TENNESSEE INSURANCE DIVISION, Petitioner, vs. WISDOM, INC., a Mississippi corporation and FRANK F. CAMP, an individual, Respondents.

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1 University of Tennessee, Knoxville Trace: Tennessee Research and Creative Exchange Tennessee Department of State, Opinions from the Administrative Procedures Division Law TENNESSEE INSURANCE DIVISION, Petitioner, vs. WISDOM, INC., a Mississippi corporation and FRANK F. CAMP, an individual, Respondents. Follow this and additional works at: Part of the Administrative Law Commons This Initial Order by the Administrative Judges of the Administrative Procedures Division, Tennessee Department of State, is a public document made available by the College of Law Library, and the Tennessee Department of State, Administrative Procedures Division. For more information about this public document, please contact administrative.procedures@tn.gov

2 BEFORE THE COMMISSIONER OF COMMERCE AND INSURANCE FOR THE STATE OF TENNESSEE TENNESSEE INSURANCE DIVISION, ) ) Petitioner, ) v. ) Docket No J ) WISDOM, INC., a Mississippi corporation, ) and FRANK F. CAMP, an individual, ) ) Respondents. ) INITIAL ORDER DEFAULT This contested case came on to be heard on September 19, 2008 in Memphis, Tennessee, before Administrative Judge Joyce Grimes Safley, assigned by the Secretary of State, Administrative Procedures Division, and sitting for the Commissioner of Commerce and Insurance. Ms. LaCosta Wix, attorney, and Ms. Amy B. Smith, attorney, of the Department of Commerce and Insurance represented the Insurance Division at the hearing. None of the Respondents were present for the hearing, nor was counsel present on the Respondents behalf. The subject of this hearing was the State s Petition to revoke Respondent Frank F. Camp s Insurance Producer License, to revoke Wisdom, Inc. s business entity producer license, and to levy civil penalties against the Respondents for numerous violations of T.C.A

3 NOTICE OF DEFAULT Upon the Respondents failure to appear at the hearing of this matter, the State showed that it had served notice of the hearing upon the Respondents. The letter sent in accordance with T.C.A (b) along with signed certified mail receipts showing Respondents receipt of the notice of hearing were entered into evidence as Exhibits 1 and 3 (collective). The State moved for a default order to be entered against the Respondents, and further moved to proceed with its proof. It is noted that the Respondents filed no preliminary pleadings, no proposed witness or exhibit list, and failed to participate in these proceedings during the entirety of the case. It is further noted that a summary suspension of the Respondents licenses was issued by Commissioner Newman on August 19, The State complied with all notice requirements. The State s motion for default was GRANTED, and the State was allowed to proceed with its proof. After consideration of the testimony and evidence presented, the arguments of counsel, and the entire record in this matter, it is determined that the Petitioner, the Insurance Division of the Tennessee Department of Commerce and Insurance (hereinafter the State ) met its burden of proof, by a preponderance of the evidence, that the alleged violations occurred. The Respondents insurance producer licenses are REVOKED, and Respondents are ORDERED, jointly and severally, to pay a civil penalty of Five Hundred 2

4 Dollars ($500.00) for each violation committed, totaling One Hundred and Twenty-two Thousand Dollars ($122,000.oo), plus the costs of this action. This decision is based upon the following findings of fact and conclusions of law. FINDINGS OF FACT 1. Respondent Frank Camp currently resides in Saltillo, Mississippi. Respondent Camp obtained a Tennessee non-resident insurance producer license, License No , on November 7, Since that time, Respondent Camp has been a licensed insurance producer in the State of Tennessee. 3. Respondent Camp focused his business on annuity sales, holding himself out to be an Elder Planning Specialist. 4 On many occasions, Respondent distributed copies of a book, Alligator Proofing Your Estate, which contains a forward describing Respondent Frank Camp as an estate planning attorney. 5. Respondent Frank Camp is the president of Respondent Wisdom, Inc., and is the designated responsible license producer for Respondent Wisdom, Inc. 6. Respondents solicited business by holding free dinner seminars which promised informative lectures on elder financial planning issues. Attendees were made aware of the seminars through unsolicited mailings they received. The seminar notices or brochures specifically prohibited agents, brokers, and lawyers from attending. 3

