Bureau of Unclaimed Property

The Chief Financial Officer oversees the Bureau of Unclaimed Property, which holds unclaimed property
accounts valued at more than $1 Billion, mostly from dormant accounts in financial institutions, insurance
and utility companies, securities and trust holdings.

Hearings

The Financial Services Commission may hold hearings for any purpose within the scope of the
insurance code deemed necessary, such as:

• Person engaging in unfair competition, or any unfair or deceptive act
• Person engaging in business of insurance without a license
• The best interest of the public would be served

►Department of Financial Services

The Department of Financial Services is headed by the Chief Financial Officer and the Commissioner of the Office of Insurance Regulation, oversees the insurance industry in accordance with the provisions of the Insurance Code.

►LICENSING

A licensee may not transact insurance business in Florida until the licensee is appointed by an insurer.

Individuals looking to acquire an insurance license must meet the following eligibility requirements:

• Must be at least 18 years old
• Must be a US citizen or legal alien
• Must be a Florida resident
• May not be an employee of the United States Department of Veterans Affairs
• May not be a funeral director or direct disposer
• Complete a 60-Hour pre-licensing education course
• Pass the insurance state licensing examination
• Must be trustworthy and competent

Background check

Any inquiry or investigation of the applicant’s qualifications, character, experience, background, and fitness must
include submission of the applicant’s fingerprints to the Department of Law Enforcement and the Federal Bureau of Investigation and consideration of any local, state, or federal criminal records.

Continuing Education

An agent needs to abide by the following guidelines every two years to maintain their license:

• 24 hours of continuing education every two years for agents licensed less than 6 years
• 20 hours of continuing education for every two years for agents licensed more than 6 years
• Any continuing education must include minimum 5 hours in law and ethics
• Pay license fees, appointment and renewal fees
• Continue to be appointed with an insurance company

Suspension, Termination, Revoking of a License

The Chief Financial Officer has the power to suspend or revoke the license of an insurance agent who violates the
Insurance Code. In lieu of suspension or revocation, the CFO has the authority to issue fines or order probation.

There are a number of situations where the Chief Financial Officer (CFO) can impose penalties or suspend, terminate, or revoke a license:

• Failure to answer a subpoena or an order of the CFO can result in a $1,000 fine

• Violation of a cease and desist order can result in a fine up to $50,000

• Willful violation of the Insurance Code is a misdemeanor

• Willfully submitting fraudulent signatures on an application or policy-related document is a third degree felony and is
subject to a $5,000 to $75,000 fine for each violation

• In the event someone breaks an insurance law for which there is no definable penalty, one can be charged $5,000 for
the first offense and $10,000 for every subsequent offense

• Provided incorrect, misleading, incomplete or untrue information in the license application

• Violating any insurance laws, regulations, subpoena, or orders from the Commissioner

• Attempting to obtain a license through fraud or misrepresentation

• Obtaining a license through fraud or misrepresentation

• Intentionally misrepresent the terms of an insurance contract

• Been convicted of a felony

• Committed any unfair insurance trade practice

• Using fraudulent, coercive, or dishonest practices or demonstrating incompetence, untrustworthiness, or financial
irresponsibility in this or any other state

• Having an insurance license denied, suspended, or revoked by another state

• Forging a name on an insurance document or application

• Cheating on an insurance license examination

• Knowingly accepting insurance business from an unlicensed individual

• Failing to comply with a court order imposing child support

• Failing to pay state income tax

• Obtaining license for the purpose of writing controlled business

• An agent's license will terminate if the agent allows 48 months to elapse without being appointed for the class or classes of insurance listed on the license

►AGENTS AND AGENCIES

Agent

An agent is an individual who has been authorized by an insurer to be its representative and to perform
all of the following acts:

• Solicit applications for insurance
• Collect premiums from policyowners
• Render services to prospects and clients
• Field underwriting if necessary

Appointment

The authority given to an agent to transact business on behalf of the insurer is called appointment. No person may
act as an insurance agent unless currently licensed by the department and appointed by the insurer.

• New appointments will expire 24 months on the last day of the licensee’s birth month
• An appointing entity may terminate its appointment of any appointee at any time with at least 60 days’ notice
• Within 30 days after terminating the appointment, the entity must file written notice with the department including
the reasons and facts involved in the termination
• An agent's license will terminate if the agent allows 48 months to elapse without being appointed for the class or classes of insurance listed on the license

Change of Address

If an agent changes his/her residence address, the Department of Financial Services must be notified within 30 days.

Reporting of Actions

If an agent is found guilty of a felony, he/she is required to notify the Department of Insurance within 30 days.
An employer has 15 days to report a felony on the agent to the DFS.

Agencies

• An insurance agency is any business location where insurance transactions take place that can
only be performed by licensed insurance agents

• There must be an agent in charge at each licensed agency location where insurance transactions
take place

• A licensed insurance agent may be the agent in charge of additional branch office locations of the
agency as long as insurance activities do not occur at any location when the agent is not physically present

Home Agencies

The Department of Financial Services considers all of these factors when determining whether an
agent’s home is an insurance agency:

• Listing the location address on business cards/marketing materials and solicits business to be done at that location

• There is a sign on the house indicating an agent is there

• The agent meets clients there

• Insurance transactions take place at the location

Professional Employer Organization

A Professional Employer Organization typically handles only administration functions.

