 1 / to a t least 2 1 6 Florida resi dents covered under the

out - of - state group major medical P olicy , as well as to about

70 Florida residents who held individual policies offered by

GTL .

15 . The Termination Letter stated, in relevant part:

2. WILL G T L BE OFFERING A REPLACEMENT PLAN?

At this time GTL will no longer be offering

major medical type coverage. However, if you

have 18 months of creditable coverage, you may

be eligible for an individual major medical

plan on a guaranteed issue basis. The Florida

Department of Financial Website

http://www. floir.com /Co mpanySearch/ provides a

listing of companies that you may wish to

contact to obtain replacement coverage.

If you have any questions about the

termination, you may contact Policy Owner

Service at 1 - 800 - 338 - 7452. You may also

con tact the Florida Department of Financial

Services, Division of Consumer Services at 1 -

877 - 693 - 5236.

16 . A guaranteed - issue policy is a replacement insurance

policy that insurers who are authorized to write individual

medical coverage in Florida are re quired by statute to write for

an individual whose group coverage has been terminated. A person

who is entitled to a conversion policy is not eligible for a

guaranteed - issue policy.

17 . There was no mention in the T ermination L etter of any

right to a con version policy as a form of replacement coverage for

the P olicy being terminated.

18. At th e time it sent the Termination Letter , GTL knew

that three - fourths of the recipients of the Termination Letter

were holders of certificates of insurance coverage under the

Policy. GTL knew that the Policy and these certificates granted a

conversion privilege. GTL did not intend to offer a conversion

policy to M embers whose coverage under the Policy was being

terminated. GTL knew it did not have coverage with Cel tic to

provide converted policies and could not offer the coverage

itself . GTL knew the Termination Letter was misleading.

1 9 . On May 11, 2010, the Division of Consumer Services of

the Department of Financial Services began receiving consumer

complaint s related to GTLÓs non - renewal of health insurance and

the Termination Letter. Mr. Edenfield received a call from the

Division of Consumer Services stating that they did not believe

GTLÓs action was a termination of individual major medical

policies.

20 . Mr. Edenfield called Mr. Allan Heindl , Vice President of

Product Approval and Compliance at GTL. Mr. Heindl told him that

the filing involved an out - of - state group major medical policy.

Mr. Edenfield then advised Mr. Heindl that GTL was required to

prov ide a conversion policy , and that GTL would need to send a new

notice out informing M embers that they were no t entitled to a

guaranteed - issue individual policy, but were entitled to a

conversion policy. Mr. Heindl stated that he would have to Ð talk

to his people Ñ about that .

2 1 . In a follow - up letter sent by e - mail from the Office and

received by GTL on May 20, 2010, the Office again advised GTL that

it was required to provide conversion policies. The Office a gain

advised GTL that it w ould be necessary for GTL to send the M embers

receiving the first letter a second one that explained that they

were entitled to a conversion policy and not a guarantee d - issue

policy from another company that issues individual policies . The

Office did not set forth any peri od of time within which GTL

nee ded to send the second letter.

2 2 . Mr. Hei n dl testified that at the time he rec e ived the

May 20 , 2010 letter, GTL disagreed with the Office about whether

GTL was required t o provide a conversion benefit.

2 3 . GTL and the Office sent a few e - mails back and forth in

early June 2010 , discussing whether GTL was required to offer

conversion policies under Florida law . GTL continued to say it

saw no such requirement in Florida S tatutes ; the Office continued

to maintain that the statutes require d it. Mr. Heindl noted that

there would no t be any conversion plan to offer because the

statute required GTL to terminate and non - renew all individual

health plans , since they were exiting the market.

2 4 . On or about September 21, 2010, Capital City Consulting,

L.L.C. , sent a letter to the Office indicating that GTL had

reviewed the statutes cited by the Office and had concluded that

GTL was not required to offer conversion policies.

2 5 . On September 22, 2010 , the Office sent anot her e - mail

advising GTL that it must comply with the conversion statute.

2 6 . On or about September 29, 2010 , GTL sent a letter to the

Office stating that after reviewing the September 22, 2010 , e - mail

from the Office and after their telephone call with De puty

Commissioner Mary Beth Senkewicz, they were unable to agree with

the OfficeÓs interpretation of the statutes and still believed

their actions did not violate the Florida Insurance Code.

2 7 . GTL never sent a follow - up letter to Members as

requested by the Office.

2 8 . GTL began terminating coverage under the Policy and

certificates in November 2010, as renewal dates occurred after the

180 - day notice provided in the Termination Letter sent in May.

2 9 . On January 12, 2011, the Office served GTL with a Notice

and Order to Show Cause alleging that GTL had violated the Florida

Insurance Code by continuing to non - renew policies and failing to

offer converted policies.

30 . On January 28, 2011, GTL filed a Petition for

Administrative Hearing with the Office. It amended that Petition

on February 1, 2011, still maintaining that it was not required to

offer conversion policies.

3 1 . In February or March, 2011, GTL began negotiations for

an agreement with Celtic to provide the conversion benefit

described in the Policy and certificates arising from GTLÓs exit

from the Florida market.

