DFS Outlines Steps for Closing an Agency
For a variety of reasons, an agent operating an insurance agency might find it necessary to close the agency’s operations. The Florida Department of Financial Services (DFS) recently identified three key steps that agents might overlook when closing an agency in Florida.
Surrender the agency license. First, DFS points out that the agent will need to surrender the agency’s license. This is done using Form DFS-H2-1997. The form must be signed and dated by an officer of the business.
File a change of agent in charge. Second, the person designated as the agent in charge of the agency typically will want to remove himself or herself as the agent in charge. This is done by logging in to the agency’s account in the MyProfile section of the DFS’ website. This is particularly important if the agency business has been sold and a new agent will be servicing the policies. By removing himself or herself as the agent in charge, the agent properly informs DFS that he or she is no longer responsible for any future activities of the agency and its staff.
Submit a change in address. DFS also advises that under Florida law, every licensee must notify DFS within 30 days after a change of name, phone number, e-mail or residence address, principal business or mailing address. Closing an agency might mean that any or all of these items have changed for the agency, and possibly for the individual agent, and should be updated. These changes also can be made using the MyProfile section of the DFS website.
DFS also recommends that the agent submit a mail forwarding order to the United States Postal Service for the agency mail if the office location will not longer be open. This is an important step in preventing policy information and notices from becoming lost or misdirected. Also, depending on the nature of the transaction or reason for closing the agency, the agent should consider providing notice to each affected customer to ensure that all policyholders have a point of contact for ongoing service needs. DFS also points out that agents may inform the Department of Financial Services’ consumer services section of any contact or forwarding information if any questions arise.
DFS reminds agents that Florida law requires every licensee to preserve books and records pertaining to insurance transactions for a minimum of five years, and at least three years after payment for premium payment. Any agent closing an insurance agency must make provisions for the records to be available for inspection in accordance with law. Agents also are reminded to keep privacy laws in mind when storing and ultimately disposing of agency records. Agents also should ensure that bank accounts remain open with sufficient funds in them to ensure all transactions are appropriately processed.
Also, depending on the reason the agency is closing, the agency’s officers and directors will want to consider whether any submissions should be made to the Division of Corporations, such as filings to remove officers or directors, to dissolve the corporation, to merge the corporation into another entity, or to change the registered agent.