►CERTIFICATE OF AUTHORITY

Before an insurance company can sell insurance in a specific state, they must apply for a license or
Certificate of Authority from that state’s Department of Insurance. Once approved and given a
Certificate of Authority, they are eligible to transact insurance.

►INSURANCE TRANSACTION

“Insurance Transaction” includes any of the following:

• Solicitation or inducement to purchase insurance
• Negotiations toward the sale of insurance
• Executing a contract of insurance
• Issuing an insurance contract
• Advising on coverages and claims

A licensee may not transact insurance business in Florida until the licensee is appointed by an insurer.

The agent's primary responsibility in the application process is to the insurer.

►UNFAIR TRADE PRACTICES

Twisting

Twisting occurs when an insurance agent convinces a policyowner to cancel their current policy so that
they can purchase new life insurance policy with another company. This would involve the agent using
misrepresentations or incomplete comparisons of the advantages and disadvantages of the two policies.
Twisting is a form of misrepresentation and is illegal.

Churning

Churning occurs when an agent has a policyholder replace one policy for another with the same company for
the sole purpose of making more commission. This can involve using the cash value and/or dividends of an existing
policy to purchase another policy with the same insurer. This normally is done using misrepresentation or deception
and is not in the policyholder’s best interest.

Note: Agents who use twisting or churning can be charged with a first degree misdemeanor and a fine from $5,000
to $75,000 for each violation.

Sliding

Sliding occurs when an agent tells an applicant that in order to get the product they want, they are required by law
to get an additional product as well. It can also mean falsely representing to an applicant that specific coverage is
included in the policy applied for with no additional charge.

Coercion

Coercion is when an agent uses physical or mental force, with the intent of convincing an applicant to buy insurance.

Misrepresentation

Misrepresentation is when an agent uses publications, sales materials, or makes statements that are false, misleading,
or deceptive to unfairly influence the purchase of a policy.

• An example of misrepresentation would be when an agent tells a client that dividends are guaranteed

Defamation

Defamation occurs when an oral or written statement is made that is intended to injure a person in the
insurance business or be critical and misleading about the financial condition of a person or company.

Fraud

Fraud occurs when someone intentionally deceives another with the intent to gain financially.

Unfair Discrimination

It is an illegal practice to unfairly discriminate against a person in any way on an insurance-related matter.
An example would be providing different terms of coverage for different policyowners in the same risk
classification. Fair discrimination is necessary for the issuance of life insurance policies, which is based on mortality.

Controlled Business

Controlled business is coverage written by an agent on his/her own life, health, property, immediate family,
or business associates. Most states will not issue a license to a person if it is determined that their primary
purpose is to write controlled business.

Note: Normally no more than 50% of an agent’s insurance sales are allowed to come from controlled business

Rebating

Rebating happens when an agent refunds part of their commission, or exchanges anything of value to induce
someone to purchase an insurance policy. Rebating is allowed in Florida if the agent rebates insureds in the same actuarial class.

• An insurer or agent may give to a prospective insured, for the purpose of advertising, any article of merchandise
having a value of not more than $25

False advertising

It is an illegal practice to falsely advertise insurance products or publish misleading information about its insurance coverage. This includes making false statements about the financial condition of an insurer.

• An insurer exaggerating its dividends in a publication is also considered a form of false advertising

►UNFAIR CLAIMS SETTLEMENT

The following acts, omissions, or practices are defined as unfair and deceptive claim settlement
practices when knowingly committed or performed with such frequency as to indicate a general
business practice, and are prohibited:

• Misrepresenting to insured’s pertinent facts or policy provisions relating to coverage at issue

• Failing to acknowledge and act reasonably promptly upon communications with respect to an insurance claim

• Failing to adopt and implement reasonable standards for prompt investigation and processing of insured’s claims

• Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements are completed
and submitted by insured’s

• Not attempting in good faith to effect prompt, fair and equitable settlements of claims on which liability has become
reasonably clear; Refusing or delaying a settlement solely because there is other insurance available to partially or
entirely satisfy the claim loss; the claimant who has a right to recover from more than one insurer has the right to
choose the coverage from which to recover and the order in which payment is to be made

• Compelling insured’s to initiate suits to recover amounts due under an insurance policy by offering substantially less
than the amount ultimately recovered in those suits

►DOMESTIC, FOREIGN, AND ALIEN COMPANIES

Insurance companies are classified according to the location of its corporation. Regardless of where the
insurance company is incorporated, it still has to get a Certificate of Authority before transacting
insurance within a state.

The following definitions apply:

Domestic insurance company: A company that resides and is incorporated under the laws of the
state in which its home office is located.

Company chartered in Florida would be a domestic company in Florida.

Foreign insurance company: A company whose home office is located in another state. It is considered
to be a foreign company in all states except for its home state.

