STATE OF MICHIGAN DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES

Before the Director of the Department of Insurance and Financial Services

Department of Insurance and Financial Services Petitioner

V

Sinan Jamil ProStar Insurance Agency Case No 16-967-L Inc dba Insurance Giant Agency ProStar Insurance Agency 2 Inc dba Insurance Giant Agency 2

Docket No 15-064706

Respondents ________________

l~s~~ and entered this fE_ day of June 2017

by Patrick M McPharlin Director

FINAL DECISION

I BACKGROUND

This matter concerns an enforcement action initiated by the Department of Insurance and Financial Services (DIFS) staff alleging that the Respondents violated the Michigan Insurance Code (Code) MCL 500100 et seq in connection with automobile insurance transactions

Respondent Sinan Jamil is a resident insurance producer with qualifications in property and casualty insurance Respondent ProStar Insurance Agency Inc is a resident insurance agency which has its principal place of business at 20037 W 8 Mile Road Detroit Michigan ProStar Insurance Agency Inc does business as Insurance Giant Agency Respondent ProStar Insurance Agency 2 Inc is a resident insurance agency which has its principal place of business at 14917 Gratiot Avenue Detroit Michigan ProStar Insurance Agency 2 Inc does business as Insurance Giant Agency 2

Respondent Jamil is the Designated Responsible Licensed Producer for ProStar Insurance Agency Inc and ProStar Insurance Agency 2 Inc See MCL 5001205(2)(b) Respondent Jamil is the only licensed individual affiliated with the ProStar agencies

Docket No 15-064706 Case No 16-967-L Page 2

A hearing was held on November 10 2016 The Respondents were represented by counsel at the hearing A Proposal for Decision (PFD) was issued March 31 2017 The Petitioner and Respondents filed exceptions to the PFD These exceptions are discussed more fully in Part Ill of this Final Decision

II FINDINGS OF FACT AND CONCLUSIONS OF LAW

The Findings of Fact of the PFD are in accordance with the preponderance of evidence and the Conclusions of Law are supported by reasoned opinion Except as explained in Part Ill below the Findings of Fact and Conclusions of Law in the PFD are adopted and made a part of this Final Decision Specifically the following Findings of Fact and Conclusions of Law are restated herein

1 In February 2013 _ contacted Respondent Sinan Jamil about purchasing automobile insurance Jamil gave her a quote for a Government Employees Insurance Company (GEICO) insurance policy and accepted payment of $44800 to obtain a GEICO insurance policy Jamil faxed a temporary certificate of insurance to indicating that she had GEICO insurance

2 Of $44800 payment Jamil sent $19900 to GEICO Accordrng to Jamil the remaining $24900 was used to purchase a roadside assistance plan from NSD Motor Club Ms 1 did not authorize the NSD Motor Club purchase and never saw any document confirming an NSD Motor Club membership At the time of the transaction Ms had a AAA membership that provided roadside assistance and had no need for an NSD Motor Club Membership

3 On July 2 2013 went to ProStar Insurance Agency to purchase a no-fault insurance policy for his motorcycle purchased a Progressive Insurance policy from Jamil He did not discuss any motor club membership or roadside assistance with Jamil had a AAA membership that provided roadside assistance and had no need for an NSD Motor Club membership Nevertheless Jamil arranged an NSD membership for which was issued on July 2 2013

4 On August 26 2013 and again on September 16 2015 DIFS investigators requested Jamil provide the insurance files related to and other individuals Despite numerous requests for the records Jamil failed to produce the requested documents (See hearing exhibits 5 and 11)

5 Respondent Jamil offered advice directly to a purchaser and obtained insurance for Ms which constitutes negotiation under MCL 5001201 (k)1 Further he solicfted insurance by attempting to sell insurance or asking a person to apply for a particular kind of insurance from a

1 Page 8 of the PFD contained a typographical error in stating the Code citation as MCL 50012019(k) the correct citation is MCL 5001201 (k)

Docket No 15-064706 Case No 16-967-L Page3

particular company MCL 5001201(m) Respondent Jamil was not appointed as an agent for GEICO

6 Respondent Jamil violated Section 1208a(1) of the Code MCL 5001208a(1) by acting as an agent of an insurer (GEICO) without being an appointed agent of that insurer

7 Respondents violated Section 1207(1) of the Code MCL 5001207(1) by failing to remit to GEICO and Progressive money which complainants and had given to Respondents

8 Respondent Jamil failed to disclose to customers and that he had withheld a portion of their premiums and failed to disclose that he would be enrolling them in a roadside assistance program

9 Farlure to fully disclose the details and costs of each product being sold in an insurance transaction constitutes an omission of material fact that misrepresents the terms benefits advantages or conditions of an insurance policy See MCL 5002005(a)2 Such misrepresentations are prohibited under Section 2005(a) of the Code MCL 5002005(a) as unfair or deceptive acts or practices and provide justification for sanctions under Section 1239(1(e of the Code MCL 5001239(1)(e)3 as intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance Moreover such intentional misrepresentations are forms of fraudulent coercive or dishonest practices and demonstrate incompetence ln the conduct of business in Mlchigan under Section 1239(1)(h) of the Code MCL 5001239(1(h)

10 Respondents violated Sections 249(a) and 1207(2) of the Code MCL 500249(a) and MCL 5001207(2) by failing to produce recordsin cooperation with the States examination of the accounts records and documents pertaining to an insurance agent

11 At all pertinent times the business operations of ProStar Insurance Agency Inc and ProStar Insurance Agency 2 Inc were controlled by Respondent Jamil At no time did any officer or manager of ProStar Insurance Agency Inc or ProStar Insurance Agency 2 Inc report to the Director the Code violations of Respondent Jamil nor was any corrective actlon taken

12 Respondents vlolated Section 1239(3) of the Code MCL 5001239(3) by failing to report to the Director the Code violations committed by Respondent Jamil and by failing to take any corrective action in connection wlth those violations

2 Although not cited in the DIFS Complaint Section 2005(a) of the Code MCL 5002005a is instructive to determine what activities constitute misrepresentations under the Code

3 Page 9 of the PFD refers to MCL 50012393 in connection with these violations the correct citation is MCL 50012391)

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Docket No 15-064706 Case No 16-967-L Page 2

A hearing was held on November 10 2016 The Respondents were represented by counsel at the hearing A Proposal for Decision (PFD) was issued March 31 2017 The Petitioner and Respondents filed exceptions to the PFD These exceptions are discussed more fully in Part Ill of this Final Decision

II FINDINGS OF FACT AND CONCLUSIONS OF LAW

The Findings of Fact of the PFD are in accordance with the preponderance of evidence and the Conclusions of Law are supported by reasoned opinion Except as explained in Part Ill below the Findings of Fact and Conclusions of Law in the PFD are adopted and made a part of this Final Decision Specifically the following Findings of Fact and Conclusions of Law are restated herein

1 In February 2013 _ contacted Respondent Sinan Jamil about purchasing automobile insurance Jamil gave her a quote for a Government Employees Insurance Company (GEICO) insurance policy and accepted payment of $44800 to obtain a GEICO insurance policy Jamil faxed a temporary certificate of insurance to indicating that she had GEICO insurance

2 Of $44800 payment Jamil sent $19900 to GEICO Accordrng to Jamil the remaining $24900 was used to purchase a roadside assistance plan from NSD Motor Club Ms 1 did not authorize the NSD Motor Club purchase and never saw any document confirming an NSD Motor Club membership At the time of the transaction Ms had a AAA membership that provided roadside assistance and had no need for an NSD Motor Club Membership

3 On July 2 2013 went to ProStar Insurance Agency to purchase a no-fault insurance policy for his motorcycle purchased a Progressive Insurance policy from Jamil He did not discuss any motor club membership or roadside assistance with Jamil had a AAA membership that provided roadside assistance and had no need for an NSD Motor Club membership Nevertheless Jamil arranged an NSD membership for which was issued on July 2 2013

