Section 5 Lesson 3 Florida Adjuster Licensure Maintenance and the Code of Ethics

Regulatory Oversight of Florida's Insurance Industry

• Oversight Body: The insurance industry in the state of Florida is overseen by the Division of Insurance Agents and Agency Services.
• Department Affiliation: This division is a subset of Florida's Department of Financial Services.
• Leadership: The division is led by Florida's Chief Financial Officer (CFO).
• Mission Statement: The primary mission of the Division of Insurance Agents and Agency Services is to protect the public and the insurance industry by:
  • Timely and accurately licensing competent individuals and entities.
  • Fairly investigating alleged violations of Florida's insurance laws.
• Organizational Units: The Division is comprised of two distinct units:
  • The Bureau of Licensing: This bureau is responsible for the licensure and appointment of all individuals and firms involved in the transaction of insurance within the state of Florida.
  • The Bureau of Investigation: This bureau is responsible for investigating alleged violations of the Florida Insurance Code committed by both licensed and unlicensed individuals.

The My Profile Portal and Administrative Management

• Primary Tool: Adjusters interact with the Bureau of Licensing primarily through an online interface known as My Profile.
• Functionality: The My Profile portal is a critical tool for adjusters and is used to:
  • Apply for a license.
  • View the current status of a license.
  • Print a copy of the license.
  • Change address information and other personal details.
  • View the official continuing education (CE) transcript.
  • Check CE compliance status.
  • View current appointments.

Licensee Appointments

• Legal Requirement: According to Florida statute, no person may act as, advertise, or hold themselves out to be an insurance agent, insurance adjuster, or customer representative unless they are currently licensed by the department AND appointed by an appropriate appointing entity or person.
• Definition of Appointment: An appointment is the authority given by an insurer or employer to a licensee to transact insurance or adjust claims on behalf of that insurer or employer.
• Mandatory Status: In order to adjust claims legally, an individual must be both licensed and properly appointed.
• The 48-Month Rule: If an adjuster goes more than $48$ months without a valid appointment, the adjuster will lose their license.
• Appointment Procedures:
  • When an insurance company or firm hires an adjuster, the company typically appoints the adjuster through Florida's automated appointment system.
  • This action formally grants the adjuster full authority to adjust claims on the company's behalf.
  • If an adjuster leaves a company, that company must terminate the appointment.
  • Within $48$ months of termination, the adjuster must either be appointed by another company or self-appoint if they intend to work independently.

Continuing Education (CE) Requirements

• General Mandate: Florida requires all licensed adjusters to complete ongoing continuing education to keep their licenses active.
• Credit Hour Requirements for New Adjusters: New adjusters must complete a total of $24$ credit hours of continuing education within every two-year compliance period.
• Content Breakdown:
  • Mandatory Law and Ethics Update: Every adjuster must complete a specific $4$-hour law and ethics update course. This course is mandated by the state to cover insurance law updates, ethics, case law, and industry trends.
  • Update Course Stipulations: The $4$-hour requirement cannot be satisfied by taking multiple smaller courses; it must be a single, properly approved course delivered in full.
  • Elective Hours: The remaining $20$ hours of the required CE are considered elective hours.
  • Course Selection: Elective hours can be fulfilled through any combination of CE courses approved by the department for adjuster credit.
• Carry-Forward Credits: Any additional CE hours accumulated during a two-year compliance period will be carried forward into the next compliance period.
• Provider Information: AE21 provides the necessary $24$ hours of online education, including the mandatory $4$-hour law and ethics update.

CE Compliance Cycles and Deadlines

• Cycle Determination: An adjuster's compliance period cycle begins and ends on the last day of their birth month.
• The Commencement of the Clock: The CE clock officially begins ticking on the last day of the adjuster's birth month following the issuance of the license.
• Example Scenario:
  • License Issued: June $2024$.
  • Adjuster's Birthday: January.
  • First Compliance Period Begins: $01/31/2025$.
  • Hours Due Date: Midnight on $01/31/2027$.
  • Subsequent Deadlines: The requirement is due by midnight on January $31$ of every odd year thereafter.
• Authority on Credits: The ultimate authority for credit tracking and deadlines is the compliance evaluation found within the My Profile portal.
• Reduction in Hours: After several years of being licensed, the number of required CE hours will be reduced. This reduction will be reflected in the compliance evaluation once the adjuster becomes eligible.

