Senate Bill sb2800
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Florida Senate - 2004 SB 2800
By Senator Argenziano
3-1392A-04
1 A bill to be entitled
2 An act relating to insurance agents and
3 agencies; amending s. 624.318, F.S.;
4 authorizing the electronic reproduction of
5 documents relating to the subject of an
6 investigation; amending s. 624.501, F.S.;
7 clarifying a license fee; amending s. 626.015,
8 F.S.; defining the term "personal lines agent";
9 amending s. 626.016, F.S.; subjecting insurance
10 agencies to regulation by the Chief Financial
11 Officer; amending s. 626.022, F.S.; providing
12 for application; amending s. 626.112, F.S.;
13 deleting a contingent requirement for insurance
14 agency licensure; amending s. 626.171, F.S.;
15 specifying licensure application requirements
16 for insurance entities other than insurance
17 agencies; deleting a provision applying to
18 insurance agencies; amending s. 626.172, F.S.;
19 revising insurance agency licensure application
20 requirements; amending s. 626.191, F.S.;
21 clarifying repeated application provisions;
22 amending s. 626.201, F.S.; clarifying a
23 department-authorized interrogatories
24 provision; amending s. 626.221, F.S.; deleting
25 provisions that permit certain persons who
26 previously qualified as managing general
27 agents, service or customer representatives, or
28 all-lines adjusters to be licensed as general
29 lines agents without an examination; providing
30 for certain adjusters to be relicensed without
31 examination; amending s. 626.241, F.S.;
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1 limiting the scope of personal lines agent
2 examinations; amending s. 626.2815, F.S.;
3 revising continuing education requirements;
4 amending s. 626.311, F.S.; limiting the types
5 of business that may be transacted by personal
6 lines agents; amending s. 626.342, F.S.;
7 including insurance agencies under provisions
8 prohibiting furnishing supplies to certain
9 unlicensed agents and imposing civil liability
10 under certain circumstances; amending s.
11 626.382, F.S.; requiring licensure renewal
12 application forms to be adopted; amending s.
13 626.451, F.S.; clarifying the effect of
14 appointment; amending s. 626.536, F.S.;
15 including insurance agencies under an
16 action-reporting requirement; amending s.
17 626.561, F.S.; including insurance agencies
18 under provisions providing funds reporting and
19 accounting requirements and imposing criminal
20 penalties; amending s. 626.572, F.S.; including
21 insurance agencies under provisions prohibiting
22 rebating; amending s. 626.601, F.S.; including
23 insurance agencies under provisions authorizing
24 the department to inquire into improper
25 conduct; creating s. 626.602, F.S.; authorizing
26 the Department of Financial Services to
27 disapprove the use of certain names under
28 certain circumstances; amending s. 626.6115,
29 F.S.; providing an additional ground for the
30 department to take compulsory adverse insurance
31 agency license actions; amending s. 626.6215,
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1 F.S.; providing an additional ground for the
2 department to take discretionary adverse
3 insurance agency license actions; amending s.
4 626.641, F.S.; providing additional criteria
5 for duration of license suspensions or
6 revocations; amending s. 626.727, F.S.;
7 providing that certain provisions apply to
8 personal lines agents; amending s. 626.732,
9 F.S.; revising certain education and experience
10 requirements for personal lines agents;
11 amending s. 626.7351, F.S.; providing an age
12 requirement for customer representatives;
13 amending ss. 626.292 and 626.321, F.S.;
14 correcting cross-references; repealing s.
15 626.592, F.S., relating to primary agents;
16 providing an effective date.
17
18 Be It Enacted by the Legislature of the State of Florida:
19
20 Section 1. Subsection (7) is added to section 624.318,
21 Florida Statutes, to read:
22 624.318 Conduct of examination or investigation;
23 access to records; correction of accounts; appraisals.--
24 (7)(a) The department or office or its examiners or
25 investigators may electronically reproduce accounts, records,
26 documents, files, and information relating to the subject of
27 the examination or investigation which are in the possession
28 or control of the person being examined or investigated.
29 (b) Notwithstanding subsection (5), a person being
30 examined or investigated may not refuse to consent to the
31 removal of any record, account, document, file, or other
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1 property of that person from the offices of such person when
2 removal is for the purpose of electronic reproduction unless
3 the person provides reasonable access to electronic
4 reproduction facilities at the person's office.
5 (c) The reasonable expense of any such reproduction
6 shall be borne by the person being examined or investigated.
7 (d) This subsection applies to all investigations and
8 examinations authorized by the Florida Insurance Code.
9 Section 2. Subsection (20) of section 624.501, Florida
10 Statutes, is amended to read:
11 624.501 Filing, license, appointment, and
12 miscellaneous fees.--The department, commission, or office, as
13 appropriate, shall collect in advance, and persons so served
14 shall pay to it in advance, fees, licenses, and miscellaneous
15 charges as follows:
16 (20) Insurance agency or Adjusting firm, original or
17 renewal 3-year license..................................$60.00
18 Section 3. Present subsections (15) through (17) of
19 section 626.015, Florida Statutes, are redesignated as
20 subsections (16) through (18), respectively, and a new
21 subsection (15) is added to that section to read:
22 626.015 Definitions.--As used in this part:
23 (15) "Personal lines agent" means a general lines
24 agent who is limited to transacting business related to
25 property and casualty insurance sold to individuals and
26 families for noncommercial purposes.
27 Section 4. Subsection (1) of section 626.016, Florida
28 Statutes, is amended to read:
29 626.016 Powers and duties of department, commission,
30 and office.--
31
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1 (1) The powers and duties of the Chief Financial
2 Officer and the department specified in this part apply only
3 with respect to insurance agents, insurance agencies, managing
4 general agents, reinsurance intermediaries, viatical
5 settlement brokers, customer representatives, service
6 representatives, and agencies.
7 Section 5. Subsection (3) is added to section 626.022,
8 Florida Statutes, to read:
9 626.022 Scope of part.--
10 (3) Provisions of this part that apply to general
11 lines agents and applicants also apply to personal lines
12 agents and applicants, except where otherwise provided.
