69O-142.011. Insurer Conduct Penalty Guidelines

(1) Purpose. The purpose of this rule is to establish uniform guidelines for the assessment of administrative fines imposed upon entities, concerning certain violations of the Florida Insurance Code and applicable Office Rules.

(2) Scope.

(a) This rule applies to all entities issuing life, health, property, casualty, liability, surety, marine, mortgage guaranty, or title insurance. This rule shall apply to all such entities regardless of whether they are organized as a stock company, mutual, assessable mutual, reciprocal, fraternal benefit society, risk retention group, self-insurance fund, or other legal form. This rule applies to all violations discovered or investigated through financial examinations, market conduct examinations, or office investigations. This rule shall not be construed as creating any substantive violations not otherwise proscribed by statute or rule.

(b) Specialty Insurers Excluded. This rule does not apply to entities issuing only one or several of the following products:

1. Warranties under Chapter 634, F.S.

2. Professional service plans under Chapter 637, F.S.

3. Ambulance service contracts under Chapter 638, F.S.

4. Legal expense insurance under Chapter 642, F.S.

5. Continuing care contracts under Chapter 651, F.S.

6. Bail bonds under Chapter 648, F.S.

7. Health care service programs under Chapter 641, F.S., (including HMOs and Prepaid Health Clinics).

(c) Certain Chapter 626, F.S., Licensees Excluded. This rule does not apply to any licensees under Chapter 626, F.S., other than general agents, third party administrators, and service companies.

(d) Late filing penalties. Penalties for late filing of routine financial reports is dealt with by separate rule.

(3) Definitions. The following terms have the following meanings for purposes of this rule.

(a) “Action” means an event or events leading to the commission of a violation.

(b) “Office” means the Florida Office of Insurance Regulation.

(c) “Office Rules” means any and all valid rules adopted by the Financial Services Commission which apply to insurers or other entities within the jurisdiction of the Office.

(d) “Florida Insurance Code” means Chapters 440, 624 through 632, 634, 635, 637, 638, 641, 642, 648, 651, 817, F.S.

(e) “Repeat Violations” means a second or subsequent offense of any given violation subject to a fine under this rule for which an insurer has been assessed an administrative fine or has received written notification of the violation from the Office in either of the two immediately preceding financial or market conduct examinations or as a result of a Office investigation conducted within the immediately preceding six years.

(f) “Violation” means any non-compliance with the Florida Insurance Code or any applicable Office Rules or Orders.

(g) “Knowing and willful:”

1. With respect to any act or omission which constitutes a violation of Part I of Chapter 627, F.S., the insurer must violate the standard established in the definition of “willful” set forth in Section 627.041(7), F.S., in order for a penalty to be assessed as “willful” under this rule.

2. With respect to all other violations of the Florida Insurance Code, as used in Section 624.4211, F.S., and for purposes of the assessment of administrative fines under this rule, and taking into account the requirements of Section 624.11, F.S., the term “knowing and willful” means any act of commission or omission which is committed intentionally as opposed to accidentally and which is committed with knowledge of the act’s unlawfulness or with reckless disregard as to the unlawfulness of the act.

(h) “Investigation” means any official Office review, analysis, inquiry, and/or research into referrals, complaints, or inquiries to determine the existence of violations.

(i) “Numerator” means the number of violations of a specific statute for a particular line of business.

(j) “Denominator” means the number of occurrences examined to determine compliance with a specific statute.

(k) “Error ratio” means the percentage computed when the numerator is divided by the denominator, rounded up to the nearest hundredth.

(l) “Permissible error ratio” means the permissible percentage of violations to occurrences examined to determine compliance as established in paragraph (4)(g), below.

(4) General Provisions.

