TDI Enforcement Teamwork and Results

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					December 2009 Volume 6, Number 5                                                                     A publication of the Texas Department of Insurance




TDI Enforcement: Teamwork and Results
THE TEXAS DEPARTMENT OF INSURANCE,
Enforcement Division investigates allegations                                      TDI Enforcement
and brings disciplinary actions for illegal activi­                                At-A-Glance
ties by insurance agents, companies, HMOs,                                         Agency Mission: To
and other entities (both licensed and unli­                                        protect insurance con­
censed) engaged in the business of insurance.                                      sumers by regulating
TDI also looks into possible wrongdoing by                                         the industry fairly and
licensees of the State Fire Marshal’s office,                                      diligently; to promote
engineers qualified to certify structures for                                      the public welfare by
windstorm insurance coverage, amusement                                            regulating insurance
                                                                                   rates to prohibit exces­
ride operators, and workers’ compensation sys­
                                                                                   sive, inadequate, or
tem participants. The sources of these allega­                                     unfairly discriminatory Attorney David Muckerheide (left) and Karen
tions include individual consumer complaints                                                                  Gilchrist prepare for a recent disciplinary hearing.
                                                                                   rates.
and referrals from other agency program areas.
                                                                                   Enforcement Results: A team of 68 attorneys, investigators and
TDI also brings actions against insurance                                          support staff closed 1,200 cases in fiscal year 2009, resulting in more
companies for excessive rates, and participates                                    than $26 million in forfeitures, penalties, assessments and restitution.
in hearings to set title insurance rates. The
relief sought in these cases may include rate
reductions and refunds of excessive premiums                                     closed in fiscal year 2009; as a result, TDI col­
paid. The agency also refers cases to the Fraud                                  lected a little more than $17.7 million in resti­
Unit for criminal prosecution and can assist                                     tution and assessed more than $8.5 million in
prosecutors in criminal cases. Enforcement                                       administrative penalties, fines and forfeitures.
works with the Office of the Attorney General
(OAG) on appeals of disciplinary actions and                                     Every enforcement action taken by the agency
on enforcement actions conducted by the                                          is the result of collaborative work by teams of
OAG’s Consumer Protection Division.                                              enforcement staff and also of cooperation
                                                                                 between the Enforcement Division and the
TDI’s routine enforcement caseload can                                           rest of the agency. Five teams handle different
include up to 2,100 active cases at any given                                    types of enforcement cases, under the leader­
time. The cases are worked by a staff of 68                                      ship of an experienced attorney: Licensing;
employees including attorneys, investigators                                     Rate, Title, Financial; Life, Health, HMO;
and support staff, under the direction of                                        Property & Casualty, State Fire Marshal; and
Associate Commissioner Catherine Reyer.                                          Division of Workers’ Compensation.                        Continued on page 2
More than 1,200 enforcement cases were

Forfeitures, Assessments and
Restitution Ordered by TDI
FY 2005 - FY 2009
                                                                                              Enforcement of Insurance Agent
                                                                                              Continuing Education Requirements . . . . . . . . 4
                                                                                              TDI Clarifies Use of Agent of Record Letter . . 5
                                                                                              Hurricane Ike Mediation Pilot Program . . . . . . 6
                                                   $51,050,935



                                                                   $26,166,080
   $30,452,285



                   $25,393,582



                                   $34,647,832




                                                                                              State Fire Marshal’s Office Receives
                                                                                              Grant Award of $566,500 . . . . . . . . . . . . . . . . . 7
                                                                                              Fraud Case Dispositions. . . . . . . . . . . . . . . . . . . 7
FY ’05           FY ’06          FY ’07          FY ’08          FY ’09
                      Disciplinary Actions . . . . . . . . . . . . . . . . . . . . . . . . 9
TDI Enforcement:
Teamwork and Results
continued from page 1
                                                                             Contact TDInSight at:
                                                                                  Texas Department of Insurance
                         “We are very fortunate to have such talented             TDInSight /MC-113-1A
                         folks in our Division,” Reyer said. “We gen­              .
                                                                                  P O.Box 149104
                         uinely enjoy the work we do and believe in the           Austin, TX 78714-9104
                         role of Enforcement as it supports the agency            512 463-6425
                         mission.”                                                512 463-6461 fax
                         “TDI has a strictly defined role to carry out as    TDInSight is published electronically to the agency
                         regulator of the Texas insurance industry and       website every two months. The newsletter can be
                         we take that job very seriously while maintain­     viewed and downloaded at:
     Catherine Reyer,    ing a positive, collegial atmosphere in the              http://www.tdi.state.tx.us/pubs/
     TDI Enforcement     workplace,” she said.                                    newsletters/tdinsight.html
              Division
                         Final enforcement actions taken by the agency       To receive notice when the latest TDInSight has been
   We would like         can include cease and desist orders, insurance      posted, readers can subscribe to TDI eNews Updates.
      the ultimate       agent license application denials, license revo­    The updates are free, opt-in email newsletters avail­
                                                                             able for viewing online or by subscription. More infor­
      result of our      cations and suspensions, monitored agent pro­
                                                                             mation about TDI eNews Updates is available at:
     enforcement         bations, administrative penalties, restitution to
 efforts to be the       harmed consumers, or any combination of                  www.tdi.state.tx.us/alert/emailnews.html
     return of any       these remedies. Reyer said only a fraction of       Direct questions or suggestions about content of the
  money owed to          complaints and allegations received by the          TDInSight via e-mail to PIO@tdi.state.tx.us or tele­
  consumers and          agency result in formal enforcement action.         phone to (512) 463-6425. Or write:
       a change in       “Our relationship with the rest of the agency            TDInSight , MC 113-1A
  future behavior        is crucial,” Reyer said. “We rely on the refer­          P.O. Box 149104
      by offending       ring programs to be our eyes and ears for                Austin, TX 78714-9104
  individuals and        what’s really going on in the market. We count
       companies.        on them to educate us as they share their expe­
                                                                             The staff that prepares this newsletter has no
                                                                             role in proposing, drafting, editing, or approving
                         rience and expertise in their respective subject    TDI rules or policies or interpreting statutes.
                         areas. And as cases demand it, we call them as      TDInSight should not be construed to repre­
                         experts in depositions and hearings.                sent the policy, endorsement or opinion of the
                                                                             Commissioner of Insurance or the Texas Depart­
                         “The cases we receive vary from egregious vio­      ment of Insurance.
                         lations of the law to administrative mistakes in
                         billing practices. The final outcomes for these     By necessity, summaries of proposed and
                                                                             adopted rules cannot explain their full com­
                         cases also vary from significant fines to warn­
                                                                             plexity. Readers interested in complete infor­
                         ing letters.                                        mation about administrative rules should consult
                         Reyer, a former staff attorney with the agency,     the versions published in the Texas Register.
                         has led the Enforcement Division since 2003.        To the best of the staff’s ability, information pre­
                         She has overseen several changes in the             sented in this newsletter is correct as of the publi­
                         agency’s enforcement responsibilities and           cation date, but scheduled dates and proposed
                         organizational structure. In 2006, Enforce­         rules and amendments may change as the adop­
                         ment was made a separate program at TDI             tion process goes forward.
                         and, in 2008, the enforcement function of the
                         Division of Workers’ Compensation was
                         placed within the agency’s overall Enforce­
                         ment Division.




