Volume 3, No. 9 - December 2014

Compliance Corner

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.

Life and Health Agents: Working from Home?

Many life and health agents rent space in a "virtual office" that are typically just conference rooms where the agent can meet with the clients outside of their home. However, the agent's home is usually the place where records are stored. Therefore the agent's home address should be listed as the business address on file with the Department, not the location of the rented space.

You can easily update your address (and other demographic information) online via your MyProfile account.

[See Sections 626.551 and 626.749, 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]

Bail Bond Agents: Temporary Bail Bond Agent Employment Reports

A temporary bail bond agent must be employed full time at the time of licensure, and at all times throughout the existence of the temporary license, by only one licensed and appointed supervising bail bond agent at a time. The supervising bail bond agent is the individual who supervises the work of the temporary bail bond agent and is responsible for the their conduct in the bail bond business.

The temporary bail bond agent along with the supervising bail bond agent are required to certify under oath monthly to the Department the hours worked each month. The employment reports are to be submitted no later than the last day of the month following the month being reported.

Failing to timely file an employment report is grounds for the temporary and supervising bail bond agents to be fined $500 each. Repeated violations are grounds to suspend the licenses of the supervising and temporary bail bond agents.

Filing a false certification is grounds for the immediate suspension of the license and imposition of a $5,000 administrative fine.

[See 648.355(1)(e), Florida Statutes, and Rule 69B-221.051(4) and 69B-241.110(6), Florida Administrative Code]

Title Agents: Title Insurer Rehabilitation Assessment Reimbursement, Policy Surcharge

We wanted to remind everyone of the new title insurance policy surcharge amount that will be added to any settlement statement (HUD-1) forms that include title insurance. This began effective September 2, 2014. NOTE: This surcharge is not related to the annual administrative surcharge of $200 due to the Florida Department of Financial Services ("Department").

The Department was appointed as the receiver for two (2) Florida based title insurers: National Title Insurance Company and K.E.L. Title Insurance Group. Under section 631.400, Florida Statutes, all title insurance underwriters writing business in Florida are liable for the expenses of the receivership. This is accomplished by assigning each title insurer with a share of the expenses that is proportionate to the share of the title insurance business written by that underwriter. For example, if a title insurer wrote 20% of all the title insurance policies issued in Florida last year, then they will pay 20% of the expenses.

The Florida Statutes (section 631.401) also provide for the current title insurers to be reimbursed for the amount they were assessed as their share of the receivership expenses. This is done by adding an amount to each new policy written until the full amount has been repaid. The per policy amount (surcharge) is calculated by the Office of Insurance Regulation. It is to be collected by the title insurer's agents until the assessment is paid in full.

The current amount of the surcharge is $3.28 per policy. This amount is comprised of:

  • National Title Insurance Company $ 0.28
  • K.E.L. Title Insurance Group $ 3.00

This amount is to be listed on the settlement statement form as a separate line item. It is not a premium and it is not listed as a premium on the settlement statement form. These amounts are indirectly assets of the estate of the insurer in rehabilitation.

The surcharge will usually be listed in the 1100 section of the current HUD-1 form as it is directly related to the title insurance industry. This will change next year when the current HUD-1 form is replaced by the new forms, which do not include the same line or section numbers.

It is important that each agency track these surcharge payments for each policy and forward them to the appropriate title underwriter in a timely manner. Failure to do so could result in action being taken by the against the title agency.

[See section 631.400 and 631.401, Florida Statutes]

Website with Compliance Information

There is a section on our website solely dedicated to compliance information. The section also provides consumers and licensees with an overview of the investigative process and many functions performed by our Bureau of Investigation. We encourage you to visit this section of our website and come back often as we update and add more information to it. You can visit the compliance site at www.MyFloridaCFO.com/Division/Agents/Compliance.