HB 1779

1
A bill to be entitled
2An act relating to insurance agents; amending s. 624.425,
3F.S.; deleting a resident agent requirement for certain
4property, casualty, and surety insurers; amending s.
5624.426, F.S., to conform; amending s. 626.025, F.S.;
6requiring surplus lines agents to comply with consumer
7protection laws; deleting provisions prohibiting certain
8actions by nonresident agents, to conform; amending s.
9626.2815, F.S.; requiring nonresident licensees to
10complete continuing education courses relating to ethics
11and unauthorized entities engaging in the insurance
12business; amending s. 626.741, F.S.; deleting a
13prohibition against nonresident general lines agents
14having offices in this state; deleting related provisions
15to conform; specifying no requirement for nonresident
16agents to maintain an office in this state; requiring
17agencies in which a nonresident agent maintains or has a
18financial interest to be subject to requirements
19applicable to agencies of resident agents in the state;
20amending ss. 626.752 and 626.753, F.S., to conform;
21creating s. 626.9272, F.S.; providing requirements for the
22licensure of nonresident surplus lines agents; providing
23requirements, restrictions, and limitations; amending ss.
24626.929 and 626.930, F.S., to conform; amending s.
25626.933, F.S.; authorizing the Department of Financial
26Services to authorize the Florida Surplus Lines Service
27Office to file suit on behalf of the department; amending
28s. 626.935, F.S.; revising grounds for adverse actions
29against surplus lines agents and licensees; repealing s.
30626.792(3), F.S.; deleting a prohibition against
31nonresident life insurance agents having offices in this
32state; repealing s. 626.835(3), F.S.; deleting a
33prohibition against nonresident health insurance agents
34having offices in this state; providing an effective date.
35
36Be It Enacted by the Legislature of the State of Florida:
37
38     Section 1.  Subsections (1) and (2) of section 624.425,
39Florida Statutes, are amended to read:
40     624.425  Resident Agent and countersignature required,
41property, casualty, surety insurance.--
42     (1)  Except as stated in s. 624.426, no authorized
43property, casualty, or surety insurer shall assume direct
44liability as to a subject of insurance resident, located, or to
45be performed in this state unless the policy or contract of
46insurance is issued by or through, and is countersigned by, an a
47local producing agent who is a resident of this state, regularly
48commissioned and licensed currently as an agent and appointed as
49an agent for the insurer under this code. If two or more
50authorized insurers issue a single policy of insurance against
51legal liability for loss or damage to person or property caused
52by the nuclear energy hazard, or a single policy insuring
53against loss or damage to property by radioactive contamination,
54whether or not also insuring against one or more other perils
55proper to insure against in this state, such policy if otherwise
56lawful may be countersigned on behalf of all of the insurers by
57a licensed and appointed resident agent of any insurer appearing
58thereon. The producing Such agent shall receive on each policy
59or contract the full and usual commission allowed and paid by
60the insurer to its agents on business written or transacted by
61them for the insurer.
62     (2)  If any subject of insurance referred to in subsection
63(1) is insured under a policy, or contract, or certificate of
64renewal or continuation thereof, issued in another state and
65covering also property and risks outside this state, a
66certificate evidencing such insurance as to subjects located,
67resident, or to be performed in this state, shall be issued by
68or through and shall be countersigned by the insurer's
69commissioned and appointed local producing agent resident in
70this state in the same manner and subject to the same conditions
71as is provided in subsection (1) as to policies and contracts;
72except that the compensation to be paid to the agent may relate
73only to the Florida portion of the insurance risks represented
74by such policy or contract.
75     Section 2.  Subsection (5) of section 624.426, Florida
76Statutes, is amended to read:
77     624.426  Exceptions to resident agent and countersignature
78law.--Section 624.425 does not apply to:
79     (5)  Policies of insurance issued by insurers whose agents
80represent, as to property, casualty, and surety insurance, only
81one company or group of companies under common ownership and for
82which a Florida resident agent is the agent of record and the
83application has been lawfully submitted to the insurer.
84     Section 3.  Subsections (8) and (9) of section 626.025,
85Florida Statutes, are amended, and present subsections (10)
86through (16) of said section are renumbered as subsections (9)
87through (15), respectively, to read:
88     626.025  Consumer protections.--To transact insurance,
89agents shall comply with consumer protection laws, including the
90following, as applicable:
91     (8)  Requirements for licensure of resident and nonresident
92agents in s. 626.112, s. 626.321, s. 626.731, s. 626.741, s.
