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. Rec~;o
IN
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A S
AGENT
SERVICES
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N.c.o.o.,
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:
APR
I 2
20/3
NORTH
CAROLINA DEPARTMENT OF INSU
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RALEIGH,
NORTH
CAROLINA
CHECl<~r._,~S?~Tmx
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STATE OF
NO
R
TH
CAROLINA
COUNTY
OF
WAKE
IN THE MATTER
OF
TH
E LICENSURE
OF
J
OEL
RAY
AND
STIFENEB,
LLC
Licen
se
Nu
mb
er
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PAOCESSOR
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BEFORE
THE
COMMISSIONER
~l\lo~
OF INSURANCE
,.,,--
VOLUNTARY
SETT
L
EMENT
AGREEMENT
NOW
COME
Joel Ray and Stifeneb,
LLC
and the North Carolina Department
of
Insurance [hereinafter "the Department"],
by
and through Senior Deputy Commissioner Angela
Ford, and hereby voluntarily and knowingly enter into the following Voluntary Settlement
Agreement, hereinafter "this document":
WHEREAS, the Department has the authority and responsibility for enforcement
of
the
insurance laws
of
this State, for regulating and licensing insurance agents
and
bail bondsmen,
and for regulating the continuing education
of
insurance agents and bail bondsmen;
WHEREAS, J
oe
l
Ray
holds nonresident producer's licenses issued
by
the
Department
with
authority for Life, and Accident Health or Sickness Lines
of
Insurance;
WH
EREAS,
M
r.
Ray
formed Stifeneb, LLC, a licensed insurance agency located in
Dallas, Texas, in 2005. Mr.
Ray
is
the manager and sole member
of
St
ifeneb, LLC. Stifeneb,
LLC bolds a nonresident business entity license issued by the Department;
WHEREAS
,
mi
Quotes,
LLC
was an internet insurance quoting company located in
Overland Park, Kansas. Agents working in miQuotes,
LLC's
Kansas call center marketed and
sold life
and
health insurance over the telephone to leads generated through the internet. William
McEvoy, a duly licensed and appointed agent, supervised and managed agents working in
miQuotes, L
LC's
Kansas call center;
WHEREAS,
in
April 2007, Stifeneb, LLC acquired nuQuotes, LLC for the purpose
of
selling
life
and health insurance through the telephone and internet ;
WHEREAS
, Stifeneb, LLC marketed and sold life and health insurance under the name
of
miQuotes.com after
it
acquired
mi
Quotes, LLC. Although Stifeneb, LLC and Mr. Ray were
already licensed to sell insurance when Stifeneb, LLC acquired
mi
Quotes, LLC, neither Stifeneb,
LLC nor Mr.
Ray
had any experience selling insurance;
I
•
•
•
WHEREAS, between April 2007 and December 2010, Stifeneb, LLC employed agents
to market and sell life and health insurance products over the telephone to leads generated
through the internet. Stifeneb, LLC
's
agents worked in the Kansas call center from April 2007
until February 2008, when Stifeneb, LLC moved the call center to Dallas, Texas. Stifeneb, LLC
operated the Texas call center from February 2008 to December 2010. Mr. Ray informed Agent
Services that William McEvoy managed and supervised Stifeneb,
LLC's
call center agents from
April 2007 until September 2009 and that Mr. Ray was
not
involved in the daily operations
of
the call center. After Mr. McEvoy's departure, Stifeneb, LLC continued
to
operate the Texas
call center in the same manner as it was run under Mr. McEvoy's supervision;
WHEREAS, in January 2011, Agent Services received a complaint from
Bob
Walker, a
former Insurance Services Manager for Stifeneb, LLC, which alleged that S~ifeneb, LLC sold
insurance through agents who lacked North Carolina resident licenses and appointments working
in Stifeneb,
LLC's
call center, and through agents who lacked North Carolina resident licenses
and appointments, with whom Stifeneb, LLC had entered into Online Agency Agreements. Mr.
Walker managed and supervised the agents working in Stifeneb,
LLC'
s call center from
September 2009 to October 2010;
WHEREAS, counsel for Mr.
Ray
and Stifeneb,
LLC
subsequently provided written
answers and documents in response to Agent Services
Di
vision's requests for information and
documents pertaining to Stifeneb,
LLC's
sa
les
of
insurance to North Carolina residents;
WHEREAS, the information
and
documents which Mr. Ray and Stifeneb, LLC provided
to Agent Services showed that between 2008 and 2010, call center agents employed
by
Stifeneb,
LLC who lacked North Carolina resident licenses and appointments sold
61
insurance policies to
North Carolina residents. These agents only held resident Texas agent licenses;
WHEREAS, the insurance applications for the 61 policies
so
ld to North Carolina
residents identified Joel
Ray
or
William McEvoy as the writing agent and were signed
by
Mr.
