19.1.3 The Commissioner of the Office of Insurance Regulation
...works in conjunction with the Department of Financial Services to oversee the insurance industry in accordance with the provisions of the Insurance Code.
The Chief Financial Officer, among other things, is responsible for (1) regulation of insurance agents, (2) insurance fraud, and (3) consumer protection.
The Chief Financial Officer and the Office of Insurance Regulation can examine insurance records any time to discover any unfair trade practices, and life insurance companies' financial conditions are constantly reviewed as well. The Insurance Code grants the Office authority concerning the types and quality of investments made by insurance companies and the techniques they use for valuing their assets for financial statement purposes.
The broad general powers and duties of the Chief Financial Officer and the Office of Insurance Regulation include:
- enforcement of the Insurance Code and carrying out those duties set forth by the Code;
- powers and authority may be expressed or implied in the Insurance Code;
- conduct, at their own expense, any investigation of insurance matters expressed in the Code, determine if a person has violated the Code or obtain information to administer the Code;
- collect, propose, publish or disseminate information regarding the duties imposed upon it by the Code; and
- have additional powers and duties as provided by other laws of the state.
What role does the Office of Insurance Regulation play? The OIR is responsible for all activities of the Financial Services Commission relating to regulation of insurers and other risk-bearing entities. Specific duties include:
- Rate-making supervision
- Policy forms approval
- Market conduct investigation
- Issuing insurer certificates of authority
- Assessing insurer solvency
- Regulating viatical settlements
- Regulating premium financing arrangements
- Administrative supervision
Insurance agents must keep records for at least three years if the transaction involves premium payments.
The following is evidence of the Office's authority granted by the Insurance Code.
- Minimum corporate bond ratings
- Earnings requirements specified for public utility bonds
- Real estate mortgage investments limited to first mortgages
- Limiting dollar amounts in certain investments, i.e., corporate stocks and junk bonds
The Office can conduct a hearing at any time they have reason to believe that:
- any person has engaged or is engaging in any unfair method of competition or any unfair or deceptive act or practice regarding insurance;
- any person is engaging in the business of insurance without being properly licensed; or
- a proceeding in respect thereto would be in the interest of the public. [Sec. 624.338, F.S.]
The Insurance Code sets forth misdemeanor penalties for any individual who knowingly makes a false or otherwise fraudulent application for any license or who violates any provision of the Code or who willfully obstructs the department, the office, or the examiner in the examinations or investigations authorized by this part.
An individual who knowingly makes a false or otherwise fraudulent application for any license or who violates any provision of the Insurance Code shall, upon conviction and in addition to any denial, suspension, revocation or refusal to renew or continue any license, be punishable as a misdemeanor by a fine of not less than $500 nor more than $3,500 or by imprisonment for not more than six months or by both, for each violation. In lieu of the above, the Chief Financial Officer may, at his discretion, impose an administrative penalty of up to $50,000, if a cease and desist order is violated. In lieu of the above, the Chief Financial Officer may, at his discretion, impose an administrative penalty of up to $50,000 if a cease and desist order is violated. In addition to a fine, the Chief Financial Officer can assess an amount equal to the amount of commission the agent earned.
Willfully submitting fraudulent signatures on an application or policy-related document is a third-degree felony and is subject to a $5,000 fine for each nonwillful violation and $75,000 for each willful violation.
"Admitted" and "Nonadmitted" Insurance Companies
An admitted insurance company is one that the Office of Insurance Regulation has licensed to transact insurance business in Florida in accordance with state laws.
A nonadmitted insurance company is just the opposite. It has NOT been licensed or authorized to transact insurance business in Florida.
Certificate of Authority
Before any entity may operate as an insurer in this state, it must obtain a Certificate of Authority from the Office. The Office shall accept and shall begin its review of an application for a certificate of authority any time after an organization has filed an application.
