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CALIFORNIA DEPARTMENT OF INSURANCE

LEGAL DIVISION

Auto Compliance Bureau - San Francisco

Kathleen L. Morgan, Bar No. 154346

45 Fremont Street, 21st Floor

San Francisco, CA 94105

Telephone: (415) 538-4142

Facsimile: (415) 904-5490

Attorney for the Department of Insurance


BEFORE THE INSURANCE COMMISSIONER
OF THE STATE OF CALIFORNIA

In the Matter of the Licenses and Licensing


Rights of
SOLO INSURANCE SERVICES, INC.
And
STEPHANIE RAGER,
Respondents.

FIRST AMENDED ACCUSATION


    File No. SD 6660-AP
    File No. SD 6661-AP
    FIRST AMENDED ORDER TO SHOW CAUSE
    1. Cease and Desist and Monetary Penalty pursuant to California Insurance Code section 790 et. seq.
    2. Order prohibiting participation in the insurance industry pursuant to California Insurance Code section 1748.5(b)

JURISDICTION


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3. The Department of Insurance ("Department") is the agency of the State of California responsible for the licensing and monitoring of the insurance industry, including insurance companies, brokers, and agents.

PARTIES


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ALLEGATIONS


SUBJECT: FAILURE TO REFUND / FIDUCIARIES
APPLICABLE LAW: California Insurance Code sections 393, 481.5, 1668(e)(j)(n) and (o), 1668.5(a)(2)(6) and (7), 1733, 1734, 1738 and 1739
ALLEGATIONS:
15. During the approximate period of August 6, 1998 through May 1999, Respondents failed to conduct insurance in a competent manner and refund their clients as required. Specifically, Respondents sold Cynthia Abbott auto insurance and charged a $50.00 broker fee. One of Ms. Abbott's cars was not registered. Therefore, her insurance was cancelled. The insurance was financed and Ms. Abbott continued to pay her monthly payments to the finance company. On January 6 and January 29, 1999, Respondents' received Ms. Abbott's refund. However, Respondents did not forward the money or send their unearned commission to Ms. Abbott until March 15, 1999. [CIC §§ 393, 481.5, 1733, 1734(a) and 1668(j)]
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16.(15). On or about April 14, 1999, Respondents were appointed as an agent for The Vision Insurance Group yet charged Jennifer Johnson a $310.00 broker fee. Respondents did not refund the fee to Ms. Johnson until approximately March 2000. [CIC §§ 1731, 1733 and 1734(a)]2
19. During the approximate period of December 2, 1998 through February 25, 1999, Respondents failed to refund unearned premiums within 30 days. Specifically, Respondents received $102.91 for their client Ray Harris. However, they did not send him his refund until February 25, 1999, and only after Mr. Harris filed a Request for Assistance with the Department. [CIC §§ 393, 481.5, 1733 and 1734(a)]
20.(20). During the approximate period of January 28, 1998 through March 26, 1998, Respondents failed to refund unearned premiums within 30 days. Specifically, Respondents received a $744.39 refund for Alex Apodaca on January 28, 1998. However, Respondents did not remit the refund to Mr. Apodaca until March 26, 1998. [CIC §§ 393, 481.5, 1733 and 1734(a)]
26. During the approximate period of May 21, 1997 through May 1, 1998, Respondents failed to refund in a timely manner. Specifically, Respondents sold Leslie Garrett auto insurance and charged a $50.00 broker fee. Ms. Garrett paid in full for her policy. Respondents rated her incorrectly and the insurer gave her an uprate. The uprate was not paid and the policy was cancelled. The insurer sent Ms. Garrett's refund to Respondents on August 12, 1997. Respondents did not forward the refund to Ms. Garrett. Ms. Garrett was involved in two accidents in 1998 and discovered she did not have auto insurance. On May 1, 1998, after the two accidents, Respondents sent Ms. Garrett her refund, and only after Ms. Garrett filed a Request for Assistance with the Department. [CIC §§ 393, 481.5, 1668(j), 1733 and 1734(a)]
27. During the approximate period of June 24, 1998 through September 4, 1998, Respondents failed to refund in a timely manner. Specifically, Respondents received a refund for their client Patricia Wright dated June 24, 1998. However, Respondents failed to forward the refund to Ms. Wright until September 4, 1998, and only after Ms. Wright filed a Request for Assistance with the Department. [CIC §§ 393, 481.5, 1733 and 1734(a)]
28. During the approximate period of May 26, 1998 through October 2, 1998, Respondents failed to refund in a timely manner and perform their duties in a competent and trustworthy manner. Specifically, Respondents sold auto insurance to Shevette Williams and charged a $200.00 broker fee. Respondents rated her car incorrectly, which caused an uprate. Respondents received a refund for Ms. Williams on July 30, 1998. However, Respondents did not forward the refund to Ms. Williams until October 2, 1998, and only after Ms. Williams filed a Request for Assistance with the Department. [CIC § 393, 481.5, 1668(j), 1733 and 1734(a)]
