Unfortunately, there are times when agents find themselves having to do something they hoped they'd never have to do...close their insurance agency. This article provides general guidelines for insurance agents who are closing an agency location.
Notify each insurance company that you represent of your intention to close the agency. Make arrangements to return the marketing materials and insured files, unless the company allows you to find a new servicing agent. The department requires that existing customers continue to be serviced either by a properly licensed and appointed agent, or by the company’s office personnel. Insurance agents who close an agency and do not make arrangements to properly service existing customers risk regulatory action by the department.
It is important that you alert any premium finance companies used by your agency. Let them know how to contact you if they have any questions about your existing book of business. If the insurance company has approved a new servicing agent, then you should give the premium finance companies that information.
The premium finance companies are not required to accept new business from the servicing agent, but may do so at their discretion. Finance companies hold you responsible for bank drafts considered to be in your possession.
You need to complete form DFS-H2-1997 to cancel the agency's license. It must be signed and dated by an officer of the business. Send the form to us once it is completed.
If you are not the owner of the agency, yet you are the agent in charge, you need to log in to the agency's MyProfile account to remove yourself as the agent in charge. This is especially important if the agency has been sold and a new agent will be servicing the policies. This notifies the department that you have stopped working at the agency and are no longer responsible for the new activities of the agent and staff in the agency.
Florida law states that every licensee must notify the department within 30 days after a change of name, phone number, e-mail or residence address, principal business or mailing address. Closing an agency indicates that you have relocated your principal place of business and possibly changed your mailing address as well. Simply log in to your MyProfile account for your agent license, and also for the agency license. (Please note that bail bond agents have only 10 workings days to notify the Department.)
Submit a mail forwarding order to the United States Postal Service for the agency mail and your personal mail. This will prevent policies, premiums, notices, etc., from being lost while the permanent address changes are being made.
Mail a notice to each customer, advising them of the closing of the agency and whom they can contact for service on their existing policies. If the insurance company has not yet approved a new servicing agent, then the notice should direct your customers to contact their insurance company for policy service. This notice should include an office telephone number for the servicing agent or insurance company.
Notify the department’s Division of Consumer Services of your agency’s closing in the event your customers contact them. You can do this by going to AskFLDFS and selecting "Consumer Services" as the recipient.
It is important to keep all bank accounts active until all outstanding checks have cleared. Checks returned due to insufficient funds will likely trigger a formal investigation by the Florida Department of Financial Services concerning the proper accounting and remittance of insurance fiduciary funds. Reminder: Section 626.611(10), F.S., prohibits withholding moneys belonging to others in the conduct of business under a license issued by the department.
Florida law requires every licensee to preserve books, accounts and records pertaining to a premium payment for at least three years after payment. Any agent closing an insurance agency must make provisions for the records to be available for inspection in accordance with law. You can comply with the law by transferring the files to a new servicing agent or returning the files to the appropriate insurance company. Keep detailed records of any files you have transferred. Do not throw documents containing confidential or personal information into the garbage without following the appropriate destruction methods. Keep in mind other rules such as the HIPAA Privacy Rule when transferring or disposing of agency files and records.
Any lease or rental agreement entered into by you for conducting your agency business likely remains binding until both parties agree to end the contract. Closing the agency doors and not returning to the location does not end your obligation to pay rent. This is true of all rental agreements, including those for computers, postage machines, copiers, telephone systems and fax machines. You are responsible for paying all utility bills until the utility company terminates or transfers the account. If you have any questions regarding these matters, seek private legal counsel.