FLORIDA 5-HOUR LAW AND ETHICS UPDATE CE Researched and Written by: Edward J. Barrett CFP, ChFC, CLU, CEBS, RPA, CRPS, CRPC

Transcription

1 FLORIDA 5-HOUR LAW AND ETHICS UPDATE CE Researched and Written by: Edward J. Barrett CFP, ChFC, CLU, CEBS, RPA, CRPS, CRPC

2 Disclaimer This course is designed as an educational program for financial professionals. EJB Financial Press is not engaged in rendering legal or other professional advice and the reader should consult legal counsel as appropriate. We have tried to provide you with the most accurate and useful information possible. However, one thing is certain and that is change. The content of this publication may be affected by changes in law and in industry practice, and as a result, information contained in this publication may become outdated. This material should not be used as a source of authority on legal and/or tax matters. Laws and regulations cited in this publication have been edited and summarized for the sake of clarity. Names used in this publication are fictional and have no relationship to any person living or dead. This presentation is for educational purposes only. The information contained within this presentation is for internal use only and is not intended for you to discuss or share with clients or prospects. Financial advisors are reminded that they cannot provide clients with tax advice and should have clients consult their tax advisor before making tax-related investment decisions. EJB Financial Press, Inc Congress St. New Port Richey, FL (800) This book is manufactured in the United States of America 2014 EJB Financial Press Inc., Printed in U.S.A. All rights reserved 2

3 About the Author Edward J. Barrett CFP, ChFC, CLU, CEBS, RPA, CRPC, CRPS, began his career in the financial and insurance services back in 1978 with IDS Financial Services, becoming a leading Financial Advisor and top District Sales Manager in Boston, Massachusetts. In 1986, Mr. Barrett joined Merrill Lynch in Boston as a Financial Advisor and then becoming the Regional Estate and Business Planning Specialist working with over 400 Financial Advisors and their clients throughout the New England region. In 1992, after leaving Merrill Lynch and moving to Florida, Mr. Barrett founded The Barrett Companies Inc. and Broker Educational Sales & Training Inc., Wealth Preservation Planning Associates and The Life Settlement Advisory Group Inc. Mr. Barrett has been a qualifying member of the Million Dollar Round Table, Qualifying Member Court of the Table and Top of the Table producer. He holds the Certified Financial Planner designation CFP, Chartered Financial Consultant (ChFC), Chartered Life Underwriter (CLU), Certified Employee Benefit Specialist (CEBS), Retirement Planning Associate (RPA), Chartered Retirement Planning Counselor (CRPC) and the Chartered Retirement Plans Specialist (CRPS) professional designations. EJB Financial Press EJB Financial Press, Inc. ( was founded in 2004, by Mr. Barrett to provide advanced educational and training manuals approved for correspondence continuing education credits for insurance agents, financial advisors, accountants and attorneys throughout the country. Broker Educational Sales & Training Inc. Broker Educational Sales & Training Inc. (BEST) is a nationally approved provider of continuing education and advanced training programs to the mutual fund, insurance and financial services industry. For more information visit our website at or call us at

4 This page left blank intentionally 4

5 TABLE OF CONTENTS About the Author... 3 CHAPTER 1 REGULATORY AWARENESS... 9 Overview and Learning Objective... 9 The Florida Department of Financial Services... 9 Jurisdiction and Duties of the DFS... 9 Chief Financial Officer (CFO) The Financial Services Commission Office of Financial Regulation Office of Insurance Regulation Licensing Requirements Background Qualifications for License Number of Applications for License Required Scope of License Appointment Payment of Fees and Taxes Appointment Renewal Notification and Termination Expiration of License and Appointment License or Appointment Transferability Appointment of Agent or Other Representative Continuation of Appointment of Agent or Other Representative Appointment Renewal Procedure Reasons for Termination Procedure for Refusal, Suspension, or Revocation of License Failure to Complete CE Requirements Termination of appointment Rights of Agent Following Termination of Appointment Effective Date of Termination of Appointment License and Appointment Required Appointment of Customer Representatives Contact Information Notice of Change of Address or Name Insurance Agency Licensing License and Appointment Required Application for Insurance Agency License Continuation, Expiration of License; Insurance Agencies Insurance Agency Names; Disapproval Branch Agencies Transfer of License from Another State Expiration of License and Appointment License or Appointment Transferability Duration of Suspension or Revocation Surrender of License Grounds for Compulsory Refusal, Suspension, or Revocation of License Procedure for Refusal, Suspension, or Revocation of License

