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Volume 2, No. 5 - June 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.

Aiding and Abetting - Don't Become a Victim!

Over the last few years the agent in charge of a general lines insurance agency would ask his unlicensed nephew to "watch the store" when everyone else at the agency went to lunch. While they were away, the nephew solicited and negotiated policies; even collected premiums as he sold insurance policies. The agent in charge, while not even present, violated Section 626.621(12) of the Florida Statutes.

The statutes provide that anyone knowingly aiding, assisting, procuring, advising or abetting any person in the violation of a provision of the insurance code, any order or rule of the Department, faces discretionary suspension or revocation of their insurance license.

In another scenario, a licensed sales manager was approached by a company representative to sell their product. The new policy had magnificent benefits, limited exclusions, a dirt-cheap premium and the company was paying a soaring commission. The sales manager provided the promotional material furnished by this new company to his team and encouraged them to market it. However, no one researched the Florida Office of Insurance Regulation's website (www.floir.com/CompanySearch) to determine if the new company was an authorized insurer. As bad luck would have it, the company was not authorized in Florida. As above, the sales manager did not transact the first policy, yet he was in violation of s. 626.621(12), F.S.

The penalty for a violation of s. 626.621(12), F.S., is addressed in Rule 69B-231.090, F.A.C., as a six-month suspension.

Keep in mind, when a licensee helps someone commit a violation of the insurance code, they may be charged with aiding and abetting, even if they played only a minor role in the "team effort."

[See 626.621, Florida Statutes, and 69B-231.090, Florida Administrative Code]

Bail Bond Agencies - What Can't Unlicensed Personnel Do?

Bail bond agents should familiarize themselves with the laws governing their profession, particularly where it comes to what unlicensed personnel in your bail bond agency are prohibited from doing.

The following can only be done by a licensed bail bond agent:

  • solicit bail bond business
  • negotiate bail bond business
  • effectuate bail bond business
  • engage in bail bond business
  • execute bail bonds
  • sign bail bonds
  • countersign bail bonds
  • pledge United States currency, United States postal money orders, or cashier's checks as security for a bail bond in connection with a judicial proceeding
  • handle collateral receipts
  • handle or accept collateral
  • accept initial premium payment
  • deliver bonds to appropriate authorities
  • presenting defendants in court
  • apprehending, arresting, and surrendering defendants to the proper authorities
  • keeping defendants under necessary surveillance
  • apprehend, detain, or arrest a principal on a bond
  • possess or execute any forms
  • possess or execute any powers of attorney
  • possess or execute any bond forms
  • possess or execute any collateral receipts

[See Chapter 648, Florida Statutes, and Chapter 69B-221, Florida Administrative Code]

For other agencies, such as general lines agencies, please refer to our guidance in the September 2012 issue of this newsletter.