13 Section 6. Subsection (7) of section 626.112, Florida
14 Statutes, is amended to read:
15 626.112 License and appointment required; agents,
16 customer representatives, adjusters, insurance agencies,
17 service representatives, managing general agents.--
18 (7)(a) No individual, firm, partnership, corporation,
19 association, or any other entity shall act in its own name or
20 under a trade name, directly or indirectly, as an insurance
21 agency, when required to be licensed by this subsection,
22 unless it complies with s. 626.172 with respect to possessing
23 an insurance agency license for each place of business at
24 which it engages in any activity which may be performed only
25 by a licensed insurance agent.
26 (b) An insurance agency shall, as a condition
27 precedent to continuing business, obtain an insurance agency
28 license if the department finds that, with respect to any
29 majority owner, partner, manager, director, officer, or other
30 person who manages or controls the agency, any person has,
31 subsequent to the effective date of this act:
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1 1. Been found guilty of, or has pleaded guilty or nolo
2 contendere to, a felony in this state or any other state
3 relating to the business of insurance or to an insurance
4 agency, without regard to whether a judgment of conviction has
5 been entered by the court having jurisdiction of the cases.
6 2. Employed any individual in a managerial capacity or
7 in a capacity dealing with the public who is under an order of
8 revocation or suspension issued by the department. An
9 insurance agency may request, on forms prescribed by the
10 department, verification of any person's license status. If a
11 request is mailed within 5 working days after an employee is
12 hired, and the employee's license is currently suspended or
13 revoked, the agency shall not be required to obtain a license,
14 if the unlicensed person's employment is immediately
15 terminated.
16 3. Operated the agency or permitted the agency to be
17 operated in violation of s. 626.747.
18 4. With such frequency as to have made the operation
19 of the agency hazardous to the insurance-buying public or
20 other persons:
21 a. Solicited or handled controlled business. This
22 subparagraph shall not prohibit the licensing of any lending
23 or financing institution or creditor, with respect to
24 insurance only, under credit life or disability insurance
25 policies of borrowers from the institutions, which policies
26 are subject to part IX of chapter 627.
27 b. Misappropriated, converted, or unlawfully withheld
28 moneys belonging to insurers, insureds, beneficiaries, or
29 others and received in the conduct of business under the
30 license.
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1 c. Unlawfully rebated, attempted to unlawfully rebate,
2 or unlawfully divided or offered to divide commissions with
3 another.
4 d. Misrepresented any insurance policy or annuity
5 contract, or used deception with regard to any policy or
6 contract, done either in person or by any form of
7 dissemination of information or advertising.
8 e. Violated any provision of this code or any other
9 law applicable to the business of insurance in the course of
10 dealing under the license.
11 f. Violated any lawful order or rule of the
12 department.
13 g. Failed or refused, upon demand, to pay over to any
14 insurer he or she represents or has represented any money
15 coming into his or her hands belonging to the insurer.
16 h. Violated the provision against twisting as defined
17 in s. 626.9541(1)(l).
18 i. In the conduct of business, engaged in unfair
19 methods of competition or in unfair or deceptive acts or
20 practices, as prohibited under part IX of this chapter.
21 j. Willfully overinsured any property insurance risk.
22 k. Engaged in fraudulent or dishonest practices in the
23 conduct of business arising out of activities related to
24 insurance or the insurance agency.
25 l. Demonstrated lack of fitness or trustworthiness to
26 engage in the business of insurance arising out of activities
27 related to insurance or the insurance agency.
28 m. Authorized or knowingly allowed individuals to
29 transact insurance who were not then licensed as required by
30 this code.
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1 5. Knowingly employed any person who within the
2 preceding 3 years has had his or her relationship with an
3 agency terminated in accordance with paragraph (d).
4 6. Willfully circumvented the requirements or
5 prohibitions of this code.
6 (c) An agency required to be licensed in accordance
7 with paragraph (b) shall remain so licensed for a period of 3
8 years from the date of licensure unless the license is
9 suspended or revoked in accordance with law. The department
10 may revoke or suspend the agency authority to do business for
11 activities occurring during the time the agency is licensed,
12 regardless of whether the licensing period has terminated.
13 (d) Notwithstanding the provisions of this subsection,
14 no insurance agency shall be required to apply for an agency
15 license if such agency can prove to the department that:
16 1. The agency is severing its relationship with each
17 majority owner, partner, manager, director, officer, or other
18 person who managed or controlled such agency and who violated
19 any of the provisions of paragraph (b).
20 2. No such majority owner, partner, manager, director,
21 officer, or other person who managed such agency is to be
22 affiliated with such agency in any capacity for a period of 3
23 years from the date of such severance.
24 Section 7. Section 626.171, Florida Statutes, is
25 amended to read:
26 626.171 Application for license as agent, customer
27 representative, adjuster, service representative, managing
28 general agent, or reinsurance intermediary.--
29 (1) The department or office shall not issue a license
30 as agent, customer representative, adjuster, insurance agency,
31 service representative, managing general agent, or reinsurance
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1 intermediary to any person except upon written application
2 therefor filed with it, qualification therefor, and payment in
3 advance of all applicable fees. Any such application shall be
4 made under the oath of the applicant and be signed by the
5 applicant. Beginning November 1, 2002, The department shall
6 accept the uniform application for nonresident agent
7 licensing. The department may adopt revised versions of the
8 uniform application by rule.
9 (2) In the application, the applicant shall set forth:
10 (a) His or her full name, age, social security number,
11 residence address, business address, and mailing address.
12 (b) Proof that he or she has completed or is in the
13 process of completing any required prelicensing course.
14 (c) Whether he or she has been refused or has
15 voluntarily surrendered or has had suspended or revoked a
16 license to solicit insurance by the department or by the
17 supervising officials of any state.
