TO: All Members
FR: Richard D. Starr, Director - Government Affairs and Chairman — Legislative, Regulatory & Compliance Committee
DT: 21 September 2006
SB: Florida Agency Licensing Law — Clarifying Points

A major topic of discussion with BISA General Counsel at the recent BISA Community & Regional Bank meeting in Colorado was Florida’s new agency licensing law that requires all insurance agencies to apply on-line for licensure or registration by October 1, 2006.

These clarifying points were discussed today with the Florida Department of Financial Services (FLDFS), and some of the details are reflected somewhat differently in the FLDFS published information. They were delivered verbally and informally by FLDFS and may not be binding. BISA is awaiting comments from other regulatory agencies.

These requirements are the result of Florida passing Florida SB 1912. We refer you to two important web links for the FLDFS general information:

www.fldfs.com/agents/AgencyRegLicInfo.htm
www.fldfs.com/agents/

The document referred to at the end of the first link, "Legislative Information Pertaining to CS to CS to SB 1912," was issued in 2005 following enactment, is in Q&A format, and is being interpreted differently on some points after many calls to the FLDFS regarding "hub and spoke" and/or "circuit riding."

An agency might qualify for registration if it was doing business before January 1, 2003. Other wise, it will only be eligible for licensing. Please see the definitions to determine your alternatives and the benefits of each. There are no fees for either registration or licensing.

There were many unanswered questions at the Colorado meeting, and we have tried to resolve several of the more troublesome hypotheticals that were presented. The following are intended to be clarifying points.

1. Each agent must be licensed and have a current carrier appointment.
2. An agent may be licensed as a life agent and a P&C agent.
3. Each location where an agent regularly does business must be licensed/registered as an agency.
4. A life agency and a P&C agency may be licensed/registered at the same address.
5. Multi-story buildings having agencies on separate floors are considered different addresses.
Agency A could be located on first floor, and Agency X could be located on tenth floor.
6. An out-of-state agency (non-resident agency) may license/register locations in Florida as resident agencies.
7. Each agency must have an Agent-in-Charge, and the Agent-in-Charge must be full-time, licensed and validly appointed by a carrier.
8. The Agent doing business in a location may be the sole agent doing business at that location, and therefore may also be the Agent-in-Charge.
9. No person may be the Agent-in-Charge at more than one location/agency.
10. If regular hours are maintained at any location/agency, it must be licensed/registered.
11. If an agent from Agency A occasionally or intermittently performs the acts of an agent at another location (i.e. bank branch), that location is not required to license/register, and the agent can be the Agent-in-Charge for those incidental visits.
12. If agent(s) keeps regular hours at a location, even if part-time, that location must be registered as an Agency and it Agent-in-Charge must not serve as such at any other location.
13. If an agent works from his home, that location will not be required to be licensed/registered if the home is not generally opened to the public. All Florida P&C agencies must be opened to the public, display signage, and be accessible. If an agent displays signage, advertises the address, lists the address on a business card, etc., the location must be licensed/registered as an agency and name an Agent-in-Charge.
14. An Agent-in-Charge can serve as such for two licensed/registered agencies only if both agencies are at the same location.

The FLDFS is considering creating rules to accommodate the hub-and-spoke or circuit riding business practices of financial institutions, but that determination has not be resolved. Legislation to correct or clarify FL SB 1912 could be introduced in the 2007 session, but that will be too late for those trying to comply with the October 1, 2006 effective date. Additionally, the November elections may result in a change of the current FLDFS administration.

This BISA NTM is for information purposes only and is not intended to be, nor is it, legal or regulatory advice. You should consult your legal counsel on these important legal, regulatory and compliance matters. You can contact me at rstarr@bisanet.org or 425-392-1699.