Titular de Insurance Insights
Volume 5, No.12 - December 2016

In The Know

- Keeping you informed is what it's all about

Citizens' Maximum Coverage Limit Decreased Effective January 1, 2017

As required by Senate Bill 1770, enacted by the Florida Legislature in 2013, and by approval of Citizens’ Board of Governors, Citizens will decrease allowable maximum policy coverage limits.

Effective January 1, 2017, for new business and renewals, the following personal residential risks no longer are eligible for coverage under Florida law:

  • A structure that has a dwelling replacement cost (Coverage A) of $700,000 or more
  • A single condominium unit with a combined dwelling and contents replacement cost (Coverage A and C) of $700,000 or more
  • A tenant contents policy with a Coverage C limit of $700,000 or more

Note: The maximum coverage limit changes reflected above will not affect policy forms where lower maximum coverage limits already exist.

Because the Florida Office of Insurance Regulation (OIR) determined there is not a reasonable degree of competition in Miami-Dade and Monroe counties, these two counties are exempt from the decreased coverage limit of $700,000. The maximum coverage limit of less than $1 million will continue to apply to risks in these two counties.

Citizens will comply with the nonrenewal guidelines in Florida Statute 627.4133 and mail affected policyholders nonrenewal notices in advance of nonrenewal dates of 1 de enero de 2017, or later. The nonrenewal will be effective at the end of each policy’s current term.

Agency principals will receive a separate email soon containing a list of affected policyholders, in order to assist them with securing coverage elsewhere.

Citizens’ website, systems and manuals will be updated to reflect this change.

Click here to read the bulletin at Citizens' website>>

Florida Surplus Lines Services Office Fee - Decreased to 0.1% Effective April 1, 2017

BULLETIN: 2016-04

The purpose of this bulletin is to notify you that the service fee charged by the Florida Surplus Lines Service Office (FSLSO) will be decreased from 0.15% to 0.1% effective April 1, 2017.

All new and renewal policies with an effective date on or after April 1, 2017 will incur a service fee of 0.1% of the total gross premium as defined in Estatutos de la Florida 626.9325. The service fee percentage charged on the premium is based on the effective date of the policy; the FSLSO service fee is charged on all applicable Florida policies.

The service fee for all endorsements, audits, installments, cancellations or return premium transactions applicable to policies effective prior to 04/01/2017 will be the same percentage as the inception date of the policy being endorsed.

EXAMPLE ONE: The service fee for a policy with an effective date of 01/01/2017 is 0.15% of the total gross premium. An additional premium endorsement to the policy with an endorsement effective date of 06/01/2017 is 0.15%. If a cancellation takes place with an effective date of 8/01/2017, the service fee credit is 0.15%.

EXAMPLE TWO: The service fee for a policy with an effective date of 04/01/2017 is 0.1% of the total gross premium. An additional premium endorsement to the policy with an effective date of 06/01/2017 is 0.1%. If a cancellation takes place with an effective date of 08/01/2017, the service fee credit is 0.1%.

Again, the service fee percentage charged on the premium is based on the effective date of the policy. For an electronic copy of the bulletin, please visit:www.fslso.com/publications.

Business rules for calculating the correct service fee will be programmed into the FSLSO’s management system. No changes need be made for SLIP or XML batch filing, however, you may need to contact your agency’s information technology vendor or staff regarding needed revisions to your agency management system that may be necessary to calculate the revised service fee.

FSLSO’s Tax Estimator provides instant access to the most current tax rates and is available in a mobile application for Apple or Android devices. To use the Tax Estimator, visit www.fslso.com/estimate.

FSLSO also provides a free Tax Estimator web service application for businesses desiring to make the Tax Estimator available from their internal agency management system or third party website. Contact Tiffany Maruniak (tmaruniak@fslso.com) for more information.

As always FSLSO can be reached toll free at 800.562.4496, or email us at easy@fslso.com or visit our website at www.fslso.com.

What's in Your Product?

When was the last time you read a policy you sell? If you have to think long and hard about this question, you might be selling a product you’re not familiar with. “Well, hold on a minute” you say. “I’m well versed on ISO (Insurance Services Office) and AAIS (American Association of Insurance Services) policy forms." That’s great, you should be. However, insurers deviate from industry standards and react to changing loss scenarios, underwriting challenges, legislative changes and court decisions long before ISO or AAIS. Fear not, you don’t necessarily have to re-read entire policy forms. You can, with a certain amount of confidence, short cut the process. Read the “Special Provisions” endorsement or the “Florida Changes” endorsement. These forms will generally give you the salient deviations from the policy form. Another handy item is the requirement in s.627.43141, F.S. (that’s not a typo, the section number is really that long). This statute requires insurers to send out a notice of changes in policy terms, but this is only handy if you’re familiar with previous changes.

Of course, if the policy is written through the Surplus Lines market you may need to be a little more diligent in your late night reading. While most Surplus Lines carriers don’t reinvent the wheel and use industry standard forms, there is the very real possibility of a company specific form which may narrow coverage.

So go impress a client with your thorough knowledge of the product you’re selling!

Department Contacts for Compliance Guidance and Licensee Complaints

The Division offers several email addresses that allow our licensees to direct their compliance questions to the appropriate sections to provide the fastest response from us. Complaints about other licensees by licensees should also be directed to the appropriate email address.

Title@MyFloridaCFO.com - for title insurance agents and agencies

BailBond@MyFloridaCFO.com - for bail bond agent and agencies

Adjusters@MyFloridaCFO.com - for all types of insurance adjusters and adjusting firms

askDFS@MyFloridaCFO.com - for general compliance questions unrelated to licensing or education

Using these valuable email addresses properly will allow the Division to respond to your inquiry as quickly and comprehensively as possible because the emails are directed to team members with the appropriate knowledge and experience in the specific subject matter.

Quejas de Consumidores

When our licensees receive complaints from consumers about the activities of other licensees, the consumers should be directed to file a complaint with the División de Servicios al Consumidor by the method they prefer (email, phone, fax, etc.) After providing any service the consumer may need to resolve an insurance dispute or concern, the Division of Consumer Services will forward the complaint to the Division's Bureau of Investigation for further review if it appears the agent may have violated the Florida Insurance Code.

Restrictions on Agency Names

When choosing a name for your insurance agency, please note that the Department may disapprove the use of any true or fictitious name, other than the bona fide name of an individual, if it violates certain guidelines. The name cannot:

◦mislead the public in any respect,
◦interfere with or be too similar to another name already being used by another agency or insurance company,
◦state or imply the agency is an insurer, motor club, hospital service plan, state or federal agency, charitable organization, or entity that primarily provides advice and counsel rather than selling or soliciting insurance, or is entitled to engage in insurance activities not permitted under the license you hold or have applied for.

The provisions above do not prohibit you from using the word “state” or “states” in the name of your agency as those terms do not, in and of themselves, imply that the agency is a state agency. Please see s. 626.602, E.F.

The Florida Statutes Are Available Online

The Florida Statutes can be viewed at Online Sunshine - Title XXXVII Insurance.