(a) Rule Not All-Inclusive. This rule contains illustrative violations. This rule does not, and is not intended to, encompass all possible violations of statute or Office rule that might be committed by insurers. The absence of any violation from this rule shall in no way be construed to indicate that same is not subject to penalty. In any instance wherein the violation is not listed in this rule, then the penalty shall be determined by consideration of:

1. The penalty factors specified in this rule; and,

2. Any closely analogous violation that is listed in this rule.

(b) Rule and Statutory Violations Included. This rule applies whether the violation is of a statutory provision, of a Office rule, or of an order implementing a statutory provision.

(c) Rule Establishes Norms. The penalty guidelines specified in this rule are the appropriate final penalty only in those cases which are resolved through the execution of a settlement stipulation and the incorporation of that settlement stipulation in a final order. This rule and any precedents developed under it do not apply to any case in which an entity disputes the existence of a violation by using a proceeding under Section 120.57, F.S. The penalty guidelines assume the typical mix of aggravating and mitigating factors found in actual practice in typical cases, in the Office experience. However, these guidelines shall not supersede the Office authority to suspend or revoke an entity’s certificate of authority or to require specific corrective action in cases in which the imposition of administrative penalties is not appropriate. For example, notwithstanding the specification of relatively smaller fines for particular violations, the Office will not impose such fines but will instead initiate action to suspend or revoke a certificate of authority as a result of such violations where significant aggravating factors are present, as enumerated in subsection (5), below. Any action taken by the Office which results in the imposition of fines under this rule or which may result in the suspension or revocation of a certificate of authority shall be conducted pursuant to the provisions of Chapter 120, F.S. The Office shall reduce the amount of a penalty which would otherwise be imposed pursuant to this rule if the payment of such a penalty would reduce surplus to an extent which the Office determines, based on the particular circumstances of the entity involved, would jeopardize the financial condition of the insurer to such an extent that the provisions of Part VI of Chapter 624, F.S., relating to administrative supervision or of Chapter 631, F.S., relating to rehabilitation and liquidation, would have to be invoked. This determination is not subject to the hearing rights provided for in Chapter 120, F.S.

(d) Description of Violations. Although the violations in subsections (8) through (11), below, include specific references to statutes and/or rules, the violations are described in general language because in many cases several statutes or rules are involved. The use of general language shall not be construed to expand or modify the statute. Violations are not necessarily described herein using the language that would be used to formally allege the violation in a specific case. In some instances a basic generic violation is described herein (e.g., misleading advertising), but there also appear one or more specific variations of that same general violation, with different penalties specified, where the Office has determined that different treatment is needed or merited (e.g., misleading advertising in medicare supplement insurance). If any statutory or rule citations in subsections (8) through (11), are changed but the violation remains the same and the tracking tables in the Florida Statutes or the history notes in the Florida Administrative Code indicate the new statutory or rule citation, then the use of the previous statutory or rule citation will not invalidate this rule.

(e) Relationship to Other Rules. The provisions of this rule shall be subordinated in the event that any other rule more specifically addresses a particular violation or violations in particular lines of insurance.

(f) Other Licensees. The imposition of a penalty upon any insurer in accordance with this rule shall in no way be interpreted as barring the imposition of a penalty upon any agent, adjuster, or other licensee in connection with the same conduct.

(g) Permissible Error Ratios.

1. Claims Violations. Subject to subparagraphs 3. and 4. of this paragraph, a permissible error ratio of seven percent (7%) is established for claims violations. This permissible error ratio is applicable to all nonwillful claims violations as set forth in the individual penalty categories in this rule. For those claims violations subject to the permissible error ratio, if the error ratio for a nonwillful violation of a specific statute or rule for a particular line of business does not exceed the permissible error ratio of 7%, no penalty shall be assessed for the noted claims violations of such statute or rule for that line of business. If the error ratio for a specific statute or rule for a particular line of business exceeds the permissible error ratio of 7%, a penalty shall be assessed for those violations which exceed the error ratio.

