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2007 Insurance Enforcement Activity

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January


Orders to Show Cause


Vincent P. Ascolese, Morganville, NJ
Frank Donofrio, Ridgefield, NJ
Estate Title Management, Inc., Fort Lee, NJ
Chicago Title Insurance Co., Jacksonville, FL
Order to Show Cause #E07-05, January 18, 2007.  Charges against Chicago Title Insurance Co. and the affiliated respondents include: that Ascolese, while a Limited Registrant (bail bonds), failed to timely notify the Department of his criminal conviction; Ascolese engaged in sales, solicitations and negotiations of bail bond insurance without obtaining a 1033 waiver; Ascolese engaged in the business of title insurance without advising the Department or obtaining a 1033 waiver;  Chicago Title and the other respondents knowingly accepted insurance business from Ascolese whom they knew to be an unlicensed producer; Chicago Title and the other respondents published (through business cards) that Ascolese was an issuing agent of Chicago Title; and Chicago Title and the other respondents facilitated Ascolese’s violation of federal and state laws.

Sammy Battista, Bridgewater, NJ
John H. Lay, II, Princeton, NJ
Order to Show Cause #E07-04, January 16, 2007; charges include that Battista requested Lay to misrepresent his identity to an insurer by impersonating a client of Battista who had applied for a life insurance policy; Lay impersonated the client in a telephone conversation with the insurer by answering a Personal History Interview; and Lay failed to notify the Department of changes in his home and business addresses.

Peter Rychok, Maplewood, NJ
Amended Order to Show Cause #E07-01, January 3, 2007 (amends OTSC E#05-111, issued August 18, 2005); producer is charged with preparing and submitting 4 auto insurance applications on behalf of an insured that contained false and misleading information regarding prior driving history by marking “NO” on questions regarding prior accidents, convictions or DMV violations when Rychok had personal knowledge of the insured’s prior driving history; submitting 32 deficient applications to the NJCAIP; in order to secure a lower premium, Rychok prepared and submitted to the NJ Workers Compensation Insurance Plan 57 applications that contained untrue lower risk information regarding employment activities; understated employee counts and contained incorrect salary information; and issuing 12 false or fraudulent certificates of insurance.

Consent Orders

Alfredo Cardenas, Union, NJ
Consent Order #E07-06, January 18, 2007; producer failed to collect and remit premium to an insurer for an added vehicle; and erroneously issued a certificate of insurance for the added vehicle when no insurance was in effect since the required premium had not been paid.  Sanction: Fine - $2,500.
 

Guardian Life Insurance Company, Lehigh Valley, PA
Consent Order #E07-02, January 16, 2007; insurer issued two replacement life policies but failed to notify the predecessor insurer regarding the replacements.  Sanction:  Fine - $3,000.

Robert J. Kirner, Bloomfield, NJ
Kirner Insurance Agency, Bloomfield, NJ
Consent Order #E07-07; January 26, 2007;  producers failed to remit premium to NJPAIP, the appropriate insurer or applicable premium finance company; converted premium received from clients to their own use; issued checks that were dishonored for insufficient funds; and failed to maintain a premium trust account.  Sanctions: Revocation of licenses; Fine - $35,000; Costs - $552.50.

Lynwood Insurance Associates, Inc., Matawan, NJ
Consent Order #E07-03, January 16, 2007; producer issued three auto insurance ID cards that did not contain required information.  Sanction:  Fine - $500.

Eric Raymond, Mt. Laurel, NJ
Corporate Synergies Group, Inc., Mt. Laurel, NJ
Consent Order #E07-08; January 18, 2007; producers solicited health insurance through advertisements that were misleading and unfairly disparaged competitors.  Sanction:  Fine - $2,500.

Union Labor Life Insurance Company, Washington, DC
Consent Order #E07-09; January 26, 2007; insurer provided coverage and utilized a network policy form that had not been approved for use in NJ.  Sanction:  Fine - $10,000.

Matters Resolved Without Determination of Violation

George M. Barnard; Consent Order #E07-10, January 30, 2007; Issue: licensee address information; Administrative sanction - $250.

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February

Orders to Show Cause

F. Roger Strandskov, Towaco, NJ
Eastern Insurance Agency, Inc., Towaco, NJ
Order To Show Cause #E07-10, January 31, 2007; Strandskov is charged with unworthiness for licensure as a result of his conviction of the second degree crime of Theft-Illegal Retention for which he was sentenced to imprisonment and payment of restitution totaling $610,849.04; each act of misappropriation underlying the criminal conviction, which acts pertain to premium owed to insurers, constitutes a separate administrative violation by Strandskov and his agency, Eastern.

Related Action:  Order Suspending Respondent Strandskov’s License Pending Completion of Administrative Proceedings #E07-11, January 31, 2007.

Miscellaneous Orders

Victor Pastor, Hillside, NJ
Order Suspending Producer License and Mortgage Solicitor Registration Pending Completion of Administrative Proceedings, #E07-15, February 26, 2007; the insurance producer license and mortgage solicitor registration held by Pastor are immediately suspended and Pastor shall not engage in the business of insurance in any capacity pending completion of administrative proceedings and entry of a Final Order.

