State Laws Chapter 14
A licensee who is self-appointed and is in the business of analyzing policies, providing insurance advice or making specific recommendations of insurance policies for a fee is a(n): A Customer Service Representative B Unlicensed agent C Unaffiliated agent D Agent
c
Which of the following is correct regarding the Life and Health Insurance Guaranty Association: A The purpose of the Association is to provide insurance coverage to those who are unable to obtain insurance elsewhere B Membership to the Association is optional for insurers authorized to conduct business in Florida C A person cannot use the existence of the Association in an advertisement in order to sell, solicit or induce the purchase of any insurance covered by the Association D The Association is funded by the federal government
c
An insurance license may be suspended for all of the following reasons, except: A Failure to comply with civil, criminal, or administrative action taken by the child support enforcement program B Cheating on the licensing exam C Violating the code of ethics as a life agent D Failure to meet the continuing education requirements before expiration
d
Which of the following is not an Unfair Claims Settlement Practice? A Denying a claim without a reasonable investigation B Failing to acknowledge and act promptly to communications regarding a claim C Settling a claim based on an application altered with the insured's consent D Making a misrepresentation regarding facts or policy provisions relating to coverage
c
A change of address must be reported to the DFS within how many days after the change? A 15 B 20 C 60 D 30
d
Nonadmitted Insurers
not state licensed and do not have a certificate of authority. They are not regulated by the state of Florida. Nonadmitted/unauthorized insurers are also referred to as unlicensed entities.
Charging an applicant for a specific product in addition to the cost of the insurance coverage applied for without informed consent of the applicant is called: A Controlled business B Sliding C Twisting D Defamation
b
The Market Investigation division must examine domestic insurers at least once every: A 3 years B 5 years C 2 years D 7 years
b
Use of Membership in Advertizing
A person cannot use the existence of the Association in an advertisement in order to sell, solicit or induce the purchase of any insurance covered by the Association
An agent licensed within the past 5 years must complete ______ hours of continuing education every ______ year(s). A 20 hours/1 year B 30 hours/3 years C 24 hours/2 years D 30 hours/2 years
c
An agent who induces a client to use the cash value of an existing policy to buy an unnecessary additional policy for the purpose of generating commission is guilty of: A Fraud B Rebating C Churning D Twisting
c
An insurer must file written notice of termination of an appointment to the Department within how many days after terminating the appointment? A 60 B 90 C 30 D 45`
c
Unfair Methods of Competition
Sliding Coercion Misrepresentation Defamation False Advertising
Unfair Methods of Competition
Twisting Churning Rebating
Premium Accountability
accepts premiums, return premiums, or other funds on behalf of the insurer or others. These trust funds are received and handled in a fiduciary capacity.
Financial Service Regulation (commission)
admin of state insurance law fall on Chief financial officer, financial services commission and director or commissioner of office of insurance regulation
Insolvent Insurer
authorized to transact insurance when policy was issued or loss occured with a liquidation order finding insolvency entered by a court
A Certificate of Authority is issued to an insurer by the: A CFO B Office of Insurance Regulation C Office of Financial Regulation D Department of Financial Services
b
A licensee must report any administrative action taken against them to the Department of Financial Services within ___ days after disposition? A 20 B 30 C 15 D 60
b
Which state entity oversees the regulation of securities representatives and mortgage brokers within the state? A State legislature B Department of Financial Services Division C Office of Financial Regulation D Office of Insurance Regulation
c
False Advertising
Knowingly making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public: In a newspaper, magazine, or other publication. In the form of a notice, circular, pamphlet, letter, or poster. Over any radio or television station; or In any other way, an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance, which is untrue, deceptive, or misleading.
