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