Consent Orders

Frederick Scott Addis, King of Prussia, PA
The Addis Group, LLC, King of Prussia, PA
Consent Order #E07-14, February 22, 2007; Producers charged fees to two clients without obtaining written agreements.  Sanction: Fine - $10,000

Joseph Pettit, Yorktown Heights, NY
National Association of Residential Real Estate Professionals, Fort Valley, GA
Consent Order #E07-13, February 20, 2007; NARREP secured surplus lines insurance coverage without utilizing a NJ insurance producer having surplus lines authority; and Pettit submitted numerous courtesy filings on behalf of NARREP, a risk purchasing group lacking surplus lines authority.  Sanction: Fine - $19,400 ($9,700 each – Pettit and NARREP).


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March


Final and Miscellaneous Orders

Thomas Dobrek, Bordentown, NJ
Mr. Lucky Bail Bonds, Inc., Gretna, LA
Final Decision and Order #E07-26, March 26, 2007; Amended Order to Show Cause #E04-56, April 21, 2006; charged respondents with issuing a $35,000 check for payment of a court-ordered bail bond forfeiture judgment that was dishonored for lack of sufficient funds; accepting premium payments but failing to obtain or post bail bonds; collecting bail bond premiums that were excessive, inadequate or unfairly discriminatory; misappropriating or converting for their own use a $10,000 collateral payment; and that in 2005 Dobrek made misrepresentations in a producer application submitted to an insurer.  Counts 1 and 2 of the Order to Show Cause (issuing dishonored $35,000 check and accepting premium but failing to post bail bonds) were dismissed.  The remaining charges were proven.  Sanctions: Revocation of Dobrek’s producer license and the limited registrations of Dobrek and Mr. Lucky Bail Bonds; Restitution - $18,301; Fines - $20,000; Costs - $1,175.

Orders to Show Cause

Joshua Paul Novello, Clark, NJ
Order to Show Cause #E07-20, March 13, 2007; producer is charged with issuing a check to the Department for payment of a licensing fee which was dishonored for insufficient funds and failing to replace this check; and failing to respond to the Department’s written inquiry.

Marva S. Ransom, Newark, NJ
Order to Show Cause #E07-18, March 5, 2007; producer is charged with issuing a check to the Department for payment of a license renewal fee which was dishonored for insufficient funds and failing to replace this check; failing to respond to a Department telephone inquiry; and failing to respond to a Department written inquiry.

Robert Stone, Camden, NJ
Order to Show Cause #E07-22, March 13, 2007; producer is charged with failing to disburse $20,415.33 received from a premium finance company to insurers; demonstrating lack of fitness for licensure by reason of this conviction of theft by failure to make required disposition of property; and failing to timely notify the Department of his indictment.

Consent Orders

Michael J. Delisi, Brick, NJ
Anton Adjustment Co.-NJ, Inc.
, Orange, NJ
Consent Order #E07-16, March 5, 2007;  public adjusters  misappropriated, converted or illegally withheld a client’s $14,268.77 insurance settlement claim payment; and failed to timely notify the Department of Delisi’s indictment.  Sanctions:  Revocation of licenses; Fine - $5,000; Costs - $500.

Health Net of New Jersey, Inc., Shelton, CT
Consent Order #E07-25, March 15, 2007;  Health Net misrepresented to the Department that it wished to implement a proposed repricing methodology which, in fact, had already been put to use; Health Net’s use of the repricing methodology violated small group regulations and was not in accordance with the provision of its large group contracts approved prior to April 2005; Health Net violated the terms of its small group contracts by failing to cover a 96-hour supply of certain prescription drugs; Health Net’s protocols from May 2005 to September 2006 failed to provide coverage for one or more therapies appropriate to treat children with autism/pervasive developmental disorder, and in instances Health Net denied coverage, in violation of the biologically-based mental illness mandate; Health Net tiered reimbursement for certain out-of-network mental health benefits based on the professional designation of the provider which violated small group rules and which was not in accordance with its large group contracts approved prior to April 2005; and Health Net failed to timely file with the Department the administrative services agreement between it and Health Net of the Northeast, Inc. (its parent) covering administrative, consulting and other support services.  Remediation is being made to adversely affected members or medical providers.  Sanction:  Fine - $400,000.

Sherry A. Kakol, Bridgeton, NJ
Consent Order #E07-17, March 5, 2007; Producer collected $4,742.36 in premium payments but failed to remit those payments to her employer.  Sanctions:  Revocation of license; Fine - $2,500.

Sandra M. Meehan, Monroe, NJ
Consent Order #E07-24, March 13, 2007;  Producer issued a check to the Department for payment of a license renewal fee which was dishonored for insufficient funds; and failed to timely notify the Department of her change of home address.  Sanction:  Fine - $750.

