Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law) flashcards

Physical Damage Coverage in a Business Auto Policy (BAP) pays for damage to the insured's own vehicles, including collision and comprehensive perils.

• Covers the insured's own vehicles.
• Includes Collision (impact with another object or upset).
• Includes Comprehensive (other than collision, e.g., fire, theft, vandalism).

Memory trick: BAP: Liability, Med, Uninsured, Physical

A state-created fund providing reinsurance to residential property insurers in Florida for a portion of their hurricane losses, aiming to stabilize the market and protect consumers.

• Acts as a layer of reinsurance for hurricane-related property losses.
• Protects insurers from catastrophic financial losses due to hurricanes.
• Helps keep private insurers solvent and reduces the burden on Citizens Property Insurance Corporation.

Memory trick: Safety Nets: Strong support for stormy times.

To be eligible to contribute to a Health Savings Account (HSA), an individual must be covered by a High Deductible Health Plan (HDHP) and meet specific criteria.

• Must be covered by an HDHP.
• Must not be covered by any other non-HDHP health insurance (with exceptions).
• Must not be enrolled in Medicare.
• Cannot be claimed as a dependent on someone else's tax return.

Memory trick: High Deductible is the key to HSA, no Medicare or other plans, okay?

A material misrepresentation in insurance is a false statement of fact made by an applicant that is significant enough to influence an insurer's decision regarding policy issuance, terms, or premium.

• Must be false or misleading.
• Must be material: affects the insurer's underwriting decision.
• Can be grounds for policy voidance or rescission by the insurer.
• Intent to deceive is not always required for materiality, only that it impacts the risk assessment.

Memory trick: A 'material' lie can void your policy's 'materiality'.

Rebating is an illegal practice in Florida where an agent offers a reduction in premium or returns a portion of their commission to an insured as an inducement to purchase an insurance policy.

• Prohibited by Florida Statute 626.9541 (1)(h).
• Involves offering something of value not specified in the policy.
• Aims to prevent unfair competition and discrimination among policyholders.
• Does not include small promotional items of nominal value.

Memory trick: Don't 'rebate' by giving back money, it's a no-go.

Subrogation is the legal right of an insurer, after paying a loss, to recover the amount from the negligent third party who caused the loss.

• Transfers rights of recovery from insured to insurer.
• Prevents insured from collecting twice.
• Holds responsible party accountable.

Memory trick: Subrogation: Step in, Sue, Recover

Medicaid is a public assistance program, jointly funded by federal and state governments, providing healthcare to eligible low-income individuals and families.

• Joint federal and state funding.
• Targets low-income individuals and families.
• Eligibility based on income and family size.
• Covers a broad range of medical services.

Memory trick: Medicaid: Uncle Sam and the State lend a hand to those in need.

Specific insurance coverage, often an endorsement or standalone policy, designed to protect property owners from liability arising from their rental operations.

• Standard dwelling policies have limited rental liability
• Covers injuries to tenants/visitors
• May include legal defense costs

Memory trick: Landlord's Liability: Lease Peace.

Coinsurance is the percentage of eligible medical expenses an insured person pays after their deductible has been met, with the insurer paying the remaining percentage.

• Applies after the deductible is satisfied.
• Expressed as a ratio (e.g., 80/20, 70/30).
• Insured pays the second number in the ratio.
• Continues until an out-of-pocket maximum is reached.

Memory trick: Deductible first, then coinsurance, until the max is met.

Actions by an insurer that are deemed unfair or deceptive in handling claims, such as misrepresenting facts, failing to act promptly, or denying claims without reasonable investigation.

• Prohibited by Florida Statute 626.9541.
• Includes acts like misrepresenting policy provisions, failing to affirm/deny coverage promptly, or denying claims without investigation.
• Aims to protect consumers from arbitrary or discriminatory claim handling.

Memory trick: Unfair acts: No honesty, no market integrity.

An 'insurer of last resort' providing auto insurance to eligible applicants who cannot obtain coverage in the voluntary market.

• Ensures availability of auto insurance
• For high-risk drivers
• All licensed auto insurers in Florida participate

Memory trick: FAJUA Fixes Auto Jeopardy for Uninsurables.

A federal program providing flood insurance to property owners in participating communities, as standard homeowner policies typically exclude flood damage.