18 (d) Whether any insurer or any managing general agent
19 claims the applicant is indebted under any agency contract or
20 otherwise and, if so, the name of the claimant, the nature of
21 the claim, and the applicant's defense thereto, if any.
22 (e) Proof that the applicant meets the requirements
23 for the type of license for which he or she is applying.
24 (f) Such other or additional information as the
25 department or office may deem proper to enable it to determine
26 the character, experience, ability, and other qualifications
27 of the applicant to hold himself or herself out to the public
28 as an insurance representative.
29 (3) An application for an insurance agency license
30 shall be signed by the owner or owners of the agency. If the
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1 agency is incorporated, the application shall be signed by the
2 president and secretary of the corporation.
3 (3)(4) Each application shall be accompanied by
4 payment of any applicable fee.
5 (4)(5) An application for a license as an agent,
6 customer representative, adjuster, insurance agency, service
7 representative, managing general agent, or reinsurance
8 intermediary must be accompanied by a set of the individual
9 applicant's fingerprints, or, if the applicant is not an
10 individual, by a set of the fingerprints of the sole
11 proprietor, majority owner, partners, officers, and directors,
12 on a form adopted by rule of the department or commission and
13 accompanied by the fingerprint processing fee set forth in s.
14 624.501. Fingerprints shall be used to investigate the
15 applicant's qualifications pursuant to s. 626.201. The
16 fingerprints shall be taken by a law enforcement agency or
17 other department-approved entity.
18 (5)(6) The application for license filing fee
19 prescribed in s. 624.501 is not subject to refund.
20 (6)(7) Pursuant to the federal Personal Responsibility
21 and Work Opportunity Reconciliation Act of 1996, each party is
22 required to provide his or her social security number in
23 accordance with this section. Disclosure of social security
24 numbers obtained through this requirement shall be limited to
25 the purpose of administration of the Title IV-D program for
26 child support enforcement.
27 Section 8. Section 626.172, Florida Statutes, is
28 amended to read:
29 626.172 Application for insurance agency license.--
30 (1) The department may issue a license as an insurance
31 agency to any person only after such person files a written
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1 application with the department and qualifies for such
2 license. If any majority owner, partner, officer, or director
3 of an insurance agency:
4 (a) Has been found guilty of, or has pleaded guilty or
5 nolo contendere to, a felony relating to the business of
6 insurance in this state or any other state or federal court,
7 regardless of whether a judgment of conviction has been
8 entered by the court having jurisdiction of such cases; or
9 (b) Has been denied a license relating to the business
10 of insurance, or has had his or her license to practice or
11 conduct any regulated profession, business, or vocation
12 relating to the business of insurance revoked or suspended, by
13 this or any other state, any nation, any possession or
14 district of the United States, or any court, or any lawful
15 agency thereof;
16
17 the insurance agency and any subsidiary or branch thereof
18 shall obtain a license from the department pursuant to this
19 section.
20 (2) An application for an insurance agency license
21 shall be signed by the owner or owners of the agency. If the
22 agency is incorporated, the application shall be signed by the
23 president and secretary of the corporation. The application
24 for an insurance agency license shall include:
25 (a) The name of each majority owner, partner, officer,
26 and director of the insurance agency.
27 (b) The residence address of each person required to
28 be listed in the application under paragraph (a).
29 (c) The name of the insurance agency and its principal
30 business address.
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1 (d) The location of each agency office and the name
2 under which each agency office conducts or will conduct
3 business.
4 (e) The name of each agent to be in full-time charge
5 of an agency office and specification of which office.
6 (f) Fingerprints for each of the following:
7 1. A sole proprietor;
8 2. Each partner;
9 3. Each owner of an unincorporated agency;
10 4. Each owner of a corporation whose shares are not
11 traded on a securities exchange;
12 5. Each owner of 10 percent or more of the voting
13 shares of a corporation which are traded on a securities
14 exchange who directs or participates in the operation of the
15 agency;
16 6. Each officer or director; and
17 7. Any other person who directs or participates in the
18 operation of the agency, whether through the ownership of
19 voting securities, by contract, or otherwise;
20
21 Fingerprints must be taken by a law enforcement agency or
22 other entity approved by the department and must be
23 accompanied by the fingerprint processing fee specified in s.
24 624.501. However, fingerprints do not have to be filed for any
25 individual who previously submitted fingerprints to the
26 department and obtained a license under this chapter if the
27 license is currently valid. The name of any person to whom
28 subsection (1) applies.
29 (g) Such additional information as the department
30 requires by promulgated rule to ascertain the trustworthiness
31 and competence of persons required to be listed on the
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1 application and to ascertain that such persons meet the
2 requirements of this code.
3 Section 9. Section 626.191, Florida Statutes, is
4 amended to read:
5 626.191 Repeated applications.--The failure of an
6 applicant to secure a license upon an application shall not
7 preclude the applicant him or her from applying again as many
8 times as desired, but the department or office shall not give
9 consideration to or accept any further application by the same
10 individual for a similar license dated or filed within 30 days
11 subsequent to the date the department or office denied the
12 last application, except as provided in s. 626.281.
13 Section 10. Subsection (1) of section 626.201, Florida
14 Statutes, is amended to read:
15 626.201 Investigation.--
16 (1) The department or office may propound any
17 reasonable interrogatories in addition to those contained in
18 the application, to any applicant for license or appointment,
19 or on any renewal, reinstatement, or continuation thereof,
20 relating to the applicant's his or her qualifications,
21 residence, prospective place of business, and any other matter
22 which, in the opinion of the department or office, is deemed
23 necessary or advisable for the protection of the public and to
24 ascertain the applicant's qualifications.
25 Section 11. Section 626.221, Florida Statutes, is
26 amended to read:
27 626.221 Examination requirement; exemptions.--
28 (1) The department or office shall not issue any
29 license as agent, customer representative, or adjuster to any
30 individual who has not qualified for, taken, and passed to the
31
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1 satisfaction of the department or office a written examination
2 of the scope prescribed in s. 626.241.