Ray
or
Mr. McEvoy as writing agent. Mr. Ray and Mr. McEvoy held appropriate North Carolina
nonresident agent licenses and appointments with the insurance companies involved. The
majority
of
the insurance applications were for
AIG
American General insurance policies;
WHEREAS, Mr. Ray violated N.C.G.S. § 58-33-105 by signing as writing agent at least
23 insurance applications which were actually taken from North Carolina residents
by
agents
who lacked North Carolina resident licenses and appointments working in Stifeneb,
LLC's
call
center;
WHEREAS,
Mr.
Ray informed Agent Services that Mr. McEvoy routinely signed the
insurance applications taken by miQuotes, LLC call center agents as the writing agent and that
Mr. McEvoy continued this practice after Stifeneb, LLC hired Mr. McEvoy to supervise and
manage its call center.
When
Mr. McEvoy later resigned from his position with Stifeneb, LLC,
Mr. Ray assumed Mr. McEvoy's role
of
signing the insurance applications taken by Stifeneb,
2
•
•
LLC's
call center agents. Mr. Ray further informed
Agent
Services that Mr.
Ray
believed
that
AIG American General
had
approved
of
Mr.
McEvoy's
practice
of
signing insurance
applications taken
by
call center agents;
WHEREAS, the information and documents which Mr.
Ray
and
Stifeneb,
LLC
provided
also
showed
that Stifeneb,
LLC
had
entered into Online
Agency
Agreements with Stifeneb,
LLC
[hereinafter, "online agents"] to market insurance online through agent
we
bsites hosted and
maintained
for
the agents
by
Stifeneb,
LLC
through
mi
Quotes.com
or
miQuotes.net on
one
of
St
ifeneb,
LLC's
servers;
WHEREAS, Stifeneb,
LLC's
Online
Agency
Agreements require
the
online agents to
be
licensed
and
appointed with
the
insurers' whose products are featured
on
the
online
age
n
ts'
miQuotes website
and
provide that
the
online agents will
rece
i
ve
compensation for
those
s~les
directly
from
the insurers. However, the Online
Agency
Agreements also provide
that
Stifeneb,
L
LC
will compensate online agents for sales
of
insurance products to residents
of
states
in
which
the agent is not licensed
or
appointed
by
the insurers. Thus, the Online
Agency
Agreements
contemplate that online agents will sell insurance
to
residents
of
states
in
which
the agents are
not
licensed
or
appointed and that Stifeneb,
LLC
will compensate the online agents
for
those
sales;
WHEREAS, Stifeneb,
LLC
violated N.C.G.S. §§ 58-33-26(a) and
U)
and
58
-33-40(a)
by
using call
center
and online agents who lacked North
Caro
lina resident licenses and
appointments to market and sell insurance to
No
rth Carol
in
a residents;
WHEREAS, Stifeneb,
LL
C violated
N.C
.G.
S.
§
58
-33-82(a),(b),
and
(d) by
compensating agents who lacked North Carol
in
a resident licenses and appointments
for
these
sales to North Carolina residents;
WHEREAS, Mr.
Ray
informed
Agent
Service
s that
Stife
neb,
LLC
closed
the
call
center
in
December
2010 after several insurers advised Stifeneb,
LLC
that its agents needed to hold
nonresident agent licenses
in
order to solicit insurance from consumers residing outs
id
e
of
Texas.
Since
St
ifeneb,
LLC
closed its call center, Stifen
eb,
LLC
has supplied insurance leads obtained
through miQuotes.com to third-party call centers with which
it
has entered into Affiliation
Agreements [hereinafter, "Affiliates"] while continuing to host and maintain agent websites
through mi Quotes.com
or
mi Quotes.net.
The
Affiliates are responsible for hiring duly licensed
and appointed agents to sell,
so
licit, and negotiate insurance to the leads furnished
by
Stifeneb,
LLC
and
must
compensate
Stifeneb, L
LC
for any resulting insurance
sa
les pursuant to the
Affiliation
Ag
r
eeme
nt
s;
WHEREAS, Mr.
