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Department Home | Agent and Agency Home | Insurance Insights Home

  Vol. 7 No. 4 July 2018

In The Know


Prepare Your Agency and Customers For Hurricane Season

Florida's hurricane season started June 1st. Most people are careful to make important plans to protect their personal safety, homes and belongings by developing a "Hurricane Plan". Take time to consider the plans you've made to protect your business and consumer records in the event a storm approaches Florida.

Agencies and agents may want to consider the following methods of preparation:

  • Protecting consumer records - many insurers have specific guidelines related to the protection of consumer records by agents and agencies. Many agencies are moving away from maintaining paper records in favor of the ease and protection of electronic data storage. However, if your computers are destroyed without a back-up, you'll lose the benefit electronic records provide. You may want to discuss off-site computer storage with your Internet Service Provider or an insurer, which may be able to suggest solutions.
  • Emergency plans for the agency and its members - if you have a lease, learn what restrictions, if any, apply to your business' premises in the event of a natural disaster and whether you'll have access to your records, furnishings and possessions. Decide how you can continue to operate if your business premises are uninhabitable and have a plan to notify your customers of the new location.
  • If your business premises are damaged during a storm and cannot be accessed by your customers, please provide your contact information to the Department's Division of Consumer Services. Consumers may call the Department if they can't reach their agent and this will allow us to provide your contact information to them.

After you have taken steps to protect your business and customer records, you may want to contact your customers before a storm approaches. Visit "Protect Your Homebase", for information on topics related to disaster preparedness.

protect home base

 

Licensing Related Legislative Changes
Effective July 1, 2018

Managing General Agents

  • MGA licenses will no longer be issued.
  • Those individuals and firms holding MGA licenses will be allowed to keep them.
  • Going forward individuals must obtain an MGA appointment under a General Lines, Life, Health, or Limited Surety agent license.
  • Firms must obtain an MGA appointment under an Insurance Agency license

Fingerprinting Requirements

  • Fingerprints submitted by unlicensed applicants are currently valid for 12 months.
  • After July 1, 2018, individuals currently licensed and seeking an additional license will not be required to obtain fingerprints if they were completed in the past 48 months.

Active Military Members, Veterans and their Spouses

  • The prelicensing course is waived for individuals currently in good standing or honorably discharged at any time.
  • Individuals currently in good standing or honorably discharged within 24 months of application are exempt from application fees.

Character and Credit Reports

  • The requirement that reinsurance intermediary applicants provide a copy of the character and credit report has been removed.
  • An appointing entity must secure a credit and character report/investigation before appointing an individual.
  • Appointing entities are no longer required to obtain reports/investigations from Department-designated third party providers.

Exchange of Business/Excess or Rejected Business

  • The threshold for company registration of a general lines agent (exchange of business) or a life/health insurance agency (excess or rejected business) has been reduced to four (4) sales from the current 24 sales.

New Adjuster Designation

  • A new adjuster designation, Claims Adjuster Certified Professional (CACP), from WebCE, Inc. is being added to the current list of adjuster designations.

 

NMC

 

New Medicare
Card Roll-out

 

CMS (Centers for Medicare & Medicaid Services) announced new resources available for beneficiaries and partners on Medicare.gov and CMS.gov.

Following are direct links to the resources:

FinCENFinCEN Reminds Financial Institutions ~
the CDD Rule is in Effect

The Financial Crimes Enforcement Network ("FinCEN") reminds financial institutions and their customers that the final rule, "Customer Due Diligence Requirements for Financial Institutions " (the CDD Rule) became effective May 11th.

FinCEN issued the CDD Rule, which amends Bank Secrecy Act regulations, to improve financial transparency and prevent criminals and terrorists from misusing companies to disguise their illicit activities and launder their ill-gotten gains.

Fll Reminder



CMS Marketplace Updates for Agents

CMS (Centers for Medicare & Medicaid Services) has released an update to its Compliance with Marketplace Requirements. Considerations for Agents and Brokers is available at this link.

Part II: Marketplace Privacy & Security Requirements for Agents and Brokers

CMS also released a guide on Marketplace Privacy & Security. The guide is available at this link.

CMS

 

Rule Chapter 69B-186.010, F.A.C. ~
Unlawful Rebates and Inducements Related to Title Insurance Transactions was adopted May 13, 2018

The existing rule was recently amended to conform with paragraph 626.9541(1)(h), F.S., and added two additional prohibitions:

• Waiving of fees, costs, or premium for title updates or endorsements requested after the issuance of the title insurance policy.

• Assuming any parties’ responsibility to provide refunds to consumers under applicable laws and regulations.

Another provision was added to not prohibit title insurance agents from amending their contracts and agreements to be in compliance with the Florida Insurance Code.

Review the amended rule at this link to the Florida Administrative Code website.