93626.785, s. 626.792, s. 626.831, or s. 626.835, or s. 626.927.
94     (9)  The prohibition against nonresident agents having a
95place of business in the state, a pecuniary interest in an
96insurance business in the state, or a financial interest in an
97insurance agency in the state, under s. 626.741, s. 626.792, or
98s. 626.835.
99     Section 4.  Paragraph (j) of subsection (3) of section
100626.2815, Florida Statutes, is amended to read:
101     626.2815  Continuing education required; application;
102exceptions; requirements; penalties.--
103     (3)
104     (j)  A nonresident who must complete continuing education
105requirements in his or her home state may use the home state
106requirements to meet this state's continuing education
107requirements as well, if the resident's state recognizes
108reciprocity with this state's continuing education requirements.
109A nonresident whose home state does not have a continuing
110education requirement but is licensed for the same class of
111business in another state which does have a continuing education
112requirement may comply with this section by furnishing proof of
113compliance with the other state's requirement if that state has
114a reciprocal agreement with this state relative to continuing
115education. A nonresident whose home state does not have such
116continuing education requirements, and who is not licensed as a
117nonresident agent in a state that has continuing education
118requirements and reciprocates with this state, must meet the
119continuing education requirements of this state. Each
120nonresident must complete, as part of his or her required
121continuing education, 3 hours every 2 years on the subject
122matter of ethics and a minimum of 2 hours every 2 years on the
123subject matter of unauthorized entities engaging in the business
124of insurance.
125     Section 5.  Subsections (3), (4), and (5) of section
126626.741, Florida Statutes, are amended, subsections (6) through
127(9) of said section are renumbered as subsections (4) through
128(7), respectively, and present subsection (8) of said section is
129amended, to read:
130     626.741  Nonresident agents; licensing and restrictions.--
131     (3)  The department shall not, however, issue any license
132and appointment to any nonresident who has an office or place of
133business in this state, or who has any direct or indirect
134pecuniary interest in any insurance agent or insurance agency
135licensed as a resident of this state; nor to any individual who
136does not, at the time of issuance and throughout the existence
137of the Florida license, hold a license as agent or broker issued
138by his or her home state; nor to any individual who is employed
139by any insurer as a service representative or who is a managing
140general agent in any state, whether or not also licensed in
141another state as an agent or broker. The foregoing requirement
142to hold a similar license in the applicant's home state does not
143apply to customer representatives unless the home state licenses
144residents of that state in a similar manner. The prohibition
145against having an office or place of business in this state does
146not apply to customer representatives who are required to
147conduct business solely within the confines of the office of a
148licensed and appointed Florida resident general lines agent in
149this state. The authority of such nonresident license is limited
150to the specific lines of authority granted in the license issued
151by the agent's home state and further limited to the specific
152lines authorized under the nonresident license issued by this
153state. The department shall have discretion to refuse to issue
154any license or appointment to a nonresident when it has reason
155to believe that the applicant by ruse or subterfuge is
156attempting to avoid the intent and prohibitions contained in
157this subsection or to believe that any of the grounds exist as
158for suspension, denial, or revocation of license as set forth in
159ss. 626.611 and 626.621.
160     (4)  Such a nonresident shall not directly or indirectly
161solicit, negotiate, or effect insurance contracts in this state
162unless accompanied by a countersigning agent, resident in this
163state, on such risk.
164     (5)(a)  All insurance policies as defined in s. 627.402,
165written under the nonresident agent's license, including those
166written or issued pursuant to the Surplus Lines Law, part VIII,
167on risks or property located in this state must be countersigned
168by a local agent resident of this state; and it shall be the
169duty and responsibility of the nonresident agent, and, if called
170upon to do so by the countersigning agent, of the insurer
171likewise, to assure that such resident local agent receives the
172same commission as allowed by the home state of the nonresident
173agent, but in no event shall the resident local agent receive,
174accept, or retain less than 50 percent of the usual Florida
175local agent's commission or 50 percent of the nonresident
176agent's commission, whichever is less, on policies of insurance
177covering property as defined in s. 624.604 and insurance
178covering in whole or in part real property and tangible personal
179property, including property floater policies. On all other
180policies of insurance, including insurance covering motor
181vehicles, plate glass, burglary, robbery, theft, larceny, boiler
182and machinery, workers' compensation, fidelity and surety,
183bodily injury liability, and property damage liability, in no
184event shall he or she receive, accept, or retain less than 25
185percent of the usual Florida local agent's commission or 25
186percent of the nonresident agent's commission, whichever is
187less.