4 On August 26 2013 and again on September 16 2015 DIFS investigators requested Jamil provide the insurance files related to and other individuals Despite numerous requests for the records Jamil failed to produce the requested documents (See hearing exhibits 5 and 11)

5 Respondent Jamil offered advice directly to a purchaser and obtained insurance for Ms which constitutes negotiation under MCL 5001201 (k)1 Further he solicfted insurance by attempting to sell insurance or asking a person to apply for a particular kind of insurance from a

1 Page 8 of the PFD contained a typographical error in stating the Code citation as MCL 50012019(k) the correct citation is MCL 5001201 (k)

Docket No 15-064706 Case No 16-967-L Page3

particular company MCL 5001201(m) Respondent Jamil was not appointed as an agent for GEICO

6 Respondent Jamil violated Section 1208a(1) of the Code MCL 5001208a(1) by acting as an agent of an insurer (GEICO) without being an appointed agent of that insurer

7 Respondents violated Section 1207(1) of the Code MCL 5001207(1) by failing to remit to GEICO and Progressive money which complainants and had given to Respondents

8 Respondent Jamil failed to disclose to customers and that he had withheld a portion of their premiums and failed to disclose that he would be enrolling them in a roadside assistance program

9 Farlure to fully disclose the details and costs of each product being sold in an insurance transaction constitutes an omission of material fact that misrepresents the terms benefits advantages or conditions of an insurance policy See MCL 5002005(a)2 Such misrepresentations are prohibited under Section 2005(a) of the Code MCL 5002005(a) as unfair or deceptive acts or practices and provide justification for sanctions under Section 1239(1(e of the Code MCL 5001239(1)(e)3 as intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance Moreover such intentional misrepresentations are forms of fraudulent coercive or dishonest practices and demonstrate incompetence ln the conduct of business in Mlchigan under Section 1239(1)(h) of the Code MCL 5001239(1(h)

10 Respondents violated Sections 249(a) and 1207(2) of the Code MCL 500249(a) and MCL 5001207(2) by failing to produce recordsin cooperation with the States examination of the accounts records and documents pertaining to an insurance agent

11 At all pertinent times the business operations of ProStar Insurance Agency Inc and ProStar Insurance Agency 2 Inc were controlled by Respondent Jamil At no time did any officer or manager of ProStar Insurance Agency Inc or ProStar Insurance Agency 2 Inc report to the Director the Code violations of Respondent Jamil nor was any corrective actlon taken

12 Respondents vlolated Section 1239(3) of the Code MCL 5001239(3) by failing to report to the Director the Code violations committed by Respondent Jamil and by failing to take any corrective action in connection wlth those violations

2 Although not cited in the DIFS Complaint Section 2005(a) of the Code MCL 5002005a is instructive to determine what activities constitute misrepresentations under the Code

3 Page 9 of the PFD refers to MCL 50012393 in connection with these violations the correct citation is MCL 50012391)

t

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Docket No 15-064706 Case No 16-967-L Page3

particular company MCL 5001201(m) Respondent Jamil was not appointed as an agent for GEICO

6 Respondent Jamil violated Section 1208a(1) of the Code MCL 5001208a(1) by acting as an agent of an insurer (GEICO) without being an appointed agent of that insurer

7 Respondents violated Section 1207(1) of the Code MCL 5001207(1) by failing to remit to GEICO and Progressive money which complainants and had given to Respondents

8 Respondent Jamil failed to disclose to customers and that he had withheld a portion of their premiums and failed to disclose that he would be enrolling them in a roadside assistance program

9 Farlure to fully disclose the details and costs of each product being sold in an insurance transaction constitutes an omission of material fact that misrepresents the terms benefits advantages or conditions of an insurance policy See MCL 5002005(a)2 Such misrepresentations are prohibited under Section 2005(a) of the Code MCL 5002005(a) as unfair or deceptive acts or practices and provide justification for sanctions under Section 1239(1(e of the Code MCL 5001239(1)(e)3 as intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance Moreover such intentional misrepresentations are forms of fraudulent coercive or dishonest practices and demonstrate incompetence ln the conduct of business in Mlchigan under Section 1239(1)(h) of the Code MCL 5001239(1(h)

10 Respondents violated Sections 249(a) and 1207(2) of the Code MCL 500249(a) and MCL 5001207(2) by failing to produce recordsin cooperation with the States examination of the accounts records and documents pertaining to an insurance agent

11 At all pertinent times the business operations of ProStar Insurance Agency Inc and ProStar Insurance Agency 2 Inc were controlled by Respondent Jamil At no time did any officer or manager of ProStar Insurance Agency Inc or ProStar Insurance Agency 2 Inc report to the Director the Code violations of Respondent Jamil nor was any corrective actlon taken

12 Respondents vlolated Section 1239(3) of the Code MCL 5001239(3) by failing to report to the Director the Code violations committed by Respondent Jamil and by failing to take any corrective action in connection wlth those violations

2 Although not cited in the DIFS Complaint Section 2005(a) of the Code MCL 5002005a is instructive to determine what activities constitute misrepresentations under the Code

3 Page 9 of the PFD refers to MCL 50012393 in connection with these violations the correct citation is MCL 50012391)

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Docket No 15-064706 Case No 16-967-L Page 4

13 Respondents knew or should have known that they were violating Sections 249(a) 1207(1) 1207(2 1208a(1) 1239(1(e 1239(1(h) and 1239(3 of the Code MCL 500249(a) 5001207(1) 5001207(2) 5001208a1 50012391)(e) 5001239(1(h) and 5001239(3

14 Respondents have committed acts that provide justification for the Director to order restitution civil fines and revocation of Respondents licenses under Sections 1239 and 1244(1) of the Code MCL 5001239 and MCL 5001244(1

15 Accordingly acivil fine in the amount of $2500 is justified for each the following

bull Respondents violation of Sections 249(a) and 1207(2 of the Code MCL 500249(a) and MCL 5001207(2) by failing to produce records in cooperation with the States examination of the accounts records and documents pertaining to an insurance agent

bull Respondents violation of Section 1207(1) of the Code MCL 5001207(1) by failing to remit to GEICO money which Ms had given to Respondents

bull Respondents violation of Section 1207(1) of the Code MCL 5001207(1) by failing to remit to Progressive money which Mr had given to Respondents

bull Respondents violation of Sections 1239(1(e) and (h of the Code MCL 5001239(1 )e) and (h) by failing to fully disclose the details and costs of each product being sold in the insurance transaction with Ms and

bull Respondents violation of Sections 12391)(e and h) of the Code MCL 50012391)(e) and (h) by failing to fully disclose the details and costs of each product being sold in the insurance transaction with

I II

Ill EXCEPTIONS

Petitioners Exceptions middot

I llIIn its exceptions the DIFS staff asserted that the ALJ erroneously rejected a proposed exhibit on I

the grounds that it constituted hearsay The exhibit in question (Petitioners Proposed Exhibit 4) is a letter Imiddotit

to DIFS from GEICOs regional vice president Scott Markel dated June 3 2013 in which GEICO informed DIFS that the Respondents were acting as GEICO agents without authorization The exhibit also included II

a copy of an April 29 2013 GEICO letter to Respondent Sinan Jamil and ProStar Insurance Agency telling them to cease and desist from soliciting selling or negotiating GEICO products (The April 29 2013 letter I

litself is an admitted exhibit Petitioners Exhibit 10)

Docket No 15-064706 Case No 16-967-L Page 5

DIFS staff is correct that an exhibit may not be excluded solely because it constitutes hearsay The Michigan Court of Appeals has found that hearsay evidence may be considered if it is commonly relied on by reasonably prudent persons in the conduct of their affairs Spratt v Department of Social Services 169 Mich App 693 701 (1988) See also Michigan State Employees Association vMichigan Civil Service Commission 126 Mich App 797804 (1983)

In administrative hearings restrictions on the admissibility of evidence are less strict than in trials in Michigan courts of law Section 75 of the Administrative Procedures Act of 1969 MCL 24275 provides