3 (2) However, no such examination shall be necessary in
4 any of the following cases:
5 (a) An applicant for renewal of appointment as an
6 agent, customer representative, or adjuster, unless the
7 department or office determines that an examination is
8 necessary to establish the competence or trustworthiness of
9 such applicant.
10 (b) An applicant for limited license as agent for
11 personal accident insurance, baggage and motor vehicle excess
12 liability insurance, credit life or disability insurance,
13 credit insurance, credit property insurance, in-transit and
14 storage personal property insurance, or communications
15 equipment property insurance or communication equipment inland
16 marine insurance.
17 (c) In the discretion of the department or office, an
18 applicant for reinstatement of license or appointment as an
19 agent, customer representative, or adjuster whose license has
20 been suspended within 2 years prior to the date of application
21 or written request for reinstatement.
22 (d) An applicant who, within 2 years prior to
23 application for license and appointment as an agent, customer
24 representative, or adjuster, was a full-time salaried employee
25 of the department or office and had continuously been such an
26 employee with responsible insurance duties for not less than 2
27 years and who had been a licensee within 2 years prior to
28 employment by the department or office with the same class of
29 license as that being applied for.
30 (e) An individual who qualified as a managing general
31 agent, service representative, customer representative, or
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1 all-lines adjuster by passing a general lines agent's
2 examination and subsequently was licensed and appointed and
3 has been actively engaged in all lines of property and
4 casualty insurance may, upon filing an application for
5 appointment, be licensed and appointed as a general lines
6 agent for the same kinds of business without taking another
7 examination if he or she holds any such currently effective
8 license referred to in this paragraph or held the license
9 within 48 months prior to the date of filing the application
10 with the department.
11 (e)(f) A person who has been licensed and appointed as
12 a public adjuster, or independent adjuster, or licensed and
13 appointed either as an agent or company adjuster as to all
14 property, casualty, and surety insurances, may be licensed and
15 appointed as a company adjuster as to any of such insurances,
16 or as an independent, adjuster or public adjuster, for these
17 types of insurance without additional written examination if
18 an application for licensure appointment is filed with the
19 office within 48 months following the date of cancellation or
20 expiration of the prior appointment.
21 (f)(g) A person who has been licensed as an adjuster
22 for motor vehicle, property and casualty, workers'
23 compensation, and health insurance may be licensed as such an
24 adjuster without additional written examination if his or her
25 application for licensure appointment is filed with the office
26 within 48 months after cancellation or expiration of the prior
27 license.
28 (g)(h) An applicant for temporary license, except as
29 provided in this code.
30 (i)(i) An applicant for a life or health license who
31 has received the designation of chartered life underwriter
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1 (CLU) from the American College of Life Underwriters and who
2 has been engaged in the insurance business within the past 4
3 years, except that such an individual may be examined on
4 pertinent provisions of this code.
5 (i)(j) An applicant for license as a general lines
6 agent, customer representative, or adjuster who has received
7 the designation of chartered property and casualty underwriter
8 (CPCU) from the American Institute for Property and Liability
9 Underwriters and who has been engaged in the insurance
10 business within the past 4 years, except that such an
11 individual may be examined on pertinent provisions of this
12 code.
13 (j)(k) An applicant for license as a customer
14 representative who has the designation of Accredited Advisor
15 in Insurance (AAI) from the Insurance Institute of America,
16 the designation of Certified Insurance Counselor (CIC) from
17 the Society of Certified Insurance Service Counselors, the
18 designation of Accredited Customer Service Representative
19 (ACSR) from the Independent Insurance Agents of America, the
20 designation of Certified Professional Service Representative
21 (CPSR) from the National Foundation for Certified Professional
22 Service Representatives, the designation of Certified
23 Insurance Service Representative (CISR) from the Society of
24 Certified Insurance Service Representatives. Also, an
25 applicant for license as a customer representative who has the
26 designation of Certified Customer Service Representative
27 (CCSR) from the Florida Association of Insurance Agents, or
28 the designation of Registered Customer Service Representative
29 (RCSR) from a regionally accredited postsecondary institution
30 in this state, or the designation of Professional Customer
31 Service Representative (PCSR) from the Professional Career
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1 Institute, whose curriculum has been approved by the
2 department and whose curriculum includes comprehensive
3 analysis of basic property and casualty lines of insurance and
4 testing at least equal to that of standard department testing
5 for the customer representative license. The department shall
6 adopt rules establishing standards for the approval of
7 curriculum.
8 (k)(l) An applicant for license as an adjuster who has
9 the designation of Accredited Claims Adjuster (ACA) from a
10 regionally accredited postsecondary institution in this state,
11 or the designation of Professional Claims Adjuster (PCA) from
12 the Professional Career Institute, whose curriculum has been
13 approved by the office and whose curriculum includes
14 comprehensive analysis of basic property and casualty lines of
15 insurance and testing at least equal to that of standard
16 office testing for the all-lines adjuster license. The
17 commission shall adopt rules establishing standards for the
18 approval of curriculum.
19 (l)(m) An applicant qualifying for a license transfer
20 under s. 626.292, if the applicant:
21 1. Has successfully completed the prelicensing
22 examination requirements in the applicant's previous state
23 which are substantially equivalent to the examination
24 requirements in this state, as determined by the department;
25 2. Has received the designation of chartered property
26 and casualty underwriter (CPCU) from the American Institute
27 for Property and Liability Underwriters and has been engaged
28 in the insurance business within the past 4 years if applying
29 to transfer a general lines agent license; or
30 3. Has received the designation of chartered life
31 underwriter (CLU) from the American College of Life
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1 Underwriters and has been engaged in the insurance business
2 within the past 4 years, if applying to transfer a life or
3 health agent license.