OIR Hearings
May administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence Will have the power to subpoena witnesses, compel attendance and testimony, and require by subpoena the production of books, papers, records, files, correspondence, documents, or other evidence which is relevant to the inquiry
Insurance Transaction
Solicitation or inducement Preliminary negotiations Effectuation of a contract of insurance Transaction of matters subsequent to effectuation of insurance contract and arising out of it
The Association will provide coverage to Florida residents who are Life, Health, and Annuity policyowners, certificateholders, beneficiaries, and assignees. Residents of other states are covered if:
The issuing insurer is domiciled in Florida The issuing insurer was not licensed in the states in which such persons reside at the time specified in the state's Guaranty Association law as necessary for coverage by that state's association. Such other states have Associations similar to Florida, and Such persons aren't eligible for coverage by those Associations
Coverage doesnt apply to:
The part of a variable life or annuity contract not guaranteed by an insurer The part of any policy/contract under which the risk is borne by the policyholder Fraternal benefit societies Health maintenance insurance Dental service plan Insurance Pharmaceutical service plan insurance Optometric service plan insurance Ambulance service association insurance Pre-need funeral merchandise or service contract insurance Prepaid health clinic insurance Any annuity/group annuity contract that is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed directly and not through an intermediary to an individual by an insurer under such contract, or under an annuity issued under an IRA, or under an annuity issued by an insurer and held by a custodian/trustee in accordance with IRA laws The portion of a policy or contract that exceeds association limits for policies or contracts using a rate of interest, crediting rate, or similar factor based on an index or other external reference to determine returns or policy values A policy or contract providing Medicare Part C or D benefits Any policy or contract or part thereof assumed by the impaired or insolvent insurer under a contract of reinsurance, other than the reinsurance for which assumption certificates have been issued
OFR provides and promotes
The safe and sound conduct of the business of financial institutions Prudent conservation of the assets of financial institutions Maintenance of public confidence Protection of the public interest in the safety, soundness, and preservation of financial institutions Protection of the interests of the depositors and creditors of financial institutions
Unfair Methods of Competition
Unfair Discrimination Unfair Claims Settlements Fraud Controlled Business
The following are not considered unlawful rebates:
With respect to life insurance or annuities, paying bonuses or abating premiums provided that doing so is fair and equitable to all policyholders and for the best interest of the company and policyholders Readjusting the rate of premium for a group policy based on the loss or expenses at the end of the first year or any subsequent year of insurance
The aggregate liability must not exceed
$100,000 in net cash surrender and net cash withdrawal values for life insurance $250,000 in net cash surrender and net cash withdrawal values for deferred annuity contracts $300,000 for all benefits including cash values, with respect to any one life; in no event shall the association be liable for any penalties or interest
CE 6yrs or more
5 hr update 15 hr elective every 2 yrs
Duties and Powers of Board of Directors
Association's liability for the contractual obligations of the insolvent insurer cannot be more than the contractual obligations of the insurer in the absence of such insolvency
Ethics
Agent Ethics can be summarized by the principle in the Golden Rule: "Conduct business with a client as you would want business to be conducted with you
If a domestic insurer is impaired
Association can guarantee/cover all applicable policies and loan money to the impaired insurer to make it whole.
If Domestic insurer is insolvent
Association will take action to ensure the insurer is able to meet its contractual obligations.
Insurer
Every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity.
The following forms require approval and may not be delivered in this state unless filed with and approved by the Office:
Insurance policy or annuity contract form Printed application Group policy certificates Printed rider, endorsement, renewal certificate
Certificate of Authority
No person can act as an insurer and no insurer or its agents, attorneys, subscribers, or representatives can directly or indirectly transact insurance in Florida unless authorized by a Certificate of Authority, issued to the insurer by the Office of Insurance Regulation.