                                                      Continued on page 3




                         2                  November/December 2009                                            www.tdi.state.tx.us
TDI Enforcement:
Teamwork and Results continued from page 2
Reyer said major enforcement cases on the
horizon for TDI for 2009-2010 involve claims            Homeowners Rate Filings

handling from Hurricane Ike, quality of care               Undergo Scrutiny

by workers’ compensation healthcare                 One of TDI’s core regulatory goals is to pro­
providers, and third-party automobile claims        mote the public welfare by regulating insur­
handling issues.                                    ance rates to prohibit excessive, inadequate,
                                                    or unfairly discriminatory rates.
Recent Enforcement Actions by TDI
•	 MEGA Life and Health Insurance Company           Insurance companies must file all rates with
   was fined $500,000by Hurricane Ike. comply
        Flooding caused for failure to              TDI for review. In any given year, TDI actuaries
   with requirements for prompt payment of          review several hundred rate filings for home­
                                                    owners insurance alone. Sometimes not all
   health insurance claims and agreed to future     the information that supports a rate change is
   compliance to ensure that claims are paid        filed and TDI actuaries must request addition­
   timely in accordance with the statute.           al information. If the filing is determined to be
•	 United Healthcare Insurance Company and          unreasonable, then the Department takes
                                                    action and puts a company on notice that the
  United Healthcare of Texas agreed to pay a        filed rates are unjustified and may be disap­
  $3 million penalty, offset by restitution to      proved. Many times, companies adjust their
  providers, for failure to fully comply with       rate filing to avoid a regulatory proceeding.
  Texas utilization review requirements, adver­
  tising requirements, and claims payment           A comparison of initial filed rates and the
                                                    final actual rates for the top companies writ­
  requirements.                                     ing homeowners shows that, in the 2006 to
•	 National Western Insurance Company               2008 timeframe, TDI's rate review process
   agreed to pay a $75,000 penalty for failing      resulted in rate reductions that ultimately led
   to properly send out annuity replacement         to consumer savings of $289,400,000.
                                                    These savings resulted from the efforts of
   notices and for failure to properly calculate    both TDI’s Enforcement and Actuarial teams.
   surrender values on certain approved annu­       In a separate action, a recent Commissioner
   ities.                                           Order directed a top homeowners insurance
•	 Revocation orders were obtained against          company to return $310 million in over­
                                                    charged premiums to its policyholders.
   William A. Osborne, Anthony Osborne and
   Casey VanLoon, who were operating a busi­        More detail about TDI's homeowners rate
   ness known as “Senior Estate Services.”          regulation, and a recent history of rate filings
   Osborne et al and several unlicensed individ­    by the top writers of homeowners insurance,
   uals were selling and reviewing “Living          can be found on the TDI website: www.tdi.
                                                    state.tx.us/home/homerates09.html.
   Trusts,” which got them into the homes of
   seniors and access to their financial assets.
•	 Former Agent Darryl Golter confessed that
   on the night Hurricane Ike made landfall, he
   had failed to secure wind and flood coverage
   for approximately 75 insurance clients.
   Golter consented to permanent revocation
   of his insurance licenses.




