DFS Spokesperson Outlines Fla. Agency Licensing Requirement Changes

Changes in Florida’s legislation during the spring session and new administrative changes requiring agency licensure or registration were described by Hazel Muhammad, bureau chief of Agent and Agen-cy Licensing with Florida’s Depart-ment of Finan-cial Services, Division of Insu-rance Agents and Agency; and Ron Villella, PIA of Florida’s lobbyist; during a “Legislative Update” in September by the Professional Insurance Agents of Florida in St. Petersburg.

According to Muhammad, more changes related to insurance agencies have occurred in this year’s Florida Legislature than any other year. Muhammad was chosen to head the agency licensing effort due to her previous experience with the Bureau of Financial Services Fraud Unit.

“Florida was one of the last states to approve legislation implementing licensure of insurance agencies,” Muhammad explained.

Muhammad and PIA of Florida distributed 24-pages of details and specifications about SB 1912, licensing and registration. Included in the information was a description of the actual legislative changes, definitions, license and appointment details and implementation.

Muhammad said every insurance agency in Florida has until Oct. 1, 2006, to apply for either registration or licensure.

Requirements clarified
Muhammad said registration applies to agencies which have been in business prior to Jan. 1, 2003, and are: wholly owned by insurance agents currently licensed and appointed under Chapter 626; an incorporated agency whose voting shares are traded on a securities exchange; or an agency whose primary function is offering insurance as a service or member benefit to members of a nonprofit organization.

Muhammad explained that licensure applies to agencies that were in business on or after Jan. 1, 2003, or the agencies that do not meet the criteria for registration. She said an agency that qualifies for registration may prefer to obtain a license instead of a registration. She said that if an agency is seeking to be licensed in a state other than Florida, it is unlikely that the Florida license will be recognized through reciprocity; however, the registration may not be honored for agency licensing in another state.

Oct. 1, 2006 deadline
Muhammad said Oct. 1, 2006, is the deadline for an agency to apply for registration or licensure. Failure of an agency to submit an application that qualifies for registration by that date can result in a penalty of a fine up to $5,000. An agency that requires licensure must submit an application by that date, or be subject to a fine of up to $10,000.

Muhammad said the department’s Web site at www.fldfs.com will accept applications and information will be provided when the system is designed for these applications.

Muhammad described the literature provided by the department as “the uniform process for implementing the new licensing requirements for insurance agencies.”

She said that, based on feedback she and other experts have obtained during educational sessions, the questions and answers will be updated to include new information, and will be updated whenever required.

Muhammad said this legislation was implemented primarily to increase consumer protection and help the Department of Financial Services better track unlicensed owners, officers and directors.

She said agencies must notify Tallahassee if there is any change in their corporate structure or ownership.

Hazel Muhammad and Ron Villella discuss licensing requirements with PIA of Florida students at the group’s September classes in St. Petersburg.