Florida Statutes, Rules, and Regulations Common to All Lines

If an agent does not notify the insurer of an address change, what is the maximum penalty that can be imposed for a one-time offense?

$250

And person who violates a cease and desist order of the Department of Office will be subject to the following penalties:

-a monetary penalty of up to $50,000 -suspension or revocation of the person's license or certificate of authority -any other relief as provided in the Insurance Code

Penalty if activities affect interstate commerce:

-fine -imprisonment (10-15 years)

Insurance Guaranty Association

-nonprofit legal entity -protects insureds against insolvent insurers -funded by member insurers -pays up to specified limits

What is the major structural unit of the Commission? And what two are established within the Commission?

1) the office 2) the Office of Financial Regulation and the Office of Insurance Regulation, which specifically regulated the business of insurance in the state

Under special circumstances, continuing education requirements may be extended beyond the two-year period for a maximum period of

12 months

Unaffiliated Insurance Agent

A licensed insurance agent, except a limited lines agent, who is self-appointed and who practiced as an independent consultant in the business of analyzing insurance policies, providing insurance advice of counseling, or making specific recommendations or comparisons of insurance products for a fee established in advance by written contracts signed by the parties

Violating a Cease and Desist Order

A monetary penalty of up to $50,000, suspension or revocation of the person's license or certificate of authority, and any other relief as provided in the insurance code

Reciprocity

A mutual interchange of rights and privileges

Charge for representing an unauthorized insurer in Florida

A third-degree felony and also held liable for any unpaid claims and refund or premiums

What level of authority is given to the Office of Insurance Regulation with respect to examination of insurer's activities to determine compliance Unfair Trade Practice Laws?

Absolute

Closest term to an authorized insurer

Affirmed

Unauthorized Insurer

An entity that is required to be licensed or registered with the Florida Office of Insurance Regulation, but that is operating without the proper authorization

Foreign Insurer

An insurance company that is incorporated in another state.

Alien Insurer

An insurance company that is incorporated outside the United States.

Subpoena

An order for someone to appear as a witness or submit testimony or evidence

Fraternal benefit society

And organization formed to provide insurance benefits for members of an affiliated lodge, religious organization, or fraternal organization with a representative form of government

Financial Services Commision

Composed of the Governor, the Attorney General, the Chief Financial Officer, and the Commissioner of Agriculture

Department of Financial Services

Consists of 15 divisions and offices, following 5 are involved in regulating insurance: 1. Division of Accounting and Auditing 2. Division of Insurance Agents and Agency Services 3. Division of Insurance Fraud 4. Division of Consumer Services 5. Office of the Insurance Consumer Advocate

Maintaining a license

Continuing education every licensing period, renewal fees, current name and address, reinstatement rules

Department of Insurance Powers and Duties

Control and supervise all insurance business in the state, enforce insurance laws, issue license and certificates of authority, approve policy forms, conduct examinations, investigations, and hearings, impose penalties. Does NOT set premium rates or establish fines and penalties

An insurance producer just sold an insurance policy to his sister. What kinda of business is this?

Controlled

Business Entity License

Corporation/association/partnership, must have a designated agent

Nonresident License

Different home state, licensed to transact in resident and nonresident states.

Unfair Discrimination

Discrimination in rates, premiums, or benefits

What is NOT a responsibility of the Office of Insurance Regulation?

Enacting new insurance laws

When reinsurance is purchased on a specific policy, it is classified as...

Facultative reinsurance

The requirements that agents not commingle insurance monies with their own funds is known as

Fiduciary responsibility

Continuing Education Requirements

How many hours must licensees complete? Are there ethics requirements? How long is a licensing period?

Sliding

Illegal practice of falsely leading an applicant to believe that a specified additional coverage of product is required by law when it's not

Continuing Education

In Florida, each licensed agent must complete a minimum of 24 hours of continuing education every 2 years in courses approved by the Department. Out of the 24 hours, agents are required to complete a 5-hour update course which covers law updates, ethics, disciplinary trends and case studies

Chief Financial Officer (CFO)

Independently elected and served as the head of the Dept. of Financial Services and as a member of the Financial Services Commission. Oversees all 15 divisions and offices of the Dept.

Domestic Insurer

Insurance company that is incorporated in this state.

CFO has the authority to...

Issue subpoenas, administer oaths, and examine witnesses when examining and investigating any person implicated in an account, claim, or demand against or by the state

What does the CFO have the authority to do?

Issue subpoenas, administer oaths, and examine witnesses when examining and investigating any person implicated in an account, claim, or demand against or by the state.

