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The Florida Senate

2024 Florida Statutes

Title XXXVII INSURANCE
Chapter 642
LEGAL EXPENSE INSURANCE
CHAPTER 642
CHAPTER 642
LEGAL EXPENSE INSURANCE
642.011 Short title.
642.013 Purpose.
642.015 Definitions.
642.016 Chapter exclusive; applicability of other laws.
642.017 Exemptions.
642.019 Organization of legal expense insurance corporations.
642.021 Certificate of authority.
642.022 Insurance business not authorized.
642.023 Required deposit or bond.
642.024 Levy upon deposit.
642.025 Policy and certificate forms.
642.0261 Net worth required of applicants.
642.0262 Net worth required to maintain certificate of authority.
642.027 Premium rates.
642.029 Contracts by insurers.
642.0301 Filing, license, statement, and miscellaneous fees.
642.032 Provisions of general insurance law applicable to legal expense insurance corporations.
642.0331 Grounds for suspension or revocation of certificate.
642.0334 Order; notice of suspension or revocation of certificate; effect; publication.
642.0336 Duration of suspension; obligations during suspension; reinstatement.
642.0338 Administrative fine in lieu of suspension or revocation.
642.034 License and appointment required.
642.036 Sales representatives to be licensed and appointed.
642.038 Reporting and accounting for funds.
642.041 Grounds for compulsory refusal, suspension, or revocation of license or appointment of contracting sales representatives.
642.043 Grounds for discretionary refusal, suspension, or revocation of license or appointment of sales representatives.
642.045 Procedure for refusal, suspension, or revocation of license and appointment of sales representative; departmental action upon violation by licensed insurance agent.
642.047 Administrative fine in lieu of suspension or revocation of license or appointment.
642.0475 Civil remedy.
642.048 Prohibited sales.
642.049 Construction.
642.011 Short title.—Sections 642.011-642.049 may be cited as the “Legal Expense Insurance Act.”
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 20, 21, ch. 83-278; ss. 6, 7, ch. 93-147.
642.013 Purpose.—The purpose of ss. 642.011-642.049 is to authorize certification and regulation of certain organizations which provide programs for the payment of the costs of legal services or provide legal services.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 20, 21, ch. 83-278; ss. 6, 7, ch. 93-147.
642.015 Definitions.—As used in ss. 642.011-642.049, the term:
(1) “Gross written premiums” means the total amount of premiums paid by the consumer for the entire period of the legal expense insurance contract, including commissions.
(2) “Insurer” means any person authorized to conduct a life or casualty insurance business in this state or a legal expense insurance corporation authorized under ss. 642.011-642.049.
(3) “Legal expense insurance” means a contractual obligation to provide specific legal services, or to reimburse for specific legal expenses, in consideration of a specified payment for an interval of time, regardless of whether the payment is made by the beneficiaries individually or by a third person for them, but does not include the provision of, or reimbursement for, legal services incidental to other insurance coverages.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 1, 20, 21, ch. 83-278; ss. 1, 6, 7, ch. 93-147; s. 1634, ch. 2003-261.
642.016 Chapter exclusive; applicability of other laws.—Except as provided in this chapter, legal expense insurance corporations shall be governed by this chapter and shall be exempt from all other provisions of the Florida Insurance Code.
History.—ss. 29, 52, ch. 85-321; ss. 6, 7, ch. 93-147.
642.017 Exemptions.—The provisions of the Florida Insurance Code do not apply to:
(1) Retainer contracts made by attorneys at law with individual clients with fees based on estimates of the nature and amount of services to be provided to the specific client and similar contracts made with a group of clients involved in the same or closely related legal matters.
(2) Any lawyer referral service authorized by The Florida Bar.
(3) The furnishing of legal assistance by labor unions or other employee organizations to their members in matters relating to employment or occupation.
(4) The furnishing of legal assistance to members, or their dependents, by a church, cooperative, educational institution, credit union, or organization of employees, in which the organization contracts directly with a lawyer or law firm for the provision of legal services and the administration and marketing of such legal services are conducted wholly by the organization.