In a contested case the rules of evidence as applied in a nonjury civil case in circuit court shall be followed as far as practicable but an agency may admit and give probative effect to evidence of a type commonly relied upon by reasonably prudent men in the conduct of their affairs

The two letters that comprise Petitioners Proposed Exhibit 4 are notifications from GEICO that the Respondents were selling the insurers products without authorization The absence of authorization is not a contested fact in this case DIFS records reveal the Respondents lacked appointments to represent GEICO The Respondents themselves have not argued that they were authorized producers for the insurer The Respondents defense was that they were not acting as insurance producers when they engaged in transactions with the consumers who made the purchases in question

The letters in Petitioners Proposed Exhibit 4 merely confirm information available to the Director in the agencys own records A reasonably prudent person would certainly rely on the letters of Proposed Exhibit 4 to confirm that the Respondents were not appointed as producers for the insurer

The Director concludes that Petitioners Proposed Exhibit 4 should have been admitted into the hearing record The Director adopts the Petitioners exception and orders that Proposed Exhibit 4 be admitted as an exhibit in the record of this matter

Respondents Exceptions

The Respondents exceptions are a restatement of the Respondents closing argument Those arguments were appropriately addressed by the ALJ in the PFD (page 8) The Respondents argue that no evidence was presented that they acted as agents for GEICO that they only assisted their customers in finding an insurer and in exchange for those efforts the customers agreed to purchase a roadside assistance program from Respondents

Docket No 15-064706 Case No 16-967-L Page 6

Respondents fail to cite any evidence in the hearing record to support their argument The Respondents offered no witnesses or exhibits at hearing and their arguments are inconsistent with admitted evidence including testimony from the customers themselves which the ALJ found to be credible and relied upon in the PFD The Director concludes that the Respondents exceptions lack merit and are therefore not adopted

IV ORDER

Therefore it is ORDERED

1 Petitioners Proposed Exhibit 4 is admitted and made a part of the hearing record

2 Respondents shall pay to the State of Michigan acivil fine of $1250000

3 Respondents shall pay restitution to the affected consumers

4 The insurance producer and insurance agency licenses of Respondents Sinan Jamil (System ID Numbers 0351807 0080225 and 0093994) are REVOKED

Director

Docket No 15-064706 Case No 16-967-L Page 5

DIFS staff is correct that an exhibit may not be excluded solely because it constitutes hearsay The Michigan Court of Appeals has found that hearsay evidence may be considered if it is commonly relied on by reasonably prudent persons in the conduct of their affairs Spratt v Department of Social Services 169 Mich App 693 701 (1988) See also Michigan State Employees Association vMichigan Civil Service Commission 126 Mich App 797804 (1983)

In administrative hearings restrictions on the admissibility of evidence are less strict than in trials in Michigan courts of law Section 75 of the Administrative Procedures Act of 1969 MCL 24275 provides

In a contested case the rules of evidence as applied in a nonjury civil case in circuit court shall be followed as far as practicable but an agency may admit and give probative effect to evidence of a type commonly relied upon by reasonably prudent men in the conduct of their affairs

The two letters that comprise Petitioners Proposed Exhibit 4 are notifications from GEICO that the Respondents were selling the insurers products without authorization The absence of authorization is not a contested fact in this case DIFS records reveal the Respondents lacked appointments to represent GEICO The Respondents themselves have not argued that they were authorized producers for the insurer The Respondents defense was that they were not acting as insurance producers when they engaged in transactions with the consumers who made the purchases in question

The letters in Petitioners Proposed Exhibit 4 merely confirm information available to the Director in the agencys own records A reasonably prudent person would certainly rely on the letters of Proposed Exhibit 4 to confirm that the Respondents were not appointed as producers for the insurer

The Director concludes that Petitioners Proposed Exhibit 4 should have been admitted into the hearing record The Director adopts the Petitioners exception and orders that Proposed Exhibit 4 be admitted as an exhibit in the record of this matter

Respondents Exceptions

The Respondents exceptions are a restatement of the Respondents closing argument Those arguments were appropriately addressed by the ALJ in the PFD (page 8) The Respondents argue that no evidence was presented that they acted as agents for GEICO that they only assisted their customers in finding an insurer and in exchange for those efforts the customers agreed to purchase a roadside assistance program from Respondents

Docket No 15-064706 Case No 16-967-L Page 6

Respondents fail to cite any evidence in the hearing record to support their argument The Respondents offered no witnesses or exhibits at hearing and their arguments are inconsistent with admitted evidence including testimony from the customers themselves which the ALJ found to be credible and relied upon in the PFD The Director concludes that the Respondents exceptions lack merit and are therefore not adopted

IV ORDER

Therefore it is ORDERED

1 Petitioners Proposed Exhibit 4 is admitted and made a part of the hearing record

2 Respondents shall pay to the State of Michigan acivil fine of $1250000

3 Respondents shall pay restitution to the affected consumers

4 The insurance producer and insurance agency licenses of Respondents Sinan Jamil (System ID Numbers 0351807 0080225 and 0093994) are REVOKED

Director

Docket No 15-064706 Case No 16-967-L Page 6

Respondents fail to cite any evidence in the hearing record to support their argument The Respondents offered no witnesses or exhibits at hearing and their arguments are inconsistent with admitted evidence including testimony from the customers themselves which the ALJ found to be credible and relied upon in the PFD The Director concludes that the Respondents exceptions lack merit and are therefore not adopted

IV ORDER

Therefore it is ORDERED

1 Petitioners Proposed Exhibit 4 is admitted and made a part of the hearing record

2 Respondents shall pay to the State of Michigan acivil fine of $1250000

3 Respondents shall pay restitution to the affected consumers

4 The insurance producer and insurance agency licenses of Respondents Sinan Jamil (System ID Numbers 0351807 0080225 and 0093994) are REVOKED

Director

V

STATE OF MICHIGAN MICHIGAN ADMINISTRATIVE HEARING SYSTEM

IN THE MATTER OF Docket No 15-064706

Department of Insurance and Financial Case No 16-967-L Services

Petitioner Agency Department of Insurance and Financial Services

Sinan Jamil ProStar Insurance Agency Case Type DIFS-lnsuranceInc dba Insurance Giant Agency

ProStar Insurance Agency Inc 2 dba Filing Type AppealInsurance Giant Agency 2

Respondent

_______________

lss~ed and entered this ~ day of March 2017

by Thomas A Halick Administrative Law Judge

PROPOSAL FOR DECISION

PROCEDURAL HISTORY

This proceeding under the Michigan Insurance Code of 1956 being 1956 PA 218 as amended MCL 500100 et seq (hereafter Insurance Code or Code) commenced with the issuance of a Notice of Hearing dated January 1 2016 scheduling a contested case hearing concerning a Complaint issued by the Staff of the Department of Insurance and Financial Services Petitioner regarding the resident insurance producer license of Sinan Jamil Pro Star Insurance Agency Inc dba Insurance Giant Agency Pro Star Insurance Agency Inc 2 dba Insurance Giant Agency 2 Respondent

The Notice of Hearing was issued pursuant to a Request for Hearing received by the Michigan Administrative Hearing System on January 12 2016 and an Order Referring Complaint for Hearing dated January 6 2016 issued by Teri L Morante Chief Deputy Commissioner The Notice of Hearing scheduled a hearing date of April 21 2016

On April 14 2016 the presiding Administrative Law Judge (ALJ) entered an Order Granting Adjournment of the hearing at Petitioners request and rescheduled the hearing for June 20 2016

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15-064706 Page2

On June 13 2016 the ALJ issued an Order Granting Adjournment of the hearing at Respondents request and rescheduled the hearing for August 25 2016 The hearing commenced as scheduled It was determined that the hearing would be continued to permit Petitioner to subpoena necessary witnesses

On October 5 2016 a prehearing conference was held by telephone and it was agreed that the continued hearing would be scheduled for November 10 2016

