Volume 5, No. 11 - November 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 The laws noted in our publications are/were in effect at the time of publication but may have been repealed, amended or replaced and new laws may have been enacted subsequently.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 ~ Customer Representatives' Lawful Duties and Compensation

Occasionally, general lines agents and the 4-40 customer representatives (CRs) they supervise blur the lines when transacting insurance under their licenses and find themselves the subject of Department discipline. We've put together a primer to clarify the duties a CR can lawfully perform followed by those activities that can only be performed by a licensed General Lines agent:

Chapter 626, Part II General Lines Agents - please pay particular attention to section 626.7315, F.S. - Prohibition against the unlicensed transaction of general lines insurance. This section discusses activities that can be lawfully conducted only by a licensed and appointed general lines agent. Florida Statute sections 626.7352, 626.7353, and 626.7354 apply specifically to customer representatives.

Chapter 69B-213, Florida Administrative Code, provides additional guidance regarding customer representatives. Please review 69B-213.010, F.A.C. regarding “Duty to Supervise” which clarifies what the Department requires of a general lines agent that is supervising customer representatives. Department form DFS-H2-1124, "Designation of Supervising Agent for Customer Service Representative or Limited Customer Service Representative" must be submitted by the supervising general lines agent. If the supervising general lines agent is also the agent in charge, and the agency designates a new agent in charge, a new form must be completed and submitted by the new supervising general lines agent. The general lines agent and the CR must be licensed and appointed at all times.

A customer representative can only solicit business within the office or by phone from the office [see subsection 626.7315(1), F.S.], and cannot "run the office" during the extended absence of a general lines agent. In the case of more than an absence of the general lines agent, a new general lines agent must be appointed as the agent in charge to supervise the customer representative during the extended absence of the original supervising agent.

A customer representative can conduct activities under his/her license during an absence of the general lines agent, but the general lines agent must have daily, in-person contact with the customer representative. Should a complaint be filed with the Department regarding business conducted during the absence of the supervising general lines agent, the Department will review all facts prior to considering the appropriate enforcement action. You can review 69B-213.120, F.A.C., for more information. The Department has authority to take disciplinary action against the customer representative, the supervising general lines agent and the agency.

An example of how the law is interpreted: We were recently asked if a customer representative could access her agency work emails from home via her smart phone. Although the employee can lawfully view the emails, to take any type of action that falls under her lawful duties as a customer representative would be unlawful as she would not be under the direct supervision of her designated supervising general lines agent.

We are frequently asked how an agency can lawfully compensate customer representatives. A customer representative must be a salaried employee of the agent or agency, and his/her compensation cannot be primarily based on the production of insurance or premiums. [See s. 626.7354(3), F.S.]

Bail Bond Agents: Reporting Contact Information Changes

Every bail bond agent must notify the Department, insurer, managing general agent, and the clerk of each court in which the licensee is registered within 10 working days after a change in the licensee's principal business address or telephone number. The licensee must also notify the Department within 10 working days after a change of the name, address, or telephone number of each agency or firm for which he or she writes bonds and any change in the licensee's name, home address, e-mail address, or telephone number. This can be easily accomplished through the licensee's MyProfile account. Otherwise, you may submit form DFS-H2-1564 to the Department.

The owner or operator of a bail bond agency must designate a primary bail bond agent for each location, and must file with the Department the name and license number of the person and the address of the location on a form approved by the Department. Failure to notify the Department within 10 working days after such change is grounds for disciplinary action. This can be easily accomplished by submitting form DFS-H2-1541 to the Department. This form should not be used to report a change in a licensee's demographic information.

[See sections 648.387 and 648.421, Florida Statutes]

Title Agencies: Update Your Info for the 2017 Administrative Surcharge

Subsection 624.501(27)(e)2, F.S., requires any title insurance agency licensed in Florida on January 1 of each year to remit an administrative surcharge of $200 to the Florida Department of Financial Services. Therefore, we are reminding all title agencies that the 2017 administrative surcharge due date will soon be approaching.

Any title insurance agency licensed in Florida on January 1, 2017, will be emailed a reminder a few days afterward to the agency's email address on file with the Department. To ensure you receive the invoice and avoid failing to pay by the January 30 due date, please log in to the MyProfile account for your title agency and make sure the correct email address is on file. While doing so, we also recommend you do the same for your individual MyProfile account.

Occasionally we discover agencies that were not aware of the reminder because of the retirement or termination of the employee assigned to monitor the email address provided to the Department. Failure to open the email sent by the Department containing the administrative surcharge reminder does not release an agency from the January 30 deadline. Please verify your information soon so this does not happen to you. If you need our assistance, you may contact us at Title@MyFloridaCFO.com to assist you through the steps to update your information. Be proactive; do not procrastinate.

Failure to pay the surcharge on or before January 30, 2017 will result in administrative action which could include a fine, in addition to the original surcharge. Payment must be made securely online via the title agency's MyProfile account. Paper checks are not accepted.

NOTE: This surcharge is not related to the one imposed on each new policy written due to the receiverships of National Title Insurance Company and K.E.L. Title Insurance Group, Inc., which is ending December 31, 2016.

Title Agency Data Call 2017

2017 marks the third year title insurance agencies are required 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 have until June 1, 2017 to make their submission to the OIR. The OIR will send an email to each licensed title agency in Florida to remind them of the new law with instructions on how to complete the process accurately.

The Title Agency Data Call is performed by the title agency by first downloading the template from the OIR website to complete offline. To do this, the agency will need to create an account and subscribe to your agency in the Data Collection and Analysis Modules (DCAM) used by the OIR, which is located at https://apps8.fldfs.com/DCAM/Logon.aspx.
(The user's guide for DCAM is located at: https://apps8.fldfs.com/DCAM/Help/DCAMUserGuide.pdf)

Once the agency's data template form is completed and the agency is ready to certify it is accurate, the agency must upload the form to the OIR before the deadline, June 1, 2017.

The data template has seven tabs or worksheets:

  1. Version: includes the OIR contact information and reporting date reminder
  2. Instructions: data template must be downloaded from DCAM for the purpose of reporting information
  3. Report_Lines: Two columns extend down a series of questions and required responses (enter either text or numeric in the two columns, as shown)
  4. Schedule A: Additional agency information
  5. Schedule B: Agent activities
  6. Schedule C (Residential): Title agent statistical information submission for 1-4 residential units
  7. Schedule C (Commercial): Title agent statistical information submission for commercial units

Each agency's submission must contain a Filing Certification signed by an agency officer (electronic signature accepted), stating the information provided is accurate to the best of their knowledge and belief. A sample copy is available on the OIR's website at: www.floir.com/siteDocuments/CertificationOfTitleDataSubmissionExample.pdf

The agency may include a cover letter, but this is an optional component for the filing.

Each agency is encouraged to include any additional or optional information that is deemed important to the overall submission. These optional items may be uploaded as PDF documents under the "Other Information/Documents" component.

It is important to know that the agency's submission is not considered to be complete until the agency receives an email receipt showing the agency's file log number.

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 of Insurance Agent and Agency Services' web page Compliance Information. Additional information is available by type of license at our Frequently Asked Questions web page.  

Note: Some information in archived articles may now be out-of-date or superseded by changes in Florida law. Please be sure you refer to the most current law.