Unfair Methods of Competition Penalties
Nonwillful Violation - $2,500 per each violation not to exceed an aggregate of $10,000 Willful Violation - $20,000 per each violation not to exceed an aggregate of $100,000
OIR Agency Actions
Receiving and reviewing all company applications prior to granting approval and licensing a company to sell insurance in the state of Florida Establishing initial financial requirements for new companies Monitoring the financial condition of all regulated insurance entities through the use of internal financial analysis and on-site examinations Tracking reserves, restricting investments to prudent vehicles and confirming accuracy of financial statements to limit insolvency Taking over insolvent companies and attempting to restore financial integrity Protecting the public against unauthorized insurance activities and behavior Conducts examinations and investigations of insurers and related parties regarding business practices and patterns of alleged violations of the Florida Insurance Code Monitoring marketing activity to avoid unfair trade practices such as twisting, unsupported replacement and illegal rebating Order hearings to discover unfair competition, unethical marketing practices, nonconformity to license requirements and if the public trust has been violated
non exam situation
Renewal of an appointment (unless deemed necessary by the Department) Applicant for a limited lines license An applicant for reinstatement of a license if suspended within 4 years before the request for reinstatement An applicant for a temporary license An applicant a CLU designation (life or health insurance) or a CPCU designation (general lines, personal lines, all-lines adjuster) Applicant who has received a degree from an accredited institution of higher learning approved by the Department An applicant applying for a license transfer A nonresident agent who holds a comparable license with similar requirements in another state
A licensee must keep preserve books, accounts, and records pertaining to premium payment for at least how many years after payment? A 3 B 5 C 4 D 6
a
Sliding
Representing to the applicant that a specific coverage or product is: Required by law in conjunction with the purchase of insurance when such coverage or product is not required Freely included in the policy when in fact there is a charge required. Charging an applicant for a specific coverage or product, in addition to the cost of the insurance coverage applied for, without the informed consent of the applicant.
Unfair Claims Settlements
Settling claims based on an application altered without the insured's consent Making a material misrepresentation to an insured in an attempt to obtain a settlement of claims on less favorable terms than those provided in the contract Failing to implement standards for the proper investigation of claims Making a misrepresentation regarding facts or policy provisions relating to coverage Failing to acknowledge and act promptly to communications regarding a claim Denying a claim without a reasonable investigation Not giving claim affirmation or denial or providing a written statement that a claim is being investigated within 30 days after receiving the proof of loss statement Failing to give proper explanation of a claim denial Failing to notify the insured of any additional information necessary for processing the claim or failing to explain the nature of requested information
OFR duties and powers
Supervise all state financial institutions, subsidiaries, and service corporations Access all books and records of persons being supervised as necessary to carry out the duties of the office Issue orders, disseminate information, and otherwise carry out the purposes, policies, and provisions of the financial institutions codes
This practice will not be considered churning if:
There is an objectively reasonable basis for believing that the replacement or extraction will result in an actual and demonstrable benefit to the policyholder There are no fraudulent, deceptive, misleading or otherwise deceptive omissions The applicant is informed that the policy values including cash values, etc., will be reduced, forfeited, or used in the purchase of the replacing or additional policy or contract The applicant is informed that the replacing or additional policy or contract will not be a paid-up policy or that additional premiums will be due, if this is the case
Term of Appointment
effective in a licensee's birth month will expire 24 months later on the last day of the birth month and are subject to renewal by the appointing entity at that time (and every 24 months thereafter). n any month other than the licensee's birth month will be valid not less than 24 months and no longer than 36 months in order to convert the expiration to the birth month cycle. They will renew every 24 months after that, unless suspended, revoked, or terminated earlier
Maintaining License with last 5 yrs
5 hr update course every 2 yrs 19 hr elective Compliance with continuing education requirements must occur prior to the issuance, continuation, reinstatement, or renewal of any appointment. Multiple Licenses - 5 hr update, 19 hr elective CE every 2 yrs
Insurance Agency
A business licensed to sell insurance products for one or more insurers or insurance companies. An agency may employ many people or be a single licensed salesperson. does not include an isureror adjuster
CFO oversees
Division of Accounting and Auditing Division of Consumer Services Division of Insurance Agent and Agency Services Division of Public Assistance/Insurance Fraud Office of Consumer Advocate for Insurance Division of Unclaimed Property
Coercion
Entering into any agreement to commit, any act of boycott, coercion, or intimidation resulting in an unreasonable restraint of, or monopoly in, the business of insurance
Fradulent Conduct Penalties Twisting, Churning and Fraudulent Signatures
1st degree misdemeanor for twisting and churning 3rd degree felony for submitting fraudulent signatures Nonwillful Violation - $5,000 fine per violation, not to exceed an aggregate of $50,000 Willful Violation - $75,000 fine per violation not to exceed an aggregate of $250,000
Unaffiliated Agent
A licensed agent, except a limited lines agent, who is self-appointed and practices as an independent consultant in the business of analyzing insurance policies, providing insurance advice or counseling or making specific recommendations of insurance policies for a fee in advance by a written contract signed by the parties. They may not be affiliated with an insurer, insurer-appointed agent or insurance agency may receive commissions on sales made prior to appts
If foreign or alien insurer is insolvent
Association will take action similar to what it will do for an insolvent domestic insurer. However, it will only do so if it has been determined that jurisdiction where the foreign/alien insurer is domiciled provides, by law, similar protection
Sharing Commissions
Cannot to it unless it is a licensed agent of that insurer. Cannot pay for stuff unless its been kept for 3 years.