On October 7 2016 a Notice of Hearing was issued scheduling the continued hearing for November 10 2016 and the hearing was held as scheduled Attorney Elizabeth Bolden and Attorney Gary Grant appeared for Petitioner Attorney David B Rosenberg appeared for Respondent

The parties were ordered to file written closing arguments on or before January 13 2017

On February 7 2017 counsel for Respondent filed a motion requesting to extend the deadline for filing the written closing statement which was granted by an Order Extending Deadline issued February 9 2017 Respondents brief was filed February 14 2017

Petitioner called the following witnesses

1 Candace Sherwood DIFS Departmental Analyst 2 Justin Blood DIFS Investigator 3 (customer of Respondent) 4 (Complainant and customer of Respondent)

Respondents called no witnesses

EXHIBITS

Petitioner offered the following exhibits on August 25 2016

1 DIFS Information for Insurance License Sinan Jamal

2 DIFS Information for Insurance License Pro Star Insurance Agency

3 DIFS Information for Insurance License Pro Star Insurance Agency 2

4 Emails between Ken Miller and Justin Blood August 6 2013 Letter from GEICO to Respondent April 29 2013 - Excluded as Hearsay

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15-064706 Page 3

Petitioner offered the following exhibits on November 10 2016

1 Complaint form - _____ ______ May 15 2013 2 Fax GEICO declarations page 3 Letters from DI FS to Pro Star May 20 2013 4 Letter from GEICO to DIFS June 3 2013 Letter from GEICO to Respondent

April 29 2013 5 Letter to Pro Star May 20 2013 Note to Candace Sherwood 6 Fax - to Sherwood - GEICO documents 7 Affidavit of 8 Sales Receipt I $249 Refund 9 Affidavit of James Brown 10 Certificate of Regularly Conducted Business Activity April 29 2013 11 Emails 6 pages

Respondents offered no exhibits

ISSUES AND APPLICABLE LAW

The issues presented in the Complaint are whether sanction(s) are properly imposed under Section 1244(1 )(a)-(d) on Respondents license based on violations of the following sections of the Insurance Code supra which provide as follows

Sec 1208a

(1) An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer An insurance producer who is not acting as an agent of an insurer is not required to become appointed

Sec 1207

(1) An agent shall be a fiduciary for all money received or held by the agent in his or her capacity as an agent Failure by an agent in a timely manner to turn over the money which he or she holds in a fiduciary capacity to the persons to whom they are owed is prima facie evidence of violation of the agents fiduciary responsibility An agent shall not accept payment of a premium for a medicare supplemental policy or certificate in the form of a check or money order made payable to the agent instead of the insurer Upon receiving payment of a premium for a medicare supplemental policy or certificate an agent shall immediately provide a written receipt to the insured

15-064706 Page4

Sec 1239

(1) In addition to any other powers under this act the commissioner may place on probation suspend or revoke an insurance producers license or may levy a civil fine under section 1244 or any combination of actions and the commissioner shall refuse to issue a license under section 1205 or 1206a for any 1 or more of the following causes

(b) Violating any insurance laws or violating any regulation subpoena or order of the commissioner or of another states insurance commissioner

(d) Improperly withholding misappropriating or converting any money or property received in the course of doing insurance business

(e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance

(h) Using fraudulent coercive or dishonest practices or demonstrating incompetence untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere

Sec 249

For the purposes of ascertaining compliance with the provisions of the insurance laws of the state or of ascertaining the business condition and practices of an insurer or proposed insurer the commissioner as often as he deems advisable may initiate proceedings to examine the accounts records documents and transactions pertaining to

(a) Any insurance agent surplus line agent general agent adjuster public adjuster or counselor

Sec 1207

(1) An agent shall be a fiduciary for all money received or held by the agent in his or her capacity as an agent Failure by an agent in a timely manner to turn over the money which he or she holds in a fiduciary capacity to the persons to whom they are owed is prima facie evidence of

15-064706 Pages

violation of the agents fiduciary responsibility An agent shall not accept payment of a premium for a medicare supplemental policy or certificate in the form of a check or money order made payable to the agent instead of the insurer Upon receiving payment of a premium for a medicare supplemental policy or certificate an agent shall immediately provide a written receipt to the insured

(2) An agent shall use reasonable accounting methods to record funds received in his or her fiduciary capacity including the receipt and distribution of all premiums due each of his or her insurers An agent shall record return premiums received by or credited to him or her which are due an insured on policies reduced or canceled or which are due a prospective purchaser of insurance as a result of a rejected or declined application Records required by this section shall be open to examination by the commissioner

Sec 1244

(1) If the commissioner finds that a person has violated this chapter after an opportunity for a hearing pursuant to the administrative procedures act of 1969 1969 PA 306 MCL 24201 to 24328 the commissioner shall reduce the findings and decision to writing and shall issue and cause to be served upon the person charged with the violation a copy of the findings and an order requiring the person to cease and desist from the violation In addition the commissioner may order any of the following

(a) Payment of a civil fine of not more than $50000 for each violation However if the person knew or reasonably should have known that he or she was in violation of this chapter the commissioner may order the payment of a civil fine of not more than $250000 for each violation An order of the commissioner under this subsection shall not require the payment of civil fines exceeding $2500000 A fine collected under this subdivision shall be turned over to the state treasurer and credited to the general fund of the state

(b) A refund of any overcharges

(c) That restitution be made to the insured or other claimant to cover incurred losses damages or other harm attributable to the acts of the person found to be in violation of this chapter

(d) The suspension or revocation of the persons license MCL 5001244(1)(a)-(d)

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15-064706 Page2

On June 13 2016 the ALJ issued an Order Granting Adjournment of the hearing at Respondents request and rescheduled the hearing for August 25 2016 The hearing commenced as scheduled It was determined that the hearing would be continued to permit Petitioner to subpoena necessary witnesses

On October 5 2016 a prehearing conference was held by telephone and it was agreed that the continued hearing would be scheduled for November 10 2016

On October 7 2016 a Notice of Hearing was issued scheduling the continued hearing for November 10 2016 and the hearing was held as scheduled Attorney Elizabeth Bolden and Attorney Gary Grant appeared for Petitioner Attorney David B Rosenberg appeared for Respondent

The parties were ordered to file written closing arguments on or before January 13 2017

On February 7 2017 counsel for Respondent filed a motion requesting to extend the deadline for filing the written closing statement which was granted by an Order Extending Deadline issued February 9 2017 Respondents brief was filed February 14 2017

Petitioner called the following witnesses

1 Candace Sherwood DIFS Departmental Analyst 2 Justin Blood DIFS Investigator 3 (customer of Respondent) 4 (Complainant and customer of Respondent)

Respondents called no witnesses

EXHIBITS

Petitioner offered the following exhibits on August 25 2016

1 DIFS Information for Insurance License Sinan Jamal

2 DIFS Information for Insurance License Pro Star Insurance Agency

3 DIFS Information for Insurance License Pro Star Insurance Agency 2

4 Emails between Ken Miller and Justin Blood August 6 2013 Letter from GEICO to Respondent April 29 2013 - Excluded as Hearsay

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15-064706 Page 3

Petitioner offered the following exhibits on November 10 2016

1 Complaint form - _____ ______ May 15 2013 2 Fax GEICO declarations page 3 Letters from DI FS to Pro Star May 20 2013 4 Letter from GEICO to DIFS June 3 2013 Letter from GEICO to Respondent

April 29 2013 5 Letter to Pro Star May 20 2013 Note to Candace Sherwood 6 Fax - to Sherwood - GEICO documents 7 Affidavit of 8 Sales Receipt I $249 Refund 9 Affidavit of James Brown 10 Certificate of Regularly Conducted Business Activity April 29 2013 11 Emails 6 pages

Respondents offered no exhibits

ISSUES AND APPLICABLE LAW

The issues presented in the Complaint are whether sanction(s) are properly imposed under Section 1244(1 )(a)-(d) on Respondents license based on violations of the following sections of the Insurance Code supra which provide as follows

