Volume 6, No. 2 - February 2017

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 The laws noted in our publications are/were in effect at the time of publication but may have been repealed, amended or replaced and new laws may have been enacted subsequently.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: How to Handle "Unreturnable" Bail Bond Collateral

Bail bond agents contact us asking what their obligations are in maintaining older files where they have not been able to return the collateral to the proper party.  In many cases this is because the indemnitor moved without notifying the bail bond agent or agency.

The bail bond agent wants to destroy the old bail bond records to make room for the records of the new bonds being written. The law allows a bail bond agent to destroy the records related to the premium payment of a bail bond, three (3) years after the payment was made. However,  collateral is not the property of the bail bond agent, agency or the insurer, so the records relating to the collateral must be maintained while the collateral is being held by them.  No records concerning collateral may be destroyed until the full amount of the collateral is returned to its rightful owner.

The question we get is what is to be done when  all efforts to return the collateral have been unsuccessful?

The CFO takes great pride in the Division of Unclaimed Property, which may be the proper and legal way to consummate some of these types of situations. This problem affects almost every business owner in the country and there is a way to get the money back to the proper owner, or the proper owner’s heirs, while relieving the holder (in this case, a bail bond agency) from custody and liability.

  • Click on the “Report & Remit Unclaimed Property” link

  • Review the procedures for remitting unclaimed property in Florida

  • Submit the funds/property and you are done!

The Division of Unclaimed Property may require the submitter to have tried to return the property for at least five (5) years before they submit the property to the State. Once that time has expired and the submitter is able to document their attempts to try to return the property, they can complete the forms required and send the property to the State. The exact requirements are found in the Reporting Instructions Manual on that Division's website.

The Division of Unclaimed Property does hold education workshops at various locations around the state for anyone holding unclaimed property. If you are interested in attending a Holder Education Workshop, please check the Calendar of Events on their website, www.fltreasurehunt.org.  You can also contact them at:

Florida Department of Financial Services
Division of Unclaimed Property
200 East Gaines Street
Tallahassee, Florida 32399-0358
EReporting@MyFloridaCFO.com
(850)  413-5522
(850) 413-3018 fax

Surplus Lines Export Eligibility

The Department continues to receive questions from agents seeking guidance on how to comply with the export eligibility requirements set forth in sections 626.916(1)(a) – (d), Florida Statutes, while simultaneously meeting the needs and demands of their clients. Because the Department recognizes the difficulty agents have in understanding the statutory provisions within the surplus lines law with regard to export eligibility, we are providing questions previously addressed by the department and our responses those to questions:

Question #1

The structure in question is a residential condominium building with a replacement cost in excess of $1 million. Therefore, only one admitted insurer is required on the DE. The customer desires ordinance & law coverage, agreed value, and sewer/water backup coverage. The agency represents four admitted insurers who write this line of coverage. Three of the admitted insurers will not offer these coverages, but one will. For the sake of discussion, the coverage under the surplus lines insurer who will offer the quote and the one admitted insurer is identical. Can the agency legally export this by listing one of the three admitted insurers on the DE, or does the fact that they have one (of four) admitted insurers willing to provide the coverage prohibit them from honestly completing the DE?

Answer #1

The language in s. 626.916(1)(a) clearly indicates that “The full amount of insurance required must not be procurable, after a diligent effort has been made by the producing agent to do so, from among the insurers authorized to transact and actually writing that kind and class of insurance in this state…” If the agent is aware of an admitted insurer willing to write the required coverage the agent should not complete a diligent effort form which suggests they are not. Doing this would be a clear attempt to circumvent the intent of the law.

Question #2

If the insured requests a specific coverage or amount of coverage that is not available with an admitted insurer, is there a specific level or difference between what an admitted insurer is offering and what a surplus lines insurer is offering before the diligent effort form can be properly completed and the policy exported? For example, if the insured requests a residential (or commercial residential) property insurance policy with $5,000 of coverage for wind damage to trees, and the agent does not have access to an admitted insurer that will offer that coverage and/or that amount of coverage as part of a property insurance policy or on a stand-alone basis, then can the agent complete a diligent effort form and export the policy? In simpler terms, if there is any coverage that the insured requests and it’s not available in the admitted market, can that risk be exported assuming the DE is honestly and properly completed?

Answer #2

The purpose of the surplus lines portion of the insurance code is to make available to consumers coverage they need but cannot obtain in the admitted market. The situation described suggests that an insured is unable to obtain a specific limit or type of coverage needed. Pursuant to s. 626.916(1)(a) F.S., the agent should attempt to layer the coverage if “the full amount of insurance” is not obtainable in the admitted market. The last sentence of s. 626.916(1)(a) F.S., says “If it is not possible to obtain the full amount of insurance required by layering the risk, it is permissible to export the full amount.” So responding in “simpler terms,” coverage that the insured requests which is not available in the admitted market can be exported assuming a diligent effort is honestly and properly completed.

Bail Bond Agents - Alert - April 1, 2017 Deadline for Registration

Florida Statutes s.648.42 requires bail bond agents to register and file their current power of attorney form with the county they reside, and each county they will be posting bonds, by April 1 of every odd year. For more information about registering, bail bond agents should contact the surety companies they are appointed to represent with and the sheriff and clerk of the circuit court in the counties where they will be posting bonds.

Agency License Cancellation for Failure to Designate an Agent in Charge

An insurance agency location may not conduct the business of insurance unless an agent in charge is designated by, and providing services to, the agency at all times. If the agent in charge designated with the Department ends his or her affiliation with the agency for any reason and the agency fails to designate another agent in charge within 30 days and such failure continues for 90 days, the agency license shall automatically expire on the 91st day from the date the designated agent in charge ended his or her affiliation with the agency [s.626.0428(4)(f), F.S.]

Title Agency Data Call 2017

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.