The Department has the power to examine and investigate any person engaging in an unfair method of competition or unfair or deceptive act or practice.
Department will conduct a hearing if it has reason to believe a person is engaging in such acts. If, after a hearing, it is determined that the person charged has engaged in any unfair or deceptive act, an order will be issued requiring the violator to cease and desist from engaging in such acts. Any person violating a cease and desist order will be subject to not more than a $50,000 fine and suspension or revocation of the license or certificate of authority.
Defamation
It is deemed unethical for an agent to make any statement (oral or written) or promote any statement that is designed to be malicious or critical about any person or company in the insurance industry.
As part of the code of ethics, all life insurance agents have a common obligation to work together to achieve all of the following, except: A Presenting the facts to persuade a client's decision to select the policy with the largest commission B Observe the laws governing life insurance C Always place the policyholder's interests first D Serve the best interests of the public
a
Charging different rates or providing different benefits to insureds of the same actuarial class or hazard category is which of the following? A Unfair discrimination B Sliding C Fictitious groping D Defamation
a
Paying any valuable consideration or inducement to a client that is not specified in the contract is known as: A Rebating B Churning C Misrepresentation D Coercion
a
Which of the following statements is NOT correct about insurance company appointments? A Appointments are subject to renewal every 48 months B To transact insurance on behalf of an insurer, an agent must be licensed by the Department and appointed by an insurer or appointing entity C An agent must be appointed for all lines of insurance to be transacted D Appointments are valid for 24 months if effective in a licensee's birth month
a
Which of the following is considered an agent? A Public adjuster B Insurance producer C Limited customer representative D Customer service representative
b
Finacial Services Commission (Department)
composed of Governor, CFO, attorney genera and commissioner of agriculture -they appoint director for each office
For purposes of administration of the Life and Health Guaranty Association, all of the following accounts must be maintained, except: A Life insurance account B Annuities account C Health insurance account D Cash value account
d
Chief Financial Officer (CFO)
elected official as head of department of financial service (or Governors Cabinet)
Dept and Office may
employ actuaries, provide funds for the professional development of employees, including the cost of professional membership fees, examinations required for employment and the cost of training courses to remain compliant with the NAIC
License Background check
fingerprints character, experience, fitness, qualifiations, credit report, character report
Records
must keep and make available the office books, accounts, and records to the Department or Office to determine that the licensee is complying with those provisions. The licensee must preserve books, accounts and records pertaining to premium payment for at least 3 years after payment. This requirement does not apply to binders when no policy is issued and no premium collected.
