Section 626.9521(1), F.S., provides that no person shall engage in any trade practice which is defined in this part as an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance. Section 626.9611(1),...

DEPARTMENT OF FINANCIAL SERVICES
Division of Insurance Agents and Agency Services

Rule No.: RULE TITLE
69B-210.005: Unlawful Inducements, Generally
PURPOSE AND EFFECT: Section 626.9521(1), F.S., provides that no person shall engage in any trade practice which is defined in this part as an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance. Section 626.9611(1), F.S., authorizes the Department to adopt reasonable rules as are necessary or proper to identify specific unfair methods of competition or unfair or deceptive acts or practices which are prohibited by Section 626.9541, F.S.
SUMMARY: The proposed rule defines the term “unlawful inducement” and also provides examples of acts and practices that are unlawful inducements to purchase insurance prohibited by Section 626.9541(1)(h), F.S.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: The agency has determined that this rule will not have an impact on small business.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
SPECIFIC AUTHORITY: 624.308 (1), 626.9611 FS.
LAW IMPLEMENTED: 626.112(8), 626.572, 626.611(11), 626.621(6), 626.753, 626.9521, 626.9541(1)(h), (m), 626.9611 FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE,TIME AND PLACE SHOWN BELOW(IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):
DATE AND TIME: September 20, 2010, 9:30 a.m.
PLACE: Room 116, Larson Building, 200 E. Gaines Street, Tallahassee, Florida
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Lorna Noren at [phone] or [e-mail]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Lorna Noren, Special Investigator, Division of Insurance Agents and Agency Services, