ALJDEC

99A-019-INS · Department of Insurance · 1999-07-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 17, 1999

APPEARANCES: Applicant appeared and was represented by attorney Jill K. Osborne; the State was represented by Shelby Cuevas, Assistant Attorney General.

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Applicant Candace Anna Gill brings this appealable agency action protesting the Arizona Department of Insurance’s denial of her application for life, disability, and variable contracts insurance agent licenses. The Department based the denial on Applicant’s felony conviction. 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 granting licensure. FINDINGS OF FACT 1. In January 1999, Applicant submitted an application for an insurance agent’s license for life, disability, and variable contracts. (Exhibit 1.) On the application, Applicant disclosed that she had been convicted of a felony in Florida in 1985, when Applicant was known as Charles William Gill. Sometime in 1997, Charles William Gill changed his sex and changed his identity to Candace Anna Gill. There is no evidence that Applicant did this to avoid or hide the past. 2. In 1985 in Lee County, Florida, Charles Gill was tried and convicted of solicitation to commit murder in the first degree. The circumstances, briefly, were that Applicant was forty years old and recently divorced. He was having trouble with his former wife regarding visitation of his daughter. Applicant solicited an undercover police officer to murder his former wife. Applicant received a seven-year prison sentence. He served just over two years of that sentence, and half of that time he was on work release because he was a model prisoner. Applicant got a paralegal certificate during that time also. He was released from prison sometime in late 1987. The record does not show whether Applicant was released on parole or whether the sentence was reduced. 3. Before the conviction, Applicant was a stockbroker and securities agent with a large firm. Upon the conviction, Applicant was automatically disqualified from selling securities by the NASD for ten years. After prison, Applicant became a golf professional and golf instructor until July 1996, when Applicant petitioned the NASD for reinstatement. Applicant was reinstated and worked in New Mexico as an independent securities agent for a Houston, Texas firm called IMS Securities, Inc. Applicant was licensed as an insurance agent in New Mexico from 1996 to 1999 without any regulatory action. (Letter of Clearance, Exhibits 1b and C.) 4. Applicant presented two character witnesses, who testified by telephone. The first was Mark Levy, a securities wholesaler who met Applicant in 1995 and has observed Applicant interact with clients. Mr. Levy has known about Applicant’s conviction since shortly after they met because Applicant told him about it. Mr. Levy described Applicant’s presentation to potential clients about various securities products as “balanced and fair,” called Applicant's conduct “exemplary,” and stated that Applicant was one of the best representatives that he has seen. Mr. Levy’s testimony is given some weight by this Administrative Law Judge, but a credibility determination is limited by the fact that he testified telephonically. 5. The second witness called by Applicant was Jackie Wadsworth, CEO of IMS Securities, Inc. in Houston, Texas. IMS is a securities firm that manages 75 brokers. Ms. Wadsworth met with Applicant in 1996 when Applicant applied for a job with IMS. Applicant informed Ms. Wadsworth about his background and they discussed everything in it, including the felony conviction and a 1982 letter of admonishment from the NYSE. Ms. Wadsworth has Applicant under “special supervision,” which means that she must approve all securities sales, keep continuous telephone contact with Applicant, and make 2-3 personal visits to Applicant per year. This supervisory power extends only to the securities aspect of Applicant’s business, it would not necessarily extend to any insurance aspect. However, variable contracts are dual-natured and would fall under the securities supervision. Ms. Wadsworth testified that she has never received a complaint about Applicant and is not aware of any unprofessional conduct by Applicant. This is true even though Ms. Wadsworth sent requests for feedback to some of Applicant’s clients, as was required by New Mexico. This Administrative Law Judge gives substantial weight to Ms. Wadsworth’s testimony, even though it too is limited by the telephonic appearance. 6. Finally, Applicant submitted several letters into evidence that are relevant to Applicant’s character. Exhibit A, from the PGA, appears to be a form letter and its writer was not available for questioning. Therefore, it is given no weight. Exhibit D is a letter from the Chrysalis Shelter for Victims of Domestic Violence in Scottsdale, where Applicant volunteers. It describes Applicant’s volunteer work at the shelter. This letter is given some weight as to Applicant’s character, even though its writer was not available for questioning. CONCLUSIONS OF LAW 1. Applicant must show that she 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)(6)-- conviction of “a felony involving moral turpitude.” 2. There is no question that Applicant has committed a crime that falls within subsection (B)(6) of the statute. But that does not automatically disqualify Applicant. The Arizona Legislature has left licensing decisions to the Director’s discretion. In Applicant’s case, the crime for which she was convicted is very serious; however, there is a great deal of mitigation as well. 3. The serious nature of the conviction should give the Director pause. It was a contemptuous and despicable act. On the other hand, it occurred 14 years ago. Since then, Applicant has gained the trust of several people and regained some professional standing. Applicant has worked for Ms. Wadsworth for a significant period of time without complaint and with Ms. Wadsworth’s support. Applicant has disclosed the conviction to people that are important to her professional life. The evidence does not show that Applicant is trying to hide her past, but has dealt with it openly. Applicant has practiced for a significant period of time under the NASD and New Mexico authorities without incident. Taking all the evidence into account, this Administrative Law Judge recommends that the Director grant Applicant the requested license. RECOMMENDED ORDER Based on the findings and conclusions above, IT IS RECOMMENDED that the Director of the Arizona Department of Insurance grant Candace Anna Gill a life, disability, and variable contracts insurance agent license.

Done this 26th day of July 1999.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Eric A. Bryant Administrative Law Judge

Original mailed this ___ day of July 1999, to:

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

By ___________________________ -----------------------

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