Key Takeaways
- Florida producers have fiduciary duties when handling client funds and premiums
- Premium trust accounts must be maintained separately from personal accounts
- Producers must report certain actions and violations to DFS within specified timeframes
- Continuing education includes mandatory ethics training (3 hours per renewal)
- Producers can be disciplined for violations of law, incompetence, or misconduct
Producer Conduct and Fiduciary Duties
Florida insurance producers have legal and ethical obligations to their clients and the public. Understanding these duties is essential for professional conduct and exam success.
Fiduciary Duties
A fiduciary is someone who acts in another's best interest. Florida insurance producers owe certain fiduciary duties:
Premium Handling
Producers must handle premiums according to strict rules:
| Requirement | Rule |
|---|---|
| Deposit | Promptly to insurer or trust account |
| Commingling | Cannot mix with personal funds |
| Trust Account | Required for holding premiums |
| Records | Must maintain detailed records |
Trust Account Requirements
- Separate bank account from personal accounts
- Clearly designated as insurance premium trust
- Detailed records of all transactions
- Regular reconciliation
- Available for DFS examination upon request
Consequences of Mishandling
- License suspension or revocation
- Required restitution
- Civil liability
- Criminal prosecution for theft or fraud
Agent vs. Agency Responsibilities
| Type | Primary Duty |
|---|---|
| Agent | Represents insurer, but must be fair to clients |
| Agency | Supervises agents, ensures compliance |
| Managing General Agent | Underwriting authority, oversight duties |
Reporting Requirements
Florida producers must report certain matters to DFS:
Administrative Actions
Within 30 days, report:
- Any administrative action by another state
- Any administrative action by a federal agency
- Termination by insurer for cause
Criminal Matters
Within 30 days, report:
- Any criminal prosecution
- Any plea of guilty or no contest
- Any conviction
Civil Matters
Report as required:
- Judgments against you related to insurance
- Material changes in application information
Record Keeping
Florida requires producers to maintain records:
Required Records
| Record Type | Retention Period |
|---|---|
| Applications | 5 years |
| Policy documents | 5 years |
| Premium records | 5 years |
| Client correspondence | 5 years |
| Replacement forms | 5 years |
Access to Records
- DFS can examine records during investigations
- Must provide records upon request
- Failure to maintain records is a violation
Continuing Education Ethics
Florida requires ethics training as part of CE:
Requirements
- 3 hours of ethics every renewal period
- Must cover Florida-specific ethical requirements
- Includes regulatory updates
- Addresses real-world scenarios
Grounds for Discipline
DFS can take disciplinary action for various violations:
Specific Grounds (Florida Statutes 626.611 & 626.621)
Mandatory Grounds (626.611) - License SHALL be denied/revoked for:
- Felony conviction
- First-degree misdemeanor conviction involving moral turpitude
- Demonstrated lack of fitness
- Material misstatement on application
- Proven twisting
Discretionary Grounds (626.621) - License MAY be denied/revoked for:
- Violation of insurance code
- Violation of lawful order of DFS
- Failure to comply with administrative subpoena
- Willful failure to pay over premium
- Misappropriation of funds
- Failure to maintain required records
Types of Discipline
| Action | Description |
|---|---|
| Letter of Warning | Minor first offense |
| Probation | License continues with conditions |
| Fine | Up to $5,000 per violation |
| Suspension | Up to 2 years |
| Revocation | Permanent (may reapply after period) |
Professional Standards
Best Practices
- Treat all clients fairly and equally
- Maintain professional competence through CE
- Disclose all material information
- Avoid conflicts of interest
- Protect client confidentiality
- Report violations by others
Client Communication
- Be truthful - never exaggerate or mislead
- Be clear - use language client understands
- Be complete - disclose all relevant information
- Be responsive - address questions promptly
- Be professional - maintain appropriate boundaries
Within how many days must a Florida producer report an administrative action by another state to DFS?
How long must Florida insurance producers retain client records?
What is the maximum suspension period DFS can impose on a Florida insurance license?