2-14 Unit 23: Florida Laws, Rules, and Regulations

- $2500 - $10000 - $20000 - $100,000

Unfair competition fines - minimum fine per nonwillful violation - maximum fine for all nonwillful violations - minimum fine per willful violation - maximum fine for all willful violations

Boycott, Coercion, and Intimidation

Using threat or force to create a monopoly or restrict fair trade in the transaction of insurance

Insurance agency

a business location at which an individual, firm, partnership, corporation, association, or other such entity engages in any activity that may be performed only by a licensed insurance agent - the term agency does NOT include an insurer or an adjuster

Viatical Settlement Broker

a person who, on behalf of a viator and for a fee, negotiates with viatical settlement providers to settle viatical settlement contracts - viator must be a FL resident - viatical settlement broker must be licensed as a FL agent - viatical settlement broker owes a fiduciary duty to, and represents the viator

25

Insurer must respond within __ days once a complaint has been filed

Twisting

Knowingly making misleading statements or making fraudulent comparisons in order to induce a client to drop a policy with an existing insurer and start a new one with a different company.

Continuing education

- 24 hours every two years - 5 hours required of ethics and industry update - 19 elective hours specific to license - if licensed more than six years, elective hours requirement is 15 hours - if licensed more than 25 years, elective hours requirement is 5 hours

Prelicensing Education Requirements

- 40 hours for life agent license - 40 hours for health agent license - 60 hours for life & health agent license

Controlled business

- Dept will not grant or renew a license or appointment of an agent if it finds that the licensee obtained a license principally for the purpose of soliciting/negotiating/procuring controlled business - Controlled business means life or health insurance or annuity contracts covering the agent or family members/officers/directors/stockholders/partners o employees of a business in which the agent or a family member is engaged

Advertising file

- Each insurer must maintain, at the insurer's home or principal office, a complete ____ file - all advertisements must be maintained in the file for 4 years or until the filing of the next regular report of examination, whichever is the longer period of time

Compensation for examining health insurance

- FL law permits a licensed health agent to charge a fee for providing advice, counsel, or recommendations - compensation must be based upon written contract between agent and the party being charged - contract must clearly define the amount of compensation to be paid to the agent, any commission received by agent from the insurer will be rebated to that party within 30 days of receipt by that agent from the insurer - agent must retain records of the contract for 3 years

Office of Financial Regulation duties

- agency actions (imposing any penalty or remedy) - affiliated parties (any person who participates in conduct of affairs of a licensee and knowingly misrepresents/conceals facts - cease and desist orders (when complaint received) to institutions engaging in unsafe/unsound practices, violation of any law/rule of the commission/any order of the Office - may make investigations to determine if a person has violated any provision

Replacement- Duties of Agent

- agent must submit to the insurer a statement signed by the applicant and agent as to whether or not the new insurance will replace existing life insurance - agent and applicant must sign Notice to Applicant Regarding Replacement of Life Insurance form - leave with applicant copies of the notice and all sales proposals used for presentation to applicant - submit to the replacing insurer with the application, copy of Notice to Applicant Regarding Replacement of Life Insurance form and copy of all sales proposals used for the presentation to the applicant

Compensation

- agents are generally compensated by the payment of commissions that a certain percentage of the initial (first year) and subsequent (renewal) premiums

Designation of Beneficiary

- agents cannot be named as beni of a life insurance policy covering the life of a person who is not a family member unless there is insurable interest - beni designation naming a former spouse is void at the time the policyholder's marriage is judicially dissolved, so long as designation was made prior to the court order

Appointment termination

- appointing entity may terminate an appointee at any time with at least 60 days advance written notice - within 30 days after terminating the appointment, the appointing entity must file written notice with the Dept including the reasons/facts involved in the termination

Terms of Appointment

- appointments for individuals renew every 24 months in the licensee's birth month - appointments for entities renew every 24 months in the same month a licensee was first licensed as an insurance representative

CFO

- head of the Dept of Financial Services - oversees accounting/audit, insurance agents and fraud, consumer services, office of the insurance consumer advocate - regulation of insurance agents

Mail order insurer

- insurance company that operates principally by mail without personal agent solicitation of prospects - FL law prohibits unauthorized ___ ___ ____ from soliciting in FL - transacting insurance without a license is a felony