www.tdi.state.tx.us                                November/December 2009	                              3
Overview: Enforcement of Insurance Agent
Continuing Education Requirements
Requirements for Most Licensees                    173,000 licensed adjusters
In general, most licensees holding any combi­      and agents in Texas complete
nation of licenses for Life Accident Health,
Property Casualty, Life, Personal Lines,
                                                   2,535,000 continuing educa­
Managing General Agent, Life and Health            tion hours each year.
Counselors, and Adjusters of all types includ­
ing Public Adjusters, must receive credit for at   Alternatives for Continuing Education Credit
least 30 hours of continuing education (CE) in     Before consulting a general course list,
each two-year renewal cycle. Courses must be       licensees may wish to inquire if courses are
taken from the approved course lists refer­        available from their company or from a profes­
enced on TDI’s website, or be an otherwise         sional association to which they belong.
certified course or a qualifying course. Only 15   Passing a part of many professional designa­
of the hours may be self study, and 2 hours        tion programs is a way to earn credit. A profes­
must be in ethics/consumer protection.             sional designation program is defined by TDI
Holders of limited lines and county mutual         rules as: (a) nationally recognized in the insur­
licenses must complete 10 hours every two-         ance industry; and (b) issued by an entity that
year renewal cycle with 2 hours of ethics. Only    maintains a not-for-profit status and has been
5 hours may be self study. It is the licensee's    in existence for at least five years.
responsibility to retain certificates of course
                                                   Up to four hours of continuing education
completion in case of audit.
                                                   credit can be earned by an agent who is an
Licensees are required to meet continuing edu­     active member of a state or national insurance
cation requirements, whether or not the license    association. For information about how the
is in use.                                         credit can be earned, you can review Chapter
                                                   4004.0535 of the Texas Insurance Code and
Fines for Failure to Complete Required CE
                                                   §19.1011 and new §19.1020 of the Texas
There is no continuing education “grace peri­
                                                   Administrative Code. The rule adopting the
od”. Once the expiration date has passed, a
                                                   new provisions can be viewed at: www.tdi.
violation exists. CE cannot be made up after
                                                   state.tx.us/rules/2005/1229C-059.html.
the expiration date. The fine for not complet­
ing required continuing education is $50 per       “Qualifying” courses, not certified by TDI,
deficient hour. Licensees who fail to complete     may also be used for credit. Qualifying courses
continuing education requirements may call         are insurance courses that are: (a) offered for
(512) 322-3503 for a payment voucher to send       credit by accredited colleges, universities, or
with a payment to clear the violation.             law schools; or (b) part of a national designa­
                                                   tion certification program; or (c) approved for
TDI currently performs systematic audits of
                                                   classroom, classroom equivalent, or participa­
licensed agents and adjusters to determine
                                                   tory credit by the continuing education
compliance with continuing education require­
                                                   approval authority of a state bar association or
ments. Audits have revealed a failure rate for
                                                   state board of public accountancy; or (d) certi­
completion of all required continuing educa­
                                                   fied or approved for continuing education
tion of approximately 30 percent. These audits
                                                   credit under the guidelines of the Federal Crop
generate annual fines of approximately
                                                   Insurance Corporation.
$100,000 to $200,000 per year. The
Department’s new continuing education track­       New Electronic Tracking of
ing system will support a goal of 100 percent      Continuing Education
compliance with continuing education require­      TDI has implemented a new Continuing
ments. The new system will require CE              Education Compliance contract with contrac­
providers to submit rosters of completion and      tors Pearson Vue and Sircon. Beginning
will track each licensee’s individual compliance   February 17, 2009, registered CE providers
in an online CE database available for viewing     began submitting electronic rosters for candi­
at www.Sircon.com.                                 dates who have completed Texas approved CE
                                                                                Continued on page 5




4                 November/December 2009                                          www.tdi.state.tx.us
TDI Clarifies Use of Agent of Record Letter

                               is
T whichbyagent has been designatedcommonly
   HE AGENT OF RECORD LETTER

lish
     used insurance carriers to clearly estab­
                                    to handle
                                                   al, a person becoming engaged to act as anoth­
                                                   er person’s agent of record must be appropri­
                                                   ately licensed as an agent.
marketing and servicing of a customer’s insur­
ance business in respect to that insurer.          Insurance carriers are also generally required
                                                   to use licensed agents when they market insur­
Except in a very few instances, the term “agent    ance products to customers under Insurance
of record” is not used in the Texas Insurance      Code Sections 4001.101, 4051.051, and
Code or rules adopted by the Department.           4054.051. A general exception to acting as an
The term has been used in the insurance            agent is acting on one’s own behalf, as detailed
industry, however, to clarify the agent-cus­       in Section 4001.003(1)(A)-(D). Persons are not
tomer relationship. The agent of record letter     prohibited from entering the marketplace and
also directs to whom the insurance company         attempting to purchase insurance directly.
will pay commissions.                              Companies and agents are not required by
                                                   statute to defer to this person or give them
The agent of record relationship may be specif­
                                                   special treatment. Rather, they likewise can
ically established by contract between the agent
                                                   choose to conduct business in the manner they
and the customer, as an identifier between the
                                                   have determined is best for them.
company and the agent, or by other means such
as a letter of designation signed by the appli­    Other license holders that can become
cant. The means of establishing the relationship   involved in advising customers with respect to
is not in the Insurance Code. An insurance         their insurance needs are life and health coun­
company normally has a number of appointed         selors and risk managers. These license types,
agents who have the ability to market insurance    however, are prohibited by Insurance Code
to the same client.                                Section 4052.055 and 28 Texas Administrative
                                                   Code Section 19.1318 from accepting dual
Many other facets of the insurance agent-cus­
                                                   compensation as both an agent and counselor
tomer relationship are regulated under the
                                                   or manager for the same service provided to
Texas Insurance Code, such as requirements in
                                                   the same client should the counselor or man­
Sections 4001.101, 4051.051, and 4054.051,
                                                   ager also hold an appropriate agent license.
among others, that a person acting as an agent
for a carrier be licensed as an agent. In gener­


Overview: Enforcement of Insurance Agent
Continuing Education Requirements
continued from page 4

courses in the Sircon Compliance Express sys­      given. This posting will show addresses, dates,
tem. Interested persons may visit the Sircon       and provider contact information. Compliance
Compliance Express system and register as          Express, a web-based service, is currently in
provider at the website: www.sircon.com.           use by hundreds of Continuing Education and
                                                   Pre-licensing Education providers in 15 other
This new automated CE compliance monitor­          states. The Department has contracted with
ing system will allow licensees, insurers, and     Pearson Vue and Sircon to make this service
the Department to monitor the status of all        available to Texas CE providers and licensees.
licensees’ compliance with Texas CE require­       Providers will be able to manage continuing
ments.                                             education processes electronically using the
As well as being able to enter CE hours earned     Compliance Express services.
by licensees into the tracking system, providers   Two important links for licensees and
will also enter new and revised courses on line.   providers:
There is also ability to perform other func­
tions, such as registering new providers.          Pearson Vue Landing page:
                                                   www.asisvcs.com/indhome.asp?CPCAT=CE4
Another service with a potential effect on a       4INS
provider’s class attendance is the providers’
ability to post information about actual course    Sircon Compliance Express:
offerings each time a classroom course is          www.sircon.com


www.tdi.state.tx.us                                November/December 2009                        5
Hurricane Ike Mediation Pilot Program