6 Duration of Suspension or Revocation Effect of Suspension or Revocation upon Associated Agencies Duties of Licensed vs. Unlicensed Personnel Agency Personnel Powers, Duties, and Limitations Expiration of License and Appointment Other Requirements Advertising Unfair Methods of Competition and Unfair or Deceptive Acts or Practices Advertising Gifts Permitted Approval by Insurer Identification of Insurers, Agents, and Insurance Contracts Recordkeeping Advertising Files Department Communication MyProfile Websites Florida State Guaranty Association Members and Assessments Powers and Duties of the Association FLAHIGA Coverage of Liabilities Examinations and Annual Reports Prohibited Advertising of Association Review Questions CHAPTER 2 INSURANCE LAW AND UPDATES Overview and Learning Objectives New Florida Law Updates Change of Address Notification Proof of Pre-Licensing Education Continuing Education Requirements Other Licensing Changes Federal Law Review Pertinent to Florida Licensed Insurance Professionals Role of the Federal Government McCarron-Ferguson Act The Federal Insurance Office Scope and Functions Powers Reports Review Questions CHAPTER 3 ETHICAL REQUIREMENTS Overview and Learning Objective Ethical Guidelines Florida Code of Ethics Misrepresentation Twisting Rebating Defamation Use of Professional Designations

7 Penalties Policyholders Bill of Rights NAIFA Code of Ethics NAIFA Code of Ethics Agents Ethics Agents Responsibilities to Clients Understanding Industry Products & Suitability of Sales and Services The Unfair Marketing Practices of Competition and Unfair or Deceptive Acts Florida Unfair Trade Practices Misrepresentation and False Advertising Twisting Churning Fraudulent Signatures Consumer Protections Rebating Penalties Insurance Fraud Understanding Required Premium Discounts Shutter Discounts Review Questions CHAPTER 4 DISCIPLINARY AND INDUSTRY TRENDS Overview and Learning Objectives Recent Violations and Enforcement Actions Misrepresentation Insurance Fraud Unlicensed Activity Sale of Unauthorized Insurance Unauthorized Products and Entities Involved in Florida Commerce New and Other Important Terminology Applicable to Florida Licensed Insurance Professionals Agent Authorized Insurer Buyer s Guide Churning Free Look Period Misrepresentation Replacement Sliding Suitability Twisting Unauthorized Insurer Review Questions Chapter Review Answers Confidential Feedback Form

8 This page left blank intentionally 8

9 CHAPTER 1 REGULATORY AWARENESS Overview and Learning Objective Insurance is a highly regulated industry. It is regulated to protect the public interest and to make sure insurance is available on an equitable basis. Regulation of the insurance industry is undertaken from several perspectives and is divided among a number of authorities (entities). In the State of Florida, the Department of Financial Services (DFS) and the Office of Insurance Regulation (OIR) each play a major role in regulating the insurance industry. The DFS is primarily responsible for regulating agents, combating insurance fraud, and protecting consumers, while the OIR is responsible for overseeing the conduct and licensing of insurance companies. In addition, the Office of Financial Regulation (OFR) is responsible for administering the state s banking and securities laws. If you combine all of these entities, DFS, OIR and OFR, they ensure that agents and agencies, and insurers are licensed properly and conduct insurance business in accordance with the Florida Insurance Code. Upon completion of this chapter, you will have an understanding of the jurisdiction of duties and responsibilities of each of these entities in the regulation of insurance in the state of Florida and will review the requirements agents must comply with to maintain their licenses. Most importantly, you ll learn about the appointment procedures, continuing education requirements, recordkeeping requirements, and advertising rules that apply to agents, as well as the penalties for noncompliance. And Finally, you ll have an understanding of the role and responsibilities of the Florida Life and Health Insurance Guaranty Association (FLHIGA). The Florida Department of Financial Services Pursuant to F.S (1) and F.S (2), the Florida Department of Financial Services, hereinafter referred to as the DFS, is a state agency headquartered in Tallahassee. In 1988, as recommended by the Constitutional Revision Commission, and passed into law by voters, the Florida Legislature carried out an amendment to the state s constitution by merging the Department of Insurance, Treasury, State Fire Marshal and the Department of Banking and Finance into the DFS effective January Jurisdiction and Duties of the DFS The DFS regulates the state s banking, securities, insurance, mortgage lending and funeral and cemetery businesses. The DFS is comprised of the following 14 divisions which are required to carry out the statutory duties of the state of Florida. They are: Accounting and Auditing 9

