By: Jason L. Perez
Department Authorized Insurance Education Provider
⭐️⭐️⭐️⭐️⭐️ | The Insurance School .com
Florida Insurance Pre-Licensing Course
Episode Five (c)
DFS | Maintaining an Insurance License.
iLaw Episode FIVE (c)
DFS | Maintaining an Insurance License.
VERIFY Before you Buy (OR) Sell.
DFS Appointments
– What is a DFS Appointment?
– HOW much are DFS Appointment Fees?
– Paying Bonuses to Un-Licensed Individuals.
– Paying Commissions to Un-Licensed Individuals
– How long are DFS Appointments valid?
– When do DFS Appointments Expire?
– How long can a licensee go without an Insurer Appointment?
Obtaining an insurance license simply says, you’re not a convicted criminal and you’re intelligent enough to be held liable for your actions. Authorization to sell policies to the public comes AFTER you’ve aligned your license with an insurer. This is done through a DFS Appointment. ONLY the DFS can issue an Appointment.
[626.112, .311, .381, .431, .471, .511,], [69B-211.004]
Administrative employees like a receptionist or office clerks are the ONLY PEOPLE associated with the business of insurance who DO NOT Need a license. The administrative type work they do is not considered part of the sales process.
® Telemarketing and campaigns designed to engage consumers require a license and valid DFS Appointment for every insurer they’re offering to the public.
Un-Licensed employees CAN NOT receive production bonuses (OR) other types of revenue sharing from the sale of an insurance policy. ONLY Licensed and Appointed Insurance Agents are eligible to receive insurance policy commissions.
CE | Maintaining Professional Competence
CE | Continuing Education Requirements
– How long is a CE Compliance Period?
– How many hours of CE are licensees required to complete
– Consequences of not complying with CE requirements.
– When will a License terminate for not complying with CE requirements?
Professional Communication Standards
DFS / Appointing Entity Licensee Communications
– Non-Transferability of Appointments
– DFS Notice for expiring CE / Appointments.
– Appointing Entities – Non-Renewal Notice to Licensees.
– Appointing Entity – [ Identify ] Reason for Non-Renewal of Appointment.
I am an Authorized Independent BROKER. First and foremost, in a sales presentation I represent MYSELF. My Authorization status identifies the different INSURERS I’m permitted to discuss. Us brokers have no restrictions on how many insurers we’re permitted to represent. My DFS Appointments are directly with insurers so, I’m personally responsible for paying my appointment fees. One $60 DFS Appointment fee per insurer.
When a licensee aligns with a local AGENCY, they’re still classified as an Independent BROKER. Let’s over-simplify this for state exam purposes… AGENCIES are Licensees who’ve replaced legal birth name(s) with an Authorized legal corporate name. Same license.
Typically, agencies have numerous licensees working under their corporate brand. Since numerous brokers contribute to the agency gross policy count, agencies have significantly higher than average yearly sales. MORE SALES = Higher commission percentages.
Higher commission structures allow agencies to attract Independent Brokers. These brokers appoint under the agency’s insurer contracts. Be warned… MOST agencies DO NOT provide marketing (OR) sales support. Two of the top reasons why new brokers appoint with an agency. Regardless… Verify the specifics of who you’re aligning yourself with BEFORE you allow them to appoint you.
Agency / Broker commission sharing is only possible when both entities are appointed with the same insurers. When Brokers appoint under an agency, the agency becomes their appointing entity. In these instances, the agency would be responsible for paying a $60 DFS Appointment fee for every insurer appointment obtained.
*Authorized Independent BROKER…
BROKERS represent MULTIPLE Insurers.
· When licensees accept employment with an Admitted Insurance Company, the DFS considers them a PRODUCER (OR) AGENT. Since these licensees are EMPLOYED, they’re ONLY appointed with ONE INSURER. The applications these AGENTS / Producers collect from consumers, are “On behalf of” someone other than themselves… Like their EMPLOYER.
Licensees must respond to consumer complaints in writing within 14-Days. In those instances, the DFS is trying to resolve the matter in under 30-Days. Investigations are legal matters. The standard response time for every official state correspondence is 30-Days.
ü Licensees are given 30-Days to respond to a DFS INVESTIGATIVE request for information (OR) relevant documentation.
Licensees must respond to consumer complaints in writing within 14-Days. In those instances, the DFS is trying to resolve the matter in under 30-Days. Investigations are legal matters. The standard response time for every official state correspondence is 30-Days.
ü Licensees are given 30-Days to respond to a DFS INVESTIGATIVE request for information (OR) relevant documentation.
VIOLATION | Submitting False Insurance Applications
– CFO Authority / Consent Order
– Consequences of violating a Consent Order
– [ Identify ] CFO Authority Limitations
[ Identify ] US Patriot Act.