Bureau of Financial Investigations
part of OFR functions a criminal justice agency for the purpose of conducting investigations to protect consumers from financial entities that violate state laws and rules
CE for 25 yr CLU or CPCU BS in Risk Management
5 hr update 5 hr elective every 2 yrs
Diverted or Misappropriated Funds penalties
$300 or less, a misdemeanor of the first degree More than $300 up to $20,000, a felony of the third degree $20,000 up to $100,000, a felony of the second degree $100,000 or more, a felony of the first degree
OFR Investigations
(within or outside the state) as often as necessary to determine if a person has violated, or is about to violate, any provision of the financial institutions codes or rules. In the course of the investigation, the office has the power to administer oaths and affirmations, take testimony and depositions, and issue, revoke, or modify subpoenas
Florida Life and Health Guaranty Association
- Purpose is to protect policyowners, insureds, beneficiaries, annuitants, payees, and assignees of life insurance - Must be residents of the state - They maintain three separate accounts: o The health insurance account o The life insurance account o The annuity account
Maintaining a License
30 day notice to DFS for address change, telephone and email if moved out of state termination failure to notify aft 30 day is 250 fine an 500 suspension
Licensing and Appointments
An appointment is the authority given to a licensee to transact insurance or adjust claims on behalf of an insurer or employer. A person may not act as, advertise, or represent to be an insurance agent unless currently licensed by the Department and appointed by an appointing entity, such as an insurer
Suspension, termination, revocation of license and other penalties
Any cause for which issuance of the license or appointment could have been refused had it then existed and been known to the department Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or appointment Violation of any lawful order or rule of the department, commission, or office Failure or refusal, upon demand, to pay over to any insurer any money collected that belongs to the insurer Violation of the provision against twisting, as defined in Unfair Trade Practices below In the conduct of business under the license or appointment, engaging in unfair methods of competition or in unfair or deceptive acts or practices, or having otherwise been a source of injury or loss to the public Willful overinsurance of any property or health insurance risk Having been found guilty, having pleaded guilty or nolo contendere (no contest), or failing to inform the Department in writing within 30 days to a felony or a crime punishable by imprisonment of 1 year or more under federal or state laws, or under the law of any other country, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases If a life agent, violation of the code of ethics Cheating on an examination required for licensure or violating test center or examination procedures. Communication of test center and examination procedures must be clearly established and documented Knowingly aiding, assisting, procuring, advising, or abetting any person in the violation of a provision of the insurance code or any order or rule of the department, commission, or office Denial, suspension, or revocation of, or any other administrative action against a licensee taken by any other jurisdiction Failure to comply with any civil, criminal, or administrative action taken by the child support enforcement program to determine paternity or to establish, modify, enforce, or collect support
OIR forms
Florida requires the insurer submit the filing at least 30 days prior to use or delivery. The Office has 30 days to approve or disapprove. The form is considered approved if no decision is made within that time period. The office may, for cause, withdraw a previous approval. An insurer may not issue or use any form disapproved by the office, or as to which the office has withdrawn approval, after the effective date of the order of the office.
CE content
Insurance law updates Ethics for insurance professionals Disciplinary trends and case studies Industry trends Premium discounts Determining suitability of products and services Other similar insurance-related topics the department determines to be relevant
Rebating
It is considered unlawful rebating to knowingly: Permit of offer to make any agreement other than as plainly expressed in the insurance contract Pay, allow, or give, directly or indirectly, an unlawful rebate of premiums payable on the contract, any special favor, advantage or benefits, or any valuable consideration or inducement that is not specified in the contract Pay, allow, or give, as an inducement to an insurance contract, stocks, bonds, or other securities of any insurance company, or dividends or profits or anything not specified in the contract
If the Division of Consumer Services requests information from a licensee to address allegations raised from a complaint, an administrative penalty may result if the licensee fails to respond to the request in writing within ____ days of receipt. A 20 B 90 C 60 D 10
a
New rates and forms must be filed and approved by the Office of Insurance Regulation: A Prior to use B Only if considered unfair or discriminatory C Within 30 days after delivery of the policy form D After a subpoena is issued by the Circuit Court
a
The Department of Financial Services has the authority to perform all of the following duties, except: A Determine solvency of an insurer B Conduct an investigation regarding alleged improper conduct of a person regulated by the Department C Supervise agent licensing D Require a licensing applicant's fingerprints to be checked by local and federal law enforcement agencies
a
Commisions and Compensations
a percentage of the first year premium, and thereafter, a percentage of subsequent renewal premiums. A life or health insurance policy may not be delivered in this state unless the application is taken and policy is delivered by a licensed and appointed agent
Misrepresentation
agent failing to make the prospect aware of relevant facts is guilty of misrepresentation. This occurs if statements are false, incomplete or misleading. If it was a material fact, the contract can be considered void even though the agent's misstatement may have been innocent. On the other hand, a purposeful misstatement of an irrelevant fact will not result in a voided contract. A sales person who knowingly makes a false statement can be found guilty of a 2nd degree misdemeanor. Agents can only make accurate statements regarding their carrier's financial strength. Additionally, representatives may not use misleading titles that tend to conceal the fact that they are insurance agents.
