REPRESENTING
ALEX SINK
CHIEF FINANCIAL OFFICER
STATE OF FLORIDA
IN THE MATTER OF:
NATIONAL TRADE BUSINESS
ALLIANCE OF AMERICA, aIkIaNATIONAL
TRADE BUSINESS ASSOCIATION,
a/kla NATIONAL TRANSPORTATION
BENEFITS ALLIANCE ASSOCIATION;
and
NATIONAL ALLIANCE OF ASSOCIATIONS,
a/kla ALLIANCE ASSOCIATION HEALTH,
a/kla HEALTHCARE ALLIANCE,
a/kla NATIONAL ALLIANCE HEALTHCARE;
and
Case No. 93206
AFFINITY HEALTH PLANS;
and
NATIONAL ALLIANCE HEAL THCARE;
and
PROFESSIONAL BENEFITS CONSULTANTS
OF DELAWARE, a/kla PERSONAL BENEFITS
CONSULTANTS, INC., alk/a PBC DIRECT;
and
THOMAS J. SULLIVAN;
JAMES DOYLE;
and CHRISTOPHER ASHIOTES.
I
IMMEDIATE FINAL ORDER
.
TO:
AFFINITY HEALTH PLANS
141 Ganttown Road, Suite E
Tumersville, New Jersey 08012
NATIONAL ALLIANCE HEALTHCARE
141 Ganttown Road, Suite E
Tumersville, New Jersey 08012
NATIONAL TRADE BUSINESS ALLIANCE
OF AMERICA
141 Ganttown Road, Suite E
Tumersville, New Jersey 08012
NATIONAL TRADE BUSINESS ASSOCIATION
141 Ganttown Road, Suite E
Tumersville, New Jersey 08012
NATIONAL TRANSPORTATION BENEFITS
ALLIANCE ASSOCIATION
141 Ganttown Road, Suite E
Tumersville, New Jersey 08012
NATIONAL ALLIANCE ASSOCIATION
141 Ganttown Road, Suite E
Tu,mersville New Jersey 08012
ALLIANCE ASSOCIATION HEALTH
141 Ganttown Road, Suite E
Tumersville, New Jersey 08012
HEALTHCARE ALLIANCE
141 Ganttown Road, Suite E
Tumersville, New Jersey 08012
NATIONAL ALLIANCE HEALTHCARE
141 Ganttown Road, Suite E
Tumersville, New Jersey 08012
PROFESSIONAL BENEFITS CONSULTANTS
OF DELAWARE
141 Ganttown Road, Suite C
Tu,mersville New Jersey 08012
2
PERSONAL BENEFITS CONSULTANTS, INC.
141 Ganttown Road, Suite C
Turnersville, New Jersey 08012
PBC DIRECT
141 Ganttown Road, Suite C
Turnersville, New Jersey 08012
THOMAS J. SULLIVAN
141 Ganttown Road, Suite E
Turnersville, New Jersey 08012
JAMES DOYLE
141 Ganttown Road, Suite E
Turnersville, New Jersey 08012
JAMES DOYLE
Family Healthcare Services Inc.
d/b/a America's Best Benefits
2515 Camino Del Mar, Ste. 11.
Del Mar California 92014
CHRISTOPHER ASHIOTES
141 Ganttown Road, Suite C
Turnersville, New Jersey 08012
KRISHEN IYER
American Life Healthcare, Inc.
2225 West Shaw Avenue
Fresno, California 93711
VENANCIO BAUTISTA
d/b/a Family Benefits
6421 Sommer Place
La Mesa, California 91942
VENANCIO BAUTISTA
Nationwide Benefits, Inc.
6421 Sommer Place
La Mesa, California 91942
ANTHONY FILIPPONE
Nationwide Benefits, Inc.
6421 Sommer Place
La Mesa, California 91942
3
MARGARET BAUTISTA
Nationwide Benefits, Inc.
6421 Sommer Place
La Mesa, California 91942
BRYAN AUTRY
International Med Tech, LLC
1135 Garnet #20
San Diego, California 92109
SHANDA VAIASUSO
d/b/a Nationwide Benefits, Inc.
2104 GreenwickRoad
.
EI Cajon, California 92019
STEFANO FILIPPONE
d/b/a U.S. Healthcare, Inc.
2321 Morena Boulevard, Suite C
San Diego, California 92110
ANTHONY J. FILIPPONE, Sr.
d/b/a U.S. Healthcare, Inc.
