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Law & Ethics Update |
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Disciplinary and Industry Trends
Recent Violations and Enforcement Actions of Licensed Florida Insurance Professionals
Not everyone feels compelled to follow the rules. Whether desperate, hopeless, greedy, or simply believing the rules don’t apply to you … or at least the way you conduct business. Here’s the thing: There are a boatload of people, from our CFO, to dissatisfied customers, to our Strike Force, with which you don’t want to conduct business regarding the enforcement of violations against you. The following are cases from the DFS, Miami and Tallahassee newspapers. Names have been altered and brevity used, but these real cases should discourage you from dancing with the devil.
The following are instances in which licensees or other persons violated the Florida Insurance Code and the administrative action the department has taken against them. Note: All administrative investigations are subject to referral to the Division of Investigative and Forensic Services for criminal investigation. Case: An investigation was opened on an owner of an insurance agency and its agent in charge (AIC) for misappropriating insurance premiums. They engaged in a scheme to divert escrow checks they received from a title insurance agency into the bank account of their insurance agency. The funds were intended to pay the homeowner insurance premiums for several insureds. At no time did the two licensees ever secure homeowner’s insurance for the consumers. To conceal their actions, the agents issued invoices to the title agency reflecting false policy numbers. Once our investigation became known, the agents began issuing refunds and excuses to the consumers and the Department. Case: An investigation was opened on a life, health and variable annuity agent after the Centers for Medicare & Medicaid Services (CMS) suspended then revoked the agent's application and access privileges which were later terminated by the Federally Facilitated Marketplace (FFM) for enrolling consumers in the Marketplace without their knowledge and consent. Investigators acquired enrollment documentation from CMS which indicated the agent had enrolled consumers in multiple states or health insurance policies without their knowledge or consent. Florida Department of Financial Services' Insurance Insights - June 2025
UNLICENSED ENTITIES Since July 2014, the Division of Investigative and Forensic Services has made hundreds of arrests of individuals who were licensed by the Department or who were required to be licensed but were operating without one. These arrests represent $4.47 million in fraud and involved insurance agents, bail bond agents and public adjusters. [Florida CFO, Division of Investigative and Forensic Services, Insurance Fraud Press Releases] Customers responding to a TV or radio ad, phone call, piece of mail, email (in this case “spam”), etc., may not have the know-how or inclination to check as to whether the company is authorized to conduct business in Florida. You do. At the very least you have access to the Active Company Search provided by the OIR. (www.FLOIR.com) Keeping ALL your customers aware of the potential for contact by a bogus entity is beneficial to all. Even clients to whom you do not provide health coverage can be educated by the knowledge of the state, OIR, you and your agency. As our CFO, DFS, OIR, Fraud Strike Force and others work to maintain or improve the integrity of the insurance industry, technology continues to improve with them. As it turns out, fraudulent agents, agencies and products don’t usually lag too far behind. It’s our job to ensure we stay one step ahead of these criminals. [Source: Florida CFO, Division of Investigative and Forensic Services , Insurance Fraud Press Releases]
With the ACA in motion and implementation of the Health Insurance Marketplace in full swing, it will be interesting to monitor how long it takes before “bogus entities” wiggle their ways into “effective” commerce. If they haven’t already, they will need to find a way to make their corrupt living by continuing to provide consumers with useless healthcare policies. Most often this is accomplished by simply offering a screaming hot deal – costs and coverage too good to be true. Once interpreted, “if it sounds too good to be true, it is.” The Division of Insurance Agent & Agency Services recommends the following procedures agents may use when researching whether an insurance company is properly licensed to transact insurance in Florida. By offering these guidelines, we hope to provide a valuable service to all agents and another useful tool for protecting the public. Agents will find that, in most cases, the simple procedures outlined below will easily identify those insurance companies presently authorized to conduct insurance business in Florida. An agent may use a print-screen function to capture a printout of the company as listed on the web site and keep in their file to show they found the authorized insurance company. Make sure you have the complete and correct name of the insurance company. Many insurance company names are very similar. 1) Go to https://companysearch.myfloridacfo.gov. 2) Enter the insurance company's name and click on the "Search" button. 3) Confirm that the insurance company as identified in step 1 is listed and authorized to conduct the line of business contemplated. Depending on the line of business, the following Authorization Types confer authority: Certificate of Authority Insurance companies shown with an Authorization Status as “Active” and Authorization Type as “Permit” have only begun the authorization process, and are NOT authorized to conduct insurance business. If the insurance company is not listed on the web site or the insurance company is shown with an Authorization Type not listed above, the agent should not place insurance business with that company. Also, just because an insurance company is authorized today does not mean it will necessarily remain authorized in the future. Always check. This web site lists authorized insurers involved in insurance business in Florida. If they are not listed on the website, agents should assume they are not authorized. IMPORTANT: Agents who, directly or indirectly, aid or represent an unauthorized insurance company can lose their agent licenses or face other disciplinary sanctions. Please see section 626.901, Florida Statutes, to read the laws. To alert us of possible unauthorized insurance or unregistered securities being sold please notify us at askDFS@MyFloridaCFO.com. The Office of Financial Regulation (OFR) oversees securities regulation. To check licensing/registration status you can call the OFR at 1-850-487-9687 or use their online search. View the list of unauthorized entities that have had action taken against them in the state of Florida.
New and Important Terminology Applicable to Licensed Florida Insurance ProfessionalsDefinitions
Chief Financial Officer (CFO): An independently elected official and a member of the governor’s cabinet who serves as head of the Department of Financial Services (DFS) and as a member of the Financial Services Commission. The CFO directly oversees the Division of Insurance Agents and Agency Services, Division of Investigative and Forensic Services, Division of Consumer Services, and the Office of the Insurance Consumer Advocate.
Controlled Business: Insurance contracts covering the agent or members of the agent’s family; officers, directors, stockholders, partners, or employees of a business in which the agent or a member of the agent’s family is engaged; or the debtors of a firm, association, or corporation of which the agent is an officer, director, stockholder, partner, or employee.
Department of Financial Services: State agency headed by the chief financial officer and the Commissioner of the Office of Insurance Regulation that oversees the insurance industry in accordance with the provisions of the Insurance Code. The CFO and the Commissioner have broad administrative, quasi-legislative (rule-making) and quasi-judicial powers in order to carry out their responsibilities.
Insurance Agency: Any business location at which an individual, firm, partnership, corporation, association, or other entity (other than an insurer or an adjuster) engages in any activity or employs individuals to engage in any activity that by law may be performed only by a licensed insurance agent.
Insurance Insights: Monthly online newsletter published by the DFS’s Division of Agent and Agency Services that provides valuable information for agents, adjusters, and agencies about what’s happening in Florida’s insurance market and industry trends.
MyProfile: Online portal created by the Florida Department of Financial Services’ Bureau of Licensing that allows licensees to perform various license-related tasks online.
Florida’s OIR recognizes that each state has its own terminology among licensed insurance professionals. It provides the NAIC’s complete list for every state at www.FLOIR.com. You may need to use the website to secure terms and codes when you are required to complete a transaction with another state.
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