Princeton Insurance Company, Princeton, NJ
Consent Order #E07-21, March 13, 2007; Beginning in April 2006, Princeton began nonrenewing and conditionally renewing a block of business consisting of approximately 60 policies insured under its POP problem (policies insured with properties having values in excess of $1M) without having first submitted a block nonrenewal plan to the Department.  Sanction:  Fine - $5,000.

Abraham H. Teitelbaum, Lakewood, NJ
Quick Title Search, LLC,
Lakewood, NJ
Consent Order #E07-23, March 13, 2007; producers permitted an unlicensed employee to transact title insurance business; they permitted that employee to offer unlawful inducements (free theatre tickets and limo services); and failed to timely notify the Department of the replacement of its designated responsible licensed producer.  Sanction:  Fine - $3,250 (allocated $2,250 to Quick Title Search and $1,000 to Teitelbaum).

Matters Resolved without Determination of Violation

Khuyen Pham, Consent Order #E07-27, March 27, 2007: Issue: licensee address information; Administrative sanction - $250.

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April


Miscellaneous Orders

CIGNA HealthCare of New Jersey
Connecticut General Life Insurance Company

Order Directing Remediation and Assessing Penalties #A07-34, April 25, 2007; CIGNA began to nonrenew optional benefit riders regarding small employer plans starting July 1, 2006 but the notices issued to employers differed from the specimen notice approved by the Department; CGLI and CIGNA provided small employer groups that were affected by the rider withdrawal with information encouraging them to select a CGLI PPO plan but failed to disclose the availability of a CIGNA HMO or HMO POS plan and did not explain the significant differences in benefits between the standard small employer HMO and HMO POS plans that were issued by CIGNA and the small employer PPO plans offered by CGLI; CGLI was required to make its PPO plan available without restrictive riders but failed to do so in many cases; CIGNA had 1,332 small employer HMO and HMO POS contracts in force as of June 30, 2006, which employers were advised that they only had the option to renew into CGLI, and in addition, as of March 26, 2007, CGLI offered and issued CGLI PPO plans containing restrictive riders to approximately 791 new small employer groups.  Order #A07-34 requests remedial relief to restore coverages and benefits to approximately the degree that would have likely existed had CIGNA and CGLI properly made available to employers required options and plan choices.  Proposed sanction:  $2,123,000 fine. 

Orders to Show Cause

Charles D. Edwards, New Brunswick, NJ
On Top Bail Bonds, New Brunswick, NJ
Renita Thomas,
North Brunswick, NJ
Order to Show Cause #E07-31, April 16, 2007; respondents are charged with permitting Renita Thomas to transact the business of insurance without a license; accepting monies for a bail bond but neither remitting the premium money in a timely manner nor returning the money to the customer in a timely manner;  and (Edwards) providing false and misleading information to Department investigators regarding the procurement of the bail bond and the unlicensed activity of Thomas.

Beatriz V. Montesinos, Paterson, NJ
Premier Agency, Inc.,
Paterson, NJ
Order to Show Cause #E07-32, April 17, 2007; producers are charged with collecting fees without a proper fee agreement and in excess of the maximum allowed fee for insurance brokers or consultants; failing to issue receipts or issuing nonconforming receipts; depositing and maintaining premium funds received from clients in an account that was not a dedicated premium trust account; failing to maintain accurate books and records reflecting all insurance-related transactions and failing to maintain a register containing the minimum required information regarding all monies received, deposited, disbursed or withdrawn in connection with insurance transactions; and failing to notify the Department of the change in Montesinos’ business address.

United HealthCare Insurance Company, Hartford CT
Order to Show Cause #E07-28, April 10, 2007; insurer is charged with the following: issuing and publishing “New Jersey Protocols on the use of Non-Participating Laboratory Services” which includes the announcement of sanctions that may be imposed against participating physicians if the doctors make what United deems are inappropriate referrals to out-of-network (OON) laboratories; the possible imposition of such sanctions effectively restricts OON benefits and constitutes an unfair claim settlement practice; and engaging in an unfair trade practice by failing to inform its members about the existence and operation of the physician sanctions, which may affect members’ benefits, quality of care, and health care plan choice.

Consent Orders

Laurence K. Bowser, Somerville, NJ
State Title Group, Inc.,
Somerville, NJ
Consent Order #E07-29, April 11, 2007;  Producers transferred title business to New Jersey Title, which business had been solicited or negotiated while State Title Group had been acting as an agent for Lawyers Title; and failed in numerous instances to timely deliver title policies to insureds.  Sanction:  Fine - $25,000.

Rosie M. Chou, Flushing, NY
Consent Order #E07-38, April 30, 2007; Producer failed to timely renew her license and transacted the business of insurance during the time her license was not active. Sanction:  Fine - $500.

Nelson Gonzalez, Perth Amboy, NJ
Consent Order #E07-37, April 30, 2007; Producer’s actions demonstrated incompetence and unworthiness, in that Gonzalez acted in an abrasive, unprofessional and improper manner while appearing at a municipal lock-up to post bail and refused to leave when ordered to do so; he was therefore arrested at the lock-up and subsequently was found guilty of a violation of a township ordinance (interference with a police officer). Sanctions:  Fine - $2,500; Costs - $500.