10 Consumer Services Funeral, Cemetery, and Consumer Services Insurance Agent and Agency Services Insurance Fraud Public Assistance Fraud Rehabilitation and Liquidation Risk Management Treasury State Fire Marshal Workers Compensation Support Divisions include the following: Administration Information Systems Legal Services Several of these divisions have a role in regulating insurance including the Divisions of Agents and Agency Services, Insurance Fraud, and Consumer Services. Agents and Agency Services regulates the licensing of individuals and entities that transact insurance business in the state of Florida. The Bureau of Licensing and the Bureau of Investigations are located with this division: The Licensing Bureau ensures that licenses are issued only to individuals who meet the state s licensing requirements, while the Bureau of Investigations investigates possible violations of the Florida Insurance Code. Insurance Fraud a law enforcement agency that protects Florida citizens and businesses from all types of financial and insurance fraud, including claims fraud, workers' compensation fraud, unauthorized insurance entity fraud, and insurance agent crimes, along with viatical application fraud. The Division of Insurance Fraud also issues public information announcements and provides training for insurers to help prevent and fight fraud. Consumer Services provides information and educational materials to consumers to help them make informed insurance and financial decisions. Consumers can contact this division s insurance specialist with insurance-related questions and to request consumer guides about topics such as buying annuities, shopping for mortgages, purchasing long-term care and health insurance, and dealing with debt collectors. Chief Financial Officer (CFO) Pursuant to F.S. Chapter 17, the Chief Financial Officer (CFO) of Florida is a statewide elected official and officer of the Florida Cabinet who is elected to a four-year term. The office was created in 2002 following the reorganization of the Florida Cabinet back in 10

11 1998 which combined the former offices of the Comptroller, Treasurer, Insurance Commissioner and Fire Marshal. The CFO is the chief fiscal officer of the state and heads the Florida Department of Financial Services. The CFO is responsible for overseeing the state's finances, collecting revenue, paying state bills, auditing state agencies, regulating cemeteries and funerals, handling fires and arsons. The Financial Services Commission The Financial Insurance Commission is comprised of four members: the Governor, the Attorney General, the Chief Financial Officer and the Commissioner of Agriculture. The two offices within the Commission are the Office of Financial Regulation (OFR), which regulates the banking, finance and securities industries in Florida, and the Office of Insurance Regulation (OIR), which regulates insurance companies. Both offices are headed by commissioners who are appointed by the Financial Services Commission. The Financial Services Commission is responsible for final approval of rules developed by each office. All regulatory decisions are vested with the offices. Financial Services Commission (Members: Governor, Attorney General, Chief Financial Officer, and the Commissioner of Agriculture Office of Financial Regulation (OFR) Office of Insurance Regulation (OIR) Let s review each of these two offices, the Office of Financial Regulation and the Office of Insurance Regulation in greater detail. Office of Financial Regulation Pursuant to F.S (3)(a)2, the mission of the Office of Financial Regulation, (OFR) is to protect the citizens of Florida by carrying out the banking, securities, and financial laws of the state efficiently and effectives, and to provide regulation of businesses that promote the sound growth and development of Florida s economy. The OFR was created in 2003 as the result of the Cabinet Reorganization Act of Although the OFR is a relatively new agency, it began as a banking, consumer finance, and securities regulator back to the mid-1800s with the creation of the former Comptroller s Office. The OFR reports to the Financial Services Commission. The head of the OIR is the Commissioner of Insurance Regulation. 11

12 The OFR reviews consumer complaints involving illegal financial activities, reviews business applications to conduct financial services, and reviews individual license applications and may impose licensing restrictions or denial of licensure. The OFR may conduct financial investigations into allegations of suspected illegal activities within its jurisdiction. The OFR performs these functions through four divisions. They are: Consumer Finance - The Division of Consumer Finance licenses and regulates non-depository financial service industries and individuals and conducts examinations and complaint investigations for licensed entities to determine compliance with Florida law. Financial Institutions - The Division of Financial Institutions ensures that each state-chartered financial institution meets state and federal requirements for safety and soundness. Securities - The Division of Securities regulates the sale of securities in, to or from Florida by firms (securities dealers, issuer dealers and investment advisers), branch offices and individuals affiliated with these firms to determine compliance with Florida law; and Bureau of Financial Investigations - The Bureau of Financial Investigations (Bureau) is a criminal justice agency with investigative teams located in Tallahassee, Orlando, Tampa, West Palm Beach and Miami. The Bureau generally conducts complex investigations involving securities and mortgage fraud. Cases are prioritized and resources are typically devoted to matters that significantly impact the citizens of Florida. The Bureau also participates in joint investigations with local, state and federal law enforcement agencies. The head of the OFR is the Director, who may also be known as the Commissioner of Financial Regulation. For additional information about the OFR you can view OFR Fast Facts at: Office of Insurance Regulation Pursuant to F.S (3)(a)1, the Office of Insurance Regulation (OIR) ensures that insurance companies licensed to do business in Florida are financially viable, operating with the laws and regulations governing the industry, and offering insurance policy products at fair and adequate rates that do not unfairly discriminate against the public. The OIR has responsibility for the regulation, compliance and enforcement of statutes related to insurance and the monitoring of industry markets. These regulatory functions are performed primarily through the units listed below. Company Admissions Section receives company applications and coordinates the review of these applications to determine whether to license companies to sell insurance in Florida. Life and Health Financial Oversight Unit- monitors the solvency of life and health insurers by obtaining and reviewing periodic financial statements. The unit 12