TDI is in the fourth month of helping con­          The Legislature introduced
sumers settle unresolved Hurricane Ike prop­        two bills during the 2009
erty claims with insurance companies partici­
pating in a free disaster mediation pilot pro­      legislative session to create
gram.                                               a mandatory mediation
                                                    program, but neither passed.
TDI implemented the Hurricane Ike Media­
tion Pilot Program on September 1 to help           TDI decided instead to
consumers and insurance companies resolve           conduct a voluntary
claims resulting from the September 13, 2008,       mediation pilot program.
storm. Of the eight mediation conferences
held as of December 1, seven have resulted in       Consumers are eligible for the pilot program if
settlement agreements with payments to poli­        they have a Hurricane Ike-related homeowner,
cyholders. Another 16 cases have been sched­        renter, industrial fire, or windstorm and hail
uled or are being scheduled.                        claim pending with AAA Texas, Allstate, or
                                                    Farmers. The claims must amount to more
“We are excited to be able to offer this pro­
                                                    than $1,000. The difference between the con­
gram to consumers as a way of assisting with
                                                    sumer’s desired settlement and the insurer’s
unresolved claims,” said Audrey Selden, senior
                                                    offer must be more than $500, but can be less
associate commissioner of TDI’s Consumer
                                                    if the parties agree.
Protection program.
                                                    The mediation process is free to consumers.
TDI began working with the Texas State
                                                    TDI selected Frisco-based Truce Dispute
Disaster Coalition – a group of industry and
                                                    Resolution Firm through a bid process to
government agency members – on a draft pro­
                                                    administer the program. TDI pays Truce an
posal to establish a disaster mediation program
                                                    administrative fee per mediated claim, and the
after Hurricane Ike struck Texas in 2008. TDI
                                                    insurance companies pay the mediators’ fees.
collected comments from the industry before
submitting the final proposal to the                Consumers can request mediation by complet­
Legislature. The Legislature introduced two         ing and submitting a mediation request form.
bills during the 2009 legislative session to cre­   The insurers have 21 days to resolve the claim
ate a mandatory mediation program, but nei­         before Truce selects a third-party mediator and
ther passed. TDI decided instead to conduct a       conducts the mediation conference. The con­
voluntary mediation pilot program.                  ferences are held in the towns affected by
                                                    Hurricane Ike and typically last a couple of
AAA Texas County Mutual Insurance
                                                    hours. Mediation does not prevent consumers
Company, Allstate Property and Casualty
                                                    from taking the matter to court or settling the
Insurance Company, and Texas Farmers
                                                    claim through another method.
Insurance Company are voluntarily participat­
ing in the pilot program. The companies             TDI will evaluate the mediation pilot program
mailed program information to all of their eli­     in 2010. More information about the program
gible policyholders in the Fall. TDI also dis­      can be found at www.tdi.state.tx.us/consumer
tributed a mediation flier to legislative offices   /storms/cpmhurrike.html.
and consumer advocacy groups; conducted a
direct mailing to eligible consumers; and dis­
cussed the program at outreach events.




6                  November/December 2009                                         www.tdi.state.tx.us
State Fire Marshal’s Office
Receives Grant Award of $566,500
T  HE STATE FIRE MARSHAL’S OFFICE (SFMO),
   a division of the Texas Department of
Insurance, was awarded $566,500 from the
                                                          The Have an Exit Strategy program will also
                                                          help universities meet the requirements of U.S.
                                                          House Bill 4137, the Higher Education
Federal Emergency Management Agency’s                     Campus Fire Safety Standards and Measures
(FEMA) Assistance to Firefighters, Fire                   Bill, as well as Texas Senate Bill 1138 which
Prevention and Safety Grant in September.                 requires student organizations at public and
Grant funds will be used to educate Texas                 private post secondary institutions to provide
university students about fire safety, escape             at least one risk management program per aca­
planning, and life saving. As part of this                demic year.
effort, the SFMO will expand its existing
                                                          The Texas program was developed after a
Have an Exit Strategy program to all public
                                                          study of the February 20, 2003 fire at “The
university campuses in the state.
                                                          Station” nightclub in West Warwick, Rhode
“The Have an Exit Strategy program encour­                Island, in which 100 patrons died. In 2004, the
ages people to identify two ways out of any               SFMO began random inspection of bars,
building and reminds them that the best way               nightclubs, lounges and dancehalls in eight
out of a building may not be the way they                 Texas counties. Of the 189 establishments
came in,” said State Fire Marshal Paul                    inspected, 96 percent had violations involving
Maldonado. “Have an Exit Strategy uses sim­               blocked exits.
ple, powerful language and imagery to encour­
                                                          For more information, visit: www.tdi.state.tx.
age students to develop an exit plan where they
                                                          us/fire/exitstrategy/index.html.
live, work, and play.”


Fraud Case Dispositions
The following recent court actions were taken involving insurance fraud cases investigated by the Texas
Department of Insurance Fraud Division. Additional information about insurance fraud is available on the
agency website at: www.tdi.state.tx.us/fraud/index.html.

