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000787608 05/05/15 750.00

STATE OF WASHINGTON

OFFICE OF THE INSURANCE COMMISSIONER

In the Matter of

Top Notch Solutions Inc.

Dba Top Notch Insurance Solutions

and Habib Rashidi Licensees. Order No. WAOIC No. FEIN WAOIC No. NPN 15-0056 237925 34-2023048 176374 5774627

CONSENT ORDER SETTING

CONDITIONS FOR PROBATIONARY LICENSES AND IMPOSING A FINE

This Consent Order Setting Conditions for Probationary Licenses and Imposing a Fine ("Order") is entered into by the Insurance Commissioner of the slate of Washington ("Insurance Commissioner"), acting pursuant to the authority set forth in RCW 48.02.060 and RCW 48.17.530(1), and Licensees Habib Rashidi and Top Notch Solutions Inc.

BASIS:

1. Top Notch Solutions Inc. ("the Agency") has been a licensed insurance producer since February 24, 2005. The Designated Responsible Licensed Person ("DRLP") for the Agency is Habib Rashidi. Mr. Rashidi has been a licensed Washington insurance producer since February 6, 2001. (The Agency and Mr. Rashidi are jointly referred to hereinafter as "Licensees.")

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3. The Agency was examined for various aspects of the insurance code, including separation of premium fiinds (RCW 48.17.600), reporting and accounting for premiums (RCW 48.17.480), records of insurance producers (RCW 48.17.470), compensation disclosure for insurance producers (RCW 48.17.270), and insurance producer's bond (RCW 48.17.250).

4. During the financial examination, the Insurance Commissioner found that the Agency did not have an appropriate accounting system with sufficient detail to track its financial transactions or an agency management system in use that records transactions related to premium; that there was commingling of funds and insufficient documentation on return premium transactions; that the separate premium account had the same name as the Agency's operating account; and that the Agency failed to disclose all fee arrangements to its clients, and document the disclosure appropriately, prior to the sale of a policy to an insured.

5. The Agency was given 90 days to correct the compliance violations addressed in this examination report. The Agency was expected to have corrected the five compliance violations as follows:

1. Update and maintain records sufficient to provide an audit trail for all ftinds constituting premiums received by the Agency. Reconstruct accounting records fi"om at least June I , 2013, and correct any identified shortages in the separate premium account. (Premium includes return premiums and premium finance transactions.);

2. Cease commingling and ensure that premiums are kept separate fi*om operating funds. Identify and track any reserve amount kept in the separate premium account in order to pay fees, advance client premiums, or for return of unearned commission in order to not deplete the separate premium account;

3. Pay any amounts owed to insureds in full and in a timely maimer. Timely means within 30 days. This includes the gross return premiums and overpayments. Ensure that each return premium transaction has sufficient 'documentation to show what funds the Agency was responsible to pay out

and to whom and when the funds were paid;

4. Rename the separate premium bank account to distinguish it from the operating account;

5. Properly disclose all fee arrangements to insureds and document the disclosure appropriately prior to the sale of a policy to an insured.

CONSENT ORDER SETTING CONDITIONS 2 Office of the Insurance Commissioner FOR PROBATIONARY LICENSES AND PO Box 40255

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6. On January 27, 2015, the Insurance Commissioner conducted a second financial examination of the Agency, covering the same period of time as the previous examination, to determine if the Agency had.implemented the required corrective actions specified in the prior examination report.

7. The second exam found that the Agency did not update the accounting system for the period of June 1, 2013, through May 31, 2014; that the Agency provided no documentation demonstrating that the return premium transactions for the initial examination period of June I , 2013, to May 31, 2014, were reconstructed; and that the Agency did not provide any compensation disclosure forms for the period of September 2014 through December 2014 to show that the Agency has been disclosing to clients the financing fee arrangements that the Agency has with Bank Direct. At the time of the exam, the Agency had not renamed its separate premium account to be distinguishable from its operating account at the time of the follow-up examination. However, the Agency corrected this failure prior to the completion of the examination.

8. By failing to implement the required corrective actions from the first exam by the time of the second exam, the Agency violated RCW 48.17.470 (records of insurance producers), RCW 48.17.480 (reporting and accounting for premiums), RCW 48.17.600 (separation of premium funds), and RCW 48.17.270 (compensation disclosure for insurance producers).

9. Mr. Rashidi, who is the DRLP for the Agency, is responsible for each of these violations under RCW 48.17.090(3)(b).

10. Under RCW 48.17.530(l)(b) and RCW 48.17.560, the Insurance Commissioner may place on probation, suspend, revoke, or refuse to issue or renew an insurance producer's license, or may levy a civil penalty or any combination of actions, for violating any insurance laws or any rule or order of the Insurance Commissioner. The Agency's violations of RCW 48.17.470, RCW 48.17.480, RCW 48.17.600, and RCW 48.17.270, justify the imposition of a fine on Mr. Rashidi and the Agency, jointly and severally.

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DRLP, to probationary licenses until they have demonstrated compliance, as defined below.

CONSENT TO ORDER:

The Insurance Conunissioner of the state of Washington and the Licensees agree that the best interest of the public will be served by entering into this Order. NOW, THEREFORE, the Licensees consent to the following in consideration of their desire to resolve this matter without further administrative or judicial proceedings. The Insurance Commissioner consents to settle this matter in consideration of the Licensees' payment of a fine, and upon such terms and conditions as are set forth below:

1. The Licensees acknowledge their duty to comply flilty with the applicable laws of the state of Washington.

2. The Licensees consent to the entry of this Order, waive any and all hearing and other procedural rights, and further administrative or judicial challenges to this Order.

3. By agreement of the parties, the Insurance Commissioner will impose a fine of $750 (Seven Hundred Fifty Dollars) to be paid by the Licensees by May 8, 2015.

4. Licensees understand and agree to pay a fine of $750 (Seven Hundred Fifty Dollars), liability for which is joint and several, and fijrther agree to convert their insurance producer's licenses to probationary licenses under RCW 48.17.530 on the conditions set forth below:

a) By August I , 2015, the Agency is to have an appropriate accounting system with sufficient detail to track its financial transactions or an agency management system that records transactions related to premium in place.

5. Licensees agree that for the period of 24 months from the entry of this Order, i f any administrative action is taken against any license either Licensee holds with any state, any action is taken against either Licensee by FINRA, or i f either Licensee is convicted of any criminal violation (other than misdemeanor traffic violations), both Licensees' probationary Washington State insurance producer's license will be revoked.

6. Licensees agree that under the terms of their probationary licenses, i f either Licensee fails to provide proof of appropriate recordkeeping as agreed, both Licensees' probationar>' Washington State insurance producer's license may be revoked at the discretion

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of the Insurance Commissioner. Licensees will be eligible to obtain full, non-probationary insurance producer's licenses upon successful completion of the probationary period, or earlier at the Insurance Commissioner's discretion.

7. Licensees agree that any future failure to comply with the statutes and regulations governing the insurance and securities industries, or fiiture conviction of a crime other than misdemeanor traffic violations, will constitute grounds for any further penalties which may be imposed in direct response to such further violation, in addition to the revocation of both insurance producer's probationary Washington State license.

8. This Order and the violations set forth herein constitute admissible evidence that may be considered in any future action by the Insurance Commissioner involving the Licensees. However, the facts of this Order, and any provision, finding or conclusion contained herein does not, and is not intended to, determine any factual or legal issue or have any preclusive or collateral estoppel effects in any lawsuit by any party other than the Insurance Commissioner.

EXECUTED this

4

day of .2015.