1.: BEFORE ms memos cor-mansions OF THE COMMONWEALTH OF In RE: THE COMMONWEALTH AGENCX, INC., 1787 Century Parkway West Suite 1, Building 18 Blue Bell, PA 19422 O. I. C. PHILLIP J. CANNELLA, 1 Peter Gamble Lane Glen Mills, PA 19342 'Sections 603, 60 ALLEGED 637May 17, 1921, P. L. 789, NO. 285 known as the Insurance Department Act of 1921, (40 P.s. et se Sections 4} 5(a) 5 a (2), 5(a)(12) of the Act of July 22, 1974, P.L. 589, No. 205, known as the unfair Insurance Practices Act (40 P.S. ??ll71.l gt seg.). Sections 51.11?51.34 of Title 31 of the Code, 31 Pa. Code Section 354 of the Act of May 17, 1921, P.L. 682, No. 284, known-as the Insurance Company Law (40 P.S. 5477b). Docket NC. P93-02-29 SETTLEMENT.AGREEHENT AND NOW, this day of AM 1996, this Settlement Agreement is hereby executed by and between Commonwealth Agency, Inc., Phillip J. Cannella, (referred to collectively hereinafter as "Respondents"), and the Insurance Department pursuant to the authority of all parties and in disposition of the matters captioned above. WHEREAS, on March 29, 1993, the Insurance Department ("Department") filed an Order to Show Cause against, inter alia, Respondents, and said Order was'docketed with the Administrative Hearings Office of the Insurance Commissioner at Docket No. WHEREAS, Respondents filed an Answer'to the Order to Show Cause on or about May 10, 1993, which Answer contested, denied, and/or otherwise responded to the allegations contained in the Order to Show Cause; WHEREAS, Phillip J. Cannella, (hereinaiter ?Cannella") represents that he has not been associated with, nor done business as Commonwealth Agency, Inc. for approximately four years, and that Commonwealth Agency, Inc. is no longer 'doing any business, to the best of Cannella's information and belief, and that Cannella will not do business as or through Commonwealth Agency, Inc.; WHEREAS, Phillip J. Cannella, represents that he does not have controlling interest in, or the legal right to individually bind, Respondent Commonwealth Agency, Inc;' WHEREAS, the Department and Respondents are desirous of resolving the outstanding issues without the further expenditure of time and monetary expense; AND now THEREFORE, intending to be legally bound thereby, Respondents and the Department hereby agree, as follows: 1. Respondents hereby admit and acknowledge receipt of proper notice of their right to a formal administrative -hearing pursuant to the Administrative Agency Law, 2 5101, QB seg., or other applicable law; 2. Respondents hereby waive any and all right to a formal administratiye hearing, and agree that this Settlement Agreement shall have the full force and effect of an Order duly entered in accordance with the adjudicatory procedures set.forth in the Administrative Agency Law or other applicable law. 3. Cannella shall pay the sum of $10,000 payable to I the Commonwealth of Payment of this sum shall be made by certified check or money order, payable to the Commonwealth of Payment should be directed to Sharcn Herbert; Administrative Assistant, Room 1321, Strawberry Square, Harrisburg, 17120. The payment may be made upon execution of the Settlement Agreement, but must be paid in any event not later than one hundred and eighty (180) days after the date the Settlement Agreement has been executed by the Deputy Insurance Commissioner. Said Sum shall not be considered an admission of liability. 4. . Respondents shall'cease and desist from engaging in any and all'activities alleged in_the Order to Show Cause docketed in this matter. 5. Cannella shall, to the best of his ability, assist the Insurance Department in conducting investigations and conducting proceedings against any licensed or unlicensed?entity or individual performing in the capacity of an insurance agent, broker, company, etc., their employees and officers, including but not limited to, testifying as a witness against any of the aforesaid individuals, entities, their employees and officers, in any proceedings brought against same. 6. Cannella?s certificate of qualification (hereinafter alternatively referred to as_"certificate") is hereby suspended for all lines of insurance for a period of three (3) months which period is to begin upon execution of the Settlement Agreement by the Deputy Insurance Commissioner. Cannella shall be notified of such execution. On the first business day following the three (3) month period, Cannella's certificate of qualification will be automatically reactivated, with no requirement on Cannella to request or file anything in connection with the reactivation. Also, after such three (3) month period,_Cannella may apply for any other insurance license for which he is qualified, and this Settlement Agreement, and any of the allegations associated with it, shall g, not act as a bar to'or in any way prohibit Cannella from receiving such certificate. 7.. Upon reactivation of Cannella's certificate, Cannella's certificate may.be immediately suspended by the Department following an investigation and determination that (i)-the payment required in paragraph 3 has not been made,.or (ii) any other terms of this Settlement Agreement have not been. complied with, or any complaint against Cannella is determined by the Department to be accurate and a statute or regulation has been violated. The Department's right to act under (ii) and above, is imited to a period of one (1) year from the date of reactivation of such certificate. Any such suspension shall be applicable to all lines of insurance. 8. Cannella specifically waives his right to prior notice of said suspension, but will be entitled to a hearing upon written request_received by the Department not later than thirty (30) days after the date the Department mailed to Cannella by certified mail return receipt requested, notification of said Suspension, which hearing shall be scheduled for a date within sixty (60) days of the Department's receipt of Cannella's written request. In the event that Cannella's certificate is suspended pursuant to paragraph 7 above, and Cannella fails to request a hearing within thirty (30) days, or fails to prevail at the hearing, Cannella's suspended certificate shall be-revoked. In the event of a hearing, the burden of proof shall remain as required under applicable statute, regulation or case law regarding.a hearing to suspend or revoke an insurance license.. 9: The Department represents that as of April 1{ 1996, there are no complaints pending against Cannella. The Department's right to act under 7 above, is limited to complaints-which are filed against Cannella with-the Department I after the execution of this Settlement Agreement. 10. Nothing in this Settlement Agreement constitutes, nor should be construed as, an admission of liability or guilt by Respondents. 11. - The signatories hereto hereby warrant that they have the authority to enter into this Settlement Agreement on behalf of their respective parties. 12. This Settlement Agreement shall be final and effective upon execution by Cannella, in his individual capacity, and to the extent he can bind Commonwealth Agency, Inc., as set forth in Paragraph 14 below, and the Deputy Insurance Commissioner. Only the Deputy Insurance Commissioner is authorized to bind the Insurance Department with respect to the settlement of the alleged violations of law contained in the Order to Show Cause, and this Settlement Agreement is not effective until executed by the Deputy Insurance Commissioner. 2 13. This Settlement Agreement constitutes the entire agreement of the parties with respect to the matters referred to herein, and may not be amended, modified or superseded except by an amended agreement fully_executed by all of the parties hereto. 14. Cannella herewith represents that he does not hays majority control of the Commonwealth Agency, Inc.. Cannella represents that to the extent he has legal power and/or authority to bind Commonwealth he will do so in accordance with the undertakings of this agreement. Cannella' represents that he will not sell insurance by or through I Commonwealth Agency, Inc. BY: DATED: y?z' on h's behalf and on behalf bf COMMONWEALTH AGENCY, INC. as forth bov DATED: S. MARTINO, Deputy insurance sioner, COMMONWEALTH Of SYLVANIA, on behalf of the INSURANCE DEPARTMENT