July                                                      Carl Butler pled guilty on July 9, 2009 in Houston to
James R. Crenshaw                                         Insurance Fraud, a Class A Misdemeanor. Butler
Seven persons convicted with a total of $24,116 in        was sentenced to a confinement of 15 days in jail.
fines and restitution ordered.
                                                          The case against Evelyn Hare for Insurance Fraud, a
Kenton W. Hobelman pled guilty on July 12, 2009 in        state jail felony, was dismissed on July 15, 2009 in
Austin to Theft, a Class A Misdemeanor. Hobelman          Beeville.
was sentenced to 24 months deferred adjudication
and 240 hours of community service.                       August
                                                          Thirteen persons convicted with a total of $465,997
Jose Cano pled guilty on June 24, 2009 in San             in fines and restitution ordered.
Antonio to Insurance Fraud, a state jail felony. Cano
was sentenced to 36 months deferred adjudication,         Roland R. Cruz pled guilty on August 17, 2009 in
250 hours of community service, fined $1,500, and         Austin to False Statement in a Written Instrument, a
ordered to pay $12,488 in restitution.                    state jail felony. Cruz was sentenced to 6 months
                                                          confinement in jail.
Thomas F. (Bubba) Morgan, Jr. pled guilty on
February 10, 2009 in Athens to Fraudulently               James D. Forrest pled guilty on August 4, 2009 in
Obtaining Benefits, a Class A Misdemeanor. Morgan         U.S. District Court to a federal offense. Forrest was
was sentenced to probation of 12 months, 50 hours         sentenced to 18 months confinement, probation of
of community service, and fined $500.                     36 months, and ordered to pay $190,340 in restitu­
                                                          tion.
David Ware pled guilty on November 18, 2009 in
Tyler to Fraudulently Obtaining Benefits, a state jail    Jacqueline A. Montano pled guilty on August 11,
felony. Ware was sentenced to 48 months deferred          2009 in Houston to Misapplication of Fiduciary
adjudication and ordered to pay $5,998 in restitu­        Property, a third degree felony. Montano was sen­
tion.                                                     tenced to 36 months deferred adjudication, 120
                                                          hours of community service, and ordered to pay
Antonio R. Hull pled guilty on July 1, 2009 in            $688 in restitution.
Livingston to Theft, a state jail felony. Hull was sen­
tenced to 36 months deferred adjudication, 200            Paul Banks pled guilty on August 12, 2009 in U.S.
hours of community service, fined $500, and               District Court to a federal offense. Banks was sen-
ordered to pay $3,130 in restitution.                                                    Continued on page 8



www.tdi.state.tx.us                                       November/December 2009                             7
Fraud Case Dispositions continued from page 7
tenced to 21 months confinement , fined $100, and        Donald L. Johnston pled guilty on August 10, 2009
ordered to pay $217,500 in restitution.                  in Dallas to Theft, a first degree felony. Johnston was
                                                         sentenced to probation of 120 months, fined
Tammy L. Birdow pled guilty on August 20, 2009 in
                                                         $3,000, and ordered to pay $208,763 in restitution.
Fort Worth to Insurance Fraud, a state jail felony.
Birdow was sentenced to 60 months deferred adju­         Wilburn Dale Myers pled guilty on July 31, 2009 in
dication, 120 hours of community service, and            Huntsville to Misapplication of Fiduciary Property, a
ordered to pay $4,960 in restitution.                    third degree felony. Myers was sentenced to 120
                                                         months deferred adjudication, 50 hours of commu­
Parker L. Holifield pled guilty on August 17, 2009 in
                                                         nity service, fined $500, and ordered to pay
Denton to Insurance Fraud, a state jail felony.
                                                         $25,580 in restitution.
Holifield was sentenced to 36 months deferred adju­
dication, 150 hours of community service, fined          Richard E. Garcia pled guilty on July 21, 2009 in
$1,500, and ordered to pay $1,757 in restitution.        San Antonio to Fraudulently Obtaining Benefits, a
                                                         Class A Misdemeanor. Garcia was sentenced to 12
Patrick W. Kee pled guilty on May 15, 2009 in San
                                                         months deferred adjudication, fined $500, and
Antonio to Insurance Fraud, a state jail felony. Kee
                                                         ordered to pay $700 in restitution.
was sentenced to probation of 24 months, fined
$1,500, and ordered to pay $9,580 in restitution.        Brandolin L. Modester pled guilty on September 17,
                                                         2009 in Denton to Theft, a state jail felony.
Kelly Rogers pled guilty on June 15, 2009 in San
                                                         Modester was sentenced to 60 months deferred
Antonio to Theft, a state jail felony. Rogers was sen­
                                                         adjudication, 120 hours of community service, fined
tenced to six months confinement, fined $1,500,
                                                         $1,500, and ordered to pay $10,221 in restitution.
and ordered to pay $20,739 in restitution.
                                                         October
Ann Sims pled guilty on June 17, 2009 in San
                                                         Seven persons convicted with a total of $69,276 in
Antonio to Insurance Fraud, a state jail felony. Sims
                                                         fines and restitution ordered.
was sentenced to 60 months deferred adjudication,
120 hours of community service, and fined $1,500.        Guadalupe B. Cardenas pled guilty on October 16,
                                                         2009 in Houston to Insurance Fraud, a Class A
James C. Howard, Jr. pled guilty on August 26, 2009
                                                         Misdemeanor. Cardenas was sentenced to 18
in Burnet to Fraudulently Obtaining Benefits, a state
                                                         months of deferred adjudication.
jail felony. Howard was sentenced to 24 months
deferred adjudication, 150 hours of community serv­      Kennith W. Lightfoot pled guilty on July 31, 2009 in
ice, fined $1,500, and ordered to pay $1,928 in          Dallas to Insurance Fraud, a Class A Misdemeanor.
restitution.                                             Lightfoot was sentenced to 18 months deferred
                                                         adjudication and ordered to pay $15,005 in restitu­
Danielle R. Neal pled guilty on August 13, 2009 in
                                                         tion.
Houston to Theft, a Class A Misdemeanor. Neal was
fined $600.                                              Mitchell Lightfoot pled guilty on January 9, 2009 in
                                                         Dallas to Insurance Fraud, a state jail felony.
Lee Perkins pled guilty on August 14, 2009 in
                                                         Lightfoot was sentenced to 18 months deferred
Graham to Securing Execution of a Document by
                                                         adjudication, fined $500, and ordered to pay
Deception, a state jail felony. Perkins was sentenced
                                                         $15,005 in restitution.
to 120 months deferred adjudication, 120 hours of
community service, and ordered to pay $8,055 in          Jaime P. Arguello pled guilty on April 7, 2009 in San
restitution.                                             Antonio to Insurance Fraud, a state jail felony.
                                                         Arguello was sentenced to 36 months deferred adju­
Cary Snider pled guilty on July 31, 2009 in Cleburne
                                                         dication, 120 hours of community service, fined
to Insurance Fraud, a state jail felony. Snider was
                                                         $1,806, and ordered to pay $4,425 in restitution.
sentenced to 60 months deferred adjudication and
fined $750.                                              Sheryl T. Neeley pled guilty on October 16, 2009 in
                                                         McKinney to Tampering with a Governmental
September                                                Record, a third degree felony. Neeley was sentenced
Seven persons convicted with a total of $252,299 in      to probation of 60 months, fined $1,000, and
fines and restitution ordered.                           ordered to pay $6,929 in restitution.
Tommy Carter pled guilty on August 21, 2009 in           Kimberly A. Ingram pled guilty on October 19, 2009
Houston to Insurance Fraud, a state jail felony.         in Cleburne to Forgery, a state jail felony. Ingram was
Carter was sentenced to 48 months deferred adjudi­       sentenced to 60 months deferred adjudication and
cation, 180 hours of community service, fined $500,      ordered to pay $18,566 in restitution.
and ordered to pay $3,235 in restitution.
                                                         Larry Strickland pled guilty on October 15, 2009 in
Fernando Mora pled guilty on August 27, 2009 in          Haskell to Fraudulently Obtaining Benefits, a state
Houston to Insurance Fraud, a state jail felony. Mora    jail felony. Strickland was sentenced to 36 months
was sentenced to 24 months deferred adjudication         deferred adjudication, 180 hours of community serv­
and 90 hours of community service.                       ice, fined $1,000, and ordered to pay $5,040 in
                                                         restitution.
Joseph Pendleton pled guilty on September 4, 2009
in Houston to Insurance Fraud, a state jail felony.
Pendleton was sentenced to 24 months deferred
adjudication, 100 hours of community service, and
fined $500.

