In The Know
STLDI’s (Short-Term Limited-Duration Insurance) and Your Customers
Consumers have more options than ever when choosing health insurance coverage. If you’ve ever tried to pick between the multitude of ranch dressings at the grocery store, you know sometimes being spoiled for choice can be overwhelming. Do you pick the buttermilk ranch, bacon ranch or avocado ranch? Yogurt based or classic? Low fat, low carb, or gluten free? Ranch dressing is a relatively simple thing. It's hard to make a mistake when choosing one. In the worst-case scenario, you’ll need to go back to the store for another bottle. For consumers comparing health insurance options, the decision can be far from simple. Choosing a product that does not suit their needs can have detrimental effects. Since the President signed the executive order extending the contract terms for short-term limited-duration insurance (STLDI), sales of STLDI’s appear to be on the rise, giving consumers yet another option. If your customer is considering short term health coverage, there is key information they need to know.
What is an STLDI? - An STLDI is designed to fill temporary gaps in health coverage. These gaps might be a change in employment, waiting to become eligible for Medicare, when transitioning from one plan to another, or awaiting the next ACA open enrollment period. Until October 2018, STLDI’s could only be issued for a maximum of three months of coverage. Now, these types of polices can have a contract term of up to 364 days and can be renewed for up to 36 months.
Can coverage be denied? – STLDI’s are not guaranteed issue. Carriers can deny an application based upon medical history.
What's excluded? –STLDI’s are not required to cover preexisting conditions, prenatal care, prescription drugs, or mental health care. If your customer is planning to expand their family, is dealing with a mental illness, or has a preexisting condition, these may not be covered under a STLDI.
Is this an Association Health Plan? – Association Health Plans are offered by small business that form and/or join associations to offer coverage to members of the association. Depending on how the master group policy is written, coverage may be determined by insurance laws of the state that approved it, which may differ from Florida’s insurance laws. Association policies, issued outside of Florida must file their policy forms for informational purposes, but the rates are not approved by the Florida Office of Insurance Regulation (OIR).
When will the policy expire? – STLDI policies are not considered minimum essential health coverage under the Affordable Care Act (ACA). As a result, loss of coverage under an STLDI will not make the customer eligible for a Special Enrollment Period under ACA. If the coverage under an STLDI expires or the customer is no longer eligible for coverage under the STLDI, and open enrollment under ACA is still months away, the consumer could be left without coverage.
Is there an out-of-pocket maximum? – There are no out of pocket limits for co-payments or deductibles.
Read more about STLDI’s here.
Agents should always verify the companies they sell for are authorized to do business in Florida. If you suspect an entity is not authorized to transact insurance in Florida, please notify our office.
Clarifying GAP Insurance
Guaranteed Asset Protection (GAP) is a product most often associated with auto loans or leases. The product is intended to protect a consumer in the event of a total loss when the cash value of the vehicle is less than the remaining balance on the loan or lease. It is illegal to sell GAP protection in Florida unless the insurer has a valid Certificate of Authority to sell insurance in Florida unless the seller of the GAP protection is the lender or lessor.
When the lending institution is agreeing to waive the difference in value, the product is not considered insurance. Similarly, many leases include language stating the lessor will waive the right to receive the difference in lease payments for an additional cost. This is also not considered insurance.
GAP protection is considered insurance when it is sold by a third party. That third party must have a certificate of authority, issued by the Office of Insurance Regulation, permitting them to sell insurance products in Florida. Agents and entities selling GAP protection must hold the appropriate Credit Insurance license.
Cyber Fraud and Title Insurance
According to the FBI’s Internet Crime Complaint Center (IC3) 2017 Internet Crime Report, Florida had the second highest number of cyber fraud victims in the country at 21,887. Losses totaled $110,620,330.00 in 2017. Florida has seen a rise in cyber fraud in real estate and title insurance transactions, specifically. This is unsurprising when you consider the large number of commercial and residential real estate transactions in Florida. While no age group is immune to cyber fraud, Florida is also home to a large population of the group most victimized by cyber fraud, the over 60 age group.
