Insurance Insights header
Volume 2, No. 2 - March 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.

Contractors Adjusting Insurance Claims

By contractors assisting their customers with their insurance claims, they may be engaging in the practice of public adjusting without being properly licensed by the Florida Department of Financial Services.

The definition of a public adjuster, as explained in Section 626.854, Florida Statutes, is any person, except an attorney, who, for money or any other thing of value (which would include securing a contract for repairs):

  • Prepares, completes or files an insurance claim form for an insured.
  • Aids in any manner on behalf of an insured in negotiating for or effecting the settlement of a claim.
  • Advertises or solicits for employment as an adjuster of such claims.

However, a contractor may discuss or explain a bid for construction or repair of covered property with the residential property owner who has suffered loss or damage covered by a property insurance policy, or the insurer of such property, if the contractor is doing so for the usual and customary fees applicable to the work to be performed as stated in the contract between the contractor and the insured.

If a contractor is acting as a public adjuster in any manner by negotiating or effecting the settlement of an insurance claim on behalf of an insured and they are performing any of these services for money, commission or anything of value without being licensed as a public adjuster, they could be subject to a cease and desist order and could also be be charged with a third-degree felony as provided by Section 626.8738, Florida Statutes.

"A public adjuster may not participate, directly or indirectly, in the reconstruction, repair, or restoration of damaged property that is the subject of a claim adjusted by the licensee; may not engage in any other activities that may be reasonably construed as a conflict of interest, including soliciting or accepting any remuneration from, of any kind or nature, directly or indirectly; and may not have a financial interest in any salvage, repair, or any other business entity that obtains business in connection with any claim that the public adjuster has a contract or an agreement to adjust."

The Florida Department of Financial Services has taken administrative action against licensed contractors for acting as a public adjuster without being licensed.

If you should have any questions about what activities constitute acting as a public adjuster, please contact the Florida Department of Financial Services at 850-413-3136 or through its website, http://www.MyFloridaCFO.com.

[See Sections 626.854 and 626.8738, Florida Statutes]

Reporting of Actions - Criminal, Administrative, and Other

Subsection 626.451(7), F.S., requires each licensee to advise the Department within 30 days after having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of one year or more under the laws of the United States, any state of the United States, or any other country, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases.

Section 626.536, F.S., requires each licensee (including insurance agencies) to submit to the Department a copy of the order, consent order, or other relevant legal documents within 30 days after the final disposition of any administrative action taken against the licensee by a governmental agency or other regulatory agency in this or any other state or jurisdiction relating to the business of insurance, the sale of securities, or activity involving fraud, dishonesty, trustworthiness, or breach of a fiduciary duty.

Subsection 626.6215(6), F.S., requires that agencies and their officers to advise the Department within 30 days after an individual licensee's violation is known or should have been known by one or more of the partners, officers, or managers acting on behalf of the agency. Actions taken against a license or registration for violations of state or federal securities or commodities law, such as an action taken by FINRA, are an example. Failure to do so could result in administrative action against the license(s) of the agency and/or majority owner, officer, partner, manager, director, or other person who manages or controls the insurance agency.

Actions may be reported via the NIPR's Attachment Warehouse, or by mailing the appropriate documents to us at:

Florida Department of Financial Services
Division of Agent and Agency Services
Bureau of Licensing
200 E. Gaines Street, Room 419
Tallahassee, FL 32399-0319

[See 626.451(7), 626.536, 626.621(13), and 626.6215(6), Florida Statutes]

Moving to Florida? Leaving Florida? You May Need a New License

If you are licensed and appointed as a Florida nonresident agent or adjuster and you move to Florida, you can continue to transact insurance or adjust claims in this state under your nonresident license and appointments, for a period not to exceed 90 days. However, you must apply for and become licensed and appointed as a resident agent or adjuster within 90 days of becoming a resident of this state. Section 626.741(5), Florida Statutes, governs this procedure for general lines agents. Similar language is in the laws governing other types/classes of agents and adjusters.

If you have a Florida resident license and move to another state, you must surrender your resident license to the Department, unless your principal business address remains in Florida. Most states require you to give up your Florida license before you can obtain a resident license in that state. Once you have obtained a resident license in your new home state, you may submit an application to us if you wish to become licensed as a Florida nonresident agent or adjuster.

If you have a Florida nonresident license and you move to a state other than Florida, you may be eligible for a nonresident license if: 1) you become licensed in the other state for the same type/class(es) of license, and 2) the other state has a reciprocal agreement with Florida. You may need to provide the Department with a letter of certification from your new home state if we request it.

In all of the above cases, you must also be properly appointed for each type/class of license you hold, before you can transact insurance or adjust claims.

If you no longer wish to transact insurance or adjust claims, you must surrender your license to the Department.

[See 626.292 and 626.551, Florida Statutes]