19.3.1 Agents' Responsibilities
Florida statutes state: "No person may be, act as, or advertise or hold himself or herself out to be an insurance agent, customer representative, or adjuster unless he or she is currently licensed and appointed."
Agents are restrained by law from knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of soliciting insurance transactions.
Agents are authorized by the company they represent and their respective duties include:
- explaining company policy and the conditions under which a policy may be obtained;
- soliciting applicants;
- collecting premiums from policyholders and applicants; and
- servicing prospects and policyholders.
Agents must also be aware of the Florida Life Insurance Solicitation Law, the Florida Replacement Rule, and the FAIFA Code of Ethics.
The Florida Life Insurance Solicitation Law spells out the information and procedures required of agents and insurers when proposing life insurance to a prospective buyer. Unless otherwise specifically included, the following products are exempt from the law:
- Annuities;
- Credit life insurance;
- Group life insurance;
- Life insurance policies issued in connection with pension and welfare plans as defined by and which are subject to ERISA; and
- Variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account.
The Florida Replacement Rule sets for the requirements and procedures to be followed by insurance companies and agents when a proposal is being made in which a prospective life insurance buyer will be replacing existing insurance contracts with the proposed new insurance. Where replacement is or may be involved, the agent shall:
- Present to the applicant, not later than at the time of taking the application, a "Notice to Applicant Regarding Replacement of Life Insurance." The Notice must be signed by the applicant and the agent and left with the applicant.
- Leave with the applicant the original or a copy of all Sales Proposals used for presentation to the applicant.
- Submit to the replacing insurer with the application, a completed copy of the "Notice to Applicant Regarding Replacement of Life Insurance" and a copy of all Sales Proposals used for presentation to the applicant.
The Code of Ethics establishes a broad outline defining appropriate and inappropriate business behavior for life insurance agents. It also establishes the activities of agents as one of public trust. (A copy of the Code of Ethics is included in the Florida study manual, page 565.)
Agents are required to keep transaction documentation for three years if the transaction involves premium payments.
Florida law requires an agent to report in writing to the Department within 30 days if he has pled guilty or nolo contendere to, or has been convicted or found guilty of, a felony or a crime punishable by imprisonment of one year or more under any state law, federal law, or law of any other country. This written report is required whether or not the agent was convicted by the court having jurisdiction of the case. [Sec. 626.451(7), F.S.]
Agents are prohibited from unlawfully using a designation or misrepresenting his/her qualifications in a way that falsely implies that he/she possesses special financial knowledge or has obtained specialized financial training or is certified or qualified to provide specialized financial advice to senior citizens. However, an agent may disclose and make recommendations in accordance with those designations which he/she has earned such as: Certified financial planner (CFP), chartered life underwriter (CLU), financial planner (CFP), chartered life underwriter (CLU), chartered financial consultant (ChFC), life underwriter training council fellow (LUTC), or an appropriate license to sell securities from the Financial Industry Regulatory Authority (FINRA).