8                    November/December 2009                                                 www.tdi.state.tx.us
                            NAME     CITY           VIOLATION                                ACTION TAKEN                          ORDER       DATE

         Alper, Theodore Joseph      Antioch, CA    Misappropriated or converted money       General Life, Accident and Health     090817   10/01/09
                                                    belonging to an insurer or insured       License revoked; must pay
                                                                                             restitution of $2,000

             Archer, Jon Bennett     Plano          Criminal history involving assault       General Property and Casualty         090723   09/04/09
                                                                                             License issued and placed on
                                                                                             probation for two years; Must file
                                                                                             quarterly reports with TDI

                      Armas, Ivan    Houston        Misappropriated or converted money       General Life, Accident and Health  090769      09/17/09
                                                    belonging to an insurer or insured       License and General Property and
                                                                                             Casualty License revoked; Must pay
                                                                                             restitution in amount of $7,221

              Avegno, Ashton B.      New Orleans,   Failed to maintain requirements          Qualified Inspector appointment       090758   09/11/09
                                     LA             to hold appointment as a Qualified       canceled
                                                    Inspector; Failed to timely respond to
                                                    TDI's request for information

   Blue Cross and Blue Shield of     Chicago        Failed to provide mandated coverage      Must readjudicate all                 090838   10/16/09
 Texas, A Division of Health Care                                                            temporomandibular joint claims
             Service Corporation                                                             within past five years that
                                                                                             excluded mandated coverage

         Bonner, Jannice Romel       Spring         Misappropriated or converted money       Escrow Officer Licenses revoked;      090747   09/08/09
                                                    belonging to a title insurance agent,    Must pay $15 million in restitution
                                                    direct operation or another person;
                                                    Felony offense

        Buttram, Stephen Veasy       Houston        Allowed unlicensed employee to act       $3,000 fine                           090811   10/01/09
                                                    as escrow officer

       Calport Title Company, LP     Port Lavaca    Failed to timely provide an annual       $5,400 fine                           090745   09/08/09
                                                    trust fund account audit report

      Chambers County Abstract       Anahuac        Failed to timely provide an annual       $25,000 fine                          090746   09/08/09
                     Company                        statistical report; Failed to timely
                                                    respond to TDI's request for
                                                    information

             CompPartners, Inc.      Irvine, CA     Failed to comply with requirements      $17,500 fine                           090782   09/18/09
                                                    for Independent Review Organizations
                                                    (IROs) including requirement that
                                                    doctors performing review of health
                                                    care services must be licensed in Texas

               Cook, Henry H. Jr.    Houston        Failed to remit premium received to      $1,500 fine; must pay                 090810   10/01/09
                                                    Texas Windstorm Insurance                restitution of $2,399
                                                    Association; Failed to register
                                                    assumed names used for business
                                                    of insurance

         Escobar, Eduardo Jose;      Houston        Misappropriated or converted money       General Life, Accident and Health     090768   09/17/09
    Escobar Dietrich, Inc. D/B/A                    belonging to an insurer or insured       License and General Property and
         Esco Insurance Agency                                                               Casualty License for Eduardo Jose
                                                                                             Escobar and Escobar Deitrich, Inc.
                                                                                             revoked; Must pay $17,236 in
                                                                                             restitution

Equitrust Life Insurance Company     West           Materially misrepresented terms          $150,000 fine                         090876   10/28/09
                                     Des Moines,    and conditions of an insurance
                                     IA             annuity policy

             Gunnells, Jeffrey A.    Seabrook       Failed to maintain requirements to       Qualified Inspector appointment       090757   09/11/09
                                                    hold appointment as a Qualified          canceled
                                                    Inspector; Failed to timely respond
                                                    to TDI's request for information

               Harris, Robbi Ann     Breckenridge   Failed to comply with continuing         $1,500 fine; must complete            090877   10/28/09
                                                    education requirements                   30 hours of continuing education;
                                                                                             General Property and Casualty
                                                                                             License suspended for one year

                Hinojosa, Virgilio   Weslaco        Failed to maintain requirements to       Qualified Inspector appointment       090742   09/08/09
                                                    hold appointment as a Qualified          canceled
                                                    Inspector



www.tdi.state.tx.us                                             November/December 2009                                   9
                            NAME     CITY            VIOLATION                               ACTION TAKEN                        ORDER           DATE

