FAIA ‘Roundups’ Analyze Florida Legislation, Its Impact

A summary and analysis of 2005 Florida legislation and its impact on the insurance industry, including detailed analyses of SB 1912, SB 530, SB1486, HB 501, HCB 6001 and HB 19 were presented to Florida Association of Insurance Agents members by William H. Perkins, instructor and Kyle Ulrich, grassroots/PAC coordinator during “Legislative Roundups” June 13 in Fort Pierce, Fla., June 9 in Tallahassee, June 7 in Naples, and June 8 in Miami. Other FAIA roundups FAIA were held in May 24 in Pensacola and May 25 in Destin.

Perkins and Ulrich explained what happened during the spring session of the Florida Legislature, what didn’t happen and what could have happened. They gave a concise, practical presentation about what various pieces of legislation meant to the “agent on Main Street.”

Perkins described recent legislation as incorporating “big changes” which will affect how agencies will operate in Florida. He said each bill had multiple provisions and a multiplicity of dates, many of which affect how agents will have to interface with the Florida Department of Insurance.

Ulrich said many of the changes, which require insurance agencies to be licensed, are the result of problems with one or two agencies, which resulted in the passage of licensing requirements for all. He said SB 1912 will require insurance agency registration, giving the DOI the ability to grab someone who was formerly outside their jurisdiction.

Ulrich explained that bills have “mirror images” which go to the house and senate. Then, before they go to Gov. Jeb Bush for his signature they have to be closely examined to make sure their provisions are aligned with other statutes. Even after that, when they go to the governor, they can be approved, vetoed, or automatically become law after they sit on his desk for 15 days with no action taken.

“Laws won’t change what we do, but will affect how we do it – if a minority breaks the law it affects the majority,” Ulrich said.

Perkins went over each law and each provision and explained what insurance agents would have to do to meet their
provisions.

SB 1912 gives the Department of Financial Services the authority to investigate the accounts, records, documents and transactions affecting the affairs of insurance agencies. It relates to the powers of DFS, the Financial services Commission and OIR to include insurance agencies under the supervision of those agencies.

For many years Florida has been the only state in the country that does not regularly license insurance “agencies,” and in fact only licenses agencies that have engaged in misconduct. FAIA worked closely with DFS to pass meaningful but non-punitive reform.

SB 1912 requires the licensure of insurance agencies by Oct. 1, 2006, with exceptions for agencies engaged in business in the state before Jan. 1, 2003.

One of the agents in the audience asked Perkins what effect the legislation would have on direct writers. He responded that large companies would have to license or register its agents in the state.

Perkins described his analysis of the legislation as “reading tea leaves,” because it will take a long time for the DFS to write an administrative rule book and to conduct workshops. He said FAIA would let its members know when DFS has its initial recommendations in place.

Ulrich described the procedure as a “glitch bill,” indicating that in the spring of 2007 the Florida Legislature can come back and say, “Lets fix the glitches.”

William H. Perkins

Kyle Ulrich