188     (b)  The provisions of this subsection, with respect to
189resident agent countersignature commission, shall not be
190applicable to any contracts of insurance purchased by a person
191whose premiums for insurance in the preceding year of such
192purchase exceeded $250,000 in the aggregate. Nothing herein is
193intended to preclude the negotiation and payment of a commission
194to the countersigning agent to compensate him or her for
195services performed or to be performed.
196     (6)(8)  Except as provided in this section and ss. 626.742
197and 626.743, nonresident agents shall be subject to the same
198requirements as apply to agents resident in this state. However,
199nonresident agents are not required to maintain an insurance
200agency in this state. If a nonresident agent does maintain or
201have a financial interest in an insurance agency in this state,
202the agency is subject to the same requirements that apply to
203agencies of resident agents in this state.
204     Section 6.  Paragraph (a) of subsection (3) of section
205626.752, Florida Statutes, is amended to read:
206     626.752  Exchange of business.--
207     (3)(a)  An insurer may furnish to resident Florida general
208lines agents who are not appointed by the insurer its forms,
209coverage documents, binders, applications, and other incidental
210supplies only for the purposes set forth in this section and
211only to the extent necessary to facilitate the writing of
212exchange of business pursuant to this section. The insurer shall
213assign a unique brokering agent's register number to each agent
214not appointed with the insurer but furnished with the insurer's
215forms, coverage documents, binders, applications, and other
216incidental supplies.
217     Section 7.  Subsections (1) and (3) of section 626.753,
218Florida Statutes, are amended to read:
219     626.753  Sharing commissions; penalty.--
220     (1)(a)  An agent may divide or share in commissions only
221with other agents appointed and licensed to write the same kind
222or kinds of insurance.
223     (b)  A resident agent and a nonresident agent, subject to
224the provisions of s. 626.741, may divide among themselves
225commissions as to kinds of insurance for which both are
226appointed and licensed.
227     (b)(c)  This section shall not be construed to prevent the
228payment or receipt of renewal commissions or other deferred
229commissions or pensions to or by any person solely because such
230person has ceased to hold a license to act as an insurance
231agent, and shall not prevent the payment of renewal commissions
232or other deferred commissions to any incorporated insurance
233agency solely because any of its stockholders has ceased to hold
234a license to act as an insurance agent.
235     (3)  A resident general lines agent may share commissions
236derived from the sale of crop hail or multiple-peril crop
237insurance with a production credit association organized under
23812 U.S.C.A. ss. 2071-2077 or a federal land bank association
239organized under U.S.C.A. ss. 2091-2098 if the association has
240specifically approved the insurance activity by its employees.
241The amount of commission to be shared shall be determined by the
242general lines agent and the company paying the commission.
243     Section 8.  Section 626.9272, Florida Statutes, is created
244to read:
245     626.9272  Licensing of nonresident surplus lines agents.--
246     (1)  The department may, upon written application and the
247payment of the fees specified in s. 624.501, issue a nonresident
248surplus lines agent license to a nonresident individual licensed
249in his or her home state as a resident general lines agent and a
250resident surplus lines agent and otherwise qualified under the
251laws of this state if, under the laws of the individual's home
252state, residents of this state may be licensed in a similar
253manner as a nonresident surplus lines agent in that state.
254     (2)  The department may not issue a license unless the
255applicant satisfies the same licensing requirements under s.
256626.927 as required of a resident surplus lines agent. The
257department may refuse to issue such license or appointment when
258the department has reason to believe that any of the grounds
259exist for denial, suspension, or revocation of a license as set
260forth in ss. 626.611 and 626.621.
261     (3)  The authority of a nonresident license is limited to
262the specific lines of authority granted in the license issued by
263the agent's home state and the lines authorized under the
264nonresident license by this state.