Temporary License

Issued for continuation of existing business, a short period of time, approved by the department, not renewable (6 months, cannot be renewed)

Defamation

Maliciously critical statements about a person or company

Twisting

Misleading comparison of policies to persuade insured to cancel or switch policies

Unfair Trade Practices

Misrepresentation, false advertising, rebating, twisting, defamation, unfair discrimination

Examinations

Must be conducted every 5 years

CE for agents who have been licensed for 6 or more years

Must complete 20 CE hours every 2 years, including a five hour update course

Appointment fees

Non refundable. However, if applicant submits a written request within 60 days after the denial of disapproval of an appointment, the Department will refund any state or county tax received in connection with the application for the appointment

Rebating

Offering benefits or services not specified in the policy

The Office of Insurance Regulation

Responsible for all activities concerning insurers, including licensing and certificates of authority, rates, policy forms, premium financing, claims, solvency, viatical settlements, administrative supervision, and any other related provisions of the Insurancr Codes

Office of Financial Regulation

Responsible for all activities of the Financial Services Commission relating to the regulation of banks, credit unions, finance companies, and the securities industry

Office of Financial Regulation

Responsible for all activities of the Financial Services Commission relating to the regulation of banks, credit unions, finance companies, and the security industry

Licensing regulations

Set out the requirements, procedures, and fees relating to the qualification, licensure, and appointment of insurance producers

Fiduciary

Someone in a position of trust

An agent's appointment has been denied. Which of the following is true?

State taxes may be refunded upon a written request

What are the insurance laws in Florida administered by?

The Chief Financial Officer, the Financial Services Commission and the Commissioner of the Office of Insurance Regulation

Who are insurance laws in Florida administered by?

The Chief Financial Officer, the Financial Services Commission and the Commissioner of the Office of Insurance Regulation

Who is the Financial Services Commission composer of?

The Governor, the Attorney General, the Chief Financial Officer, and the Commissioner of Agriculture.

appointment

The authority given by an insurer to an agent to transact insurance or adjust claims on the insurer's behalf

What is the main purpose of the Department of financial services?

To enforce the provisions of the insurance code, and to execute the duties imposed upon it by the codes

What is the purpose of licensing?

To ensure that a producer meets educational and ethical standards require to fulfill producer's responsibilities to the insurer and to the public

What is the purpose of rate regulations?

To promote the public welfare by regulating insurance rates in order to assure that they are not excessive, inadequate, or unfairly discriminatory, and to authorize and regulate cooperative action among insurers in rate-making

insolvent

Unable to meet financial obligations

Reinsurance treaty

When an insurer has an automatic reinsurance agreement between itself and the reinsurer in which the reinsurer is bound to accept all risks ceded to it

How are dividends generated?

When the premiums and the earnings combined exceed the actual cost of providing coverage, creating a surplus

inducement

an offer that attempts to influence the other party

Rebating

inducement offered in the sale of insurance products that is not specified in the policy. Offer and acceptance of rebates are illegal

home office

insurer's headquarters, principal place of business

The Chief Financial Officer (CFO)

is independently elected and serves as the head of the Department of Financial Services and as a member of the Financial Services Commision

Exempt

not subject to an obligation

How many days after a change of name, address, principle business street address, or mailing or email address must every licensee notify the Department?

30 days ($250 fine for first offense)

Reinsurance

A contract under which one insurance company (the reinsurer) indemnifies another insurance company for part or all of its liabilities. Protects insurers against catastrophic losses.

Reinsurance

A contract under which one insurance company indemnified another insurance company for part or all of its liabilities. Purpose is to protect insurer's against catastrophic losses

statute

A formal written law enacted by legislature; insurance statuses can be found in the state Insurance Code

Fraternal Benefit Societies

An organization formed to provide insurance benefits for members of an affiliated lodge, religious organization, or fraternal organization with a representative form of government. Considered charitable institutions and not insurers

Fraud

Any misrepresentation of a material fact, made knowingly and with the intent to deceive; an act of deceit or cheating

Agent Licensing

At least 18 years old, pass licensing examination, complete application process & pay fees, and be of good character

Misrepresentation

False, misleading, or deceptive statements about policy terms or benefits

In Florida, what must an agent due to maintain license?

Must complete a minimum of 24 hours of CE every 2 years in courses provided by the Department. Out of the 24 hours, agents are required to complete a 5-hour update course which covers insurance law updates, ethics, disciplinary trends and case studies, product stability, and other insurance related topics required by the Department

What type of policies do stock companies traditionally issue?

Nonparticipating policies, in which policy owners do not share in profits or losses

The National Association of Insurance and Financial Advisors (NAIFA)

One of the oldest and largest trade organizations in the Insurance field, promotes ethical conducts of its members.

Mutual Companies

Owned by the policy owners and issue participating policies.

Mutual companies

Owned by the policy owners and issue participating policies. Policy owners are entitled to dividends, but dividends are not guaranteed

Stock Companies

Owned by the stockholders who provide the capital necessary to establish and operate the insurance company and who share in any profits or losses.

Stock companies

Owned by the stockholders who provide the capital necessary to establish and operate the insurance company and who share in any profits or losses.

What is the major difference between a stock company and a mutual company?

Ownership

participating policy

Policy owners are entitled to dividends, which, in the case of mutual companies, are a return of excess premiums are are non taxable

Types of Licenses

Producer(Agent), business entry, nonresident, temporary

Pertaining to insurance, what is the definition of a fiduciary responsibility?

Promptly forwarding premiums to the insurance company

Domicile

Refers to the location where an insurer is corporates, not necessarily where the insurer conducts business

Churning

Replacing insurance policies for the sole purpose of making commission

Producer(Agent) License

Represents insurer's, appointed to transact on behalf of insurer

The Office of Insurance Regulation

Responsible for all activities concerning insurers, including licensing and certificates of authority, rates, policy forms, premium financing, claims, solvency, viatical settlements, administrative supervision