5 7. At least twelve residents of Tennessee or Mississippi, including John Ryczek, Jonnie and Sharon Petrey, Yoe-Yeaner Janes, William Moore, William Brown, Nella Veksler, Everette Smith, Marca Kendrick, Judith Theobald, Donald Henderson, and Carol Doss, attended Respondents Elder Planning Seminars after receiving invitations through the mail or by accompanying someone who had received the mailed invitation. 8. Based upon the information they received at the seminars, each of the twelve individuals mentioned above set up appointments with Respondent Camp to discuss the possibility of purchasing annuity products from him. 9. John Ryzcek ( Mr. Ryzcek ) and his wife met with Respondent Camp on two separate occasions to discuss annuity opportunities. The Ryzceks eventually purchased five annuity products from Respondents, based upon Respondent Camp s false assurances that their assets would be free from inclusion in financial eligibility calculations (for Medicare or Medicaid) for nursing home placement. Respondents also falsely represented that the annuities were for a short term. Specifically, Respondent Camp assured the Ryzeks that they would be able to withdraw any amount of their money at any time after the first of the year of the contract. 10. At the time of delivering the Ryzeck s National Western Life Insurance Company ( NWL ) annuity contracts, Respondent Camp removed a page from the contract to make it look as it appeared when it was delivered by the insurance company. When questioned by Mr. Ryzeck, Respondent Camp 4

6 assured him that the page Respondent had removed contained no vital information. 11. During Mr. Ryzcek s testimony, Mr. Ryzcek identified two NWL annuity contracts as being delivered to him by Respondents. The contracts both contained a page entitled Policy Data Page. Mr. Ryzcek further testified that the three contracts in which his wife was named as the annuitant contained the same Policy Data Page. 12. Later, Jenny Darley of NWL examined the Policy Data Page in both of the contracts furnished to Mr. Ryzcek by Respondents, and determined that in both contracts, the Policy Data Page had been altered. Ms. Darley testified, credibly, that the Policy Data Page Mr. Ryzcek received from Respondents did not contain the surrender schedule associated with that annuity. Ms. Darley also testified that without the surrender schedule, an annuitant or policyholder would not know of the surrender charges associated with early withdrawal. 13. Ms. Darley identified the Policy Data Page issued by her company, NWL, which should have been delivered to the Ryzceks. The Policy Data Page revealed the term of the Ryzceks contracts to be fifteen (15) years. Ms. Darley testified that the Ryczeks would not have been able to withdraw their money from the annuity without a penalty for fifteen (15) years. 14. Jonnie Petrey ( Mr. Petrey ) and his wife Sharon Petrey ( Mrs. Petrey ) met with Respondent Camp on two separate occasions. The meetings resulted in the Petreys purchase of four NWL annuity contracts from 5

7 Respondents. Mr. Petrey stressed to Respondent Camp at the time of the sale that the Petreys number one priority was that they would be able to withdraw money from the annuity account after five years. Respondent Camp assured the Petreys that this would be the case. Respondent Camp also told the Petreys that the money placed in the annuities would not be accessible by nursing homes or Medicaid. 15. Respondent Camp falsely told the Petreys, on the day that they purchased their annuities, that they would receive a ten percent (10%) bonus only if they signed the contract that day. Respondent Camp further misrepresented that, at the Petreys deaths, their children could take over the annuities without penalty. The Petreys were persuaded by the promise of the bonus to apply for the annuities that day. As a result, the Petreys lost several thousand dollars in surrender charges for transferring money from other annuities to the NWL annuity contracts sold by Respondents. 16. After receiving paperwork from NWL, Mr. Petrey began to worry that his annuity actually had fifteen (15) year terms rather than the terms represented by Respondent. Mr. Petrey confronted Respondent Camp, and Respondent Camp insisted that Mr. Petrey was misunderstanding the contract. Respondent untruthfully told Mr. Petrey that after five years, Mr. Petrey would be able to draw out all of his money without penalty. Based upon the assurances and misrepresentations, the Petreys completed their annuity purchases from Respondent Camp. 6

8 17. At the hearing of this matter, Mr. Petrey was shown three (3) documents which each contained the signature Jonnie Petrey. Upon examining the documents, Mr. Petrey testified that neither the signatures affixed to the documents or nor the initials written on the documents were in his handwriting. Mr. Petrey also testified that he had not signed, nor had he authorized anyone else, to sign these documents on his behalf. Mr. Petrey pointed out that there were several mistakes in the annuity forms, including the misspelling of his name in the signature, and misrepresentation of Mr. Petrey s finances. 18. Mrs. Petrey testified that the three annuity forms containing the signature Sharon Petrey had not been signed by her, nor had she authorized anyone to sign them on her behalf. The same was true for annuity forms which bore the signature Sharon Petrey using Mrs. Petrey s power of attorney for her mother. Similarly to the forms purportedly signed by Mr. Petrey, the alleged annuity forms with the signature Sharon Petrey contained several inaccuracies and misstatements of fact, including the incorrect statement that Mrs. Petrey was receiving Social Security benefits. At the time the forged signature was placed on the document, Mrs. Petrey was not eligible for social security benefits, because she was sixty (60) years of age on the date the annuity forms were signed. 19. Ms. Darley of National Western Life Insurance Company ( NWL ), identified the three documents with the forged Jonnie Petrey signature as a consumer disclosure form, an annuity suitability questionnaire, and a 7

9 change of beneficiary form. Ms. Darley testified that the first two documents are forms that NWL requires a producer to have a consumer sign at the time of application. Ms. Darley also testified that NWL requires these disclosures and signed forms as a way to ensure that the consumer is knowledgeable about the product (annuity) he is purchasing and that the product is suitable for the financial needs and goals of the consumer. 20. On or around October 16, 2003, Respondent Camp sold Yoe- Yeaner Janes and her husband three (3) annuities from Allianz Life Insurance Company of North America ( Allianz ). Although the Janes were satisfied with the Allianz annuities, Respondent Camp began trying to persuade the Janes to transfer the funds from their Allianz policies to new National Western Life Insurance Company ( NWL ) contracts. On or around April 21, 2008, Respondent Camp made a visit to the Janes home to solicit, in person, the change of the three Allianz policies for NWL policies. 21. Initially the Janes went ahead with the transfer of funds for the new NWL policies. However, the Janes became suspicious of Respondent Camp and contacted Allianz to try to stop the transfer. While two of the transfers were stopped, one of the new NWL policies was not cancelled. Mrs. Janes learned of her ownership of an NWL annuity by a letter sent from NWL. 22. Upon discovering the error, Mrs. Janes wrote NWL a hand-written note informing NWL that she wished to have the funds from the NWL policy surrendered back to Allianz. After delivering her letter to NWL, Mrs. Janes believed that her NWL policy was cancelled. 8

10 23. On July 1, 2008, NWL received a facsimile of a handwritten note purporting to be written and signed by Yoe-Yeaner Janes. The forged note informed NWL that Mrs. Janes had had a chance to review her NWL policy, now understood its terms, and that she wished for the NWL policy to remain in force. 24. Mrs. Janes learned of the faxed letter because it was sent to her as an attachment to a letter from NWL. The NWL letter stated that NWL considered the forged facsimile letter as an acceptance of her NWL policy. 25. Ms. Darley, of NWL, identified the forged handwritten facsimile letter as a fax that had been received by her company, and testified that the telephone number at the top of the fax, , was part of the date stamp created by the fax machine of the sender. 26. Mr. Frank Cooper, a Fraud Investigator for the Department of Commerce and Insurance, identified the telephone number at the top of the fax, , as the home telephone number of record of Respondent Camp s father, Frank C. Camp. 27. Ms. Darley testified that NWL terminated the Respondents contracts with its company. 28. William Moore ( Mr. Moore ) and his wife purchased two (2) Allianz annuity contracts from Respondent Camp. Mr. Moore stated that he felt he could trust Respondent Camp, and was persuaded to purchase the annuities after being falsely told by Respondent Camp that his money could be withdrawn from the annuity account at any time without penalty, and could 9