Unaffiliated agent

- licensed agent (not limited lines agent) who is not appointed by or affiliated with any insurer but is self-appointed - for a fee, this agents acts as an independent insurance consultant who analyzes policies, provides advice, or makes specific recommendations/comparisons of insurance products

Agent

- means a general lines agent, life agent, health agent, or title agent - the term does not include a customer representative, limited customer representative, or service representative

Certificate of Authority

- no person may act as an insurer in FL except as authorized by a ____ __ ____ issued to the insurer by the Office, any person who acts as an insurer/transacts insurance, without a ____ __ ____ commits a 3rd degree felony

Office of Insurance Regulation major areas of responsibility

- organizing and licensing of companies - policing against unauthorized insurance activities - regulation of insurance company activities - monitoring the financial condition of insurers

Unlawful rebates

- paying an unlawful rebate of premiums as inducement to purchase an insurance contract - giving special favor or advantage in the dividends or other benefits - giving, selling, or purchasing, as inducement, any securities of any insurance company or anything of value whatsoever not specified in the insurance contract

All-lines adjuster

- person who acts on behalf of an insurer to determine the amount of a claim and to effect settlement of such claim

Public adjuster

- person who, for compensation, acts on behalf of an insured or third-party claimant in negotiating or effecting the settlement of claims

Commission rebates

- rebate must be available to all insureds in the same actuarial class - rebate must be in accordance with a rebating schedule - rebating schedule must be uniformly applied in that all insureds who purchase the same policy through the agent for the same amount of insurance receive the same percentage rebate - rebate schedule must be prominently displayed in public view in the agent's place of business

criminal/administrative - 30 - 30

- report administrative action against agent within __ days - report within __ days if guilty of a felony/sentenced to year in prison

Replacing Insurer Duties

- send to applicant a completed Comparative Information Form containing complete info required by the form regarding the proposed insurance - this must be done within 5 working days of the date of the application and the Notice to the Applicant Regarding Replacement of Life Insurance are received at its home/regional office - send to existing insurer a copy of the Notice to the Applicant Regarding the Replacement of Life Insurance immediately upon receipt at home/regional office - maintain copies of Notice to Applicant Regarding Replacement of Life Insurance/comparative information forms/all sales proposals for at least 3 years or until the conclusion of the next regular examination by the Dept of its state of domicile, whichever is later

Insurance transaction examples

- solicitation or inducement to purchase insurance - preliminary negotiations toward the sale of insurance - effectuation of a contract of insurance - transaction of matters subsequent to effectuation of a contract of insurance and arising out of it

Free look provision

- unconditional refund of premiums for LIFE INSURANCE must be available for a period of 14 days - unconditional refund of premiums for a FIXED ANNUITY CONTRACT must be available for a period of 21 days - unconditional refund for a VARIABLE ANNUITY must be available for a period of 21 days

Insurance agency or agent must maintain a copy of all rebate schedules for the most recent __ years

5 years

5 times

License exams may not be taken more than _ times in a 12-month period

24

Licensing appointments renew every __ months

Cease and desist order

After a misconduct hearing, if it is determined that the person has engaged in unfair/deceptive acts or practices or unlawful transactions of insurance, the Dept or Office will issue a ____ requiring the violator to cease and desist form engaging in such unlawful transactions of business - Dept or Office may order suspension or revocation of the person's certificate of authority or license - any person who violates ____ may be subject to a monetary penalty of not more than $50,000 or suspension/revocation of such person's certificate of authority or license

60

An insurer that terminates an appointment must provide at least __ days advance notice

Annuities - 5 years - 10%

Annuities - Records must be kept for at least __ years - An annuity contract issued to a consumer age 65 or older may not contain a surrender charge exceeding __% of the amount withdrawn

- file an application - meet the required qualifications - pay all applicable fees - provide proof that they completed any required prelicensing

Applicants for an insurance license must:

- $100,000 - $250,000 - $300,000

Life and Health Insurance Guaranty Association maximum liability is as follows: - life insurance net cash surrender value and withdrawal values - annuity net cash surrender and withdrawal values - all life insurance benefits, including cash values, on any one life

5

Market conduct examinations at least once every _ years

Notice to Applicant Regarding Replacement of Life Insurance - 3 years

Notice to Applicant Regarding Replacement of Life Insurance must be maintained for at least ___ years

Group life - 31 days - 2 years - 31 days

Group Life - Grace period for group life insurance is __ days - Incontestable after policy has been in force for __ years - Conversion to individual plan must be completed within __ days after termination