Joan M. Merola,
East Brunswick, NJ
John P. Merola
, East Brunswick, NJ
Consent Order #E07-30, April 16, 2007; Despite having his license revoked, John Merola held himself out to be and acted as a public adjuster, and Joan Merola aided and abetted in his activities.  Sanctions:  Revocation of license – Joan Merola; Fine - $15,000.

United HealthCare Insurance Company,
Hartford CT
United Healthcare of New Jersey, Inc., Trumbull CT
Consent Order #E07-36, April 30, 2007, United advised large group contract members who requested predetermination of infertility procedures involving an egg donor that the expenses were not covered, when in fact the procedures fell within the infertility mandate.  (United did cover other necessary infertility procedures for the same members.)  Sanction:  Fine - $25,000.

Matters Resolved without Determination of Violation

Jayanti C. Solanki; Consent Order #E07-35, April 26, 2007; Issue: licensee address information; Administrative sanction:  $250.

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May


Orders to Show Cause

Jose D. Uribe, Union City, NJ
Inter-America Insurance Agency, LLC, Union City, NJ
Order to Show Cause No #E07-41, May 14, 2007; producers are charged with selling insurance policies to various companies domiciled in New Jersey for insurance coverage through an entity, American Transportation Insurance Company (ATIC), that was not authorized to provide coverage in New Jersey; issuing commercial automobile insurance identification cards and certificates of insurance purporting to provide automobile insurance coverage with ATIC when, in fact, no such policies were issued; selling an insurance policy to Millenium Car Services for insurance coverage through an entity, Universal Insurance Exchange, that was not authorized to provide coverage in New Jersey; issuing commercial automobile insurance identification cards and certificates of insurance purporting to provide automobile insurance coverage with Lancer Insurance Company when, in fact, no such policies were issued; accepting automobile insurance premium payments but failing to secure valid insurance coverage, remit the premium payments to an insurer or return the premium payments to the insureds; failing to timely return unearned premiums and commissions for insurance coverages financed by Prime Rate Premium Finance Corporation; failing to provide complete and timely responses to Department inquiries and Department Subpoena No. 05-26; and Uribe’s failure to report to the Department his arrest in Hudson County in connection with the alleged sale of fraudulent documents.
 

Matters Resolved without Determination of Violation

Thomas J. Hewitt; Consent Order #E07-39, May 11, 2007; Issue: licensee address information; Administrative sanction - $250.

Homeland Insurance Company of New York, Consent Order #E07-40, May 14, 2007; Issue: surplus lines transaction; Administrative sanction - $1,000.

Palisades C.E. School, Consent Order #E07-42, May 23, 2007; Issue: dishonored checks; Administrative sanction - $1,000.

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June


Final and Miscellaneous Orders

AmeriChoice of New Jersey, Inc., Newark, NJ
Order Assessing Penalties #E07-45, June 1, 2007;  From August through December 2004 AmeriChoice indicated that it was terminating coverage for private duty nursing (PDN) for P.P., a teenager whose medical history includes among other disorders: cerebral palsy, mental retardation, spastic quadriplegia, scoliosis, and asthma, and who had been receiving PDN through AmeriChoice in prior years. In August 2005 a nursing service received an order from P.P.’s physician for nursing services, but the request was not processed by either AmeriChoice or the carrier’s vendor, Ancillary Care Management (ACM).  On September 2, 2005, P.P. was admitted to Cooper Hospital with severe dehydration, acute renal failure and was unresponsive to verbal or tactile stimuli.  On September 10, 2005, P.P. was discharged to home with multiple open wounds and no discharge orders.  On September 12, 2005, P.P.’s physician ordered 12 hours of PDN per day, wound care and supplies.  AmeriChoice forwarded the physician’s order to ACM the same day but only authorized PDN starting September 15th.  P.P. only received very sporadic PDN from September 15, 2005 forward, and even though AmeriChoice was aware that the nursing service had insufficient staff, neither it nor ACM located alternate PDN providers.  P.P. received no PDN on September 13, 14, 17, and 18, 2005, and P.P. was readmitted to Cooper on September 19, 2005.  Following readmission P.P. was not able to resume living at home, was disenrolled from AmeriChoice and placed in a pediatric long term care facility.  In regards to P.P.’s care, AmeriChoice failed to adhere to quality assurance and utilization management regulations.  When issued a notice of deficiency by the Division of Medical Assistance and Health Services, AmeriChoice’s senior medical director, in an appeal, contended that there was no medical justification for PDN for P.P.  AmeriChoice failed to fully respond to a DOBI subpoena by failing to provide a letter from Cooper Hospital that could be considered critical of the actions of AmeriChoice relative to P.P.  Proposed sanction:  $300,000 fine.

Leonardo
Efren Palmer, Newport Beach, CA
Final Order #E07-50, June 20, 2007; Order to Show Cause #E06-137 issued September 25, 2006 charged that Palmer submitted four separate payments to the National Insurance Producer Registry (NIPR) for payment of non-resident license fees in four states (NJ, PA, VA and DE) with a credit card he lacked authority to use; and applied for a NJ producer license using a wrongfully converted form of payment. Sanctions:  Revocation of license; Fine - $5,000, Costs - $672.50.