Company chartered in Texas would be a foreign company in Florida.

Alien insurance company: is one that is chartered and organized in any country other than the United
States. It is considered an alien insurance company in all states.

Company chartered in Canada would be an alien company in Florida.

►AUTHORIZED, UNAUTHORIZED, AND ELIGIBLE COMPANIES

Authorized insurer: An insurance company that has qualified and received a Certificate of Authority
from the Department of Insurance (or sometimes called Department of Financial Services) to sell
insurance in that state.

• Also called an admitted insurance company


Unauthorized Insurer: An insurance company that has been denied or not yet applied for a Certificate
of Authority and may not sell insurance in that state.

• Also called a non-admitted insurance company

• Possible consequences for placing with an unauthorized insurer include: conviction of a third degree felony, liability for all unpaid claims, and revocation of all insurance licenses

►STOCK AND MUTUAL COMPANIES

Stock Insurance Company: An insurance company that is owned and controlled by stockholders (shareholders). The
stockholders provide the capital and share in profits or losses.

• Stock Insurance Companies are considered Non-participating or Non-par because the
  policy owners do not share in the profits of the company

• Their objective is to produce a profit for its owners, the stockholders

• Stock Insurance Companies that issues both participating and non-participating policies are
  referred to as a company doing business on a mixed plan

Mutual life insurance companies: are owned and controlled by its policyowners. These policyholders
elect a board of trustees or directors to manage the firm. The profits of a mutual insurance company are
returned to the policy owners in the form of dividends or retained as surplus to meet future obligations.

• Mutual Insurance Companies are considered Participating or Par because the policy owners do
  share in the profits of the company

• Objective is to provide insurance to its owners, the policy owners, at the lowest possible net
  cost

►Advertising

Advertisement may include any method of communication
• In a newspaper, magazine, or other publication
• In the form of a notice, circular, pamphlet, letter, or poster
• Over any radio or television

Advertisement does not include
• Material used solely for the training and education of an insurer’s employees, agents, or brokers
• Internal communication within an insurer’s own organization
• Correspondence between a prospective group or blanket policyholder and an insurer during negotiations

Testimonials

Testimonials and endorsements used in advertisements must be genuine and represent the current opinion of the author.

Disparaging comparisons and statements

An advertisement must not directly or indirectly make unfair or incomplete comparisons of policies, contracts, or benefits.

Identity of insurer

The name of the actual insurer must be stated in all of the insurer’s advertisements. The form number or numbers of the policy advertised must be stated in any invitation to contract. An advertisement must not use a trade name, name of the parent company of the insurer, or any other device that would be misleading to the true identity of the actual insurer.

Statement about an insurer

An advertisement must not contain statements that are untrue or misleading with respect to the assets, corporate structure, financial standing, age, or relative position of the insurer.

Advertising file

Each insurer must maintain at its home office a complete file of its advertising materials, available for inspection, for a period of 4 years.

Gifts

An agent is allowed to give advertising gifts to a prospective customer, provided they do not exceed $25.

►FLORIDA LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION

The Florida Life and Health Insurance Guaranty Association was established to provide funds to
protect an insured in the event of an insurer's insolvency.

• The Life and Health Guaranty Association is funded by insurance companies through assessments

• Agents are prohibited from using the existence of the Life and Health Guaranty Association for
selling, soliciting, or inducing purchase of an insurance policy

►Code of Ethics

Agent Ethics

Trade practices: The life insurance industry has been declared to be a public trust in which service of all
agents of all companies have a common obligation to work together in serving the best interest of the insuring public.

Note: The Code of Ethics specifically forbids agents or companies to engage in any act of twisting, rebating,
defamation, or misrepresentation.

Fiduciary responsibility: An agent must handle funds of a client or insurance company honestly and fairly and
NOT use them for the agent's own purposes.

Licensed Agents: Agents may not submit applications to an insurer unless the name of the insurer is legibly typed
or printed on the first page of the application at the time coverage is bound or the premium is quoted. The application
must also disclose the name and license identification number of the agent as shown on the agent's license. This
information must be legibly typed, printed, stamped, or written. A copy of the completed application must be provided
to the prospective insured.

Every insurance policy issued in the state of Florida must specify the following:

• The names of the parties to the contract
• The subject of the insurance
• The risks insured against
• The effective date and period of coverage
• The premium
• The conditions pertaining to the insurance
• The form numbers and edition dates of all endorsements attached to the policy



National Association of Insurance and Financial Advisors (NAIFA)

The National Association of Insurance and Financial Advisors is a professional organization whose code
of ethics is incorporated into Florida law and whose responsibility it is to establish the activities of agents.

►FLORIDA LIFE LAWS

Rules of Disclosure

The “rules of disclosure” review what needs to be provided to each prospective purchaser of a life
insurance policy. This includes a buyer’s guide, policy summary, and 14 day free-look period.

Minimum Age

The minimum age at which an individual can sign a life insurance application is 15 years.

