Compliance Corner - January 2024
Suitability in Annuity Contracts - Statutory Changes Effective January 1, 2024
Among the changes made to s. 627.4554, F.S., when making a recommendation to purchase an annuity, an agent shall act in the best interest of the consumer under the circumstances known at the time the recommendation is made, without placing the financial interest of the agent or insurer ahead of the consumer’s interest.
An agent has acted in the best interest of the consumer if the agent has satisfied the following obligations regarding care, disclosure, conflict of interest, and documentation as further described in the statutes.
Broker-dealers and registered representatives of broker-dealers, must comply with applicable SEC and FINRA rules pertaining to best interest obligations and supervision of annuity recommendations and sales, including, but not limited to, Regulation Best Interest, 17 C.F.R. s. 240.15l–1, and any amendments or successor regulations as described in s. 627.4554, F.S.
Changes to s. 627.4554, F.S. require changes to Rule 69B-162.011, F.A.C. The rule-making process can be lengthy; therefore, the Department will allow use of the NAIC Appendixes A, B and C, until further notice. The forms are posted on this page of the Division of Insurance Agents and Agencies' website. Critical updates to the process will be posted on our website's "Industry Awareness" page on our website.
Bail Bond Agent and Agency Requirements
Several changes were made to bail bond agent and agency requirements under HB-487:
Bail bond agencies are required to obtain a license prior to transacting bail bond business in Florida.
Agencies that have not obtained a registration from the Department are required to apply for a bail bond agency license. Bail bond agencies can apply for a license after creating a MyProfile account. Instructions for establishing a MyProfile account are found at this link. Information about the resident bail bond agency license 25-04 is available at this link.
A bail bond agency currently registered with the Department will not need to apply for a license because its registration will automatically be converted to a license.
A person may not own, control, manage, or otherwise have a pecuniary interest in a bail bond agency unless such individual is licensed pursuant to s. 648.27, F.S., appointed through the department, and actively engaged as a bail bond agent for at least the preceding 24 months. [s. 648.285(1), F.S.]
The agent in charge (currently referred to as the "primary bail bond agent") of an agency must have a minimum of 24 months of experience as a licensed bail bond agent immediately preceding the appointment as the bail bond agent in charge of an agency. This law applies to all bail bond agencies [s. 648.3875(2), F.S.]
If the bail bond agent in charge designated with the department ends his or her affiliation with the bail bond agency for any reason and the bail bond agency fails to designate another bail bond agent in charge within the required 10-day period and that failure continues for 90 days, the bail bond agency license will automatically expire on the 91st day after the date the designated bail bond agent in charge ended his or her affiliation with the agency. [s. 648.387(2), F.S.]
Effective July 1, 2025, each insurer or managing general agent appointing a bail bond agency in this state must file the appointment with the department. An entity appointed under this section must hold a valid bail bond agency license. [s. 648.382(1)(b), F.S.]
Before being appointed, a bail bond agent must sign the following sworn statement for each surety company appointing the agent [s. 648.382(2)(d), F.S.]
"Pursuant to section s. 648.382(2)(b), Florida Statutes, I do solemnly swear that I owe no premium to any insurer or agency and that I will discharge all outstanding forfeitures and judgments on bonds that have been previously written. I acknowledge that failure to do this will result in my active appointments being canceled."
An appointed bail bond agency must have the attestation listed above signed by its owner. [ s. 648.382(2)(d), F.S.]
Each appointing insurer or managing general agent must advise the department in writing within five days after receiving notice or learning that an appointee has been arrested for, pled guilty or nolo contendere to, or been found guilty of, a felony or other offense punishable by imprisonment of 1 year or more under the law of any jurisdiction, whether judgment was entered or withheld by the court. [ s. 648.382(4), F.S.]
In-person "Classroom" education may be conducted in-person and through virtual formats consistent with the format allowed for other license types. [s. 648.386(1), F.S.]
Applicants for a bail bond license must have successfully completed the pre-licensing education requirements within 24 months of submitting the application. [s. 648.34(2)(f), F.S.]
In-person or telephone contact by bail bond agents between 9:00 pm and 8:00 am is prohibited, regardless of the type of crimes the defendant has been charged with committing. [s. 648.44(1)(c), F.S.]
Advertising in jails must include the advertiser's email and web addresses. [s. 648.44(1)(b), F.S.]