(5) Employee welfare benefit plans to the extent that state laws are superseded by the Employee Retirement Income Security Act of 1974, 29 U.S.C. s. 1144, provided evidence of exemption from state laws is shown to the office.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 2, 20, 21, ch. 83-278; ss. 6, 7, ch. 93-147; s. 1635, ch. 2003-261.
642.019 Organization of legal expense insurance corporations.—
(1) Any number of corporations or adult natural persons may organize a legal expense insurance corporation under the law of this state relating to corporations generally.
(2) The articles of incorporation shall conform to the requirements applicable to corporations, and, in addition:
(a) The name of the corporation shall indicate that legal services or indemnity for legal expenses is to be provided; and
(b) The purposes of the corporation shall be limited to providing legal services or indemnity for legal expenses and business reasonably related thereto.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 3, 20, 21, ch. 83-278; ss. 6, 7, ch. 93-147.
642.021 Certificate of authority.—
(1) It is unlawful for any person to engage in a legal expense insurance business in this state without a valid certificate of authority issued by the office, pursuant to ss. 642.011-642.049, except that a domestic, foreign, or alien insurer authorized to transact life or casualty insurance in this state may transact legal expense insurance provided it complies with the applicable provisions of ss. 642.011-642.049. A certificate of authority under ss. 642.011-642.049 may be issued only to a legal expense insurance corporation.
(2) The corporation shall file with the office an application for a certificate of authority upon a form adopted by the commission and furnished by the office, which shall include or have attached the following:
(a) The names, addresses, and occupations of all directors and officers and of each shareholder who owns or controls 10 percent or more of the shares of the applicant corporation.
(b) A certified copy of the corporate articles and bylaws and, for the 3 most recent years, the annual statements and reports of the corporation.
(c) Each agreement relating to the corporation to which any director or officer, or any shareholder who owns or controls 10 percent or more of the shares of the corporation, is a party.
(d) A statement of the amount and sources of the funds available for organization expenses and the proposed arrangements for reimbursement and compensation of incorporators or other persons.
(e) A statement of compensation to be provided directors and officers.
(f) The forms to be used for any proposed contracts between the corporation and participating attorneys or between the corporation and corporations which perform administration, marketing, or management services and the forms relating to the provision of services to insureds.
(g) The plan for conducting the insurance business, which plan shall include all of the following:
1. The geographical area in which business is intended to be conducted in the first 5 years.
2. The types of insurance intended to be written in the first 5 years, including specification whether and to what extent indemnity rather than service benefits are to be provided.
3. The proposed marketing methods.
(h) A current statement of the assets and liabilities of the corporate applicant.
(i) Forms of all legal service contracts the applicant proposes to offer showing the rates to be charged for each form of contract.
(j) Such other documents and information as the commission or office may reasonably require.
(3) Copies of the documents filed pursuant to paragraphs (f) and (i) of subsection (2) shall be filed with The Florida Bar within 5 days after filing with the office.
(4) The office shall issue a certificate of authority only to a legal expense insurance corporation, provided it is satisfied that:
(a) All requirements of law have been met;
(b) All natural persons who are directors and officers, and each shareholder who owns or controls 10 percent or more of the shares of the applicant corporation, are trustworthy and collectively have the competence and experience to engage in the particular insurance business proposed; and
(c) The business plan is consistent with the interests of potential insureds and of the public.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 4, 20, 21, ch. 83-278; ss. 2, 6, 7, ch. 93-147; s. 1636, ch. 2003-261.
642.022 Insurance business not authorized.—Nothing in the Florida Insurance Code or this chapter shall be deemed to authorize any legal expense corporation to transact any insurance business other than that of legal expense insurance or to otherwise engage in any other type of insurance unless it is authorized under a certificate of authority issued by the office under the provisions of the Florida Insurance Code.
History.—ss. 30, 52, ch. 85-321; ss. 6, 7, ch. 93-147; s. 1637, ch. 2003-261.
