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DFS Cautions Against Use of Unlicensed Personnel

DFS Cautions Against Use of Unlicensed Personnel

The Florida Department of Financial Services (DFS) has published a reminder cautioning agencies about the limitations on support activities that may be performed by unlicensed personnel. DFS describes unlicensed personnel as having “limited discretion” in how they can support the operations of an insurance agency.

Rule Chapter 69B-222, Florida Administrative Code, describes the permissible scope of activities by unlicensed personnel. According to DFS, agencies should keep in mind the limitations on incidental agency activities and restrictions on the manner in which unlicensed individuals may be compensated. An unlicensed individual’s “incidental activities,” as described in the rules cannot, exceed ten percent of the individual’s overall activities. Further, the agency cannot compensate the unlicensed person on the basis of his or her individual production.

DFS also emphasizes that the following activities are never permitted for unlicensed personnel:

  • Comparing insurance products; advising as to insurance needs or insurance matters; or interpreting policies or coverage;
  • Binding new, additional or replacement coverage for new or existing customers; or binding coverage on or recording additional property under existing policies;
  • Soliciting the sale of insurance by telephone, in person, or by other communication. However, the unlicensed person may telephone persons to set appointments for licensed and appointed agents, customer representatives, or to obtain basic policy information as to existing insurance coverage. The unlicensed person may not engage in a substantive discussion of insurance products.

DFS reminds agencies that in addition to being a regulatory violation, transacting insurance without the appropriate license and appointment is a third-degree felony.