Temporary Bail Bond Agents
The “temporary bail bond agent” license type has not been issued since July 1, 2023; all existing temporary bail bond licenses will expire on June 30, 2025.
Anyone currently licensed as a temporary bail bond agent may apply for a 2-34 Limited Surety Agent license if they meet the other qualifications for the license. [ s. 648.355(3), F.S.]
Verify Before You Sell! Stay Informed - Stay Legal
Don't do it. Do not allow yourself to be recruited by a marketer touting cheaper health insurance or a guaranteed "can't lose" investment for your clients.
Many times, the sales materials will be impressive, and fabricated letters from regulators or others will give the appearance of legitimacy. Some of the warning signs of an unauthorized or bogus health plan will be the use of trade associations, unions, or affinity groups that a consumer must join to be eligible for coverage. Another warning sign is the use of the phrase "Multiple Employer Welfare Arrangement" (MEWA). While MEWAs can be legitimate, they must be licensed by the state, and not many are. The marketers may claim their plan is a federal plan or an Employee Retirement Income Security Act (ERISA) plan and exempt from state regulation, which is a definite red flag.
There is always someone who has a guaranteed, get-rich-quick investment seeking out insurance professionals with an established market of clients to whom they can sell these products. These bogus investments can range from communications equipment companies to real estate and land development opportunities, which almost always turn out to be unregistered securities. These investments have been so well packaged and pitched that some agents also purchased them, as did their family members.
Too often unsuspecting agents have allowed themselves and their clients to become victims by purchasing a less expensive health plan that never paid any claims, or an investment promising high returns that turned out to be a sham. The last time there was a peak in this type of activity, numerous consumers were financially devastated as they were left holding unpaid medical bills or worthless investments. As a result, agents lost their insurance licenses and were also subjected to criminal penalties and civil lawsuits.
As an insurance professional you are responsible for conducting necessary due diligence to avoid putting your clients at risk. The excuses, "I thought it was legitimate" and "I was fooled and am also a victim," are not acceptable defenses. When verifying an insurance company’s license or whether an investment is registered, make sure that you have the correct and complete name as some scams will use names similar to licensed companies and registered investments to create confusion. Don't do it; do not allow yourself to become another victim. Verify before you sell!
The Division of Insurance Agent & Agency Services recommends the following procedures agents may use when researching whether an insurance company is properly licensed to transact insurance in Florida. By offering these guidelines, we hope to provide a valuable service to all agents and another useful tool for protecting the public.
Agents will find that, in most cases, the simple procedures outlined below will easily identify those insurance companies presently authorized to conduct insurance business in Florida. An agent may use a print-screen function to capture a printout of the company as listed on the web site and keep in their file to show they found the authorized insurance company.
Make sure you have the complete and correct name of the insurance company. Many insurance company names are very similar.
Go to https://companysearch.myfloridacfo.gov.
Enter the insurance company's name and click on the "Search" button.
Confirm that the insurance company as identified in step 1 is listed and authorized to conduct the line of business contemplated. Depending on the line of business, the following Authorization Types confer authority:
- Certificate of Authority
- Letter of Approval
- Letter of Eligibility
- Letter of Registration
- License
- Provisional Certificate of Authority
- Residual Market
Insurance companies shown with an Authorization Status as “Active” and Authorization Type as “Permit” have only begun the authorization process and are NOT authorized to conduct insurance business.
If the insurance company is not listed on the web site or the insurance company is shown with an Authorization Type not listed above, the agent should not place insurance business with that company. Also, just because an insurance company is authorized today does not mean it will necessarily remain authorized in the future. Always check.
This web site lists authorized insurers involved in insurance business in Florida. If they are not listed on the web site, agents should assume they are not authorized.
IMPORTANT: Agents who, directly or indirectly, aid or represent an unauthorized insurance company can lose their agent licenses or face other disciplinary sanctions. Please see section 626.901, Florida Statutes, to read the laws. To alert us of possible unauthorized insurance or unregistered securities being sold please notify us at AskDFS@MyFloridaCFO.com.
The Office of Financial Regulation (OFR) oversees securities regulation. To check licensing/registration status you can call the OFR at 1-850-487-9687 or use their online search.
View the list of unauthorized entities that have had action taken against them in the state of Florida.
Always go to https://companysearch.myfloridacfo.gov to search for insurance companies authorized to do business in Florida.
