Unit 10: Florida Laws and Rules Common to All Lines of Insurance

Upon a grant of a ______ or _____, the finding or plea no longer bars or disqualifies the applicant from licensure unless the clemency specifically excludes licensure in the financial services business; however, a _____ or _____ does not require the department to award a license.

pardon, restoration of civil rights

This _____ _____ applies to convictions, guilty pleas, and nolo contendere pleas, regardless of adjudication, by any applicant.

permanent bar

The Department of Financial services is overseen by an independently elected _________, who is also a member of the governor's cabinet.

CFO (chief financial officer)

Applicants must meet the following knowledge, experience, or instruction requirements within four years immediately preceding the licensing application. How many hours for the life only agents (2-14)?

40 hrs

Through the OFR's _____ _____ ________ _________, the Office investigates suspected wrongdoings and may refer such violations to prosecutorial agencies to aid in its enforcement.

Bureau of Financial Investigations

FBAA

Florida Bail Agents Association

insurance company

is the party that provides insurance coverage, typically through a contract of insurance.

Licensed 25+ years And CLU, CPCU, Bachelor of Science in Risk Management - OR - 18+ semester hours in insurance-related courses

10 Credits every 2 years. 5-Hr Law and Ethics Update. 5 Elective Credits

The Department will not issue a license to an applicant based on test results that were earned greater than _______ prior to an application for licensure.

12 months

Penalties for violation

Any agent licensed in Florida, who knowingly represents or aids an unauthorized company, commits a felony of the third degree. Other penalties may be rendered based on the violation.

CDOs

Cease and desist orders

NAIFA

National Association of Insurance and Financial Advisors

OFR

Office of Financial Regulation

OIR

Office of insurance regulation

The OIR has four major areas of responsibility, including:

Organizing and licensing insurance companies, including establishing initial financial requirements. Monitoring unauthorized insurance activities. Maintaining and overseeing the regulation of company activities, such as policy forms, provisions, and rates (direct rate regulation does not apply to life insurance). Monitoring the financial condition of insurers, investment categories, and appropriate methodology for developing liabilities

Licensees who are unable to comply with the CE requirements set forth by the state due to active duty in the ______, may submit a written request for a waiver to the Department.

USAF

_______ employees shall not engage in insurance activities that require licensure as an insurance agent or customer representative unless a licensed agent is physically present.

Unlicensed

An individual who holds a license as a customer representative, limited customer representative, title agent, motor vehicle physical damage and mechanical breakdown insurance agent, an industrial fire insurance, or burglary insurance agent and who is not a licensed life or health agent, must complete a minimum of _______ of approved CE every ____ years.

five hours, two

Each licensee, except a title insurance agent, must complete at a minimum, a ________ law and ethics update course every two years specific to the license authority held.

five-hour

When imposing an _____, the OFR will consider the appropriateness of the penalty with respect to the financial resources, good faith, gravity of the violation, history of previous violations, and other matters as justice may require. [F.S. 655.031]

action

An ______ owned and operated by a single licensed agent who does business in their own name and does not employ or use other licensees, is not required to obtain an insurance _____ license

agency

The term _____ is defined to include general lines agent, life agent, health agent, and title agent. The term specifically does not include a customer representative, limited customer representative, or service representative. [F.S. 626.015]

agent

An _____ company is an insurance company organized under the laws of a foreign country.

alien

An ______ is an individual who ascertains or determines the amount of a claim, loss, or damage payable because of an insurance claim on behalf of a public adjuster or an insurer for some form of consideration, directly or indirectly. The term all-lines adjuster does not apply to life insurance or annuity contracts.

all-lines adjuster

Unaffiliated agents must _______ themselves and cannot be appointed by an insurance company.

appoint

In an _________, the OFR has the power to administer oaths and affirmations, take testimony and depositions, and issue subpoenas. Non-compliance of a subpoena will result in a contempt of court (circuit court).

investigation

Issued to a company (carrier, insurer, or insurance company), a __________ is the OIR's permission to engage in insurance activities within the state. Any company, directly or indirectly, acting as an authorized company in the state of Florida without a certificate of authority, is committing a felony of the third degree.

certificate of authority

A branch office under the same name and federal tax identification number as the licensed primary agency and has a designated agent in charge of the branch ______ ______ need a license.

does not

If the OFR finds that the conduct of the financial institution is likely to cause insolvency, the OFR may issue an _____ requiring the institution to immediately cease and desist from the conduct.

emergency cease and desist order (ECDO)

If the recipient of the CDO _____ to respond to a complaint within the time allotted, the recipient is in default and justifies the entry of the order.

fails

A ________ insurance company operates principally by mail without personal agent solicitation of prospects. Florida law prohibits unauthorized _________ companies from soliciting in Florida. The transaction of insurance, including the application for insurance, must be taken by, and the policy delivered through, a licensed and appointed Florida agent.

mail-order

A _________ licensee must meet the CE requirements set forth in their home state to meet Florida's CE requirements.

nonresident

An ECDO is effective immediately upon service of the order for a period of ____ days.

