Volume 1, No. 5 - June 2010
In The Know
- Keeping you informed is what it's all about

2010 Legislative Update
Miscellaneous Insurance Provisions - CS/CS/SB 2176
This bill adds to the list of applicants for a customer representative license who are exempt from the state licensing examination to include individuals with the designation of Certified Insurance Representative from the National Association of Christian Catastrophe Insurance Adjusters. This bill also includes the Safeguard Our Seniors Act, which enhances penalties for unethical annuity sales practices as well as provides certain consumer protections for seniors (age 65 or older) who purchase annuity contracts. These include the following:

  • Increases the financial penalty for the willful act of "twisting" or "churning" of an annuity to a maximum of $75,000.
  • Limits the period of a surrender charge for an annuity sold to a senior consumer to 10 years and limits the surrender charge to 10 percent.
  • Extends the "free look" period for the purchase of an annuity by a senior consumer from 14 to 21 days.
  • Authorizes the Department of Financial Services to require an agent to make monetary restitution to a senior consumer harmed by a violation of the insurance code under certain circumstances.
  • Includes a third party marketer that aids and abets an insurance agent in the violation of the insurance code involving an annuity sale to a senior consumer as an affiliated party of the insurance agent, bringing that marketer under the regulatory authority of the department.
  • Gives the department authority to take license disciplinary action against an agent who has been disciplined under his or her securities license or a related license.
  • Prohibits the department from issuing a license to a former licensee who has had his or her license revoked resulting from the solicitation or sale of an insurance product to a senior consumer.
  • Extends the prohibition on a life insurance agent being the beneficiary of a life insurance policy sold to someone other than the agent's family member by including the agent's family members within the prohibition and by prohibiting the agent, or the agent's family member, from serving as a guardian, trustee, or having power of attorney over the insured.
  • Requires an insurer to provide a cover sheet attached to the policy when an annuity is issued informing the purchaser about the free look period and about how to contact the insurer and the department if they have questions about the annuity.
  • Allows the use of video depositions in administrative hearings involving a senior consumer and requires compliance with the Rules of Civil Procedure.
Effective date: January 1, 2011, except as otherwise provided (see law). Chapter 2010-175, Laws of Florida.

Life Insurance - CS/CS/HB 885
This bill provides an exemption from a continuing education requirement for certain life agents. If a life agent hasn't sold individual life insurance policies or annuity contracts during their continuing education compliance cycle and doesn't have any active individual life insurance policies or annuity contracts, he or she is not required to take the three-hour continuing education training on the subject of suitability in annuity and life insurance transactions. This is a very specific exemption and to claim it you must complete form DFS-H2-2033, which is on our forms page. You will be able to do this through your MyProfile account in the future. The bill also bars the sale or transfer of annuities purchased as a part of a Medicare Secondary Payer (MSP) settlement to third parties that are not connected with the settlement. The bill amends §627.552, F.S., regarding employee groups for purposes of group life insurance policies by prohibiting employers from creating a class of employees eligible for insurance that consists solely of employees covered under the employer’s group health plan. The bill removes the 50% cap, which applies to spouses and children, and allows spouses and dependent children to be insured under a group life insurance policy up to the amount for which the employee is insured. This bill also creates §627.4605, F.S., which provides that an insurer is not required to send notice of replacement life insurance to the current insurer when the replacement policy is issued by the same insurer or an affiliate of the insurer of the policy that is to be replaced. Specifically, notice of replacement life insurance does not need to be sent to the current insurer for transactions involving:

  • An application to the current insurer that issued the current policy when a contractual change or conversion privilege is being exercised;
  • A current policy is being replaced by the same insurer pursuant to a program approved by the Florida Office of Insurance Regulation (OIR); or,
  • A term conversion privilege is being exercised among corporate affiliates.
Effective date: May 11, 2010. Chapter 2010-61, Laws of Florida.

Guaranty Associations - CS/CS/CS/HB 159
This bill covers many technical and substantive changes so you should review the bill for further details. One important change is that licensed insurance agents are no longer prohibited from furnishing written information that is in a form prepared by FLAHIGA, summarizing the claim, cash value, and annuity cash value limits of FLAHIGA, upon the request of the policyholder or applicant for insurance. Effective date: July 1, 2010. Chapter No. 2010-49, Laws of Florida.

Wind Mitigation Inspectors/Verification Forms - CS/CS/CS/CS/HB 663
The bill provides that an insurer must accept a mitigation verification form only if it is signed by specified categories of inspectors, which under the bill will include a new category for licensed home inspectors who have completed at least three hours of hurricane mitigation training (that includes training on hurricane mitigation techniques and compliance with the uniform mitigation verification form) and completion of a proficiency exam. Thereafter, these licensed home inspectors must complete at least two hours of continuing education on this subject as part of their license renewal requirements each year. The bill requires that a person who is authorized to sign a mitigation verification form must inspect the structures personally and not through employees or other persons, and must certify and attest to this on the form. The bill specifies what constitutes misconduct on the part of an inspector and provides for disciplinary action by licensing boards and the Department's Division of Insurance Fraud. The bill authorizes an insurer, at its own expense, to require that any uniform mitigation verification form provided by an authorized mitigation inspector be independently verified by an inspector, inspection company, or an independent third-party quality assurance provider before accepting the form as valid. Effective date: Various (see law). Chapter No. 2010-176, Laws of Florida.

Motor Vehicle Records - HB 5501
The bill creates two new motor vehicle record (MVR) reports and applicable fees:

  • A report for searching an individual’s driver history record when no record is found on file, with a fee of $2; and,
  • A report for searching an individual’s driver history to confirm that there has been no change to the record since the last time a search was done, with a fee of one cent.
Effective date: July 1, 2010. Chapter No. 2010-163, Laws of Florida.