2. Other Violations. Subject to subparagraphs (4)(g)3. and 4. of this paragraph, a permissible error ratio of ten percent (10%) is established for all nonwillful violations other than claims violations. This permissible error ratio is applicable to all nonwillful violations other than claims violations as set forth in the individual penalty categories in this rule. For those other violations subject to the permissible error ratio, if the error ratio for a nonwillful violation of a specific statute or rule for a particular line of business does not exceed the permissible error ratio of 10%, no penalty shall be assessed for the noted other violations of such statute for that line of business. If the error ratio for a specific statute or rule for a particular line of business does exceed the permissible error ratio of 10%, a penalty shall be assessed for those violations which exceed the error ratio.

3. Whether the error ratio for any violation(s) is less than, equal to, or exceeds the permissible error ratio does not preclude the Office from requiring corrective action(s).

4. For those violations subject to an error ratio, the Department will increase the sample size used to determine the error ratio if it receives a written request from the insurer or other entity to do so. The sample size will be increased by up to, but no more than, 200 files.

(h) Investigations. Any violation(s) found as a result of a Office investigation shall not be subject to the permissible error ratio provisions of this rule. The Office experience over the years has been that error ratios are not appropriately applied to the majority of investigations conducted by the Office because of the nature and scope of investigations and because of the type of business being investigated. However, if the allegations being investigated are ones which lend themselves to the application of error ratios, the Office shall, if the particular circumstances relating to the alleged violations reasonably require further investigation in the context of an examination, convert the investigation into a target examination, at which point error ratios will be applied to the results of the examination.

(5) Penalty Factors. The following factors are considered in determining penalties for violations not listed in this rule, and, as to listed violations, the placement of the penalty within the range specified. The factors are not necessarily listed in order of importance.

(a) Willfulness and knowledge of the violation.

(b) Actual harm or damage to any insured, claimant, applicant, or other person or entity caused directly or indirectly by the violation, as determined by the Office financial examination, market conduct examination, or Office investigation.

(c) Degree of potential harm to which any insured or claimant was exposed by the violation, as determined by the Office financial examination, market conduct examination, or Office investigation.

(d) Degree to which the violation, if not detected, tends to undermine the regulatory process or regulatory system or the integrity of regulatory reports.

(e) Whether the entity reasonably should have known of the act’s unlawfulness.

(f) Corrective activities which are substantially initiated only after the violation or possibility of violation is formally or informally noted or brought to the attention of the entity by the Office. The Office will not assess a penalty for violations for which successful corrective activities were actually and substantially initiated (not just planned) and implemented by the insurer before the violation was noted by or brought to the attention of the Office, and before the insurer was made aware that the Office was investigating the alleged violation. Insurers shall take note of the requirements of Section 624.4211(2), F.S., regarding restitution. It has been the Office experience that corrective activities have included remedial procedures put in place to assure that the violation does not recur; adverse personnel activities taken when appropriate; and making any injured party whole as to harm suffered in relation to the violation. The entity’s corrective activities may include other measures as the entity deems appropriate.

(g) Financial gain or loss to the insurer from the violation.

(h) Degree of cooperation of the insurer with the Office in remedying the violation including any restitution provided to affected consumers.

(i) Previous fines or suspensions imposed by the Office against the insurer.

(j) Whether the violation is a repeat violation.

(k) The extent to which any applicable permissible error ratio is exceeded.

(6) Multiple Violations.

(a) For those violations not subject to the permissible error ratio provisions of this rule, each factually separate occurrence is a separate violation for purposes of this rule and application of the penalties, and penalties for such separate violations are cumulative, to the extent provided in Section 624.4211, F.S., notwithstanding that the violations are of the same statutory or rule provision.

(b) For those violations subject to the permissible error ratio provisions of this rule that comprise the numerator when divided by the denominator exceed the permissible error ratio established by this rule, each such violation is a separate violation for purposes of this rule and for the application of the penalties set forth in this rule to the extent provided in Section 624.4211, F.S., notwithstanding that the violations are of the same statutory or rule provision.

(7) Penalty Categories and Fines Assessed. Violations are divided into four categories. Category I violations are the most serious and category IV violations are the least serious. The Office will use the factors in subsection (5), above, to determine, within the penalty ranges specified below, the fine for each violation within a category. The penalty amount does not include any investigative or legal costs that are assessed in addition to the fine.

