ALJDEC decisions subject to certification as final

19A-181-INS · Department of Insurance and Financial Institutions - Insurance · 2021-02-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of:

Stocker, Ryan

(National Producer No. 17910213)

No. 19A-181-INS

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 26, 2021

APPEARANCES: The Arizona Department of Insurance (“the Department”) was represented by Holly Wan, Esq., Assistant Attorney General.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

_____________________________________________________________________

FINDINGS OF FACT

The Department referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on Respondent’s appeal of the Department’s intent to revoke his insurance producer’s license. The Department issued a Notice of Hearing that charged cause to discipline Respondent’s license under A.R.S. §§ 20-286(C)(1), 20-295(A), 20-295(A)(2), and 20-463(A)(1). The Notice of Hearing to Respondent at its address and email address of record

The Department submitted ten exhibits and presented the testimony of its investigator Wendy Greenwood.

Respondent failed to appear and did not request that the hearing be continued. Although the start of the hearing was delayed 15 minutes, Respondent did not appear through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence to defend its license.

At all material times, Respondent was licensed in Arizona as a non-resident insurance producer with lines of authority in accident/health or sickness, National Producer Number 17910213, which expires on August 31, 2022.

On or about July 18, 2019, Humana Insurance Company (“Humana”), sent a “Termination for Cause” letter to the Department stating that it terminated Respondent’s agent appointment for “fraudulent or dishonest acts or practices.”

Prior to that, Humana was informed by TZ Insurance Solutions (“TZ”) on or about May 24, 2019, that Respondent was terminated on May 22, 2019, as certain for Medicare Supplement insurance applications, prepared by Respondent, contained false and/or inaccurate information.

In an Agent Review Board Submission Form dated June 21, 2019, Humana stated that Respondent sold Medicare Supplement policies to at least seven members using “fake addresses in Kalamazoo, Michigan to obtain a better premium rate so he could sell more policies”.

The Department on September 11, 2019, emailed and mailed by certified mail, a Subpoena Duces Tecum (“Subpoena”). The Subpoena was sent to Respondent’s residential, business and emails addresses on record with the Department. The Subpoena ordered Respondent to provide documents and appear on October 2, 2019 before the Department to give testimony at an Examination Under Oath.

The Subpoena mailed to Respondent’s business address was retuned as undeliverable.

On October 7, 2019, Respondent contacted the Department informing the Department that he received the Subpoena, but could not appear for the Examination Under Oath because he lived in Florida. The Department requested that Respondent submit a written statement as to the Medicare Application for Maria Hernandez by October 9, 2019. Respondent also updated his contact information at that time.

Respondent complied with the Department’s request and submitted an email stating that Ms. Hernandez informed him that she had kids in Michigan and Florida and because she was not working, she spent most of her time staying with her daughter and helping take care of their children.

Ms. Greenwood testified as to the above timeline as well as the Department’s investigation.

Ms. Greenwood testified the Department examined Ms. Hernandez’s application which listed her permanent address in Kalamazoo, Michigan. Ms. Greenwood further testified that a Department investigator was able to speak with Ms. Hernandez. According to the testimony, Ms. Hernandez reported that she was a resident of Arizona since 1981, and had never been to or lived in Michigan, and did not know anyone in Michigan.

Ms. Greenwood also testified that Humana, by letter dated October, 22, 2019, informed the Department that, “[t]he member’s resident state determines where the policy should be issued.”

Finally, Ms. Greenwood testified that based upon Respondent’s submission of at least seven false Humana applications, as well as his failure to comply with the Subpoena and failure to update his address with the Department, his license should be revoked to protect the public.

CONCLUSIONS OF LAW

The Department has jurisdiction to determine the merits of complaints against Respondent’s insurance producer’s license and, if appropriate, to revoke, suspend, or impose other discipline on Respondent’s insurance producer’s license.

The Department bears the burden of proof to establish that cause to discipline Respondent’s insurance license by a preponderance of the evidence. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Respondent bears the burden to establish affirmative defenses and factors in mitigation of the penalty by the same evidentiary standard.

A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

The Department established that Respondent submitted at least seven fraudulent applications for Humana Medicare Supplement policies. The Department’s conversation with Ms. Hernandez provided ample evidence to prove the allegation. The Department has thereby established cause to discipline Respondent’s insurance producer’s license under A.R.S. § 20-463(A)(1)(a).

Further, the Department established cause to discipline Respondent’s insurance producer’s license under A.R.S. § 20-295(A)(2), as Respondent failed to properly and completely respond to the Subpoena issued by the Department.

Finally, Respondent failed to inform the Department of his change of addresses in a timely manner. Therefore, the Department has thereby established cause to discipline Respondent’s insurance producer’s license under A.R.S. § 20-286(C)(1) and

With respect to the appropriate penalty, the Tribunal finds Respondent’s fraud to be egregious and repetitive. Respondent’s only attempt to explain his actions came in the form of his email to the Department on October 9, 2019, where he stated, “I work over the phone and can only go off of what is told to me by a customer...” Based upon the Department’s conversation with Ms. Hernandez, this simply is incorrect. There would be zero reason for Ms. Hernandez to claim she resided in Michigan. Although it appears that there was only one instance where Respondent engaged in this conduct for a resident in Arizona, he nonetheless repeated this practice at least six more times. Therefore, under the circumstances, revocation of Respondent’s license is appropriate.

RECOMMENDED DECISION

Based on the foregoing, on the effective date of the final order in this matter, it is ordered that Respondent Ryan Stocker’s’ license National Producer Number 17910213 shall be revoked.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification.

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-137160-45720000Done this day, February 1, 2021.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted electronically to:

Christina Corieri, Interim Director

Arizona Department of Insurance -54864001

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-137160-45720000