One of the most common types of cyber fraud is conducted via email. Often, the perpetrator will hack into a real estate agent’s email account and send a phony email to one of the parties, created to look like legitimate correspondence. The "spoofed" email includes wiring instructions to complete the transaction. The hacker’s goal is to transfer funds to their bank account rather than the seller’s. Often, the hacker’s account is located offshore, making recovery of the funds difficult. Emails can also be hacked to obtain normally protected personal information from documents used in the transaction, like social security numbers, for later use in conducting other types of fraud, such as identity theft. As a title insurance licensee, being tricked by one of these hackers can be very costly. Below are some tips to protect yourself, your agency, and the buyer.
Look to your underwriter – Many carriers offer cyber security specific training or materials to guide you.
Be secure – Be sure your system, browser and security software is up to date. Avoid public wi-fi, even if it is password protected. If you can’t avoid public wi-fi, consider using an alternate encryption such as a virtual private network (VPN). Implement two-factor authentication for remote access to your network.
Be vigilant – Verify the sender’s email address. Hover over any link with your mouse and look to the bottom of your browser window. The actual web address the link directs to will be listed there. Don't click the link unless you're absolutely sure it's safe. If you are submitting financial information via a link or website, look to the address bar and be sure the URL begins with https. The “s” indicates the site is secure.
Double check – Use contact information you already have to verify an email is legitimate. DO NOT use the links or phone numbers in the email you are verifying. The links could expose your computer and/or network to more cyber-attacks. If the email is spoofed, the email addresses and phone numbers included probably belong to the hackers.
Verify – Check to be sure the funds were sent to the correct bank account immediately after the transfer.
Title Insurance Agency Fees
The Department of Financial Services (Department) is often asked to advise if certain fees are allowable and where these fees are to be recorded on the closing disclosure and/or HUD settlement forms. The Department can answer these concerns very simply:
1. The Florida Department of Financial Services does not regulate the amount of each fee charged as part of a closing.
The Department is charged with making sure Florida consumers are not deceived by our licensees when they purchase title insurance and close on a property.
As part of any inspection or investigation done, the Department will verify at a minimum that the title insurance agent, or agency:
The Florida Statutes defines "closing services" as the service provided by a licensed title insurer, title insurance agent or agency, or attorney agent in the agent’s or agency’s capacity as such, including, but not limited to, preparing documents necessary to close the transaction, conducting the closing, or handling the disbursing of funds related to the closing in a real estate closing transaction in which a title insurance commitment or policy is to be issued. These are activities that reduce the future liability of the title insurer by making sure the closing was conducted suitably, the correct people signed the appropriate forms, all existing liens were identified and discharged or excluded from coverage, the property was properly identified, existing loans were satisfied, and the new documents were recorded timely in the proper venue.
The Florida Insurance Code does not require the title agent, or agency, to meet these requirements on its own. Title agencies are permitted to hire outside parties to assist in the completion of these duties. When a title insurance agency does this, it must also include these fees in with its closing services fee that it advertises to the public and that it reports to the Office of Insurance regulation (OIR) in its data filing for that year.
Title agencies are permitted to charge the third-party fees as separate line items as long as the consumer has been notified these fees represent responsibilities of the agency, which were contracted to a third party. The consumer must also understand these fees will be charged to them either as part of the closing services fee total, or in addition to the agency’s closing services fee. However, in no case should a third-party fee be charged to a consumer in a deceptive or misleading manner. Irrespective of how these fees are charged, the Florida Insurance Code will hold the title agency and its agent in charge responsible for the work product of the vendors selected and/or hired by the agency to perform any services that fall under closing services, primary title services, or the title search, regardless of which party to the transaction pays for these services.
The 2018 Florida Statutes are available online. The Florida Statutes can be viewed at Online Sunshine
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