In 2014, the DFS repealed a rule, for lack of rulemaking authority, that required prelicensure course attendees to complete 75 percent of the course hours to receive credit. The bill places this former rule requirement into statute. It requires attendees to complete 75 percent of course hours in required prelicensure courses for applicants to receive credit. This provides a uniform course completion standard for course providers.
Knowledge, Experience, or Instruction Requirements

Life applicants
Currently, life agent applicants must meet specified knowledge and experience requirements within the four years preceding their application. These requirements are waived if the applicant holds the Chartered Life Underwriter (CLU) designation. The bill eliminates some requirements and revises others. It specifies that whoever satisfies their knowledge requirement through coursework must do so in the subjects of life insurance, annuities, and variable contracts, rather than simply insurance. A life agent applicant may satisfy their knowledge requirement by earning or maintaining one of the following designations in the four years prior to application: 

· Chartered Financial Consultant (ChFC) from the American College of Financial Services;
· Fellow, Life Management Institute (FLMI) from the Life Management Institute

The bill permits a life agent applicant to qualify for licensure if they have completed at least 40 hours of coursework in multiple lines of insurance, including life insurance, annuities, and variable contracts (60 hours for a 2-15 license). The coursework must include instruction in unauthorized insurance entities and three hours of ethics training. The bill also allows those applicants that rely on prior employment with the DFS or the Office of Insurance Regulation (OIR) to claim credit for their employment experience for four years following their separation from employment, rather than only 90 days.
[House of Representatives Final Bill Analysis — June 17, 2015]

Health Applicants
Currently, health agent applicants must meet specified knowledge and experience requirements within the four years preceding their application. These requirements are waived if the applicant holds the Chartered Life Underwriter (CLU) designation. The bill eliminates some requirements and revises others. It specifies that whoever satisfies their knowledge requirement through coursework must do so in the subject of health insurance, rather than simply insurance. A health agent applicant may satisfy their knowledge requirement by earning or maintaining one of the following designations in the four years prior to application: 

· From the American College of Financial Services: Registered Health Underwriter (RHU);  Chartered Healthcare Consultant (ChHC); or  Registered Employee Benefits Consultant (REBC);
· Certified Employee Benefit Specialist (CEBS) from the Wharton School of the University of Pennsylvania;
· Health Insurance Associate (HIA) from America’s Health Insurance Plans.

The bill permits a health agent applicant to qualify for licensure if they have completed at least 40 hours of coursework in multiple areas of insurance, including health insurance (60 hours for a 2-15 license). The coursework must include instruction in unauthorized insurance entities and three hours of ethics training. The bill also allows those applicants that rely on prior employment with the DFS or the OIR to claim credit for their employment experience for four years following their separation from employment, rather than only 90 days.

Retention of Records by an Agent

 The bill requires agents to retain records for at least five years following policy expiration. [House of Representatives Final Bill Analysis — June 17, 2015]

 

[HB1133] Recommendations to Surrender Annuities

The bill eliminates DFS rulemaking authority concerning the content of the form used to deliver the required information. The required notice will solely be governed by the standards specified in s. 627.4553, F.S. The bill requires the notice to be in writing, but does not remove or increase any of the elements already specified in law. Such information shall include, but is not limited to, the amount of any estimated surrender charge, the loss of any minimum interest rate guarantees, the possibility of tax consequences, the amount of any forfeited death benefit, and a description of any other investment performance guarantees being forfeited as a result of the transaction.

The bill requires the agent to maintain a record of the notice that it delivers to the surrendering annuity owner.

[House of Representatives Final Bill Analysis — June 17, 2015]

DEFINITION
 "Surrender" is defined as “the voluntary surrender, by the owner's request, of the annuity or life insurance policy before its maturity date, in exchange for the policy's current cash surrender value which results in a surrender or termination of the policy or contract. The term excludes any involuntary termination that is otherwise required by the terms of the policy contract and excludes all transactions other than a surrender, such as maturity, policy loan, lapse for nonpayment of premium, or withdrawal of policy or contract values, annuitization, or exercise of reduced-paid-up or extended-term nonforfeiture options.” CS/CS/HB 1133, enrolled, lines 745-755

[HB1133] Email Delivery

Adds email delivery with receipt as an approved method for  agents to notify insured of insurer insolvency notifications to their insured's. 631.341, F.S.

