“Twisting” involves inducing a policyholder to lapse, forfeit, or surrender an existing life insurance policy to purchase a new one from the same or a different insurer, based on incomplete or misleading comparisons. “Churning” is a similar practice, but it specifically involves replacing a policy with another from the same company, primarily to generate new commissions for the agent, without providing a substantial benefit to the policyholder. Both are illegal in Florida. Florida Statute 626.9541(1)(l) defines and prohibits unfair methods of competition and unfair or deceptive acts or practices in the insurance industry, which includes twisting. Penalties for engaging in these practices can include license suspension or revocation, fines, and potential civil liability for damages suffered by the policyholder. The Department of Financial Services actively investigates and prosecutes cases of twisting and churning to protect consumers.

The Florida Life and Health Insurance Guaranty Association provides a safety net for Florida residents who hold life or health insurance policies with insurers that become insolvent. Established under Florida Statute 631.711, its purpose is to protect policyholders by continuing coverage or paying claims up to certain limits when an insurer is financially unable to do so. However, the Guaranty Association has limitations. Coverage is capped at $300,000 for life insurance death benefits, $100,000 for cash surrender values, and $500,000 for health insurance benefits. Certain types of policies, such as those not approved by the Florida Department of Financial Services or those issued by unauthorized insurers, may not be covered. The Guaranty Association is funded by assessments on solvent insurance companies operating in Florida, ensuring that the burden of protecting policyholders is shared across the industry.

Licensed insurance producers in Florida are required to complete continuing education (CE) courses to maintain their licenses. Florida Administrative Code 69B-228.050 outlines the specific requirements. Generally, producers must complete 24 hours of CE every two years, including specific hours dedicated to law and ethics updates. Certain specialized licenses may require additional CE hours in specific subject areas. Failure to comply with CE requirements can result in license suspension or revocation. Producers are responsible for tracking their CE credits and ensuring that courses are approved by the Florida Department of Financial Services. The Department provides resources and tools to help producers manage their CE obligations and avoid penalties.

“Suitability” in annuity sales refers to the requirement that insurance producers must make recommendations that are appropriate for the client’s financial situation, needs, and objectives. Florida Regulation 69O-161.001 outlines the standards and procedures for annuity transactions to ensure suitability. Producers must gather comprehensive information about the client, including their age, income, financial experience, risk tolerance, and investment goals. They must then analyze this information to determine if an annuity is a suitable product for the client and, if so, which type of annuity is most appropriate. Producers must document their suitability analysis and provide the client with a clear explanation of the annuity’s features, benefits, risks, and costs. Failure to adhere to suitability requirements can result in disciplinary actions, including fines and license revocation.

Twisting, as defined under Florida insurance regulations, is a prohibited practice where an insurance producer induces a policyholder to lapse, forfeit, surrender, or convert an existing insurance policy to purchase another policy with the same insurer or a different insurer, based on incomplete or fraudulent comparisons of the two policies. The primary intent behind twisting is to benefit the producer through commissions, rather than serving the best interests of the policyholder. Specific actions that constitute twisting include misrepresenting the terms, benefits, advantages, or conditions of any insurance policy; making incomplete comparisons of policies; and omitting material facts that would influence the policyholder’s decision. Producers might exaggerate the drawbacks of the existing policy while downplaying the limitations of the new policy. Florida Statute 626.9541(1)(l) specifically addresses unfair methods of competition and unfair or deceptive acts or practices in the business of insurance, which includes twisting. Violators of this statute are subject to administrative penalties, including fines, suspension, or revocation of their insurance license. Additionally, civil lawsuits may be filed by policyholders who have suffered financial losses as a result of twisting. The Department of Financial Services has the authority to investigate allegations of twisting and impose appropriate sanctions.

Florida licensed insurance producers are required to complete continuing education (CE) courses to maintain their licenses. The general requirement is 24 hours of CE every two years, prior to the license renewal date. At least 3 of these hours must be in ethics, and the remaining hours must be relevant to the lines of authority held by the producer. Specific requirements are outlined in Florida Statute 626.281 and Florida Administrative Code Rule 69B-220.050. These rules specify the types of courses that qualify for CE credit, which include courses approved by the Department of Financial Services and offered by authorized providers. Courses can cover topics such as insurance law, policy updates, risk management, and specialized product knowledge. Failure to complete the required CE hours by the renewal date can result in penalties, including fines and suspension of the insurance license. Producers are typically given a grace period to complete the CE requirements, but continued non-compliance can lead to license revocation. Producers must maintain records of their completed CE courses as proof of compliance, and these records may be subject to audit by the Department of Financial Services.

