BEFORE THE COMMISSIONER OF INSURANCE

Transcription

1 BEFORE THE COMMISSIONER OF INSURANCE OF THE STATE OF KANSAS In the Matter of the Kansas Resident ) Insurance Agent s License of ) Frank Dean Barber ) NPN # , ) The Kansas Resident Insurance Agency ) Docket No CO License of Barber Financial Group, ) ) And the Application for ) Kansas Resident Insurance Agency License ) Of BFG Insurance Service, LLC. ) CONSENT AGREEMENT AND FINAL ORDER Pursuant to the authority granted to the Commissioner of Insurance ( Commissioner ) by K.S.A and in accordance with K.S.A et seq., and K.S.A et seq., the Commissioner hereby accepts the stipulations of the parties and imposes sanctions against the Kansas resident insurance agent s license of Frank Dean Barber ( Respondent ) and the Kansas resident insurance agency license of Barber Financial Group ( Barber ) and orders the issuance of a Kansas resident agency license to BFG Insurance Service, LLC ( Applicant ). This Consent Agreement shall become effective as a Final Order, without further notice when signed by the Commissioner or her designee and filed of record with the Kansas Insurance Department ( KID ). Findings of Fact 1. Respondent is licensed as a resident agent to transact the business of insurance in Kansas and has been so licensed since May 24, 1993.

2 2. Respondent s legal address is in Lenexa, Kansas, and his mailing address of record is W. 95 th St., Lenexa, KS Barber has been licensed as a Kansas resident insurance agency since April 30, Barber s legal and mailing address of record is W. 95 th St., Lenexa, KS Respondent is the Kansas licensed agent designated to be responsible for the agency s compliance with the insurance laws and regulations of the State of Kansas. 6. On January 25, 2011, Respondent, as manager, signed on behalf of Applicant BFG and submitted a Uniform Application for Business Entity Insurance License ( Application ) to the Kansas Insurance Department (KID), and it was received January 27, Question 2 under Item 37 asks, Has the business entity or any owner, partner, officer or director of the business entity, or member or manager of a limited liability company, ever been named as a party in an administrative proceeding regarding any professional or occupational license, or registration? 8. Question 5 under Item 37 asks, Has the business entity or any owner, partner, officer or director [ever been] a party to, or ever been found liable in any lawsuit or arbitration proceeding involving allegations of fraud, misappropriation or conversion of funds, misrepresentation or breach of fiduciary duty? 9. Respondent answered yes to both questions and provided supporting documentation from the following complaints: John B. Hinz v. ING Financial Partners, Inc., and Frank Dean Barber, FINRA No , and Stephen Routh, et al., v. ING 2

3 Financial Partners, Inc., Locust Street Securities, Inc., and Frank Dean Barber, FINRA No Each complaint alleges misrepresentation in the sale of variable annuities and each was resolved by award or settlement in favor of the complainant. 11. Respondent attached a statement about each action, including a statement that the Hinz complaints were received in March Attached to the application was Respondent s letter requesting cancellation of the business entity license for Barber Financial Group, and transfer of all appointments to BFG Insurance Service, LLC. 13. Respondent, as President and owner, signed and submitted an application for a business entity license in the name of Barber Financial Group on April 27, On that application, Respondent, on behalf of Barber, answered no to Question 2 and Question 5 under Item Barber has not subsequently reported either complaint. 16. Barber signed an application prepared by someone else and did not personally verify that it was complete and correct. 17. As an individual agent, Respondent has not reported either FINRA matter as required by K.A.R Respondent understands his right to have a hearing on the facts and disposition and to seek review of any adverse order in this matter. 19. Respondent expressly waives hearing and stipulates that sufficient evidence exists to support action against his license and the agency license of Barber up to and including revocation. 3

