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Volume 5, No. 2 - February 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 The laws noted in our publications are/were in effect at the time of publication but may have been repealed, amended or replaced and new laws may have been enacted subsequently.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: Public Adjusters - Conflict of Interest

Public adjusters are reminded to avoid conflicts of interest while performing the duties under their license. A public adjuster may not participate, directly or indirectly in:

  • the reconstruction, repair, or restoration of damaged property that is the subject of a claim adjusted by the licensee
  • may not engage in any other activities that may be reasonably construed as a conflict of interest, including soliciting or accepting any remuneration from, of any kind or nature, directly or indirectly; and may not have a financial interest in any salvage, repair, or any other business entity that obtains business in connection with any claim that the public adjuster has a contract or an agreement to adjust. [Sec. 626.8795, F.S.]

General Lines Agents Rights Following Termination of Insurer Appointment

We are frequently contacted by licensees whose appointment with an insurer has terminated and they want to know what they are legally allowed to do for the customers they sold insurance to under the appointment. Following the termination of his or her agency appointment as to an insurer, the agent may continue to service, and receive commissions or other compensation relative to, policies written by him or her for the insurer during the existence of the appointment.

The agent may countersign all certificates or endorsements necessary to continue such policies to the expiration date, including renewal option periods, and collect and remit premiums due, but shall not, without the consent of the insurer, change or modify the policy in any way nor increase the hazards insured against therein. [Sec. 626.754, F.S.].

This guidance does not consider an agent or agency's contract terms with the appointing insurer.

Insurance Agency Names

Naming your insurance agency can take time and creativity. Many agency owners formally register their agency names with the appropriate state agencies before applying for a license. The Department has guidelines for agency names and we recommend you consult those laws before spending time and money to formally organize your agency entity only to have your chosen name disapproved.

The Department may disapprove the use of any true or fictitious name, for several reasons including use by another agency or insurer; a name that may mislead the public in any respect; or the name states or implies that the agency is an insurer, motor club, hospital service plan, state or federal agency, charitable organization, entity that primarily provides advice and counsel rather than sells or solicits insurance, or is entitled to engage in insurance activities not permitted under licenses held or applied for.

A fictitious name, or as more commonly known, doing business as (DBA), must be properly registered with the Department of State, Bureau of Corporations; however, the Department has determined that the use of multiple fictitious names (DBAs) is misleading to the public. Accordingly, no insurance, bail bond, or title agency, adjusting firm, or any other business entity regulated by the Department of Financial Services, Division of Agent and Agency Services may use more than one DBA per business entity.

If you have concerns whether your intended agency name will be disapproved, please contact AgentLicensing@MyFloridaCFO.com. [Sec. 626.602, F.S.]

Liability of General Lines Agent for Wrongful Acts

A general lines insurance agent who is an officer, director, or stockholder of an incorporated general lines insurance agency shall remain personally and fully liable and accountable for any wrongful acts, misconduct, or violations of any provisions of this code committed by such licensee or by any person under his or her direct supervision and control while acting on behalf of the corporation under Sec. 626.734, F.S.

The statutes should not be construed to render any person criminally liable or subject to any disciplinary proceedings for any act unless such person personally committed or knew or should have known of such act and of the facts constituting a violation of the Florida Insurance Code.

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 [Sec. 626.0428(4)(f), F.S.]

Title Agencies: 2016 Administrative Surcharge is Due Now

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 January 30th deadline for payment of the 2016 administrative surcharge has passed. If you have not yet paid the surcharge for your agency, you are now subject to a late fee penalty of not less than $500, in addition to the surcharge.

If you have not made your surcharge payment, it is imperative that you contact the Department immediately to bring your agency into compliance. You may contact us at Title@MyFloridaCFO.com. Failure to take immediate action will result in administrative proceedings against your agency license.

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.

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. We can assist you through the steps to update your information. Be proactive; do not procrastinate.

Failure to pay the surcharge on or before January 30, 2016 could result in administrative action which could include a fine or a suspension of the agency’s license, 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: To make sure you receive email notices from us, add email addresses Title@dfs.state.fl.us and Title@MyFloridaCFO.com to your email account's "Safe Senders" or other list.

Title Agency Data Call 2016

2016 marks the second 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, 2016 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://apps.fldfs.com/DCAM/Logon.aspx.
(The user's guide for DCAM is located at: https://apps.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, 2016.

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 make a submission but do not receive the confirmation email, please let OIR know.

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's web page Compliance Information. Additional information is available by type of license at our Frequently Asked Questions web page.