265     (4)  Any individual who holds a nonresident agent's
266license, upon becoming a resident of this state, may, for a
267period not to exceed 90 days, operate under the nonresident
268license and appointment but must become licensed as a resident
269agent within that time to continue transacting business in this
270state after the 90-day period.
271     (5)  Except as provided in this section, nonresident
272surplus lines agents are subject to the requirements that apply
273to resident surplus lines agents in this state, including ss.
274626.913-626.937.
275     (6)  If available, the department shall verify a
276nonresident applicant's licensing status through the producer
277database maintained by the National Association of Insurance
278Commissioners, its affiliates, or its subsidiaries.
279     Section 9.  Subsection (1) of section 626.929, Florida
280Statutes, is amended to read:
281     626.929  Origination, acceptance, placement of surplus
282lines business.--
283     (1)  A resident general lines agent while licensed and
284appointed as a surplus lines agent under this part may originate
285surplus lines business and may accept surplus lines business
286from any other originating Florida-licensed general lines agent
287appointed and licensed as to the kinds of insurance involved and
288may compensate such agent therefor.
289     Section 10.  Subsection (1) of section 626.930, Florida
290Statutes, is amended to read:
291     626.930  Records of surplus lines agent.--
292     (1)  Each surplus lines agent shall keep in his or her
293office in this state, or in the agent's state of residence for a
294nonresident who does not have an office in this state, a full
295and true record for a period of 5 years of each surplus lines
296contract, including applications and all certificates, cover
297notes, and other forms of confirmation of insurance coverage and
298any substitutions thereof or endorsements thereto relative to
299said contract procured by the agent and showing such of the
300following items as may be applicable:
301     (a)  Amount of the insurance and perils insured against;
302     (b)  Brief general description of property insured and
303where located;
304     (c)  Gross premium charged;
305     (d)  Return premium paid, if any;
306     (e)  Rate of premium charged upon the several items of
307property;
308     (f)  Effective date of the contract, and the terms thereof;
309     (g)  Name and post office address of the insured;
310     (h)  Name and home-office address of the insurer;
311     (i)  Amount collected from the insured; and
312     (j)  Other information as may be required by the
313department.
314     Section 11.  Section 626.933, Florida Statutes, is amended
315to read:
316     626.933  Collection of tax and service fee.--If the tax or
317service fee payable by a surplus lines agent under this Surplus
318Lines Law is not so paid within the time prescribed, the same
319shall be recoverable in a suit brought by the department against
320the surplus lines agent and the surety or sureties on the bond
321filed by the surplus lines agent under s. 626.928. The
322department may authorize the Florida Surplus Lines Service
323Office to file suit on behalf of the department. All costs and
324expenses incurred in a suit brought by the office that are not
325recoverable from the agent or surety shall be borne by the
326office.
327     Section 12.  Paragraphs (a), (b), and (j) of subsection (1)
328of section 626.935, Florida Statutes, are amended to read:
329     626.935  Suspension, revocation, or refusal of surplus
330lines agent's license.--
331     (1)  The department shall deny an application for, suspend,
332revoke, or refuse to renew the appointment of a surplus lines
333agent and all other licenses and appointments held by the
334licensee under this code, upon any of the following grounds:
335     (a)  Removal of the licensee's office from the licensee's
336state of residence.
337     (b)  Removal of the accounts and records of his or her
338surplus lines business from this state or the licensee's state
339of residence during the period when such accounts and records
340are required to be maintained under s. 626.930.
341     (j)  For any other applicable cause for which the license
342of a general lines agent could be suspended, revoked, or refused
343under s. 626.611 or s. 626.621.
344     Section 13.  Subsection (3) of section 626.792, Florida
345Statutes, is repealed:
346     626.792  Nonresident agents; licensing and restrictions.--
347     (3)  No such applicant or licensee shall have a place of
348business in this state, nor be an officer, director,
349stockholder, or partner in any corporation or partnership doing
350business in this state as a life insurance agency.
351     Section 14.  Subsection (3) of section 626.835, Florida
352Statutes, is repealed:
353     626.835  Nonresident agents; licensing and restrictions.--
354     (3)  No such applicant or licensee shall have a place of
355business in this state, nor be an officer, director,
356stockholder, or partner in any corporation or partnership doing
357business in this state as a health insurance agency.
358     Section 15.  This act shall take effect July 1, 2004.


CODING: Words stricken are deletions; words underlined are additions.