31. During the approximate period of March 8, 1998 through November 9, 1998, Respondents failed to refund as required. Specifically, on March 8, 1998, Respondents' client Kevin McCallister's insurance cancelled. However, Respondents did not send the unearned commission to the finance company or the interest to Mr. McCallister until November 9, 1998, and only after Mr. McCallister filed a Request for Assistance with the Department. [CIC §§ 393, 481.5, 1733 and 1734(a)]
32. During the approximate period of July 29, 1997 through March 26, 1998, Respondents failed to conduct the business of insurance in a competent and forthright manner. Specifically, Respondents sold Adriano Ascencio auto insurance and charged a $25.00 broker fee. Respondents failed to refund Mr. Ascencio in a timely manner. Further, Respondents did not fully refund Mr. Ascencio. Mr. Ascencio submitted a check for $305.00 on July 29, 1997, which was returned for insufficient funds. He then submitted a money order for $315.00 for the downpayment, plus a $10.00 fee. On or about September 18, 1997, Respondents put through the first check, which then cleared. Therefore, Mr. Ascencio paid a $620.00 downpayment, but was only refunded based upon a $305.00 downpayment. Further, the refund was not sent to Mr. Ascencio until March 26, 1998, 3 months later than required. [CIC §§ 393, 481.5, 1668(j), 1733 and 1734(a)]
33. On or about February 14, 1997, Respondents failed to transact insurance in a competent and trustworthy manner and refund in a timely manner. Specifically, Respondents sold Byron Bishop an annual auto insurance policy and charged a $150.00 down payment. Mr. Bishop paid in full for the Clarendon insurance policy. However, Clarendon only sold six-month policies unless the policy was financed. Respondents submitted a loan application signed by "Byron Bishop," even though Mr. Bishop never signed a loan application. On March 4, 1997 Clarendon issued a six-month policy and sent a $777.48 refund to Respondents. On March 15, 1997, Clarendon sent another refund of $166.50 refund to Respondents. On May 6, 1997, Clarendon sent a third refund of $212.40 to Respondents. Respondents failed to fully refund Mr. Bishop until July 9, 1999, and only after Mr. Bishop filed a Request for Assistance with the Department. [CIC §§ 393, 481.5, 1668(j), 1733 and 1734(a)]
34. During the approximate period of January 5, 1998 through April 6, 1998, Respondents failed to refund in a timely manner. Specifically, Respondents sold auto insurance to Lisa and John Fletcher and charged a $100.00 broker fee. The Fletchers paid in full. However their insurance was cancelled for non-payment of an uprate. On January 5, 1998, Respondents received a refund for the Fletcher of $602.75. Respondents did not forward the refund to the Fletchers until April 6, 1998, and only after they filed a Request for Assistance with the Department. [CIC §§ 393, 481.5, 1668(j), 1733 and 1734(a)]
35. During the approximate period of September 18, 1997 through December 7, 1998, Respondents failed to refund in a timely manner. Specifically, Respondents sold Irene Foster auto insurance and charged Ms. Foster two 50.00 broker fees. Respondents did not correct their error until Ms. Foster filed a Request for Assistance and failed to refund $50.00, plus interest until December 7, 1998. [CIC §§ 1668(j), 1733 and 1734(a)]
SUBJECT: UNFAIR PRACTICES
APPLICABLE LAW: California Insurance Code sections 790, 1668(e)(j)(n) and (o), 1668.5(a)(2)(6) and (7), 1738 and 1739.
ALLEGATIONS:
SUBJECT: FAILURE TO PROPERLY SERVICE POLICIES
APPLICABLE LAW: California Insurance Code sections 1668(j)(n) and (o), 1668.5(a)(2)(6) and (7), 1724.5, 1738 and 1739.
ALLEGATIONS:
40. During the approximate period of July 9, 1997 through May 7, 2001, Respondents failed to conduct insurance in a competent and trustworthy manner. Specifically, Respondents sold Delia Esquivel liability insurance through Bristol West, and physical damage coverage, through CenCal, two separate insurance companies. Respondents failed to add the lienholder onto Ms. Esquivel's CenCal policy. Vivian Olivas, Respondents' unlicensed transactor/ employee, sent the request to add the lienholder request to Bristol West. Approximately, one year later, Ms. Esquivel's lienholder placed coverage on her. When Ms. Esquivel attempted to resolve the problem with Respondents, they said they would make the change for $500.00, even though it should have been on the policy when coverage was initially placed. Ms. Esquivel was forced to take the duplicate coverage. Further, Respondents are unable to locate Ms. Esquivel's file. [CIC §§ 1631, 1668(j) and 1727(a)]
58. On or about December 17, 1998, Respondents failed to conduct insurance in a competent manner. Specifically, Respondents sold Rukaiyah Abdullah auto insurance and charged a $50.00 broker fee. Respondents rated Mr. Abdullah's car incorrectly which caused an uprate. [1668(j)]
59. During the approximate period of October 20, 1998 through March 19, 1999, Respondents failed to transact insurance in a competent and trustworthy manner. Specifically, Respondents sold Clayton Brokhausen auto insurance and charged a $90.00 broker fee. Several weeks later Mr. Brokhausen received a cancellation notice for lack of payment from the insurance company, even though he had not received a bill or policy. Mr. Brockhausen contacted Respondents who informed him that Respondents needed to write another policy for him in order to continue coverage. Based upon Respondents incorrect assertions, Mr. Brokhausen purchased a second policy on December 3, 1998 and paid another broker fee of $100.00. Mr. Brokhausen's original policy was still in force, he had duplicate coverage, and Respondents did not have to write a new policy to continue coverage. Mr. Brokhausen he could have paid the original insurance company and his insurance would not have cancelled. [CIC §§ 485, 486, 487 and 1668(j)]
60. During the approximate period September 2, 1998 through March 30, 1999, Respondents failed to transact insurance in a competent and trustworthy manner. Specifically, Respondents sold Luis Rodriguez auto insurance. Respondents told Mr. Rodriguez that he was purchasing an annual policy for $707.00 and gave him a copy of the agreement which did not have any broker fee included. Respondents gave him an ID card that indicated that he had an annual policy. However, they actually charged him a $500.00 broker, without disclosing to him the amount of the broker fee, and without their license number on the quote. Further, the policy was only for six-months. [CIC §§ 1668(j) and 1725.5]
61. During the approximate period of March 24, 1998 through October 23, 1998, Respondents failed to transact insurance in a competent and trustworthy manner. Specifically, Respondents sold Helen Doyel auto insurance at her home. Within two hours she called Respondents and requested the policy be cancelled. She was told they could not. Within the next two days she wrote two letters requesting the insurance be cancelled. Eventually, on July 29, 1998, the insurance was flat cancelled. Ms. Doyel had to pay $99.41 to the finance company, a $50.00 policy fee and $52.94 in miscellaneous fees. Ms. Doyel did not receive the rest of her refund from Respondents until October 23, 1998. [CIC § 1668(j)]
62. During the approximate period of December 21, 1997 through January 1999, Respondents failed to transact insurance in a competent and trustworthy manner and refund in a timely manner. Specifically, Respondents sold Daniel Olivera auto insurance and charged a $50.00 broker fee. Further, Mr. Olivera paid for a SR-22 filing in order to show the DMV that he had insurance. On March 23, 1998, Mr. Olivera requested that one vehicle be deleted from his policy. The original policy was not issued until March 30, 1998.The deletion of the vehicle was not processed until June 19, 1998, and the insurer did not submit the refund until December 2, 1998. Respondents did not refund to Mr. Olivera their portion of the unearned commission until January 8, 1999. Mr. Olivera did not get the SR-22 until December 1998. Mr. Olivera did not get any relief until after he filed a Request for Assistance with the Department. [CIC §§ 393, 481.5 and 1668(j)]
63. During the approximate period of March 12, 1998 through June 29, 1998, Respondents failed to transact insurance in a competent and trustworthy manner. Specifically, Respondents sold auto insurance to Heros Najarian and charged a $225.00 broker fee. Their employee, Mark Orneles, who was not licensed to transact insurance sold Mr. Najarian the insurance. Mr. Orneles failed to rate Mr. Najarian correctly by omitting three at-fault accidents. The insurer refused to place coverage due to Mr. Najarian's driving record. Further, on March 12, 1998, Respondents ran Mr. Najarian's motor vehicle record, which clearly showed the three accidents and gave a copy to Mr. Najarian. They kept a copy for their file. However, when the Department requested information from Respondents, the motor vehicle record in Respondents' file did not show the three accidents. [CIC §§ 1631 and 1668(j)]
64. On or about October 26, 1997, Respondents failed to transact insurance in a competent and trustworthy manner and used unlicensed employees to sell insurance. Specifically, Respondents sold Mary Encinas and Deanna Vela auto insurance, charged a $200.00 broker fee, and accepted a cashier's check for $2000.00 as payment in full for a year of insurance coverage. On October 27, 1997, Respondents refunded the insureds $957.00. The insureds then received an uprate and their insurance was cancelled on December 10, 1997 for non-payment of the uprate. Ruben Wyles, who was not licensed at the time did the transaction. Respondents refused to refund the broker fee. [CIC §§ 1631 and 1668(j)]
