ALJDEC

00A-192-INS · Department of Insurance · 2001-01-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 18, 2001

APPEARANCES: Applicant appeared on his own behalf; the State of Arizona, Department of Real Estate was represented by Asst. Attorney General Shelby Cuevas.

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Applicant Kevin Charles Pattison brings this appealable agency action protesting the denial of his application for an agent’s license for property and casualty, life, and disability insurance by the Arizona Department of Insurance (“Department”). The Department based its denial on Applicant’s 1997 license revocation. The parties presented evidence and testimony at the hearing. Based on the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order upholding the denial. FINDINGS OF FACT 1. From 1992 through 1996, Applicant held insurance licenses in Arizona. Under license 533390, he was licensed as an agent for property and casualty insurance and for life and disability insurance. (Exhibits 7, 11, and 13.) Furthermore, he was licensed as a broker for property and casualty insurance. (Id.) In addition, he was the only licensed agent on an entity license issued to Express Auto Insurance, of which Applicant was Vice President. (Exhibit 3, at p. 29.) The Express Auto Insurance license expired for lack of renewal in June 1996. (Id.) 2. In December 1996, the Department issued a Notice of Hearing against Applicant, alleging that Applicant failed to forward to insurers several applications and premiums he received from individuals. (Exhibit 2.) The Notice required Applicant to respond with a written answer and was sent to Applicant’s two (2) addresses on file with the Department. (Exhibits 2 and 3.) 3. When Applicant failed to respond to the Notice, the Department Director entered an order in January 1997 finding Applicant to be in default (hereinafter “the Order”). (Exhibit 4.) The Order revoked Applicant’s licenses and ordered Applicant to pay $1962.00 in restitution and a $2500.00 civil penalty. (Id.) To this date, Applicant has not paid the restitution or civil penalty. (Exhibit 5.) 4. Applicant testified that he knew nothing about the revocation order. He thought that the licenses had expired. He never got the Notice or Order because the Express Auto Insurance business was closed, he was in the process of a divorce, he was not getting his mail, and he did not update his address. As far as he was concerned, he had let his licenses lapse and then expire. He testified that he first learned about the revocation in October 2000, when he submitted the pending application. He was told by someone at the Department that he had a revocation on his record, so he changed his answer to the question in Section V(B) of the application, which asks about any license disciplinary activity. (Exhibit 1.) He attached a handwritten addendum stating that he had just learned of the revocation. (Id.) 5. On November 6, 2000, the Department denied the application on the grounds of having a record of dishonesty and having a record of revocation. (Exhibit 14.) Applicant timely appealed. (Exhibit 15.) CONCLUSIONS OF LAW 1. Applicant must show that he meets the qualifications for licensure as an insurance agent. A.R.S. § 20-291. The Director has discretion to deny a license application for any of the reasons listed in A.R.S. § 20-290(B). The Department has alleged that grounds for denial of Applicant’s application exist under that statute per subsection (B)(2)—a ”record of dishonesty on the part of the applicant in business or financial matters” and subsection (B)(5)—a “record of suspension or revocation of an insurance license in any jurisdiction.” 2. The evidence supports the grounds for the Department’s denial of the application. The revocation Order is final and unappealable. The evidence in this record shows that the Notice and the Order were sent to the addresses that Applicant had on file with the Department. At a minimum, Applicant would be required to pay the restitution and civil penalty, and to show that he has taken care of whatever problems caused the underlying facts upon which the revocation was based. Applicant simply did not do that at the hearing. It appears that he failed to do so mainly because he found out about the revocation three months ago and has been confused about it since. RECOMMENDED ORDER Considering the findings and conclusions above, IT IS RECOMMENDED that the Director of the Arizona Department of Insurance uphold the denial of Kevin Charles Pattison’s October 2000 application for licensure as an insurance agent.

Done this 19th day January 2001.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Eric A. Bryant Administrative Law Judge

Original mailed this ___ day of January 2001, to:

Charles R. Cohen ATTN: Curvey Burton Arizona Department of Insurance 2910 N. 44th Street, Suite 210 Phoenix, AZ 85018

By ___________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826