          Horn, Kenneth Vaughn;      Austin         Misappropriated or converted money       General Property and Casualty     090743       09/08/09
 Tejas Insurance Managers, Inc.;                    belonging to an insurer or insured       License, Managing General Agent
     Tejas Premium Finance, Inc.                                                             License and Surplus Lines License
                                                                                             revoked; Premium Finance Company
                                                                                             License cancelled

          Maddran, Robin Diane       Dallas         Acted as an escrow officer without       $750 fine                           090812     10/01/09
                                                    a proper license

          Meissner, Gwynn Barry      Fair Oaks      Improper sale of unauthorized            General Life, Accident and Health   090784     09/18/09
                                     Ranch          annuity contracts                        License revoked


Mid-West National Life Insurance     North          Failed to pay clean claims in timely     $100,000 fine; Must maintain a      090800     09/25/09
         Company of Tennessee        Richland Hills manner; Failed to provide certain        98 percent or higher quarterly
                                                    mandated coverages to insureds           prompt pay compliance standard

                 Moore, Bryan L.     Tyler          Misappropriated or converted money       General Life, Accident and Health   090866     10/26/09
                                                    belonging to an insurer or insured       License and the General Property
                                                                                             and Casualty License revoked;
                                                                                             must pay restitution

               Moore, William A.     San Antonio    Failed to maintain requirements to       Qualified Inspector appointment     090759     09/11/09
                                                    hold appointment as a Qualified          canceled
                                                    Inspector

          Morgan, Danette Elise      Dallas         Materially misrepresented terms          General Property and Casualty       090724     09/04/09
                                                    and conditions of an insurance           License and General Life,
                                                    policy; Failed to notify TDI of an       Accident and Health License
                                                    administrative action taken by           revoked
                                                    another state insurance regulator

               Morris, Thomas B.     Addison        Failed to maintain requirements to       Qualified Inspector appointment     090748     09/08/09
                                                    hold appointment as a Qualified          canceled
                                                    Inspector

     National Pacific Dental, Inc.   Houston        Failed to comply with utlization         $100,000 fine; Must file            090783     09/18/09
                                                    review statutes, procedures and          compliance plan for utilization
                                                    regulations                              review with TDI within 120 days

     Pineridge Investments, LLP      Whitehouse     Violated minimum escrow                 $15,000 fine                         090825     10/07/09
          d/b/a Homeland Title                      accounting requirements; acted as
                                                    title insurance agent without a license

        Policy Finance Company       Clarksville    Failed to timely remit an annual         $2,500 fine; Premium Finance        090816     10/01/09
                                                    operations report and assessment         Company License revoked
                                                    fee

Progressive Title & Abstract, LLC    Dallas         Issued title insurance without noting    $50,000 fine; Title Agent License   090720     09/01/09
                                                    outstanding enforceable recorded         revoked
                                                    liens; Failed to maintain supporting
                                                    evidence for disbursements; False
                                                    statement on closing settlement
                                                    statement

         Stewart Title Company       Amarillo       Failed to timely remit title insurance   $3,400 fine                         090721     09/01/09
    d/b/a Stewart Title Amarillo                    policy guaranty fees
                        Division

       The Mega Life and Health      North          Failed to pay clean claims in a          $500,000 fine; Must maintain a      090799     09/25/09
            Insurance Company        Richland Hills timely manner; Failed to provide         98 percent or higher quarterly
                                                    certain mandated coverages to            prompt pay compliance standard
                                                    insureds


   Simon, Celestine Akachukwu        Houston        Failed to comply with                    $750 fine; General Life,            090848     10/21/09
                                                    Commissioner’s Order                     Accident and Health License
                                                                                             revoked.

         Thompson, Jesse James       Fort Worth      Criminal history                        General Property and Casualty       090839     10/16/09
                                                                                             License issued and placed on
                                                                                             probation for 2 years.

      Washington, James Harold       Mansfield      Failed to comply with continuing         $1,500 fine; must complete          090813     10/01/09
                                                    education requirements                   15 hours of continuing education




                               10                     November/December 2009                                                       www.tdi.state.tx.us
License Applications Denied
                                NAME   CITY        REASON FOR DENIAL                      ACTION TAKEN                          ORDER            DATE

           Briscoe, Walter Shelby      Azle        Criminal history involving assault     Insurance Adjuster License issued     090755      09/11/09
                                                                                          and placed on probation for two
                                                                                          years; Must file quarterly reports
                                                                                          with TDI

         Singleton, Melvin Victor      Arlington   Criminal history involving fraud and   General Life, Accident and Health     090756      09/11/09
                                                   dishonesty                             License issued and placed on
                                                                                          probation for two years




NEW COMPANIES                                                      LOCATION                         LINE                                 DATE LICENSED

Ability Resources, Inc. - TPA                                      Wilmington, DE                   Third Party Administrator              11/18/09

American Insurance Administrators, LLC - TPA                       Dover, DE                        Third Party Administrator              09/24/09

Colony Specialty Insurance Company                                 Columbus, OH                     Property & Casualty                    09/25/09

Combined Group Insurance Services, Inc. - TPA                      Carrollton, TX                   Third Party Administrator              11/18/09

Consolidated Associations of Railroad Employees - TPA              Topeka, KS                       Third Party Administrator              09/24/09

DK Mellan, LLC - TPA                                               Irving, TX                       Third Party Administrator              11/18/09

ETMG, LLC - TPA                                                    Austin, TX                       Third Party Administrator              11/18/09

First Nonprofit Insurance Company                                  Chicago, IL                      Property & Casualty                    09/25/09

HPHG, LLC - TPA                                                    Lubbock, TX                      Third Party Administrator              11/18/09

Maxim Insurance Solutions, LC - TPA                                Jefferson City, MO               Third Party Administrator              10/20/09

M Health, Inc. - TPA                                               Houston, TX                      Third Party Administrator              09/24/09

National Benefit Services, LLC - TPA                               West Jordan, UT                  Third Party Administrator              10/08/09

North American Risk Services, Inc. - TPA                           Wilmington, DE                   Third Party Administrator              10/08/09

