Lesson 19 Review
There are four entities that exercise regulatory authority over the insurance industry in Florida: (1) the State Legislature, (2) the Department of Financial Services, (3) the Office of Insurance Regulation, and (4) the State Court System.
The use of terms such as financial planner, investment adviser, financial consultant, or financial counseling is restricted.
It is unlawful for agents to share commissions with anyone other than with agents who are also duly licensed in the same line.
Failure to answer a subpoena or an order of the Chief Financial Officer can result in a $1,000 fine. Remember, a violation of a cease and desist order can carry a fine of up to $50,000.
Insurance agents must keep records for at least three years if the transaction involves premium payments.
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. Before any entity may operate as an insurer in this state, it must obtain a Certificate of Authority from the Office.
Possible consequences for aiding and abetting an unauthorized insurer are:
- conviction of a third degree felony;
- liability for all unpaid claims; and
- suspension or revocation of all insurance licenses.
Every marketing communication that is intended to be used in the marketing of an insurance plan must be submitted for review by the office prior to use and must contain certain disclosures.
If a new policy is being written to replace an existing policy, the agent must explain why the policy is being replaced and how the replacement will be beneficial to the client. The replacement of existing life insurance policies with new contracts of life insurance requires a written comparison and summary statement at the policyholder's request.
Florida law requires insurance companies to deliver a Buyer's Guide and a Policy Summary.
Florida law prohibits individual health insurance policies, other than disability income, from excluding coverage for a preexisting condition for longer than 24 months.
Florida law allows life insurance (and annuity) applicants 14 days to inspect a policy that is delivered with the intent of issuing insurance coverage for the policyowner (free look period) and if the policy is not issued, the applicant must be given a full refund.
A lapse notice must be sent to the policyowner at the end of the required grace period.
Coverage for any newborn children of an individual who is covered under a health insurance policy must be provided immediately at birth and must be provided for a period of at least 18 months.
As with mental and nervous disorders, health insurers are required by Florida law to offer coverage for alcoholism and drug dependency to the policyowner, who may or may not choose to offer the coverage to the employees.
Groups eligible for group life and health insurance are:
- Employer-Employee Groups
- Labor Unions
- Trustee Groups
- Debtor Groups
- Association Groups
- Credit Unions
- Dependent Groups
Florida law does not regulate retirement plans.
Cliff vesting means that the employee must have five years of service before becoming vested, at which point the employee is 100% vested. Graded vesting is a gradual percentage that increases by 20% each year beginning after two years of service until 100% vested after six years of service.
Modified community rating means that all small groups are afforded the same pricing for everyone in the same category or class, identical by county of residence. Composite rating can be used for groups of 10 or more and averages the cost for all employees, charging the same premium for each, regardless of the nature variances of age and sex.
The Florida Health Care Access Act allows small businesses to provide group health insurance coverage for its employees on a guarantee-issue basis regardless of health circumstances, preexisting conditions, or claims history.
The information contained in Unit 4 and Part IV (Units 26 through 30) of the Florida study manual has been presented in Lessons 19 and 20 of the online course.
