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  Vol. 8, No. 5 - September 2019

Compliance Corner

Emergency Adjusters - Insurer, Firm and Adjuster Responsibilities

Hurricane Dorian reminded us the months of August through October are historically the "busiest" in the annual hurricane season so we are providing an overview of this topic. For more information, visit our website topic page "Emergency Adjuster License" at this link.

Emergency Adjusters - Your Responsibilities

In the aftermath of Hurricane Michael's landfall in October 2018, investigators checking licenses in the heavily impacted areas identified Emergency Adjusters with expired licenses from prior hurricane seasons or no license at all.

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 storm without proper license credentials will be turned away. Anyone found adjusting claims without a license could be subject to administrative action and/or criminal penalties.

Emergency adjuster licenses and appointments made last hurricane season are not valid for the 2019 hurricane season. Emergency adjuster licenses are temporary in nature and do not renew. If you plan to adjust claims in Florida during the 2019 hurricane season, you are responsible for making sure you are properly licensed and appointed prior to adjusting claims.

Emergency Adjuster Application and Appointments

The emergency adjuster license application is only available in the event of an emergency situation that impacts the state of Florida. When the Department determines there is an emergency situation, it will make the application available.

When the application is made available, only Florida-licensed insurance companies and adjusting firms may apply for the Emergency Adjuster Licenses via their MyProfile account.

Emergency Adjuster applications are submitted via MyProfile, which is separate from an eAppoint account. If you have not created a MyProfile account for your Appointing Entity, you will need to create one. You will need your Appointing Entity Number and FEIN to create the MyProfile account.

Independent adjusting firms are required to submit form DFS-H2-6364, to designate the firm's Primary Adjuster in Charge. This form should be submitted prior to establishing the firm's MyProfile account or attempting to appoint emergency adjusters to the firm.

The appointing entity assumes all responsibility, assuring by due diligence inquiry, certifying that the emergency adjuster applicant is certified as qualified to adjust claims, losses, or damages under policies or contracts of insurance issued by the insurer in the event of a catastrophe or emergency; has received training in and is capable of correctly utilizing any computer software program provided by the appointing entity or person to adjust claims; and is of good and honest character.

The appointing entity is defined as a Florida-licensed insurance company or independent adjusting firm.

Please contact AgentLicensing@MyFloridaCFO.com or call 850-413-3137 for additional information or assistance with the licensing and appointment process.

Bail Bond Agents - Surrendering a Defendant

An important aspect of working as a Florida bail bond agent is the lawful surrender of a defendant. Bail bond agents should understand the requirements for lawful surrender under s. 648.4425(2), F.S.

"Any bail bond agent that surrenders or recommits a defendant must provide the defendant with a statement of surrender on a department-prescribed form. The statement must be signed by the agent and must state the reason for surrender. The statement must be attached to the surrender form with a copy provided to the defendant and a copy maintained by the agent in the defendant's file."

Florida Administrative Rule Chapter 69B-221.100(3), F.A.C., provides that a Bail Bond agent may retain the premium earned if one of the five conditions listed in this rule have been breached by the principal. Should the Bail Bond agent surrender the defendant prior to a breach of the bail bond for any other reason, the premium must be returned to the person who paid it.

Department Investigators routinely conduct random inspections of a Bail Bond agency's records and find that a surrender form will often contain only the reason for surrender stating: Violation of Bond Conditions or Breach of Bond. Such statements are inadequate and do not comply with the laws governing surrenders.

If a Bail Bond agent states on the form that the premium will not be returned without providing a valid reason, the violation could result in enforcement action against the agent's license, and possibly the primary bail bond agent’s license, too.

IIn addition, bail bond agents are required to maintain documentation to establish the violation which led to the surrender of the defendant. For example, a notation indicating the indemnitor called to advise the defendant is going to flee is not a valid reason for surrender. The bail bond agent is responsible for contacting the defendant, recording their actions, and collecting evidence to prove the defendant intended to flee the jurisdiction of the court.

The Statement of Surrender Form, DFS-H2-1542 is available on the Department's website and can be printed for use. Please review 69B-213.120, F.A.C., for more information.

Customer Representatives and the Supervising
Agent - Reminder

The supervising agent must complete the "Designation of Supervising Agent for Customer Representatives or Limited Customer Representatives" form DFS-H2-1124 on behalf of the 4-40 licensee, and submit it to the Bureau of Licensing. A copy of the completed current form must also be maintained at the agency. If you have not submitted a current copy of this form to the Department for your customer representative(s), then it is highly recommended you come into compliance immediately.

Selling your agency or "book of business"

We occasionally receive inquiries asking for guidance about selling an agency "book of business".

Agencies are private businesses and although licensing is required, the Department is not a party to the sale or acquisition of an agency. The sale/purchase is a civil-legal matter and licensees should contact an attorney for assistance.

The owner(s) of the agency should contact the involved insurers in advance of any sale regarding the transition, including notification to consumers of the change. Insurers may need to terminate agency contracts or effectuate new contracts with the new owners to allow it to continue to service the existing customer base.

If you sell your insurance agency you can arrange for the business name, assets, liabilities, building and equipment to transfer to the new owner as part of the sale, however, neither your license nor any appointment is transferable. A license or appointment issued under the Florida Insurance Code is valid only to the person or entity named and is not transferable to another person. Please see section 626.441, F.S.

The new agency must apply for a license prior to conducting business in the State of Florida. Requirements to obtain an agency license can be viewed at this link.

Suitability and Disclosure in Annuity Investments

If you make a recommendation to a consumer and it results in a transaction involving an annuity product, you have certain responsibilities mandated by law. Rule 69B-162.011, F.A.C., requires certain disclosures and an objective comparison of annuity contracts when you recommend the exchange or replacement of an annuity. As the agent, you will be required to complete several forms including an Annuity Suitability Questionnaire to assist in determining the suitability of your recommendation.

Required Forms:

Disclosure and Comparison of Annuity Contracts (DFS-H1-1981, Effective 10/21/2014)

Annuity Suitability Questionnaire (DFS-H1-1980, Effective 10/21/2014)

Unless you are exempted by section 627.4554, F.S., and required by the Financial Industry Regulatory Authority (FINRA) to perform an alternative suitability analysis, you must use the state required form.

Misrepresenting whether an annuity is being replaced and failing to complete and submit the required suitability and disclosure forms (and the required replacement form) or to comply with FINRA's suitability rules is a serious violation and could result in enforcement action, up to and including revocation of your Department licenses.

Compliance Informationcompliance globe

Department licensees and consumers can access compliance information at the Division of Insurance Agent and Agency Services' web page Compliance Information. Additional information is available by type of license at our Frequently Asked Questions web page.


Make Sure You Don't Miss Important Information From Us

We highly recommend licensees routinely check their MyProfile accounts for messages from the Department. We send an email notification when a message has been sent to remind you to check your MyProfile account, but on rare occasions you may not receive that email. For this reason, we suggest you add our domains dfs.state.fl.us and MyFloridaCFO.com to your email software's Trusted or Safe Senders List to ensure you are able to receive email notifications from us.

Licensees who have a valid email address on file with the Department, as required by law, are sent important email notifications when something affecting their application, license, continuing education, or appointment(s) occurs. Additionally, we will keep you informed with warnings regarding new schemes and scams being marketed to licensees.

You can update your contact information through your MyProfile account. We want to keep you informed in a timely manner of pertinent information. You are still required to abide by the Florida Insurance Code regardless of whether you read the information we provide or attempt to provide.

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