2321 Morena Boulevard, Suite C
San Diego, California 92110
ETHAN WILLIAM ERICKSON
Family Healthcare Services, Inc.
d/b/a America's Best Benefits
11526 Sorrento Valley Road, Suite E
San Diego, California 92121
YOU ARE HEREBY NOTIFIED that pursuant to Sections 624.317, 624.318,
624.319, 624.321, 624.307, 626.901(6) and 626.909, Florida Statutes, the Chief
Financial Officer of the State of Florida, as the head of the Florida Department of
Financial Services ("Department"), has caused an investigation to be made relative to
your activities involving the illegal transaction of insurance in the State of Florida, as
defined by Section 624.10, Florida Statutes. As a result of that investigation, the Chief
Financial Officer has found and determined as follows:
4
1.
The Department has jurisdiction over the parties and the subject matter
pursuant to Sections 120.569(2)(n) (Decisions which affect substantial interests),
624.307 (General powers and duties), 624.317 (Investigation of agents, adjusters,
administrators, service companies and others), 624.318 (Conduct of examination or
investigation;
access to records; correction of accounts; appraisals), 624.401
(Certificate of Authority), 626.901 (Representing or aiding unauthorized insurer
prohibited), 626.909 (Jurisdiction of the Department), and 626.9541 (Unfair or deceptive
acts or practices), Florida Statutes.
2.
Section 624.401(1), Florida Statutes, states that no person shall act as an
insurer, and no insurer or its agents, attorneys, subscribers, or representatives shall
directly or indirectly transact insurance in this state except as authorized by a subsisting
Certificate of Authority issued to the insurer by the Office of Insurance Regulation
("OIR").
3.
Section 624.401(4)(a), Florida Statutes, states that any person that acts
as an insurer, transacts insurance, or otherwise engages in insurance activities in this
state without a Certificate of Authority in violation of this section commits a felony of the
third degree, punishable as provided in Sections 775.082, 775.083, or 775.084, Florida
Statutes, and Section 624.401(b) provides for enhancement of that penalty to a felony
of up to the first degree if insurance fraud is present.
4.
Section 120.569(2)(n), Florida Statutes, provides that "if an agency head
finds that an immediate danger to the public health, safety or welfare requires an
immediate final order, it shall recite with particularity the facts underlying such finding in
. the
final order."
5
5.
Section 626.901(1), Florida Statutes, states that no person shall directly or
indirectly act as an agent for, or otherwise represent or aid on behalf of another, any
insurer not then authorized to transact such insurance in this state or in any other
manner represent or assist such an insurer in the transaction of insurance with respect
to subjects of insurance resident, located, or to be formed in this state.
6.
Subsections 626.901(1)(a) through (h), Florida Statutes, prohibit any
person, from within this state or any other state, from aiding or abetting the
unauthorized transaction of insurance. By its marketing activities in Florida, including
those performed by its marketing contractors and subcontractors, . NATIONAL
ALLIANCE OF ASSOCIATIONS ("NATIONAL ALLIANCE") and THOMAS J. SULLIVAN
have acted as agents for unauthorized insurers, contrary to the prohibitions in Section
626.901, Florida Statutes.
7.
Section 926.901(5), Florida Statutes, states that the Department of
Financial Services or the Office of Insurance Regulation may, pursuant to Section
120.569, Florida Statutes, at their discretion, issue an immediate final order to cease
and desist to any person or entity that violates this section. The same section further
states that the "Legislature finds that a violation of this section constitutes an imminent
and immediate threat to the health, safety, and welfare of the residents of this state."
8.
all
Records maintained by the New Jersey Secretary of State reflect that at
relevant times
NATIONAL TRADE
BUSINESS ALLIANCE
OF AMERICA
("NATIONAL TRADE") is or was a nonprofit New Jersey corporation headquartered in
Tu,rnersville New Jersey with THOMAS J. SULLIVAN as its President. Those records
also reflect that THOMAS J. SULLIVAN is presently the President of NATIONAL
6
ALLIANCE. Attached as Composite Exhibit "A" is a copy of records maintained by the
New Jersey Secretary of State.
9.
