Agent Penalty Workshop Held
On January 28, 2010, a rule development workshop was held regarding proposed changes to chapter 69B-231, F.A.C., related to penalty guidelines for insurance representatives. This rule chapter sets forth penalties for various provisions of the Insurance Code by insurance representatives such as agents. The changes are being made in response to legislative additions and deletions from the Insurance Code and to increase the penalties for certain violations. The changes include:
- In transactions related to viatical settlement contracts, commission of a fraudulent or dishonest act, receiving fees from settlements involving unlicensed persons, or dealing in bad faith with viators, the licensee will be suspended for 12 months. s. 626.611(17)(a), (c), and (d), Fla. Stat.
- In transactions related to viatical settlement contracts, no longer meeting the requirements for initial licensure, the penalty will be revocation. s. 626.611(17)(b), Fla. Stat.
- For misrepresentations and false advertising of insurance policies in violation of section 626.9541(1)(a), the penalty is increased from a 6 month suspension to a 12 month suspension.
- For twisting in violation of section 626.9541(1)(l), the penalty is increased from a 9 month suspension to a 12 month suspension.
- For unfair rate increases for persons in military service in violation of section 626.9541(1)(cc), the penalty is a 6 month suspension.
- For fraudulent signatures on an application or policy-related document in violation of section 626.9541(1)(ee), the penalty is a 12 month suspension.
- For unlawful use of designations or misrepresentation of agent qualifications in violation of section 626.9541(1)(ff), the penalty is a 12 month suspension.
- Penalties have also been increased for violations of section 626.536 (reporting of actions) and 626.541 (notice of changes) to minimum penalties of $500 for the first violation, $1,000 for the second, and a 2 month suspension for third and subsequent violations.
- For failing to properly account for commissions to the receiver related to an insolvent insurer, in violation of section 631.155, the penalty is revocation.
- Added to the list of aggravating and mitigating factors that can increase or decrease a penalty are financial loss to the victim and violation of the Unfair Insurance Trade Practices Act and section 627.4554 in relation to the sale of a life insurance policy or annuity to a senior citizen.
The current draft of the rule amendments is attached. Only a few other persons attended the workshop and no comments were made. The record will be held open until February 8, 2010 and written comments can be sent to kathy.spencer@myfloridacfo.com.