13 also monitors the financial condition of managed care entities by conducting actuarial reviews and field examinations and analyzing financial statements. Life and Health Product Review Unit reviews and approves health insurance rates and life and health policies that are to be issued to Florida residents. Market Investigations Unit - examines and investigates business practices and alleged violations of the Florida Insurance Code. Market Research and Technology Unity collects and distributes information and resource materials relating to the oversight and development of Florida s insurance markets. The unit also provides analysis and discussion at both the national and international levels regarding insurance issues important to Florida. Property and Casualty Financial Oversight Unit monitors the financial stability of insurers by obtaining and reviewing financial statements and conducting on-site financial examinations. Property and Casualty Product Review Unit reviews property and casualty rules, forms, and rate filings for homeowners, auto, workers compensation, liability, and other personal and commercial property and casualty lines of coverage to ensure compliance with the Florida Insurance Code. Specialty Product Administration Unit provides regulation and oversight to insurance administrators, continuing care retirement communities, motor vehicle service agreement companies, home warranty associations, service warranty associations, insurance premium finance companies, donor annuities, legal expense corporations, viatical settlement providers, third party administrators, and title insurance agents and insurers. The unit licenses and monitors the quality of company assets, adequacy of stated liabilities, general operating results and market conduct of these entities to assure compliance with the Florida Insurance Code. The OIR regulates and provides oversight for all insurance companies and insurancerelated entities licensed to do business in Florida as described above. Additionally, the OIR provides oversight to all residual markets and joint underwriting associations, which were created by the Legislature to provide insurance to consumers who are unable to obtain coverage in the private market. Examples of these entities include the Florida Patients Compensation Fund and the Florida Automobile Joint Underwriting Association. Licensing Requirements Licensing insurance producers and insurers helps protect the insurance consumer and allows the state s Insurance Departments to maintain standards of uniformity. By licensing individual insurance producers and insurers, the state can provide some level of assurance to the consumer that their needs will be met by an individual capable of offering guidance and competency and be protected by a regulated insurer. 13

14 Background Insurance producers must be licensed properly to sell insurance in the jurisdictions where they conduct business. A resident license is required for selling within the state where the producer resides; should a producer sell in another state, he or she must obtain a nonresident license to do so. The sale of products other than property and casualty insurance, such as life insurance or investments, also requires a separate license. It is the responsibility of every insurance producer to comply fully with the state regulations regarding their licensing requirements for all activities in which he or she engages. Qualifications for License Pursuant to F.S , the DFS will not grant or issue a license as life agent to any individual found to be untrustworthy or incompetent, or who does not meet the following qualifications: The applicant is a natural person at least 18 years of age. The applicant is a United States citizen or legal alien who possesses work authorization from the United States Bureau of Citizenship and Immigration Services and is a bona fide resident of this state. An individual who is a bona fide resident of this state must be deemed to meet the residence requirement of this paragraph, excluding the existence at the time of application for license of a license in his or her name on the records of another state as a resident licensee of such other state, if the applicant furnishes a letter of clearance satisfactory to the department that the resident licenses have been canceled or changed to a nonresident basis and that he or she is in good standing. The applicant s place of business will be located in this state and he or she will be actively engaged in the business of insurance and will maintain a place of business, the location of which is identifiable by and accessible to the public. The license is not being sought for the purpose of writing or handling controlled business, in violation of s The applicant is qualified as to knowledge, experience, or instruction in the business of insurance and meets the requirements provided in s The applicant is not a service representative, a managing general agent in this state, or a special agent or similar service representative of a health insurer which also transacts property, casualty, or surety insurance; except that the president, vice president, secretary, or treasurer, including a member of the board of directors, of a corporate insurer, if otherwise qualified under and meeting the requirements of this part, may be licensed and appointed as a local resident agent. The applicant has passed any required examination for license required under s The department will not grant, continue, renew, or permit to exist the license or appointment of a general lines agent unless the agent meets the requirements of the above. 14

