FL 5-214 2017 Update Course - Success CE

1 FLORIDA LAW AND ETHICS Update 5 214 2 Copyright 2014, 2016, 2017 Success Continuing Education 2 Corporate Plaza Drive, Suite 100 Newport Beach, CA 92660 (949) 706-9425 (A member of the Success CE family of Companies) Copyright 2014, 2016, 2017 Success Continuing Education All Rights Reserved. No part of this publication may be used or reproduced in any form or by any means, transmitted in any form or by any means, electronic or mechanical, for any purpose, without the express written permission of Success Continuing Education. This publication is designed to provide general information on the topic presented.

2 It is sold with the understanding that the publisher is not engaged in rendering any legal or professional services. Although professionals prepared this content, it should not be used as a substitute for professional services. If legal or other professional advice is required, the services of a professional should be sought. 3 FLORIDA LAW AND ETHICS Update 2-14 LIFE (INCLUDING VARIABLE ANNUITIES & VARIABLE CONTRACTS) An entity that is required to be licensed or registered with the Florida Office of Insurance Regulation but is operating without the proper authorization is identified as an unauthorized insurer.

3 All persons have the responsibility of conducting reasonable research to ensure they are not writing policies or placing business with an unauthorized insurer. Any person who, directly or indirectly, aids or represents an unauthorized insurer can lose their licenses or face other disciplinary sanctions. Please see , Florida Statutes, to read the laws. Lack of careful screening can result in significant financial loss to Florida consumers due to unpaid claims and/or theft of premiums. Under Florida law, a person can be charged with a third degree felony and also held liable for any unpaid claims and refund of premiums when representing an unauthorized insurer.

4 It is the person s responsibility to give fair and accurate information regarding the companies they represent. TABLE OF CONTENTS CHAPTER 1 .. 1 REGULATORY AWARENESS .. 1 JURISDICTION OF DUTIES AND RESPONSIBILITIES .. 2 Title XXXVII .. 2 Chief Financial Officer .. 3 The Department of Financial Services .. 3 The Financial Services Commission .. 6 The Office of Insurance Regulation .. 6 The Office of Financial Regulation .. 7 LICENSING REQUIREMENTS .. 7 Licensing Examination .. 9 Law Enforcement Records .. 10 Required Documentation .. 11 Appointment .. 12 First-Time Applicant Character and Credit Report.

5 14 Contact Information .. 15 Working out of the Agent s Home .. 15 Insurance Agency Licensing .. 16 Agent in Charge .. 16 Agency Names .. 18 License Transfer .. 18 License Surrender .. 19 Grounds for Refusal, Suspension, or Revocation .. 20 Insurance Agent License .. 20 Insurance Agency License .. 22 Duration of Suspension or Revocation .. 24 Controlled Business .. 25 Administrative Fines and Restitution .. 25 Duties of Licensed vs Unlicensed Personnel .. 25 Limited Lines .. 27 Continuing Education .. 27 Duplicate Courses .. 28 Reporting and CE Recordkeeping Requirements .. 28 Continuing Education (CE) Exemption.

6 29 Funds Accountability .. 29 Advertising Code .. 30 Recordkeeping .. 31 2 Senior Consumers .. 31 DEPARTMENT COMMUNICATION .. 31 MyProfile Account .. 32 INSURANCE Insights .. 32 Transparency Florida An Open Door to Florida s Finances .. 33 Finances and Economy & Fraud and Consumer Protection .. 33 GUARANTY ASSOCIATIONS .. 36 Florida Life and Health Insurance Guaranty Association .. 36 CHAPTER 1 REVIEW QUESTIONS .. 38 CHAPTER 2 .. 40 INSURANCE LAW AND UPDATES .. 40 FEDERAL LAWS AFFECTING FLORIDA INSURANCE PROFESSIONALS .. 40 Suitability Information .. 42 Duties of Insurers and Agents.

7 42 Required Ongoing Training .. 43 Recordkeeping .. 43 Dodd-Frank Wall Street Reform and Consumer Protection Act .. 44 NEW FLORIDA-SPECIFIC UPDATES .. 45 Recommendations to Surrender HB 1133 .. 45 Insurance Agent and Agency Amendments HB 633 .. 45 Beneficiary Designations in the Case of Divorce .. 47 Third Party Applications .. 48 Fingerprinting .. 48 Contact Information .. 49 Moving Out of State .. 49 Summary of Annuity Updates .. 49 CHAPTER 2 REVIEW QUESTIONS .. 51 CHAPTER 3 .. 52 ETHICAL REQUIREMENTS .. 52 CODE OF ETHICS DFS .. 52 Fiduciary Responsibilities .. 53 Twisting and Churning.

8 54 Rebating .. 55 Defamation .. 55 Misrepresentation .. 56 Use of Designations .. 57 Unlicensed Insurance Activity .. 57 Required Disclosure on Forms .. 58 MARKETING REGULATORY AND ETHICAL GUIDELINES .. 58 UNDERSTANDING INDUSTRY PRODUCTS & SUITABILITY OF SALES AND SERVICES 60 Policy Replacement .. 61 3 UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS .. 61 Power of the Department and Office .. 64 Illegal Dealings in Life or Disability Insurance .. 64 Life Insurance Solicitation .. 65 Annuity Solicitation .. 66 UNDERSTANDING PREMIUM DISCOUNTS .. 66 CHAPTER 3 REVIEW QUESTIONS.

9 68 CHAPTER 4 .. 69 DISCIPLINARY AND INDUSTRY TRENDS .. 69 RECENT VIOLATIONS & ENFORCEMENT ACTIONS .. 69 DFS Insurance Fraud Rewards .. 69 Insurer Anti-Fraud Investigative Units .. 70 Cease and Desist .. 70 DFS Bureau of Investigation .. 71 Recent Enforcement Actions .. 71 Aiding and Abetting .. 72 Acting Without Licensure .. 73 Misappropriation of Funds .. 73 Nonresident Application Denied .. 73 Lack of Fitness or Trustworthiness .. 74 False Advertising .. 74 UNAUTHORIZED PRODUCTS & ENTITIES .. 75 Red Flags .. 76 NEW AND OTHER IMPORTANT TERMINOLOGY .. 77 Advertising .. 77 Chief Financial Officer (CFO).

10 77 Disclosure Required .. 77 Division of Agent and Agency Services .. 77 The Dodd-Frank Act .. 77 eAppoint .. 78 Florida Code of Ethics .. 78 Financial Services Commission .. 78 Incontestable Clause .. 78 Insurer Anti-Fraud Investigative Units .. 79 Law Enforcement Records .. 79 Risk Bearing Entity .. 79 Suitability Information .. 79 Unconditional Refund Period .. 79 Use of Designations .. 80 CHAPTER 4 REVIEW QUESTIONS .. 81 ANSWERS TO CHAPTER REVIEW QUESTIONS .. 82 4 5 FLORIDA LAW AND ETHICS Update 5 214 1 CHAPTER 1 REGULATORY AWARENESS It is important to keep up to date with the rules and regulations regarding the industry in which a person works, no matter what the industry.