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Compliance Corner - April 2024

Suitability in Annuity Contracts - Rule and Forms Adopted

Changes to s. 627.4554, F.S. required changes to Rule 69B-162.011, F.A.C. Adoption of the rule and the required forms is pending. The forms pending adoption, NAIC Appendixes A, B and C, are posted on this page of the Division of Insurance Agents and Agencies' website. Licensees should continue to use the forms and we will update them to include the date of adoption when the rule is final.

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 their obligations regarding care, disclosure, conflict of interest, and documentation as further described in the consumer profile information required in s. 627.4554, F.S.

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.

Bail Bond Agency License Required

Bail bond agencies are required to obtain a license prior to transacting bail bond business in Florida.
 
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 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 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.]

Adjusters - Prepare for Hurricane Season Now!

Emergency Adjusters

We’re reminding all lines adjusters who would like to respond to the aftermath of hurricanes or any other natural disaster in Florida that Emergency Adjusters must be licensed and appointed by an insurer or an adjusting firm to legally adjust insurance claims in Florida. Adjusters attempting to enter restricted areas after a disaster without proper license credentials will be turned away. Anyone found adjusting claims without a license could be subject to Department enforcement action and/or criminal penalties.

Emergency adjuster licenses and appointments made last hurricane season are not valid for the 2024 hurricane season. Emergency adjuster licenses are valid for 180 days from issue and do not renew. If you plan to adjust claims in Florida during the 2024 hurricane season, you are responsible for making sure you are property licensed and appointed prior to adjusting claims.

Public Adjusting Firms and Adjusters

Hurricane season starts June 1. The time to verify your license is in compliance is NOW - not when a storm is heading our way! This is a short checklist to ensure your license is in good standing:

  • Is your adjuster license active? Is your public adjuster firm license active? Use our Licensee Search portal to verify the status of your license and appointment.
  • You can search for the firm's license using our Licensee Search portal.
  • Are you self-appointed or appointed by an adjusting firm?
  • Have you filed the required $50,000 surety bond filed with AgentLicensing@MyFloridaCFO.com?
  • Are you compliant with your continuing education requirements? You can review your continuing education status through your MyProfile account.
  • Has a primary adjuster been designated for your firm?
  • Is your contact and other demographic information up-to-date? You can update it via your online secure MyProfile account.
  • Are the apprentices in your firm licensed and appointed?
  • Do you have your department-issued license with you?
Public Adjusters - Disclosure Form

Changes to Rule 69B-220.051, F.A.C. have been adopted effective April 29, 2024. The purpose of the changes to the rule is to comply with recent amendments to s. 626.8796(6), F.S.  Effective July 1, 2023, the statutes require public adjusters to provide Florida insureds with a disclosure form prior to signing a contract.

The rule amendment added Rule 69B-220.051(8), F.A.C., requires public adjusting firms and their adjusters to provide the disclosure form to every insured who enters into an adjusting contract with the licensees.

The form "Public Adjusting Disclosure Form, DFS-H1-1982", is available on our website and its effective date is April 29, 2024. This form may be modified to include the name of the public adjusting firm and/or its logo, but all other text must remain intact.

We urge all Public Adjusters and firms to review Florida Statutes Chapter 626, Part VI and Rule Chapter 69B-220, F.A.C to ensure you understand the laws and rules which regulate your license.

Title Agencies: Title Data Filing for CY 2023

The Florida Office of Insurance Regulation (Office) is conducting its annual Title Agencies Data Filing pursuant to sections 624.307 and 627.782, F.S. and Rule 69O-186.013, F.A.C. Title Insurance Agencies licensed at any time during Calendar Year 2023 are required filers. There are no exceptions - even if your agency closed during 2023. Your submission is due to the Office no later than 11:59 PM ET on Friday, May 31, 2024.

The Office's reporting system is called the Insurance Regulation Filing System. Here is the link: https://irfs.fldfs.com/

Further instructions are available on OIR's website at: 

http //floir com/tool and data/data-call-reporting

If you have questions regarding this filing process, please email the Office at TitleAgencyReporting@floir.com or contact the Market Data Collections Unit at (850) 413-3147. If phone lines are busy you are encouraged to send your questions by email. Your email may request that a representative from Market Data Collections call you (remember to

provide your number). Calls will be returned in the order your email messages are received.

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 determining if 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 be held accountable for unpaid claims, 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 (850) 487-9687 or use their online search tool.

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.