Insurance Insights header
Volume 2, No. 1 - January 2013

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.

Adjusting Firms: Designate a Primary Adjuster

The primary adjuster law states that each person operating an adjusting firm and each location of a multiple location adjusting firm must designate a primary adjuster for each such firm or location. The statute also defines a primary adjuster as the licensed adjuster who is responsible for the hiring and supervision of all individuals within an adjusting firm location who deal with the public and who acts in the capacity of a public adjuster as defined in s. 626.854, or an independent adjuster as defined in s. 626.855. An adjuster may be designated as a primary adjuster for only one adjusting firm location.

Primary adjusters must be designated by submitting a properly completed form DFS-H2-6364 to the Department. There is no cost to designate a primary adjuster but it could cost you disciplinary action including a fine for failing to do so.

[See Section 626.8695, Florida Statutes]

Altering Certificates of Insurance

Any insurance agent or agency who alters or modifies the wording on a property and casualty certificate of insurance without approval by the issuing insurer is in violation of Florida's Unfair Insurance Trade Practices Act. This violation risks severe penalties including but not limited to fines by the Department and/or loss of their insurance license. Agents and agencies should not comply with any request to place wording on a Certificate or Evidence of Insurance that is not supported by the policy. Additionally, all such requests or demands by any lending institution and/or mortgage broker should be reported to the Florida Office of Financial Regulation at (850) 487-9687 or at http://www.flofr.com.

[See Section 626.9541(1)(a), Florida Statutes, and Informational Memorandum OIR-03-003M]

Fingerprinting Requirement of Licensed Firms/Entities Reminder

If there is a change in ownership or control of any entity licensed under Chapter 626, F.S., or if a new partner, officer, or director is employed or appointed, a set of fingerprints of the new owner, partner, officer, or director must be filed with the Department within 30 days after the change. This includes insurance agencies, title insurance agencies, travel agencies holding a travel insurance license, managing general agents, firm reinsurance intermediary brokers, as well as others. The acquisition of 10 percent or more of the voting securities of a licensed entity is considered a change of ownership or control. Please note that for insurance agencies fingerprints need not be filed for any individual who is currently licensed and appointed.

If you are required to be fingerprinted, you must do so through Florida's vendor, MorphoTrust USA, formerly L-1 Enrollment. You can register, request fingerprint cards to be mailed to you, and pay for fingerprinting by visiting www.L1enrollment.com/FLInsurance or by calling 1-800-528-1358. The fingerprinting fee is $55.50.

[See Section 626.202, Florida Statutes]

Working in the Industry After Being Suspended or Revoked

The Florida Insurance Code clearly states that it is unlawful during the period of suspension or revocation of a license or appointment for the former licensee to engage in or attempt or profess to engage in any transaction or business for which a license or appointment is required. This prohibition extends until the license is reinstated or, if revoked, a new license issued. Furthermore, the former licensee or appointee may not directly or indirectly own, control, or be employed in any manner by an agent, agency, adjuster, or adjusting firm.

Any former licensee or appointee in violation of this law commits a felony of the third degree, subjecting themselves to further action by the Department up to and including criminal prosecution

Before hiring someone to work at your agency or firm we suggest you check to ensure that their license is not currently suspended or revoked.

[See Sections 626.015 and 626.641, Florida Statutes]