11 be withdrawn immediately, if necessary. Respondent Camp also encouraged the annuity purchase by stating that there was a ten per cent (10%) bonus, and claiming that there were no restrictions associated with it. 29. Sometime after Respondent Camp s and the Moores meeting, Respondent Camp send the Moore s a copy of Alligator Proofing Your Estate. 30. Mr. Moore identified a document, at the hearing, which Respondent Camp had represented to Mr. Moore as his complete contract with Allianz for his annuity. 31. Mr. Moore testified that when he examined the Allianz contract more closely, he noticed that there were pages missing. 32. Lori Wells, a principal chief investigator with Allianz Insurance Company, identified the document which was William Moore s complete contract with Allianz, as it was issued to Respondent Camp by Allianz. When Ms. Wells compared the complete contract issued by Allianz with the document which Respondent Camp delivered to Mr. Moore, she found that the contract given to Mr. Moore by Respondent was missing several important pages, including the contents page of the contract, the privacy notice, the contract summary page, and the page disclosing the consumer s right to a free look period. 33. Ms. Wells testified that the missing pages contained information that serves to alert a policyholder to the length of his contract, any requisite surrender charges for early withdrawals, and the right to the free look period, 10

12 the period of time that the policyholder may cancel the contract for any reason without penalty. 34. William Brown ( Mr. Brown ) and his wife learned of Respondent s financial planning seminars through their friends, the Moore s, and subsequently attended one of the Respondents dinner seminars. The Browns later met with the Respondent. When the Browns met with the Respondent, they purchased two (2) Allianz annuity contracts from Respondent Camp. 35. Mr. Brown testified that Respondent Camp persuaded him to move his investments from existing annuities because Respondent Camp convinced Mr. Brown that the annuities his money was invested in were not safe, and that there were hidden charges which were reducing some of Mr. Brown s principal. Respondent Camp relieved Mr. Brown s worries about any surrender charges on his existing policies by promising Mr. Brown a ten percent (10%) bonus for purchasing the Allianz policy. Respondent Camp promised Mr. Brown that the bonus should equal the amount of surrender charges. Respondent Camp did not tell Mr. Brown about any restrictions associated with the bonus. 36. After Mr. Brown talked with his financial adviser, he realized that there might be problems with the Allianz contract. Mr. Brown discovered that several pages were missing from the documents that Respondent Camp had supplied to Mr. Brown as his complete Allianz contract. 11

13 37. At the hearing, Mr. Brown identified the Allianz contract given to him by Respondent Camp. Ms. Wells, principal chief investigator with Allianz, did a comparison of the complete Allianz contract and the contract given to Mr. Brown by Respondent Camp. Ms. Wells noted that the contract given to Mr. Brown by Respondent Camp was missing several important pages, including the individual retirement annuity disclosure statement for IRA and Self IRAs, the contents of the contract, the privacy notice, the contract summary page, and the page disclosing the consumer s right to a free look period. 38. Everette Smith ( Ms. Smith ) attended two of Respondent s seminars, and received a copy of Respondent s Alligator Proofing Your Estate booklet, before meeting with Respondent Camp at Respondents office to discuss Allianz annuity products. 39. Respondent Camp convinced Ms. Smith that her current investments were not adequate, and further told her that her money would have a higher gain and be better protected in Allianz annuities. Respondent Camp also falsely assured Ms. Smith that she could withdraw her money without penalty. Respondent Camp did not tell Ms. Smith about a surrender schedule. Relying upon Respondent Camp s misrepresentations, Ms. Smith purchased two (2) Allianz annuities from the Respondent. 40. At the hearing, Ms. Smith identified two documents as the documents that Respondent Camp had delivered to her and had falsely represented to be her complete Alliianz contracts. 12

14 41. Allianz principal chief investigator Wells identified two documents which were Ms. Smith s complete contracts with Allianz, as issued by Allianz to Respondent Camp. When Ms. Wells did a comparison of the complete Allianz contracts with the documents which Respondent Camp had given to Ms. Smith, Ms. Wells testified that the documents delivered to Ms. Smith by Respondent Camp were not the complete contracts issued by Allianz, and were missing the same pages which were missing in the incomplete contracts given to Mr. Moore and Mr. Brown. 38. Ms. Smith lost approximately $29,000 (Twenty-nine Thousand Dollars) in surrender charges for changing her investments into Allianz annuities. She was unable to recover the funds which she lost. 39. Marca Kendrick ( Ms. Kendrick ) stated that she purchased two (2) Allianz annuities from Respondent Camp. Ms. Kendrick provided copies of the Allianz contracts delivered to her by Respondent, which were falsely represented to be complete contracts by the Respondent. 40. Allianz investigator Wells testified that the complete contracts which Allianz had delivered to Respondent Camp for Ms. Kendrick were missing pages when they were delivered to Ms. Kendrick. The Allianz contracts which Respondent Camp actually delivered to Ms. Kendrick were missing several pages, including the privacy notice, the buyer s guide, the contract summary page, and the information about the free look period. 41. Judith Theobald testified that she attended Respondents dinner seminar. Later, Ms. Theobald met with Respondent Camp at her house. 13