“Controlled business,” as defined in Florida insurance regulations, refers to insurance written on the lives, property, or interests of a producer, their immediate family, or their business associates. Florida Statute 626.731 restricts the amount of controlled business a producer can write to prevent them from primarily using their license to insure themselves and their close connections, rather than serving the general public. Specifically, the statute states that during any 12-month period, the total premiums on controlled business cannot exceed 50% of the total premiums written by the producer on all lines of insurance. This limitation is designed to ensure that producers are actively engaged in serving the broader insurance market and not just using their license for personal gain. If a producer violates the controlled business rule, the Department of Financial Services may take disciplinary action, including suspending or revoking the producer’s license. The Department may also require the producer to provide documentation demonstrating compliance with the rule. Producers must maintain accurate records of their business to demonstrate that they are not in violation of the controlled business restrictions.

When a customer files a complaint against an insurance producer in Florida, the producer has a responsibility to promptly and thoroughly investigate the complaint. This includes gathering all relevant information, documenting the steps taken to address the complaint, and communicating with the customer in a timely and professional manner. The Department of Financial Services (DFS) plays a crucial role in overseeing the handling of customer complaints. The DFS has the authority to investigate complaints and take disciplinary action against producers who violate insurance regulations. Customers can file complaints directly with the DFS, and the DFS may also initiate investigations based on information received from other sources. Failure to properly address customer complaints can result in various consequences for the producer, including administrative penalties, fines, suspension or revocation of their insurance license, and civil lawsuits. The DFS may also require the producer to undergo additional training or implement corrective measures to prevent future complaints. It is essential for producers to maintain a strong record of customer service and compliance with insurance regulations to avoid potential disciplinary actions. Florida Statute 626.611 outlines grounds for suspension, revocation, or refusal of license.

The Florida Insurance Guaranty Association (FIGA) is a statutory entity created to provide a safety net for policyholders in the event that an insurance company becomes insolvent and is unable to fulfill its obligations. FIGA’s primary purpose is to protect policyholders from financial losses by paying covered claims up to certain limits. FIGA covers most types of property and casualty insurance policies issued by licensed insurers in Florida. However, certain types of policies, such as life insurance, health insurance, and annuity contracts, are not covered by FIGA. The specific types of policies covered and the limitations on coverage are outlined in Florida Statute 631.50. FIGA’s coverage is subject to certain limitations, including maximum claim amounts and deductibles. The maximum claim amount that FIGA will pay is generally limited to $300,000 per claim, regardless of the policy limits. Policyholders are also responsible for paying any applicable deductibles. FIGA is funded by assessments on solvent insurance companies operating in Florida, ensuring that the cost of protecting policyholders is shared across the industry.

Insurance producers in Florida have a fundamental ethical obligation to act in the best interest of their clients when recommending insurance products. This duty requires producers to thoroughly assess the client’s needs, financial situation, and risk tolerance before making any recommendations. Producers must recommend products that are suitable for the client’s specific circumstances, even if those products offer lower commissions. Producers also have a duty to disclose any conflicts of interest that may influence their recommendations. This includes disclosing any financial relationships with insurance companies or any incentives that may bias their advice. Transparency is essential to maintaining trust and ensuring that clients can make informed decisions. Misrepresentation or concealment of material facts is strictly prohibited. Producers must provide accurate and complete information about the terms, benefits, limitations, and exclusions of the insurance products they are selling. Omitting or distorting information can mislead clients and result in financial harm. Florida Statute 626.9541 addresses unfair methods of competition and unfair or deceptive acts, which includes misrepresentation. Violations can lead to disciplinary actions, including fines and license revocation.

In Florida, insurance agencies and producers who wish to operate under an assumed name (doing business as or DBA) must comply with specific requirements outlined in Florida Statutes and Administrative Codes. The primary purpose of these regulations is to ensure transparency and accountability in the insurance industry. Before using an assumed name, the agency or producer must register the name with the Florida Department of Financial Services (DFS). The registration process typically involves submitting an application, providing documentation of the legal entity operating under the assumed name, and paying a registration fee. The DFS reviews the application to ensure that the assumed name is not misleading or confusing and that it does not infringe on any existing trademarks or business names. Operating under an unregistered assumed name can result in penalties, including fines and cease-and-desist orders. The DFS may also take disciplinary action against the agency or producer’s license. It is essential for agencies and producers to maintain accurate records of their registered assumed names and to notify the DFS of any changes or cancellations. Florida Statute 626.604 addresses requirements for insurance agencies, including registration of names and locations.