Selling unlicensed policies becomes a felony

By Greg Groeller
Orlando Sentinel Staff Writer
October 1, 2002

Insurance agents who sell medical policies underwritten by unlicensed insurance companies could be charged with a felony under a Florida law that takes effect today.

The Florida Department of Insurance has received dozens of complaints from consumers who have been duped into buying health insurance issued by carriers that are not licensed by the agency to do business here.

Because such carriers are not regulated, the state is not obligated to cover any claims that the insurers fail to pay. As a result, in the past two years alone, 30,000 Floridians have been stuck with unpaid medical bills totaling $6 million, the agency said.

The new law makes it a third-degree felony -- punishable by as much as five years in prison and a $5,000 fine -- for an agent to sell products of an unlicensed carrier. Until now, selling unlicensed policies in Florida was a second-degree misdemeanor.

The Insurance Department said it has shut down six companies that sold unlicensed policies in Florida and is investigating "dozens" of individual agents.