ALJDEC - Licensing

23A-096-INS · Department of Insurance and Financial Institutions - Insurance · 2024-03-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of:

HERNANDEZ CALERO, NUMAR

Petitioner.

No. 23A-096-INS

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 14, 2024

APPEARANCES: Petitioner Numar Hernandez Calero (Petitioner) did not appear. Assistant Attorney General Zachary Howard represented the Department of Insurance and Financial Institutions - Insurance (Department).

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

EXHIBITS ADMITTED INTO EVIDENCE: Department’s Exhibits 1 through 6.

_____________________________________________________________________

FINDINGS OF FACT

1. On or about February 15, 2022, the State of New York routinely denied Petitioner’s application for an insurance license, because Petitioner failed to respond. See Department’s Exhibit 3.

2. On or about December 8, 2023, Petitioner submitted a renewal application for an Arizona non-resident insurance producer license through the National Insurance Producer Registry (hereinafter “Application”).

3. Petitioner answered “No” to the following question on the Background Questions section of the Application:

Have you been named or involved as a party in an administrative proceeding, including a FINRA sanction or arbitration proceeding regarding any professional or occupational license or registration, which has not been previously reported to this insurance department? "Involved" means having a license censured, suspended, revoked, canceled, terminated; or, being assessed a fine, placed on probation, sanctioned or surrendering a license to resolve an administrative action. “Involved” also means being named as a party to an administrative or arbitration proceeding, which is related to a professional or occupational license, or registration. “Involved” also means having a license, or registration, application denied or the act of withdrawing an application to avoid a denial. INCLUDE any business so named because of your actions in your capacity as an owner, partner, officer or director, or member or manager of a Limited Liability Company. You may exclude terminations due solely to noncompliance with continuing education requirements or failure to pay a renewal fee. If you answer yes, you must attach to this application: a) a written statement identifying the type of license and explaining the circumstances of each incident, b) a copy of the Notice of Hearing or other document that states the charges and allegations, and c) a copy of the official document which demonstrates the resolution of the charges or any final judgment.

4. On December 11, 2023, the Department notified Petitioner by e-mail that she submitted an incorrect response to question 2 of the Background Questions section of the Application. The Department did not notify Petitioner through the e-mail of the specific information that was obtained from another state’s insurance department. The December 11, 2024 notice provided, in relevant part, as follows:

The Arizona Department of Insurance and Financial Institutions (DIFI) (the department) recently received your application for a non-resident license through the National Insurance Producer Registry (NIPR). In the “Background Questions” section of the application, question 2 asks, “Have you or any business in which you are an owner, partner, officer or director, or member or manager of a limited liability company, ever been involved in an administrative proceeding or occupational license, or registration?” Your answer was, “No”. DIFI has received evidence from another state’s insurance department that this response is not correct. Based on the possible failure to disclose, DIFI may initiate an administrative action against you for failing to fully disclose information on the application. To complete the processing of your application you have the following options:

Withdraw the incorrectly filed application: By sending an email to [email redacted] requesting the incorrectly submitted application be withdrawn. After the incorrect application has been withdrawn, you may resubmit a NEW application and fee with the correct response to question 2 of the “Background Questions”.

Proceed with the current application: You must request that DIFI continue with your current application. You must advise DIFI of which option you have decided to proceed with, no later than 14 days from the date of this letter, by sending an email to [email redacted]. If the DIFI does not receive a response from you within 14 days of our receipt of your application, DIFI will proceed with the review of the application 14 days from the date of the deficiency pursuant to A.A.C. R20-6-708. You may contact the DIFI at [email redacted] or (602) 364-4457 if you have any questions or concern.

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5. On December 11, 2023, Petitioner responded to the notification. Petitioner explained that she was denied a license in New York due to lack of replying. Petitioner further stated that the reason for the lack of response was improper contact information. However, Petitioner stated that she was unaware of any “administrative actions.”

6. On December 12, 2023, the Department notified Petitioner that the Application was denied pursuant to Arizona Revised Statutes (A.R.S.) §§ 20-295 A. (1), (3) and (9). The December 12, 2023 notice provided, in relevant part as follows:

Pursuant to Arizona Revised Statutes §§ 20-295 A. (1), (3) and (9) without limitation, your application for an insurance license is hereby denied.

20-295 A 1. Providing incorrect, misleading, incomplete or materially untrue information in the license application.

20-295 A 3. Obtaining or attempting to obtain a license through misrepresentation or fraud.

20-295 A 9. Having an insurance producer license, or its equivalent, denied, suspended or revoked in any state, province, district or territory.

7. On January 31, 2024, the Department issued a Notice of Hearing setting the Department’s denial for hearing on February 14, 2024. The Notice of Hearing provided that the issue set for determination was, “whether grounds exist to affirm the intent to deny Petitioner’s renewal application for an Arizona insurance producer license.”

8. A hearing was conducted on March 5, 2024.

9. At hearing, the Department presented the testimony of the Department’s Licensing Supervisor, Aqueelah Curie.

CONCLUSIONS OF LAW

Petitioner bears the burden of persuasion. See Ariz. Rev. Stat. § 41-1092.07(G)(1).

The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

The evidence presented at hearing shows that Background Question 2 of the Application inquires whether Petitioner was involved in an administrative proceeding. However, the exact meaning of an “administrative proceeding” as stated in Background Question 2 is unclear. To the extent that an administrative proceeding means a disputed matter or appeal, there was no evidence presented to establish that Petitioner was named in or a party to an administrative proceeding. Therefore, there are no grounds to deny the Application under Arizona Revised Statutes § 20-295(A)(1), nor Arizona Revised Statutes § 20-295(A)(3).

However, the Department’s Director may deny an application for an insurance producer’s license if the applicant was denied an application for an insurance producer’s license in another state. See Arizona Revised Statutes § 20-295(A)(9).

It is undisputed that Petitioner’s application for an insurance producer’s license in New York was denied. Therefore, the Director has grounds to deny the Application pursuant to Arizona Revised Statutes § 20-295(A)(9).

Therefore, Petitioner’s appeal should be dismissed.

ORDER

IT IS ORDERED that Numar Hernandez Calero’s appeal is dismissed.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

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 forty (40) days from the date of that certification.

Done this day, March 5, 2024.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Barbara D. Richardson,

Department of Insurance and Financial Institutions - Insurance

Zachary Howard, Esq.

[email redacted]

Numar Hernandez Calero

[email redacted]

By: OAH Staff