“Blocking this broker bill was one of the most significant events of the legislature, said Tim Meenan, lobbyist for FAIFA. It remains unclear what groups favored the bill, though Meenan said he expects other such efforts to be attempted in the future. “This kind of bill would have undermined the authority that licensed agents bring to the table.”

Agents Gain Flexibility

On a more positive note, the legislature did pass several bills important to agents. One was a bill that will make it easier for licensed agents to work at more than one location. The bill authorizes a licensed insurance agent in charge of an insurance agency to be the agent in charge of one or more branch insurance locations, so long as an unlicensed person does not conduct insurance business when the agent in charge is not present. “This bill will give many agents the flexibility to work out of different locations,” said Tom Ashley, FAIFA senior vice president.

Agencies with multiple locations will still need to get each of them licensed as a branch agency, but they will no longer need to maintain a full time agent at those locations. The bill initially only referred to banks but the insurance agent lobby made sure it applied to insurance agencies. “The amendment levels the playing field regarding branch insurance office activities relative to agent activities to ensure that we have the same exemption as banks, brokers, and funeral homes for our branch offices,” Ashley said. The multiple branch bill also allows the DFS to approve correspondence courses offered by independent programs of study as satisfying the pre-licensing education requirements for obtaining a life or health insurance agent license.

The legislature made it easier for agents who call on school teachers and administrators in different counties. A bill that was passed allows agents to submit for fingerprint-based background screening in just one county rather than doing it for each county they work in. In other words, if an agent passes a background screening in Duval County, the agent does not need to go through the process again to do business in Nassau County.

“No one questions the need to do background screening for the safety of students, but this removes some unnecessary hurdles to our agents working in multiple counties,” Meenan said. “There's nothing wrong with going through the screening once, but to do it five or six times a year can be a hassle.”

The bill requires state and federal criminal history checks to be performed at least every five years. The bill requires a non-instructional contractor such as an agent, to inform a school district that he or she has had a criminal history check in another school district within the last five years. A contractor who has been convicted of a disqualifying offense (any offense that would require registration as a sex offender, murder, terrorist, kidnapper, among others) is prohibited from being on school grounds when students are present, unless he or she has received a full pardon or had civil rights restored. Violation of this prohibition is a third degree felony.

Other Changes

In another victory for agents, the legislature passed a measure that gives agents immunity from the insolvency of reciprocal insurance arrangements, condo association self insurance funds and other non traditional risk funds formed as a result of an expanded Florida Hurricane Catastrophe Fund. The provision was important because agents' “errors and omissions” insurance policies would not cover these new types of funds.

New rules that allow the formation of condo self insurance funds prohibit these funds from favoring one agent over another while specifying that any applicant can retain or choose any licensed agent. While these self-insured condo funds are still a new concept, they are expected to become a more popular way for condo associations to hold down their liability coverage.

Finally, as part of the revamping of Citizens Property Insurance Corporation, the legislature made it easier for agents to compare private company policies with Citizens by drafting a definition of comparable coverage when comparing rates. It also removed the 10-day waiting period to sign up an applicant for a Citizens policy. “This bill will make life easier for agents and their customers,” said Scott Johnson, executive vice president of the Florida Association of Insurance Agents.

Overall, Johnson said agents had a “pretty good” legislative session. During the session, former head of Citizens, Bob Ricker, agreed to work as a consultant to FAIA. “He will help agents better work with Citizens,” Johnson said.

Not all agent groups were happy about some of the changes made by lawmakers. Surplus lines agents were particularly unhappy about changes in Citizens that is making the insurer competitive with the private market. Under approved legislation this spring, agents selling surplus lines insurance covering personal residential property risks must notify their customers, in writing, that coverage may be available and may be less expensive from Citizens and to provide notices that Citizens assessments may be higher.

Surplus lines agents strongly doubt that consumers will do little more than glance over the possible assessment especially given the changes in Citizens' rates. Florida Insurance Commissioner Kevin McCarty issued an order rescinding Citizens approved rates that would have become effective January 1, 2007, and ordered Citizens to rollback rates to December 31, 2006 levels. Further legislation during the regular session extended that freeze to January 2009. Insurers warn the rate freeze will have the effect of making Citizens more appealing to consumers and ending its role as the market of last resort. Already Citizens is the largest insurance company in Florida with some 1.3 million policyholders, almost half in South Florida.

Although it remains to be seen how the Citizens changes will affect the market, and most agents agree it will pull consumers away from the surplus lines market. “What it comes down to is the state of Florida has turned to Citizens as the salvation to all our problems. I think that is despicable,” says Steven A. Firestone, president of Firestone Agency of Florida, a major excess & surplus lines broker in Coral Springs.

Meenan agrees that the state still appears unwelcoming to new players given the many restrictions place on the industry. On a positive note, four new domestic carriers are entering the market. American Keystone Insurance Co., is planning to write homeowners' coverage for high-valued properties that have a worth of between $250,000 and $3 million. Homeowners Choice Property and Casualty Insurance Co., has announced it is planning to acquire 15,000 to 20,000 policies from Citizens, while Olympus Insurance Co., has stated plans to start offering properties later this year. Modern USA Insurance Co., also plans to start offering homeowners' coverage later this year.