Chapter 4 — Prohibited Practices & Consumer Protections

It is a violation of the Insurance Code for anyone to fail to maintain a complete record of all the complaints received since the date of the last examination. For purposes of this paragraph, “complaint” means any written communication primarily expressing a grievance. This includes correspondence received by email. [§626.9541(j)]

• Knowingly making a false or fraudulent written or oral statement or representation on, or relative to, an application or negotiation for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from any insurer, agent, broker, or individual
• Knowingly making a material omission in the comparison of a life, health, or Medicare supplement insurance replacement policy with the policy it replaces, for the purpose of obtaining a fee, commission, money, or other benefit from an insurer, agent, broker, or individual

Free insurance is insurance for which the purchaser of real property, personal property, or services pays no identifiable charge. Insurance for which an identifiable or additional charge is paid in an amount less than the cost of the insurance would also be categorized as prohibited free insurance.

• Once a premium payment reaches your hands, you need to submit it on behalf of the client immediately and in the manner it was paid
• Do not impose or request an additional premium for a policy of motor vehicle liability, personal injury protection, medical payment, or collision insurance
• You cannot refuse to renew a policy solely because the insured was involved in a motor vehicle accident, unless the insurer’s file contains information from which the insurer, in good faith, determines the insured was substantially at fault in an accident
• Anyone otherwise qualified can be a director of two or more domestic competing insurers, unless the effect is to lessen competition to generally or materially create a monopoly. This does not apply to those who are directors of two or more insurers under common control or management

• A life insurer cannot designate who will conduct an insured’s funeral, or organize, promote, or operate any plan to restrict the insured’s freedom of choice in the open market as to the purchase, arrangement, and conduct of a funeral service
• An insurer cannot contract or agree to furnish funeral merchandise or services in connection with the disposition of an insured at death
• An insurer cannot contract or agree with any funeral director promising a funeral director consent to conduct the funerals of insureds of the insurer
• An insurer will provide, in any insurance contract covering the life of a Florida resident, for the payment of proceeds or benefits in U.S. dollars

Any person or organization that violates a provision of Illegal Dealings in Premiums or Excess Charges for Insurance is subject to suspension of any license or authority. The office cannot suspend the license or authority of any rating organization or insurer for failure to comply with an order until the time prescribed for an appeal has expired, or if an appeal has been taken, until the order has been affirmed. [§626.9702]

No person may: [§626.9551]

• Require, as a condition precedent or subsequent to the lending of money or extension of credit, that the person negotiate any policy or contract of insurance through a particular insurer, group of insurers, agent, broker, or group of agents or brokers
• Reject an insurance policy solely because the policy has been issued or underwritten by a person not associated with a financial institution, when the insurance is required in connection with a loan or extension of credit
• Unreasonably disapprove the insurance policy provided by a borrower for the protection of the property securing the credit or lien (disapproval is deemed unreasonable if not based solely on uniformly applied reasonable standards)
• Require any borrower, mortgagor, or purchaser to pay a separate charge in connection with the handling of an insurance policy required in connection with a loan or other extension of credit
• Provide to others or use insurance information required to be disclosed by a customer to a financial institution in connection with the extension of credit for the purpose of soliciting the sale of insurance, unless the customer has given express written consent or the opportunity to object

Federally or state-insured depository institutions and credit unions must make clear and conspicuous written disclosure prior to the sale of any insurance policy that policies:

• Are NOT deposits
• Are not insured by the FDIC or any other entity
• Are not guaranteed by the insured depository institution or any person soliciting the purchase or selling the policy
• May involve investment risk, including potential loss of principal

All documents constituting policies of insurance must be separate and cannot be combined with or part of other documents. A loan officer of a financial institution involved in the application, solicitation, or closing of a loan transaction cannot solicit or sell insurance in connection with the loan, but may refer the customer to an insurance agent who is not involved in the same loan transaction.

The department and office each have power, within their respective regulatory jurisdictions, to examine and investigate the affairs of every person involved in the business of insurance in order to determine whether any person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice. [§626.9561]

Whenever the department or office has reason to believe a person in Florida has engaged in an unfair method of competition or unfair or deceptive act, and that a proceeding would be in the best interest of the public, it will conduct a hearing in accordance with the Administrative Procedures Act.

Penalties for failure to comply with a subpoena or an order directing discovery are limited to fines up to $1,000 per violation. Statements of charges, notices, and orders may be served by anyone duly authorized by the department or office, either in the manner provided by law for service of process in civil actions or by certifying and mailing a copy to the person affected. [§626.9571]

No life or disability insurer can refuse to renew, sell, or issue a life or disability insurance policy, establish or charge a premium or rate to an applicant or prospective policyholder, or establish or charge an unfair, discriminatory premium or rate based solely on the grounds that the applicant or policyholder suffers from a severe disability. [§626.9705]

• A spinal cord disease or injury resulting in permanent and total disability
• Amputation of any extremity that requires prosthesis
• Permanent visual acuity of 20/200 or worse in the better eye with the best correction
• A peripheral field where the widest diameter of the field subtends an angular distance no greater than 20 degrees
• Neurosensory deafness