(8) Category I. If the violation is knowing and willful, the fine assessed per violation will range from $12,000 to $20,000. If the violation is nonwillful, the fine assessed per violation will range from $1,000 to $2,500 per violation. Violations listed in this category are exempt from the permissible error ratio provisions of this rule.

(a) Violation of any lawful order of the Office, pursuant to Section 624.418(2)(a), F.S.

(b) Failure to take corrective activities or other measures as agreed to by the insurer in writing to the Office, pursuant to Section 624.418(2)(a), F.S.

(c) Failure to take effective corrective activities or other measures on a formal written criticism made by the Office in a previous exam report, after that report becomes final, pursuant to Sections 624.316 and 624.3161, F.S.

(d) Failure of insurer or any of its officers to properly respond to or cooperate with the Office in reporting, or providing information to the Office, or producing or making reasonably available, any of its accounts, records, or files, as requested by the Office, pursuant to Sections 624.318 and 624.418(2)(b), F.S.

(e) Use of an unlicensed managing general agent or third party administrator, pursuant to Sections 626.091(3), 626.112, and 626.901, F.S.

(f) Assisting in or facilitating insurance agency activities in prohibited association with a financial institution, pursuant to Section 626.988, F.S., and Rule Chapter 69O-223, F.A.C.

(g) Filing or causing to be filed any materially incorrect financial report with the Office, pursuant to Section 624.424(1), F.S.

(h) Writing any line of insurance other than those authorized by the certificate of authority, pursuant to Section 624.401(2), F.S.

(i) Violation of an emergency rule, pursuant to Section 624.418(2), F.S.

(j) Improperly assisting an unlicensed insurer, pursuant to Section 626.901, F.S.

(k) Violation of Medicare Supplement and Long-Term Care standards for marketing and provisions relating to excessive duplicative insurance, pursuant to Sections 627.6741, 627.6743, 627.6744 and 627.9407, F.S., and Chapters 69O-156 and 69O-157, F.A.C.

(l) Violation of the Unfair Trade Practices Act, pursuant to Part IX, Section 626.9541, F.S.

(m) Violation of long-term care disclosure advertising, and/or performance standards, pursuant to Section 627.9407, F.S., and rule Chapter 69O-157, F.A.C.

(n) Failure to maintain records, pursuant to Sections 624.318, 626.561, and 626.875, F.S.

(o) Failure to file advertising as required, pursuant to Chapters 69O-150, 69O-156 and 69O-157, F.A.C.

(p) Failure to timely refund unearned premium, pursuant to Sections 627.4133, 627.6043, 627.6741, 627.728, 627.7282, and 627.7283, F.S., and Rules 69O-167.001 and 69O-167.002, F.A.C.

(q) Use of unfiled rates or forms, pursuant to Sections 627.062, 627.0645, 627.0651, 627.091, 627.191, and 627.410, F.S., and Chapter 69O-149, F.A.C.

(r) Use of unfiled rate manuals, underwriting guidelines, or other required filings, pursuant to Sections 627.062, 627.0651, 627.091, 627.410(6), 627.640, 627.6745, and 627.6785, F.S., and Parts I and III of Chapter 69O-149; Part I of Chapter 69O-156; Rule 69O-157.022; Chapter 69O-170; and Rule 69O-175.004, F.A.C.

(s) Failure to provide 15-day advance notice of premium increase when automatic bank withdrawal arrangement is in force, pursuant to Section 627.0665, F.S.

(t) Failure to allow Free-Look period, pursuant to Sections 626.99(4)(a) and 627.674(3)(d), F.S. and Rules 69O-154.003 and 69O-157.018, F.A.C.

(u) Failure to comply with replacement requirements, pursuant to Chapters 69O-151, 69O-156 and 69O-157, F.A.C.

(v) Failure to notify Office of withdrawal from line of business, pursuant to Section 624.430, F.S.