65. During the approximate period of August 8, 1997 through February 6, 1998, Respondents failed to transact insurance in a competent and trustworthy manner. Specifically, Respondents sold auto insurance to Linette Fenimore and charged a $75.00 broker fee. However, Respondents did not accurately quote the price of the coverage to Ms. Fenimore. Respondents submitted the application to the insurer with the incorrect symbol for the car and with the Waiver of Mandatory Arbitration being unsigned. This resulted in an uprate. Further, the broker fee was not filled in. Respondents refused to refund the broker fee. [CIC § 1668(j)]
66. During the approximate period of July 25, 1998 through November 10, 1998, Respondents failed to transact insurance in a competent and trustworthy manner. Respondents sold auto insurance to Lourdes Ferrer and charged a $75.00 broker fee. Respondents failed to give a quote using rates that were effective August 1, 1998 even though Ms. Ferrer's policy was effective August 8, 1998. This resulted in an uprate for Ms. Ferrer. Respondents then refused to give Ms. Ferrer a refund of her broker fee. [CIC § 1668(j)]
67.(43). On or about October 22, 1998, Respondents failed to perform their duties as a broker. Specifically, Respondents sold Theresa Bray auto insurance and charged a $163.00 broker fee. Ms. Bray specifically needed insurance and a SR-22 form to file with the California Department of Motor Vehicles. Respondents originally wrote the application for a specified insurance company. Later that day, Respondents informed Ms. Bray that the original insurance company would not cover her, but that Coast Insurance Company would cover her even though she needed a SR-22 form filed with the DMV. Thereafter, coverage was obtained. Respondents failed to issue the SR-22 form and Ms. Bray's driver's license was suspended. Further, Respondents' employee Dawn Earl, who represented Respondents in the transaction, was not endorsed to their license. [CIC §§ 1668(j) and 1704]
68. During the approximate period of June 6, 1998 through November 5, 1998, Respondents failed to perform their duties as a broker. Specifically, Respondents sold Haydee Garcia auto insurance and charged a $100.00 broker fee. Respondents put the wrong address on the insurance application and the Ms. Garcia never received her policy or bill. Therefore, the policy was canceled for lack of payment. Respondents refused to refund Ms. Garcia's broker fee. [CIC § 1668(j)]
69. During the approximate period of June 6, 1998 through October 5, 1998, Respondents failed to perform their duties as a broker. Specifically, Respondents sold auto insurance to Jim McNally and rated him as married even though he was single. This caused an uprate in his insurance. Mr. McNally's problem was not resolved until he filed a Request for Assistance from the Department. [CIC § 1668(j) and CCR § 2694(a)(1)]
72. During the approximate period of September 6, 1997 through March 6, 1998, Respondents failed to perform their duties as a broker. Specifically, Respondents sold auto insurance to Maria Valencia and charged a $130.00 broker fee. Respondents included motorist protection in the insurance, which caused the premium to increase. Consequently, Ms. Valencia's monthly payments were increased. Ms. Valencia continued to pay the original monthly payment schedule and her insurance was cancelled for non-payment. [CIC § 1668(j)]
During the approximate period of February 2, 1996 through November 1, 1996, Respondents failed to transact insurance in a competent and trustworthy manner and used unlicensed employees to sell insurance. Specifically, Respondents sold auto insurance to Henry Flores and charged a $30.00 broker fee. Mr. Flores received an uprate because he was rated as having three years driving experience when he clearly only had two years driving experience. Further, he was sold the insurance by Greg Thomas who did not have a license to transact insurance. [CIC § 1631 and 1668(j)]
SUBJECT: UNLICENSED TRANSACTORS
APPLICABLE LAW: California Insurance Code sections 1631, 1668(j)(n)(o) and (p), 1668.5(a)(2)(6)(7) and (8), 1738 and 1739.
ALLEGATIONS:

STATEMENT OF CHARGES FOR CEASE AND DESIST

AND MONETARY PENALTY ORDER, AND


STATEMENT OF POTENTIAL LIABILITY, PURSUANT TO CIC § 790 et. seq.

CAUSE FOR ORDER PROHIBITING PARTICIPATION IN

THE INSURANCE INDUSTRY PURSUANT TO CIC § 1748.5

CAUSE FOR DISCIPLINE PURSUANT TO CIC §§ 1738 AND 1668

PETITION FOR DISCIPLINE AND ORDER TO SHOW CAUSE

Dated: _____09/07/01______________. HARRY LOW

   

1 In order to alleviate confusion, the paragraph numbers use in the Accusation issued May 9, 2001,are denoted by "(#)".

2 The respondents held the $150.00 broker fee that should have been refunded since it was unearned premium. Premium is defined as "the sum which insured is required to pay." Allstate Ins. Co. v. State Board of Equal. (1959) 169 Cal.App.2d 165, at 168.

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Last Revised - November 13, 2001
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