Fla. Judge Rules Agent Countersignature Law Unconstitutional

October 9, 2003

A Florida U.S. district court judge has struck down as unconstitutional the state’s countersignature law, which required that Florida resident agents and brokers get half the commission on insurance transactions earned by nonresident agents and brokers.

“For years, Florida has been a holdout for strong countersignature laws, in spite of legislative pressure to eliminate obstacles to conducting interstate business,” said James Taylor, southeastern regional manager for the National Association of Independent Insurers (NAII). “This ruling will set the stage for a more balanced producer licensing law in the state.”

In a decision entered Sept. 30, Judge Robert Hinkle of the United States District Court for the Northern District of Florida ruled that state law requiring a Florida resident agent countersignature for any insurance policies placed by non-resident agents is unconstitutional. Under the statute, resident agents are entitled to 50 percent of the commission or fee income for countersigning. The judge also ruled against statutes prohibiting non-resident agents from being licensed as surplus lines brokers.

Because the judge’s decision and the corresponding judgment render the law invalid, non-resident agents licensed in the state reportedly no longer need to comply with the countersignature requirement and may also engage in surplus lines activities.

“The ruling is in line with the recent passage of Florida’s producer licensing law in eliminating a significant impediment to streamlining the business of insurance sales,” added Taylor.

Topics Agencies Legislation Florida

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