15 Respondent Camp promised Ms. Theobald high interest returns (as much as eight percent or twelve percent, or higher) for his annuity products. Additionally, Respondent Camp gained Ms. Theobald s trust by speaking of his church affiliation and his family. Relying upon Respondent Camp s representations, Ms. Theobald purchased two (2) annuity contracts from Respondent Camp: one with Allianz and one with American Equity Investment Life Insurance Company ( AEIL ). 42. When convincing Ms. Theobald to purchase the annuities, Respondent Camp did not mention restrictions or surrender charges, nor did he disclose the term of Ms. Theobald s annuity contracts. Respondent Camp insisted to Ms. Theobald that she would be able to withdraw her money from the funds at any time without a penalty. 43. Ms. Theobald testified, credibly, that she would not have purchased the annuities if Respondent Camp had not assured her that she would be able to withdraw her money without penalty at any time. 44. At the hearing, Ms. Theobald identified a document as the AEIL contract delivered to her by Respondent Camp, which he represented to be her complete AEIL contract. Ms. Theobald also identified a separate sheet or document entitled Contract Specifications Sheet. The Contract Specifications Sheet was delivered with her contract, but was not bound inside the contract. 45. Tara Gorsch, Service Administrator in AEIL s Complaint Department, testified that the document delivered to by Respondent Camp to 14

16 Ms. Theobald was missing pages from the complete document issued by AEIL. The document identified as the complete contract by Ms. Gorsch contained a Contract Specifications sheet which was greatly different from the document given to Ms. Theobald by Respondent Camp. The complete Contract Specifications Sheet included a surrender schedule, stating that the length of the contract was twelve (12) years. The surrender schedule was omitted from the document which Respondent Camp delivered to Ms. Theobald. 46. Ms. Theobald also identified a document which Respondent Camp had delivered to her as the complete contract for her annuity policy with Allianz. 47. Ms. Wells, with Allianz, compared the compete contract issued by Allianz for Ms. Theobald with the contract which was delivered to Ms. Theobald by Respondent Camp. Ms. Wells noted that the document delivered to Ms. Theobald by Respondent Camp was missing several pages, including the privacy notice, the buyer s guide to fixed diver annuities, the contract summary page, and the information on the free look period. The contract summary page which was in the complete contract issued by Allianz stated that the term of Ms. Theobald s contract was fifteen 915) years, and indicated that Ms. Theobald would not be able to withdraw any funds without a penalty until the end of that fifteen ( 15) year period. 48. Allianz sent a document to Ms. Theobald, after the purchase of the annuity, which was titled Policy Delivery Receipt. The document contained a signature purporting to be Ms. Theobald s signature. However, Ms. Theobald 15

17 testified that the signature on the Policy Delivery Receipt was not her own signature and was forged. 49. Nella Veksler ( Ms. Veksler ) testified that she attended Respondents dinner seminar. Later, Respondent Camp visited Ms. Veksler at her home on many occasions in order to sell her annuities. Eventually Ms. Veksler purchased two annuities from Respondent Camp, including an AEIL annuity. 50. Respondent Camp did not explain the terms of the contract purchased by Ms. Veksler, including the length of the contract or any surrender charges associated with her policy. Respondent Camp falsely told Ms. Veksler that her investment would be guaranteed by the state of Tennessee for up to one million dollars ($1,000,000). 51. At the hearing, Ms. Veksler identified a document which was delivered to her by Respondent Camp and was represented by him to be her complete AEIL annuity contract. 52. When Ms. Gorsch, Service Administrator in AEIL s Complaint Department, identified the complete contract as issued by AEIL to Ms. Veksler, she noted that the complete contract contained a contract specifications sheet which listed the surrender charges schedule for Ms. Veksler s policy. The contract specifications sheet was missing from the contracted which Ms. Veksler received from Respondent Camp. 53. Donald Henderson ( Mr. Henderson ) purchased an AEIL annuity from Respondent after Respondent visited him at his home. Mr. Henderson 16