Sec 1208a

(1) An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer An insurance producer who is not acting as an agent of an insurer is not required to become appointed

Sec 1207

(1) An agent shall be a fiduciary for all money received or held by the agent in his or her capacity as an agent Failure by an agent in a timely manner to turn over the money which he or she holds in a fiduciary capacity to the persons to whom they are owed is prima facie evidence of violation of the agents fiduciary responsibility An agent shall not accept payment of a premium for a medicare supplemental policy or certificate in the form of a check or money order made payable to the agent instead of the insurer Upon receiving payment of a premium for a medicare supplemental policy or certificate an agent shall immediately provide a written receipt to the insured

15-064706 Page4

Sec 1239

(1) In addition to any other powers under this act the commissioner may place on probation suspend or revoke an insurance producers license or may levy a civil fine under section 1244 or any combination of actions and the commissioner shall refuse to issue a license under section 1205 or 1206a for any 1 or more of the following causes

(b) Violating any insurance laws or violating any regulation subpoena or order of the commissioner or of another states insurance commissioner

(d) Improperly withholding misappropriating or converting any money or property received in the course of doing insurance business

(e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance

(h) Using fraudulent coercive or dishonest practices or demonstrating incompetence untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere

Sec 249

For the purposes of ascertaining compliance with the provisions of the insurance laws of the state or of ascertaining the business condition and practices of an insurer or proposed insurer the commissioner as often as he deems advisable may initiate proceedings to examine the accounts records documents and transactions pertaining to

(a) Any insurance agent surplus line agent general agent adjuster public adjuster or counselor

Sec 1207

(1) An agent shall be a fiduciary for all money received or held by the agent in his or her capacity as an agent Failure by an agent in a timely manner to turn over the money which he or she holds in a fiduciary capacity to the persons to whom they are owed is prima facie evidence of

15-064706 Pages

violation of the agents fiduciary responsibility An agent shall not accept payment of a premium for a medicare supplemental policy or certificate in the form of a check or money order made payable to the agent instead of the insurer Upon receiving payment of a premium for a medicare supplemental policy or certificate an agent shall immediately provide a written receipt to the insured

(2) An agent shall use reasonable accounting methods to record funds received in his or her fiduciary capacity including the receipt and distribution of all premiums due each of his or her insurers An agent shall record return premiums received by or credited to him or her which are due an insured on policies reduced or canceled or which are due a prospective purchaser of insurance as a result of a rejected or declined application Records required by this section shall be open to examination by the commissioner

Sec 1244

(1) If the commissioner finds that a person has violated this chapter after an opportunity for a hearing pursuant to the administrative procedures act of 1969 1969 PA 306 MCL 24201 to 24328 the commissioner shall reduce the findings and decision to writing and shall issue and cause to be served upon the person charged with the violation a copy of the findings and an order requiring the person to cease and desist from the violation In addition the commissioner may order any of the following

(a) Payment of a civil fine of not more than $50000 for each violation However if the person knew or reasonably should have known that he or she was in violation of this chapter the commissioner may order the payment of a civil fine of not more than $250000 for each violation An order of the commissioner under this subsection shall not require the payment of civil fines exceeding $2500000 A fine collected under this subdivision shall be turned over to the state treasurer and credited to the general fund of the state

(b) A refund of any overcharges

(c) That restitution be made to the insured or other claimant to cover incurred losses damages or other harm attributable to the acts of the person found to be in violation of this chapter

(d) The suspension or revocation of the persons license MCL 5001244(1)(a)-(d)

(

15-064706 Page 3

Petitioner offered the following exhibits on November 10 2016

1 Complaint form - _____ ______ May 15 2013 2 Fax GEICO declarations page 3 Letters from DI FS to Pro Star May 20 2013 4 Letter from GEICO to DIFS June 3 2013 Letter from GEICO to Respondent

April 29 2013 5 Letter to Pro Star May 20 2013 Note to Candace Sherwood 6 Fax - to Sherwood - GEICO documents 7 Affidavit of 8 Sales Receipt I $249 Refund 9 Affidavit of James Brown 10 Certificate of Regularly Conducted Business Activity April 29 2013 11 Emails 6 pages

Respondents offered no exhibits

ISSUES AND APPLICABLE LAW

The issues presented in the Complaint are whether sanction(s) are properly imposed under Section 1244(1 )(a)-(d) on Respondents license based on violations of the following sections of the Insurance Code supra which provide as follows

Sec 1208a

(1) An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer An insurance producer who is not acting as an agent of an insurer is not required to become appointed

Sec 1207

(1) An agent shall be a fiduciary for all money received or held by the agent in his or her capacity as an agent Failure by an agent in a timely manner to turn over the money which he or she holds in a fiduciary capacity to the persons to whom they are owed is prima facie evidence of violation of the agents fiduciary responsibility An agent shall not accept payment of a premium for a medicare supplemental policy or certificate in the form of a check or money order made payable to the agent instead of the insurer Upon receiving payment of a premium for a medicare supplemental policy or certificate an agent shall immediately provide a written receipt to the insured

15-064706 Page4

Sec 1239

(1) In addition to any other powers under this act the commissioner may place on probation suspend or revoke an insurance producers license or may levy a civil fine under section 1244 or any combination of actions and the commissioner shall refuse to issue a license under section 1205 or 1206a for any 1 or more of the following causes

(b) Violating any insurance laws or violating any regulation subpoena or order of the commissioner or of another states insurance commissioner

(d) Improperly withholding misappropriating or converting any money or property received in the course of doing insurance business

(e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance

(h) Using fraudulent coercive or dishonest practices or demonstrating incompetence untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere

Sec 249

For the purposes of ascertaining compliance with the provisions of the insurance laws of the state or of ascertaining the business condition and practices of an insurer or proposed insurer the commissioner as often as he deems advisable may initiate proceedings to examine the accounts records documents and transactions pertaining to

(a) Any insurance agent surplus line agent general agent adjuster public adjuster or counselor

Sec 1207

(1) An agent shall be a fiduciary for all money received or held by the agent in his or her capacity as an agent Failure by an agent in a timely manner to turn over the money which he or she holds in a fiduciary capacity to the persons to whom they are owed is prima facie evidence of

15-064706 Pages

violation of the agents fiduciary responsibility An agent shall not accept payment of a premium for a medicare supplemental policy or certificate in the form of a check or money order made payable to the agent instead of the insurer Upon receiving payment of a premium for a medicare supplemental policy or certificate an agent shall immediately provide a written receipt to the insured

(2) An agent shall use reasonable accounting methods to record funds received in his or her fiduciary capacity including the receipt and distribution of all premiums due each of his or her insurers An agent shall record return premiums received by or credited to him or her which are due an insured on policies reduced or canceled or which are due a prospective purchaser of insurance as a result of a rejected or declined application Records required by this section shall be open to examination by the commissioner

Sec 1244

(1) If the commissioner finds that a person has violated this chapter after an opportunity for a hearing pursuant to the administrative procedures act of 1969 1969 PA 306 MCL 24201 to 24328 the commissioner shall reduce the findings and decision to writing and shall issue and cause to be served upon the person charged with the violation a copy of the findings and an order requiring the person to cease and desist from the violation In addition the commissioner may order any of the following

(a) Payment of a civil fine of not more than $50000 for each violation However if the person knew or reasonably should have known that he or she was in violation of this chapter the commissioner may order the payment of a civil fine of not more than $250000 for each violation An order of the commissioner under this subsection shall not require the payment of civil fines exceeding $2500000 A fine collected under this subdivision shall be turned over to the state treasurer and credited to the general fund of the state

(b) A refund of any overcharges

(c) That restitution be made to the insured or other claimant to cover incurred losses damages or other harm attributable to the acts of the person found to be in violation of this chapter

(d) The suspension or revocation of the persons license MCL 5001244(1)(a)-(d)

15-064706 Page4

Sec 1239

(1) In addition to any other powers under this act the commissioner may place on probation suspend or revoke an insurance producers license or may levy a civil fine under section 1244 or any combination of actions and the commissioner shall refuse to issue a license under section 1205 or 1206a for any 1 or more of the following causes