(w) Failure to maintain company records and assets in the State of Florida, pursuant to Sections 628.271 and 624.443, F.S.

(x) Failure to establish or comply with reserve requirements, pursuant to Sections 625.041, 625.051, 625.061, 625.071, 625.081, 625.091, 625.111, 625.121 and 625.131, F.S.

(y) Investments in ineligible investments, pursuant to Section 625.302, F.S.

(z) Failure to comply with limits on investments without a special consent from the Office pursuant to Sections 625.305, 625.306, 625.307, 625.308, 625.309, 625.310, 625.311, 625.312, 625.313, 625.314, 625.315, 625.316, 625.317, 625.318, 625.319, 625.320, 625.321, 625.322, 625.323, 625.324, 625.325, 625.3255, 625.326, 625.3262, 625.327, and 625.329, F.S.

(aa) Making prohibited investments as defined in Section 625.332, F.S.

(bb) Violation of the restrictions on maximum annual premiums writing, pursuant to Section 624.4095, F.S.

(cc) Improper allocation of any item on the balance sheet having a material effect on the balance sheet, pursuant to Rule 69O-137.001, F.A.C.

(dd) Failure to obtain approval for converting company from a stock company to a mutual company, merging or selling, or acquiring a controlling interest, pursuant to Sections 628.441, 628.451, 628.461, 628.471, 628.481 and 624.491, F.S.

(ee) Failure to file and acquire approval to pay commissions to persons with effective control, pursuant to Section 628.255, F.S.

(ff) Violation of the Small Employer Health Care Access Act, pursuant to Section 627.6699, F.S., and Part III of Chapter 69O-149, F.A.C.

(gg) Violation of requirements regarding excluded assets in determination of the financial condition of an insurer, pursuant to Section 625.031, F.S.

(hh) Failure to document subjective modifications, pursuant to Section 627.062, F.S., and Rules 69O-170.004 and 69O-170.013, F.A.C.

(9) Category II. If the violation is knowing and willful, the fine assessed per violation will range from $2,500 to $10,000. If the violation is nonwillful, the fine assessed per violation will range from $750 to $2,000 per violation.

(a) Those nonwillful violations subject to the permissible error ratio provisions of this rule include:

1. Failure to properly supervise company adjuster, pursuant to Section 626.878, F.S., and paragraph 69O-220.201(4)(g), F.A.C.

2. Advertisement of the existence of the Guaranty Fund(s) as an inducement to sell, pursuant to Sections 631.65 and 631.735, F.S.

3. Cancellation or nonrenewal of policy for unapproved reasons, pursuant to Sections 627.4133, 627.728, 627.7282, F.S.

4. Failure to make payment of loss within 20 days of settlement, pursuant to Section 627.4265, F.S.

5. Failure to pay a claim and any interest when due, pursuant to Sections 627.4265 and 627.613, F.S.

6. Failure to provide outline of coverage, pursuant to Sections 627.4143, 627.642 and 627.9407(10), F.S.

7. Failure to include the fraud statement, pursuant to Section 817.234(1)(b), F.S.

8. Failure to pay interest on cash surrender of life or annuity policy after 30 days, pursuant to Section 627.482, F.S.

9. Failure to provide required minimum cancellation, nonrenewal or change in rates notice, pursuant to Sections 627.4133, 627.6043, 627.6645 and 627.7281, F.S.

(b) Those violations, willful or nonwillful, not subject to the permissible error ratio provisions of this rule include:

1. Furnishing supplies to unlicensed agents, pursuant to Section 626.342, F.S.

2. Failure to show insurer’s name on application, pursuant to Section 627.4085, F.S.

3. Use of unlicensed adjuster, agent, or representative, pursuant to Section 626.112, F.S.

4. Failure to make delivery of policy, pursuant to Section 627.421(1), F.S.

5. Failure to provide extension of benefits, pursuant to Section 627.667, F.S.

6. Failure to provide conversion policy, pursuant to Sections 627.646 and 627.6675, F.S.

7. Failure to file Certificate of Compliance for Advertising, pursuant to subsections 69O-150.018(2), 69O-150.119(2) and 69O-156.120(2), F.A.C.