32 . On April 5, 2011, in response to a March 17, 2011 ,

inquiry from Celtic as to the number of covered lives remaining,

Mr. Heindl advised in part , ÐThe size of the group in F L at the

time of termination was 286 and today we have 28 left. IÓm not

sure if FL would make us go back and offer coverage to all

previously insured insuredÓs. If FL does, I canÓt imagine many

would come back to GTL. Ñ

33 . Discussions between GTL and Celtic continued in April

and May. GTL reached an ÐunderstandingÑ with Celtic in May that

Celtic would provide conversion coverage. The understanding was

that if GTL sent notification to all terminated insureds informing

them of the conversion available from C eltic, then GTL would pay

an initial transaction fee of $125,000 to Celtic, due when the

agreement was entered into, along with the sum of $30,000 per

policy for each conversion policy subsequently issued by Celtic.

If Celtic did not send out a notice to the terminated insureds,

then the initial transaction fee would be reduced to $100,000.

At the time the understanding was reached, only 28 or fewer

Members were left ; t here was no understanding in place when the

coverage of at least 188 Members was ter minated.

34 . No written contract incorporating this understanding was

ever entered into with Celtic. GTL did not send out a notice to

the terminated Members . The initial transaction fee was never

paid . Mr. Heindl testified at hearing that if a Member had come

forward and actually applied for conversion, GTL would then have

moved forward and paid the agreed - upon fees. No Member requested

information about a conversion policy.

35. GTL chose not to send any notice to terminated Members

in an effort to e liminate or minimize the possibility that Members

might request conversion policies, and so avoid the co sts of

contracting with Celtic to provide the conversion coverage. GTL

was hoping that the Members were unaware of their conversion

rights, and would n ot become aware of them.

3 6 . A t no time from the inception of the Policy and the

certificates based thereon, through the time the Termination

Letters were sent, until the time of the Final Hearing in this

case, did GTL ha ve in effect any written contract with Celtic or

any other insurer to issue converted polic ies to Members upon

GTLÓs termination of the Policy group coverage in its entirety , or

in the State of Florida .

3 7 . On August 26, 2011, Mr. Heindl , party representative for

GTL, conceded under oa th in deposition that the Policy was an out -

of - state group policy and that sections 627.6515 and 627.6675 ,

Florida Statutes (2010) , 2 / did apply to the Policy.

3 8 . On September 2, 2011, an Order was issued granting the

OfficeÓs Unopposed Motion to Amend N otice and Order to Show Cause.

Counts I and II of the earlier complaint were amended . The

earlier complaint had charged in these counts that Ð Guarantee

Trust violated the Florida Insurance Code by failing to offer

converted policies as required by Sectio n 627.6675, Florida

Statutes.Ñ As a mended , C ounts I and II alleged that ÐGu a rantee

Trust violated the Florida Insurance Code by issuing the

Termination Letter without offering converted policies required by

the Florida Insurance Code and Section 627.6675 , Florida

Statutes.Ñ

3 9 . The word ÐofferÑ or ÐofferingÑ is not defined in the

Florida Insurance Code. The se terms are used in dozens of places

throughout the Code , however, in phrases such as Ðinsurers to

offer coverage , Ñ Ðoffers policies or certificate s , Ñ Ðlicensees

offering policies , Ñ and Ðoffering insurance,Ñ all in the context

of describing insurance lines and products being made available in

the market by an insurer . GTL itself used the se words in similar

contexts . In its September 21, 2010, lette r to the Office , GTL

stated ÐGTL is not required to offer conversion policies.Ñ

In later e - mails to Celtic, GTL referred to Ðoffering a conversion

optionÑ and Ðmake us go back and offer coverage.Ñ In the

Termination Letter itself, GTL wrote, ÐGTL w ill no longer be

offering major medical type coverage.Ñ GTL could not reasonably

have interpreted the phrase Ðwithout offering converted policiesÑ

in Counts I and II as referr ing only to notification to Members .

GTL was well aware that Counts I and II w e re alleg ing that GTL Ós

issuance of the Termination Letter constituted a revocation of

GTLÓs contractual and statutory responsibility to make conversion

insurance available to Members at a point in time at which GTL did

not have a written contract in place with any carrier to provide

such conversion policies. GTL was not hindered in its ability to

prepare a defense to Counts I and II.

40 . The Office showed by clear and convincing evidence that

at the time GTL issued the Termination Letter , GTL did not hav e a

contract with another insurer to provide conversion policies upon

GTLÓs exit from the Florida market , and w ould be unable to do so

itself.

4 1 . The Amended Notice and Order to Show Cause of

September 2, 2011, also added three new counts, alleging tha t the

Termination Letter sent out to covered persons constituted an

unfair insurance trade practice under the Florida Insurance Code

because it was misrepresentative, deceptive, and misleading.

4 2 . T he statement in the Termination Letter that GTL would

no longer be offering major medical coverage was not a false

statement. GTL was withdrawing entirely from the Florida market

and would not itself be offering any coverage, including

individual conversion polic ies . Although technically true, the

statement w as nevertheless likely to mislead a reasonable M ember ,

because it made no mention that GTL was legally required to

arrange for another provider to offer the conversion policy on

GTLÓs behalf. The statement that GTL would no longer be offering

major medica l type coverage, omitting any further information,

would leave the incorrect impression with a reasonable M ember that

the right to a conversion policy upon termination, as set forth in

the certificate of health insurance , no longer existed . GTL knew

that this statement was misleading as to a reasonable Member.

