Volume 4, No. 6 - June 2015

In The Know

- Keeping you informed is what it's all about

2015 Legislative Update

Some of the laws that affect applicants and licensees of the Department were changed in the 2015 legislative session. For more information, review Chapter 2015-180 of the Florida Laws. All laws shown are effective July 1, 2015.

General Lines Agents Selling Health Insurance

Sec. 626.015(5)(d), F.S. - general lines agents can transact health insurance with any health insurer they are appointed with.

What this means:

The prohibition against general lines agents writing health insurance for companies other than those insurers that also sell property and casualty insurance was removed.

No additional license will be required as general lines agents are required to study health insurance in the general lines prelicensing course and take an exam that includes health insurance.

Agent in Charge Licensing and Appointment Reductions

Sec. 626.0428(4)(a), F.S. - an agency's agent in charge will now only be required to hold a minimum of two license types for the lines of insurance transacted at the agency. However, if the agency sells only one line of insurance, the agent in charge must hold that license type.

Expansion in Licensing Requirement Exemptions

Changes to sec. 626.221, F.S. and several other laws, expand prelicensing and examination exemptions for some applicants, including:

• Customer representative- the prelicensing course and examination will no longer be required. Customer representative who have earned a degree and the degree includes 9 hours of insurance instruction in areas specific to property and casualty insurance or hold certain designations such as Accredited Customer Service Representative (ACSR) will qualify.

• General lines and all-lines adjuster licenses - exempt from the prelicensing course and examination for applicants who have an insurance degree and 18 hours of college credits in areas specific to property and casualty insurance, or if they hold the CPCU designation from American Institute for Chartered Property and Casualty Underwriters.

• All lines adjusters - the Associate in Claims (AIC), CPCU or other designations can exempt an applicant from the prelicensing course and adjuster examination.

• Personal lines – exempts the prelicensing course and examination for applicants who have any degree, if the degree included 9 hours of insurance instruction in areas specific to personal lines, or if they hold the CPCU designation from American Institute for Chartered Property and Casualty Underwriters.

• Life, health, annuity and variable contract lines - creates an exemption from prelicensing course and the examination for applicants who hold any degree, if the degree included 9 hours of insurance instruction in the license area they are applying for, or if the applicant holds a CLU designation from the American College of Financial Services.

License transfers from another state Sec. 626.221(o) - applicants for nonresident licenses can qualify for a license transfer if the applicant holds a comparable license in another state with similar examination requirements as this state.

What this means: non-resident transfer applicants are no longer required to take a pre-licensing exam or hold certain designations or licenses.

The Bureau of Licensing will review each applicant’s exemption criteria to determine whether applicants are eligible for exemption.

Continuing Education

Sec. 626.2817(3), F.S. - clarifies that 75% of a pre-license course must be completed in order for a student to receive credit.

What this means: a provider can certify a student as having “completed” a prelicensing course provided the student attended 75% of the course. This does not mean a provider only has to teach 75% of the course.

Customer Representatives' Compensation

Sec. 626.753(1)(b), F.S. - allows agencies to pay customer representatives both salary and commissions instead of salary only. Also see Sec. 626.7354(3), F.S.

What this means: customer representatives can be paid some commission as long as the commissions don’t exceed their base salary.

Applicant Requirements for Knowledge, Experience or Instruction

Sec. 626.7851, F.S. - requires the coursework a life agent takes be specific to the lines of insurance the license authorizes them to sell.  This includes life insurance, annuities, and variable contracts (which includes variable life insurance and variable annuities). 

Specifies that certain professional designation courses can substitute for the required pre-licensure education for life agents.

What this means:

Allows the department to develop a combination course which covers multiple lines of insurance to satisfy the knowledge and instruction requirement provided the course is at least 60 hours and covers life insurance, annuities, variable products and health insurance.

Agent's Records

Sec. 626.748, F.S. - clarifies the law to require licensees to maintain records for five (5) years after policy expiration. 

Non-resident agent licensing exemption

Sec. 626.7851, F.S. - allows non-resident life agent applicants exemption from examination if they hold a comparable license in another state with similar examination requirements.

Recommendations to Surrender

Sec. 627.4553, F.S. - defines the term "surrender" to exclude actions that are not intended to be covered by the law, removes a reference to companies as the intent of the original law was to address improper agent conduct.

Requires that notification be given to the consumer by an agent in writing, rather than on a specific form created by the department.

Changes the requirement regarding the disclosure of tax consequences by insurance agents.