Volume 4, No. 11 - November 2015

In The Know

- Keeping you informed is what it's all about

Review Your Lender Closing Instructions Carefully

We reviewed the following article recently published by the Florida Bar Realty and Trust Law Section, which shared important information with its members. We are sharing this with all of our licensees.

Representatives of the title insurance industry regularly meet with officials from the Florida Office of Insurance Regulation ("OIR") and the Florida Department of Financial Services ("DFS") regarding the regulation of the industry. These meetings focus primarily on forms, rules, and related industry matters.

At a recent meeting, OIR officials focused comments on Sec. 626.9541(1)(a), F. S. That provision reads in pertinent part, "(1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS.-The following are defined as unfair methods of competition and unfair or deceptive acts or practices: (a) Misrepresentations and false advertising of insurance policies. Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any ... statement ... which: 1. Misrepresents the benefits, advantages, conditions, or terms of any insurance policy:"

OIR noted that some lender's general closing instructions require the title agent to make assurances about coverage that may not comply with Florida law, specifically Sec. 627.777, F.S., or Chapter 690-196, F.A.C. Affirmative coverage was cited as an area of concern.

For example, one major lender requires in their general lender closing instructions the following:

Express affirmative coverage against loss is required in connection with each exception which adversely affects the property, such as easements, encroachments, violations of restrictions, common walls, overhang of eaves, porches, decks, roofs, etc.

OIR officials indicated that the title agent that assents to such a closing instruction and agrees to give affirmative coverage over any easement otherwise excepted on Schedule B is possibly misrepresenting the terms of the policy that will ultimately be issued to the lender because such coverage can not be given. While the facts of a given title will control the final analysis, rarely are those available at the time the general loan closing instructions are presented. There was further discussion about the possibility that the requesting lender may violate the statute by making an inappropriate demand.

While we are unaware of any specific instances of enforcement by OIR or DFS against title agents or attorneys, OIR has taken this position against casualty insurance agents that alter a homeowner policy binder or Evidence of Property Insurance ("EPI") to indicate to the lender that the policy covers "full replacement costs" or similar words that misrepresent the actual coverage.

The practice take away should be apparent. Pay attention to both general and special loan closing instructions and negotiate adjustments as appropriate. Failure to do so may result in substantial penalties under Sec. 626.9521, F.S. to both you and the requesting lender.

James C. Russick
V.P. Florida State & Gov't Affairs Counsel
Old Republic National Title Insurance Company

(This article was originally published in the Fall 2015, issue of Action Line, a Florida Bar Real Property and Trust Law Section publication.)

Citizens Accepting Electronic Signature Submissions

On August 1, 2015, Citizens began accepting agents’, applicants’ and policyholders’ electronic signatures (also called esignatures) on all required documents, with two exceptions that require “wet” signatures:

• Due to statutory requirements, policyholder statements to exclude windstorm coverage and/or contents coverage
• Notarized forms and required forms signed by a customer’s authorized representative

• Submitting esignatures on required documents is voluntary.
• Esignatures must be obtained through the use of third-party esignature providers.
• Forms signed with esignatures must be submitted to Citizens via PolicyCenter® and ePAS, as applicable.
• Agents and agencies using esignatures are responsible for all associated costs and for ensuring that such use complies with all applicable state and federal laws and regulations.
• Agents and agency principals are encouraged to review their respective Agent Appointment Agreement and Agency Agreement documents and must continue to comply with such agreements. In particular, note the provisions of the agreements pertaining to Records Custody and Retention and Citizens’ Confidential Information.

The ability to use electronic signature is a request that has been on the Agent Roundtable (ART) action list for some time. The ART provided information about the electronic signature process, and several members participated in the pilot earlier this year. They are pleased that this request is now a reality.

Note: This information was reprinted with permission from Citizens Property Insurance Corporation.

Marking Emails from the Department as SPAM

If a licensee marks an email notification from the Department as SPAM, they may not get our future emails but will still be held responsible for complying with the Florida Insurance Code. We have become aware that some licensees mark our communications as SPAM accidentally since they are quickly marking a lot of messages in their Inbox as SPAM. Please be sure to pay close attention when you are doing this as it could cause you to unknowingly miss important information about your license and compliance issues.