• Administered by FEMA
• Requires community participation in flood plain management
• Separate policy from standard homeowner's insurance

Memory trick: Federal Flood Funds Flow Freely.

The process by which a lapsed Florida insurance license can be reactivated, with requirements varying based on the duration of the lapse.

• Lapse of 12 months or less: complete CE, pay fees, late fees.
• Lapse of more than 12 months: must reapply and pass the state exam.
• The Department of Financial Services (DFS) oversees this process.

Memory trick: Reinstatement Rules: Re-enter the market, Responsibly.

A provision in group health insurance policies that determines the order in which two or more plans pay benefits when an individual is covered by multiple policies, preventing overinsurance.

• Prevents individuals from collecting more than 100% of expenses.
• Determines which plan is 'primary' and 'secondary'.
• Applies when an insured has multiple group health coverages.
• Follows specific rules (e.g., birthday rule for children).

Memory trick: COB: Coordinate benefits, don't over-insure, it's the right procedure!

Earthquake is an excluded peril in most standard commercial property insurance forms and must be added via endorsement or a separate policy.

• Not a standard covered peril.
• Requires specific endorsement.
• Can also be purchased as a standalone policy.

Memory trick: Perils Excluded Need Endorsement

The Florida Workers' Compensation Joint Underwriting Association (FWCJUA) is a residual market mechanism providing workers' compensation insurance to eligible employers unable to obtain coverage in the voluntary market.

• Residual market for Workers' Comp.
• Ensures coverage for high-risk employers.
• Not a voluntary market insurer.

Memory trick: Residual Markets: Last Resort Coverage

This Florida Statute outlines the requirements for prompt payment of claims and fair settlement practices for property insurance policies, ensuring insurers handle claims efficiently and equitably.

• Applies to property insurance policies.
• Mandates acknowledgment of communications within 14 days.
• Requires payment or denial of claims within 90 days after notice.
• Includes provisions for undisputed amounts to be paid promptly.

Memory trick: Prompt payments ensure fairness, like clockwork and scales.

Standard homeowners insurance policies (e.g., HO-3) universally exclude flood damage to both dwelling and personal property, requiring a separate flood insurance policy.

• Universal exclusion in HO policies.
• Applies to dwelling and contents.
• NFIP is primary source for flood coverage.

Memory trick: Homeowners Exclude Water, Earth, War

A type of supplemental health insurance that pays a fixed cash benefit for each day an insured is hospitalized, directly to the policyholder, regardless of other insurance coverage or actual medical costs.

• Benefits are paid directly to the insured.
• Payments are fixed and not based on actual medical bills.
• Often used to supplement other health insurance plans to cover deductibles, copays, or non-medical expenses.

Memory trick: Indemnity is your daily income during hospital stay.

The waiting period between the start of a disability and the first day for which disability income benefits are paid. Benefits are not payable during this period.

• Time deductible for disability insurance.
• Must be satisfied before benefits begin to accrue.
• Longer periods mean lower premiums.
• Benefits are usually paid monthly in arrears after the period and first benefit month.

Memory trick: Eliminate the wait, then get paid after the full month's date.

Part A of the Personal Auto Policy (PAP) provides coverage for bodily injury and property damage for which the insured is legally responsible.

• Covers legal liability to others.
• Includes both bodily injury and property damage.
• Mandatory in most states, including Florida.

Memory trick: Always Be Careful Driving

Detailed actions prohibited under Florida Statute 626.9541, aiming to ensure fair and prompt claims handling by insurers.

• Includes misrepresenting facts, failing to act promptly, or denying claims without reasonable investigation.
• Prohibits compelling litigation by lowball offers.
• Ensures transparency and fairness in the claims process.

Memory trick: Claims Code: Clear conduct for claims.

Flexible Spending Account (FSA) reimbursements are limited to the amount contributed by the employee for that plan year, even if total eligible expenses exceed contributions.

• Reimbursement cannot exceed annual contribution.
• Funds are 'use-it-or-lose-it' (with exceptions for grace period/carryover).
• Employer owns the funds until reimbursed.
• Contributions are pre-tax.

Memory trick: Your FSA fund is your limit, don't spend more than you commit!

Moral hazard is a situation where an insured intentionally causes or exaggerates a loss to collect insurance benefits, stemming from dishonesty or character flaws.