Comparative Information Form - 5 days

If request by applicant, replacing insurer must send Comparative Information Form within __ days of receipt of application

Individual life insurance grace period - 30 days

Individual life insurance grace periods must be at least __ days.

accept of deny claims - 30 days

Insurer must accept or deny claims within __ days

Financial Services Commission

Office of Financial Regulation - regulation of banks, credit unions, securities industry, finance companies, other financial institutions - Bureau of Financial Investigations Office of Insurance Regulation - regulates insurers - duties include: licensing, rates, forms, market conduct, claims, certificates of authority, solvency, viatcals, premium financing

- $5,000 - $50,000 - $75,000 -$250,000

Penalties for Fraudulent Signatures - third degree felony - minimum fine per nonwillul violation - maximum fine for all nonwillful violations - minimum fine per willful violation - maximum fine for all willful violations

30

Policy forms must be filed at least __ days before use

Nonforfeiture Options

Reduced paid up insurance Extended term insurance Cash surrender value

30 (appointment)

Termination notice must be sent to Department within __ days

Separate account requirements

agent or insurance agency must keep the funds belonging to each insurer for which an agent is not appointed in a separate account so as to allow the Dept or Office to properly audit such funds

Replacement of life insurance

any transaction in which life insurance is to be purchased, and as part of the transaction, existing life insurance is to be: - lapsed/surrendered/forfeited/exchanged/or otherwise terminated - converted to reduced paid-up insurance or continued as extended term insurance - amended to reduce benefits or term of coverage - reissued with a reduction in cash value - borrowing more than 25% of the policy cash value

Surrender recommendations

information must include: - amount of any estimated surrender charge - loss of any minimum interest rate guarantees - possibility of tax consequences - amount of any forfeited death benefit - description of any other investment performance guarantees being forfeited as a result of the transaction

Advertising gifts permitted

insurer or agent may give to insureds/prospective insureds/others for the purpose of advertising, any article of merchandise having a value of not more than $100

Use of Insurance Guaranty Association Membership in advertising

is prohibited

Churning

knowingly making any misleading or fraudulent comparisons in an attempt to replace existing insurance with a new policy with the same insurer

30 days

name, address, phone number, or email address must be reported within __ days

FL Life and Health Insurance Guaranty Association

nonprofit legal entity whose purpose is to protect policyowners, insureds, beneficiaries, annuitants, payees, and assignees of insurance policies and contracts against the failure of an insurer to perform its contractual obligations due to its impairment or insolvency

- 1st degree misdemeanor - 3rd degree felony - 2nd degree felony - 1st degree felony

penalties for misappropriation of funds - $300 or less - $301-20,000 - $20,001-100,000 - $100,000 or more

- $5,000 - $75,000

penalties for twisting and churning - first-degree misdemeanor - minimum fine per nonwillful violation - maximum fine per willful violation

3 years

premium payment records must be maintained for how many years

Violation of Controlled Business

shall be deemed to exist if the Dept finds that during a 12 month period, the premiums submitted on controlled business are in excess of the premiums submitted by the licensee on insurance contracts on the general public

Defamation

unfair practice of knowingly making any oral or written statement that is false or maliciously critical of/derogatory to any person and that is calculated to injure such person

False advertising

unfair practice of knowingly making/circulating/placing advertisements containing any representation or statement with respect to the business of insurance that is untrue, deceptive, or misleading

Misrepresentations

unfair practice of knowingly misrepresenting: - the benefits, conditions, or terms of any insurance policy - the dividends to be received on any insurance policy - any name or title of any insurance policy or class of insurance policies misrepresenting its true nature - any insurance policy as being shares of stock or ownership interest in the company

Sliding

unfair practice of: - representing to the applicant that a specific ancillary product is required by law when such product is not required - representing to the applicant that a specific ancillary product is included in the policy without an additional charge when such charge is required - charging an applicant for a specific ancillary product, in addition to the cost of the insurance product applied for, without the informed consent of the applicant

Misconduct hearing

when Dept or Office has reason to believe that any person has engaged or is engaging in this state in any unfair method of competition or any unfair/deceptive act, it may conduct a ___ ___

Conversion of Industrial Life

when an insured has industrial life policies that total $3,000 or more in face value, the insured has the option to convert all of these policies into one ordinary life policy without evidence of insurability