Volume 6, No. 8 - August 2017

Compliance Corner compliance

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 The laws noted in our publications are/were in effect at the time of publication but may have been repealed, amended or replaced and new laws may have been enacted subsequently.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 ~ "Reciprocal Action" Authority Expands

Since the reciprocal action statute (s. 626.621(13), F.S.) went into effect on January 1, 2011, the Department has taken the following enforcement actions against licensees and have other cases pending:

  • 86 revocations
  • 31 suspensions
  • 15 probation and/or monetary penalty
  • 14 open investigations

On July 1, 2017, s. 626.621(15), F.S. became effective. This law broadens the Department's authority to take enforcement action against licensees for the "Denial, suspension, or revocation of, or any other adverse administrative action against, a license to practice or conduct any regulated profession, business, or vocation by this state, any other state, any nation, any possession or district of the United States, any court, or any lawful agency thereof."

Surplus Lines Export Eligibility ~ Q & As

From time to time, we publish questions and answers that may be of interest to our licensees active in the surplus lines market:

Question: If the total dwelling replacement cost of residential structures insured by one policy totals $1 million or more, but no one individual structure has a dwelling replacement cost of $1 million or more, would this exemption requiring only one declination apply? For example, if there were 3 separate condominium structures each with a dwelling replacement cost of $400,000 covered under one policy for a total of $1.2 million.

Answer: No, the exemption requiring only one declination will not apply if there is no single residential structure with a dwelling replacement cost of $1 million or more. Even though one policy will be issued to cover all of the buildings included in a single condominium association, an agent cannot use the aggregate replacement cost value of the buildings to reach the threshold. This is because the language in the statute specifically refers to “the residential structure.” The agent will only need one declination if any residential structure has a dwelling replacement cost of $1 million or more, but the qualifying structure must be “residential.” It must have dwelling units and cannot be solely a pool, commercial unit, or other common area.

Question: Also, If an individual coverage such as liability was written on a residential structure with a dwelling replacement costs of $1 million or more, would the one declination exemption apply?

Answer: Yes. So long as the residential structure has a dwelling replacement cost of $1 million or more, any type of coverage that requires a diligent effort would require only the one declination. Section 626.914(4), Florida Statutes, does not limit the type of coverage sought to a property policy. It specifically states: “diligent effort means seeking coverage from and having been rejected by at least one authorized insurer currently writing this type of coverage and documenting this rejection.”

Title Agency Data Call 2017

2017 marked the third year title insurance agencies were required under s.626.8437(11), F.S. to submit information to the Florida Office of Insurance Regulation (OIR) under the data call required by s.627.782(8), Florida Statutes. Title agencies had until June 1, 2017, to make their submission to the OIR

According to OIR, more than 300 agencies failed to comply with the requirements of the data call. Agencies that did not comply by the June 1, 2017 deadline are being reviewed for possible disciplinary action against their license.

Each year, many agencies can avoid unintentional non-compliance by making sure the data was submitted to the OIR. An 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 submitted your information, but did not received a confirmation email, you should contact the OIR immediately.

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.