642.023 Required deposit or bond.—
(1) To assure the faithful performance of its obligations in the event of insolvency, each legal expense insurance corporation, prior to the issuance of its certificate of authority, shall deposit and maintain with the department securities of the type eligible for deposit by insurers under s. 625.52, which securities shall be held in trust and shall have at all times a market value in the amount specified. Whenever the market value of the securities deposited with the department is less than 95 percent of the amount of the deposit required, the insurer shall deposit additional securities or otherwise increase the deposit to the amount required. The initial deposit for a corporation shall be in the amount of $50,000 for at least the first full year of operation. The amount of the initial deposit shall be adjusted annually thereafter on October 1 as follows:
(a) Each corporation having in force $300,000 or less of gross written premiums shall deposit with the department an amount equal to $30,000.
(b) Each corporation having in force more than $300,000 of gross written premiums, but less than $750,000, shall deposit with the department an amount equal to $75,000.
(c) Each corporation having in force more than $750,000 of gross written premiums shall deposit with the department an amount equal to $100,000.
(2) In lieu of any deposit of securities required under subsection (1) and subject to the approval of the office, a legal service insurance corporation may file with the office a surety bond issued by an authorized surety insurer. The bond shall be for the same purpose as the deposit in lieu of which it is filed. The office may not approve any bond under the terms of which the protection afforded against insolvency is not equivalent to the protection afforded by those securities provided for in subsection (1).
(3) Securities or bonds deposited pursuant to this section shall be for the benefit of, and subject to, action thereon by any person sustaining an actionable injury due to the failure of the corporation to faithfully perform its obligations to its insureds in the event of insolvency or impairment of any legal expense insurance corporation.
(4) The state shall be responsible for the safekeeping of all securities deposited with the department under ss. 642.011-642.049. Such securities are not, on account of being in this state, subject to taxation, but shall be held exclusively and solely to guarantee the performance by the legal expense insurance corporation of its obligations to its insureds.
(5) Such deposit or bond shall be maintained unimpaired as long as the legal expense insurance corporation continues to do business in this state. Whenever the corporation ceases to do business in this state and furnishes proof satisfactory to the office that it has discharged or otherwise adequately provided for all its obligations to its insureds in this state, the office and department shall release the deposited securities to the parties entitled thereto, on presentation of the receipts of the department for such securities, or shall release the bond filed with it in lieu of such deposit.
(6) The office, upon written request of the legal expense insurance corporation, may reduce the amount of deposit or bond required under subsection (1) if it finds that the policyholders and certificateholders of the corporation are adequately protected by:
(a) The terms and number of existing contracts with subscribers;
(b) Financial guarantees of financially sound public or private organizations or agencies;
(c) Other reliable financial guarantees; or
(d) Plan attorney agreements that provide for full plan benefits to subscribers without additional payments by the subscribers if the plan terminates.
(7) The office may at any time enter an order modifying the amount of the deposit or bond specified under subsection (1) or subsection (2) if it finds that there has been a substantial change in the facts on which the determination was based.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 5, 20, 21, ch. 83-278; s. 184, ch. 91-108; ss. 6, 7, ch. 93-147; s. 1638, ch. 2003-261.
642.024 Levy upon deposit.—No judgment creditor or other claimant of a legal expense insurance corporation shall have the right to levy upon any of the assets or securities held in this state as a deposit under s. 642.023.
History.—ss. 41, 52, ch. 85-321; ss. 6, 7, ch. 93-147.
642.025 Policy and certificate forms.—
(1) Legal expense insurance may be written as individual, group, blanket, or franchise insurance. Each contractual obligation for legal expense insurance shall be evidenced by a policy. Each person insured under a group policy shall be issued a certificate of coverage.
(2) No policy or certificate of legal expense insurance may be issued in this state unless a copy of the form has been filed with and approved by the office pursuant to s. 627.410.
(3) The office shall not approve any policy or certificate form which does not meet the following requirements:
(a) Policies shall contain a list and description of the legal services to be supplied or the legal matters for which expenses are to be reimbursed and any limits on the amounts to be reimbursed.
(b) Policies and certificates shall indicate the name of the insurer and the full address of its principal place of business.
(c) Certificates issued under group policies shall contain a full statement of the benefits provided and exceptions thereto but may summarize the other terms of the master policy.