15 Number of Applications for License Required Pursuant to F.S , after a license as agent, customer representative, or adjuster has been issued to an individual, the same individual must not be required to take another examination for a similar license, regardless, in the case of an agent, of the number of insurers to be represented by him or her as agent, unless: Specifically ordered by the department to complete a new application for license; or During any period of 48 months since the filing of the original license application, such individual was not appointed as an agent, customer representative, or adjuster, unless the failure to be so appointed was due to military service, in which event the period within which a new application is not required may, in the discretion of the department, be extended to 12 months following the date of discharge from military service if the military service does not exceed 3 years, but in no event to extend under this clause for a period of more than 6 years from the date of filing of the original application for license. Scope of License Pursuant to F.S , except as to personal lines agents and limited licenses, a general lines agent or customer representative must qualify for all property, marine, casualty, and surety lines except bail bonds which require a separate license under chapter 648. The license of a general lines agent may also cover health insurance if health insurance is included in the agent s appointment by an insurer as to which the licensee is also appointed as agent for property or casualty or surety insurance. The license of a customer representative must provide, in substance, that it covers all of such classes of insurance that his or her appointing general lines agent or agency is currently so authorized to transact under the general lines agent s license and appointments. No such license will be issued limited to particular classes of insurance except for bail bonds which require a separate license under chapter 648 or for personal lines agents. Personal lines agents are limited to transacting business related to property and casualty insurance sold to individuals and families for noncommercial purposes. Except with respect to a limited license as a credit insurance agent, the license of a life agent covers all classes of life insurance business. Except with respect to a limited license as a travel insurance agent, the license of a health agent covers all kinds of health insurance and such license may not be limited to a particular class of health insurance. No agent licensee can transact or attempt to transact under his or her license any line of insurance for which he or she does not have currently in force of record with the department an appointment by an authorized insurer. At any time while a license is in force, an insurer may apply to the department on behalf of the licensee for an appointment. Upon receipt of the appointment application and 15

16 appointment taxes and fees, the department may issue the additional appointment without further investigation concerning the applicant. The department may contract with other persons to administer the appointment process. Appointment Pursuant to F.S , no person may be, act as, advertise, or act to be an insurance agent, insurance adjuster, or customer representative unless he or she is currently licensed by the DFS and appointed by an appropriate appointing entity or person. All applicants must be submitted electronically through eappoint, the state s electronic appointment system that is used for original and renewal appointments as well as appointment terminations. Payment of Fees and Taxes Pursuant to F.S , all initial appointments must be submitted to the DFS on a monthly basis no later than 45 days after the date of appointment and becomes effective on the date requested on the appointment form. Failure to notify the DFS within the required time period will result in the appointing entity being assessed a delinquent fee of $250 per appointee. Delinquent fees must be paid by the appointing entity and may not be charged to the appointee. Failure to timely renew an appointment by an appointing entity prior to the expiration date of the appointment will result in the appointing entity being assessed late filing, continuation, and reinstatement fees. Such fees must be paid by the appointing entity and cannot be charged back to the appointee. Appointment Renewal Notification and Termination Pursuant to F.S , the appointment of an appointee will continue in force until suspended, revoked, or otherwise terminated, but subject to a renewal request filed by the appointing entity in the appointee s birth month as to natural persons or license date as to entities and every 24 months thereafter, accompanied by payment of the renewal appointment fee and taxes. Each appointing entity must file with the DFS the lists, statements, and information as to appointees whose appointments are being renewed or terminated, accompanied by payment of the applicable renewal fees and taxes as by a date set forth by the DFS following the month during which the appointments will expire. 16

17 Expiration of License and Appointment Pursuant to F.S , upon the expiration of any person s appointment, the person will be without any authority and must not engage or attempt to engage in any activity requiring an appointment. When a licensee s last appointment for a particular class of insurance has been terminated or not renewed, the DFS must notify the licensee that his or her eligibility for appointment as such an appointee will expire unless he or she is appointed prior to expiration of the 48-month period referred to in subsection. An individual who fails to maintain an appointment with an appointing entity writing the class of business listed on his or her license during any 48-month period will not be granted an appointment for that class of insurance until he or she qualifies as a first-time applicant. License or Appointment Transferability Pursuant to F.S , a license or appointment issued under this part is valid only as to the person named and is not transferable to another person. No licensee or appointee can allow any other person to transact insurance by utilizing the license or appointment issued to such licensee or appointee. Appointment of Agent or Other Representative Pursuant to F.S , each appointing entity or person designated by the DFS to administer the appointment process appointing an agent, adjuster, service representative, customer representative, or managing general agent in this state must file the appointment with the DFS and, at the same time, pay the applicable appointment fee and taxes. Every appointment will be subject to the prior issuance of the appropriate agent s, adjuster s, service representative s, customer representative s, or managing general agent s license. By authorizing the effectuation of an appointment for a licensee, the appointing entity is thereby certifying to the DFS that an investigation of the licensee has been made and that in the appointing entity s opinion and to the best of its knowledge and belief, the licensee is of good moral character and reputation, and is fit to engage in the insurance business. The appointing entity must provide to the DFS any other information the DFS may reasonably require relative to the proposed appointee. Each appointing entity must advise the DFS in writing within 15 days after it or its general agent, officer, or other official becomes aware that an appointee has pleaded guilty or nolo contendere to or has been found guilty of a felony after being appointed. Any law enforcement agency or state attorney s office that is aware that an agent, adjuster, service representative, customer representative, or managing general agent has pleaded guilty or nolo contendere to or has been found guilty of a felony must notify the DFS of such fact. 17