Contestable period

A provision that the policy terms shall be incontestable after it has been in force for a period of 2 years from
its date of issue (unless the purpose for taking out the coverage was fraud).

Free Look Period

Free Look provision allows an insured a period of 14 days from the delivery date of the policy to look
over the new policy and return it for a full premium refund if dissatisfied for any reason.

Note: the 14 day period begins when the applicant receives the policy in the mail or is delivered by an agent.

Buyer’s Guide

Buyer's Guide provides basic information about an insurance policy. This document explains how a buyer should
go about choosing the amount and type of insurance to buy, and how a buyer can save money by comparing the
cost of similar policies.

Note: The insurer must provide a buyer's guide along with a policy summary to any prospective
purchaser before accepting the applicant's initial premium or upon the applicant's request.

Grace Period

Life insurance policies must provide a grace period of 31 days after the due date. If the insured
dies during the grace period, the insurance company may deduct any premium due from the death benefit.

Interest Rates

The maximum fixed policy loan interest rate that an insurer can charge in Florida is 10%. Adjustable
rates for policy loans are based on Moody’s corporate bond index.

Named Beneficiary

In Florida, if a policy is made payable to a named beneficiary, a creditor can make no claim on the proceeds.

Senior Citizen Grace Periods

In Florida, anyone over the age of 64 will receive an additional 21 days beyond the normal policy grace period.

Suicide Clause

In Florida, if an insured commits suicide within 2 years of policy issue, the beneficiary will only receive
a refund of premiums paid. After two years, the face amount will be paid in the event of suicide.

Industrial Policies

When an insured has industrial life insurance policies with a single insurance company that total
$3,000 or more in face value, the insured has the option to convert all of these policies into one
ordinary life insurance policy at standard premium without evidence of insurability.

Reinstatement

An insurance company that requires an application for reinstatement has 45 days to reject the
application before reinstatement is automatic. In other words, if the insurer takes no action within
45 days, the policy is considered reinstated automatically.

Excess Business

Under Florida law, "excess business" is permitted when an agent's own company is not able to
write the amount of insurance requested by the applicant. Excess business is that portion of a
risk above the limits of that which the agent’s own insurer will accept. A licensed life agent may
place excess or rejected risks with any other authorized insurer without being required to secure
an appointment as to such other insurer.

Excess Charges

Excess charges occur when an agent knowingly collects money for a premium or an additional charge
for insurance that is not provided for in the policy.

ERISA

ERISA supersedes Florida state law relating to employee retirement plans. The savings clause in ERISA protects the following areas of state regulation:
• Insurance
• Banking
• Securities

Agent Responsibilities

While life insurance agents should be generally familiar with all Florida insurance regulations, the
following 3 are of particular importance:

• The Solicitation Law: spells out the information and procedures required of agents and
insurers when proposing life insurance to a prospective buyer;

• Replacement Rule: sets forth the requirements and procedures to be followed by
insurance companies and agents when a proposal is being made in which a prospective life insurance
buyer will be replacing existing insurance contracts with the proposed new insurance

• Code of Ethics: establishes a broad outline defining appropriate and inappropriate
business behavior for life insurance agents.

►REPLACEMENT

Replacement

Replacement is strictly regulated and requires full disclosure by both the agent and the replacing
insurance company. Replacement regulations exists to assure that purchasers receive specified
information and it also reduces the opportunity for misrepresentation. Policy replacement is
defined as a transaction in which a new policy or contract is to be purchased, and the agent is
aware that an existing policy or contract has been, or will be:

• Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer or
otherwise terminated

• Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise
reduced in value by the use of nonforfeiture benefits or other policy values

• Modified to cause a reduction in benefits or length of policy term

• Subjected to loans exceeding 25% of the cash value

• Reissued with a reduction in cash value

• Used in a financed purchase

Duties of the Replacing Agent

• Present to the applicant a Notice Regarding Replacement that is signed by both the applicant
and the agent. A copy must be left with the applicant.

• Obtain a list of all existing life insurance and/or annuity policies to be replaced including policy
numbers and the names of all companies being replaced.

• Leave the applicant with the original or a copy of written or printed communications used for
presentation to the applicant.

• Submit to the replacing insurance company a copy of the Replacement Notice with the application.

• An agent must disclose the possible tax consequences of replacing or exchanging an existing annuity or life
insurance policy.

Duties of the Replacing Insurance Company

• Require from the agent a list of the applicant's life insurance or annuity contracts to be replaced
and a copy of the replacement notice provided to the applicant.

• Send each existing insurance company a written communication advising of the proposed
replacement within a specified period of time of the date that the application is received
in the replacing insurance company's home or regional office. A policy summary or ledger
statement containing policy data on the proposed life insurance or annuity must
be included.

The replacement of existing life insurance policies with new contracts of life insurance requires a written Comparison and Summary Statement at the policyowner's request.

Conservation

An agent's attempt to stop the replacement of an existing life insurance policy or annuity is known as conservation.

►GROUP LIFE INSURANCE

Certificate

Instead of a policy, the participants under a group plan are issued certificates of insurance
as evidence that they have coverage.

