Chapter 1 — Regulatory Awareness

The Chief Financial Officer is the chief fiscal officer of the state and is responsible for settling and approving accounts against the state and keeping all state funds and securities. The Chief Financial Officer of Florida is a statewide constitutional officer of Florida. The office was created in 2002 following the 1998 reforms of the Florida Cabinet.

The CFO is a combination of the former offices of Comptroller and Treasurer/Insurance Commissioner/Fire Marshal. The office heads the Florida Department of Financial Services and is responsible for overseeing the state’s finances, collecting revenue, paying state bills, auditing state agencies, regulating cemeteries and funerals, and handling fires and arsons. In addition, the CFO has administrative oversight over the offices which handle banking and insurance regulation. The CFO is a member of the Cabinet.

The Chief Financial Officer (CFO) of the Florida Department of Financial Services is an elected position, which requires living in Florida and provides an office in the Capitol building.

Title IV, Chapter 17 (Executive Branch: Chief Financial Officer) of the Florida Statutes is dedicated to the operations of the CFO. The responsibilities are grand in scope, and that of which you need to be keenly aware is the office of the CFO supervises insurance consumer services, licensing, and oversight of insurance agents and agencies. Insurance fraud investigation is overseen by the CFO, as well as ensuring businesses have workers’ compensation coverage in place for employees, and helping injured workers with benefit payments and re-employment.

Florida Department of Financial Services (FLDFS) is a state agency of Florida. Its headquarters are in Tallahassee. In 2002 the Florida Legislature merged the Department of Insurance, Treasury and State Fire Marshal and the Department of Banking and Finance into one department, the Florida Department of Financial Services.

The Department is led by the Chief Financial Officer of Florida (CFO), who is elected statewide to a four year term. The CFO is assisted in running the Department by two Deputy Chief Financial Officers and a Chief of Staff. The Department is organized into 13 functional Divisions and 7 Offices. [Source: Florida Statute §20.121]

Additional offices include: Office of Communications, Office of Finance and Budget, Division of Funeral Cemetery and Consumer Services, Office of the General Counsel, Division of Information Systems, Office of Inspector General, Office of Insurance Consumer Advocate, Office of Internal Affairs and Appointments, Office of Legislative Affairs, Office of Program Management, Division of Public Assistance Fraud, Division of Rehabilitation and Liquidation, Office of Research and Planning, and Division of Unclaimed Property.

Offices are maintained at the State Capitol in Tallahassee and around the state as designated. [Source: Florida Statute §624.302]

The Financial Services Commission consists of the Governor, Attorney General, Chief Financial Officer, and Commissioner of Agriculture. Commission members serve as the agency head of the Financial Services Commission. Commission actions are decided by majority votes consisting of at least three affirmative votes. The commission is not subject to control, supervision, or direction by the Department of Financial Services and is a completely separate budget entity.

The Office of Insurance Regulation has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. It is also responsible for all activities concerning insurers and other risk bearing entities, including licensing, rates, policy forms, market conduct, claims, issuance of certificates of authority, solvency, viatical settlements, premium financing, and administrative supervision.

The head of the Office of Insurance Regulation is the Director of the Office of Insurance Regulation, who may also be known as the Commissioner of Insurance Regulation. [Source: §620.121(3)(a)(1)]

The Financial Services Commission also established the Office of Financial Regulation (OFR). The OFR is responsible for all activities relating to the regulation of banks, credit unions, other financial institutions, finance companies, and the securities industry. The head of the office is known as the Director or Commissioner of Financial Regulation.

The OFR includes a Bureau of Financial Investigations, which functions as a criminal justice agency for investigating and enforcing Florida laws applicable to the office. If, during an investigation, the office has reason to believe that any criminal law of Florida has or may have been violated, the office refers any records identifying the alleged violation to state or federal law enforcement or prosecutorial agencies. [Source: §20.121(3)(a)(2)]

A license and appointment is required in order to engage in the solicitation of insurance in Florida. An appointment is the authority given by an insurer or employer to a licensee to transact insurance or adjust claims on their behalf. Solicitation of insurance is an attempt to persuade any person to purchase an insurance product by:

• Describing the benefits or terms of insurance coverage, including premiums or rates of return
• Distributing an invitation to contract to prospective purchasers
• Making general or specific recommendations as to insurance products
• Completing orders or applications for insurance products
• Comparing insurance products, advising as to insurance matters, or interpreting policies or coverages
• Offering or attempting to negotiate on behalf of another person a viatical settlement

Performing these acts of solicitation without a license from the department and appointment by an appropriate appointing entity or individual is fraudulent and defies Florida statute. [Source: §626.112]

The department will not issue a license to anyone unless a written application is filed with the department, the applicant meets the qualifications for the license applied for, and nonrefundable, prepayment is made for applicable fees. The application must be made under oath and signed by the applicant.

An applicant must submit a set of fingerprints and pay the fingerprint processing fee. Fingerprints are used to investigate the applicant’s qualifications and are taken by a law enforcement agency, designated examination center, or other department-approved entity. [Source: §626.171]

The department will not issue a license as a life agent to anyone found to be untrustworthy or incompetent, or who does not meet the following qualifications:

• Must be a natural person of at least 18 years of age
• Must be a United States citizen or legal alien with work authorization and a bona fide resident of Florida
• Must not be an employee of the United States Department of Veterans Affairs or state service office
• Must not be a funeral director, its employee or representative, or have an office in connection with a funeral establishment (with limited exceptions for preneed contracts up to $12,500)
• Must take and pass any required examination for license
• Must be qualified as to knowledge, experience, or instruction in the business of insurance

[Source: §626.785]

“Appointment” means the authority given by an insurer or employer to a licensee to transact insurance or adjust claims on behalf of an insurer or employer. [Source: §626.051(3)]

In order to advertise or act as an insurance agent or a customer representative, they must be currently licensed by the department and appointed by an appropriate entity or person. Any person who knowingly transacts insurance or insurance activities without a license commits a third degree felony.

Effective October 1, 2015, the department automatically converts the registration of an approved registered insurance agency to an insurance agency license. [Source: §626.112]