Court documents are wordy and complicated. No worries, this 8-page DFS Consent Order is now a few easy to hold nuggets. For instance, the only reason the document opens with the CFO’s Authority is for readers to know this order is legally binding.
DFS | Division of Investigative & Forensic Services
Criminal Investigations – Sworn Law Enforcement
The DFS investigation uncovered enough evidence to seek a conviction & jail sentence from the circuit courts. Florida’s CFO has Quasi-JUDICIAL authority. This means CFO Patronis has the legal authority to bypass the courts and impose fines. This consent order illustrates those powers.
The CFO can’t strip Gary’s right to a jury trial.
Gary had to agree to the CFO’s consent order offer. I’d imagine he took it because, when the DFS seeks prosecution, they typically collected enough evidence to get it. Instead of risking a jury trial and prison, Gary accepted the CFO’s offer.
N License revocation for at least 18-Months,
N Administrative fines,
N Victim Restitution.
18-Months without the Authorization to engage in ANY business which requires licensure is his MINIMUM Punishment. AT the end of the 18-Months, the DFS will evaluate Gary’s request for licensure. No guarantees. If Gary hasn’t paid his fines, restitution or satisfied the DFS’s consent order requirements, his suspension will remain in force.
Odds are his suspension is indefinite.
ü Section {e) of the Consent Order simply states that Gary is forbidden to submit more fraudulent applications. I would think that was a given however, I’m sure Gary knew he was breaking the law so, the DFS felt it was necessary to say it to be on the safe side.
If Gary violates his consent order, it’s like he’s violating probation. If he re-engages in regulated insurance activities, the DFS is referring the matter to the circuit courts for incarceration. By agreeing to a consent order, Gary waived his rights to a trial on the first case.
If he violates the CFO’s order, NO TRIAL… just an appearance before a judge to have a jail sentence imposed.
A CFO Consent Order is literally a get out of jail free card.
Think of it like being on probation. Violate the CFO’s terms and conditions and you’ve already accepted the maximum penalties for the first offense. Once a consent order is in place, violation compound. Engaging in the business of insurance while under a DFS Consent Order is the easiest way to pick up a 3rd Degree Felony for being and an Un-Authorized Entity.
In a nutshell…
The Department could have referred the matter to the local circuit courts.
ü This Press Release highlights the CFOs Quasi-Judicial Authority to hold a hearing, collect evidence, and impose penalties.
[Note] CFO | Quasi-Legislative Authority
® Legal authority to propose New BILLS (Potential laws)
The Florida CFO doesn’t have the authority to force someone to comply with a hearing (OR) consent order request. When a person doesn’t cooperate, the CFO / DFS will refer the matter to Florida’s local circuit courts. Once the Judicial system has the case in hand, a warrant is issued, and local law enforcement will make the arrest.
Gary could have fought the charges however, when the DFS looks for a prosecution, they have plenty of evidence. Typically, if the matter goes to trial and the defendant is found guilty, the penalties are much harsher.
Detect & Deter | Report money laundering activities.
#(iQ39) [NAIFA U2, p. 22]
* September 11th triggered the creation of the USA Patriot Act.
The “Patriot” Act gives our Federal government authority to address potential money laundering activities which may be utilized to fund organized crime, terrorism and other horrible crimes against humanity.
USA Patriot Act is a required Pre-licensing & Continuing Education topic because, Permanent Life Insurance and Annuities are designed to manage and disburse large sums of money. Since its implementation in 2001, entities who transfer funds have been required to maintain specialized trainings focused on identifying financial or clerical “abnormalities”.
Two forms of ID constituting proper identification is a result of the Patriot Act. When we open a bank account or, enroll a kid in school, we’re required to provide 2-forms of ID. Although it is impossible to eliminate terrorist funding completely, Patriot Act protections made conventional methods of transferring money ineffective.
Public saftey is everyone’s responsibiity however, people without professional licenses SHOULD report suspucious activities. Licensees on the other hand… We’re OBLIGATED to report suspicious or illegal activities. Brokers who turn a blind eye to illegal activities, may eventually be used as pawns in someone’s scheme. Imagine the guilt if your negligence helped fund a terrorist an attack in your community.
Non-Licensees have a CIVIL responsibility to Self-Regulate.
*Licensees have a legal responsibility to Self-Regulate.
Let’s briefly discuss my use of the word OBLIGATED… We don’t want licensees out in the streets trying to detain suspects. Simply said, “If you see somethng Say Something.” Report crimes you wittness. Civilians like us aren’t expected to physically interviene.
Insurance Careers Start Here
Neil Schwabe, M.G.A. LUTCF
Sarah Insure, Independent Broker