Review of the Department's and the OIR's records reveals that none of
the following entities currently hold or have ever been granted a license or Certificate of
Authority authorizing the entity or individual to transact health insurance business,
discount medical plan organization business or insurance business in any capacity, nor
are the following entities registered as eligible surplus lines insurance carriers:
NATIONAL ALLIANCE HEALTHCARE, AFFINITY HEALTH PLANS OF AMERICA,
NATIONAL TRADE BUSINESS ALLIANCE OF AMERICA, NATIONAL TRADE
BUSINESS ASSOCIATION, NATIONAL TRANSPORTATION BENEFITS ALLIANCE
ASSOCIATION,
NATIONAL
ALLIANCE
OF
ASSOCIATIONS,
ALLIANCE
ASSOCIATION HEALTH, HEALTHCARE ALLIANCE, and NATIONAL ALLIANCE
HEALTHCARE. The Certificates of Non-Authority are attached as Composite Exhibit
"B."
10.
PERSONAL BENEFITS CONSULTANTS, INC. (PBC) is engaged in the
business of marketing sale and distribution of health and insurance products. Thomas J.
Sullivan, in addition to being President of NTBAA and NAA, was also the incorporator of
PBC. James M. Doyle is a Vice President of PBC. Christopher Ashiotes serves as Vice
President and Director of Marketing for PBC. Additionally, NTBAA entered into a
contract with PBC to market health insurance benefits to NTBAA members. In turn,
PBC contracted with multiple companies and individuals, including: American's Best
Benefits, Ethan William Erickson, American Life Healthcare, Krishen Lyer, Venancio
Bautista, Family Benefits, Bryan Autry, International Med Tech, Shanda Vaiasuso,
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Nationwide Benefits, Anthony Filppone, Margaret Bautista, Stefano Filppone, U.S.
Healthcare, Inc., who sent out mass solicitations by facsimile (also known as fax
blasting) to individuals in Florida and other states, including individuals who were not
members of NTBAAor NAA.
11.
Despite the absence
of any Certificate of Authority or any other
authorization to transact insurance business in Florida, NATIONALTRADE and
NATIONAL ALLIANCE represented
in its solicitations and other transactional
communications that AFFINITY HEALTH PLANS and
NATIONAL ALLIANCE
HEALTHCARE were the insurers underwriting the coverage solicited and sold by
NATIONALTRADE or NATIONALALLIANCEor their selected marketers to residents of
Florida (and other states), in violationof the Florida Insurance Code including, Sections
624.401 and 626.901, Florida Statutes.
12.
THOMAS J.
SULLIVAN, JAMES
DOYLE, and
CHRISTOPHER
ASHIOTES are not licensed as insurance representatives of any type by the State of
Florida. Attached as Composite Exhibit "C" are Certificates of Non-Licensure for
THOMAS J. SULLIVAN,JAMES DOYLE, and CHRISTOPHER ASHIOTES. Further,
NATIONALALLIANCEis, as a pattern of practice, using agents unlicensed in Florida to
illegallytransact insurance in Florida.
13.
.
Consumer complaint records maintained by the Department's Office of
Consumer Services reflect that NATIONALTRADE and NATIONALALLIANCEhave,
within the State of Florida, solicited policies on behalf of the fictional entities AFFINITY
HEALTH PLANS and NATIONALALLIANCEHEALTHCARE, by and through the
aforementioned affiliated entities and individuals named herein. This has been and is
8
being accomplished by fax blasting Florida consumers, soliciting the purchase of health
insurance, dental insurance, hospitalization coverage, accident insurance, vision,
hearing and chiropractic insurance. Such actions constitute the illegal transaction of
insurance, which is a felony under Florida law. Further, these illegal acts have resulted
in substantial financial harm and an immediate danger to the health, safety, and welfare
of Florida residents.
14.
To date, approximately 790 Florida residents have purchased insurance
through one of the aforementioned unlicensed entities. This has generated many
consumer complaints for non-payment of claims and requested cancellation refunds.
The unpaid claims from these sales are in excess of $100,000. This situation presents
an imminent and immediate danger to the health, safety and welfare of Florida
consumers.
15.
On or about February 26, 2007, NATIONAL TRADE solicited and sold to
Jill E. Cardillo, a resident of the State of Florida, as a benefit of membership in joining
NATIONAL TRADE, a purported health insurance policy covering Ms. Cardillo and her
husband. Monies required to procure the purported coverage were timely and fully paid
by Ms. Cardillo. The entire transaction was performed via facsimile transmission and
automated bank withdrawals from the Cardillo account. See, Cardillo Affidavit, attached
as Exhibit D.
16.
The purported coverage was represented to Ms. Cardillo to take effect on
April 1, 2007, and was represented in writing to Ms. Cardillo by NATIONAL TRADE to
have been written by Bankers Fidelity Insurance Company. See, letter to Cardillo
attached as Exhibit E.
9
17.