18 purchased the annuity after Respondent falsely informed him that his contract would be for seven (7) years and that Mr. Henderson would be able to withdraw his money penalty free after that time. This information was not true. Mr. Henderson testified that he would not have purchased the AEIL annuity policy if he had known that the term of his contract was greater than seven ( 7) years. 54. Mr. Henderson identified, at the hearing, the documents which Respondent Camp delivered to him and represented to be the complete AEIL contract. 55. Ms. Gorsch, Service Administrator in AEIL s Complaint Department, identified the contract which her company had issued to Respondent Camp for Mr. Henderson. The document issued by AEIL stated that the term of the contract was twelve (12) years. 56. Carol Doss ( Ms. Doss ) purchased an annuity from Respondent Camp after being told that her contract term would only be for a couple of years and that she would be free to withdraw her funds without a penalty after that time. 57. At the hearing, Ms. Doss identified the AEIL contract which was delivered to her by Respondent Camp and represented to be Ms. Doss s complete contract. Ms. Doss testified that the contract delivered to her by Respondent Camp had a loose page 3 (the Contract Specifications Page ). 58. Ms. Gorsch, Service Administrator in AEIL s Complaint Department, identified a document as the duplicate document for the complete contract issued to Ms. Doss by AEIL. The complete contract contained a bound 17

19 page 3 which detailed the twelve (12) year contract term. Ms. Gorsch stated that the Contract Summary was missing from the contract Respondent Camp supplied to Ms. Doss. As a result, Ms. Doss did not have information regarding the surrender charges associated with early withdrawal from the policy. 59. Ms. Gorsch testified that upon AEIL discovering that the above reference AEIL contracts had been altered by Respondent Camp after leaving AEIL,. AEIL refunded the contracts of Mr. Henderson, Ms. Doss, Ms. Veksler, Ms. Kendrick, and Ms. Theobald. 60. AEIL canceled Respondents appointments with its company. 61. Despite AEIL canceling Respondents appointments with AEIL, Respondent Camp answered No to the question listed on the license renewal form for Respondent Wisdom, Inc. : Has the business entity or any owner, partner, officer, or director had an insurance agency contract or any other business relationship with an insurance company terminated for any alleged misconduct since last renewal. 62. Based upon similar acts by Respondent Camp which took place in Mississippi, the Office of the Mississippi Secretary of State Business Regulation and Enforcement Division has taken action against Respondent and levied penalties against Respondent Camp. The Order, which was entered into evidence, found that the Respondent had violated the Mississippi Securities Act as well as M.C.A , et seq., by illegally engaging in unregistered activity in dispensing financial panning and investment advise. 18

20 CONCLUSIONS OF LAW 1. This contested case matter is governed by Title 56 of the Tennessee Code Annotated, including the Tennessee Insurance Producing Act of 2002, T.C.A , et seq.; the Tennessee Administrative Procedures Act, T.C.A , et seq; and the Rules of the Tennessee Department of Commerce and Insurance. 2. T.C.A (a) provides, in pertinent part, that [t]he commissioner may place on probation, suspend, revoke or refuse to issue or renew a license issued under this part or may levy a civil penalty in accordance with subsection (e) or take any combination of such actions, for any one or more of the following causes: (1) Providing incorrect, misleading, incomplete or materially untrue information in the license application; (2) Violating any law, rule, regulation, subpoena or order of the commissioner or of another state s commissioner; *** (5) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance or to any document related to an insurance transaction; *** (8) Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility I the conduct of business in this state or elsewhere; *** (10) Forging another s name to an application for insurance or to any document related to an insurance transaction. 3. T.C.A (e) addresses actions which may be taken against licenses, and penalties which may be assessed, for violations of Title 56: 19