• Involves intentional dishonesty.
• Increases probability of loss.
• Distinct from morale hazard (indifference).

Memory trick: Hazards are Perilous Risks

Legislation enacted in Florida primarily to reform the state's no-fault automobile insurance system, with a focus on Personal Injury Protection (PIP) benefits and fraud prevention.

• Impacted PIP benefits and eligibility
• Aimed at combating insurance fraud
• Part of broader auto insurance reform efforts

Memory trick: FLAIR: Focus on No-Fault's PIP.

Florida law mandates that licensed insurance agents maintain records of all insurance transactions for a specified period to ensure compliance and accountability.

• Minimum retention period is 5 years.
• Records include applications, policies, correspondence, and financial records.
• Records must be readily available for inspection by the Department of Financial Services.
• Ensures consumer protection and regulatory oversight.

Memory trick: Keep records for a 'five-star' review of your work.

An agent acts in a fiduciary capacity when handling client premiums, meaning they must hold these funds in trust for the insurer or insured, keeping them separate from personal funds.

• Agents must not commingle client funds with personal funds.
• Funds are held in trust for the principal (insurer or insured).
• Violation can lead to license suspension or revocation.

Memory trick: Fiduciary Funds: Financial integrity is fundamental.

A residential setting that provides housing, personal care services (such as help with bathing, dressing, and eating), supervision, and some health care services to individuals who need assistance with activities of daily living (ADLs) but do not require the skilled medical care of a nursing home.

• Focus on custodial care and ADL assistance.
• Residents typically maintain some independence.
• Less expensive than skilled nursing facilities.

Memory trick: ALF: Assisted Living, where daily needs are met.

The process of determining the insured's financial responsibility for medical services, involving deductibles, coinsurance, and out-of-pocket maximums.

• Deductible: Amount paid by insured before insurance pays.
• Coinsurance: Percentage of costs shared after deductible.
• Out-of-Pocket Maximum: Cap on insured's annual spending for covered services.

Memory trick: Deduct then Co-pay, but don't exceed the Max.

The Florida Life and Health Insurance Guaranty Association (FLHIGA) provides a safety net for policyholders by paying covered claims when a member life or health insurer becomes insolvent, up to specified limits.

• Protects life, health, and annuity policyholders.
• Activated upon an insurer's insolvency.
• Funded by assessments on member insurers.
• Not an agency of the state and does not replace regulatory oversight.

Memory trick: Guaranty associations are a shield when insurers fail.

A 'free look' period, mandated by Florida law for certain individual insurance policies, allows the policyholder to return the policy within a specified number of days for a full refund if not satisfied.

• Typically 10 or 14 days.
• Applies to individual life and health insurance policies.
• Allows for full premium refund upon policy return.
• Ensures consumer satisfaction and understanding of complex policies.

Memory trick: Look free at life and health, but not auto or property.

A Florida Statute that defines and prohibits various unfair methods of competition and unfair or deceptive acts or practices in the business of insurance.

• Covers misrepresentation, false advertising, defamation
• Prohibits unfair claims settlement practices
• Aims to protect consumers from deceptive actions

Memory trick: Six Two Six, Nine Five Four One: No False Fun.

Fixtures, alterations, installations, or additions made by a tenant to a leased premises that become a permanent part of the building but cannot be removed without damage, covered under Business Personal Property.

• Made by a tenant, not the building owner
• Become part of the realty
• Covered under Business Personal Property (BPP) section

Memory trick: Tenant's Touches are BPP's Best Bets.

The Florida Department of Financial Services (DFS) possesses statutory authority to investigate insurance licensees for compliance with the Florida Insurance Code, protecting consumers and maintaining market integrity.

• Authority granted by Florida Statute 624.307.
• DFS can examine books, records, and affairs of licensees.
• Ensures compliance with insurance laws and regulations.
• Protects consumers from unfair or illegal practices.

Memory trick: The DFS uses 624.307 to search for truth.

An association that pays covered claims of insolvent property and casualty insurers authorized to do business in Florida, up to statutory limits.

• Protects policyholders from insurer insolvency
• Funded by assessments on member insurers
• Subject to maximum claim limits

Memory trick: FPCIGA Funds Failed Companies' Claims.

The obligation of an insurance agent to protect sensitive client information and not disclose it without legal requirement or client authorization.