On April 16, 2007, Mr. Cardillo suffered a heart attack, necessitating
hospitalization and multiple by-pass surgery. Exhibit D.
18.
Despite that written assurance, the truth is that Bankers Fidelity never
wrote the purported health insurance coverage for the Cardillos, or any other member of
NATIONAL TRADE. See Exhibits F and G, attached hereto. Thus, NATIONAL TRADE
violated the provisions of Section 626.901, Florida Statutes, and perpetrated a fraud
upon the Cardillos.
19.
The Cardillos' attempts to make claims under the purported coverage
have been uniformly rejected by NATIONAL TRADE'S purported claims adjuster (SDS
Management Group), causing significant financial harm to the Cardillos. See, Exhibit D.
20.
NATIONAL TRADE is not licensed to transact insurance in Florida, and
failed to use a Florida licensed agent to transact the purported insurance coverage with
Ms. Cardillo.
21.
In response to receiving a facsimile transmission solicitation sent by
NATIONAL TRADE, on or about August 16, 2007, Luciana Steadman, a resident of the
State of Florida, after speaking with one Gary Smith, who represented himself to be a
customer service representative with America Best Benefits (a marketing sub-contractor
for NATIONAL TRADE), completed an application for health insurance and returned it
by facsimile transmission to NATIONAL TRADE. Ms. Steadman paid all necessary
premiums and other fees to place the desired coverage into effect. See, Steadman
affidavit, attached as Exhibit H.
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22.
NATIONAL TRADE informed Ms. Steadman in writing that she and her
family had become members of the Affinity Health Plan
-A
Limited Benefit Insurance
Plan, supposedly effective on September 1, 2006. See, Exhibit I.
23.
Because she did not receive a copy of the purported policy after
requesting the same, on or about September 20, 2007, Ms. Steadman called
NATIONAL TRADE'S designated 800 number, and asked that the policy be cancelled
and her monies returned. Exhibit H.
24.
Despite that request and numerous subsequent requests, Ms. Steadman
was routinely sent from one person to another, each of whom in turn stated that
someone else was responsible for processing refunds. She has never received the
requested refund. Exhibit H.
25.
On or about August 16, 2006, Ms. Carol Levin received a faxed solicitation
by one Gary Smith of Affinity Healthcare relative to a purported health plan (attached as
Exhibit J). The health plan was purported to be issued by Affinity Health Insurance.
Ms. Levin called Mr. Smith at the toll free number provided. During that phone call, she
was advised by Mr. Jim Doyle that the coverage was actual insurance coverage, not a
medical discount plan. Based upon their representations, Ms. Levin began paying a
monthly premium of $124.50, and continued to make payments until July of 2007. Ms.
Levin subsequently noted that her lab bills were not being paid and contacted Mr.
Doyle, who indicated that these bills would be paid. When these promises of payment
were not kept, Ms Levin cancelled the policy in July of 2007.
26.
At all relevant times, James Doyle held himself out to be Secretary and
Treasurer of NATIONAL TRADE, as well as a member of its Board of Trustees.
11
27.
At all relevant times, Christopher Ashiote held himself out to be vice-
president of PBC Direct, with whom NATIONAL TRADE had a marketing agreement,
and on at least one occasion signed a transactional document as president of
NATIONAL TRADE.
28.
Both Doyle and Ashiote have recently pled guilty to felony-level insurance
code violations in Texas, and have been sentenced to five years of probation, 400 hours
of community service, and total restitution of $630,000. Doyle and Ashiote have
demonstrated themselves to be a source of injury or harm to the insurance-buying
public.
29.
In June or July of 2007, NATIONAL TRADE ceased doing business.
However, Thomas J. Sullivan continued that business through a corporate alter ego
named NATIONAL ALLIANCE OF ASSOCIATIONS, located at the same address as
NATIONAL TRADE, and with the same person, THOMAS J. SULLIVAN, listed with the
State of New Jersey as president of each corporation. Exhibit A.
30.
The corporate website for NATIONAL ALLIANCE (http://www.naaus.orq)
solicits insurance transactions from all who can access its website, excluding a number
of states where they do not offer the coverage. Those excluded states include Virginia,
Kentucky, Arizona, North Carolina, Pennsylvania, and Texas, where NATIONAL
TRADE and/or NATIONAL ALLIANCE and their marketing affiliates were the subject of
regulatory disciplinary actions for the same type of unauthorized and unlicensed
activities, and non-payment of claims infractions, committed in Florida. Florida,
however, is not one of the excluded states. Thus, NATIONAL ALLIANCE is presently
and illegally soliciting insurance in Florida, as well as performing those other functions
12
constitutingthe transaction of insurance under Florida law, and failing to pay just claims,
thereby violating Sections 624.11, 624.310, 624.401, 626.112, 626.829, 626.8305,
626.901, 626.9521, and 626.9541(1)(a), (b), (e), (i) and (k), Florida Statutes. See,
ExhibitK.