• Each person insured under a Group Life insurance policy is a certificate holder

The certificate must contain the following information:

• Group policy number
• Description of insurance protection to which the certificate-holder is entitled
• The name of the insured, beneficiaries and dependents (if any)
• The rights and conditions

Conversion

In Florida, group life policies must contain a conversion privilege that allows for conversion to an individual policy for a specified period of time.

• Converted individual policies do not require evidence of insurability

Eligibility

Participants are given a period of time, known as the eligibility period, to join the group plan. Other
plans use an open enrollment period, in which case all new employees must wait until the next
enrollment period before joining the group plan. In Florida, there is no minimum number of insureds
required for a group life insurance policy.

Note: Those who do not enroll at the first opportunity can be required to provide evidence of insurability

Exclusions

Part-time employees, seasonal workers, and full-time employees before the probationary period may be excluded
from a group life plan.

• Full-time employees may be included after the probationary period

Group Life Statutes

• The employees eligible for group insurance under the policy shall be all of the employees of the employer.

• In the event of a termination of a group life plan or termination of a covered employee, a person covered
by a group policy has the right to convert such coverage to an individual policy within the conversion period
(31 days) without proving insurability. If this right is exercised, the employee is responsible
for the payment of premium.

• There are no restrictions regarding the assignment of coverage under a group life insurance policy

Cancellation

An insurer must notify each certificate holder (employee) when the master policy has expired or is being cancelled.

• The insurer may take such action through the policyholder (employer)

Fraternal Life Insurance Organizations

Fraternal life insurance organizations are nonprofit providers of life insurance that is covered
by a special section of the Florida insurance code.

Entities

The following entities for selling life insurance are legal in the State of Florida

• Personal producing general agencies
• Independent agency systems
• Career agency systems

Eligibility Requirements for Associations

The following are the eligibility requirements for an association to purchase life insurance for its members on a group basis:

• The group must be a natural group (organized for some reason other than to obtain group insurance)
• A minimum of 100 participants is required for a contributory plan
• The group must have been in existence for two years
• The group must hold regular meetings at least on an annual basis

Noncontributory group

In a noncontributory group, the policy must cover 100% of eligible persons.

►Viatical Settlements

Allows someone with a terminal illness to sell their existing life insurance policy to a third party for a
percentage of the face value. To receive a percentage of the policy face value, an owner of a life policy
may sell the policy to a viatical settlement provider. The new owner continues to make the premium
payments and will eventually collect the entire death benefit. Viatical settlement brokers must be
licensed before conducting any viatical transactions. Proceeds of the viatical settlement contract
could be subject to the claims of creditors.

Note: the original policy owner is called the Viator and the new third party owner is called the Viatical
or sometimes called the Viatee. A viatical settlement broker can advertise the availability of
viatical settlements, introduce viators to viatical settlement providers, and charge a fee for their services.

► VARIABLE PRODUCTS

• An agent who wants to sell Variable annuities must be licensed by the state, which includes examinations
in Life and Variable contracts.

• Agents marketing variable life insurance must be licensed and appointed as a life and variable
contract agent, and a broker dealer

• Variable annuities are regulated by both the Department of Financial Services and the Securities
Exchange Commission

• A variable annuity policyholder must be informed of the accumulated value of the contract
during the premium payment period at least once each year

► SUITABILITY IN ANNUITY TRANSACTIONS

Standards and procedures are in existence to ensure that anyone looking to purchase, exchange, or replace
an annuity is properly informed and the recommendations given to them are in their best interests. The
intended goal of this regulation is a consumer who has had their insurance needs and financial objectives properly addressed.

The following list is information that should be taken into consideration when making suitable recommendations concerning the purchase, exchange, or replacement of an annuity:

• Age
• Annual income
• Financial situation and needs
• Financial experience
• Financial objectives
• Intended use of the annuity
• Financial time horizon
• Existing assets
• Liquidity needs
• Net worth
• Risk tolerance
• Tax status
• Present income

►FLORIDA HEALTH LAWS

►REQUIRED PROVISIONS

Entire Contract

A provision that the policy, application, and all attachments shall constitute the entire contract
between the parties.

• States that the agent does NOT have the authority to change the policy or waive any of its provisions

Time Limit on Certain Defenses (Incontestable Period)

A health or disability policy is incontestable after it has been in force for a period of 2 years. Only fraudulent
misstatements in the application may be used to void the policy or deny any claim at this point.

Grace Period

The grace period for health and accident insurance is required to be no less than 7 days for weekly premium
policies, 10 days for monthly premium policies and, 31 days for all other policies. If premium is paid within
the grace period, coverage shall remain in effect.

Reinstatement

If a health policy is reinstated after it had lapsed for nonpayment, there is a waiting period of 10 days
before a claim covering sickness will be covered. Injuries sustained from an accident, however, will be covered immediately.

• If the insurer takes no action within 45 days after receiving the reinstatement application, the
policy is considered automatically reinstated.

Notice of Claim

Written notice of a claim must be given within 20 days after a covered loss starts or as soon as reasonably possible.

