As an agent transacting insurance in this state, you must maintain in your office the documents required by the Florida Insurance Code. These documents include your daily reports, applications, change endorsements and documents signed or initialed by your insureds concerning such policies. These documents may be maintained electronically as long as the documents will be available when needed by the department, your policyholders or the appropriate insurers. See: 626.748, F.S.
From time to time agents may be asked by one of their customers to provide an entity with a certificate of insurance. A certificate of insurance is essentially proof of coverage and it indicates which insurance company insures the risk. Issuing certifications, declarations or other evidence of coverage that differs from the terms, benefits or conditions of an underlying insurance contract is unlawful. Informational Memorandum OIR-03-003M issued on February 21, 2003 addressed this topic and remains relevant today.
Certificates of insurance generally serve only as evidence of insurance in lieu of an actual copy of an insurance policy. An insurer is under no obligation to abide by any certificate of insurance which has been modified by any person or entity which does not have actual or apparent authority to do so. Distribution of a certificate of insurance which has been modified without authorization and which purports to alter the provisions of the underlying policy, misrepresents the conditions or terms of the insurance policy in violation of 626.9541(1)(a)1, F.S., thereby subjecting the person or entity modifying the certificate to license discipline and administrative fines, in addition to possible criminal penalties.
The Department is receiving an increase in inquiries and seeing more violations in regard to agents and agencies charging their customers for issuing certificates of coverage. There are several fees that are permitted by statute that can be charged, such as policy fees by the managing general agent, motor vehicle report fees, and inspection fees; however, fees for issuing certificates of coverage is not one of them. If you charge for this service, you could be facing administrative penalties for violating subparagraph 626.9541(1)(o), F.S., which is illegal dealings in premium, excess or reduced charges. We will still hold the licensee responsible even if they delegated the issuance of the certificates to a third party who charges the customer.
We realize the time and expense involved issuing numerous certificates for some customers could become significant, but the licensee is expected to absorb these service costs based upon current laws. See subparagraph 626.9541(1)(o), Florida Statutes.
As a licensed customer representative (CR) you must be appointed by either a duly licensed and appointed general lines agent or a general lines insurance agency before you can conduct insurance business. The general lines agent who appoints you or your designated supervising agent is responsible for supervising your work and conduct while you conduct insurance business. You can only be appointed by one agent or agency at any one time. Be sure to follow up with your supervising general lines agent to ensure he or she has appointed you as required by law. You cannot appoint yourself. See 626.7353, F.S.
With your CR appointment, you may take applications, give quotes, interpret policies, explain procedures, give insurance advice, solicit new customers at the agent’s office or by phone from that office, bind new or additional coverages and sign applications and binders in your own name. These activities are limited to the lines and companies for which your supervising and appointing agent is licensed and appointed, or for which the agent is otherwise authorized to handle under exchange of business laws or joint underwriting association rules or contracts. All of the duties above must be conducted inside the office; you must work solely at the agent’s principal place of business. As an example, you may not leave the office and go to a car dealership to take an application from someone purchasing a car or go to someone’s home to take a homeowner’s insurance application. You can leave the office to perform clerical or administrative tasks such as taking a photo of a car for the agent or going to the post office. You must always identify yourself as customer representative working for your named supervising agent and must never make or give the impression that you are an agent.
You may never handle, as a CR, life insurance matters unless you hold a life license.
Please see Rule 69B-213, F.A.C., for the complete text on Customer Representatives authority.
As an agent, you or your agency may charge a consumer the actual cost of the motor vehicle report (MVR) for each licensed driver. However, you may not include subscription or access fees associated with obtaining the MVR in the cost to the consumer. See 627.7295(5)(b), F.S.
A licensed general lines agent may charge a per-policy fee not to exceed $10 to cover the administrative costs of the agent associated with selling the motor vehicle insurance policy if the policy covers only personal injury protection coverage as provided by s. 627.736 and property damage liability coverage as provided by s. 627.7275 and if no other insurance is sold or issued in conjunction with or collateral to the policy. The fee is not considered part of the premium.
If a credit card company charges a fee for payments of policies/premiums, then in accordance with 626.9541(o)2., F.S., a licensed agent may charge “ . . . the exact amount of any discount or other such fee charged by a credit card facility in connection with the use of a credit card, as authorized by subparagraph (q)3., in addition to the premium required by the insurer.”
Section 626.9541(q)3., F.S. states, “A licensed agent or insurer may solicit or negotiate insurance; seek or accept applications for insurance; issue or deliver any policy; receive, collect, or transmit premiums, to or for an insurer; or otherwise transact insurance in this state, or relative to a subject of insurance resident, located, or to be performed in this state, through the arrangement or facilities of a credit card facility or organization, for the purpose of insuring credit card holders or prospective credit card holders if:
a. The insurance or policy which is the subject of the transaction is noncancelable by any person other than the named insured, the policyholder, or the insurer;
b. Any refund of unearned premium is made to the credit card holder by mail or electronic transfer; and
c. The credit card transaction is authorized by the signature of the credit card holder or other person authorized to sign on the credit card account.”
See 626.9541(q), F.S.
An agent may pay an unlicensed person for referrals of potential clients as long as it complies with Florida Statute 626.112(8) which states "No insurance agent, insurance agency, or other person licensed under the Insurance Code may pay any fee or other consideration to an unlicensed person other than an insurance agency for the referral of prospective purchasers to an insurance agent which is in any way dependent upon whether the referral results in the purchase of an insurance product."
To summarize, it is OK to pay an unlicensed person for every referral. If you only pay that unlicensed person for referrals that result in the sale of an insurance product, it violates the law.
While Florida law requires you to maintain records in an office that is accessible to the public, it does not prohibit you from having such an office in your residence if it complies with the following provisions:
If you are a general lines agent with your place of business in your home as outlined above, your agency must be licensed.
"Unaffiliated insurance agent" means a licensed insurance agent, except a limited lines agent, who is self-appointed and who practices as an independent consultant in the business of analyzing or abstracting insurance policies, providing insurance advice or counseling, or making specific recommendations or comparisons of insurance products for a fee established in advance by written contract signed by the parties. An unaffiliated insurance agent may not be affiliated with an insurer, insurer-appointed insurance agent, or insurance agency contracted with or employing insurer-appointed insurance agents. [See subsection 626.015(18), F.S. (effective July 1, 2014)]
An agent who appoints his or her license as an unaffiliated insurance agent may not hold an appointment from an insurer for any license he or she holds; transact, solicit, or service an insurance contract on behalf of an insurer; interfere with commissions received or to be received by an insurer-appointed insurance agent or an insurance agency contracted with or employing insurer-appointed insurance agents; or receive compensation or any other thing of value from an insurer, an insurer-appointed insurance agent, or an insurance agency contracted with or employing insurer-appointed insurance agents for any transaction or referral occurring after the date of appointment as an unaffiliated insurance agent. An unaffiliated insurance agent may continue to receive commissions on sales that occurred before the date of appointment as an unaffiliated insurance agent if the receipt of such commissions is disclosed when making recommendations or evaluating products for a client that involve products of the entity from which the commissions are received. [See subsection 626.311(6), F.S. (effective July 1, 2014)]
Unlicensed personnel have limited discretion as to how they can support the operations of an insurance agency. Permitted and prohibited activities are described in Chapter 69B-222, F.A.C. Incidental activities and compensation are two of the most important points to remember when employing unlicensed personnel. Incidental activities as described in the rules cannot exceed 10% of an employee's overall activities and compensation cannot be made based on the individual production of the unlicensed person. The following actions are never allowable by unlicensed personnel: