Volume 5, No. 6 - June 2016

In The Know

- Keeping you informed is what it's all about

2016 Legislative Update

Some of the laws that affect applicants and licensees of the Department were changed in the 2016 legislative session. For more information, review Chapters 2016-132 and 202 of the Laws of Florida. All laws shown are effective July 1, 2016 unless otherwise noted.

Department of Financial Services

Cat Fund Assessments, §215.555, F.S.

Extends the current exemption for medical malpractice insurance premiums from emergency assessments of the Florida Hurricane Catastrophe Fund (Cat Fund) from May 31, 2016, until May 31, 2019.

Public Adjusters, §626.854(2)(b), F.S.

Provides that a licensed health insurance agent who assists an insured with coverage questions, medical procedure coding issues, balance billing issues, understanding the claim filing process, or filing a claim is not acting as a public adjuster.

Florida Surplus Lines Service Office, §626.921, F.S.

Authorizes the DFS to select five persons nominated by the Florida Surplus Lines Association to serve on the Florida Surplus Lines Service Office (FSLSO) Board of Governors.

Surplus Lines Agent Affidavit, §626.931(1), F.S.

Allows a surplus lines agent who has not transacted business during a quarter exemption from filing an affidavit with the FSLSO.

Sinkhole Neutral Evaluation Program, §627.7074, F.S.

Changes the qualifications of neutral evaluators under the DFS Sinkhole Neutral Evaluation Program to prohibit an individual from acting as a neutral evaluator on a claim if that individual was employed, within the previous five years, by the firm that did the initial sinkhole testing.

Life Insurance Policies Covering Burial-Related Expenses, §626.785(1)(d), F.S.

The statute change increased the amount of coverage an insurance agent can sell for insurance policies used to cover burial-related expenses. The amended statute increases the policy coverage maximum to $21,000 plus an annual increase based on the Consumer Price Index (CPI), beginning with the 2016 CPI.

Effective April 8, 2016. Chapter 2016-202, Laws of Florida.

Agent Compensation for Health Insurance Policies, §626.593, F.S.

The amended law allows health insurance agents providing services related to individual health plans to enter a contract with the premium payor for fee-based compensation in lieu of commissions. Any commissions earned must be lawfully rebated to the person paying the premium.

Effective April 8, 2016. Chapter 2016-202, Laws of Florida.

Citizens Property Insurance Corporation

Depopulation, §627.351(6), F.S.

Changes to the current depopulation procedures include the requirement that Citizens communicates the take-out offers, not the take-out company; notice of the offer must include information that compares the coverage and estimated premium for each take-out offer, and must advise its policyholders that they can accept or reject any offer. The changes must be in place by January 1, 2017.

Confidential Underwriting Files §627.351(6), F.S.

Expands the list of of who may receive confidential underwriting and claims files to include entities that have become an authorized insurer, a reinsurer, a licensed reinsurance broker, a licensed rating organization or modeling company. The information must only be used for the specific purpose of developing a take-out or rating plan or analyzing risks for underwriting in the private market. The law expressly prohibits an insurance agent from using the data to solicit policyholders.

Agent Appointments, §627.351(6), F.S.

Requires Citizens to only appoint agents who maintain an appointment under §626.015(3), F.S., by an insurer who is authorized to write and is actually writing or renewing personal lines residential property coverage, commercial resident al property coverage, or commercial nonresidential property coverage within the state.

Effective July 1, 2016. Chapter 2016-229, Laws of Florida

Motor Vehicle Insurance

Motor Vehicle Insurance Rating, §627.0651, F.S.

Allows use of a single zip code rating if the rates are actuarially sound and are not excessive, inadequate or unfairly discriminatory.

Return of Unearned Premium, §627.7283, F.S.

Allows an insured to apply unearned premium to any policies issued to the insured by an insurer upon cancellation of a motor vehicle insurance policy by the insurer or insured.

Effective July 1, 2016. Chapter 2016-133, Laws of Florida

Health Insurance

Out-of-Network Health Insurance Coverage, §627.662, §627.6471, §627.64194, §626.9541

Prohibits out-of-network providers from balance billing members of a PPO or EPO for emergency services or for nonemergency services when the nonemergency services are provided in a network hospital and the patient had no ability and opportunity to choose a network provider, establishes standards for determining reimbursement to the providers, and authorizes providers and insurers to settle disputed claims under the statewide provider and health plan claim dispute resolution program.

Effective July 1, 2016. Chapter 2016-222, Laws of Florida

PIP Eligible Health Care Clinics, §627.736, F.S.

The change to the law allows medical clinics managed by a licensed health care practitioner (who has certain specified responsibilities) and owned, directly or indirectly, by a publicly traded corporation that has $250 million or more in total annual sales of health care services to receive reimbursement from insurers for PIP medical services without having to be licensed under the Health Care Clinic Act.

Effective July 1, 2016. Chapter 2016-133, Laws of Florida

Citizens Reinstates Disciplinary Process for Binding Violations

Citizens is reinstating the performance standards and disciplinary process for binding violations that are issued on new-business applications submitted on or after July 1, 2016. For more information, read the complete Personal Lines Bulletin at Citizens' website.

Hurricane Season is Here - Public Adjuster Compliance Reminders

  • Is your license active?
  • Are you self-appointed or appointed by an adjusting firm?
  • Do you have the required $50,000 surety bond?
  • Are you compliant with your continuing education requirements?
  • Has a primary adjuster been designated for your firm?
  • Is all contact information up-to-date? You can update it at MyProfile.
  • Are any apprentices licensed and appointed?
  • Do you have your Department issued license with you?

State of Emergency Claims - Special Requirements Upon Governor's Declaration

Earlier this month, Governor Rick Scott declared a State of Emergency for tropical storm Colin. For claims that are based on events that are the subject of a declaration of a state of emergency by the Governor, and during the year after the declaration of emergency:

  • A public adjuster may not charge, agree to, or accept from any source compensation, payment, commission, fee, or any other thing of value in excess of ten percent (10%) of the amount of insurance claim payments made by the insurer for claims for one year after the declaration of emergency is issued.
  • The insured or claimant has 5 business days after the date on which the contract is executed to cancel a public adjuster’s contract.

The following are excerpts of the standards of conduct that define ethical behavior, and are included in the code of ethics:

  • The work of adjusting insurance claims engages the public trust. An adjuster shall put the duty for fair and honest treatment of the claimant above the adjuster’s own interests in every instance.
  • An adjuster shall not attempt to negotiate with or obtain any statement from a claimant or witness at a time that the claimant or witness is, or would reasonably be expected to be, in shock or serious mental or emotional distress as a result of physical, mental, or emotional trauma associated with a loss.
  • An adjuster shall not directly or indirectly refer or steer any claimant needing repairs or other services in connection with a loss to any person with whom the adjuster has an undisclosed financial interest.
  • A public adjuster shall not prevent, or attempt to dissuade or prevent, an insured or claimant from speaking privately with the insurer, company employee adjuster, independent adjuster, attorney, or any other person, regarding the settlement of the claim.
  • A public adjuster shall not enter into a contract or accept a power of attorney which vests in the public adjuster the effective authority to choose the persons who shall perform repair work.

Please refer to Section 69B-220.201, Florida Administrative Code for the full Adjuster Code of Ethics.

The 2015 Florida Statutes Now Available Online

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