(d) Policies providing for legal services to be supplied by a limited number of attorneys who have executed provider contracts with the insurer, whether the attorney in an individual case is to be selected by the insured or by the insurer, shall provide for alternative benefits if the insured is unable to find a participating attorney willing to perform the services or the attorney selected by the insurer is disqualified or otherwise unable to perform the services. The alternative benefit may consist of furnishing the services of an attorney selected and paid by the insurer or paying the fee of an attorney selected by the insured. The policy shall also provide a procedure that includes impartial review for settling disagreements concerning the grounds for demanding an alternative benefit.
(e) No policy, except one issued by a mutual or reciprocal insurance company, may provide for assessments on policyholders or for reduction of benefits for the purpose of maintaining the insurer’s solvency.
(f) Policies shall contain a statement that the subscriber has a right to file a complaint with The Florida Bar concerning attorney conduct pursuant to the plan.
(g) Policies shall contain a statement that the individual beneficiary has the right to retain, at his or her own expense, except when the policy provides otherwise, any attorney authorized to practice law in this state.
(4) The office may disapprove a policy or certificate form if it finds that the form:
(a) Is unfair, unfairly discriminatory, misleading, or ambiguous or encourages misrepresentation or misunderstanding of the contract;
(b) Provides coverage or benefits or contains other provisions that would endanger the solvency of the insurer; or
(c) Is contrary to law.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 6, 20, 21, ch. 83-278; ss. 6, 7, ch. 93-147; s. 495, ch. 97-102; s. 1639, ch. 2003-261.
642.0261 Net worth required of applicants.—To receive authority to transact legal expense insurance, an applicant applying for a certificate of authority after October 1, 1993, must possess a net worth not less than the greater of:
(1) Ten thousand dollars; or
(2) Ten percent of the applicant’s total liabilities.
History.—ss. 3, 7, ch. 93-147.
642.0262 Net worth required to maintain certificate of authority.—To maintain a certificate of authority to transact legal expense insurance, a legal expense insurance corporation must maintain a net worth of not less than the greater of:
(1) Ten thousand dollars; or
(2) Ten percent of the insurer’s total liabilities.
History.—ss. 4, 7, ch. 93-147; s. 83, ch. 2000-158.
642.027 Premium rates.—No policy of legal expense insurance may be issued in this state unless the premium rates for the insurance have been filed with and approved by the office. Premium rates shall be established and justified in accordance with generally accepted insurance principles, including, but not limited to, the experience or judgment of the insurer making the rate filing or actuarial computations. The office may disapprove rates that are excessive, inadequate, or unfairly discriminatory. Rates are not unfairly discriminatory because they are averaged broadly among persons insured under group, blanket, or franchise policies. The office may require the submission of any other information reasonably necessary in determining whether to approve or disapprove a filing made under this section or s. 642.025.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 20, 21, ch. 83-278; ss. 6, 7, ch. 93-147; s. 1640, ch. 2003-261.
642.029 Contracts by insurers.—
(1) Contracts made between the insurer and participating attorneys, management contracts, or contracts with providers of other services covered by the legal expense insurance policy shall be filed with and approved by the office.
(2) An insurer shall annually report to the office the number and geographical distribution of attorneys and providers of other services covered by the legal expense insurance policy with whom it maintains contractual relations and the nature of the relations. The office may require more frequent reports from an insurer or group of insurers.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 7, 20, 21, ch. 83-278; ss. 6, 7, ch. 93-147; s. 1641, ch. 2003-261.
642.0301 Filing, license, statement, and miscellaneous fees.—
(1) Every legal expense insurance corporation must pay to the office the following fees:
(a) Certificate of authority of legal expense insurance corporation. Filing application for original certificate of authority, including all accompanying documents, filing fee..........$250
(b) Annual license fee for legal expense insurance corporations..........$300
(c) Statements of legal expense insurance corporation:
1. Annual statement..........$100
2. Quarterly statement..........$25
(2) For any service not described in subsection (1), the fee is that prescribed in s. 624.501.
History.—ss. 5, 7, ch. 93-147; s. 1642, ch. 2003-261.