18 Each licensee must advise the DFS in writing within 30 days after having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the laws of the United States, any state of the United States, or any other country, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases. Continuation of Appointment of Agent or Other Representative Pursuant to F.S , subject to renewal or continuation by the appointing entity, the appointment of the agent, adjuster, service representative, customer representative, or managing general agent will continue in effect until the person s license is revoked or otherwise terminated, unless written notice of earlier termination of the appointment is filed with the DFS or person designated by the DFS to administer the appointment process by either the appointing entity or the appointee. Appointment Renewal Procedure Pursuant to 69B , the following apply: Purpose - the purpose of this rule is to establish procedures for persons seeking the biennial renewal of appointments to transact insurance pursuant to the Florida Insurance Code. Additionally, this rule sets forth the fees that will be assessed to individual and entities that file appointment renewals after the time frames specified by statute and this rule. Scope - this rule applies to all persons submitting a request for renewal of appointments as an agent, customer representative, adjuster, service representative, managing general agent, title insurance agent, sales representative, reinsurance intermediary, or bail bond agent, and must govern the renewal of appointments pursuant to the authority set forth in Sections , , , , and , F.S. Definitions - for purposes of this rule, the following definitions will apply. o Appointment must be as defined in Section , F.S. o (b) Continuation fee is the fee an appointing entity is charged to renew each licensee s appointment after the expiration date of the appointment, but before the licensee s appointment is cancelled. o (c) Department means the Florida Department of Financial Services. o (d) License must be as defined in Section and , F.S. o (e) License Issue Month means the month in which the person or entity was first licensed by the Department. The license issue month is the month during which all appointments must expire and be subject to renewal in accordance with the Florida Insurance Code and this rule. o (f) Renewal must mean the continuation of an existing appointment for an additional period of time. 18

19 o (g) Renewal notice means an electronic notification sent by the Department to the appointing entity for its use in notifying the Department of persons to be renewed or not renewed. Term of appointments: o In the case of natural persons, new appointments or appointments being continued, which are effectuated in a licensee s birth month, will expire 24 months later on the last day of the licensee s birth month and will be subject to renewal at that time by the entity for which they are appointed pursuant to the filing deadlines prescribed in subsections (6) and (7), below, and every 24 months thereafter unless suspended, revoked, or otherwise terminated at an earlier date. o In the case of entities other than natural persons, new appointments or appointments being continued, which are effectuated in the same month a licensee was first licensed as an insurance representative, will expire 24 months later on the last day of the licensee s license issue month and will be subject to renewal at that time by the entity for which they are appointed pursuant to the filing deadlines prescribed in subsections below, and every 24 months thereafter unless suspended, revoked, or otherwise terminated at an earlier date. o Appointments effectuated during any month other than the licensee s birth month in the case of natural persons, or during the license issue month in the case of entities other than natural persons, will be valid for not less than 24 months and no longer than 36 months, which are the minimum and maximum number of months necessary to convert the original issue month to the licensee s birth month or license issue month, whichever the case may be, and expiring the last day of the licensee s birth month or license issue month, whichever is applicable, and will be subject to renewal at that time by the entity for which the licensee is appointed pursuant to the filing deadlines prescribed in subsections (6) and (7), below, and every 24 months thereafter unless suspended, revoked, or otherwise terminated at an earlier date. Renewal Fees: o All appointment renewal fees and taxes as prescribed in Section , F.S., must be submitted via the Department s online appointment system at and paid by electronic payment prior to any appointments being renewed. However, appointments for bail bond agents must be submitted on a form prescribed by Rule 69B , F.A.C., and paid via a paper check. All checks must be made payable to the Florida Department of Financial Services. o Failure by an appointing entity to submit and pay the renewal invoice with the required renewal fees by the prescribed renewal date deadlines set forth by statute and in this rule will require the payment of an additional $20 delinquency fee and a $5 continuation fee by the appointing entity for each person listed on the renewal notice. The appointing entity will have 45 days from the last day of the renewal period to renew a licensee s 19