4 3 . Similarly, the statement in the Ter mination Letter that

Ðyou may be eligibleÑ for an individual major medical plan on a

guaranteed issue basis was not a false statement . The statement

did not say that any reader ÐwasÑ entitled to such a policy, only

that they ÐmayÑ be. Again, while not technically false , this

statement was likely to mislead a reasonable M ember, for none of

these individuals was in fact eligible for a guaranteed - issue

policy . GTL could easily have distinguished between M embers and

its individual policy holders in the letter, or better yet , sent

two different letters, but it failed to do so. GTL instead chose

to say only that readers Ðmay be eligibleÑ for a guaranteed issue

po licy and to include the reference to the DepartmentÓ s website

list of other companies , without any mention of the converted

policy available to a majority of recipients of the letter. This

omission was likely to leave a reasonable M ember eligible for a

co nversion policy with the incorrect impression that this right no

longer existed . GTL knew that this statement was misleading .

4 4 . Even the second question asked in the Termination Letter

was misleading. The question posed by GTL, ÐWILL GTL BE OFFERING

A REPLACEMENT PLAN?Ñ was followed by true statements, but it was

not the right question. C ertificate holder s would be interested

in knowing what coverage might be available to them from any

source to replace the terminated coverage , not simply coverage

fro m GTL itself . Again, reasonable Members would likely be left

with the impression that a conversion policy was no longer

available to them because GTL was exiting the Florida market. GTL

knew that posing the question in this fashion was misleading .

4 5 . O n November 15, 2011, GTL filed a Petition to Challenge

Unadopted Rule. The Petition was served on the Office more than

30 days before it was filed with the Division of Administrative

Hearings, as stipulated at hearing.

4 6 . The Financial Services Commis sion has not adopted the

statement that it is a violation of provisions of the Florida

Insurance Code to Ðissue a termination letter without offering

converted policies as required by Section 627.6675 , Ñ or any

similar statement, by rulemaking procedures.

4 7 . The Office proved by clear and convincing evidence that

Celtic was n ever required to provide conversion policies if the

termination of the Policy was a result of a decision to

discontinue major medical coverage in Florida . It similarly

proved that no other contract providing conversion policies under

these circumstances was ever entered into with Celtic or any other

insurer, and that GTL could not itself provide conversion

coverage .

4 8 . The Office proved by clear and convincing evidence that

GTL know ingly made, issued, published, disseminated, circulated,

and placed before the public the Termination Letter.

4 9 . The Office failed to prove by clear and convincing

evidence that any statement in the Termination Letter was false.

50 . The Office proved by clear and convincing evidence that

statements in the Termination Letter were made for the purpose of

inducing, and tended to induce, the forfeiture of the conversion

policy to which the Members were entitled under the Policy.

5 1 . The Office proved by cl ear and convincing evidence that

the Termination Letter contain ed an assertion, representation and

statement with respect to the business of insurance that was

willfully deceptive and misleading. GTL knew, or should have

known, that this was an unfair or deceptive act or practice under

the Florida Insurance Code.

C ONCLUSIONS OF LAW

5 2 . The Division of Administrative Hearings has jurisdiction

over the parties and subject matter in this proceeding pursuant to

sections 120.569 and 120.57(1), Florida Statut es (2011) .

5 3 . GTL is a ÐpersonÑ within the meaning of section 626.9511

and is subject to the jurisdiction and regulation of the Office

pursuant to the Florida Insurance Code. GTL has standing to

contest the intended action of the Office set forth in th e

complaint against it.

5 4 . The Office has the burden of proof to show, by clear and

convincing evidence, that GTL committed the acts alleged in the

Amended Notice and Order to Show Cause . DepÓt of Banking and Fin.

v. Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996); Ferris v.

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

5 5 . Clear and convincing evidence has been defined as

requiring :

[ T ]hat the evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly remembered; the

testimony must be precise and explicit and the

witnesses mu st be lacking in confusion as to

the facts in issue. The evidence must be of

such weight that it produces in the mind of

the trier of fact a firm belief or conviction,

without hesitancy, as to the truth of the

allegations sought to be established.

In re Davey , 645 So. 2d 398, 404 (Fla. 1994)( quoting Slomowitz v.

Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983) ) .

5 6 . The a pplicable statutes "must be construed strictly, in

favor of the one against whom the penalty would be imposed."

Munch v. Dep Ó t of Prof Ól Reg . , 592 So. 2d 1136, 1143 (Fla. 1st DCA

1 992) ; Dyer v. DepÓt of Ins. , 585 So. 2d 1009 (Fla. 1st DCA 1991) .