4 20. Respondent further stipulates that evidence of Barber s incomplete and inaccurate application, in addition to Respondent s own failures to report actions involving alleged misconduct in the sale of insurance products, must be considered in assessing the application of BFG. 21. Respondent further waives administrative and judicial review. Applicable Law 22. K.S.A (a) provides, in relevant part: The commissioner may deny, suspend, revoke or refuse renewal of any license issued under this act if the commissioner finds that the applicant or license holder has... (1) Provided incorrect, misleading, incomplete or untrue information in the license application. (2) Violated: Any Provision of chapter 40 of the Kansas Statutes Annotated or any rule and regulation promulgated thereunder.... K.S.A (a). 23. Kansas Insurance Department administrative regulations require a licensed insurance agent to report within 30 days any disciplinary action against an occupational license other than an insurance license, K.A.R (b), and/or any judgment based on conduct involving fraud, deceit, or misrepresentation or any violation of insurance law, K.A.R (c). 24. In lieu of taking action under subsection (a), the Commissioner may censure the licensee or impose an administrative penalty up to a maximum of $500 for each violation or $1000 for each violation if the licensee knew or reasonably should have known the act could give rise to a disciplinary proceeding under subsection (a). Conclusions of Law 4

5 25. The Commissioner has jurisdiction over Respondents and the Applicant as well as the subject matter of this proceeding, and such proceeding is held in the public interest. 26. The Commissioner finds that Barber s agency license may be revoked because Respondent, on behalf of Barber, provided incomplete or untrue information in the license application. 27. Further, the Commissioner finds that Barber is subject to action against its agency license pursuant to K.S.A (a)(2(A) because Respondent has violated K.A.R (b) and (c) in failing to report the FINRA actions subsequent to the application. 28. Based on the undisputed facts, the Commissioner finds that Respondent is subject to action against his individual agent license pursuant to K.S.A (a)(2(A) because Respondent has violated K.A.R (b) and (c) in failing to report the FINRA actions. 29. The Commissioner further finds that Respondent knew or reasonably should have known that failure to disclose the two FINRA actions on Barber s application and failure to report them to the Commissioner as an individual agent would subject him and the agency to disciplinary action. 30. The Commissioner finds that the actions would not have resulted in denial of Barber s application for a license or revocation of Respondent s individual license. 31. Accordingly, imposition of a civil penalty will adequately protect the public by enforcing the requirement of full disclosure on an application for licensure and subsequently. 5

6 32. In consideration of Respondent s stipulations and for purposes of a consent agreement only, the Commissioner agrees to impose a total penalty of $1000, jointly and severally against Barber as an entity and Respondent individually, in settlement of all violations and to issue the license of Applicant BFG. Stipulation The undersigned stipulates and agrees to the above findings fact and conclusions of law and waives his rights to administrative hearing and judicial review of the Commissioner s Order. Prepared by: _/s/ Frank Dean Barber _ Frank Dean Barber Date Respondent and representative of Barber Financial Group and BFG Insurance Service, LLC _/s/ Brenda J. Clary Brenda J. Clary KID Staff Attorney 6

7 IT IS THEREFORE ORDERED BY THE COMMISSIONER OF INSURANCE THAT Frank Dean Barber and Barber Financial Group, jointly and severally, shall pay a civil penalty of one thousand dollars ($1000). It is further ordered that, upon full payment of the civil penalty, the insurance agency license of Barber Financial Group shall be cancelled and the Kansas resident insurance agency license of BFG Insurance Service shall be issued. IT IS SO ORDERED THIS _18t DAY OF FEBRUARY 2011, IN THE CITY OF TOPEKA, COUNTY OF SHAWNEE, STATE OF KANSAS. _/s/ Sandy Praeger Sandy Praeger Insurance Commissioner /s/ Robert M. Tomlinson Robert M. Tomlinson Assistant Commissioner of Insurance NOTICE In the event Respondent files a Petition for Judicial Review, pursuant to K.S.A (e), the agency officer to be served on behalf of the Kansas Insurance Department is Zachary J.C. Anshutz, General Counsel Kansas Insurance Department 420 S.W. 9 th Street Topeka, Kansas

8 Certificate of Service The undersigned hereby certifies that she served a true and correct copy of the above and foregoing Consent Agreement and Final Order and accompanying Notice of Rights on this 18th day of February 2010, by causing the same to be placed in the United States Mail, first class postage prepaid, addressed to the following: Frank Dean Barber Barber Financial Group BFG Insurance Service, LLC W. 95 th Street Lenexa, KS _/s/ Brenda J. Clary Brenda J. Clary Staff Attorney 8