Providence Washington Insurance Solutions, LLC - TPA               Providence, RI                   Third Party Administrator              11/05/09

Scion Dental, Inc. - TPA                                           Wilmington, DE                   Third Party Administrator              10/20/09

SXC Health Solutions, Inc. - TPA                                   Dallas, TX                       Third Party Administrator              11/05/09

TPA of Texas Investments, LLC - TPA                                San Antonio, TX                  Third Party Administrator              11/05/09

U.S. Imaging Network, LLC - TPA                                    Wilmington, DE                   Third Party Administrator              10/08/09

Universal Insurance Company of North America                       Sarasota, FL                     Property & Casualty                    10/26/09




www.tdi.state.tx.us                                           November/December 2009                               11
Name Changes
COMPANY NAME                                               LOCATION             CHANGED TO                                          DATE OF CHANGE

AIG Casualty Company                                       Harrisburg, PA       Chartis Property Casualty Company                       11/02/09
AIG Retirement Services Company - TPA                      Houston, TX          Valic Retirement Services Company                       10/22/09
American Bonding Company                                   Tucson, AZ           C/A cancel in Texas Due to Liquidation in Arizona       10/12/09
American Commerce Insurance Company                        Columbus, OH         Added Aircraft--Liability & Physical Damage Insurance 09/25/09
American Investors Life Insurance Company, Inc.            Topeka, KS           C/A Cancel-Merg w/Aviva Life and Annuity Company, 10/21/09
                                                                                Des Moines, IA (14600)
Association Insurance Company                              Atlanta, GA	        Added Fire, Allied Coverages, Inland Marine,         09/18/09
                                                                                Auto-Liab & PD, FID & Sur, Glass, Burglary & Theft,
                                                                                Forgery and Boiler & Machinery Insurance, Changed 10 to 08
Atlantic Insurance Company                                 Irving, TX           Freedon Specialty Insurance Company,                    10/12/09
                                                                                Columbus, OH
Atlantic Insurance Company                                 Irving, TX           Added Employers’ Liability and                          10/12/09
                                                                                Deleted Prepaid Legal Services Insurance
Atradius Trade Credit Insurance, INC.                      Baltimore, MD        Hunt Valley, Maryland                                   11/10/09
Berkley Risk Administrators Company of Texas, Inc. - TPA   Dallas, TX           No Longer Involved in TPA Business                      11/06/09
Camden Fire Insurance Association, The                     Mount Laurel, NJ     Morristown, New Jersey                                  11/04/09
Care Improvement Plus of Texas Insurance Company           San Antonio, TX      Added Accident Insurance                                10/21/09
Censtar Title Insurance Company                            Houston, TX          C/A Cancel-Merg w/First American Title                  09/18/09
                                                                                Insurance Company, Santa Ana, CA (30020)
Columbian National Title Insurance Company                 Topeka, KS           C/A Cancel-Merg w/First American Title                  11/04/09
                                                                                Insurance Company, Santa Ana, CA (30020)
Connecticut Surety Company, The                            Hartford, CT         C/A Cancel in Texas Due to Liquidation in Connecticut 09/18/09
Continental Heritage Insurance Company                     Mayfield Heights, OH Boca Raton, Florida (Charter Amendment)                 09/18/09
Continental Heritage Insurance Company                     Mayfield Heights, OH Deleted Fire, Auto-Liab & PD AND Liab                   09/18/09
                                                                                Other Than Auto, Changed 08 TO 10
Coordinated Care Solutions of Texas, Inc.                  Houston, TX          Certificate of Authority Cancelled                      09/11/09
Creative Benefits, Inc. - TPA                              Vista, CA            No Longer Involved in TPA Business                      11/06/09
First Liberty Insurance Corporation, The                   West Des Moines, IA Hoffman Estates, Illinois (Charter Amendment)            10/21/09
FM Benefit Plans Agency, Inc. - TPA                        Houston, TX          Bunker Hill Benefit Plans Agency, Inc.                  10/22/09
Hiscox Insurance Company INC.                              Geneva, IL	         Added Fire, Allied Coverages, Rain, Auto-Liab & PD,     09/22/09
                                                                                FID & Sur, Glass, Forgery, Boiler & Machinery and
                                                                                Credit Ins
IGF Insurance Company                                      Indianapolis, IN     C/A Cancel in Texas Due to Liquidation in Indiana       10/12/09
Imperial Casualty and Indemnity Company                    Oklahoma City, OK    Added Workers’ Compensation &                           10/26/09
                                                                                Employers’ Liability Insurance
LM GENERAL Insurance Company                               Wilmington, DE       Hoffman Estates, Illinois (Charter Amendment)           10/21/09
LM Insurance Corporation                                   West Des Moines, IA Hoffman Estates, Illinois (Charter Amendment)            10/21/09
LM Personal Insurance Company                              Wilmington, DE       Hoffman Estates, Illinois (Charter Amendment)           10/21/09
Midwestern United Life Insurance Company                   Indianapolis, IN     Monrovia, Indiana                                       09/18/09
PHP Companies, Inc. - TPA                                  Knoxville, TN        No Longer Involved in TPA Business                      11/06/09
United Healthcare Insurance Company                        Hartford, CT         United Healthcare Insurance Company                     11/12/09
United Liberty Life Insurance Company                      Louisville, KY       C/A Cancel-Merg w/Citizens Security Life                10/12/09
                                                                                Insurance Company, Louisville, KY (94875)
Vinings Insurance Company                                  Columbia, SC         Added Fire, Allied Coverages, Inland Marine,            09/18/09
                                                                                Auto-Liab & PD, FID & Sur, Glass, Burglary & Theft,
                                                                                Forgery and Boiler & Machinery Insurance,
                                                                                Changed 10 TO 08
Western Growers Assurance Trust                            Irvine, CA           Extend Initial C/A From 11/14/09 TO 11/14/10            11/13/09



                                12                 November/December 2009                                                    www.tdi.state.tx.us

				
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