Insurance Contract
agreement enforceable by law in which the insurer agrees to pay a certain amount of money upon the death of the insured, and the policyholder agrees to pay the premium
Fraud
any action, during policy issuance or payment of a claim, involving intentional deception that results in injury to another party, and concealment, misrepresentation, misleading behavior, or nondisclosure of a material fact. This includes willfully submitting to an insurer, on behalf of a consumer, an insurance application or policy-related document bearing a false or fraudulent signature.
Duties and Powers of the Department
any liquidation or rehabilitation proceeding involving a domestic insurer, the Department will be appointed as the liquidator or rehabilitator. If a foreign/alien insurer is subject to liquidation or rehabilitation in its home jurisdiction, the Department will be the conservator.
Additional Appointment
any time while a license is in force, an insurer may apply on behalf of the licensee to the Department to process an additional appointment as a general lines agent, life agent, or health agent. Upon receipt of payment of applicable taxes and fees, the appointment may be issued without further investigation
License Requirements
applicant must file a written application with the Department, meet the qualifications, and pay all applicable nonrefundable fees in advance. The application must be made under oath and signed by the applicant. The application must include the applicant's full name, age, Social Security number, residence, business, and mailing address, contact telephone numbers (including business number) and email address. A statement must be included indicating the method used to meet any prelicensing education requirements
How often may the Office of Financial Regulation make investigations? A Every 5 years B As often as necessary C Every 3 years D Every 2 years
b
Which of the following statements regarding unlicensed entities is NOT correct? A Unlicensed entities are nonadmitted insurers and are not regulated by the state of Florida B All transactions must be completed by a licensed and appointed agent in Florida C Mail order solicitations are permitted through unlicensed entities D A person acting as an agent for an unlicensed entity will be personally liable for any unpaid claims
c
Which state entity is responsible for issuing a Certificate of Authority for an insurance company? A State judicial system B State legislature C Office of Insurance Regulation D Department of Financial Services Division
c
Market Conduct Examination
conducts examinations and investigations of insurers relating to its transactions directly and indirectly affecting the insurer domestic insurer must be examined at least once every 5 years. The examination will cover the preceding 5 fiscal years of the insurer domestic insurer that has continuously held a certificate of authority for less than 3 years must be examined at least once every year
Board of Directors Life and Health Ins Guaranty Assoc.
consist of 5-9 members, with at least one member being a domestic insurer. Members are elected by other member insurers subject to the approval of the Department. Members can be reimbursed for expenses, but they cannot be compensated for serving on the board
As part of the qualification process to become licensed in Florida, an applicant must do all of the following, except: A Secure a detailed credit and character report made by an independent reporting service B Pass a written examination within 1 year of submitting an application for license C Successfully complete any required prelicensing coursework within 4 years immediately preceding the date of application D Submit fingerprints to the Department of Financial Services
d
Which of the following actions is the responsibility of the Office of Insurance Regulation? A Providing consumer education by answering general insurance questions B Overseeing banking regulations C Licensing of insurance agents D Monitoring the financial condition of all regulated insurance entities
d
Which of the following is not a requirement to obtain an insurance license in Florida? A Include a statement on the application indicating the method used to meet any prelicensing requirements B Pay all applicable nonrefundable fees in advance C File a written application made under oath and signed by the applicant D Successfully complete a minimum of 40 hours of coursework including 3 hours of ethics and instruction on unauthorized entities for each area of insurance an applicant is seeking a license for
d
License seizure
found guilty or has pleaded guilty or nolo contendre (no contest) to a felony involving money laundering, embezzlement, or a felony that is otherwise related to financial services business is permanently barred
Agent
general lines agent, life agent, health agent, or title agent. This includes an insurance producer, but does NOT include a customer service representative, limited customer representative, or service representative.
Risk Retention Group
group-owned insurers that primarily assume and spread the liability-related risks of its members. They are owned by their policyholders. RRGs insure large groups of members in the same profession, such as real estate agents, or with similar liability exposures such as theme parks, go-cart tracks, or water slides.