Claim Forms

An insurance company will send forms for filing proof of loss to a claimant within 15 days after company receives notice of a claim.

Proof of Loss

Written proof for any loss must be given to the insurance company within 90 days.

Time Payment of Claims

The time payment of claims provision allows insurers 45 days after receiving notice and proof of loss in
which to pay or deny the claim.

• The minimum schedule of time in which claims MUST be made to an insured under an Individual Disability
policy is monthly

Right to Examine (Free-Look)

Health insurance policies must provide a minimum free-look period of 10 days upon policy delivery. This allows
the policyowner time to decide whether or not to keep it. If the policyowner decides not to keep the policy within
the 10 days allowed, a full refund will be given.

• A person who is eligible for Medicare has a free-look period of 30 days

Legal Actions

No legal action can be initiated within 60 days after proof of loss has been submitted to the insurance company.
In addition, no legal action can be initiated after 5 years from the initial time written proof of loss has been provided.

Advertisements

• All advertisements for health insurance shall make clear the identity of the insurer
• Insurance companies are responsible for the accuracy of testimonials

Physical Exams and Autopsies

The insurer has the right to examine the insured during the claim process and to an autopsy
when death is involved and where it is not forbidden by law.

Illegal Occupation

The insurer shall not be liable for any loss to which a contributing cause was the insured being
engaged in a felony or illegal occupation.

Change of Beneficiary

The change of beneficiary provision allows the policyowner to change the policy beneficiary if so
desired as long as the beneficiary designation is revocable. This provision also gives the
policyowner the right to surrender or assign the policy without obtaining the beneficiary’s permission.

►PRE-EXISTING CONDITIONS

Individual Health Insurance

Florida law prohibits individual health insurance policies (other than disability income insurance) from
excluding coverage for preexisting conditions for longer than 24 months following the effective date
of coverage, based upon a condition that had manifested itself during the previous 24-month period
in such a manner as would cause an ordinarily prudent person to seek medical advice or treatment.

Group Health Insurance

For group health insurance: Pre-existing conditions (conditions for which medical advice, diagnosis, care
or treatment was recommended or received in the 6 months prior to the effective date of enrollment)
may be excluded for a maximum of 12 months from the date of enrollment (18 months for late enrollees).
Creditable coverage will be used to reduce the exclusion period, unless the individual has a coverage gap
of 63 days prior to enrollment in the group plan.

• The underwriting and issuance of a master group health policy in Florida requires that all employees or members must be eligible to participate regardless of individual health history

Replacement Health Insurance

When a person covered by a health insurance plan moves to another plan, any credit toward fulfilling
the preexisting requirement on the prior plan will be transferred to the new plan.

Pre-existing Conditions, Replacement Policies

When replacing an individual health policy in Florida, the required replacement notice to the applicant
must include notice that pre-existing conditions may not be covered.

An individual’s waiting period for pre-existing conditions is reduced when he or she has “creditable
coverage.” Creditable coverage is previous coverage under another group or individual health
plan when there has not been a break in coverage of 63 days. The 63-day period begins when
the individual’s previous coverage ended. It ends when coverage under your plan begins, or,
if earlier, when your group’s waiting period for eligibility begins.

Under HIPAA requirements 18 months of “creditable coverage” are required in order for a person
who does not have access to other health insurance to be given the opportunity to purchase an
individual health insurance policy

►FLORIDA ELIGIBILITY REQUIREMENTS AND OFFERS

Newborn Child Coverage

All health plans that provide coverage to family members of the insured, must provide coverage
for the insured’s newborn child from the moment of birth for a period of 18 months.

Handicapped Children

In Florida, coverage for a child who is dependent on the parents for support due to a physical handicap
may be continued beyond the contractual limiting age when the child is incapable of self sustaining employment.

Adopted and Prospective Adopted Children

All health plans must provide coverage to the insured’s adopted children on the same basis as other dependents.

Substance Abuse

All health plans must provide benefits when an insured is confined for treatment of alcoholism or drug abuse
in a licensed medical care facility.

Mental Health

All health plans must provide benefits when an insured is confined for in-patient treatment of mental illness
in a licensed medical care facility.

Converted Policies

At the option of the insurer, a separate converted policy may be issued to cover a dependent.

Genetic Testing

The use of genetic information or test results by health insurers or HMO’s is prohibited.

Definition of Small Employer

A small employer is one that employs not more than 50 employees

When offering a health benefit plan to small employers, the carrier MUST offer at least the standard plan

• A small employer carrier that offers health coverage in the small employer group market shall
renew or continue in force that plan at the option of the small employer

Exclusive Provider Organization

A provider that has entered into a written agreement with a health insurance company to provide
health care services for certain insureds. It can offer these services through its own facilities
or a network of health care professionals, or it may use another facility, such as an HMO.

Dread Disease Policies

Dread Disease policies cover a single disease or illness only.

Discount Medical Plan

An arrangement or contract in which a person, in exchange for fees or other consideration, provides
access for plan members to the services of providers of medical services at a discount.