• Builds trust with clients
• Protects personal and financial data
• Required by ethical standards and privacy laws

Memory trick: Keep Client Secrets Sealed, Unless Law or Leave.

Florida 2-20 General Lines Agents must complete specific continuing education hours to renew their license, varying based on how long they've been licensed.

• Licensed less than 6 years: 24 hours total, including 5 hours of ethics.
• Licensed 6 years or more: 20 hours total, including 4 hours of ethics.
• Must be completed every two years prior to license expiration.

Memory trick: CE: Continuous Education, Essential for excellence.

The maximum length of time for which disability income benefits will be paid under a policy, once the elimination period has been satisfied.

• Can range from a few months to 'to age 65' or 'lifetime'.
• Longer benefit periods typically mean higher premiums.
• Benefits stop once the insured recovers or the benefit period ends.

Memory trick: Benefit Period: How long the money flows.

A health insurance plan with a higher deductible than traditional insurance plans, resulting in lower monthly premiums. Often paired with a Health Savings Account (HSA).

• Lower monthly premiums.
• Higher deductibles.
• Higher out-of-pocket costs before coverage kicks in.
• Can be combined with HSAs for tax advantages.

Memory trick: Low premium, high deductible, that's the HDHP deal!

The maximum amount an insurance company will pay for a specific medical service, based on the average fee charged by providers for the same service in the same geographic area.

• Based on typical charges in a local area.
• Determined by the insurer's data.
• If a provider charges more, the insured may pay the difference.
• Helps control healthcare costs.

Memory trick: Reasonable: what's typical around here, not just what's billed, my dear.

Statutory maximum amounts FLHIGA will pay for covered claims when a life or health insurer becomes insolvent.

• Death Benefits: $300,000 per life
• Cash Surrender/Withdrawal: $100,000 per policyholder
• Health Benefits: $500,000 per individual

Memory trick: Three Hundred for Death, One Hundred for Cash, Five Hundred for Health.

The conditions that must be met for a Long-Term Care insurance policy to begin paying benefits, typically related to functional or cognitive impairment.

• Inability to perform a certain number of Activities of Daily Living (ADLs).
• Commonly 2 out of 6 ADLs.
• Cognitive impairment (e.g., Alzheimer's, dementia) is another trigger.
• Doctor's certification of need for care.

Memory trick: ADLs and a foggy brain are the keys to LTC gain.

A type of group insurance plan where both the employer and the employees share the cost of the premiums. A certain percentage of eligible employees must participate for the plan to be effective.

• Both employer and employee pay part of the premium.
• Requires a minimum percentage (e.g., 75%) of eligible employees to participate.
• More common than non-contributory plans due to cost sharing.

Memory trick: Contributory means you contribute, too!

Florida privacy laws and regulations dictate that insurers and agents must only collect information that is relevant and necessary for underwriting or claims, and must protect that information.

• Information collected must be relevant to the insurance transaction (underwriting, claims).
• Unnecessary collection of sensitive personal data is prohibited.
• Consumers have rights regarding the privacy of their information.
• GLBA and state laws govern data privacy in insurance.

Memory trick: Privacy Pacts: Protect personal data, Precisely.

Commercial Inland Marine insurance provides broad coverage for property that is mobile in nature, or that is temporarily away from the insured's premises.

• Covers property in transit.
• Covers property at various, unspecified locations.
• Often used for contractors' equipment, fine art, or cargo.

Memory trick: Property Moves, Marine Covers

CGL Coverage B protects businesses against claims of personal injury (e.g., false arrest, libel) and advertising injury (e.g., defamation, copyright infringement) arising from their operations.

• Covers non-physical injuries.
• Includes offenses like libel, slander, false arrest, wrongful eviction.
• Covers copyright infringement and misappropriation of advertising ideas.
• Distinct from bodily injury/property damage liability.

Memory trick: A for Body/Property, B for Personal/Ads, C for MedPay, D for Rented.

Commercial General Liability (CGL) policies exclude professional liability claims (e.g., from advice or services), which are covered by Errors and Omissions (E&O) or Professional Liability policies.

• CGL covers BI/PD and Personal/Advertising Injury.
• CGL excludes professional services.
• E&O covers negligence in professional services.

Memory trick: CGL: General, Not Professional

An auto insurance endorsement that provides liability, uninsured/underinsured motorist, and medical payments coverage for an individual who does not own a car but frequently drives non-owned vehicles.