Fiduciary Capacity/ Responsibility
holds a position of special trust and confidence
Rates
insurer may not deliver, issue for delivery, or renew in this state any health insurance policy form until it has filed with the office a copy of every applicable rating manual, rating schedule, change in rating manual, and change in rating schedule; if rating manuals and rating schedules are not applicable, the insurer must file with the office applicable premium rates and any change in applicable premium rates.
Unfair Discrimination
insurer may not discriminate against a policy holder by refusing to underwrite, refusing to issue or renew a policy, by denying a claim, by terminating a policy or by increasing rates because the insured's claims may result from abuse, assault, battery or sexual assault from a family or household member.
Termination of Appointment
insurer must give at least 60 days' advance written notice to the appointee of its intention to terminate the appointment. The insurer must file written notice of termination of the appointment to the Department within 30 days after terminating the appointment. The written notice must state the reasons and facts involved in the termination. Unless termination is due to suspension or revocation of a license
Controlled Business
is the practice of a licensee selling life insurance policies or annuity contracts covering: The licensee or family members Officers, directors, stockholders, partners, or employees of a business in which the licensee or a family member is engaged The debtors of a firm, association, or corporation of whom the licensee is an officer, director, stockholder, partner, or employee
ll Life, Health, and Annuity insurers authorized to conduct business in Florida must be members of the Association. For purposes of administration, the Association maintains three accounts:
life insurance, annuities, and health insurance.
OIR Investigations
necessary of the accounts, records, documents, and transactions pertaining to or affecting the insurance affairs of any: Administrator, service company, or other person subject to its jurisdiction Person having a contract or power of attorney with the right to manage or control an insurer Person engaged in or proposing to be engaged in the promotion or formation of: A domestic insurer; An insurance holding corporation; or A corporation to finance a domestic insurer or in the production of the domestic insurer's business
Reinsurance
operate to accept all or a portion of the financial risk of loss from the primary (or "ceding") insurance company. The risk of loss is shared between the primary insurer and the reinsurer. All contractual obligations between the insurer and the insured are with the original primary insurance company. The insured has no direct contact with the reinsurance company. It may be described as 'insurance for insurance companies
Examination
pass a written examination to qualify passing score on the examination is valid for 1 year. may take exam before applying if fail you can retake may not be taken more than 5 times in a 12 month expired of suspended license may have to retake exam
found guilty or has pleaded guilty or nolo contendre (no contest) to any other felony is disqualified from licensure for:
period of 15 years for felonies involving moral turpitude A period of 7 years for all other felonies A period of 7 years for misdemeanors related to the financial services business
Criminal Actions
plead guilty, nolo contendere to, has been convicted or found guilty of a felony or any crime punishable by imprisonment of 1 year or more must report the action to the Department within 30 days, whether or not the agent was convicted by the court having jurisdiction.
Impaired Insurer
potentially unablae to fulfill its contractual obligations but not insolvent
Department and Office duties and powers
powers and authority as expressed or reasonably implied by the Insurance Code enforce the provisions and execute such duties imposed within its respective jurisdictions collect, propose, publish, and disseminate information relating to the subject matter of any duties imposed by law each have additional powers and duties as provided by other laws of this state one or other can conduct investigations of insurance matters, determine if a person has violated any provision of the code, or secure information useful to lawfully administer any provisions of the code. Such investigations are at the cost of the state.
Licensing Purpose
purpose of the licensing laws is to require a minimum level of insurance knowledge and for the applicant to be familiar with the Florida insurance laws
Administrative Actions
report any administrative action within 30 days after disposition. This includes providing copies of the order, consent to order, or other legal documents reported by any governmental or regulatory agency in Florida or any other state or jurisdiction to the Department. related to Business of insurance Sale of securities Activities involving fraud, dishonesty, untrustworthiness, or breach of fiduciary duty
Office of Insurance Regulation (Office)
responsible for all activities concerning insurers and other risk-bearing entities in Insurance company licensing Rates Policy forms Market conduct and investigations Claims Issuance of Certificates of Authority Insurance company solvency Viatical settlements Premium financing Administrative supervision
Office of Financial Regulation
responsible for all activities of the Financial Services Commission relating to the regulation of the following: Banks, credit unions, and other financial institutions Financial service companies Securities industry The OFR is also responsible for regulating persons licensed in the mortgage and securities industry.
