ALJDEC decisions subject to certification as final

21A-087-INS · Department of Insurance and Financial Institutions - Insurance · 2022-02-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of:

Eric James Snyder

and

Offices of Eric J. Snyder, LLC

Petitioners.

No. 21A-087-INS

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 4, 2022 and January 13, 2022.

APPEARANCES: Eric Snyder represented himself. Assistant Attorney General Holly Wan represented the Arizona Department of Insurance and Financial Institutions, Insurance Licensing.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

_____________________________________________________________________

FINDINGS OF FACT

CURRENT APPLICATION

1. On October 30, 2021, Eric James Snyder (“Snyder”) submitted an application (“License Application”) to the Department for an Arizona Resident insurance adjuster license through the National Insurance Producer Registry (“NIPR”).

2. On the License Application, Snyder answered “Yes” to the following question:

(1A) Have you ever been convicted of a misdemeanor, had a judgment withheld or deferred, or are you currently charged with committing a misdemeanor?

3. Snyder provided written statements and identified the following two misdemeanor convictions:

a. CR2019-005425-001, Unsworn Falsification

b. CR2021-007059-001, Criminal Possession of Forgery Device

4. On October 30, 2021, Snyder also submitted a license application for the Business (“Business Application”). Snyder listed himself as the “owner/adjuster” on the Business Application.

5. On the Business Application, Snyder answered “Yes” to the following question:

(1A) Has the business entity or any owner, partner, officer or director of the business entity, or member or manager of a limited liability company, ever been convicted of a misdemeanor, had a judgment withheld or deferred or is the business entity or any owner, partner, officer or director of the business entity, or member or manager currently charged with, committing a misdemeanor?

6. On November 5, 2021, the Department denied Snyder’s application for an Arizona Resident adjuster license and the application for the Business license. The bases for the Department’s denial were the following:

(a) A.R.S. § 20-295(A)(1), providing incorrect, misleading, incomplete or materially untrue information in the license application;

(b) A.R.S. § 20-295(A)(2) violation of any provision of Title 20, or any rule, subpoena or order of the Director; and

7. On November 5, 2021, Snyder timely appealed the Department’s denial. Regarding the matter, Snyder argued that the allegation of false or fraudulent documentation in the 2017 “application process” was “not correct nor true...” Snyder further noted:

[this] was proven in court ... after 2+ years in court to keep my current AZ adjuster license eligible for renewal and to keep me eligible for a new business adjuster license for my LLC in Arizona. All felony and fraud charges were dropped and/or dismissed.

PREVIOUS APPLICATION AND BACKGROUND

8. On November 6, 2017, Snyder applied for an Arizona non-resident adjuster license through NIPR.

9. At that time, Snyder was licensed in Texas by the Texas Department of Insurance as an adjuster. Snyder worked for United Services Automobile Association (“USAA”), which had its own licensing department that handled any and all of the licensures Snyder held under the USAA employment.

10. Based on the NIPR application, on November 6, 2017, the Department issued to Snyder an Arizona Non-resident adjuster license through reciprocity. See generally, A.R.S. § 20-321.02. That 2017 license was set to expire on 10/31/2021.

11. Due to his existing Texas licensure, Snyder’s Arizona non-resident license was limited to the same lines of authority as his resident Texas license, pursuant to A.R.S § 20-287(C)(2).

12. On November 6, 2017, Snyder began a series of email communications with the Department. Essentially Snyder wanted to have the issued Arizona Non-resident license simply changed to an Arizona Resident license, advancing the argument that he had applied for a Resident license and that NIPR had made a mistake with regard to the application.

13. On November 7, 2017, Snyder inquired of the Department regarding Arizona non-resident licenses being restricted to certain lines of authority.

14. The Department responded to Snyder indicating that to hold an unrestricted, Non-resident adjuster license in Arizona, a person had to have taken and passed the required Arizona exam. See A.R.S. § 20-321.01(C)(3).

15. On November 7, 2017, in another email to the Department, Snyder stated that he did take the Arizona exam and he also submitted an Examination Score Report (“Report”) that indicated a 73% score and a “Pass” grade. The following information appears at the bottom of the Report:

Re-examination instructions: Candidates wishing to retake this examination must re-register and remit another full examination fee. Exam registration information may be found in the Licensing Information Bulletin.

16. On November 7, 2017, the Department reviewed the submitted test result page and compared the submitted test results with records obtained directly from the test provider, Prometric. Prometric provided examination information documenting that the total percentage obtained on Snyder’s October 6, 2017 examination was 68%. Additionally, Prometric noted that, if he had passed the examination, the information at the bottom of the Report would have directed him regarding completing the licensing process.

17. Based on its review of the documentation, the Department determined that Snyder had forged and altered the Report he submitted on November 7, 2017 purportedly showing he had passed the Arizona exam.

18. Based on the forged test result page, the Department referred the matter to its Fraud Unit for further investigation.

______________________

19. Regarding the 2017 NIPR application, Snyder maintained that he had applied for an (Arizona) Resident license and that the NIPR system erroneously “selected” a Non-resident license application.

20. After being advised by the Department that he would need to submit another application and pay the application fees to obtain an Arizona Resident license, Snyder pushed the Department to change the licensure so that he would not have to pay additional fees; Snyder queried whether the fees could simply be transferable “[s]ince this was just a mistake done yesterday?”

21. In December of 2017, Snyder pursued obtaining NIPR verification of an NIPR error for consideration by the Department regarding the licensure after again being advised by the Department that it could not “convert” the license and that Snyder would need to submit a new Resident application.