90

An applicant who has been found guilty of or has pleaded guilty or nolo contendere to a crime not included above, regardless of adjudication, is subject to a ______ disqualifying period for all felonies involving moral turpitude, which are not subject to the permanent bar.

15-year

A licensee who holds multiple insurance licenses must complete an update course that is specific to at least one of the licenses held. In addition, each licensee must also complete _____ of approved elective continuing education courses every two years.

19 hours

Licensed 6+ years

20 Credits every 2 years. 5-Hr Law and Ethics Update. 15 Elective Credits

Insurers have _____ _____ to respond to the Department once a consumer complaint has been filed.

20 days

Licensed 1-5 years

24 Credits every 2 years. 5-Hr Law and Ethics Update. 19 Elective Credits

A licensee must complete a total of ______ of approved continuing education (CE) every two years

24 hours

Appointments shall be valid for not less than ___ months and no longer than____ months. This minimum and maximum number of months are necessary to convert the original issue month to the licensee's birth month or license issue month. Appointments renew every ___ months thereafter unless suspended, revoked, or otherwise terminated at an earlier date.

24, 36, 24

A licensee who has been licensed for ___ or more years and is a CLU or CPCU or has a Bachelor of Science degree in risk management must complete a minimum of five hours of elective CE courses every two years.

25

An appointee may terminate their appointment at any time. Within ____ after terminating an appointment, the appointing entity must file written notice that includes the reasons and facts for termination with the Department.

30 days

Applicants must meet the following knowledge, experience, or instruction requirements within four years immediately preceding the licensing application. How many hours for the health only agents (2-40)?

40 hrs

Bail bonds agents must complete the ____-hour update course and a minimum of _____ hours of elective CE courses every ____ years.

5, nine, two

An appointing entity may terminate its appointment of any appointee at any time with at least ____ days' advanced written notice delivered in person, via mail with postage prepaid, or by e-mail.

60

Applicants must meet the following knowledge, experience, or instruction requirements within four years immediately preceding the licensing application. How many hours for the life, health, and annuities agents (2-15)?

60 hrs

A passing grade on the state licensing exam is ____% and is valid for a period of 12 months.

70

_______ and _______ factors can affect the true length of the disqualifying period. After the disqualifying period has been met, the burden is on the applicant to demonstrate that they are rehabilitated, do not pose a risk to the insurance buying public, are fit and trustworthy to engage in the business of insurance, and are otherwise qualified for licensure.

Aggravating, mitigating

The state licensing examination is NOT required for:

An applicant for a renewal license, unless the Department determines that an examination is required to establish competence and or trustworthiness. An applicant for a limited license: travel Insurance, motor vehicle rental insurance, credit insurance, in-transit and storage personal property, and portable electronic insurance. A reinstatement of a license or appointment as an agent whose license has been suspended within the 48 months prior to the date of application or written request for reinstatement. An applicant for a temporary license. An applicant who has been conferred the designation of CLU or chartered property casualty underwriter® (CPCU®); an applicant may be required to take an exam regarding Florida insurance laws and regulations). An applicant applying for a non-resident license who holds a comparable license in another state with similar examination requirements as Florida

The OFR may issue and serve CDOs upon any state financial institution whenever it has reason to believe that such institution is engaged in conduct that is:

An unsafe or unsound practice, a violation of any law relating to the operation of a financial institution, a violation of any rule of the commission, a violation of any order of the OFR, a breach of any written agreement with the OFR, a prohibited act or practice pursuant to F.S. 655.032, or a willful failure to provide documentation or information to the OFR or any appropriate federal agency, or its representatives, upon written request [F.S. 655.033]

The following types of policies may not be delivered in Florida unless the form has been filed with and approved by the OIR.

Basic insurance policy. Annuity contract application form. Group insurance. Riders, endorsements, and renewal certificates.

Policyholders shall have the right to:

Competitive pricing practices and marketing methods. Comprehensive coverage. Fair and accurate insurance advertising. Selling approaches that provide accurate and balanced information. An insurance company that is financially stable. A competent and honest insurance agent/broker to service their needs. An insurer that provides an economic delivery of coverage and tries to prevent losses. A readable insurance policy. A balanced and positive regulation by the Department, Commission, and Office.