8. Failure to maintain claims office in the state for school accident insurance, pursuant to Section 627.661, F.S.

9. Failure to affix out of state group stamp, pursuant to Sections 627.5515 and 627.6515, F.S.

10. Filing financial statements with the department prepared in a manner inconsistent with NAIC Accounting Practices and Procedures, as required by Rule 69O-137.001, F.A.C.

11. Violation of admitted asset requirements, pursuant to Section 625.012, F.S.

12. Failure to correctly value bonds or other evidences of debt having a fixed term and rate of interest, pursuant to Section 625.141, F.S.

13. Failure to correctly value securities (other than bonds), pursuant to Section 625.151, F.S.

14. Failure to correctly value real and personal property, pursuant to Section 625.161, F.S.

15. Failure to correctly value purchase money mortgages on real property, pursuant to Section 625.171, F.S.

16. Failure to comply with the retention of risk on any one subject of risk, pursuant to Section 624.609, F.S.

(10) Category III. If the violation is knowing and willful, the fine assessed per violation will range form $1,500 to $2,500. If the violation is nonwillful, the fine assessed per violation will range from $500 to $1,000 per violation.

(a) Those nonwillful violations subject to the permissible error ratio provisions of this rule include:

1. Use of an agent who is licensed but not properly licensed for the product sold, pursuant to Section 626.112, F.S.

2. Failure to meet continuing education requirements for agents appointed by the company, pursuant to Section 626.2815, F.S.

3. Acceptance of business by an insurer from an agent not properly appointed pursuant to Section 624.425, F.S.

4. Failure to adjust a claim in accordance with the terms and conditions of the contract, pursuant to Section 626.877, F.S.

5. Failure to adjust claims including partial losses in accordance with the valued policy law and to provide a statement by the insurer limiting the amount of the recovery, pursuant to Section 627.702, F.S.

6. Failure to properly handle claims per certification from the Department of Labor and Employment Security, pursuant to Section 440.20(16)(a), F.S.

7. Failure to respond to claimant’s attorney within 30 days, pursuant to Section 627.7264, F.S.

(b) Those violations, willful and nonwillful, not subject to the permissible error ratio provisions of this rule include:

1. Failure to register or appoint agent, pursuant to Section 626.112, F.S.

2. Failure to request additional appointments for life and health agents when placing business with another insurer and receipt of commissions prior to receipt of appointment by the Office, pursuant to Section 626.341, F.S.

3. Refusal to write worker’s compensation based on premium volume, pursuant to Section 627.1615, F.S.

4. Failure to file experience reports for health insurance, pursuant to Section 627.9175(2)(a), F.S.

5. Failure to state the source of statistics used in an advertisement, pursuant to Chapter 69O-150, F.A.C.

6. Failure of a solicitation of coverage to be from and contain the name of a Florida licensed agent, pursuant to Chapter 69O-150, F.A.C.

7. Use of a commercial rating system in an advertisement without the required disclosure as to the extent of such rating, and the scope and limitation of such rating, pursuant to Chapters 69O-150 and 69O-156, F.A.C.

8. Failure to notify the Office of terminating the appointment of an agent, pursuant to Section 626.511, F.S.

9. Failure to dispose of ineligible property and securities not in compliance within the time frame provided by Section 625.338, F.S.

10. Non-compliance with Section 624.45, F.S., concerning financial institutions’ participation in reinsurance or insurance exchanges.

11. Failure to comply with Section 624.610, F.S., concerning reinsurance.

12. Making investments other than a policy loan or annuity contract loan of a life insurer without being authorized or approved by the insurer’s board of directors or by a committee authorized by such boards or in any other manner not in compliance with Section 625.304, F.S.

13. Failure to notify the Office of any change in directors or principal officers, pursuant to Section 628.261, F.S.

14. Failure to provide personal injury coverage, or to pay personal injury protection claims, pursuant to Section 627.736, F.S.