4 (n) An applicant for a nonresident agent license, if
5 the applicant:
6 1. Has successfully completed prelicensing examination
7 requirements in the applicant's home state which are
8 substantially equivalent to the examination requirements in
9 this state, as determined by the department, as a requirement
10 for obtaining a resident license in his or her home state;
11 2. Held a general lines agent license, life agent
12 license, or health agent license prior to the time a written
13 examination was required;
14 3. Has received the designation of chartered property
15 and casualty underwriter (CPCU) from the American Institute
16 for Property and Liability Underwriters and has been engaged
17 in the insurance business within the past 4 years, if an
18 applicant for a nonresident license as a general lines agent;
19 or
20 4. Has received the designation of chartered life
21 underwriter (CLU) from the American College of Life
22 Underwriters and has been in the insurance business within the
23 past 4 years, if an applicant for a nonresident license as a
24 life agent or health agent.
25 (3) An individual who is already licensed as a
26 customer representative shall not be licensed as a general
27 lines agent without application and examination for such
28 license.
29 Section 12. Subsection (8) is added to section
30 626.241, Florida Statutes, to read:
31 626.241 Scope of examination.--
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1 (8) An examination for licensure as a personal lines
2 agent shall be limited in scope to the kinds of business
3 transacted under such license.
4 Section 13. Paragraphs (a), (b), (c), and (d) of
5 subsection (3) of section 626.2815, Florida Statutes, are
6 amended to read:
7 626.2815 Continuing education required; application;
8 exceptions; requirements; penalties.--
9 (3)(a) Each person subject to the provisions of this
10 section must, except as set forth in paragraphs (b), and (c),
11 and (d), complete a minimum of 24 hours of continuing
12 education courses every 2 years in basic or higher-level
13 courses prescribed by this section or in other courses
14 approved by the department. Each person subject to the
15 provisions of this section must complete, as part of his or
16 her required number of continuing education hours, 3 hours of
17 continuing education, approved by the department, every 2
18 years on the subject matter of ethics and a minimum of 2 hours
19 of continuing education, approved by the department, every 2
20 years on the subject matter of unauthorized entities engaging
21 in the business of insurance. The scope of the topic of
22 unauthorized entities shall include the Florida Nonprofit
23 Multiple Employer Welfare Arrangement Act and the Employee
24 Retirement Income Security Act, 29 U.S.C. ss. 1001 et seq., as
25 it relates to the provision of health insurance by employers
26 to their employees and the regulation thereof.
27 (b) For compliance periods beginning on January 1,
28 1998, A person who has been licensed for a period of 6 or more
29 years must complete 20 hours every 2 years in intermediate or
30 advanced-level courses prescribed by this section or in other
31 courses approved by the department.
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1 (c) A licensee who has been licensed for 25 years or
2 more and is a CLU or a CPCU or has a Bachelor of Science
3 degree in risk management or insurance with evidence of 18 or
4 more semester hours in upper-level insurance-related courses
5 must complete 10 12 hours of continuing education courses
6 every 2 years in courses prescribed by this section or in
7 other courses approved by the department, except, for
8 compliance periods beginning January 1, 1998, the licensees
9 described in this paragraph shall be required to complete 10
10 hours of continuing education courses every 2 years.
11 (d) Any person who holds a license as a customer
12 representative, limited customer representative, title agent,
13 motor vehicle physical damage and mechanical breakdown
14 insurance agent, crop or hail and multiple-peril crop
15 insurance agent, or as an industrial fire insurance or
16 burglary insurance agent and who is not a licensed life or
17 health insurance agent, shall be required to complete 10 12
18 hours of continuing education courses every 2 years, except,
19 for compliance periods beginning on January 1, 1998, each
20 licensee subject to this paragraph shall be required to
21 complete 10 hours of continuing education courses every 2
22 years.
23 Section 14. Subsection (1) of section 626.311, Florida
24 Statutes, is amended to read:
25 626.311 Scope of license.--
26 (1) Except as to personal lines agents and limited
27 licenses, the applicant for license as a general lines agent
28 or customer representative shall qualify for all property,
29 marine, casualty, and surety lines except bail bonds which
30 require a separate license under chapter 648. The license of
31 a general lines agent may also cover health insurance if
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1 health insurance is included in the agent's appointment by an
2 insurer as to which the licensee is also appointed as agent
3 for property or casualty or surety insurance. The license of
4 a customer representative shall provide, in substance, that it
5 covers all of such classes of insurance that his or her
6 appointing general lines agent or agency is currently so
7 authorized to transact under the general lines agent's license
8 and appointments. No such license shall be issued limited to
9 particular classes of insurance except for bail bonds which
10 require a separate license under chapter 648 or for personal
11 lines agents. Personal lines agents are limited to transacting
12 business related to property and casualty insurance sold to
13 individuals and families for noncommercial purposes.
14 Section 15. Subsections (1) and (2) of section
15 626.342, Florida Statutes, are amended to read:
16 626.342 Furnishing supplies to unlicensed life,
17 health, or general lines agent prohibited; civil liability.--
18 (1) An insurer, a managing general agent, an insurance
19 agency, or an agent, directly or through any representative,
20 may not furnish to any agent any blank forms, applications,
21 stationery, or other supplies to be used in soliciting,
22 negotiating, or effecting contracts of insurance on its behalf
23 unless such blank forms, applications, stationery, or other
24 supplies relate to a class of business with respect to which
25 the agent is licensed and appointed, whether for that insurer
26 or another insurer.
27 (2) Any insurer, general agent, insurance agency, or
28 agent who furnishes any of the supplies specified in
29 subsection (1) to any agent or prospective agent not appointed
30 to represent the insurer and who accepts from or writes any
31 insurance business for such agent or agency is subject to
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1 civil liability to any insured of such insurer to the same
2 extent and in the same manner as if such agent or prospective
3 agent had been appointed or authorized by the insurer or such
4 agent to act in its or his or her behalf. The provisions of
5 this subsection do not apply to insurance risk apportionment
6 plans under s. 627.351.