Maintaining Contact Information and License Standing

• Reporting Obligations: Florida statute requires licensees to notify the department in writing within $30$ days of a change regarding:
  • Name.
  • Residence address.
  • Principal business street address.
  • Mailing address.
  • Contact phone numbers.
  • Email address.
• Consequences of Non-Compliance: Failure to update contact information within the $30$-day window can result in a fine. Multiple offenses can lead to the suspension or revocation of the license.
• Name Change Documentation: To change a name on a license, supporting documentation (such as a marriage certificate or divorce decree) must be mailed or faxed to the department.

Grounds for Disciplinary Action

• The Department may take action against an adjuster's license based on specific grounds categorized as either compulsory/mandatory or discretionary.
• Compulsory or Mandatory Refusal, Suspension, or Revocation:
  • Material misstatement, misrepresentation, or fraud in obtaining a license.
  • Material misrepresentation of the terms and coverage of an insurance contract to the insured or another interested party with the intent to settle a claim.
  • Fraudulent or dishonest practices.
• Discretionary Refusal, Suspension, or Revocation:
  • Violation of any provision of the insurance code.
  • Violation of any lawful order or rule of the department.
  • Engaging in deceptive acts or practices.
  • Showing oneself to be a source of injury or loss to the public.
  • Cheating on a licensure examination.

Florida’s Unfair Insurance Trade Practices Act

• Prohibited Behaviors: The Act forbids the following practices:
  • Failing to act promptly.
  • Denying claims without conducting a reasonable investigation.
  • Failing to give an insured or claimant a response to a claim.
  • Failing to explain a denial in writing.
  • Failing to maintain compliant claims handling procedures.
• Expected/Required Behaviors: All carriers and adjusters are expected to:
  • Act promptly in claim handling.
  • Conduct a reasonable investigation for every claim filed.
  • Provide an answer to every insured or claimant who files a claim.
  • Explain claim denials in writing.
  • Implement and follow procedures for handling and responding to complaints.

The Adjuster's Code of Ethics

• Florida has established a formal list of rules governing adjusting practices known as the Adjuster’s Code of Ethics. Key requirements include:
  1. Communication with Represented Parties: An adjuster may not discuss settlement with anyone represented by an attorney. If a letter of representation is received, all communication with the insured or claimant must cease unless authorized in writing by the attorney.
  2. Truthfulness in Interviews: During written or recorded interviews (with insureds, claimants, or witnesses), never suggest or induce the interviewee to suppress or deviate from the truth. Provide a copy of the transcribed statement to the interviewee if requested.
  3. Prohibition on Legal Advice: Never give legal advice. Adjusters must explain rights under the law but must not advise on decision-making.
  4. Drafting Special Releases: Never engage in drafting special releases, as this is considered the practice of law. Adjusters should only use release forms provided by the carrier or client.
  5. Protection of Incapacitated Claimants: Never take advantage of an incapacitated claimant (e.g., someone in the hospital, on medication, or under extreme stress/pressure that impairs judgment).
  6. Advising of Rights vs. Legal Advice: Adjusters must advise insureds and claimants of their rights under the policy or law. The "fine line" is that an adjuster explains contractual/legal rights but does NOT suggest or recommend the ultimate decision. An attorney recommends a specific path in the client's best interest; an adjuster does not.
  7. Integrity and Objectivity:
     • Approach claim investigations with an unbiased, unprejudiced, and open state of mind.
     • Report all facts truthfully and factually.
     • Never accept payments from anyone involved in the claims handling process.
     • Act on each claim promptly with the goal of reaching a final disposition as quickly and fairly as reasonably possible.