15. Failure to honor personal injury protection requirements of claims mediation, pursuant to Section 627.745, F.S., and Rule 69O-176.022, F.A.C.

16. Failure to comply with provisions of Chapter 440, F.S., pursuant to Section 440.52(3), F.S.

(11) Category IV. If the violation is knowing and willful, the fine assessed per violation will range from $1,000 to $1,500. If the violation is nonwillful, the fine assessed per violation will range from $100 to $500 per violation.

(a) Those nonwillful violations subject to the permissible error ratio provisions of this rule include:

1. Failure to notify applicant of Florida Joint Underwriting Association availability for private passenger auto coverages, pursuant to Section 627.728(6), F.S.

2. Failure to provide $10,000 property damage liability or $30,000 combined bodily injury liability and property damage liability with each personal injury protection policy, pursuant to Section 627.7275, F.S., and Rule 69O-175.004, F.A.C. (Note that the property damage liability requirement is effective for policies issued on and after 10/1/89.)

3. Insufficient timing of binder cancellation, pursuant to Section 627.420, F.S.

4. Failure to provide specific reasons including underwriting reasons either on denial of an application, or to accompany each notice of nonrenewal and cancellation, pursuant to Sections 627.4091 and 627.4133, F.S.

5. Failure to attach mandatory forms to policy, pursuant to Section 627.412, F.S.

6. Failure to provide premium installment plans for workers’ compensation policies with over $1,000 in annual premium, pursuant to Section 627.162, F.S.

7. Failure to adhere to filed underwriting rules for private passenger auto and homeowners’ coverages, pursuant to Sections 627.062 and 627.0651, F.S., and Rules 69O-170.013, 69O-170.014 and 69O-175.003, F.A.C.

8. Error in workers’ compensation statistical data reported by insurer, pursuant to Section 627.331, F.S.

9. Failure to use acceptable workers’ compensation application form, as required by Section 440.381, F.S., and Rule 69O-189.003, F.A.C.

10. Failure to properly forward auto titles to Department of Highway Safety and Motor Vehicles, pursuant to Section 319.30, F.S.

11. Violations of countersignature provisions, pursuant to Section 624.425, F.S.

12. Improper application of safe driver points to comprehensive coverage, pursuant to Section 627.0652, F.S.

13. Failure to make available risk management guidelines, pursuant to Section 627.0625, F.S.

14. Failure to provide rules for and apply credit for completion of the Department of Highway Safety and Motor Vehicles approved accident prevention course by persons 55 or older, pursuant to Section 627.0652, F.S.

15. Failure of insurer to provide premium credits; on Liability, PIP and Collision for Anti-lock brakes; on PIP and Med Pay for Air Bags; on Comprehensive Coverage for Anti-Theft Devices for private passenger autos as approved by the Department, pursuant to Section 627.0653, F.S.

16. Failure to list forms and edition dates on declaration, pursuant to Section 627.413(1)(g), F.S.

17. Failure to display rates for auditable exposures, pursuant to Section 627.413(2), F.S.

18. Failure to show coinsurance statement on property insurance policy subject to coinsurance provisions, pursuant to Section 627.701, F.S.

19. Regarding uninsured motorist coverages, providing uninsured motorist at lesser limit than bodily injury without signed election form; or failure to annually notify insureds of uninsured motorist option and to document offers; or failure to make election part of application; or providing uninsured motorists coverage that differs from that selected by insured; or failure to document uninsured motorist’s elections; or failure to offer uninsured motorists coverage, pursuant to Section 627.727, F.S.

20. Issuing a personal injury protection and property damage liability auto policy for less than 6 months except as permitted by Section 627.7295, F.S., or violation of 2-month cancellation restriction and policy free provision or charging an unfiled policy fee, pursuant to Section 627.7295, F.S.