Ray
informed Agent Services that Stifeneb, LLC stopped
compensating online agents for sales made to residents
of
states
in
which the online agents are
not duly licensed and appointed after Agent Services informed Stifeneb,
LLC
that this practice
• violates N.C.G.S. §§ 58-33-26(a) and
U),
58
-33-40(a)
and
58-33-82(a), (b), a
nd
(d);
3
•
•
•
WHEREAS, Mr. Ray and Stifeneb,
LLC
have amended Stifeneb,
LLC's
standard Online
Agency Agreements to eliminate any provision for compensation to online agents
for
online
sa
les made to residents
of
states in which the online agent is
not
duly licensed and appointed
with the insurers;
WHEREAS, pursuant to N.C.G.S. § 58-2-70(g), the Commissioner
of
Insurance and the
Department have the express authority to negotiate a mutually acceptable agreement with
any
person as to the status
of
the person's license
or
certificate
or
as to any civil penalty
or
restitution;
WHEREAS, throughout the course
of
the Department's investigation and its discussions
with Mr. Ray regarding this matter, Mr. Ray and Stifeneb, LLC have demonstrated cooperation
with the Department; and
WHEREAS, Joel Ray and Stifeneb, LLC have agreed to settle, compromise, and resolve
the matters referenced in this Agreement, and the Department has agreed not to
pursue
additional
penalties, sanctions, remedies,
or
restitution based on this matter;
WHEREAS, the parties to this Agreement mutually wish to resolve this matter by
consent before the Department initiates an administrative hearing concerning this matter; and
WHEREAS,
Joe
l Ray and Stifeneb,
LLC
have agreed to pay a total administrative fine
of
$8,400 in lieu
of
other administrative action against their licenses for these violations
of
Chapter
58;
WHEREAS, the parties to this document have reached a mutually agreeable resolution
of
this matter as set out
in
this Voluntary Settlement Agreement.
NOW, THEREFORE,
in
exchange for the consideration
of
the promises and agreements
set
out
herein, the Department, Joel Ray, and Stifeneb, LLC hereby agree to the following:
1.
Contemporaneously with the execution
of
this document, Joel Ray
and
Stifeneb,
LLC shall pay a civil penalty
of
eight thousand four hundred dollars ($8,400.00)
to the Department.
The
check for the payment
of
this civil penalty shall be
payable to the "North Carolina Department
of
Insurance."
This
civil penalty shall
be
sub
ject
to disbursement in accordance with the provisions
of
Article IX,
Section 7
of
the North Carolina Constitution for the benefit
of
the public schools.
The
Department must receive both the civil penalty and this signed document
from Joel Ray and Stifeneb,
LLC
by
no later than March
27
, 2013.
2.
Joel Ray and Stifeneb,
LLC
agree to comply with all statutory and regulatory
requfrements applicable to insurance agents in this State .
4
•
•
•
3. This Agreement does not in any way affect the
Department's
disciplinary power
in any future actions, cases or complaints involving Joel
Ray
and Stifeneb, LLC.
4.
The
parties to this document agree that the Superior
Court
of
Wake
County
shall
be
the venue for any actions seeking to enforce this document.
5.
If,
for any reason, any
part
or
provision
of
this document
is
found to
be
void
or
unenforceable, the other parts and provisions shall remain in full force and effect.
6.
The
parties to this document have read and understand this document
and
agree to
abide
by
the terms and conditions contained herein.
7. This Agreement, when finalized, will
be
a public record and is
not
confidentiaL
Any
and all licenses issued by the Department to the licensee shall reflect that
Regulatory Action has been taken against the licensee following the execution
of
this Agreement.
The
Department is free
to
disclose the contents
of
this
Agreement with third parties upon request
or
pursuant to any law or policy
providing for such disclosure.
8.
The
part
ies to this Agreement agree that this Agreement shall have the full force
and effect
of
an Order
of
the Commissioner. Joel
Ray
and Stifeneb,
LLC
understand that N.C. Gen. Stat. § 58-33-46(a)(2) provides that a
person's
licenses
may
be
revoked for violating an Order
of
the Commissioner.
9. Joel Ray and Stifeneb,
LLC
voluntarily waive any right to notice
of
an
administrative hearing and any right to a hearing
on
the violation and disciplinary
action referenced in this Settlement Agreemen
t.
Joel Ray and Stifeneb,
LLC
also
waive any right to appeal and agr
ees
not
to
challenge the validity
of
this
Settlement Agreement in any way.
I 0.
The
promises, agreements, representations and consideration contained herein are
not
mere recitals but are contractual in nature.
11.
Thi
s written document contains the entire agreement between
the
Parties. There
are no other oral or written agreements
of
any kind that alter
or
add to this
agreement.
5
•
NORTH
CAROLINA
DEPARTMENT
OF
By
Ange
K.
ord
.
S//,?,,.~u~~
Commissioner
Date:~
1
:lo l
~
•
•
6
Jo
Ray
Date: 3 -
li
.,.,
1
~
N.C.
DEPARTMENT
OF
INSURANCE
PUBLIC
SERVICES
GROUP