Counts I and II

57 . Count I alleges that ÐGuarantee Trust violated the

Florida Insurance Code by issuing the Termination Letter without

offering converted policies required by the Florida Insurance Code

and Section 627.6675, Florida Statutes.Ñ Count II alleges

violation of the same statute, and further alleges that this

failure is a Ð hazardous and injurious business practice Ñ to its

policyholders. This further factual allegation in Count II is an

element of section 624.418(1)(b). However, GTL was not charged

with violating section 624.418(1)(b).

58 . Disciplinary actions may be based only upon those

offenses specifically alleged in the Administrative Complaint.

See Cottrill v. Dep't of Ins. , 685 So. 2d 1371 (Fla. 1st DCA

1996) .

5 9 . Section 627.6425 provides that if an insurer

discontinues health insurance coverage in the individual market in

Florida, the insurer must provide notice 180 days prior to the

date of the first nonrenewal and may not provide such coverage in

Florida for a period of 5 years after the date of the last

nonrenewal. This section provides that the term Ðindividual

health insuranceÑ also includes out - of - state group insurance for

the purpose of these requirements.

60 . Section 627.6515(2) governs the regulation of out - of -

state group health insurance policies such as the Policy at issue

here, and requires such policies to provide conversion policies

pursuant to section 627.6675.

6 1 . Section 627.6675 provid es in rel evant part:

627.6675 Conversion on termination of

eligibility. Ï Subject to all of the provisions

of this section, a group policy delivered or

issued for delivery in this state by an

insurer . . . that provides . . . major

medical expense insurance . . . sh all provide

that an employee or member whose insurance

under the group policy has been terminated for

any reason, including discontinuance of the

group policy in its entirety . . . shall be

entitled to have issued to him or her by the

insurer a policy or c ertificate of health

insurance, referred to in this section as a

Ðconverted policy.Ñ A group insurer may meet

the requirements of this section by

contracting with another insurer, authorized

in this state, to issue an individual

converted policy, which po licy has been

approved by the office under s. 627.410 .

6 2 . A detailed analysis of the statute is necessary.

The first sentence of section 627.6675 provides that a major

medical expense group policy must contain a provision stating

that a member whose insurance has been terminated is entitled

to a conversion policy.

6 3 . It is clear that the statute is not only requiring

a group policy to contain a conversion right, but is

requiring, albeit indirectly, an insurer to actually have the

ability to provide the conversion policy. This

interpretation is confirmed by the next sentence, which

states that a group insure r may Ð meet the requirements of

this section Ñ by contracting with another insurer . A

contract with another insurer would not in any way meet the

requirement for the policy to contain a provision regarding

the right to conversion . Rather, it is the actual ability to

provide conversion coverage that can be met through a

contract with another insurer. In fact, in a situation in

which a group insurer is withdrawing from the Florida market,

the only way a conversion policy could be provided is through

a contr act with another insurer.

6 4 . What is not clear from the language of section 627.6675,

however, is the point in time at which the duty arises to contract

with another insurer to provide the conversion benefit in the case

of withdrawal from the Florida m arket.

6 5 . T here are at least three possib le interpretations .

First, because no insurer can ever know with certainty that it

will not later be withdrawing from the State entirely, one might

conclude that every group insurer must enter into such a contr act

not later than the time it issues the original group policy.

Second, one might conclude that it is sufficient to have a

contract at the time a group insurer decides to exit the Florida

market entirely, at or before the time it actually gives notice of

that decision. Third, one might conclude that the requirement of

the statute is met if the contract has been entered in time for it

to be in force at the time the conversion policy actually needs to

be issued.

6 6 . Various policy reasons might be cited i n favor of one

interpretation or another, but the statute itself says nothing

about the time when the contract must be in place.

6 7 . Any ambiguity in penal statutes must be interpreted in

favor of the licensee. Beckett v. DepÓt of Fin. Servs. , 982 So.

2 d 94 (Fla. 1 st DCA 2008). W hen a penalty is imposed for

violation of a statute, any doubt as to its meaning must be

resolved in favor of a strict construction, so that those covered

by the statute have clear notice of what conduct the statute

proscribes. Capital NatÓl Fin. Corp. v. DepÓt of Ins. , 690 So. 2d

1335, 1337 (Fla. 3 rd DCA 1997)( citing City of Miami Bch v. Galbut ,

626 So. 2d 192 (Fla. 1993) ) .

68 . The ambiguity in section 627.6675 as to the time at

which a contract with another insurer to provide conversion

policies must be entered into must be resolved in favor of GTL.

An insurer exiting the market must therefore enter into a contract

with another insurer to provide conversion coverage in time for

that contract to be in force when the conversion policies actually

need to be issued.

69 . S ubsection 627.6675(17) contains a notice provision

applicable to the conversion privilege. It states:

( 17) NOTIFICATION. Ï A notification of the

conversion privilege shall be included in each

certificate of coverage. The insurer shall

mail an election and premium notice form,

including an outline of coverage, on a form

approved by the office, within 14 days after

an individual who is eligible for a converted

policy gives notice to the insurer that the

individual is considering applying for the

converted policy or otherwise requests such

information. The outline of coverage must

contain a description of the principal

benefits and coverage provided by the policy

and its principal exclusions and limitations,

including, but not limited to, deductibles and

coinsurance.