(b) Violating any insurance laws or violating any regulation subpoena or order of the commissioner or of another states insurance commissioner

(d) Improperly withholding misappropriating or converting any money or property received in the course of doing insurance business

(e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance

(h) Using fraudulent coercive or dishonest practices or demonstrating incompetence untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere

Sec 249

For the purposes of ascertaining compliance with the provisions of the insurance laws of the state or of ascertaining the business condition and practices of an insurer or proposed insurer the commissioner as often as he deems advisable may initiate proceedings to examine the accounts records documents and transactions pertaining to

(a) Any insurance agent surplus line agent general agent adjuster public adjuster or counselor

Sec 1207

(1) An agent shall be a fiduciary for all money received or held by the agent in his or her capacity as an agent Failure by an agent in a timely manner to turn over the money which he or she holds in a fiduciary capacity to the persons to whom they are owed is prima facie evidence of

15-064706 Pages

violation of the agents fiduciary responsibility An agent shall not accept payment of a premium for a medicare supplemental policy or certificate in the form of a check or money order made payable to the agent instead of the insurer Upon receiving payment of a premium for a medicare supplemental policy or certificate an agent shall immediately provide a written receipt to the insured

(2) An agent shall use reasonable accounting methods to record funds received in his or her fiduciary capacity including the receipt and distribution of all premiums due each of his or her insurers An agent shall record return premiums received by or credited to him or her which are due an insured on policies reduced or canceled or which are due a prospective purchaser of insurance as a result of a rejected or declined application Records required by this section shall be open to examination by the commissioner

Sec 1244

(1) If the commissioner finds that a person has violated this chapter after an opportunity for a hearing pursuant to the administrative procedures act of 1969 1969 PA 306 MCL 24201 to 24328 the commissioner shall reduce the findings and decision to writing and shall issue and cause to be served upon the person charged with the violation a copy of the findings and an order requiring the person to cease and desist from the violation In addition the commissioner may order any of the following

(a) Payment of a civil fine of not more than $50000 for each violation However if the person knew or reasonably should have known that he or she was in violation of this chapter the commissioner may order the payment of a civil fine of not more than $250000 for each violation An order of the commissioner under this subsection shall not require the payment of civil fines exceeding $2500000 A fine collected under this subdivision shall be turned over to the state treasurer and credited to the general fund of the state

(b) A refund of any overcharges

(c) That restitution be made to the insured or other claimant to cover incurred losses damages or other harm attributable to the acts of the person found to be in violation of this chapter

(d) The suspension or revocation of the persons license MCL 5001244(1)(a)-(d)

15-064706 Pages

violation of the agents fiduciary responsibility An agent shall not accept payment of a premium for a medicare supplemental policy or certificate in the form of a check or money order made payable to the agent instead of the insurer Upon receiving payment of a premium for a medicare supplemental policy or certificate an agent shall immediately provide a written receipt to the insured

(2) An agent shall use reasonable accounting methods to record funds received in his or her fiduciary capacity including the receipt and distribution of all premiums due each of his or her insurers An agent shall record return premiums received by or credited to him or her which are due an insured on policies reduced or canceled or which are due a prospective purchaser of insurance as a result of a rejected or declined application Records required by this section shall be open to examination by the commissioner

Sec 1244

(1) If the commissioner finds that a person has violated this chapter after an opportunity for a hearing pursuant to the administrative procedures act of 1969 1969 PA 306 MCL 24201 to 24328 the commissioner shall reduce the findings and decision to writing and shall issue and cause to be served upon the person charged with the violation a copy of the findings and an order requiring the person to cease and desist from the violation In addition the commissioner may order any of the following

(a) Payment of a civil fine of not more than $50000 for each violation However if the person knew or reasonably should have known that he or she was in violation of this chapter the commissioner may order the payment of a civil fine of not more than $250000 for each violation An order of the commissioner under this subsection shall not require the payment of civil fines exceeding $2500000 A fine collected under this subdivision shall be turned over to the state treasurer and credited to the general fund of the state

(b) A refund of any overcharges

(c) That restitution be made to the insured or other claimant to cover incurred losses damages or other harm attributable to the acts of the person found to be in violation of this chapter

(d) The suspension or revocation of the persons license MCL 5001244(1)(a)-(d)

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FINDINGS OF FACT

Based on the entire record in this matter including the witness testimony and admitted exhibits the following findings of fact are established by a preponderance of the evidence

1 At all relevant times Sinan Jamil (hereinafter Respondent or Jamil) was a licensed resident insurance producer with a qualifications in casualty and was authorized to transact the business of insurance in Michigan Respondent is the sole shareholder of Pro Star Insurance Agency Inc dba Insurance Giant Agency (Insurance Giant) and serves as its Designated Responsible Licensed Producer (DRLP)

2 At all relevant times Insurance Giant was an active resident insurance producer agency with a qualification in property and casualty and its license is still active

3 Pro Star Insurance Agency Inc 2 (Pro Star) is a Michigan corporation that at all relevant times was a licensed resident agency insurance producer with qualifications in property and casualty Jamil is the sole shareholder and DRLP of Pro Star

4 Jamil advised a customer of rates for GEICO insurance policies

5 Jamil assisted a customer in obtaining a GEICO insurance policy and input information on the GEICO application

6 Jamil assisted _ over the telephone by giving her a quote for a GEICO insurance policy and accepted payment of $44800 over the telephone by a debit card to obtain a GEICO insurance policy Jamil faxed a temporary certificate of insurance to indicating that she had GEICO insurance

7 Of the $44800 that paid to Jamil $19900 was provided to GEICO and $24900 was used to purchase roadside assistance in the form of a NSD Motor Club Membership never saw any document confirming the NSD Motor Club Membership and was not informed of and did not authorize the purchase

8 At the time of the subject transaction had an AAA membership that provided roadside assistance and had no need for an NSD Motor Club Membership

9 On July 2 2013 entered Pro Star Insurance Agency to purchase a no-fault insurance policy for his motorcycle at the lowest price possible He did not discuss any motor club membership or roadside assistance with Jamil

15-064706 Page7

had an AAA membership that provided roadside assistance and had no need for an NSD Motor Club Membership purchased a Progressive Insurance policy from Jamil Records from NSD show that an NSD membership was issued to on July 2 2013

10 On April 29 2013 GEICO issued a letter to Jamil demanding that he cease and desist from selling soliciting andor negotiating GEICO insurance products and from completing and submitting policy applications for your customers This letter indicated that GEICO was investigating suspected involvement in the sale of over 431 policies over the internet and that Jamil had charged an unlawful fee for bundling other products with GEICO products without the customers knowledge [Pet Exh 10]

11 The states investigator Justin Blood observed applications and documents related to GEICO insurance policies at Pro Star

120n May 15 2013 _ signed an Insurance Complaint Form alleging that she purchased a GEICO insurance policy over the telephone from Respondent Jamil (Insurance Giant) that she paid Jamil $44900 but that GEICO only received $19900 [Pet Exh 1 2 4]

13 On August 26 2013 and again on September 16 2015 Petitioner requested Respondents insurance transaction files and Respondent failed to comply

CONCLUSIONS OF LAW

As the complaining party Petitioner has the burden to prove the truth of the factual and legal allegations set forth in the Complaint by a preponderance of evidence As the i Michigan Supreme Court has stated [p]roof by a preponderance of the evidence requires that the fact finder believe that the evidence supporting the existence of the Icontested fact outweighs the evidence supporting its nonexistence Blue Cross and Blue Shield of Michigan v Milliken 422 Mich 1 367 NW2d 1 (1985) II r

iiPursuant to Section 1239(1) of the Insurance Code supra the Commissioner (now Department Director per Executive Order 2013-1) may sanction a license of a resident insurance producer for violations of the Code MCL 5001244