7 Section 16. Section 626.382, Florida Statutes, is
8 amended to read:
9 626.382 Continuation, expiration of license; insurance
10 agencies.--The license of any insurance agency shall be issued
11 for a period of 3 years, subject to the payment of the
12 original and renewal fees prescribed in s. 624.501, and shall
13 continue in force until canceled, suspended, revoked, or
14 otherwise terminated. Renewal requests shall be made by
15 submitting to the department a form adopted by departmental
16 rule.
17 Section 17. Subsection (3) of section 626.451, Florida
18 Statutes, is amended to read:
19 626.451 Appointment of agent or other
20 representative.--
21 (3) By authorizing the effectuation of the appointment
22 of an agent, adjuster, service representative, customer
23 representative, or managing general agent the appointing
24 entity is thereby certifying to the department that it is
25 willing to be bound by the acts of the agent, adjuster,
26 service representative, customer representative, or managing
27 general agent, within the scope of the licensee's employment
28 or appointment.
29 Section 18. Section 626.536, Florida Statutes, is
30 amended to read:
31
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1 626.536 Reporting of actions.--Each An agent and
2 insurance agency shall submit to the department, within 30
3 days after the final disposition of any administrative action
4 taken against the agent by a governmental agency in this or
5 any other state or jurisdiction relating to the business of
6 insurance, the sale of securities, or activity involving
7 fraud, dishonesty, trustworthiness, or breach of a fiduciary
8 duty, a copy of the order, consent to order, or other relevant
9 legal documents. The department may adopt rules implementing
10 the provisions of this section.
11 Section 19. Subsections (1) and (3) of section
12 626.561, Florida Statutes, are amended to read:
13 626.561 Reporting and accounting for funds.--
14 (1) All premiums, return premiums, or other funds
15 belonging to insurers or others received by an insurance
16 agency, agent, customer representative, or adjuster in
17 transactions under the his or her license are trust funds
18 received by the licensee in a fiduciary capacity. An agent or
19 insurance agency shall keep the funds belonging to each
20 insurer for which an agent he or she is not appointed, other
21 than a surplus lines insurer, in a separate account so as to
22 allow the department or office to properly audit such funds.
23 The licensee in the applicable regular course of business
24 shall account for and pay the same to the insurer, insured, or
25 other person entitled thereto.
26 (3) Any insurance agency, agent, customer
27 representative, or adjuster who, not being lawfully entitled
28 thereto, either temporarily or permanently diverts or
29 misappropriates such funds or any portion thereof or deprives
30 the other person of a benefit therefrom commits the offense
31 specified below:
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1 (a) If the funds diverted or misappropriated are $300
2 or less, a misdemeanor of the first degree, punishable as
3 provided in s. 775.082 or s. 775.083.
4 (b) If the funds diverted or misappropriated are more
5 than $300, but less than $20,000, a felony of the third
6 degree, punishable as provided in s. 775.082, s. 775.083, or
7 s. 775.084.
8 (c) If the funds diverted or misappropriated are
9 $20,000 or more, but less than $100,000, a felony of the
10 second degree, punishable as provided in s. 775.082, s.
11 775.083, or s. 775.084.
12 (d) If the funds diverted or misappropriated are
13 $100,000 or more, a felony of the first degree, punishable as
14 provided in s. 775.082, s. 775.083, or s. 775.084.
15 Section 20. Subsections (1) and (2) of section
16 626.572, Florida Statutes, are amended to read:
17 626.572 Rebating; when allowed.--
18 (1) No insurance agency or agent shall rebate any
19 portion of a his or her commission except as follows:
20 (a) The rebate shall be available to all insureds in
21 the same actuarial class.
22 (b) The rebate shall be in accordance with a rebating
23 schedule filed by the agent with the insurer issuing the
24 policy to which the rebate applies.
25 (c) The rebating schedule shall be uniformly applied
26 in that all insureds who purchase the same policy through the
27 agent for the same amount of insurance receive the same
28 percentage rebate.
29 (d) Rebates shall not be given to an insured with
30 respect to a policy purchased from an insurer that prohibits
31 its agents from rebating commissions.
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1 (e) The rebate schedule is prominently displayed in
2 public view in the agent's place of doing business and a copy
3 is available to insureds on request at no charge.
4 (f) The age, sex, place of residence, race,
5 nationality, ethnic origin, marital status, or occupation of
6 the insured or location of the risk is not utilized in
7 determining the percentage of the rebate or whether a rebate
8 is available.
9 (2) The insurance agency or agent shall maintain a
10 copy of all rebate schedules for the most recent 5 years and
11 their effective dates.
12 Section 21. Subsection (1) of section 626.601, Florida
13 Statutes, is amended to read:
14 626.601 Improper conduct; inquiry; fingerprinting.--
15 (1) The department or office may, upon its own motion
16 or upon a written complaint signed by any interested person
17 and filed with the department or office, inquire into any
18 alleged improper conduct of any licensed insurance agency,
19 agent, adjuster, service representative, managing general
20 agent, customer representative, title insurance agent, title
21 insurance agency, continuing education course provider,
22 instructor, school official, or monitor group under this code.
23 The department or office may thereafter initiate an
24 investigation of any such licensee if it has reasonable cause
25 to believe that the licensee has violated any provision of the
26 insurance code. During the course of its investigation, the
27 department or office shall contact the licensee being
28 investigated unless it determines that contacting such person
29 could jeopardize the successful completion of the
30 investigation or cause injury to the public.
31
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1 Section 22. Section 626.602, Florida Statutes, is
2 created to read:
3 626.602 Insurance agency names; disapproval.--The
4 department may disapprove the use of any true or fictitious
5 name, other than the bona fide natural name of an individual,
6 by any insurance agency on any of the following grounds:
7 (1) The name is an interference with or is too similar
8 to a name already filed and in use by another agency or
9 insurer;
10 (2) The use of the name may mislead the public in any
11 respect;
12 (3) The name states or implies that the agency is an
13 insurer, motor club, hospital service plan, state or federal
14 agency, charitable organization, or entity that primarily
15 provides advice and counsel rather than sells or solicits
16 insurance, or is entitled to engage in insurance activities
17 not permitted under licenses held or applied for;
18 (4) The name states or implies that the agency is an
19 underwriter. This subsection does not prevent a natural person
20 who is a life agent from describing himself or herself as an
21 underwriter or from using the designation "chartered life
22 underwriter" or who is a general lines agent from using the
23 designation "chartered property and casualty underwriter," if
24 the person is entitled to use such terms to describe himself
25 or herself; or
26 (5) The agency has already filed and not discontinued
27 the use of more than two names, including the true name. This
28 subsection does not prevent a licensee who has lawfully
29 purchased or succeeded to the business or businesses of other
30 licensees from using for each such business not more than two
31 additional names, true or fictitious, consisting of names used
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1 by the licensee's predecessors in the conduct of such
2 businesses.