70 . Under its agree ment with GTL, Celtic Life Insurance

Company was not obligated to provide conversion coverage to

Members if the termination of their coverage under the Policy was

caused by GTLÓs withdrawal from the Florida market. The agreement

with Celtic provided in re levant part:

An eligible Participant may apply for

Conversion Insurance if his or her Plan

coverage terminates for any reason other than

the following:

Discontinuance of the Plan, either in its

entirety or in a particular state or states;

or, except wher e Conversion is otherwise

required by state law, discontinuance of the

employerÓs participation in the Plan.

In the quoted sentence, it is clear that the phrase Ðexcept

where Conversion is otherwise required by state lawÑ does not

modify the part of th e sentence that comes just before the

semicolon, but rather applies only to discontinuation of an

employerÓs participation in the plan.

71 . GTL never entered into a binding contract with Celtic or

with any other insurer to provide conversion coverage in the event

it exited from the Florida market .

7 2 . Counts I and II state that GTL violated the Florida

Insurance Code by Ðissuing the Termination Letter without offering

converted policiesÑ required by section 627.6675. GTL argues that

this can only mean that GTL failed to affirmatively offer Members

the statutorily mandated right of conversion as a part of the

Termination Letter that was sent to Members on or about May 5,

2010. GTL contends that the word Ðoffer ing Ñ in the charge equates

to Ðnoti f y ing Ñ M e mbers of the right to converted policies. It

maintains that the statute only requires that Members be notified

of their right to conversion in the certificate of coverage, not

in the Termination Letter.

7 3 . GTL is correct that u nder the statute, notif ication

to a Member of the conversion privilege is required only in

the certificate of coverage. This notification was provided

in the certificates , and section 627.6675 did not require GTL

to give notice of the conversion privilege at the time it

notifie d Members that their coverage was being terminated.

7 4 . The Office, however, argues that the Termination

Letter incorrectly told Members that it would not be offer ing

a conversion policy . The Office argues that the violation of

section 627.6675 occurre d because the letter Ð revoked Ñ the

offer to provide conversion coverage that was already

contained in the Policy .

7 5 . In disputing the OfficeÓs interpretation, GTL asserts

that an unadopted rule is being applied. However, subparagraph

120.57(1)(e)1., w hich provides that an agency or administrative

law judge may not base agency action that determines the

substantial interests of a party on an unadopted rule, has no

application in this case. There was no evidence at hearing of the

existence of any unadop ted rule or generally applicable agency

policy statement . The statement of the charges itself contains

nothing beyond the allegation that certain facts constitute a

facial violation of section 627.6675. As the final sentence of

subparagraph 120.57(1)(e)1 . specifically notes, an agency is free

to simply apply a statute to facts at hearing, without engaging in

rulemaking.

7 6 . GTL next suggests that the facts alleged to be a

violation are ambiguous, since the phrase Ðissuing the Termination

Letter wit hout offering converted policiesÑ might be interpreted

to refer to providing affirmative notice to Members of their

conversion rights within the Termination Letter . If ambiguous

charges did hinder GTL in preparing its defense, again GTLÓs

interpretation m ust prevail. Ghani v. DepÓt of Health , 714 So. 2 d

1113 (Fla. 1 st DCA 1998) .

7 7 . However, t here is ample evidence that GTL was aware that

in using the term Ðoffering,Ñ the Office was referring to the

contractual and statutory responsibility of GTL to make conversion

policies available to Members , as discussed earlier . In essence,

Counts I and II alleged that GTL Ós issuance of the Termination

Letter constituted a revocation of GTLÓs earlier ÐofferÑ embodied

within the text of the certificates . GTL was familiar with use of

the phrase Ðoffering insura nceÑ from the Florida Insurance Code

and used similar phrases in its own correspondence. GTL had

argued for months , before charges were filed or amended , that GTL

was not required to make conversion policies available to Members.

7 8 . While the phrase Ðis suing the Termination Letter without

offering converted policiesÑ semantically might also refer to

failure to affirmatively notify Members about their right to a

converted policy in the Termination Letter, this ambiguity in the

language used in drafting th e charges was purely technical in

nature. It is well settled that an administrative complaint need

not be cast with that degree of technical nicety required in a

criminal prosecution. Libby Investigations v. Dep ' t of State ,

685 S o . 2d 69 (Fla. 1 st DCA 1996). An administrative complaint

must state the acts complained of with sufficient specificity to

allow a licensee a fair chance to prepare a defense. Davis v.

DepÓt of Prof 'l Reg. , 457 So. 2d 1074 (Fla. 1 st DCA 1984). Counts

I and II certainly m ight have been drafted more clearly , but GTL

was not prejudiced in preparing its defense . GTL was aware that

the Office was charging that GTL Ós Termination Letter revoked its

ÐofferingÑ of conversion coverage in violation of statute.

7 9 . However, th e Office did not show by clear and convincing

evidence that the Termination Letter of GTL could or did ÐrevokeÑ

the offer to provide conversion coverage contained in the

certificates.

80 . First, the language of the Termination Letter never

stated that no conver sion policy was available, although it left

that misleading impression. Without a clear statement in

contravention of the terms of the certificate, it cannot be said

that the letter somehow ÐrevokedÑ the offer contained there .