642.032 Provisions of general insurance law applicable to legal expense insurance corporations.—The following provisions of the Florida Insurance Code shall apply to legal expense insurance corporations, to the extent that they are not inconsistent with the provisions of ss. 642.011-642.049:
(1) Chapter 624, administration and general provisions.
(2) Chapter 625, accounting, investments, and deposits.
(3) Chapter 626, part IX, unfair insurance trade practices.
(4) Chapter 627, part I, rates and rating organizations, and part II, the insurance contract.
(5) Section 628.4615, specialty insurers; acquisition of controlling stock, ownership interest, assets, or control; merger or consolidation.
(6) Chapter 631, insurer insolvency; guaranty of payment.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 8, 20, 21, ch. 83-278; s. 15, ch. 86-250; s. 10, ch. 90-248; s. 131, ch. 91-108; ss. 6, 7, ch. 93-147; s. 8, ch. 2001-64.
642.0331 Grounds for suspension or revocation of certificate.—
(1) The certificate of authority of an insurer, whether issued pursuant to this chapter or the insurance code, may be revoked or suspended, or the office may refuse to renew a certificate of authority, if the office determines that the insurer:
(a) Has violated any lawful rule or order of the commission or office or any provision of this chapter.
(b) Is in an unsound financial condition which would render its further transaction of business in this state hazardous or injurious to its policyholders, its certificateholders, or the public.
(c) Is using such methods or practices in the conduct of its business so as to render its further transaction of business in this state hazardous or injurious to its policyholders, its certificateholders, or the public.
(d) Has refused to be examined or to produce its accounts, records, or files for examination, or if any of its officers have refused to give information with respect to its affairs or have refused to perform any other legal obligation as to such examination, when required by the office.
(e) Has failed to pay any final judgment rendered against it in this state within 60 days after the judgment became final.
(f) Without just cause has refused to pay proper claims or perform services arising under its policies or contracts; without just cause has compelled policyholders or certificateholders to accept less than the amount due them; or has employed attorneys, or has brought suit against the association, to secure full payment or settlement of such claims.
(g) Is affiliated with, and under the same general management or interlocking directorate or ownership as, another insurer which transacts business in this state without having a certificate of authority.
(2) The office may, pursuant to s. 120.60, in its discretion and without advance notice or hearing thereon, immediately suspend the certificate of any insurer, whether such certificate was issued pursuant to this chapter or the insurance code, if it finds that one or more of the following circumstances exist:
(a) The insurer is insolvent or impaired.
(b) The deposit required by s. 642.023 is not being maintained.
(c) Proceedings for receivership, conservatorship, or rehabilitation or other delinquency proceedings regarding the insurer have been commenced in any state.
(d) The financial condition or business practices of the insurer otherwise pose an imminent threat to the public health, safety, or welfare of the residents of this state.
History.—ss. 9, 21, ch. 83-278; ss. 6, 7, ch. 93-147; s. 1643, ch. 2003-261.
642.0334 Order; notice of suspension or revocation of certificate; effect; publication.—
(1) Suspension or revocation of a certificate of authority of an insurer shall be by order of the office mailed to the corporation by registered or certified mail. The office also shall promptly give notice of such suspension or revocation to the sales representatives in this state of the corporation who are of record in the office of the office. The insurer shall not solicit or write any new contracts in this state during the period of any such suspension or revocation.
(2) In its discretion, the office may cause notice of the revocation or suspension to be published in one or more newspapers of general circulation published in this state.
History.—ss. 10, 21, ch. 83-278; ss. 6, 7, ch. 93-147; s. 1644, ch. 2003-261.
642.0336 Duration of suspension; obligations during suspension; reinstatement.—
(1) Suspension of an insurer’s certificate of authority shall be for such period, not to exceed 1 year, as is fixed in the order of suspension, unless such suspension or the order upon which the suspension is based is modified, rescinded, or reversed.
(2) During the period of suspension, the insurer shall file its annual statement and pay fees as required under this chapter as if the certificate of authority had continued in full force.
(3) Upon expiration of the period of suspension, if within such period the certificate of authority has not otherwise terminated, the certificate of authority shall automatically be reinstated, unless the causes of the suspension have not been removed or the insurer is otherwise not in compliance with the requirements of this chapter.