3 Section 23. Section 626.6115, Florida Statutes, is
4 amended to read:
5 626.6115 Grounds for compulsory refusal, suspension,
6 or revocation of insurance agency license.--The department
7 shall deny, suspend, revoke, or refuse to continue the license
8 of any insurance agency if it finds, as to any insurance
9 agency or as to any majority owner, partner, manager,
10 director, officer, or other person who manages or controls
11 such agency, that any either one or both of the following
12 applicable grounds exist:
13 (1) Lack by the agency of one or more of the
14 qualifications for the license as specified in this code;.
15 (2) Material misstatement, misrepresentation, or fraud
16 in obtaining the license or in attempting to obtain the
17 license; or
18 (3) Denial, suspension, or revocation of a license to
19 practice or conduct any regulated profession, business, or
20 vocation relating to the business of insurance by this state,
21 any other state, any nation, any possession or district of the
22 United States, any court, or any lawful agency thereof.
23 Section 24. Subsection (6) is added to section
24 626.6215, Florida Statutes, to read:
25 626.6215 Grounds for discretionary refusal,
26 suspension, or revocation of insurance agency license.--The
27 department may, in its discretion, deny, suspend, revoke, or
28 refuse to continue the license of any insurance agency if it
29 finds, as to any insurance agency or as to any majority owner,
30 partner, manager, director, officer, or other person who
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1 manages or controls such insurance agency, that any one or
2 more of the following applicable grounds exist:
3 (6) Failure to take corrective action or report a
4 violation to the department within 30 days after an individual
5 licensee's violation is known or should have been known by one
6 or more of the partners, officers, or managers acting on
7 behalf of the agency.
8 Section 25. Subsections (1) and (2) of section
9 626.641, Florida Statutes, are amended to read:
10 626.641 Duration of suspension or revocation.--
11 (1) The department or office shall, in its order
12 suspending a license or appointment or in its order suspending
13 the eligibility of a person to hold or apply for such license
14 or appointment, specify the period during which the suspension
15 is to be in effect; but such period shall not exceed 2 years.
16 The license, appointment, or eligibility shall remain
17 suspended during the period so specified, subject, however, to
18 any rescission or modification of the order by the department
19 or office, or modification or reversal thereof by the court,
20 prior to expiration of the suspension period. A license,
21 appointment, or eligibility which has been suspended shall not
22 be reinstated except upon request for such reinstatement; but
23 the department or office shall not grant such reinstatement if
24 it finds that the circumstance or circumstances for which the
25 license, appointment, or eligibility was suspended still exist
26 or are likely to recur or if grounds exist to deny the license
27 or appointment pursuant to s. 626.611, s. 626.6115, s.
28 626.621, or s. 626.6215.
29 (2) No person or appointee under any license or
30 appointment revoked by the department or office, nor any
31 person whose eligibility to hold same has been revoked by the
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1 department or office, shall have the right to apply for
2 another license or appointment under this code within 2 years
3 from the effective date of such revocation or, if judicial
4 review of such revocation is sought, within 2 years from the
5 date of final court order or decree affirming the revocation.
6 An applicant for another license or appointment pursuant to
7 this subsection must qualify for licensure in the same manner
8 as a first-time applicant and is subject to denial of the
9 application pursuant to s. 626.611, s. 626.6115, s. 626.621,
10 or s. 626.6215. The department or office shall not, however,
11 grant a new license or appointment or reinstate eligibility to
12 hold such license or appointment if it finds that the
13 circumstance or circumstances for which the eligibility was
14 revoked or for which the previous license or appointment was
15 revoked still exist or are likely to recur; if an individual's
16 license as agent or customer representative or eligibility to
17 hold same has been revoked upon the ground specified in s.
18 626.611(12), the department or office shall refuse to grant or
19 issue any new license or appointment so applied for.
20 Section 26. Section 626.727, Florida Statutes, is
21 amended to read:
22 626.727 Scope of this part.--This part applies only to
23 general lines agents, customer representatives, service
24 representatives, and managing general agents, all as defined
25 in s. 626.015. Provisions of this part which apply to general
26 lines agents and applicants also apply to personal lines
27 agents and applicants, except where otherwise provided.
28 Section 27. Subsection (1) of section 626.732, Florida
29 Statutes, is amended to read:
30 626.732 Requirement as to knowledge, experience, or
31 instruction.--
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1 (1) Except as provided in subsection (3), no applicant
2 for a license as a general lines agent or personal lines
3 agent, except for a chartered property and casualty
4 underwriter (CPCU), other than as to a limited license as to
5 baggage and motor vehicle excess liability insurance, credit
6 property insurance, credit insurance, in-transit and storage
7 personal property insurance, or communications equipment
8 property insurance or communication equipment inland marine
9 insurance, shall be qualified or licensed unless within the 4
10 years immediately preceding the date the application for
11 license is filed with the department the applicant has:
12 (a) Taught or successfully completed classroom courses
13 in insurance, 3 hours of which shall be on the subject matter
14 of ethics, satisfactory to the department at a school,
15 college, or extension division thereof, approved by the
16 department;
17 (b) Completed a correspondence course in insurance, 3
18 hours of which shall be on the subject matter of ethics,
19 satisfactory to the department and regularly offered by
20 accredited institutions of higher learning in this state and,
21 except if he or she is applying for a limited license under s.
