Volume 5, No. 7 - July 2016

Compliance Corner

This section has been created to assist you in keeping your insurance business in compliance. The items are intended as reminders only. Note: Division publications may include references to the Florida Statutes and/or the Florida Administrative Code. The laws noted in our publications are/were in effect at the time of publication but may have been repealed, amended or replaced and new laws may have been enacted subsequently.

Compliance Topic of the Month ~ Transacting Insurance - License Required

Florida Statutes s.626.112(1)(7) are the fundamental laws that require individuals and entities to obtain a license before advertising or "transacting" insurance in the state of Florida. What is "transacting insurance"?

Section 624.10, F.S,. defines transacting " with respect to insurance, includes any of the following" activities or actions:

Solicitation or inducement
Preliminary negotiations
Effectuation of a contract of insurance
Transaction of matters subsequent to effectuation of a contract of insurance and arising out of it.

"Solicitation" as defined in s.626.112,(1)(b)(1.-6.), F.S. ", as the" attempt to persuade any person to purchase an insurance product" by:

1. Describing the benefits or terms of insurance coverage, including premiums or rates of return;

2. Distributing an invitation to contract to prospective purchasers;

3. Making general or specific recommendations as to insurance products;

4. Completing orders or applications for insurance products;

5. Comparing insurance products, advising as to insurance matters, or interpreting policies or coverages; or

6. Offering or attempting to negotiate on behalf of another person a viatical settlement contract as defined in
s. 626.9911, F.S.

Any person (or entity) who knowingly transacts insurance or otherwise engages in insurance activities in this state without a license in violation of this section commits a felony of the third degree, punishable as provided in s.775.082, s.775.083, or s.775.084, Florida Statutes.

Life and Health Advertising

Life and health advertising must have the prior approval of the benefiting insurance company before being disseminated. Any advertisements approved by the insurer should be used exactly as approved. See Rule 69B-150.013(10), F.A.C.

When advertising for life, health or annuity products, if there is a reference in the advertisement to a specific policy feature, interest or bonus rate, premium amount, etc., the name of the insurer issuing the policy needs to be disclosed in the advertisement. Furthermore, that insurer needs to approve the advertisement prior to dissemination. Making any alterations to an advertisement that has already been approved by the insurer could cause it to no longer be compliant. See 69B-150.114, F.A.C.

Contractor Advertising

If you are a public adjuster and a contractor advertising your services to the public for the construction or repair of a covered property that may result in the property owner filing for reimbursement of your fees under their insurance policy, you should be sure that your advertising or solicitation materials do not imply that you will, as referenced in the definition of a public adjuster:

    • Aid 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.

The use of phrases such as those listed here may imply that you will assist in adjusting the claim: “We handle insurance and claims negotiations", “We have the skill and knowledge to handle the entire claim process ”, “We will take care of processing your insurance claim ” or ”We can reopen insurance claims on behalf of homeowners ”. It is unlawful for a public adjuster to act as a public adjuster on a claim for which that adjuster is also acting as a contractor.

Prohibited Bail Bond Agency Personnel

The following persons are prohibited from owning or being employed by a bail bond agency. Refer to sections 648.285, F.S. and 648.44(2), F.S.

  • Jailers or persons employed in any jail
  • Police officers or employees of a law enforcement agency
  • Judges, employees of a court, or employees of the clerk of any court
  • Sheriffs and deputy sheriffs or employees of any sheriff’s department
  • Attorneys
  • Persons having the power to arrest or persons who have authority over or control of prisoners
  • Any person who has been convicted or pleaded guilty or no contest to a felony or a crime involving moral turpitude
  • Any person who previously had their license to be a limited surety (bail bond) agent, temporary bail bond agent or professional bail bond agent revoked.

Lawful Title Agency Closing Services

The Florida Statutes defines closing services as the services performed by a licensed title insurer, title insurance agent or agency, or attorney agent in the agent’s or agency's capacity as such, including, but not limited to, preparing documents necessary to close the transaction, conducting the closing, or handling the disbursing of funds related to the closing in a real estate closing transaction in which a title insurance commitment or policy is to be issued.

This means the closing services fee listed on the settlement statement form is to include all the fees and charges made by the agency to close and complete the transaction. Consumers should not be charged additional fees in addition to the amount listed as the closing or settlement services fee on the settlement statement form.

Examples of fees that should not be listed as separate line items on the form include, but are not limited to:

  • Postage and handling
  • Notary services
  • Copies
  • Digital documents
  • Document preparation fees
  • Document storage or warehousing fees
  • Electronic conversion of documents to CD or DVD formats

Agencies that charge additional fees as separate line items may be found to be engaging in deceptive practices against Florida consumers in violation of the Florida Statutes. The penalty for violations such as this can be as strong as suspending or revoking the license of the agent and the agency involved in the practice. Agencies may provide consumers with an itemized listing of the fees and charges that comprise the closing services fee being charged. This itemized listing would be in addition to the settlement statement form and the amounts included would need to total to the same number listed on the settlement statement form as the closing services fee.

No other charges are authorized by the Florida Statutes to be charged by a title insurance agent or agency for these services.

Title Agency Data Call 2016

2016 marks the second year title insurance agencies are required under s.626.8437(11), F.S. to submit information to the Florida Office of Insurance Regulation (OIR) under the data call required by section 627.782(8), Florida Statutes. Title agencies had until May 31, 2016, to make their submission to the OIR. The OIR sent emails to each licensed title agency in Florida to remind them of the law with instructions on how to complete the process accurately.

Based on the preliminary information we have received from the OIR, more than 250 licensed agencies have failed to submit a report.

Agencies that did not comply with this requirement by May 31, 2016, now face possible disciplinary action against the agency’s license.

If you have any questions regarding this filing process, please contact the OIR's Market Data Collections Unit at 850-413-3147 or via email: TitleAgencyReporting@floir.com.

Compliance Information

Department licensees and consumers can access compliance information at the Division's web page Compliance Information. Additional information is available by type of license at our Frequently Asked Questions web page.