8 1 . Second, and more impor tantly, t he contractual and

statutory obligation to offer conversion coverage c ould not be

erased or r evoked even by an unambiguous unilateral communication

from GTL advising that the conversion coverage was no longer being

offered. S ection 627.6675 requi res that certain language

providing conversion coverage must be a part of a policy, and that

requirement was met when the certificates were issued. Although a

subsequent letter could not retroactively create a violation of

section 627.6675 , it could be a violation of other provisions of

the Florida Insurance Code, such as alleged in other counts

discussed below .

8 2 . In s ummary , the Termination Letter issued by GTL had no

effect on either: 1) the requirement that the Policy and

certificates contain a pr ovision on conversion; or 2) the

requirement that GTL contract with another insurer to provide such

coverage, because -- under the interpretation of section 627.6675

most favorable to GTL -- that requirement had not yet arisen .

8 3 . The O ffice failed to p rove by clear and convincing

evidence that GTL violated the Florida Insurance Code by issuing

the Termination Letter without offering converted policies in

violation of section 627.6675.

8 4 . GTL was not charged with a violati on of section

6 24.418(1)(b) , so Count II does not allege any violation distinct

from that alleged in Count I.

Counts III and IV

8 5 . Section 626.9521 of the Unfair Insurance Trade Practices

Act prohibits any person from engaging in an unfair method of

competition or an unfair or de ceptive act or practice involving

the business of insurance, as defined in section 626.9541.

8 6 . S ection 626.9541 , Florida Statutes, provid es in relevant

part:

(1) UNFAIR METHODS OF COMPETITION AND UNFAIR

OR DECEPTIVE ACTS. Ï The following are defined

a s unfair methods of competition and unfair or

deceptive acts or practices:

(a) Misrepresentations and false advertising

of insurance policies. Ï Knowingly making,

issuing, circulating, or causing to be made,

issued, or circulated, any estimate,

illustra tion, circular, statement, sales

presentation, omission, or comparison which:

1. Misrepresents the benefits, advantages,

conditions, or terms of any insurance policy.

* * *

6. Is a misrepresentation for the purpose of

inducing, or tending to induce, the lapse,

forfeiture, exchange, conversion, or surrender

of any insurance policy.

8 7 . No cases defining misrepresentation for purposes of

paragraph 626.9541 (1)(a) were found or cited by the parties .

M isrepresentation almost always require s a false statement ,

however . Black's Law Dictionary (rev. 4th ed.), defines

Ðm isrepresentation Ñ as any Ð manifestation by words or other

conduct by one person to another that, under the circumstances,

amounts to an assertion not in accordance with the facts."

Florida law has similarly defined misrepresentation in most

contexts. 3/ See , e.g. , Butler v. Yusem , 44 So. 3d 102 (Fla.

2010)(false statement concerning material fact required element of

fraudulent misrepresentation); Jallali v. Nova Southe astern Univ.,

Inc. , 55 So. 3d 665 (Fla. 4 th DCA 2011) ( without false statement,

there can be no negli gent misrepresentation) ; Collingnon v.

Larson , 145 So. 2d 246 (Fla. 1 st DCA 1962)( for statement by

insurance agent to constitute a misrepresentation under s tatute,

it must be found to have been false). In the absence of a

statutory definition, the word Ð misrepresentation Ñ should be given

this usual meaning . Nat'l Fed'n of Retired Persons v. Dep't of

Ins. , 553 So. 2d 1289 (Fla. 1st DCA 1989). Misrepresentat ion, as

defined in paragraph 626.9541(1)(a), requires a false statement.

8 8 . The Office failed to prove by clear and convincing

evidence that any statement in the Termination Letter was a false

statement. It contained no false statement about the benefi ts or

terms of the Policy. It truthfully stated that GTL would no

longer be offering major medical type coverage. It truthfully

stated that Ðyou may be eligible Ñ for an individual major medical

plan on a guaranteed - issue basis. While it is true that M em bers

were not eligible, others who received the letter were. Since a

false statement is a required element of Count III and Count IV,

the Office failed to prove either of these counts by clear and

convincing evidence.

Count V

8 9 . Section 626.9521 of th e Unfair Insurance Trade Practices

Act prohibits any person from engaging in an unfair method of

competition or an unfair or deceptive act or practice involving

the business of insurance, as defined in section 626.9541.

90 . Section 626.9541 (1)(b) prov ides in relevant part:

(1) UNFAIR METHODS OF COMPETITION AND UNFAIR

OR DECEPTIVE ACTS. Ï The following are defined

as unfair methods of competition and unfair or

deceptive acts or practices:

* * *

(b) False information and advert ising

generally. Ï Knowingly making, publishing,

disseminating, circulating, or placing before

the public, or causing, directly or

indirectly, to be made, published,

disseminated, circulated, or placed before the

public:

1. In a newspaper, magazine, or ot her

publication,

2. In the form of a notice, circular,

pamphlet, letter, or poster,

3. Over any radio or television station, or

4. In any other way,

an advertisement, announcement, or statement

containing any assertion, representation, or

statement with respect to the business of

insurance, which is untrue, deceptive, or

misleading.