For example, we notify you via email that your CE requirement is due and you mark the message as SPAM. Our system receives notification of this then marks your email address as an invalid email address and no longer send emails to it. From that point on, you do not receive the email notifications we attempt to send to you. These emails would have let you know that you have passed your CE due date and you stand to lose any and all appointments you have. If you go four years without an appointment, your license expires. That one simple click marking our message as SPAM can lead to this situation. Unfortunately, if it reaches this final point of the license expiring, you may have to re-qualify as a first-time applicant, including passing an examination.

Additionally, if we receive a bounced response to an email notification we send you, our system will mark your email address as an invalid email address and no longer send emails to it. If your email address changes, you are required by law to notify us under 626.551, F.S., within 30 days or you may be subject to a $250 fine for the first offense. This update can be made through your MyProfile account.

Agents/Brokers: Important NPN Tips for Re-enrollments

The Centers for Medicare & Medicaid Services (CMS) would like to provide you with a few tips to ensure that your National Producer Number (NPN) is retained when your clients re-enroll in coverage through the Marketplace for plan year 2016.

Please note that the following guidance applies only to the Marketplace for Individuals and Families. NPNs are automatically carried over when agents and brokers assist small employers when logged into the Small Business Health Option Program (SHOP) Marketplace Agent/Broker Portal.

Tip #1: When helping a consumer use the “Side-by-Side” (i.e., Marketplace) enrollment pathway at HealthCare.gov, check to see if your NPN is included on the application. If not, have the consumer enter it before the consumer closes out the application. Ensure the consumer enters the correct NPN and then direct the consumer to click “Save & Continue” to move forward. If contacting the Marketplace Call Center about a consumer’s application, ensure your NPN is still associated with the application. If your NPN is not there, consumers may have the Marketplace Call Center add or re-enter your NPN to an application when making updates to it.

Tip #2: When helping a consumer with a renewal for plan year 2016 using the Direct Enrollment pathway, make sure to move the consumer through “Report a Life Change” to make updates and confirm information. If an application submitted via Direct Enrollment last year is not touched by you this year, the auto re-enrolled application may not contain your NPN; thus, this NPN may not be included in the enrollment transaction sent to the issuer. If you continue to the partner (i.e., issuer or web-broker) website after helping the client use “Reporting a Life Change” and selecting the same or a new qualified health plan (QHP), your NPN will be generated on the enrollment transaction sent to the issuer.

If you have a legitimate reason to believe you should be credited for a Federally-Facilitated Marketplace (FFM) enrollment, but have not been credited for it, you should contact the respective QHP issuer directly to discuss the specific situation. If the QHP issuer believes you did, in fact, assist a consumer, but the NPN was erroneously left off of the enrollment transaction, the QHP issuer may pay the commission accordingly. Please note that agents and brokers must meet registration requirements prior to assisting with an FFM application to be credited for the enrollment transaction. For more information about plan year 2016 FFM registration requirements, please visit the Agents and Brokers Resources webpage.

For general questions about the agent and broker program, please email the FFM Producer and Assister Help Desk at FFMProducer-AssisterHelpDesk@cms.hhs.gov. You may also contact the Agent and Broker Call Center by calling 1-855-CMS-1515 (855-267-1515) and selecting option “1.” Call Center Representatives will be available Monday through Saturday from 8:00 AM to 10:00 PM Eastern Time (ET) and will also be available during limited hours on Sundays and holidays through November. Please note that this call center will not have access to consumer information and will not be able to handle specific questions or issues with a consumer’s application. Agents and brokers should continue to call the Marketplace Call Center at 1-800-318-2596 for assistance related to enrolling consumers into coverage through the Individual Marketplace. For assistance related to coverage through the SHOP Marketplace, contact the SHOP Call Center at 1-800-706-7893.

The 2015 Florida Statutes Now Available Online

The most current Florida Statutes can now be viewed at Online Sunshine - Title XXXVII Insurance.