21. Failure to notify insured that cancellation or non-renewal will be reported to Department of Highway Safety and Motor Vehicles, pursuant to Section 627.736(9)(b), F.S. Note that the policing of the various required notices is the responsibility of the Department of Highway Safety and Motor Vehicles.

22. Failure to notify insureds of annual personal injury protection options including deductibles, pursuant to Section 627.739(2), F.S.

23. Failure to comply with preinspection of privately purchased private passenger automobiles for physical damage coverage for new business policies issued in counties with populations of 500,000 or more, pursuant to Section 627.744, F.S., and Rule 69O-167.004, F.A.C.

24. Failure to show on an auto policy not providing bodily injury liability and property damage liability that the policy does not comply with the wording required by Florida law, pursuant to Rules 69O-184.011 and 69O-184.012, F.A.C.

25. Failure to use imprint information on non-pay cancellation notice by premium finance company, pursuant to Section 627.848, F.S., and Rule 69O-196.001, F.A.C.

26. Failure to comply with rules for completion of underwriting for private passenger auto coverages, pursuant to Section 627.7282, F.S., and Rule 69O-167.002, F.A.C.

27. Failure to reduce collision rates 3.5% on policies effective 1/1/90 to reflect mandatory $10,000 property damage liability coverage or $30,000 when property damage liability and bodily injury liability are combined, pursuant to Rule 69O-175.005, F.A.C.

28. Misapplication: failure to follow filed rating plans, underwriting guidelines, or other required filings, pursuant to Sections 627.062, 627.0645, 627.0651, 627.091, 627.191, 627.640, 627.6745, and 627.6785, F.S.

(b) Those violations, willful and nonwillful, not subject to the permissible error ratio provisions of this rule include:

1. Violations of licensed agent law, life and health insurance, pursuant to Section 624.428, F.S.

2. Failure to show subjects of insurance in the policy declaration and including in part, claims conditions and limitations and failure to include prescribed policy contents, pursuant to Section 627.413, F.S.

3. Failure to provide required policy information to any other person with an insurable interest in the policy, pursuant to Section 627.421(2), F.S.

4. Failure to follow the equity dating statute and follow rule for processing additional premium due company, pursuant to Section 627.7282, F.S., and Rule 69O-167.001, F.A.C.

5. Applying deductible to a windshield loss, pursuant to Section 627.7288, F.S.

6. Failure to cancel policy on an insured’s request basis, when financed by a premium finance company, pursuant to Section 627.848(4), F.S.

7. Use of unfiled premium finance forms and charges and interest plans under in-house control, pursuant to Section 627.904, F.S.

8. Use of short rate rules that develop premium greater than 90% of pro rata unless filed and approved by the Department, pursuant to Section 627.062, F.S., and Rule 69O-170.010, F.A.C.

9. Failure of advertising material produced in quantity to bear an identifying form number or other identifying means, pursuant to Chapter 69O-150, F.A.C.

10. Failure to comply with the requirements for the placement of excess or rejected business, pursuant to Sections 626.793 and 626.837, F.S.

11. Deposits not in compliance with Sections 624.411, 624.412, 626.5091, 625.50, 625.51, 625.52, 625.53, 625.55, 625.56, 625.57, 625.58, F.S.

12. Exceeding limits on dividends to stockholders and policyholders, pursuant to Sections 628.371 and 628.381, F.S.

13. Failure to file with the Office any amendments to articles of incorporation or by-laws, pursuant to Sections 628.101, 628.111 and 628.221, F.S.

14. Deficient, inadequate or improper internal controls as established by NAIC guidelines in manuals adopted in Rule 69O-137.001, F.A.C.

15. Failure of the company to assure that the company is managed by not less than five (5) directors, pursuant to Section 628.231, F.S.

16. Failure to secure a fidelity bond in the recommended amount as established by NAIC guidelines in manuals adopted in Rule 69O-137.001, F.A.C.

Rulemaking Authority 624.308 FS. Law Implemented 624.11, 624.307(1), 624.418, 624.4211 FS. History–New 11-6-94, Formerly 4-142.011.