The Florida Association of Insurance and Financial Advisors (FAIFA) fulfills a similar function to NAIFA in Florida. FAIFA’s Code of Ethics specifically addresses misrepresentations, twisting, rebating, and defamation. FAIFA's Code of Ethics has been adopted into the Department of Financial Services’ rules (Florida Administrative Code 69B-215):
Other Regulatory Organizations
National Association of Insurance Commissioners
All state insurance commissioners or directors are members of the National Association of Insurance Commissioners (NAIC). This organization has standing committees that work regularly to examine various aspects of the insurance industry and to recommend appropriate insurance laws and regulations. The NAlC has four broad objectives:
¨ to encourage uniformity in state insurance laws and regulations;
¨ to assist in the administration of those laws and regulations by promoting efficiency;
¨ to protect the interests of policyowners and consumers; and
¨ to preserve state regulation of the insurance business.
The NAIC has been instrumental in developing guidelines and model legislation that help ensure that the insurance industry maintains a high level of public trust by conducting its business competently and fairly. This group also develops standards for policy provisions, helping ensure that policies become more uniform across the country. The NAIC has no enforcement powers.
Unfair Trade Practices Act
The McCarran-Ferguson Act exempts insurance activities from federal anti-trust laws – “to the extent they are governed by state law.” Shortly after passage of McCarran Ferguson, each state passed laws to address this concern and preserve state regulation of insurance. Most jurisdictions, including Florida, have adopted some version of the NAIC's Model Unfair Trade Practices Act. (Florida Statutes Chapters 626.9521 and 626.9541) This act gives state regulatory officers the power to investigate insurance companies and producers, to issue cease and desist orders and to impose penalties on violators. The act also gives officers the authority to seek a court injunction to restrain insurers from using any methods believed to be unfair or deceptive. Violations of Florida’s Unfair Trade Practices Act can also result in revocation or suspension of an agent’s license (Florida Administrative Code 69B-231). Misrepresentation and false advertising, coercion and intimidation, unfair discrimination, and inequitable claims settlements are all considered unfair trade practices.
One recent NAIC Model law of is of particular interest to agents selling annuities: the Senior Suitability in Annuity Transactions Model Regulation. This model law focuses on "senior consumers" and requires agents to adequately document the suitability of their recommendations to those age 65 or older. The NAIC is in the process of expanding the scope of this model law to cover all consumers regardless of age. To date, Florida has adopted a version of the "senior customer" version of this model act — which was covered in detail in Chapter 1.
The National Association of Insurance and Financial Advisors (NAIFA) is an organization of life insurance agents dedicated to supporting the life insurance industry and advancing the quality of service provided by insurance professionals. NAIFA’s Code of Ethics that stresses the high professional duty expected of underwriters toward their clients, as well as to their companies. The Code emphasizes the ethical balance needed to avoid conflict between these two obligations.