• For individuals without their own vehicle
• Applies to cars they borrow or rent
• Provides coverage on a personal basis

Memory trick: No Car, No Problem, Non-Owner's Got You.

Florida law limits the application of hurricane deductibles to once per calendar year for a single insured property, regardless of how many hurricane events impact the property.

• Applies to residential property insurance policies.
• Triggered by a hurricane event.
• Can only be applied once per calendar year.
• Based on Florida Statute 627.701.

Memory trick: One calendar year, one hurricane deductible hit.

Insurable interest in property exists when an individual or entity would suffer a financial loss if the property were damaged or destroyed.

• Must exist at the time of loss.
• Can arise from ownership, possession, or contractual liability.
• Without it, an insurance contract is void as a wagering contract.

Memory trick: Interest in Loss = Insurable Success

A Florida statute governing data security and breach notification requirements for entities handling personal information of Florida residents.

• Applies to personal information of Florida residents
• Mandates breach notification within 30 days
• Defines 'personal information' broadly

Memory trick: FIPA's Fast Fifteen for Florida Folks.

A federal law that allows certain individuals and their dependents to temporarily continue their group health insurance coverage after a qualifying event, such as job loss or reduction in hours.

• Applies to employers with 20 or more employees.
• Coverage typically lasts 18 or 36 months.
• The individual is responsible for paying the full premium, plus a small administrative fee.

Memory trick: COBRA's coils help you cling to coverage.

Biennial continuing education hours required for licensed General Lines Agents in Florida, varying by length of licensure.

• Less than 6 years licensed: 24 hours (5 ethics)
• 6 or more years licensed: 20 hours (4 ethics)
• Must be reported biennially

Memory trick: Six Years, Twenty Hours, Four Ethics.

A coinsurance clause in property insurance requires the insured to carry a certain percentage of the property's value (e.g., 80%) in coverage; otherwise, they become a coinsurer and share in partial losses.

• Encourages adequate coverage.
• Applies to partial losses.
• Formula: (Amount Carried / Amount Required) x Loss - Deductible.

Memory trick: CAR = Coinsurance Amount Required

A Bailee's Customer Policy is an Inland Marine form that covers loss or damage to customers' property while it is in the care, custody, or control of the insured (the bailee).

• Covers property of others.
• For businesses that hold others' property for service (e.g., dry cleaners, repair shops).
• Overcomes the 'care, custody, or control' exclusion in CGL.

Memory trick: Bailee Protects Borrowed Belongings

Florida law imposes a waiting period before an individual with a misdemeanor conviction involving moral turpitude can be considered for an insurance license, emphasizing rehabilitation.

• Applies to misdemeanors involving moral turpitude.
• 5-year waiting period from final disposition of the crime.
• DFS considers rehabilitation and other factors after the waiting period.
• Governed by Florida Statute 626.207(3)(b).

Memory trick: Misdemeanor 'moral turpitude' means a 5-year pause.

Criteria an employer must meet to obtain workers' compensation coverage through FWCJUA, the residual market for such insurance.

• Declined by voluntary market insurers
• Employer must be unable to procure coverage
• Ensures availability of workers' comp

Memory trick: FWCJUA: For When Carriers Can't Cover.

A group health plan where an employer pays a fixed premium to an insurance carrier, transferring all financial risk and administrative responsibilities for claims to the carrier.

• Employer pays fixed premiums.
• Insurer assumes financial risk.
• Insurer handles claims administration.
• Provides predictable costs for the employer.

Memory trick: Full protection means fixed payments and no risk worries.

A Florida initiative that encourages private insurance companies to 'take out' or assume policies from Citizens Property Insurance Corporation, aiming to reduce Citizens' exposure and return policies to the private market.

• Voluntary program for private insurers to assume Citizens policies.
• Aims to reduce the size and exposure of Citizens.
• Policyholders have the option to decline the take-out offer and remain with Citizens if eligible.

Memory trick: Depopulation Drive: Directing policies to the private side.

A federal law that requires financial institutions, including insurers, to explain their information-sharing practices to consumers and to safeguard sensitive data.

• Applies to financial institutions, including insurance companies.
• Requires privacy notices to consumers.
• Mandates safeguarding customer information.

Memory trick: Privacy Laws: Protect Personal Info, Powerfully.