Ch 15.1 Laws Common to All Lines of Insurance

Which state entity is responsible for approving a Certificate of Authority for an insurance company? A) State legislature B) State judicial system C) Office of Insurance Regulation D) Department of Financial Services Division

Office of Insurance Regulation The Commissioner of the Office of Insurance Regulation also regulates insurance licensing, rates, policy forms, market conduct, claims, and company solvency

Insurance Fraud

The Bureau of Financial Investigations, which functions as a criminal justice agency within DFS, may conduct investigations within or outside Florida as the bureau deems necessary to aid in the enforcement of a suspected violation. If, during an investigation, the office has reason to believe any criminal law has or may have been violated, the office will refer any records to show such violation to state or federal law enforcement or prosecutorial agencies and provide investigative assistance to those agencies as required.

The state entities that regulate insurance in the State of Florida are

The State legislature - Makes and amends laws that comprise the Insurance Code. • The Department of Financial Services Division (together with the Office of Insurance Regulation) implements rules for enforcement of laws called "quasi-legislative or quasi-judicial power." • The Office of Insurance Regulation, which is headed by the Commissioner of the Office of Insurance Regulation. • The State judicial system, which: • Decides conflicts between companies and policyholders. • Enforces the code by administering criminal penalties. • Decides if new laws are constitutional. Note: State laws set the standards for companies, agents, and policy owner rights. Laws are needed because: insurance is a public trust. It impacts state economy and is often beyond the understanding of many policyholders

The administration of state insurance law is the responsibility of which of the following? A) Attorney General B) Director of Financial Regulation C) Governor D) Chief Financial Officer

Chief Financial Officer The administration of state insurance law is the responsibility of the Chief Financial Officer (CFO), Financial Services Commission and Director of the Office of Insurance Regulation.

Division of Consumer Services

The Division of Consumer Services within the DFS is responsible for assisting consumers, answering general insurance and financial questions from its toll-free helpline, regional service centers, and website. The division provides consumer education and outreach assistance, as well as the following: • Receive and compile inquiries and complaints the DFS deems necessary to assist consumers. • Provide direct assistance and advocacy for consumers who request such services. • Report alleged violations of law by persons licensed by the DFS, OIR, or OFR to the appropriate regulator

The administration of state insurance law is the responsibility of the Chief Financial Officer (CFO), Financial Services Commission and Director of the Office of Insurance Regulation. The CFO

Is elected and is part of Governor's Cabinet. • Acts as head of Dept. of Financial Services. • Is a member of the Financial Services Commission. • Oversees Divisions of Insurance Agents, Insurance Fraud, Consumer Services and Office of Consumer Advocate.

Financial Services Commission regulations

Regulating the following areas of insurance industry: • Licensing • Rates • Policy forms • Market conduct • Claims • Certificates of Authority • Protecting the public through oversight of insurance company solvency. • Maintaining expertise related to life and health, property and casualty, specialty lines, and other insurance entities

The Commission also appoints the Director of the Office of Financial Regulation (OFR), which is responsible for:

Regulating the following: • Banks, credit unions, savings association, international bank agencies. • Financial service companies. • Securities industry. • Includes the Bureau of Financial Investigations: • Functions as a criminal justice agency. • Conducts investigations to protect consumers from financial entities that violate state laws and rules

Which state entity decides conflicts between insurance companies and policyholders? A) State legislature B) State judicial system C) Office of Insurance Regulation D) Department of Financial Services Division

State judicial system The State judicial system also enforces the code by administering criminal penalties and decides if new laws are constitutional

Department of Financial Services (DFS) General Duties and Powers Agent and Adjuster Licensing and Investigations

The DFS supervises methods of obtaining business, including agent licensing and control of unfair trade practices. The department may interrogate an applicant or agent relating to the applicant's qualifications, residence, prospective place of business, and any other matter which, in the opinion of the department or office, is deemed necessary or advisable for the protection of the public and to ascertain the applicant's qualifications.

Receivership

The Division of Rehabilitation and Liquidation of the DFS monitors the financial condition of insurers and rehabilitates or liquidates insurers as needed. It has the responsibility of performing the duties as receiver of any insurer placed into receivership in Florida. The division plans, coordinates, and directs the conservation, rehabilitation, and liquidation of insolvent insurance companies, unlicensed insurance companies, and unlicensed insurance entities. The basic responsibilities of the receiver include the collection of assets or debts due to the company, and evaluating all known claims against the company. The goal of the division as the liquidator is to maximize the value of the assets of the liquidated company and distribute the assets equitably.

Financial Services Commission

The Financial Services Commission is composed of the Governor, CFO, Attorney General, and Commissioner of Agriculture. It appoints the Commissioner of the Office of Insurance Regulation (OIR), which is responsible for:

The CFO can impose the following penalties upon an agent for Insurance Code violations:

• Failure to answer a subpoena or order - $1,000 fine. • Violation of cease and desist order - Up to $50,000 fine. • Willful violation of the Insurance Code - Misdemeanor of the 2nd degree (imprisonment up to 60 days). • Fraudulent conduct in committing twisting or churning - 1st degree misdemeanor (imprisonment up to one year). • Non-willful violation - $5,000 fine per violation. • Willful violation - $75,000 fine per violation. • Willfully submit fraudulent signatures - 3rd degree felony (imprisonment up to 5 years). • Non-willful violation - $5,000 fine per violation. • Willful violation - $75,000 fine per violation