Based on the above findings of fact Petitioner has shown by a preponderance of evidence that Respondent Jamil violated Insurance Code Sections 1208a1) [soliciting insurance policies without an appointment] 12071) [failing to remit money received from customers to the insurer] and 249 and 12072) [failure to provide records]

15-064706 Page8

Further Petitioner has proven by a preponderance of the evidence that Respondent Pro Star and Pro Star 2 violated Section 12393) of the Code because the violations committed by the individual licensee Jamil were known or should have been known by 1 or more of the partners officers or managers acting on behalf of Pro Star and Pro Star 2 MCL 5001239(3)

The record evidence shows that Respondent Jamil knowingly engaged in conduct that violated the Insurance Code

Sec 1208a

(1) An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer An insurance producer who is not acting as an agent of an insurer is not required to become appointed

The totality of the evidence proves that Jamil acted as an agent of an insurer without being appointed as an agent of that insurer Jamils arguments to the contrary are unavailing He clearly offered advice directly to a purchaser and obtained insurance for customer which constitutes unlawful negotiation under MCL 50012019k) Further he unlawfully solicited insurance by attempting to sell insurance or asking a person to apply for a particular kind of insurance from a particular company MCL 5001201(m) There is no dispute that Jamil was not appointed as an agent for GEICO

Sec 1207

(1) An agent shall be a fiduciary for all money received or held by the agent in his or her capacity as an agent Failure by an agent in a timely manner to turn over the money which he or she holds in a fiduciary capacity to the persons to whom they are owed is prima facie evidence of violation of the agents fiduciary responsibility An agent shall not accept payment of a premium for a medicare supplemental policy or certificate in the form of a check or money order made payable to the agent instead of the insurer Upon receiving payment of a premium for a medicare supplemental policy or certificate an agent shall immediately provide a written receipt to the insured

Customer credibly testified that she paid $44800 to Jamil to purchase a GEICO insurance policy but that GEICO received only $19900 It is clear that Jamil charged

$24900 for roadside assistance through a NSD Motor Club Membership without her knowledge and against her best interests (she already had similar coverage through AAA)

15-064706 Page9

Jamil also charged customer for a Progressive Insurance policy and collected money in excess of what was required for that policy and used it to purchase an NSD Motor Club Membership without his knowledge and against his interest ( also already had roadside coverage through AAA)

Sec 1239

(3) In addition to any other powers under this act the commissioner may place on probation suspend or revoke an insurance producers license or may levy a civil fine under section 1244 or any combination of actions and the commissioner shall refuse to issue a license under section 1205 or 1206a for any 1 or more of the following causes

(b) Violating any insurance laws or violating any regulation subpoena or order of the commissioner or of another states insurance commissioner

(d) Improperly withholding misappropriating or converting any money or property received in the course of doing insurance business

(e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance

(h) Using fraudulent coercive or dishonest practices or demonstrating incompetence untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere

Respondent Jamil is subject to sanctions for failing to produce records in cooperation with the states examination of the accounts records and documents pertaining to an insurance agent in violation of section 249 of the Code which provides as follows

Sec 249

For the purposes of ascertaining compliance with the provisions of the insurance laws of the state or of ascertaining the business condition and practices of an insurer or proposed insurer the commissioner as often as he deems advisable may initiate proceedings to examine the accounts records documents and transactions pertaining to

15-064706 Page 10

(a) Any insurance agent surplus line agent general agent adjuster public adjuster or counselor

PROPOSED DECISION

The undersigned Administrative Law Judge proposes that the above findings of fact and conclusions of law be adopted and that a sanction or sanctions be ordered by the Department Director in a final decision and order

Thomas A Halick Administrative Law Judge

EXCEPTIONS

Any Exceptions to this Proposal for Decision should be filed in writing with the Department of Insurance and Financial Services Division of Insurance Attention Dawn Kobus PO Box 30220 Lansing Michigan 48909 within twenty-one (21) days of the issuance of this Proposal for Decision An opposing party may file a response within fourteen (14) days after Exceptions are filed

15-064706 Page7

had an AAA membership that provided roadside assistance and had no need for an NSD Motor Club Membership purchased a Progressive Insurance policy from Jamil Records from NSD show that an NSD membership was issued to on July 2 2013

10 On April 29 2013 GEICO issued a letter to Jamil demanding that he cease and desist from selling soliciting andor negotiating GEICO insurance products and from completing and submitting policy applications for your customers This letter indicated that GEICO was investigating suspected involvement in the sale of over 431 policies over the internet and that Jamil had charged an unlawful fee for bundling other products with GEICO products without the customers knowledge [Pet Exh 10]

11 The states investigator Justin Blood observed applications and documents related to GEICO insurance policies at Pro Star

120n May 15 2013 _ signed an Insurance Complaint Form alleging that she purchased a GEICO insurance policy over the telephone from Respondent Jamil (Insurance Giant) that she paid Jamil $44900 but that GEICO only received $19900 [Pet Exh 1 2 4]

13 On August 26 2013 and again on September 16 2015 Petitioner requested Respondents insurance transaction files and Respondent failed to comply

CONCLUSIONS OF LAW

As the complaining party Petitioner has the burden to prove the truth of the factual and legal allegations set forth in the Complaint by a preponderance of evidence As the i Michigan Supreme Court has stated [p]roof by a preponderance of the evidence requires that the fact finder believe that the evidence supporting the existence of the Icontested fact outweighs the evidence supporting its nonexistence Blue Cross and Blue Shield of Michigan v Milliken 422 Mich 1 367 NW2d 1 (1985) II r

iiPursuant to Section 1239(1) of the Insurance Code supra the Commissioner (now Department Director per Executive Order 2013-1) may sanction a license of a resident insurance producer for violations of the Code MCL 5001244

Based on the above findings of fact Petitioner has shown by a preponderance of evidence that Respondent Jamil violated Insurance Code Sections 1208a1) [soliciting insurance policies without an appointment] 12071) [failing to remit money received from customers to the insurer] and 249 and 12072) [failure to provide records]

15-064706 Page8

Further Petitioner has proven by a preponderance of the evidence that Respondent Pro Star and Pro Star 2 violated Section 12393) of the Code because the violations committed by the individual licensee Jamil were known or should have been known by 1 or more of the partners officers or managers acting on behalf of Pro Star and Pro Star 2 MCL 5001239(3)

The record evidence shows that Respondent Jamil knowingly engaged in conduct that violated the Insurance Code

Sec 1208a

(1) An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer An insurance producer who is not acting as an agent of an insurer is not required to become appointed

The totality of the evidence proves that Jamil acted as an agent of an insurer without being appointed as an agent of that insurer Jamils arguments to the contrary are unavailing He clearly offered advice directly to a purchaser and obtained insurance for customer which constitutes unlawful negotiation under MCL 50012019k) Further he unlawfully solicited insurance by attempting to sell insurance or asking a person to apply for a particular kind of insurance from a particular company MCL 5001201(m) There is no dispute that Jamil was not appointed as an agent for GEICO

Sec 1207

(1) An agent shall be a fiduciary for all money received or held by the agent in his or her capacity as an agent Failure by an agent in a timely manner to turn over the money which he or she holds in a fiduciary capacity to the persons to whom they are owed is prima facie evidence of violation of the agents fiduciary responsibility An agent shall not accept payment of a premium for a medicare supplemental policy or certificate in the form of a check or money order made payable to the agent instead of the insurer Upon receiving payment of a premium for a medicare supplemental policy or certificate an agent shall immediately provide a written receipt to the insured

Customer credibly testified that she paid $44800 to Jamil to purchase a GEICO insurance policy but that GEICO received only $19900 It is clear that Jamil charged

$24900 for roadside assistance through a NSD Motor Club Membership without her knowledge and against her best interests (she already had similar coverage through AAA)

15-064706 Page9

Jamil also charged customer for a Progressive Insurance policy and collected money in excess of what was required for that policy and used it to purchase an NSD Motor Club Membership without his knowledge and against his interest ( also already had roadside coverage through AAA)

