Volume 1, No. 6 - August 2010
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.

Senior Suitability Questionnaire/Disclosure Forms and FINRA Requirements

Florida law requires a determination to be made about the suitability of an annuity when selling to individuals age 65 or older (“seniors”). The law also requires certain disclosures and an objective comparison of annuity contracts when recommending the exchange or replacement of a senior’s annuity. Forms for this purpose have been adopted. The law provides that an agent satisfying the requirements of the NASD (FINRA) with regard to the recommendation of variable annuities will be considered to have met the requirements of the Florida senior suitability law. [Section 627.4554(8), Florida Statutes]

Public Adjuster 48-Hour Solicitation Limit
In May 2010, the Florida Department of Financial Services prevailed in a court case regarding the constitutionality of Florida Statute 626.854(6). This statute prohibits a public adjuster from directly or indirectly contacting an insured or claimant until at least 48 hours after the occurrence of the event that caused the claim, unless the contact was initiated by the insured or claimant. The Department is now interpreting this statute to mean a public adjuster is still prohibited from initiating telephonic or face-to-face contact with an insured or claimant during those first 48 hours; however, contact by the public adjuster by means of printed or electronic correspondence, such as e-mails, letters, flyers or door hangers, is allowed and not in violation of the statute.

Commission Sharing
An agent may divide or share commissions only with other agents appointed and licensed to write the same kind or kinds of insurance. [Section 626.753(1)(a), 626.794(1), and 626.838, Florida Statutes]