Robert Sutton, Plainfield, NJ
Final Order #E07-49, June 20, 2007; Order to Show Cause #E06-79 issued May 10, 2006; charged Sutton with, on numerous occasions, falsely certifying that he witnessed a named insured’s signature on an insurance application (and in three instances the named insured was not aware of the existence of the policies); falsely stating that an applicant suffered from “no illnesses” and was in good health, when in truth the applicant was terminally ill in a hospital; and  signing Consent Order No. 2001-07562-39 with the Office of the Insurance Prosecutor in which he admitted falsely certifying the insured’s signature on three applications, such admitted misconduct demonstrating Sutton’s unfitness for licensure.  Although provided with notice and an opportunity to contest these charges, Sutton failed to properly request a hearing.  Sanctions:  Revocation of license; Fine - $15,000; Costs - $475.

Orders to Show Cause

Richard N. Hartman, Somerville, NJ
Thomas J. Sharp, IV, Somerville, NJ
Thomas J. Sharp & Associates, Inc., Somerville, NJ
Order to Show Cause #E07-44, June 1, 2007;  Producers are charged with causing premium trust funds to be withdrawn and moved into their business operating account and thereafter disbursed to pay operating expenses, with shortfalls in the premium trust account accumulating to between $600,000 and $925,000; failing to prepare a written record of the discrepancies in the premium trust account; failing to maintain accurate books and records; moving dedicated premium funds from the premium trust account to a money market fund which was not insured by the FDIC and without having secured from the principals and maintained for inspection by the Department written authorization for the investment of the money and the retention of the earnings on that money; making disbursements of commission payments from the premium trust account which were not supported by an appropriate written record; and failing to prepare and maintain a monthly reconciliation of the premium trust account.

Consent Orders

CUNA Mutual Insurance Society, Madison, WI
Settlement Agreement and Consent Order #E07-43, May 30, 2007;  Errors in premium refunds regarding single premium credit insurance products, which errors were uncovered during a NJDOBI market conduct examination.  Multi-state Remediation - $270,000; Mult-state costs and penalties – approximately $294,000, costs to NJDOBI as lead state regulator - $75,000.

Peter S. Gruenberg, Cranford, NJ
Banc of America Corporate Insurance Agency, LLC, Cranford, NJ
Consent Order E07-47, June 8, 2007; a former affiliate entity that merged with BACIA solicited health insurance via a web site which contained information that was misleading in fact or implication and unfairly disparaged competitors.  Sanction:  Fine - $2,500.

Title Closing Services, LLC, d/b/a Weichert Title Agency,
d/b/a Democracy Title Agency, Cherry Hill, NJ
Consent Order #E07-46, June 8, 2007; Weichert issued improper $250 credits in connection with certain sales transactions involving Weichert Relocation Resources.  Sanction:  $5,500
.

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July


Final and Miscellaneous Orders

Steven B. Budge, Cliffwood Beach, NJ
Final Decision and Order #E07-52, June 28, 2007 based on Order to Show Cause #E04-131, issued October 19, 2004 ; Public adjuster misrepresented, concealed or failed to disclose material facts regarding a property damage loss and intentionally inflicted greater damage to the property than that which actually existed; and he failed to notify the Department of his indictment for theft by deception.  Sanctions:  Revocation of license; Fine - $8,500; Costs - $812.50.

Aetna Health, Inc., Blue Bell, PA
Order Directing Remediation and Assessing Penalties, #A07-59, July 23, 2007; As a result of provider complaints, the Department learned that starting in or about June 2007, Aetna paid certain out-of-network claims at a rate based on 125% of Medicare (75% of Medicare in the case of lab fees and durable medical equipment).  Aetna sent certain providers a letter stating the payment represented Aetna's determination of a fair payment and that additional reimbursement would not be considered.  Aetna applied this claims practice for services such as emergency care, services provided by nonparticipating providers during an admission to a network hospital, and services rendered as the result of a referral or authorization by Aetna.  In such cases, Aetna knew that its payment obligations exceeded what it paid and represented in its letters.  Aetna stated that a total of 130 providers were issued such a letter, with the first issued on or about June 8, 2007.

Aetna stated that it did not make additional payments to those providers who indicated they intended to balance bill members or to providers who did in fact balance bill members.  In these situations, Aetna paid additional sums only if members contacted Aetna to complain about being balance billed.  Aetna's practices contravened its obligation to ensure that its members were not balanced billed under these circumstances. Aetna processed over 3,000 claims in this manner.  Aetna has been ordered to cease using 125% of the Medicare allowable amount as the maximum allowable charge for these services.  It has also been ordered to reprocess all the affected claims and pay those claims based on the billed charges, with additional amounts accompanied by 12% interest.  Aetna is further ordered to send a notice to the affected providers informing that its obligation is not to pay them a “fair” amount but rather an amount sufficient to ensure that they do not balance bill members.  Further, the Aetna has been ordered to pay a fine of $9,457,500.  Aetna has 30 days to contest the order.  Proposed Sanctions:   Remediation to all affected providers or members; Fine - $9,457,500.