Contributory Group Plan

Under Florida law, there is no specific minimum percentage participation for employees covered by employee group health insurance.

Coordination of benefits (COB)

The purpose of the coordination of benefits (COB) provision, found only in group health plans, is to avoid duplication of benefit payments.

Association Plans

Association Plans must be fully insured by an authorized insurer, so the insurer is subject to state regulation.

Prepaid Limited Health Service Organization (PLHSO)

A PLHSO is any person, corporation, partnership, or any other entity that, in return for a prepayment,
undertakes to provide or arrange for, or provide access to, the provision of a limited health service
to enrollees through an exclusive panel of providers for the following services:

• Ambulance services
• Dental care services
• Vision care services
• Mental health services
• Substance abuse services
• Chiropractic services
• Podiatric care services
• Pharmaceutical services

►COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that requires employers
with 20 or more employees to include a continuation of benefits provision for former employees and their
dependents. COBRA guarantees that the participant can continue the group coverage (at their own expense)
at group rates if their participation in the group plan is terminated because of a qualifying event.

Qualifying events: include the death of the employee, termination of employment (except for termination
because of gross misconduct) or a reduction in work hours, which results in the participant no longer qualifying
for group coverage.

Note: It is important to remember that COBRA benefits apply only to group health insurance, not group life insurance.

Continuation of Group Coverage

Employees who have been covered under a group health plan for at least 3 months before their
termination to be eligible to continue their coverage under COBRA. They must request
continuation within 31 days following termination.

Mini COBRA

Florida's Health Insurance Coverage Continuation Act (Mini COBRA) applies to employers who
employ less than 20 employees.

►FLORIDA EMPLOYEE HEALTH CARE ACCESS ACT

The purpose of the Florida Employee Health Care Access Act is to make group health insurance
available to employers with 50 or fewer employees.

• The provisions of the Florida Employee Health Care Access Act require that all small group health benefit plans be issued on a "guaranteed-issue" basis

►FLORIDA HEALTHY KIDS CORPORATION

Florida Healthy Kids offers health insurance for children ages 5-18. Health Kids is designed to provide quality, affordable health insurance for families not eligible for Medicaid.

• Families with children covered by the Florida Healthy Kids Corporation program pay only a portion of the premium

►LONG-TERM CARE

Definition

Long-term care insurance is designed to provide coverage for diagnostic, preventive, therapeutic,
rehabilitative, maintenance, or personal care services in a setting other than an acute care unit of a hospital.

• A health insurance agent license is required in order to solicit Long-term care insurance in the State of Florida

• Long-term care insurance is any policy designed to provide coverage for at least 12 consecutive
months for each covered person on an expense-incurred, indemnity, prepaid, or other basis

Notice to Buyer

A “notice to buyer” must be on the first page of each long-term care policy delivered in. It explains that some
long-term care costs may not be covered.

Outline of Coverage

An outline of coverage is required and provides a very brief description of the important features of the policy.
It is considered a summary of coverage. It requires:

• A summary of the policy's principal exclusions and limitations
• A statement of the policy’s renewal and cancellation provisions
• A description of the policy’s principal benefits and coverage

Renewability Provision

Individual long-term care insurance policies shall contain an appropriately captioned renewability
provision on the first page of the policy form.

• The renewability provision shall clearly state that the coverage is guaranteed renewable or noncancellable

Pre-existing Conditions

Pre-existing conditions are those for which medical advice or treatment was recommended by or received
from a health provider within six months preceding the effective date of an individual long-term care policy.

Free look

A 30 day free look period is required for long-term care policies.

Inflation Protection

All insurers issuing long-term care insurance policies must offer, as an optional benefit, an inflation protection
feature which provides for automatic future increases in the level of benefits without evidence of
insurability. Adjustments must be at a level which provides reasonable protection from future increases
in the costs of care for which benefits are provided.

Lapse notice

An insurer must mail a long-term care lapse notice at least 30 days prior to the effective date of cancellation to both the policyholder and a specified secondary addressee.

Home Health Care

Long-term care policies must pay for "at-home" care at the same daily amount as paid for a nursing
home if the insured meets the qualifications for nursing home care.

Limitations and Exclusions

Exclusion or limitation of benefits on the basis of Alzheimer’s Disease is NOT permitted. However,
limits and exclusions may be placed on:

• Preexisting conditions or diseases
• Alcoholism and drug addiction
• War or acts of war
• Participation in a felony, riot or insurrection
• Suicide or self-inflicted injury
• Aviation (except for fare-paying passengers)

►MEDICARE SUPPLEMENTS

• Insurers must file with the Commissioner a copy of any Medicare supplement advertisement
before it is to be used in Florida

• The marketing of Medicare Supplements is regulated to prevent sales of excessive insurance,
inaccurate policy comparisons, and the failure to display notice of limitations to the buyer

• The agent who solicits the application is primarily responsible for determining the
appropriateness of a Medicare supplement policy for a proposed insured

• Every agent soliciting Medicare Supplements must provide a suitability form

• To verify if replacement is involved in a Medicare Supplement sale, insurance
law requires that a question about replacement appear on the application form

• If a Medicare Supplement policy is sold, the agent must deliver an Outline of Coverage to the applicant no later than when the application is taken

• When a Medicare supplement policy is purchased during the open enrollment
period, the policy must be issued regardless of health status

• Free-look period for Medicare Supplements is 30 days

• The open enrollment period for Medicare (and Medicare Supplements) begin 3
months before your 65th birthday and lasts for 7 months

• An insurer may exclude coverage for a preexisting condition on a Medicare
Supplement Policy for up to 6 months.