22 626.321, for licensure as a general lines agent, has had at
23 least 6 months of responsible insurance duties as a
24 substantially full-time bona fide employee in all lines of
25 property and casualty insurance set forth in the definition of
26 general lines agent under s. 626.015 or, for licensure as a
27 personal lines agent, has completed at least 3 months in
28 responsible insurance duties as a substantially full-time
29 employee in property and casualty insurance sold to
30 individuals and families for noncommercial purposes;
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1 (c) For licensure as a general lines agent, completed
2 at least 1 year in responsible insurance duties as a
3 substantially full-time bona fide employee in all lines of
4 property and casualty insurance, exclusive of aviation and wet
5 marine and transportation insurances but not exclusive of
6 boats of less than 36 feet in length or aircraft not held out
7 for hire, as set forth in the definition of a general lines
8 agent under s. 626.015, without the education requirement
9 mentioned in paragraph (a) or paragraph (b) or, for licensure
10 as a personal lines agent, has completed at least 6 months in
11 responsible insurance duties as a substantially full-time
12 employee in property and casualty insurance sold to
13 individuals and families for noncommercial purposes without
14 the education requirement in paragraph (a) or paragraph (b);
15 or
16 (d)1. For licensure as a general lines agent,
17 completed at least 1 year of responsible insurance duties as a
18 licensed and appointed customer representative or limited
19 customer representative in commercial or personal lines of
20 property and casualty insurance and 40 hours of classroom
21 courses approved by the department covering the areas of
22 property, casualty, surety, health, and marine insurance; or
23 2. For licensure as a personal lines agent, completed
24 at least 6 months of responsible duties as a licensed and
25 appointed customer representative or limited customer
26 representative in property and casualty insurance sold to
27 individuals and families for noncommercial purposes and 20
28 hours of classroom courses approved by the department which
29 are related to property and casualty insurance sold to
30 individuals and families for noncommercial purposes; or
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1 (e)1.2. For licensure as a general lines agent,
2 completed at least 1 year of responsible insurance duties as a
3 licensed and appointed service representative in either
4 commercial or personal lines of property and casualty
5 insurance and 80 hours of classroom courses approved by the
6 department covering the areas of property, casualty, surety,
7 health, and marine insurance; or.
8 2. For licensure as a personal lines agent, completed
9 at least 6 months of responsible insurance duties as a
10 licensed and appointed service representative in property and
11 casualty insurance sold to individuals and families for
12 noncommercial purposes and 40 hours of classroom courses
13 approved by the department related to property and casualty
14 insurance sold to individuals and families for noncommercial
15 purposes.
16 Section 28. Subsection (1) of section 626.7351,
17 Florida Statutes, is amended to read:
18 626.7351 Qualifications for customer representative's
19 license.--The department shall not grant or issue a license as
20 customer representative to any individual found by it to be
21 untrustworthy or incompetent, or who does not meet each of the
22 following qualifications:
23 (1) The applicant is a natural person 18 years of age
24 or older.
25 Section 29. Paragraph (c) of subsection (2) of section
26 626.292, Florida Statutes, is amended to read:
27 626.292 Transfer of license from another state.--
28 (2) To qualify for a license transfer, an individual
29 applicant must meet the following requirements:
30 (c) The individual shall submit a completed
31 application for this state which is received by the department
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1 within 90 days after the date the individual became a resident
2 of this state, along with payment of the applicable fees set
3 forth in s. 624.501 and submission of the following documents:
4 1. A certification issued by the appropriate official
5 of the applicant's home state identifying the type of license
6 and lines of authority under the license and stating that, at
7 the time the license from the home state was canceled, the
8 applicant was in good standing in that state or that the
9 state's Producer Database records, maintained by the National
10 Association of Insurance Commissioners, its affiliates, or
11 subsidiaries, indicate that the agent is or was licensed in
12 good standing for the line of authority requested.
13 2. A set of the individual applicant's fingerprints in
14 accordance with s. 626.171(4)(5).
15 Section 30. Paragraph (a) of subsection (2) of section
16 626.321, Florida Statutes, is amended to read:
17 626.321 Limited licenses.--
18 (2) An entity applying for a license under this
19 section is required to:
20 (a) Submit only one application for a license under s.
21 626.171. The requirements of s. 626.171(4)(5) shall only apply
22 to the officers and directors of the entity submitting the
23 application.
24 Section 31. Section 626.592, Florida Statutes, is
25 repealed.
26 Section 32. This act shall take effect October 1,
27 2004.
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1 *****************************************
2 SENATE SUMMARY
3 Revises provisions relating to insurance agents and
agencies. Provides for the Chief Financial Officer to
4 regulate agencies. Authorizes the electronic reproduction
of certain documents pertaining to an investigation.
5 Clarifies certain fees and defines the term "personal
lines agent." Deletes a requirement for agency licensure.
6 Specifies certain licensure requirements for entities
other than agencies. Revises agency licensure application
7 requirements. Clarifies provisions pertaining to
interrogatories authorized by the department. Deletes
8 provisions related to exemptions from examination
requirements for certain licenses. Exempts certain former
9 licensees from examination requirements. Limits the
content in personal lines agent licensure examinations.
10 Revises continuing education requirements. Limits the
type of business that a personal lines agent may conduct.
11 Prohibits agencies from furnishing supplies to certain
unlicensed agents and provides penalties. Establishes
12 licensure renewal application form requirements.
Establishes reporting requirements for agencies and
13 provides penalties. Authorizes the Department of
Financial Services to inquire into improper conduct.
14 Provides for the department to prohibit the use of
certain names. Provides grounds for the department to
15 take compulsory or discretionary adverse insurance agency
license actions. Provides additional grounds for
16 disciplinary action. Applies certain existing provisions
to personal lines agents and revises certain education
17 and experience requirements for such agents. Corrects
cross-references. Repeals a provision regulating primary
18 agents. (See bill for details.)
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