31.
In consideration of the above, and pursuant to Sections 120.569(2)(n) and
626.901(5), Florida Statutes, the Chief Financial Officer of the State of Florida, as head
of the Department of Financial Services, finds that such solicitations by NATIONAL
ALLIANCE, THOMAS J. SULLIVAN, and the affiliated entities and individuals named
herein, constitute an immediate danger to the public health, safety, or welfare of Florida
citizens.
If NATIONAL ALLIANCE, THOMAS J. SULLIVAN, and the affiliated individuals
and entities named herein, by whatever means and through whatever affiliated parties,
are allowed to continue the unauthorized and unlicensed transaction of insurance in
Florida, and to deny just claims made by Florida residents, those statutory violations
which place the public health, safety, or welfare in danger are likely to be r~peated.
Thus, the Department must take emergency action against NATIONAL ALLIANCE,
THOMAS J. SULLIVAN, and the affiliated individuals and entities named herein, to
protect the public interest. NATIONAL ALLIANCE OF ASSOCIATIONS, THOMAS J.
SULLIVAN, and the affiliated individuals and entities named herein, have thus far
demonstrated a willful and total disregard for the statutory provisions of Chapters 624
and 626, Florida Statutes, and are thus a source of injury to the insurance-buying
public.
13
WHEREFORE,
NATIONAL TRADE, NATIONAL ALLIANCE, THOMAS J.
SULLIVAN, and each and every one of the affiliated individuals and entities named
.
herein, are all ordered to immediately cease and desist from the further transaction of
insurance in Florida, by whatever means and through whatever parties, until such time
as proper authorization and licensure have been granted by this Department.
Further, AFFINITY HEALTH PLANS, NATIONAL ALLIANCE HEALTHCARE,
NATIONAL TRADE BUSINESS ALLIANCE OF AMERICA, NATIONAL TRADE
BUSINESS ASSOCIATION, NATIONAL TRANSPORTATION BENEFITS ALLIANCE
ASSOCIATION, NATIONAL ALLIANCE ASSOCIATION, ALLIANCE ASSOCIATION
HEALTH, HEALTHCARE ALLIANCE, PROFESSIONAL BENEFITS CONSULTANTS
OF DELAWARE, PERSONAL BENEFITS CONSULTANTS, INC., PBC DIRECT,
THOMAS J. SULLIVAN, JAMES DOYLE and CHRISTOPHER ASHIOTES shall, within
five (5) d~ys of the date this IMMEDIATE FINAL ORDER is received, notify, in writing,
each and every agent, broker, salesperson, and other marketing outlet that is presently
or that has in the past been used to solicit, sell, or deliver AFFINITY HEALTH PLANS
and NATIONAL ALLIANCE HEALTHCARE products in Florida of the cessation of the
Florida
business
of AFFINITY
HEALTH
PLANS
and
NATIONAL ALLIANCE
HEALTHCARE, because they are unlicensed, and shall also inform such persons and
entities that any pending transfers will not be processed and that no further applications
will be accepted nor contracts issued by AFFINITY HEALTH PLANS and NATIONAL
ALLIANCE HEALTHCARE, and shall immediately thereafter file with the Department a
sworn attestation of each officer and director that there has been full and complete
compliance with this provision.
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Additionally, within ten (10) days of receipt of this Immediate Final Order, the
entities and individuals referenced herein shall file with the Department a copy of all
policies issued to a resident of the State of Florida as well as a detailed spreadsheet
compiling the information contained in all contracts issued to a resident of the State of
Florida. Said spreadsheet shall include at a minimum; last name, first name, address,
phone number, premium amount, and claims information.
DONE AND ORDERED this 3rd day of December, 2007.
Karen Chandler
Deputy Chief Financial Officer
NOTICE OF RIGHTS
Any party to these proceedings adversely affected by this Order is entitled to seek
review of this Order pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Fla.
R. App. P. Review proceedings must be instituted by filing a petition or notice of appeal
with the General Counsel, acting as the agency clerk, at 612 Larson Building,
Tallahassee, Florida, and a copy of the same with the appropriate district court of
appeal within thirty (30) days of rendition of this Order.
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