►PROHIBITED LONG-TERM CARE AND MEDICARE SUPPLEMENTS SALES PRACTICE

• Twisting: Using misrepresentations or inaccurate comparisons to induce a person to terminate or borrow
against their current insurance policy to take out an insurance policy with another insurer

• High pressure tactics: Used to induce the purchase of insurance through force, fright, threat, or undue pressure

• Cold lead advertising: Failing to disclose that the purpose of the marketing effort is insurance solicitation

• Misrepresentation: Misrepresenting a material fact in selling a long-term care insurance policy

►HMO DEFINITIONS

Member: A person who makes a contract or on whose behalf a contract is made with a health maintenance organization for health care services.

Provider: Any person, including a physician or hospital, who is licensed or otherwise authorized in this state to provide health care services.

Subscriber: A person who makes a contract with a health maintenance organization, either directly or through an insurer or marketing organization, under which the person or other designated persons are entitled to the health care services.

Individual contract: A contractual agreement for the provision of health care services on a prepaid basis entered into between an HMO and a subscriber covering the subscriber and the subscriber’s dependents.

• An insurer may NOT issue an HMO contract

Every subscriber must receive a benefits package that includes a copy of the HMO contract and certificate
and a member’s handbook. The contract must contain all of the provisions required by law, such as:

• Must clearly state all services covered by contract
• Must state all limitations
• Enrollment
• Rates charged shall not be excessive
• Procedures for emergency treatment outside the HMO’s geographic area
• Grace period of no less than 10 days

• Preexisting conditions in children may not be excluded
• Contract must be accompanied by an identification card
• Statement of time limit of certain defense clause (2 years) must be included
• Rate of payment must be clearly stated

►DENTAL

Restorative

Restorative dentistry is the procedure for restoring the function and integrity of a missing tooth
structure. Examples include fillings, crowns, and dental bridges.

Oral Surgery

Oral and maxillofacial surgery is surgery to treat many diseases, injuries and defects in the head,
neck, face, jaws and the hard and soft tissues of the oral and maxillofacial region.

Endodontics

Endodontics is the branch of dentistry dealing with diseases of the dental pulp. Root canals would
be an example. Endodontics is commonly excluded or limited from a dental policy.

Periodontics

Periodontics is a dental specialty that involves the prevention, diagnosis and treatment of disease of
the supporting and surrounding tissues of the teeth or their substitutes. It also involves the
maintenance of the health, function, and esthetics of these structures or tissues.

Prosthodontics

Prosthodontics is a branch of dentistry dealing with the replacement of missing parts using
biocompatible substitutes such as bridgework or dentures

Orthodontics

Orthodontics is the treatment of irregularities in the teeth (esp. of alignment and occlusion)
and jaws, including the use of braces.

Dental Plans

Occasionally, dental insurance is part of a health benefits package with a single deductible called
an integrated deductible, applying to both medical and dental coverages. More often, however,
dental coverage and claims are handled separately with a separate deductible. There also may be
a probationary period in group dental insurance to help hold down coverage for preexisting conditions.
Some dental policies are scheduled, meaning benefits are limited to specified maximums per procedure,
with first dollar coverage. Most, however, are comprehensive policies that work in much the same way
as comprehensive medical expense coverage. In addition to deductibles, coinsurance and maximums may
also affect the level of benefits payable under a dental plan.

Here are some other bullet points to consider when addressing dental plans:

• A pre-treatment estimate of the cost of dental services may be required whenever the patient
requires dental treatment

• Comprehensive dental plans usually provide routine dental care services without deductibles or
coinsurance to encourage preventative care (such as teeth cleanings, fluoride treatments etc)

• Dental plans are typically indemnity plans, which pay benefits based on a predetermined, fixed
rate set for the services provided…regardless of the actual expenses incurred.

• To prevent adverse selection in a group dental expense plan, the plan may require any of the following:
probationary periods, waiting periods, evidence of insurability, or limits on annual benefits

• With prepaid dental plans, coverage is limited to a closed panel of dentists

• The absence of deductibles on routine examinations encourages preventive care in dental insurance

• Dental treatment expenses required to repair an injury would normally be covered under a hospital or
medical expense policy.

• Some hospital and medical expense plans will provide coverage for some dental related services related
to the jaw or facial bones. Some of these include: reduction of any facial bone fractures; removal of
tumors; treatment of dislocations, facial and oral wounds/lacerations in order to repair an injury; and
the removal of cysts or tumors of the jaws or facial bones.