Law & Ethics Update

Defendant was sentenced to about three years in prison followed by 25 years' probation, and was ordered to pay full restitution to the victims. He is also banned from the Florida insurance industry.


A South Florida man was accused of taking loans and life insurance policies out in the name of a Tallahassee man. The suspect, 60-year-old John Smith, told the victim about an investment opportunity called, "Endowment to the 21st Century." In this investment scheme, the victim was told that, with no financial risk at all, he could get a life insurance policy. When he died, a portion of that insurance money would go to a Christian School.


Smith gained the victim's trust, and was able to get confidential information from him. The victim even agreed to get a physical and give blood and urine samples in order to participate in the program. By the way, Smith was not licensed to perform any insurance activities, and the school was never intended to receive any funds from the illegal investment scheme.

Smith then used the information in a similar but unrequested manner: he took out a $5 million life insurance policy on the victim. The victim had not agreed to the multi-million dollar policy, but Smith reportedly forged the victim’s signature and used false information to get it. 

Smith also took out a $282,050 loan in the victim's name. With fees and premiums, the total amounts to more than $300,000. Smith faces more than eight charges related to the incident, and he is an out-of-state fugitive on a robbery charge.


An investigation of a life and health agent alleged that he sold consumers health insurance plans from unauthorized insurers. When the consumers had medical claims they were informed there was no coverage and the consumers suffered significant financial hardships.

The agent was fined $1,000 and investigative costs of $1,000. He was ordered to disgorge all commissions received from all of the contract plans or policies he sold and must satisfy all unpaid claims or losses for all persons entitled to coverage for the policies he sold.

Patrice Sands of Pompano Beach for selling fraudulent insurance policies to elderly military veterans and their families at Make-A-Wish Veterans, Inc., a Miami-based company that provides assistance to veterans. An agency investigation discovered that Sands collected premiums from her victims and deposited the funds into bank accounts tied to her business, Universal Research Group Insurance Agency, but failed to secure policies through a company licensed to transact insurance in the state of Florida. Sands faces up to 25 years in prison.

Since July 2014, the Division of Insurance Fraud has made 59 arrests of individuals who were licensed by the Department or who were required to be licensed but were operating without one. These arrests represent $4.47 million in fraud and involved insurance agents, bail bond agents and public adjusters. [Florida CFO, Division of Fraud, Insurance Fraud Press Releases]


This is a single example of how “agencies” and their policies are created and later solicited to you, to offer to your customers.

Customers responding to a TV or radio ad, phone call, piece of mail, email (in this case “spam”), etc., may not have the know-how or inclination to check as to whether the company is authorized to conduct business in Florida. You do. At the very least you have access to the
Active Company Search provided by the OIR. Keeping ALL your customers aware of the potential for contact by a bogus entity is beneficial to all. Even clients to whom you do not provide health coverage can be educated by the knowledge of the state, OIR, you and your agency.


If you DO solicit or sell for an unauthorized entity you are violating the Representing or Aiding Unauthorized Insurer Prohibited statute, which could cause you to be liable for repayment of any losses suffered by a client when the unauthorized entity fails to pay claims. You may also be charged with a third degree felony for violating the Penalty for Representing Unauthorized Insurer statute, punishable by up to five years in prison and a fine of up to $5000 (first offense).

As our CFO, DFS, OIR, Fraud Strike Force and others work to maintain or improve the integrity of the insurance industry, technology continues to improve with them. As it turns out, fraudulent agents, agencies and products don’t usually lag too far behind. It’s our job to ensure we stay one step ahead of these criminals.


New and Important Terminology Applicable to Licensed Florida Insurance Professionals



Florida’s OIR recognizes that each state has its own terminology among licensed insurance professionals. It provides the NAIC’s complete list for every state at

You may need to use the website to secure terms and codes when you are required to complete a transaction with another state.

AM Best, an insurance rating service, offers a glossary of insurance terms for those looking for anything not already made available in this table, within the Florida Office of Insurance Regulation, or by the compliance representative affiliated with your office.




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