Consent Orders

Yvette Binn-Graham, Voorhees, NJ
Amalgamated Title Abstract Company, Inc., Mt. Laurel, NJ
Consent Order #E07-53, July 19, 2007; based on Order #E06-106, July 13, 2006; Producers failed to remit premium on 375 occasions; failed to disburse loan proceeds and failed to discharge a prior mortgage; failed to make disbursements toward outstanding liens in five real estate transactions; wrote two checks for reimbursement of premiums with checks that were dishonored for insufficient funds; and failed to keep real estate settlement proceeds and insurance premium payments segregated and in trust.  Sanctions:  Revocation of Licenses; Fine - $65,000; Costs - $1,200.

Joseph A. Curreri, Holmdel, NJ
Walter A. Nalbandian, Holmdel, NJ
Henry A. Nalbandian, Holmdel, NJ
Martin A. Nalbandian, Holmdel, NJ
Creative Insurance Services, Inc., Holmdel, NJ
Consent Order #E07-54, July 19, 2007; Martin and Henry Nalbandian were not eligible for group coverage as they were directors, not employees of Creative; at that time Creative was not aware of the applicable statute governing this issue.  In transmitting information to an insurer, Curreri submitted information provided by others without making an appropriate level of additional inquiry to attempt to verify the accuracy of that information.  Creative failed to maintain a trust account.  Sanctions:  Fines - $25,000 (Creative and Walter Nalbandian, an active officer of Creative); $12,500 (Henry Nalbandian); $12,500 (Martin Nalbandian); $7,500 (Joseph Curreri); Costs - $1,625.

Martin K. Goldstein, Middle Village, NY
Consent Order #E07-56, July 18, 2007;  Producer paid for renewal of his license with a check that was dishonored on the basis of a closed account; he failed to timely inform the Department of changes regarding his home and business addresses; and he filed to timely respond to Department inquiries. Sanctions:  Fine - $850; Costs - $150.

Robert J. Moore, Hawthorne, NJ
Len-Mor Agency, Inc., Hawthorne, NJ
Consent Order #E07-58, July 19, 2007; Producers commingled premium and operating funds and failed to provide requested records.   Sanctions:  Probation of license for one year (Moore); Fine - $12,000 (Moore and Len-Mor); Costs - $400.

Thomas M. True, Westfield, NJ
True & Kookogey, Inc., Westfield, NJ
Consent Order #E07-55, July 19, 2007; Producers charged a client fees without obtaining a fully executed fee agreement; although they represented to a client that commissions would not be earned, in fact the producers received commissions; they provided a credit representing refunds on cancelled policies but failed to actually remit the funds to their client; and they failed to timely provide requested information to the Department.  Sanctions:  Probation of licenses for one year; Restitution - $16,998 plus interest; Fine - $15,000.

 
Matters Resolved without Determination of Violation

James Edward Titus; Consent Order #E07-57, July 19, 2007; Issue: timely license renewal.  Administrative Sanction - $6,000.

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August


Miscellaneous Orders

Harry A. Carroll, Moorestown, NJ
Order Assessing Penalties #E07-62, August 1, 2007; Producer issued a check for renewal of his license that was subsequently dishonored for insufficient funds; despite being requested to do so, producer failed to replace the check with good funds; producer issued another check in connection with licensing fees that was also dishonored for insufficient funds; he thereafter issued a replacement check (for the second check) that was also dishonored for insufficient funds.  Sanctions:  Revocation of license, subject to retroactive reinstatement on condition of payment of licensing fees, including applicable late fees, and a fine of $3,000.  Carroll has 30 days to contest the order.

Orders to Show Cause

Nathaniel F. Perry, Sr., Camden, NJ
Order to Show Cause #E07-64, August 13, 2007; Producer is charged with failing to timely pay installments of a fine imposed pursuant to a prior consent order and failing to provide proof of restitution required under that prior consent order.

Consent Orders 

Raed M. Issa, Bloomfield, NJ
Affordable Premium Agency, Inc., Bloomfield, NJ
Consent Order #E07-65, August 17, 2007; Producers submitted applications to NJCAIP that were not qualified for such coverage; they also submitted numerous other applications to NJCAIP containing deficiencies. Sanction:  Fine - $2,500.

Mohamed R. Mowad, Marlboro, NJ
Regal Insurance Brokerage, Inc., Brooklyn, NY
Consent Order #E07-66, August 17, 2007; Producers failed to timely report and disclosed an administrative action taken by the New York State Insurance Department.  Sanction:  Fine - $3,000 ($1,500 each – Mowad and Regal).