22. In a December 6, 2017 comment back to NIPR (who had advised Snyder that he had paid for a non-resident license) Snyder maintained that he had not “paid” for a non-resident license but had paid for a Resident license, adding the following comment:

Your system did not allow me to purchase it[.] it was going to be corrected by a manager but they needed the release letter from Texas to correct the error. I now provided NIPR with [t]he letter for management to correct the letter and the system error that was confirmed by a previous manager only days and weeks ago.

CRIMINAL CONVICTION

23. On July 9, 2019, following investigation, Snyder was indicted on Count 1: Fraudulent Schemes and Practices in Maricopa County Superior Court, Case No. CR2019-005425-001. Snyder was also indicted on Counts 2 and 3: Forgery. The forgery charges were not directly related to the forged test results; however, they involved forged insurance claims Snyder submitted to Geico Insurance.

24. On August 5, 2021, Snyder signed a plea agreement. Snyder agreed to Count 1 (amended): Unsworn Falsification, a class 2 misdemeanor, in violation of A.R.S. § 13-2704. Counts 2 and 3 were dismissed. The factual basis for Count 1 of the plea agreement stated, in pertinent part:

On November 7, 2017, [Snyder] knowingly made a statement that he believed to be false and material to the Stephen Fromholtz, Assistant Director at the Arizona Department of Insurance, regarding his independent adjuster’s license.

25. The plea agreement also stipulated that Snyder pay restitution to Geico Insurance in the amount of $2,577.21, and to the Department, in the amount of $1,687.50 for investigative costs.

26. On October 8, 2021, the Court accepted the plea agreement and entered a guilty judgment against Snyder for Count 1 (as amended): Unsworn Falsification [on application], a class 2 misdemeanor, in violation of A.R.S. § 13-2704.

27. Snyder was ordered to unsupervised probation for a term of 12 months beginning October 7, 2021, and restitution in the total amount of $4,264.71.

_____________________

28. Although Snyder acknowledged that he falsified the Report he submitted to the Department on November 7, 2017, Snyder’s basic position is that the current denial is not proper because the submittal of the falsified Report in November of 2017 was not during an “application process” for the reason that the NIPR application process was already over and the Department had already issued the November 2017 license. While there were multiple other explanations and arguments Snyder offered in regard to the history of this matter, as explanations for the entire background, the issue for Snyder always circled back to his position that he had not violated the statutes because the false report submittal was not during an “application process.” An additional argument Snyder advanced was that the falsified submittal was a part of a “private” communication with Ms. Fromholtz and not a part of an application process.

29. Finally, Snyder posited that he had not been aware that the 2017 surrender of his then-existing Texas licensure essentially negated the Arizona Non-resident licensure, but that during the past 4 years the Department had not received any complaints about his work and practice.

30. On October 29, 2021, Snyder took the Arizona examination and received a passing score of 72%.

31. The Department’s position is that the documented record of Snyder’s proven lies and deception with regard to the licensure process both in 2017 and in this appeal in 2021, along with his continued efforts to minimize the issues associated with falsification and obfuscation, demonstrate that he likely cannot be regulated in a manner that would protect the public. The Department argued that they have demonstrated the statutory violations of A.R.S. § 20-295(A)(1), providing incorrect, misleading, incomplete or materially untrue information in the license application; A.R.S. § 20-295(A)(2), violation of any provision of Title 20, or any rule, subpoena or order of the Director; and A.R.S. § 20-295(A)(3), obtaining or attempting to obtain a license through misrepresentation or fraud.

CONCLUSIONS OF LAW

1 The Director has jurisdiction over this matter. The Department was created and enabled to administer certain laws of the State of Arizona by protecting the public interest through licensure and regulation of the insurance producer profession in this state. A.R.S. § 20-142 and A.R.S. §§ 20-281 et seq. The Department’s Director may deny an applicant’s request for a license in multiple circumstances set forth within A.R.S. § 20-295(A). Thus, the Department’s Director has the statutory authority to deny Snyder’s request for a license.

2. The Office of Administrative Hearings has subject matter and personal jurisdiction over the named parties in this Notice of Hearing, under A.R.S. § 20-161 and A.R.S. §§ 41-1092 et seq.

3. Snyder bears the burden of persuasion in this matter to demonstrate that the Department’s determination was improper or inappropriate pursuant to state law and rules. A.R.S. § 41-1092.07(G)(1).

4. The standard of proof on all issues is that of a preponderance of the evidence. A.A.C. R2-19-119(A). A preponderance of the evidence is “[e]vidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (6th ed. 1990).

5. In this case, Snyder’s actions in providing incorrect, misleading, incomplete and materially untrue information in the licensure regulatory process in 2017 and in 2021, as well as attempting to obtain licensure through misrepresentation and fraud are grounds for the Director to deny licensure at this time pursuant to Arizona law. The decision to deny is within the discretion of the Director.

6. In this case, the Administrative Law Judge concludes that grounds exist for the Director to deny Petitioner’s application for an insurance license pursuant to A.R.S. § 20-295(A)(1), (A)(2), and (A)(3).

RECOMMENDED ORDER

IT IS ORDERED the Department’s denial of Petitioner Eric J. Snyder’s Arizona Resident insurance adjuster license and the Department’s denial of the Offices of Eric J. Snyder, LLC’s Arizona business entity license is upheld and Petitioners’ appeal is dismissed.

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 after the date of that certification.

Done this day, February 8, 2022.

/s/ Kay Abramsohn

Administrative Law Judge

Transmitted electronically to:

Evan G. Daniels,

Department of Insurance and Financial Institutions - Insurance