 

Guidance on Title Escrow Accounts

In recent weeks, several title agents and attorneys have contacted the Department seeking guidance with title escrow accounts. An overview of the agent's duties with respect to tile escrow accounts is addressed in s.626.8473, F.S. All funds received by a title insurance agent or agency received from others as escrow funds shall be held in a fiduciary capacity and shall remain the property of the consumer. A title insurance agent or agency must return any amounts due to the consumer.

The most common issue brought to the Department's attention involves the disbursement of overages due to the consumer. In some instances, the consumer receiving the disbursement owed from the escrow account fails to cash or deposit the check.

This is especially common when the disbursement check is for a minimal amount. In these instances, the title agent or agency must continue attempting to disburse the overage to the consumer.

uncashed check

 

 

 

If the consumer fails to cash or deposit the overage check after seven years, the title agent or agency may send the amount to the Florida Department of Financial Services, Division of Unclaimed Property.

Section 626.8473, F.S., prohibits title agents or agencies from charging the consumer any type of fee or expense from the amount owed in the escrow account. The disbursement is required to be sent as a check as the referenced statute also prohibits title agents or agencies from converting the funds held in the escrow account. Any person who converts or misappropriates the funds held in the escrow account has committed a criminal offense with the degree of penalty varying depending on the amount converted or misappropriated.

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

CFO Jimmy Patronis Consumer Alert:
Floridians Must Protect Themselves
Against Cryptocurrency Scams

cryptocurrency

Cryptocurrency continues to gain momentum in Florida:

  • The Seminole County Tax Collector now accepts bitcoin and bitcoin cash to pay for property taxes, driver license and ID card fees, tags and titles
  • Tampa/St. Petersburg were ranked seventh in the top 10 bitcoin-friendly cities in 2016
  • Miami/Ft. Lauderdale were ranked eighth in the top 10 bitcoin-friendly cities in 2016
  • There are more than 160 Bitcoin ATMs across Florida
  • An entirely Bitcoin real estate transaction in Miami took place in December 2017

CFO Jimmy Patronis said, "With new technology comes new ways for consumers to be defrauded. As cryptocurrency becomes more popular in our state, it's important for Floridians to fully understand what they are getting into before they invest. Texas has already opened 32 investigations into cryptocurrency investment schemes, and with a local government in our state now accepting bitcoin as a form of payment cryptocurrency isn't going away. It's my goal to ensure consumers are protected.

"It's critical that consumers are aware that cryptocurrency remains an unregulated currency and should be aware of the following if they choose to purchase or invest in cryptocurrency."

1. Do your homework. Never invest based solely on what you read online, on social media, or in a bulletin or mailer. It's easy for a company, its promoters-including celebrities-to make grandiose claims about new product developments, lucrative contracts, or the company's financial health. Before you invest, you must independently verify those claims. Use unbiased sources, including the U.S. Securities and Exchange Commission (SEC) and securities industry self-regulatory organizations.

2. Cryptocurrency values can be unstable. Cryptocurrency can be highly volatile with the potential for complete loss of value. This may affect investors as well as consumers using cryptocurrency as a means of payment. Cryptocurrency's volatility also may make securities offerings tied to these currencies unsuitable for most investors depending on an individual's financial goals.

bitcoin3. Cryptocurrencies can be stolen. There is the potential for consumers to incur financial losses if an account is not maintained in a secure manner. Currently, most cryptocurrency accounts or "wallets", unlike funds held in U.S. banks or credit unions, are not insured against loss.

4. Cryptocurrency transactions may be taxable. For federal tax purposes, the IRS has announced that cryptocurrency is treated as property. General tax principles applicable to property transactions apply to transactions using cryptocurrency. For more information, go to https://www.irs.gov/newsroom/irs-reminds-taxpayers-to-report-virtual-currency-transactions

State and federal regulators are evaluating and developing approaches to regulating cryptocurrency and companies that deal in cryptocurrencies. Any company that offers to exchange, administer, or maintain cryptocurrencies may be subject to state regulation and licensing as well as federal regulation.


Are You Puzzled??

Across:
1. A contractor waiving a deductible or giving a
discounted rate directly to a May puzzlecustomer is a form of _______.
5. Callers who report suspected fraud to the Department may be eligible for a _______ reward.
6. _______ issued the CDD Rule which became effective May 11th.
7. Insurance companies must acknowledge a claim within _______ days.
8.If a customer fails to cash an escrow overage check after seven years, the agency may send it to the Division of _______ Property.
9. A 1.8% decrease in workers' comp insurance rates could result in a savings of 79.5 _______ for Florida businesses.

Down:
2. The CFO and _______ announced the arrest of a man who admitted to stealing $61,954 in insurance premiums.
3. CFO Patronis announced the donation of 1,000 copies of _______ Learns to Earn to the Early Learning Coalition of the Big Bend.
4. The questions Alexa can't answer about your license can best be answered via your _______ account.
5. Before hurricane season begins, agencies should verify that they have ________ coverage.

Go to Education Central for puzzle answer key.

Legal Notices © 2018 Florida Department of Financial Services