(4) Upon reinstatement of an insurer’s certificate of authority following suspension, the authority of the sales representatives in this state to represent the insurer shall be reinstated.
History.—ss. 11, 21, ch. 83-278; ss. 6, 7, ch. 93-147.
642.0338 Administrative fine in lieu of suspension or revocation.—
(1) If the office finds that one or more grounds exist for the revocation or suspension of a certificate of authority issued under this chapter, the office may, in lieu of such suspension or revocation, impose a fine upon the insurer.
(2) With respect to any nonwillful violation, such fine shall not exceed $1,000 per violation. In no event shall such fine exceed an aggregate amount of $5,000 for all nonwillful violations arising out of the same action. When an insurer discovers a nonwillful violation, the insurer shall correct the violation and, if restitution is due, make restitution to all affected persons. Such restitution shall include interest at 12 percent per year from either the date of the violation or the date of inception of the affected person’s policy, at the insurer’s option. The restitution may be a credit against future premiums due provided that the interest on the restitution will accumulate until the premiums are due. If the amount of restitution due to any person is $50 or more and the insurer wishes to credit it against future premiums, the insurer shall notify such person that it wishes to do so but that the person may receive a check instead of a credit. If the credit is on a policy which is not renewed, the insurer shall pay the restitution to the person to whom it is due.
(3) With respect to any knowing and willful violation of an order or rule of the office or commission or a provision of this chapter, the office may impose a fine upon the insurer in an amount not to exceed $5,000 for each such violation. In no event shall such fine exceed an aggregate amount of $25,000 for all knowing and willful violations arising out of the same action. In addition to such fines, such insurer shall make restitution when due in accordance with the provisions of subsection (2).
(4) The failure of an insurer to make restitution when due as required under this section constitutes a willful violation of this chapter. However, if an insurer in good faith is uncertain as to whether any restitution is due or as to the amount of such restitution, it shall promptly notify the office of the circumstances, and the failure to make restitution pending a determination thereof will not constitute a violation of this chapter.
History.—ss. 12, 21, ch. 83-278; ss. 6, 7, ch. 93-147; s. 1645, ch. 2003-261.
642.034 License and appointment required.—No person may solicit, negotiate, sell, or execute legal expense insurance contracts on behalf of an insurer in this state unless such person is licensed and appointed as a sales representative or is licensed and appointed under the insurance code as a general lines agent. No person licensed and appointed as a legal expense insurance sales representative may solicit, negotiate, sell, or execute any other contract of insurance unless such person is duly licensed and appointed to do so under the provisions of chapter 626.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 13, 20, 21, ch. 83-278; s. 177, ch. 91-108; ss. 6, 7, ch. 93-147; s. 97, ch. 2003-1; s. 72, ch. 2003-267; s. 63, ch. 2003-281.
642.036 Sales representatives to be licensed and appointed.—Sales representatives of legal expense insurers shall be licensed, appointed, renewed, continued, reinstated, or terminated as prescribed in chapter 626 for insurance representatives in general, and shall pay the license and appointment fees prescribed in s. 624.501. No employee or sales representative of an insurer may directly or indirectly solicit or negotiate insurance contracts, or hold herself or himself out in any manner to be an insurance agent, unless so qualified, licensed, and appointed therefor under the insurance code.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 14, 20, 21, ch. 83-278; s. 21, ch. 85-208; s. 178, ch. 91-108; ss. 6, 7, ch. 93-147; s. 496, ch. 97-102; s. 79, ch. 98-199; s. 98, ch. 2003-1; s. 73, ch. 2003-267; s. 64, ch. 2003-281.
642.038 Reporting and accounting for funds.—
(1) All funds belonging to an insurer or other person received by a sales representative in transactions under his or her license and appointment shall be trust funds so received by such representative in a fiduciary capacity; and the representative, in the applicable regular course of business, shall account for and pay the same to the insurer or other person entitled thereto.
