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 Laws of Florida.. 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 pre-licensing 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 pre-licensing and examination exemptions for some applicants, including:

• Customer representative - the pre-licensing course and examination will no longer be required. Applicants who have earned a degree which includes 9 hours of insurance instruction in areas specific to property and casualty insurance or hold certain designations specified in law will qualify.

• General lines and all-lines adjuster licenses - exempt from the pre-licensing 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), is added to the other designations which can exempt an applicant from the pre-licensing course and adjuster examination.

• Personal lines - exempts the pre-licensing 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 pre-licensing 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.

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

Pre-licensing Education

Sec. 626.2817(3), F.S. - clarifies that 75% of a pre-licensing 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 pre-licensing 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 pre-licensing education courses for life agents, which are combined with another license type, must be a minimum of 60 hours in length.

Sec. 626.8311, F.S. - requires the coursework a health agent takes be specific to the lines of insurance the license authorizes them to sell. This includes all categories of health insurance.

Specifies that pre-licensing education courses for health agents, which are combined with another license type, must be a minimum of 60 hours in length.

What this means:

Stand alone life or health courses will remain 40 hours; however, combination life and health courses must now be at least 60 hours and cover 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. 

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, and 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.