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Volume 4, No. 8 - August 2015

In The Know

- Keeping you informed is what it's all about

 

Governor Scott Declares State of Emergency - Notice to Public Adjusters:

The Governor declared a State of Emergency for the entire state in anticipation of a landfall by Tropical Storm Erika. This means the 10% fee cap for public adjusting contracts for damages caused by Tropical Storm Erika is in effect and those contracts also now can be cancelled five days after execution rather than the normal three days. [s.626.854(7)(11)(b)(1), F.S.]

Click here to read the order>>

Title Insurance Agencies as Escrow Agents

The Florida Statutes do not prohibit the acceptance of escrow funds outside a title insurance transaction and s.877.101, F.S. specifically identifies licensed title insurance agencies as an entity that may accept escrow funds.
PLEASE NOTE: Accepting escrow funds for a transaction outside one that results in the issuance of a title insurance policy may not be covered under your agency's surety and fidelity bonds. You should also check your agency's errors and omission coverage, too.

Closing an Insurance Agency

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.

Surrender your agency license
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.

File a change of agent in charge
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.

Submit a change in address
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.)

Post office
Submit a mail forwarding order to the United States Postal Service for the agency mail. This will prevent policies, premiums, notices, etc., from being lost while the permanent address changes are being made.

Contact your customers
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.

Bank accounts
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.

Agency files and records
Florida law requires every licensee to preserve books and records pertaining to insurance transactions for a minimum of five years [s.626.748, F.S.] and for premium payment, at least three years after payment [s.626.561, F.S.]

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.

Next month - Closing a Bail Bond Agency

The 2015 Florida Statutes Available Online

The most current Florida Statutes can be viewed at Online Sunshine - Title XXXVII Insurance.

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.