21 With respect to any person licensed or required to be licensed under this part, and in addition to or in lieu of any applicable denial, suspension or revocation of a license, the commissioner may assess a civil penalty against such person in an amount no less than one hundred ($100) nor more than one thousand dollars ($1,000) for each separate violation of a statute, rule or order pertaining to the sale, solicitation or negotiation of insurance in this state. Each day of continued violation constitutes a separate violation. 4. T.C.A states that: Any person who commits, or participates in any of the following acts with an intent to induce reliance, has committed an unlawful insurance act: (1) Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, by or on behalf of an insured, claimant or applicant to an insurer, insurance professional or a premium finance company in connection with an insurance transaction or premium finance transaction, any information which the person knows to contain false representations, or represents the falsity of which the person has recklessly disregarded, as to any material fact, or which withholds or conceals a material fact, concerning any of the following: (A) The application for, rating of, or renewal of, any insurance policy; (2) Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, to or by an insurer, insurance professional or premium finance company in connection with an insurance transaction or premium finance transaction, any information which the person knows to contain false representations, or representations the falsity of which the person has recklessly disregarded, as to any material fact, or which withholds or conceals a material fact, concerning any of the following: (A) The solicitation for sale of any insurance policy or purported insurance policy. 5. The State has the burden of proof to show, by a preponderance of the evidence, that Respondents have violated the above referenced statutes, 20

22 subjecting Respondents to action against their licenses and applicable penalties. 6. The State has met its burden of proof in this case. The State has shown that Respondent Camp used fraudulent, coercive, and dishonest practices in the conduct of insurance business. It has further shown that Respondent Camp has intentionally misrepresented the terms of an actual or proposed insurance transaction. 7. Respondent Camp made false representations to victims in this matter regarding the nature of their annuity purchases. Respondent lied about or omitted information regarding the length or term of the annuity contracts, the surrender charges schedules, restrictions associated with early withdrawal or bonus features, and the free look period to which his victims were entitled. Respondent Camp committed these wrongful acts and omissions with the twelve (12) individuals listed in the Findings of Fact portion of this order. 8. The State has met its burden of proof, by a preponderance of the evidence, that Respondent Camp provided incorrect, misleading, incomplete, false, or materially untrue information in Respondents license renewal applications. After Respondent Camp s business relationship had been terminated by an insurance company by a termination letter, Respondent Camp submitted a license application that claimed that no officer of his company, Wisdom, Inc., had had his business relationship terminated by an insurance company. 21

23 9. The State has additionally shown, by a preponderance of the evidence, that Respondent forged individual s names on documents relating to insurance transactions. As set forth above, Respondent forged Mr. and Mrs. Petrey s signatures on three (3) separate forms associated with four Allianz annuity products sold by the Respondent. Respondent forged Ms. Theobald s name on a Policy Delivery Receipt. Finally, Respondent forged Yoe-Yeaner Janes signature, and faxed the forged, handwritten letter from Respondent s father s home telephone number. 10. The State has also met its burden of proof, by a preponderance of the evidence, that Respondent Camp knowingly presented false information in the solicitation of insurance products on the many occasions upon which he misrepresented the length of an insurance policy. Respondent also knowingly misrepresented himself as an attorney by distributing a book, Alligator Proofing Your Estate, which referred to Respondent as an attorney. Respondent s misrepresentation occurred during the solicitation of insurance business. 11. Lastly the State has shown, by a preponderance of the evidence, that Respondent presented false information by untruthfully assuring Ms. Veksler that her annuity would be guaranteed by the federal government for up to One Million Dollars. Respondent falsely told the Petreys that their money would be protected from nursing homes and Medicaid. 22

24 12. The evidence preponderates that each of Respondent s twelve victims relied upon Respondent s misrepresentations and assertions in deciding to purchase their annuities from Respondent. 13. It is appropriate in this matter to revoke Respondents licenses. It is also appropriate to assess penalties against the Respondents. Accordingly, it is ORDERED the Non-resident Insurance Producer License, No , issued to Respondent Frank F. Camp, be REVOKED. It is further ORDERED that the Business Entity Insurance Producer License, No 355, issued to Respondent Wisdom, Inc. be REVOKED. PENALTIES ARE ASSESSED AGAINST THE RESPONDENTS, JOINTLY AND SEVERALLY, IN THE AMOUNT OF $500 PER VIOLATION COMMITTED, FOR A TOTAL AMOUNT OF ONE HUNDRED AND TWENTY- TWO THOUSAND DOLLARS ($122, ) IN PENALTIES. The costs of this action are also assessed against the Respondents. It is so ordered. This order entered and effective this 4th day of December, Thomas G. Stovall, Director Administrative Procedures Division 23

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