Sec 1239

(3) In addition to any other powers under this act the commissioner may place on probation suspend or revoke an insurance producers license or may levy a civil fine under section 1244 or any combination of actions and the commissioner shall refuse to issue a license under section 1205 or 1206a for any 1 or more of the following causes

(b) Violating any insurance laws or violating any regulation subpoena or order of the commissioner or of another states insurance commissioner

(d) Improperly withholding misappropriating or converting any money or property received in the course of doing insurance business

(e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance

(h) Using fraudulent coercive or dishonest practices or demonstrating incompetence untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere

Respondent Jamil is subject to sanctions for failing to produce records in cooperation with the states examination of the accounts records and documents pertaining to an insurance agent in violation of section 249 of the Code which provides as follows

Sec 249

For the purposes of ascertaining compliance with the provisions of the insurance laws of the state or of ascertaining the business condition and practices of an insurer or proposed insurer the commissioner as often as he deems advisable may initiate proceedings to examine the accounts records documents and transactions pertaining to

15-064706 Page 10

(a) Any insurance agent surplus line agent general agent adjuster public adjuster or counselor

PROPOSED DECISION

The undersigned Administrative Law Judge proposes that the above findings of fact and conclusions of law be adopted and that a sanction or sanctions be ordered by the Department Director in a final decision and order

Thomas A Halick Administrative Law Judge

EXCEPTIONS

Any Exceptions to this Proposal for Decision should be filed in writing with the Department of Insurance and Financial Services Division of Insurance Attention Dawn Kobus PO Box 30220 Lansing Michigan 48909 within twenty-one (21) days of the issuance of this Proposal for Decision An opposing party may file a response within fourteen (14) days after Exceptions are filed

15-064706 Page8

Further Petitioner has proven by a preponderance of the evidence that Respondent Pro Star and Pro Star 2 violated Section 12393) of the Code because the violations committed by the individual licensee Jamil were known or should have been known by 1 or more of the partners officers or managers acting on behalf of Pro Star and Pro Star 2 MCL 5001239(3)

The record evidence shows that Respondent Jamil knowingly engaged in conduct that violated the Insurance Code

Sec 1208a

(1) An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer An insurance producer who is not acting as an agent of an insurer is not required to become appointed

The totality of the evidence proves that Jamil acted as an agent of an insurer without being appointed as an agent of that insurer Jamils arguments to the contrary are unavailing He clearly offered advice directly to a purchaser and obtained insurance for customer which constitutes unlawful negotiation under MCL 50012019k) Further he unlawfully solicited insurance by attempting to sell insurance or asking a person to apply for a particular kind of insurance from a particular company MCL 5001201(m) There is no dispute that Jamil was not appointed as an agent for GEICO

Sec 1207

(1) An agent shall be a fiduciary for all money received or held by the agent in his or her capacity as an agent Failure by an agent in a timely manner to turn over the money which he or she holds in a fiduciary capacity to the persons to whom they are owed is prima facie evidence of violation of the agents fiduciary responsibility An agent shall not accept payment of a premium for a medicare supplemental policy or certificate in the form of a check or money order made payable to the agent instead of the insurer Upon receiving payment of a premium for a medicare supplemental policy or certificate an agent shall immediately provide a written receipt to the insured

Customer credibly testified that she paid $44800 to Jamil to purchase a GEICO insurance policy but that GEICO received only $19900 It is clear that Jamil charged

$24900 for roadside assistance through a NSD Motor Club Membership without her knowledge and against her best interests (she already had similar coverage through AAA)

15-064706 Page9

Jamil also charged customer for a Progressive Insurance policy and collected money in excess of what was required for that policy and used it to purchase an NSD Motor Club Membership without his knowledge and against his interest ( also already had roadside coverage through AAA)

Sec 1239

(3) In addition to any other powers under this act the commissioner may place on probation suspend or revoke an insurance producers license or may levy a civil fine under section 1244 or any combination of actions and the commissioner shall refuse to issue a license under section 1205 or 1206a for any 1 or more of the following causes

(b) Violating any insurance laws or violating any regulation subpoena or order of the commissioner or of another states insurance commissioner

(d) Improperly withholding misappropriating or converting any money or property received in the course of doing insurance business

(e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance

(h) Using fraudulent coercive or dishonest practices or demonstrating incompetence untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere

Respondent Jamil is subject to sanctions for failing to produce records in cooperation with the states examination of the accounts records and documents pertaining to an insurance agent in violation of section 249 of the Code which provides as follows

Sec 249

For the purposes of ascertaining compliance with the provisions of the insurance laws of the state or of ascertaining the business condition and practices of an insurer or proposed insurer the commissioner as often as he deems advisable may initiate proceedings to examine the accounts records documents and transactions pertaining to

15-064706 Page 10

(a) Any insurance agent surplus line agent general agent adjuster public adjuster or counselor

PROPOSED DECISION

The undersigned Administrative Law Judge proposes that the above findings of fact and conclusions of law be adopted and that a sanction or sanctions be ordered by the Department Director in a final decision and order

Thomas A Halick Administrative Law Judge

EXCEPTIONS

Any Exceptions to this Proposal for Decision should be filed in writing with the Department of Insurance and Financial Services Division of Insurance Attention Dawn Kobus PO Box 30220 Lansing Michigan 48909 within twenty-one (21) days of the issuance of this Proposal for Decision An opposing party may file a response within fourteen (14) days after Exceptions are filed

15-064706 Page9

Jamil also charged customer for a Progressive Insurance policy and collected money in excess of what was required for that policy and used it to purchase an NSD Motor Club Membership without his knowledge and against his interest ( also already had roadside coverage through AAA)

Sec 1239

(3) In addition to any other powers under this act the commissioner may place on probation suspend or revoke an insurance producers license or may levy a civil fine under section 1244 or any combination of actions and the commissioner shall refuse to issue a license under section 1205 or 1206a for any 1 or more of the following causes

(b) Violating any insurance laws or violating any regulation subpoena or order of the commissioner or of another states insurance commissioner

(d) Improperly withholding misappropriating or converting any money or property received in the course of doing insurance business

(e) Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance

(h) Using fraudulent coercive or dishonest practices or demonstrating incompetence untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere

Respondent Jamil is subject to sanctions for failing to produce records in cooperation with the states examination of the accounts records and documents pertaining to an insurance agent in violation of section 249 of the Code which provides as follows

Sec 249

For the purposes of ascertaining compliance with the provisions of the insurance laws of the state or of ascertaining the business condition and practices of an insurer or proposed insurer the commissioner as often as he deems advisable may initiate proceedings to examine the accounts records documents and transactions pertaining to

15-064706 Page 10

(a) Any insurance agent surplus line agent general agent adjuster public adjuster or counselor

PROPOSED DECISION

The undersigned Administrative Law Judge proposes that the above findings of fact and conclusions of law be adopted and that a sanction or sanctions be ordered by the Department Director in a final decision and order

Thomas A Halick Administrative Law Judge

EXCEPTIONS

Any Exceptions to this Proposal for Decision should be filed in writing with the Department of Insurance and Financial Services Division of Insurance Attention Dawn Kobus PO Box 30220 Lansing Michigan 48909 within twenty-one (21) days of the issuance of this Proposal for Decision An opposing party may file a response within fourteen (14) days after Exceptions are filed

15-064706 Page 10

(a) Any insurance agent surplus line agent general agent adjuster public adjuster or counselor

PROPOSED DECISION

The undersigned Administrative Law Judge proposes that the above findings of fact and conclusions of law be adopted and that a sanction or sanctions be ordered by the Department Director in a final decision and order

Thomas A Halick Administrative Law Judge

EXCEPTIONS

Any Exceptions to this Proposal for Decision should be filed in writing with the Department of Insurance and Financial Services Division of Insurance Attention Dawn Kobus PO Box 30220 Lansing Michigan 48909 within twenty-one (21) days of the issuance of this Proposal for Decision An opposing party may file a response within fourteen (14) days after Exceptions are filed