Division of Consumer Services
responsible for assisting consumers, answering general insurance and financial questions provides consumer education and outreach assistance 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 Designate an employee as the primary contact for consumers on issues relating to sinkholes
permanent revocation of license
revoked due to solicitation or sale of an insurance product to a person 65 or older, the department may decide to permanently revoke or not grant the person a license.
OIR general power and duties
supervises insurers through the approval of new rates and forms, which must be approved by the OIR prior to use.
Churning
the practice whereby policy values (such as cash value) in an existing life insurance policy, annuity contract, and/or any riders, are used to purchase another insurance policy or annuity contract with that same insurer for the purpose of earning additional premiums, fees, commissions, or other compensation.
Admitted Insurers
those that have been issued a license (certificate of authority) by conforming to Florida standards for transacting business.
Record Keeping
transacting any insurance policy must maintain in his/her office or have readily available records of policies transacted for a period of at least 5 years after the policy expiration to enable policyholders
Unlicensed Entities
unpaid claims by an unlicensed entity will become the personal responsibility (liability) of any person who knew or should have known that it is a violation to enter into a contract to transact insurance on behalf of an unlicensed entity Agents doing business with unlicensed entities are subject to a felony of the third degree and may have their license suspended or revoked
health agent
within 4 yrs of app complete one of listed 40 hrs health course 3 hr ethics 60 hrs in multiple insurance coursework 3hrs of ethics active designation as a Registered health Underwriter (RHU), Chartered Healthcare Consultant (ChHC), Registered Employee benefits Consultant (REBC), Certified Employee Benefit Specialist (CEBS), or Health Insurance Associate active license in anothe state employed by dept or office for 1 yr full time
Life Agent
within 4 yrs of application complete on of listed 40 hrs coursework in life insurance, annuities, and variable contracts along with 3 hours of ethics 60 hours of coursework in multiple areas of insurance, which includes life insurance, annuities, and variable contracts, 3 hours of ethics Held an active license in life insurance in another state, as long as that state grants reciprocity to licensees formerly licensed in this state Earned or maintained an active designation as a Chartered Financial ConsulBeen employed by the Department or Office for at least 1 year, full time in life insurance regulatory matters and was not terminated for causetant
Assessments Against Member Insurers
Association must collect dues in order to carry out its powers and duties. The total assessment on each member for each account cannot, in 1 calendar year, total more than 1% of the sum of the insurer's premiums written in Florida in the immediately preceding 3 years, divided by 3 Office can suspend or revoke, after notice and hearing, the certificate of authority for a member that fails to pay an assessment fee
All of the following are examples of insurance transaction, except A Taking an insurance application and collecting premium from an applicant B Soliciting an interested party to purchase an insurance policy C Delivering an insurance contract to a policyowner D Creating advertising materials on behalf of the insurance company
d
An agent may share a commission or any valuable consideration with: A An unaffiliated agent who charges a fee to make recommendations B A policyowner who provides referrals C A person who is licensed and appointed by the same insurer in a different line of business D A person who is licensed and appointed in the same line of business
d
OFR Agency Actions
may take administrative action and impose penalties as provided under the financial institutions code if engaged in Unsafe or unsound practice Violation of any law relating to the operation of a financial institution Violation of any rule of the commission or order of the office Breach of any written agreement with the office Prohibited act or practice Willful failure to provide documents to the office or a federal agency upon written request
Department of Financial Services
supervises methods of obtaining business, including agent licensing and control of unfair trade practices. may make further investigation of the applicant's character, experience, background, and fitness for the license or appointment, and require the applicant's fingerprints to be checked by local and federal law enforcement agencies.
Separate Account Requirements
the funds belonging to each insurer for which the agent is not appointed in a separate account to allow the Department or Office to audit the funds. In the regular course of business, the agent must account for and pay the same to the insurer, insured, or other entitled party.