20 appointment late and pursuant to payment of the normal appointment fee, the delinquency fee and the continuation fee. Otherwise the licensee s appointment will be cancelled. Filing dates: o The Department will send an electronic notification to the appointing entity to the address on record with the Department at least 90 days prior to the expiration date of an appointment. Simultaneously, the renewal notice will be sent to the appointing entity s account in the Department s online appointment system. o The Department will send an electronic notification to the appointing entity to the address on record with the Department on the first day of the appointment renewal month letting the appointing entity know it can submit and pay the amount indicated on the renewal invoice. The appointing entity will have from the first day of the renewal month to the last day of the renewal month to submit and pay for the renewal invoice without being assessed the delinquency fee and continuation fee. For example, on March 1, appointing entities may be notified they have until March 31 to submit and pay for renewal invoices without being assessed the delinquency fee and continuation fee. o If an appointing entity fails to renew an appointment during the renewal month, the Department will send an electronic notification to the appointing entity to the address on record with the Department on the first day of the month following an appointment expiration date informing the appointing entity it has 45 days to renew the appointment. If a renewal invoice is paid during this 45-day period, the appointing entity will pay, in addition to the normal appointment fee, a delinquency fee and a continuation fee per appointment. For example, on April 1, appointing entities who failed to submit and pay for their March renewal invoice will be notified by the Department that they have 45 days to renew appointments with a March 31 expiration date by paying a delinquency fee and a continuation fee per appointment. o If an appointing entity fails to renew an appointment during the renewal month or in the 45-day late renewal period immediately following the renewal month, the Department will send an electronic notification to the appointing entity to the address on record with the Department on the first day after the 45-day late renewal period informing the appointing entity that the appointment was not renewed and has been cancelled. The licensee whose appointment was cancelled will also receive such electronic notification at the address on record with the Department. If the appointing entity desires to re-appoint the licensee, the appointing entity must submit a new appointment via the Department s online appointment system. New appointments will be dated effective when services are first provided by the appointee to the appointing entity or the first day after cancellation of a prior appointment if services have been continuously provided by the appointee. If the new appointment s requested effective date is more than 45 days earlier than the date it is 20

21 submitted to the Department, the appointing entity will be assessed a $250 original appointment delinquency fee per appointment. For example, on May 16, appointing entities who failed to submit and pay their March renewal invoice during the month of March or during the 45-day late renewal period ending May 15, will be sent an electronic notification by the Department informing them they must submit new appointments if they desire to appoint their licensees whose appointments expired March 31. o During the periods described in paragraphs above, an appointing entity may elect to not renew an appointment. During the same periods, in order to renew a licensee s appointment the licensee s , home, business and mailing addresses must be valid in the Department s records. If the licensee is indicated on the renewal invoice as having invalid addresses on record with the Department, the licensee must update the invalid addresses in order for the appointing entity to renew the licensee s appointment. Notification procedures. The renewal notice sent to the appointing entity must be completed in its entirety. The certification will be signed by the appropriate official for the appointing entity. Reasons for Termination Pursuant to F.S , any insurer terminating the appointment of an agent; any general lines agent terminating the appointment of a customer representative or a crop hail or multiple-peril crop insurance agent; and any employer terminating the appointment of an adjuster, service representative, or managing general agent, whether such termination is by direct action of the appointing insurer, agent, or employer or by failure to renew or continue the appointment as provided, must file with the DFS a statement of the reasons, if any, for and the facts relative to such termination. In the case of termination of the appointment of an agent, such information may be filed by the insurer or by the general agent of the insurer. In the case of terminations by failure to renew or continue the appointment, the information required must be filed with the DFS as soon as possible and at all events within 30 days, after the date notice of intention not to so renew or continue was filed with the DFS. In all other cases, the information required will be filed with the DFS at the time, or at all events within 10 days after, notice of the termination was filed with the DFS. Procedure for Refusal, Suspension, or Revocation of License Pursuant to F.S , if any licensee is convicted by a court of a violation of the Florida Insurance Code or a felony, the licenses and appointments will be immediately revoked by the DFS. The licensee may subsequently request a hearing and the DFS will expedite any such requested hearing. The sole issue at such hearing will be whether the revocation should be rescinded because such person was not in fact convicted of a violation of this code or a felony. 21

22 The papers, documents, reports, or evidence of the DFS relative to a hearing for revocation or suspension of a license or appointment pursuant to the provisions of this Chapter and Chapter 120 are confidential and exempt from the provisions of F.S (1) until after the same have been published at the hearing. However, such papers, documents, reports, or items of evidence are subject to discovery in a hearing for revocation or suspension of a license or appointment. Failure to Complete CE Requirements Pursuant to F.S (10), the DFS may immediately terminate or refuse to renew the appointment of an agent or adjuster who has been notified by the DFS that his or her continuing education requirements have not been certified, unless the agent or adjuster has been granted an extension or waiver by the DFS. The DFS may not issue a new appointment of the same or similar type to a licensee who was denied a renewal appointment for failing to complete continuing education as required until the licensee completes his or her continuing education requirement. Termination of appointment Pursuant to , subject to an appointee s contract rights, an appointing entity may terminate its appointment of any appointee at any time. Except when termination is upon a ground which would subject the appointee to suspension or revocation of his or her license and appointment under s or s , and except as provided by contract between the appointing entity and the appointee, the appointing entity must give at least 60 days advance written notice of its intention to terminate such appointment to the appointee, either by delivery thereof to the appointee in person or by mailing it, postage prepaid, addressed to the appointee at his or her last address of record with the appointing entity. Notice so mailed will be deemed to have been given when deposited in a United States Postal Service mail depository. As soon as possible and at all events within 30 days after terminating the appointment of an appointee, other than as to an appointment terminated by the appointing entity s failure to continue or renew it, the appointing entity must file written notice with the department, together with a statement that it has given the appointee notice as provided in subsection (1) and will file with the department the reasons and facts involved in such termination as required under s Upon termination of the appointment of an appointee, whether by failure to renew or continue the appointment, the appointing entity must: File with the department the information required under s Subject to the exceptions provided under subsection (1), continue the outstanding contracts transacted by an agent until the expiration date or anniversary date when the policy is a continuous policy with no expiration date. This paragraph will not be construed to prohibit the cancellation of such contracts when not otherwise prohibited by law. 22