What does an individual need to do to become a licensed insurance producer in Florida?

Complete pre-licensing course, complete and sign an application under oath, obtain back ground check (fingerprints), pay all applicable fees in advance to the department.

The Department and respective offices have the following powers and duties. the provisions and execute the duties imposed upon them by this code, within the respective jurisdiction of each, as provided by law • Have the powers and authority expressly conferred upon it by, or reasonably implied from, the provisions of this code • Conduct such investigations of insurance matters, as it may deem proper to determine whether any person has violated any provision of this code within its respective regulatory. The cost of such investigations shall be borne by the state. Collect, propose, publish, and disseminate information relating to the subject matter of any duties imposed upon it by law. Have such additional powers and duties as may be provided by other laws of this state • Employ actuaries who shall be at-will employees and serve at the pleasure of the CFO. Actuaries employed pursuant to this paragraph shall be members of the Society of Actuaries or the Casualty Actuarial Society. • Expend funds for the professional development of their employees to ensure compliance with NAIC regulations and training • Develop and implement an outreach program for encouraging the entry of additional insurers into the Florida market • Send legal documents to individuals or to unauthorized carriers by trackable means, including electronic methods • Receive inquires and complaints from consumers, provide follow-up and consumer assistance, administer penalties, and adopt rules to administer this section • Florida-licensed insurers must designate the CFO as their attorney to 20 receive service of all legal processes issued against them in any Florida 21 civil action. [F.S. 624.422]

Department of Financial Services

Headed by the _______ or ______, the Office of Financial Regulation (OFR) is responsible for all actives of the Financial Service Commission relating to the regulation of banks, credit unions, finance companies, and the securities industry.

Director or Commissioner of Financial Regulation

The ______or ______ is the head of the OIR.

Director, Commissioner of Insurance Regulation

_____ is the name given to an insurance company in the state of its incorporation, as a Florida insurance company is _____ in the state of Florida, foreign as to all other states and alien as to all other countries.

Domestic company, domestic (domicile)

ECDO

Emergency Cease and desist order

________ CE hours accumulated during any two-year compliance period may be carried forward to the next compliance period.

Excess

CFO with the ______, and the _______, the CFO administers insurance laws of Florida. [F.S. 20.121]

Financial Services Commission , Commissioner of the Office of Insurance Regulation (OIR)

FAHU

Florida Association of Health Underwriters

FAIA

Florida Association of Insurance Agents

FAPIA

Florida Association of Public 9 Adjusters

The _____ _____ _____ _____ filing rules state that a company cannot deliver, issue for delivery, or renew in Florida 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 the rating schedule. [F.S. 624.302, 627.410, F.A.C. 69O-149.002-023]

Florida health insurance company

_________ are organized under a special section of the insurance code. They must be characterized as nonprofit associations or organizations that have a member-based membership and are operated as lodge systems that include ritualistic work and an elected board.

Fraternals

The office of Insurance regulation is responsible for all activities concerning?

Insurance companies, licensing and certificate of authority, rates, policy forms, premium financing, claims, solvency, viatical settlements, administrative supervision and other provisions of the insurance code

Effective which date was Florida's Department of Insurance, Treasury, State Fire Marshal, and the Department of Banking and Finance were merged into the Department of Financial Services (DFS)?

January 2003

LAAIA

Latin American 8 Association of Insurance Agencies

A ______ company is a participating insurance company owned by its policyholders. ______ companies generally participate in policy dividends.

mutual

No individual may act as an insurance agent unless they are currently licensed by the Department and appointed by an insurance company or other appropriate _____ entity.

appointing

A filing for each item must be completed at least 30 days before any such use or delivery. If a form has been filed and no action has taken place within 30 days, the form is deemed _______.

approved

An ______ company is duly authorized to transact insurance business in Florida and must have a certificate of authority

authorized/admitted

Persons who have committed certain _____are permanently barred from licensure

felonies

An applicant who has committed a felony of the ______, a _____, a felony involving money laundering, a felony of embezzlement, or a felony directly related to the financial services business is permanently barred from licensure.

first degree, capital felony, felony

The OIR may examine any insurance company as often as may be warranted in the interest of the policyowner or the public. Each domestic company must be examined not less than once every _____ years.

five

An applicant who does not earn a passing score on the state examination may make additional attempts after filing for a reexamination. (Fees apply.) Applicants may not take an examination for a licensing type more than _____ times in a___ month period.

