Volume 5, No. 4 - April 2016

In The Know

- Keeping you informed is what it's all about

Recent Change Allows Health Insurance Agents to Charge a Fee in Lieu of Commissions

Florida health insurance agents can now lawfully enter into a contract with a consumer and charge a flat fee in lieu of receiving commissions from the insurer for individual health policies. The law went into effect when Senate Bill 1386 was signed by Governor Scott on April 8, 2016.

Introduction of the legislation was spurred by the elimination or significant reduction of commission payments to agents by a number of health insurers for some individual health policies.

As with contracts for fee-based compensation for group health policies, it is critical that all requirements of the law be met in order for an agent to lawfully charge a fee to a consumer. Requirements include effectuating a written contract between the agent and the party to be charged, and stating the fee and the services that will be provided in consideration of the fee. The contract must also inform the consumer that any commission or compensation paid to the agent or agency by an insurer or other persons or entities in consideration for the policy written will be promptly rebated to the party (consumer) named in the contract.

Lawful compensation is limited to specific services by the licensee, such as giving or offering advice, counsel, recommendation, or information in respect to the terms, conditions, benefits, coverage, or premium of insurance policies.

[The relevant Florida Statute, s.626.593, has not been updated at Online Sunshine as of publication.]

Reminder: Florida Surplus Lines Service Office (FSLSO) fee decrease

Effective April 1, 2016, new and renewal policies with an effective date on or after April 1, 2016 will incur a FSLSO Service Office fee of 0.15% of the total gross premium as defined in Florida Statute 626.9325. The fee percentage charged on the premium is based on the effective date of the policy. The fee is applicable to Florida single state policies only.

The FSLSO Service Office fee for all subsequent endorsements applicable to policies effective prior to April 1, 2016 will be the same percentage as the inception date of the policy being endorsed.

Again, the FSLSO Service Office fee percentage charged on the premium is based on the effective date of the policy. Click here for an electronic copy of the bulletin referencing this change.

Agents/Brokers: Upcoming CMS Consumer Protection and PII webinar

The Centers of Medicare & Medicaid Services (CMS) will host a “Protection Requirements and Appropriate Usage of Consumer’s Personally Identifiable Information (PII)” webinar on Wednesday, May 11, 2016 from 1:00 PM to 2:30 PM Eastern Time. The webinar will review:

  • The standards of conduct for agents and brokers
  • Requirements for protecting and using consumer PII
  • Other best practices and guidance related to consumer PII

The webinar will also highlight new requirements for protecting PII as documented in the Department of Health & Human Services' Notice of Benefit and Payment Parameters for 2017 Final Rule (Payment Notice) and the Final 2017 Letter to Issuers in the Federally-facilitated Marketplaces (Letter to Issuers) that will be effective starting for plan year 2017.

To register for the webinar, please log in to www.REGTAP.info. If you have questions on the webinar registration process, visit the new “Upcoming Agent and Broker Webinars” section of the Agents and Brokers Resources webpage for more information.

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

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.