 

 

 

 

Pertinent Federal Law Review Pertinent to Florida Licensed Insurance Professionals

 

Each state’s insurance director manages most insurance issues and products at the state level. There are, however, instances in which the state and federal governments work together, for example, Medicaid is a state and federally funded program.



State and Federal Relationship


There is a relatively new (3-years) Federal Insurance Office (FIO) that was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA), which, so far, has allowed states the same freedoms as before creation of the FIO.

The fall of the economy, during which we endured the exposure of an insurance industry debacle, played a significant role in Title V of the DFA. It created the FIO and appointed a director who had previously been the acting Insurance Director in Illinois, and an officer for the NAIC. This appointment allowed a voice for the state-run industry and, as the director said during his first press conference, the FIO has refrained from stepping into state lines. He can, however, intervene if a reasonable request is made. The FIO authorities extend to all lines of insurance except health and LTC insurances (except those lines of insurance included with life or annuity components).

 

Although the FIO states, “authority extends to all lines except health … “ we can hardly call the Affordable Care Act “health insurance without federal input!” We have been virtually hit over the head with volumes of Affordable Care Act documentation, rules, policies, and dates. The Act is set to run on a rolling calendar, which results in yearly changes to the rules you become accustomed, each time January 1st rolls around. On a Federal level, these are AFA laws for 2014 and 2015.

 

 

Affordable Care Act Updates

 

Prohibiting Discrimination Due to Preexisting Conditions or Gender.  The law implements reforms that prohibit insurance companies from refusing to sell coverage or renew policies based on an insured having a preexisting condition. In the individual and small group market, the law eliminates the ability of insurance companies to charge higher rates due to gender or health status. Effective Date: January 1, 2014.

 

Eliminating Annual Limits on Insurance Coverage. The law prohibits new plans and existing group plans from imposing annual dollar limits on the amount of coverage an individual receives. The law will phase out annual limits by 2014. Effective Date: January 1, 2014.

 

Ensuring Coverage for Individuals Participating in Clinical Trials. Insurers are prohibited from dropping or limiting coverage because an insured chooses to participate in clinical trials. This applies to all clinical trials that treat cancer or other life-threatening diseases. Effective Date: January 1, 2014.

 

 

IMPROVING QUALITY AND LOWERING COSTS

 

Making Care More Affordable. To make it easier for the middle-class to afford insurance, tax credits are available for people with income between 100 and 400 percent of the poverty level and are not eligible for other affordable coverage. In 2014, 400 percent of the poverty level is $46,680 for an individual or $95,400 for a family of four. The tax credit can be taken in advance, so it can lower premium payments each month, rather than making families wait for tax time. It’s also refundable, so even moderate-income families can receive the full benefit of the credit. These individuals may also qualify for reduced cost sharing (copayments, co-insurance, and deductibles). Effective Date: January 1, 2014.

Establishing the Health Insurance Marketplace. If employers don’t offer insurance, individuals can buy it directly in the Health Insurance Marketplace. Individuals and small businesses can buy affordable and qualified health benefit plans in this new transparent and competitive insurance marketplace. The Marketplace offers a choice of health plans that meet certain benefits and cost standards. Members of Congress are getting their healthcare insurance through the Marketplace, and everyone else is able buy insurance through the Marketplace too. Effective Date: January 1, 2014.

 

Increasing the Small Business Tax Credit. The law implements the second phase of the small business tax credit for qualified small businesses and nonprofit organizations. In this phase, the credit is up to 50 percent of the employer’s contribution to provide health insurance for employees.  There is also up to a 35 percent credit for small nonprofit organizations.  Effective Date: January 1, 2014.

 

 

INCREASING ACCESS TO AFFORDABLE CARE

 

Increasing Access to Medicaid. Americans who earn less than 133 percent of the poverty level (approximately $15,521 for an individual and $31,721 for a family of four) are eligible to enroll in Medicaid. States will receive 100% federal funding for the first three years to support this expanded coverage, phasing to 90% federal funding in subsequent years. Effective Date: January 1, 2014.

 

Promoting Individual Responsibility. Under the law, most individuals who can afford it will be required to obtain basic health insurance coverage or pay a fee to help offset the costs of caring for uninsured Americans. If affordable coverage is not available to an individual, he or she will be eligible for an exemption. Effective Date: January 1, 2014.

 

Paying Physicians Based on Value Not Volume.  Effective January 1, 2015.

.[Source: http://www.hhs.gov/healthcare/facts/timeline/timeline-text.html#2013]

 

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