Victor Pastor, Coral Gables, FL
Consent Order #E07-68, August 23, 2007; Pastor forged client requests and cash surrendered for his own personal benefit client annuities; Pastor failed to timely notify the Department that he was charged with four counts of forgery, two counts of theft by unlawful taking and one count of conspiracy; and he failed to timely notify the Department of his conviction (based on a guilty plea) to one count of forgery and one county of theft by unlawful taking. Sanctions:  Revocation of producer license and mortgage solicitor registration; Fine - $10,000.

James P. Philbin, Dunellen, NJ
Consent Order #E07-67, August 23, 2007; Philbin sponsored investment seminars for senior citizens from which he anticipated the generation of insurance business but failed to identify himself as a producer and used an unregistered business name; he distributed materials that had the capacity to mislead by creating an impression overstating his qualifications; he claimed to have coauthored a book, “A Retiree’s Guide to the Secrets of a Secure and Peaceful Retirement” and a tax guide, “What You Ought to Know Before You Receive Your Retirement Distribution,” which were, in fact, marketing materials he purchased from a third party; Philbin sent a letter to a consumer referencing a $2,165 fee for insurance related services that was not contained in a previously executed written fee agreement and which did not clearly set forth the terms and services for which the fee was being charged; Philbin failed to timely notify the Department of a change of business address;  he failed to report to the Department that he was the subject of a disciplinary action by the NJ Bureau of Securities regarding his sale 18 promissory notes in the amount of $490,542.74 which notes were not registered with the Bureau, ultimately resulted in significant losses to the purchasers, and regarding which Philbin failed to exercise reasonable skill, care and diligence.  Sanctions: Suspension of license for 60 days; Probation of license for two years; Fine - $50,000; Restitution - $47,450.70.

Karissa Sencion, Morristown, NJ
Consent Order #E07-61, August 1, 2007; Producer prepared and submitted policy change forms to an insurer -- adding herself as an additional insured under an auto policy in which she falsely stated that she resided with the named insured and falsely listing her status as “married;” Sencion has entered into a Consent Order with the Office of the Insurance Fraud Prosecutor, agreeing to pay a $1,500 fine and admitting violation of the NJ Insurance Fraud Prevention Act.  Sanctions:  Revocation of license; Fine - $1,500; Costs - $650.

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September


Final and Miscellaneous Orders


Irvin Erwin, Newtonville, NJ
Final Decision and Order #E07-78, September 17, 2007; Provider admitted to the violations set forth in Order to Show Cause E06-72, issued April 24, 2006, which charged Erwin with submitting premium payments to PAIP using checks that were dishonored by his bank for insufficient funds; numerous instances of failing to remit premiums; failing to maintain a premium trust account; failing to maintain and intentionally destroying records; issuing temporary insurance identification cards when no insurance was in effect because the applications and premium payments were never submitted by him to the insurer and to CAIP; submitting applications that failed to comply with PAIP standards; and failing to timely report an administrative disciplinary action taken by the NASD.  Sanctions:  Revocation of license; fine - $100,000. 

Seymour Furman, Union, NJ
Final Decision and Order #E07-76, September 17, 2007; Furman prepared and submitted to an insurer a false and misleading life insurance application, regarding which actions he entered into a Consent Order with the Office of the Insurance Fraud Prosecutor.  Sanctions:  Revocation of license; Fine - $5,000; Costs - $1,400.

Polena Berenshteyn-Krass, Huntingdon Valley, PA
Consent Order and Dismissal #E07-82, September 24, 2007; Producer agrees to cease and desist transacting business in a name other than that appearing on her producer license, transacting business in New Jersey unless her license is in full force and effect, and transacting business with any entity which is required to be but is not licensed.

Orders to Show Cause

Taleb Abdau Ahmed, New Brunswick, NJ
Order to Show Cause #E07-79, September 17, 2007; Producer is charged with failing to timely notify the Department of his criminal indictment and subsequent conviction, and with failing to respond to Department inquiries.

Cynthia R. Colon, Mays Landing, NJ
Order to Show Cause #E07-74; September 17, 2007; Producer is charged with misappropriating insurance premiums and failing to timely notify the Department of her indictment and subsequent criminal conviction for the crime of theft by unlawful taking.

Related Action:  Order to Show Cause Seeking Immediate License Suspension
Pending Completion of Administrative Proceedings #E07-73; Sep. 17, 2007.

International Fellowship of Christians & Jews, Inc.
Order to Show Cause #E07-80, September 17, 2007; Holder of permit to issue charitable annuities is charged with failing to submit a 2006 Annual Statement.

Consent Orders

Elizabeth M. Carpio, Staten Island, NY
Consent Order #E07-72, September 12, 2007; Producer issued a check for renewal of her license that was subsequently dishonored for insufficient funds.  Sanction:  Fine - $500.

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October


Final and Miscellaneous Orders

CBCA Administrators, Inc., Fort Worth, TX
Conditional Order Revoking License #E07-84, October 16, 2007; Third Party Administrator failed to file annual reports. Sanctions:  Revocation of license, subject to retroactive reinstatement upon the filing of 2005 and 2006 annual reports and payment of a $50,000 fine if such actions are taken on or before November 16, 2007.

