Rayborn outlines Florida insurance agency requirements to Latin Association

The requirements for Florida insurance agencies to be licensed by the state before Oct. 1, with fines of up to $10,000 for not licensing, were discussed in a presentation “Agency Licensing, Are You Prepared? That is the $10,000 Question,” presented by Keri Rayborn of Rayborn Associates during the February meeting of the Latin American Association of Insurance Agencies in Miami, Fla.

Rayborn told LAAIA members the Florida Legislature passed a bill during the 2004-2005 session that requires insurance agencies to become licensed, similar to the way agents license themselves currently.

“The Department of Financial Services will have forms with which you can obtaining your agency license or agency registration available online at the beginning of March at www.fldfs.com,” Rayborn said.

Insurance code changes
According to Rayborn, the act made the following changes to the insurance code:

Requires DFS to license insurance agencies in a manner similar to the licensure of insurance agents by Oct. 1 with exceptions;

Authorizes DFS to require specified information of applicants seeking licensure as an agency; obtain fingerprints of specified owners, partners, officers, and directors; and require additional information to ascertain the trustworthiness and competence of insurance agency applicants;

Prohibits the use of deceptive agency names;

Clarifies in the Insurance Code that all licensees of DFS or OIR must make their books, accounts and records available to examiners and investigators for electronic reproduction purposes upon request;

Repeals the requirement that a primary agent be designated for each agency location;

Creates laws to prohibit the state or its political subdivisions from excluding a licensed agent from participating in a bid or negotiation for an insurance product or plan;

Creates laws to authorize DFS to issue a nonresident title insurance license to a title insurance agent licensed by a state other than Florida; and

Corrects cross-references and makes other conforming changes.

Rayborn said this new act mandates that any newly licensed insurance agency formed on or after 1/1/03, whether owned in part or in whole by a licensed agent will have to become licensed by Oct. 1, 2006. The agency license is valid for three years, then must be renewed. There is no fee associated with the renewal.

This act allows for registration by Oct. 1, 2006, in lieu of licensing for agencies that have been in business prior to 1/1/03 and qualify under the following:

Any agency wholly owned by insurance agents currently licensed and appointed under Chapter 626.

An incorporated agency whose voting shares are traded on a securities exchange.

Any agency whose primary function is offering insurance as a member service of benefit to members of a nonprofit organization.

The registration is a one time issuance and does not need to be renewed. If any of the principals of the agency are found in violation of the insurance code, the agency will lose the registration and must file for an agency license.

Important items of note:
If you fail to register your agency by Oct. 1, 2006 DFS can impose a fine up to $5,000.

If you fail to license your agency by Oct. 1, 2006 DFS can impose a fine up to $10,000.

If your agency qualifies for registration and your agency conducts business in other states, you may want to consider licensing your agency. Many states are not reciprocal with Florida’s agency registration.

If you qualify for registration and decide to license your agency, later you can not change back to a registration. Once your agency holds the license they must maintain it.

If any ownership changes, mergers, acquisitions, consolidation, or anything of the like takes place after 1/1/03 your agency must become licensed.

If an agency has multiple locations each location must be either lic-ensed or registered. Each agency must have a licensed and appointed agent in fulltime charge of each location.

If your agency must be licensed there are a few exemptions from filing fingerprints:

An individual currently licensed and appointed as an insurance agent at the time the application was submitted.

Directors and officers of a corporation whose voting shares are traded on a securities exchange.

Your agency has been in business for 30 years and you decide to open up another branch office in a different location after 1/1/03, regardless if no ownership or employment changes, the original business will be qualified to register and the new branch location will be required to have a license.

Topics Florida Agencies