five, 12

A ________ is an insurance company formed under the laws of the United States but operating in a state other than the one in which it has been incorporated.

foreign company

What is the general duties and powers of the Office of Financial Regulation?

has a supervisory position overall state financial institutions, their subsidiaries, and service corporations. The OFR's purpose is to maintain public confidence and provide for the safe and sound business transactions of the financial institutions it oversees. [F.S. 655.012]

The Office will examine each insurance company applying for an ________ to transact insurance in the state of Florida before granting the initial certificate.

initial certificate of authority

The circuit court may issue an _________, or the granting of another appropriate relief, in the event it feels that the violation of the financial institution will cause substantial injury to a state financial institution. [F.S. 655.034]

injunction

An _________ is a location where a licensed insurance business entity transacts insurance business. The term ____ does not include an insurer or an adjuster. Note that an _______ that is owned and operated by a single licensed agent conducting business in their own name and not employing or otherwise using the services of or appointing other licensees is exempt from the agency licensing requirement.

insurance agency

During an ______, the DFS or OIR can administer oaths, subpoena and examine witnesses, and receive evidence. Any person who willfully obstructs the Department, the Office, or the examiner in any examination or investigation may be guilty of a misdemeanor. [F.S. 624.317, .318, .321, 626.601]

investigation

insurance contract

is an agreement enforceable by law that binds one or more parties to a certain promise in exchange for a form of consideration.

insurance transaction

is the selling, soliciting, negotiating, and effectuation of a contract of insurance.

The department may issue the applicant a license on a ______ basis for the remainder of the disqualifying period. The applicant's ______ period ends at the end of the disqualifying period.

probationary

Within 30 days after the applicant passes the state licensing exam, the Department will notify them and issue their ______ ______.

producer license

A _______ is a properly licensed individual who receives compensation for directly or indirectly preparing, completing, or filing an insurance claim for an insured or third-party claimant. The term ________ does not include a licensed health insurance agent who assists an insured with coverage, billing, or claims processing issues.

public adjuster

Where an applicant is subject to a seven-year disqualifying period and has served at least half of the disqualifying period, they may _______ for a license if, during that time, they have not been found guilty of or have not pleaded guilty or nolo contendere to a crime.

reapply

When the originating insurance company (the ceding insurer) insures itself through another insurer (the assuming insurer) on part of an insurance risk, the contract is called________.

reinsurance

Agency licenses remain in force until ______, _______, _______ by the Department, or they ________ by operation of law.

revoked, canceled, terminated, expire

The applicant is subject to a _______ for all other felonies not otherwise barred and a _______ for misdemeanors related to the financial services business.

seven-year bar

A licensee who has been licensed for ____ or more years must complete a minimum of 15 hours of elective CE every two years.

six

A _____ company is a non-participating insurance company owned and organized for the purpose of making a profit for its stockholders, stakeholders, or shareholders.

stock

Florida law allows an agency to permit a ______ ______ to complete, submit, and sign a licensing application on behalf of the agency. The agency is responsible for ensuring that the application is true and accurate. Additionally, the agency is held accountable for ________ or ________.

third party, misstatements, misrepresentations.

An examination must be conducted at least once every year with respect to a domestic insurance company that has held a certificate of authority for less than ______ years. The examination must cover the preceding fiscal year or the period since the last examination.

three

Active participants of teh NAIFA, FAIA, FAHU, LAAIA, FAPIA, FBAA, or Professional Bail Agents of the US may receive up to _____ hours of elective CE credit per calendar year, if properly reported, for attending ___ or more hours of association meetings.

two, four

An ________ is licensed as an agent but is not appointed by or affiliated with any insurance company. To become an u________, one must ______. The agent may act as an independent consultant (for a fee) in the business of analyzing specific 49 policies, providing insurance advice, or counseling, and making specific 50 recommendations or comparisons. All fees must be established in 51 advance by a written contract signed by both the unaffiliated agent and 52 the client.

unaffiliated agent, self-appoint.

An ________ company is not authorized to transact insurance business in Florida and does not have a certificate of authority

unauthorized/non-admitted

No person may directly or indirectly act as an agent for ________ entities (any company not authorized to transact insurance business in Florida). If an unauthorized insurance company fails to pay in part or in full any claim or loss, and that party knew, or reasonably should have known that the contract was entered in violation of the insurance code, that insurer is liable to the insured for the full amount of the claim or loss not paid.

unlicensed

A ________ is an individual who, on behalf of a viator and for a fee, commission, or other valuable consideration, offers or attempts to negotiate viatical settlement contracts between a viator resident in this state and one or more viatical settlement providers.

viatical settlement broker