(2) Any sales representative who, not being entitled thereto, diverts or appropriates such funds or any portion thereof to his or her own use commits theft as provided in s. 812.014.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 15, 20, 21, ch. 83-278; s. 179, ch. 91-108; s. 4, ch. 92-79; ss. 6, 7, ch. 93-147; s. 497, ch. 97-102; s. 104, ch. 2019-167.
642.041 Grounds for compulsory refusal, suspension, or revocation of license or appointment of contracting sales representatives.—The department shall, pursuant to the insurance code, deny, suspend, revoke, or refuse to renew or continue the license or appointment of any sales representative or the license or appointment of any general lines agent if it finds that, as to the sales representative or general lines agent, any one or more of the following applicable grounds exist:
(1) Material misstatement, misrepresentation, or fraud in obtaining or attempting to obtain a license or appointment.
(2) The license or appointment is willfully used, or to be used, to circumvent any of the requirements or prohibitions of ss. 642.011-642.049.
(3) Willful misrepresentation of any legal expense contract or willful deception with regard to any such contract, performed either in person or by any form of dissemination of information or advertising.
(4) In the adjustment of claims, material misrepresentation to a contract holder or other interested party of the terms and coverage of a contract, with the intent and for the purpose of settling such claim on less favorable terms than those provided in and contemplated by the contract.
(5) Demonstrated lack of fitness or trustworthiness to engage in the business of legal expense insurance.
(6) Demonstrated lack of adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment.
(7) Fraudulent or dishonest practices in the conduct of business under the license or appointment.
(8) Misappropriation, conversion, or unlawful withholding of moneys belonging to an insurer or other person and received in the conduct of business under the license or appointment.
(9) Unlawfully rebating, or attempting to unlawfully rebate, or unlawfully dividing, or offering to divide, his or her commission with another.
(10) Willful failure to comply with, or willful violation of, any proper order or rule of the office, commission, or department or willful violation of any provision of ss. 642.011-642.049.
(11) Being found guilty of, or pleading guilty or nolo contendere to, a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or any state thereof or under the law of any other country which involves moral turpitude, without regard to whether a judgment of conviction has been entered.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 16, 20, 21, ch. 83-278; s. 55, ch. 88-166; s. 180, ch. 91-108; ss. 6, 7, ch. 93-147; s. 498, ch. 97-102; s. 71, ch. 2002-206; s. 1646, ch. 2003-261.
642.043 Grounds for discretionary refusal, suspension, or revocation of license or appointment of sales representatives.—The department may, in its discretion, deny, suspend, revoke, or refuse to renew or continue the license or appointment of any sales representative if it finds that, as to the representative, any one or more of the following applicable grounds exist under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under s. 642.041:
(1) Any cause for which granting of the license or appointment could have been refused had it been known to the department at the time of application.
(2) Violation of any provision of ss. 642.011-642.049, or of any other law applicable to the business of legal expense insurance in the course of dealings under the license or appointment.
(3) Violation of any lawful order or rule of the office, commission, or department.
(4) Failure or refusal to pay over, upon demand, to any insurer he or she represents, or has represented, any money which belongs to the insurer.
(5) In the conduct of business under the license or appointment, having engaged in unfair methods of competition or in unfair or deceptive acts or practices, as such methods, acts, or practices are defined under part IX of chapter 626, or having otherwise shown himself or herself to be a source of injury or loss to the public or detrimental to the public interest.
(6) Having been found guilty of, or having pled guilty or nolo contendere to, a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or any state thereof or under the law of any other country, whether or not a judgment of conviction has been entered.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 17, 20, 21, ch. 83-278; s. 55, ch. 87-226; s. 56, ch. 88-166; s. 181, ch. 91-108; ss. 6, 7, ch. 93-147; s. 499, ch. 97-102; s. 9, ch. 2001-64; s. 1647, ch. 2003-261.
642.045 Procedure for refusal, suspension, or revocation of license and appointment of sales representative; departmental action upon violation by licensed insurance agent.—
(1) If any sales representative is convicted by a court of a violation of any provision of ss. 642.011-642.049, the license and appointment of such individual shall thereby be deemed to be immediately revoked without any further procedure relative thereto by the department.
