Volume 3, No. 2 - March 2012

Compliance Corner

We continue to see a pattern of noncompliance in the areas noted below. This section has been created to assist you in keeping your insurance business in compliance. The items are intended as reminders only and are not necessarily the exact text of the Florida Statutes or Florida Administrative Code. The legal cites have been provided for your further reference.

Bail Bond Agents: Reminder about Referring Attorneys

The Florida Statutes prohibit a bail bond agent from suggesting or advising the employment of any particular attorney to represent his/her principal (defendant).

The Department strictly enforces this statute and does not allow any bail bond agent to refer any defendant to a particular attorney or attorneys. Bail bond agents found to be referring defendants to use the services of one or more attorneys may find they are the subject of an investigation into their business activities as a licensee.

To be clear, the bail bond agent's act of suggesting more than one attorney does not remove it from being "any particular attorney". All attorneys are "particular" attorneys if they are chosen by the agent to suggest to a client. This includes bail bond agents:

  • Making business cards available for one or more attorneys;
  • Providing a list of attorneys recommended by the bail bond agent; and/or
  • Distributing marketing materials for one or more attorneys.

It does not include a bail bond agent who provides the defendant with an unaltered copy of the local telephone directory, or a listing by the Florida Bar of the attorneys in a particular area or field of expertise. It also does not prevent a bail bond agent from providing a defendant with the contact information for a lawyer referral service, as long as that service is not associated with the bail bond agent or bail bond agency.

[See 648.44(1)(a), Florida Statutes]

Public Adjusters: Reminder about Law Changes Already Effective

The Department notified its public adjuster licensees in June 2011 of significant law changes made during the 2011 legislative session. A reminder was published in November and another was published in December, however, we continue to receive complaints that licensees are allegedly circumventing or disregarding the law. The Department will take administrative action against any person who violates the Florida Insurance Code.

Public Adjuster Contract Requirements
(Effective January 1, 2012)

There were several important statutory provisions added pertaining to contracts made by public adjusters:

  • Must state the type of claim, including an emergency claim, non-emergency claim or supplemental claim.
  • Requires the signatures of all named insureds.
  • If the signatures of all named insureds are not available, the public adjuster must submit an affidavit signed by the available named insureds attesting that they have authority to enter into the contract and settle all claim issues on behalf of the named insureds.
  • An unaltered copy of the contract must be remitted to the insurer within 30 days after execution. This means the contract provided to the insurer must also contain the agreed upon fee or percentage of compensation for the public adjuster's services.

[See 626.8796(2), Florida Statutes]

Citizens Property Insurance Corporation Claims - 10% Fee Cap
(Effective May 17, 2011)

A public adjuster can contract with a Citizens policyholder at any time allowed by law. A public adjuster cannot charge more than 10% of any amount paid in excess of the original offer that is made by Citizens. If a public adjuster enters into a contract prior to Citizens making an offer, then the "original offer" is when Citizens makes its first offer.

We believe it is important to emphasize the statutory language: "For ANY claim filed under ANY policy of the corporation, a public adjuster may not charge, agree to, or accept any compensation, payment, commission, fee, or other thing of value greater than 10%...." This language addresses any type of policy and any type of claim filed on behalf of a Citizens policyholder. The statute does not distinguish between new, supplemental, or reopened claims.

The Division's Bureau of Investigation is aware of numerous public adjusting contracts being submitted to Citizens Property Insurance Corporation that contain a fee amount higher than 10%. Several contracts also being submitted to Citizens that contain a waiver form that includes the text from subsection 627.351(6)(a)6., F.S., and a disclaimer signed by the policyholder that they were waiving their rights under the referenced statutory provision and agreeing to a fee higher than 10%.

The Department believes subsection 627.351(6)(a)6., F.S., does not confer any rights to consumers, but rather, imposes only restrictions on adjusters. Therefore, since a waiver involves the voluntary surrender of a known right, the use of any type of waiver cannot serve as a defense to charging a fee in excess of the limits proscribed by subsection 627.351(6)(a)6., F.S., because a consumer has no rights to waive under that provision.

Submitting a contract for public adjusting services that exceeds 10% on a policy issued by Citizens Property Insurance Corporation or attempting to use any document signed by the policyholder wherein they agree to pay a higher fee for public adjusting services proscribed by law is considered a violation of the Florida Insurance Code. The Department will pursue action against any public adjuster or public adjusting firm that violates this provision of the law.

[See 626.877 and 627.351(6)(a)6, Florida Statutes and http://www.MyFloridaCFO.com/Agents/Industry/News/PubAdjRegs.htm]

 

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