9 1 . A s noted earlier, section 627.6675 provides that

when a group policy is terminated, an insurer may meet its

responsibility to provide an individual converted poli cy by

contracting with another insurer , as GTL knew .

9 2 . Under subparagraph 627.6487(3)(b)2., an individual who

is eligible for a conversion policy under section 627.6675 is not

also eligible for an individual major medical plan on a guaranteed

issue basi s , as GTL knew .

9 3 . Deception under paragraph 626.9541(1)(b) does not

require that a false statement be made. It is sufficient if

there is a representation, or an omission , with respect to

the business of insurance which is misleading. Cf .

Mille nnium Comm . v . Dep't of Legal Af f. , 761 So. 2d 1256,

1263 (Fla. 3 rd DCA 2000)(under Florida Deceptive and Unfair

Trade Practices Act, practice is deceptive if there is a

representation or omission likely to mislead a reasonable

consumer under the circumsta nces).

9 4 . The Termination Letter contained assertions,

representations, and statements with respect to the business of

insurance that were deceptive and misleading because they left the

impression that a right to a conversion policy no longer existed,

which, for eligible Members, was incorrect. Cf . F.T.C. v.

Cyberspace.com, LLC , 453 F.3d 1196, 1200 (9th Cir. 2006)

(solicitation may contain truthful disclosures but still be

misleading based upon net impression create d ). GTL knew that th e

Termination Le tter was misleading as to Members eligible for a

conversion policy.

9 5 . While section 627.6675 contains no requirement that

an insurer affirmatively remind group members of their

conversion right upon termination , an insurer does remain

bound by the requi rements of paragraph 626.9541(1)(b).

Should an insurer provide information, th at information

cannot be deceptive or misleading. Cf. Vokes v. Arthur

Murray, Inc. , 212 So. 2d 906, 909 (Fla. 2 nd DCA 1968) ( in

contractual situations where a party owes no duty to disclose

facts , if he nevertheless undertakes to do so, he must

disclose the whole truth ) .

9 6 . In proving a violation of paragraph 626.9541(1)(b),

it was not necessary for the Office to prove that any

particular Member was in fact deceived or misled, but only

necessary for it to show that the statemen t was objectively

deceptive or misleading . Cf . DepÓt of Legal Affairs v.

Commerce Commercial Leasing, LLC , 946 So. 2d 1253 (Fla. 1 st

DCA 2007)( Florida Deceptive and Unfair Trade Practices Act

does not require show ing of actual reliance on representation

o r omission, only whether practice likely to deceive ); Davis

v. Powertel, Inc . 776 So. 2d 971 (Fla. 1 st DCA 2001)( FDUTPA

requires proof that practice is objectively Ðlikely to

misleadÑ consumers, not proof that any consumer was

subjectively misled).

9 7 . The Office proved by clear and convincing evidence that

GTL knowingly made, published, disseminated, and circulated the

Termination Letter to 216 Members , which contain ed an assertion,

representation and statement with respect to the business of

insurance that was willfully deceptive and misleading. GTL knew,

or should have known, that this was an unfair or deceptive act or

practice under the Florida Insurance Code.

9 8 . The Office proved by clear and convincing evidence

that GTL committed 216 willful vi olations of the Florida

Insurance Code .

Penalties

9 9 . Section 626.9581 provides that t he Office may , in its

discretion, suspend or revoke the certificate of authority , or

order such other relief as may be provided in the Florida

Insurance C ode, as to any person who knew, or reasonably should

have known, that they committed an unfair or deceptive act or

practice . Section 624.01 provides that chapters 624 - 632, 634,

635, 641, 642, 648, and 651 constitute the Florida Insurance Code.

Such other relief theref ore includes the provisions of sections

6 24.310 , 624.418, 624.4211 , and 626.9521 .

100 . Subsection 624.310(5) provides that the Office may

impose penalties against any person for violation of any provision

of the Florida Insurance Code, including the suspe nsion or

revocation of the certificate of authority in addition to the

imposition of administrative fines. It provides that fines shall

not exceed the amounts specified in section 624.4211.

10 1 . S ection 624.418 (2)(a), Florida Statutes, states that

the Office may, in its discretion, suspend or revoke the

certificate of authority of an insurer for violations of the

Florida I nsurance C ode.

10 2 . Section 624.4211 grants authority to the Office to

impose a fine in lieu of suspension or revocation. It provid es in

relevant part:

( 1) If the office finds that one or more

grounds exist for the discretionary revocation

or suspension of a certificate of authority

issued under this chapter, the office may, in

lieu of such revocation or suspension, impose

a fine upo n the insurer.

(2) With respect to any nonwillful violation,

such fine may not exceed $5,000 per violation.

In no event shall such fine exceed an

aggregate amount of $20,000 for all nonwillful

violations arising out of the same action.

* * *

(3) With respect to any knowing and willful

violation of a lawful order or rule of the

office or commission or a provision of this

code, the office may impose a fine upon the

insurer in an amount not to exceed $40,000 for

each such violati on. In no event shall such

fine exceed an aggregate amount of $200,000

for all knowing and willful violations arising

out of the same action.