23 An appointee may terminate the appointment at any time by giving written or electronic notice thereof to the appointing entity, department, or person designated by the department to administer the appointment process. The department will immediately terminate the appointment and notify the appointing entity of such termination. Such termination will be subject to the appointee s contract rights, if any. Upon receiving notice of termination, the department or person designated by the department to administer the appointment process will terminate the appointment. Rights of Agent Following Termination of Appointment Pursuant to , following the termination of his or her agency appointment as to an insurer, the agent may for the period herein provided continue to service, and receive from the insurer commissions or other compensation relative to, policies written by him or her for the insurer during the existence of the appointment. The agent may countersign all certificates or endorsements necessary to continue such policies to the expiration date including renewal option periods, and collect and remit premiums due, but must not otherwise, except with the consent of the insurer, change or modify the policy in any way nor increase the hazards insured against. This section does not apply as to agents of direct writing insurers or to agents and insurers between whom the relationship of employer and employee exists. Effective Date of Termination of Appointment Pursuant to 69B F.A.C., when an appointing entity terminates the appointment of an appointee and files written notice of such termination with the DFS the DFS must terminate the appointment. The date of such termination on DFS records will be the effective date of such termination as indicated by the appointing entity in its filing with the DFS or, if no date is indicated, the date on which the DFS received the filing. License and Appointment Required Pursuant to F.S (7), effective October 1, 2006, no individual, firm, partnership, corporation, association, or any other entity can act in its own name or under a trade name, directly or indirectly, as an insurance agency, unless it complies with s. F.S with respect to possessing an insurance agency license for each place of business at which it engages in any activity which may be performed only by a licensed insurance agent. Each agency engaged in business in this state before January 1, 2003, which is wholly owned by insurance agents currently licensed and appointed under this chapter, each incorporated agency whose voting shares are traded on a securities exchange, each agency designated and subject to supervision and inspection as a branch office under the rules of the National Association of Securities Dealers, and each agency whose primary function is offering insurance as a service or member benefit to members of a nonprofit corporation may file an application for registration in lieu of licensure in accordance with 23

24 F.S (3). Each agency engaged in business before October 1, 2006 was required to file an application for licensure or registration on or before October 1, If an agency is required to be licensed but fails to file an application for licensure in accordance with this section, the department will impose on the agency an administrative penalty in an amount of up to $10,000. If an agency is eligible for registration but fails to file an application for registration or an application for licensure in accordance with this section, the department will impose on the agency an administrative penalty in an amount of up to $5,000. A registered insurance agency will, as a condition precedent to continuing business, obtain an insurance agency license if the department finds that, with respect to any majority owner, partner, manager, director, officer, or other person who manages or controls the agency, any person has: Been found guilty of, or has pleaded guilty or nolo contendere to, a felony in this state or any other state relating to the business of insurance or to an insurance agency, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of the cases. Employed any individual in a managerial capacity or in a capacity dealing with the public who is under an order of revocation or suspension issued by the department. An insurance agency may request, on forms prescribed by the department, verification of any person s license status. If a request is mailed within 5 working days after an employee is hired, and the employee s license is currently suspended or revoked, the agency will not be required to obtain a license, if the unlicensed person s employment is immediately terminated. Operated the agency or permitted the agency to be operated in violation of s With such frequency as to have made the operation of the agency hazardous to the insurance-buying public or other persons: o Solicited or handled controlled business. This subparagraph does not prohibit the licensing of any lending or financing institution or creditor, with respect to insurance only, under credit life or disability insurance policies of borrowers from the institutions, which policies are subject to part IX of chapter 627. o Misappropriated, converted, or unlawfully withheld moneys belonging to insurers, insureds, beneficiaries, or others and received in the conduct of business under the license. o Unlawfully rebated, attempted to unlawfully rebate, or unlawfully divided or offered to divide commissions with another. o Misrepresented any insurance policy or annuity contract, or used deception with regard to any policy or contract, done either in person or by any form of dissemination of information or advertising. o Violated any provision of this code or any other law applicable to the business of insurance in the course of dealing under the license. o Violated any lawful order or rule of the department. 24