Law & Ethics Update

Case: An investigation was opened on a life, health and variable annuity agent based on an insurer's referral of a consumer complaint. The agent enrolled 23 applicants into products under the Affordable Care Act (ACA) with the intention of making fraudulent claims. Most of the people who signed up for the policies were homeless and did not live in Florida. The agent arranged for fraudulent claims to be submitted from an addiction recovery clinic based in California. The plan unraveled when Investigators discovered the agent used a vacant house as the address for all 23 applicants.
Disposition: License revoked. [April 2017 issue]

Case: A case was opened on a life, health and variable annuity agent when the Financial Industry Regulatory Authority (FINRA) barred the agent from associating with any FINRA member in any capacity, which includes holding any type of individual registration.  FINRA's findings concluded the agent converted $15,250 from elderly customers, forged or falsified the signatures of four customers on nine separate documents, and changed the account address of record for three customers from their home addresses to the agent's business address. The agent paid most of the surrender charges a customer incurred as the result of his recommendation to surrender a variable annuity contract, thereby guaranteeing her against loss, a violation of FINRA rules.
Disposition: License revoked. [May 2017 issue]

Case: Department investigative staff initiated an investigation of an insurance agency based on a referral from the Florida Office of Insurance Regulation. The referral alleged the agency employed unlicensed individuals to solicit and transact insurance with Florida consumers. Examination of records obtained during the course of the investigation revealed the agency employed approximately 568 individuals who collectively held over 5,500 resident and non-resident licenses. However, the investigation also revealed approximately 330 events in which an employee, not licensed in Florida, conducted transactions requiring a Florida insurance license. While no consumer harm was found in these events, the volume of occurrences demonstrated a business practice on the part of the agency in allowing employees to conduct a high volume of insurance business without the proper licenses and appointments.
Disposition: The agency was fined $165,000.




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. (
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.

If you DO solicit or sell for an unauthorized entity you are violating the Representing or Aiding Unauthorized Insurer Prohibited statute, which could cause you to be liable for repayment of any losses suffered by a client when the unauthorized entity fails to pay claims. You may also be charged with a third degree felony for violating the Penalty for Representing Unauthorized Insurer statute, punishable by up to five years in prison and a fine of up to $5000 (first offense).

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]

Unauthorized Products and Entities Involved in Florida Commerce

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.”



New and Important Terminology Applicable to Licensed Florida Insurance Professionals


Floridaís OIR recognizes that each state has its own terminology among licensed insurance professionals. It provides the NAICís complete list for every state at

You may need to use the website to secure terms and codes when you are required to complete a transaction with another state.

AM Best, an insurance rating service, offers a glossary of insurance terms for those looking for anything not already made available in this table, within the Florida Office of Insurance Regulation, or by the compliance representative affiliated with your office.†




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