FAIA Stands Up for Agent, Files Amicus Court Brief on DFS Due-Diligence Decision

The Florida Association of Insurance Agents has filed an amicus (friend of the court) brief with the First District Court of Appeal in a case involving an insurance agent who appealed a Final Order of the Department of Financial Services.

The order revoked the agent’s insurance license based on a finding by DFS that he violated the provisions of section 626.901(1), Florida Statutes, prohibiting representation of unauthorized insurers. DFS also found that the statute is a “strict liability” statute. Under the doctrine of strict liability, no proof is required that the agent knew or should have known he was representing an unauthorized entity. FAIA claims that such a standard is not only unfair but also not intended by the statute.

According to the FAIA brief, at the time the agent was appointed there were no rules nor any communicated regulatory policies guiding agents on what constitutes due diligence in such matters. “Of course we support prohibitions against representing unauthorized carriers,” Jeff Grady, FAIA president said. “But such an interpretation is unfair to insurance agents who, many times, must rely on the state for such determinations.”

In this case, when the agent accepted an appointment with Meridian Benefit Inc. in good faith, it was neither an “authorized insurer” nor a qualified ERISA plan as it claimed. “But, the agent didn’t know that and there was no information available from the state that would have helped” Grady said. “Still, he lost his license and his livelihood and that’s not right.”

The case is still pending, but if the FAIA point of view prevails, it will have averted a major set-back for all Florida independent agents struggling to compete in an increasingly competitive and complicated health insurance market.

Topics Florida Agencies