Michael B. Chamberlain, Bridgeton, NJ
Final Order #E07-83, October 2, 2007;  Order to Show Cause #E06-160 issued November 21, 2006 charged that that Chamberlain improperly withdrew annuities belonging to a client in the aggregate amount of $303,756 and used the funds for his own personal benefit.  (Chamberlain pleaded guilty to one count of second degree theft relating to the improper withdrawal of annuity funds.)  Although provided with notice and an opportunity to contest these charges, Chamberlain failed to do so.  Sanctions:  Revocation of license; Restitution - $303,756; Fine - $25,000; Costs - $250.

Orders to Show Cause

Victor D. Jones, Paramount, CA
Business and Individual Insurance Services, Inc. Paramount, CA
Order to Show Cause #E07-86, October 22, 2007;  Producers issued a check for payment of Jones’ nonresident producer application which was subsequently dishonored for insufficient funds (eventually a valid replacement check was issued); failed to timely notify the Department of a change of business address; and failed to timely respond to the Department’s inquiries.

Consent Orders

Donald R. Readlinger, Cranford, NJ
Hale Insurance Agency, Cranford, NJ
Consent Order #E07-85, October 22, 2007; Readlinger prepared and sent to carriers change of broker request letters on behalf of Hale agency using the reproduced signature of a municipal official (Readlinger promptly took action to rescind the effects of his actions upon being advised by the municipality that he did not have authority to take such actions, and Hale subsequently resigned as the municipality’s insurance broker). Sanctions:  Surrender of producer license having the effect of revocation (Readlinger); Probation of license for two years (Hale agency); Fine - $20,000.


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November


Consent Orders

Stacy A. Bates, Millville, NJ
Pladeck Associates, Inc., d/b/a Bates General Insurance Agency, Millville, NJ
Consent Order #E07-87, November 5, 2007; Producers misappropriated and converted to their own use premium payments received from numerous clients.  Sanctions:  Restitution - $105,552.62; Fine - $22,500; Costs - $2,332.50.  (The producers’ licenses were previously revoked pursuant to Consent Order E05-01, issued January 6, 2005.)

Conventus Inter-insurance Exchange, Woodbridge, NJ
Consent Order #E07-90, November 27, 2007; Conventus failed to submit to the Department in a timely manner Consent to Higher Rate applications.  Sanction:  Fine - $2,000.

Dana Matthews, Alexandria, VA
Consent Order #E07-88, November 13, 2007; Producer issued a check for payment of her producer license which was subsequently dishonored for insufficient funds.  Sanction:  Fine - $500.

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December

Orders to Show Cause

Robert Ellison, New Brunswick, NJ
Dependable Bail Bonds, LLC, New Brunswick, NJ
Order to Show Cause #E07-91, December 7, 2007; Producers are charged with failure to abide by the terms of prior Consent Order #E06-130 (which ordered the payment of a fine), and with failure to timely notify the Department of a change of business address.

Consent Orders

Paul Kaplan, Springfield, NJ
Consent Order #E07-93, December 12, 2007;  Kaplan, along with other producers who were charged under OTSC #E05-06 and whose licenses were previously revoked by operation of Final Order #E06-123, accepted premium payments, yet failed to remit the funds to an insurer or return the funds to the consumers; converted and altering checks payable to others; issued checks that were subsequently dishonored for insufficient funds; issued auto insurance ID cards purporting to show coverage, when in fact coverages were never placed and no insurance was in force; issued non-compliant temporary auto insurance ID cards; issued a Certificate of Insurance when no coverages were in force because the producers failed to place the requested coverages; submitted deficient applications to PAIP, resulting in a revoked PAIP certification; submitted deficient applications to CAIP; and failed to comply with Department subpoenas. Sanctions:  Revocation of license; Restitution - $4,457.53; Fine -$15,000.

Peter Rychok, Maplewood, NJ
Consent Order #E07-92, December 7, 2007; Producer admits that he provided inaccurate information in 4 private passenger auto insurance applications; submitted 32 deficient applications to CAIP, and provided inaccurate information regarding 57 clients in workers’ compensation insurance applications.  Sanctions:  Revocation of license (to be effective June 7, 2008, before which time Rychok agrees to cease submitting new workers’ compensation insurance applications or to derive commissions therefrom); Fine - $12,500.

St. Paul Surplus Lines Insurance Company, Wilmington, DE
Northfield Insurance Company, Des Moines, IA
Consent Order #E07-94, December 12, 2007; Insurers wrote a Garage Program, which included primary commercial auto BI and PD coverages in the surplus line market, although there was no evidence to suggest an inadequate NJ-admitted insurance market for such coverages; provided its surplus lines general agents with auto insurance identification card stock that had not been submitted to or approved by the Department and which stock did not conform with required content provisions; failed to exercise due oversight and control in connection with the issuance of the insurance identification cards
Sanctions:  Fine - $20,000 (paid by Northfield); Costs - $5,000 (St. Paul and Northfield); Remediation – the Garage Program business has been transferred to Northland Insurance Company, which insurer is admitted to conduct property and casualty insurance business in New Jersey.

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