Volume 4, No. 3 - March 2015

In The Know

- Keeping you informed is what it's all about

Reporting of Actions - Criminal, Administrative, Securities 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 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. An example would be an action taken against a license or registration for violations of state or federal securities or commodities law, such as an action taken by FINRA. 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, which may also satisfy reporting requirements for other states you are licensed in.

*Securities regulatory agencies include but are not limited to the U.S. Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and state securities regulators such as the Florida Office of Financial Regulation.

Agency and Firm Owners: Check Your New Employees' Background

Agency and firm owners have an obligation to check the backgrounds of individuals they hire for administrative action history with the Department and for criminal history. Employing an individual with a suspended or revoked license can lead to action against your own license and possible criminal charges.

Florida law states that during the period of suspension or revocation of a license or appointment, and until the license is reinstated or, if revoked, a new license issued, the former licensee or appointee may not engage in or attempt or profess to engage in any transaction or business for which a license or appointment is required. Additionally, they may not directly or indirectly own, control, or be employed in any manner by an agent, agency, adjuster, or adjusting firm.

It is also important to know the criminal background of individuals employed in your agency. Some licensees, such as bail bond agents, are prohibited from allowing convicted individuals to work in their agencies. A person who has been convicted of or who has pled guilty or no contest to a felony or a crime involving moral turpitude or a crime punishable by imprisonment of 1 year or more regardless of whether adjudication of guilt was withheld, may not act in any capacity for a bail bond agency or participate as a director, officer, manager, agent, contractor, or employee of any bail bond agency or office. Any person who permits a person who has been convicted to do so can be charged with a third degree felony.

[See 626.342, 626.621, 626.641, 648.387, 648.44, and 648.441, Florida Statutes]