(2) Whenever it appears that any licensed insurance agent has violated the provisions of ss. 642.011-642.049, or if any grounds listed in s. 642.041 or s. 642.043 exist as to such agent, the department may take such action as is authorized by the insurance code for a violation of the insurance code by such agent, or such action as is authorized by this chapter for a violation of this chapter by a sales representative.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 18, 20, 21, ch. 83-278; s. 182, ch. 91-108; ss. 6, 7, ch. 93-147; s. 99, ch. 2003-1; s. 74, ch. 2003-267; s. 65, ch. 2003-281.
642.047 Administrative fine in lieu of suspension or revocation of license or appointment.—
(1) If, pursuant to procedures provided for in ss. 642.011-642.049, it is found that one or more grounds exist for the suspension or revocation of, or refusal to renew or continue, any license or appointment issued under ss. 642.011-642.049, and except when such suspension, revocation, or refusal is mandatory, an order may be entered imposing upon the licensee or appointee, in lieu of such suspension, revocation, or refusal, an administrative penalty for each violation in the amount of $100 or, in the event of willful misconduct or willful violation on the part of the licensee or appointee, an administrative fine of $500. The administrative penalty may be augmented in amount by an amount equal to any commissions received by or accruing to the credit of the licensee or appointee in connection with any transaction to which the grounds for suspension, revocation, or refusal related.
(2) The order may allow the licensee or appointee a reasonable period not to exceed 30 days, within which to pay to the department or office the amount of the penalty so imposed. If the licensee or appointee fails to pay the penalty in its entirety to the department or office within the period so allowed, the license or appointment of the licensee or appointee shall stand suspended or revoked, or renewal or continuation may be refused, as the case may be, upon expiration of such period and without any further proceedings.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 20, 21, ch. 83-278; s. 183, ch. 91-108; ss. 6, 7, ch. 93-147; s. 1648, ch. 2003-261.
642.0475 Civil remedy.—
(1) Any person damaged by a violation of the provisions of this chapter may bring a civil action against a person violating such provisions in the circuit court of the county in which the alleged violator resides, or has his or her principal place of business, or in the county wherein the alleged violation occurred. Upon adverse adjudication, the defendant shall be liable for actual damages or $500, whichever is greater, together with court costs and reasonable attorney’s fees incurred by the plaintiff.
(2) No punitive damages may be awarded under this section unless the acts giving rise to the violation occur with such frequency as to indicate a general business practice and these acts are:
(a) Willful, wanton, and malicious.
(b) In reckless disregard for the rights of any insured.

Any person who pursues a claim under this subsection shall post in advance the costs of discovery. Such costs shall be awarded to the insurer if no punitive damages are awarded to the plaintiff.

(3) As a condition precedent to bringing an action under this section, the department and the person against whom the action is to be brought shall be given notice of the violation. The notice shall state with specificity the facts which allegedly constitute the violation and the law which the plaintiff is relying upon. No action shall lie if, within 30 days thereafter, the damages are paid or the circumstances giving rise to the violation are corrected.
(4) This section shall not be construed to authorize a class action suit against a legal expense insurance corporation or a civil action against the department, commission, or office or their employees.
History.—ss. 19, 21, ch. 83-278; ss. 6, 7, ch. 93-147; s. 500, ch. 97-102; s. 1649, ch. 2003-261.
642.048 Prohibited sales.—No insurer of prepaid legal services and no legal expense insurance corporation shall market on the premises of any establishment licensed to sell alcoholic beverages any insurance policy or contract which makes provision for legal services or indemnifies for the cost of legal services in connection with any traffic or boating criminal offense involving the operation of a motor vehicle, boat, or vessel while under the influence of alcoholic beverages.
History.—s. 1, ch. 87-169; s. 7, ch. 93-147.
642.049 Construction.—Nothing contained in ss. 642.011-642.049 shall be construed to regulate the practice of law or limit the powers or authority of the Supreme Court of Florida in the regulation of the conduct of attorneys.
History.—s. 1, ch. 79-103; s. 2, ch. 81-318; ss. 20, 21, ch. 83-278; ss. 6, 7, ch. 93-147.