10 3 . S ubs ection 626.9521 (2) provides that any person who

engages in a deceptive act or practice shall be subject to : a

fine not greater than $5,000 for each nonwillful violation, not to

exceed an aggregate amount of $20,000 f or all nonw illful

violations arising out of the same action ; and a fine not greater

than $ 4 0,000 for each willful violation, not to exceed an

aggregate amount of $ 2 00,000 for all willful violations arising

out of the same action. It states that t hese f ines may be im posed

in addition to other penalties.

10 4 . GTL argues that no administrative fine may be imposed

in this case for any unfair method of competition or an unfair or

deceptive act or practice because paragraph 624.310(5)(a) requires

that GTL be given a writt en notice that set s forth the nature of

the violations and set s a reasonable period of time to correct

them before a hearing can be initiated , or a fine accrue .

10 5 . GTL is correct in part, in that no fine pursuant to

subsection 624.310(5) may be imposed . While GTL was arguably

notified in writing of the nature of the violation, and what

action needed to be taken by GTL to correct it, no reasonable

period of time within which GTL needed to take the action was set

forth in th at notice. Although referenced by the Office in

several counts , the administrative fine provisions of subsection

624.310(5) are therefore not applicable here.

10 6 . However, subsection 624.310(7) goes on to expressly

state that the provisions of section 624.310 are in addition to

ot her provisions of th e Florida I nsurance C ode, and do not curtail

or impede similar provisions or the power of the Office. Thus ,

under the complicated penalty structures of the Florida Insurance

Code, similar penalty provisions found in s ection s 626.9581 ,

624.418 , and 624.4211 are not implicated by the Ðadvance noticeÑ

provisions of subsection 624.310(5).

10 7 . In r ecommend ing a penalty , the undersigned has

considered that GTL knew that the Policy and the certificates

granted Members conversion rights, and knew, or should have known,

that Florida law required them to provide conversion coverage or

contract with another insurer to provide it . They also knew their

contract with Celtic did not provide conversion policies when GTL

was withdrawing from the F lorida market.

108. GTL knew that the Termination Letter was objectively

misleading for a large majority of the people who were to receive

it, and knew that sending a misleading letter about the business

of insurance was a violation of the Florida Insura nce Code.

10 9 . Under subparagraph 627.6425(3)(b)2., because GTL has

completely discontinued offering all health insurance in Florida,

GTL is prohibited from offering any individual health insurance in

Florida for a five - year period beginning on the date of

discontinuation of the last policy not renewed.

1 10 . The financial benefit to GTL resulting from its action

is difficult to estimate. At a point when only 28 Members

remained, in April, 2011, GTLÓs understanding with Celtic suggests

the two insurers b elieved it would cost Celtic something less than

$100,000 , plus $30,000 per Member policy, to assume the risk and

responsibility of providing conversion coverage if requested .

1 1 1 . GTL did not send out a letter to the Members correcting

the impression lef t by the misleading letter of May 5, 2010, or

make any other attempt to remedy the violation . GTL was hoping

that the Members were unaware of their conversion rights , and

would not become aware of them.

RECOMMENDATION

Upon consideration of the above fin dings of fact and

conclusions of law, it is

RECOMMENDED:

That the Office of Insurance Regulation enter a F inal O rder

finding that Guarantee Trust Life Insurance Company committed 216

knowing and willful violation s of s ubsection 626.9521(1), Florida

Stat utes , for engaging in an unfair method of competition and

unfair or deceptive act or practice as defined in subsection

626.9541(1)(b), Florida Statutes, and imposing a fine of $ 1, 000

for each such violation , for a total fine not to exceed an

aggregate amou nt of $200,000 .

DONE AND ENTER ED this 16 th day of March , 2012 , in

Tallahassee, Leon County, Florida.

S

F. SCOTT BOYD

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee P arkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

t his 16 th day of March, 2012.

ENDNOT ES

1 / It is not entirely clear from the evidence whether GTL

corrected the reference to the erroneous website prior to sending

out the letter or later sent a follow - up letter with the corrected

website, but that issue is not material here.

2 / All references to statutes and rules are to the versions in

effect in 201 0 , which remained unchanged throughout the time of

the alleged violations, except as otherwise indicated.

3/ There is no affirmative duty to disclose involved here, as

discussed earlier.

COPIES FURNISHED:

Cynthia S. Tunnicliff, Esquire

Pennington, Moore, Wilkinson,

Bell and Dunbar, P.A.

215 South Monroe Street, Second Floor

Post Office Box 10095

Tallahassee, Florida 32302 - 2095

[e-mail]

Stephen H. Thomas, Jr., Esquire

Kenneth Tinkham, Esquire

Office of Insurance Reg ulation

200 East Gaines Street

Tallahassee, Florida 32399 - 4206

Kevin M. McCarty, Commissioner

Office of Insurance Regulation

200 East Gaines Street

Tallahassee, Florida 32399 - 0305

Belinda Miller, General Counsel

Office of Insurance Regulation

200 East Gaines Street

Tallahassee, Florida 32399 - 0305

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 recommend ed order should be filed with the

agency that will issue the final order in this case.