Unfair Methods of Competition and Unfair or Deceptive Acts or Practices
The purpose of Chapter 69B-151.201 is to implement the provisions of Unfair Methods of Competition and Unfair or Deceptive Acts or Practices, with respect to churning and to adopt Form OIR-D0-1180. This rule applies to all types of policies that include a value feature, irrespective of the marketing method by which such policies or contracts are sold.
Selling annuities requires the use of state-required forms: the Annuity Suitability Questionnaire and the Disclosure and Comparison of Annuity Contracts. This rule applies exclusively to any recommendation to purchase or exchange an annuity contract made to a senior consumer by an insurance agent or an insurer, which results in the purchase or exchange recommended. A senior consumer is a person 65 years of age or older.
In Florida you cannot engage in trade practices defined to be an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance.
- Any person who violates these provisions is subject to a fine of not greater than $5,000 for each non-willful violation and not greater than $40,000 for each willful violation
- Fines for non-willful violations can aggregate to $20,000 if they arise out of the same action; aggregate amount of $200,000 for all willful violations arising out of the same action
- Violations of twisting or churning — a misdemeanor of the first degree — carry an administrative fine of not greater than $5,000 (non-willful) or $75,000 (willful) per violation
- Willfully submitting fraudulent signatures on an application or policy-related document constitutes a felony of the third degree, as well as administrative fines up to $5,000 (non-willful) or $75,000 (willful) per violation
- Violation of a cease and desist order is subject to a monetary penalty of not more than $50,000 as to all matters determined in such hearing, plus suspension or revocation of the license or certificate of authority [§626.9601]
Misrepresentations and False Advertising [§626.9541(1)(a)]
Knowingly making, issuing, or circulating any estimate, illustration, circular, statement, sales presentation, omission, or comparison which: misrepresents the benefits, advantages, conditions, or terms of any insurance policy; makes false or misleading statements as to dividends; is a misrepresentation for the purpose of inducing lapse, forfeiture, exchange, conversion, or surrender of a policy; misrepresents any insurance policy as being shares of stock; or uses any advertisement that would mislead a reasonable person to believe the Federal or State Government is responsible for the insurance sales activities or guarantees any returns on insurance products.
False Information and Advertising Generally [§626.9541(1)(b)]
Knowingly making, publishing, disseminating, circulating, or placing before the public in any medium, any advertisement, announcement, or statement with respect to the business of insurance which is untrue, deceptive, or misleading.
Defamation [§626.9541(1)(c)]
Knowingly making, publishing, or circulating any oral or written statement that is false or maliciously critical of, or derogatory to, any person and calculated to injure the person.
Unfair Discrimination [§626.9541(1)(g)]
Knowingly making or permitting unfair discrimination between individuals of the same actuarially supportable class and equal expectation of life, in the rates charged for a policy. Also prohibits underwriting or denying coverage based on an applicant’s history of abuse by a family or household member — a health or life insurer may refuse based on medical condition, but cannot consider whether such condition was caused by an act of abuse.
Unlawful Rebates [§626.9541(1)(e)]
Except as otherwise expressly provided by law, knowingly permitting, offering to make, or making any contract or agreement as an inducement to purchase an insurance contract which is not plainly expressed in the issued policy — including rebates of premiums, special advantages in dividends, or anything of value not specified in the contract.
Unfair Claim Settlement Practices [§626.9541(i)]
Includes: attempting to settle claims on the basis of an altered document without knowledge or consent of the insured; material misrepresentation to effect settlement on less favorable terms than those provided in the contract; and committing with enough frequency to indicate a pattern any of the following: failing to adopt standards for proper investigation of claims; denying claims without reasonable investigation; failing to acknowledge communications with respect to claims; failing to provide written explanation of claim denial; or failing to pay personal injury protection claims within the time period required by statute.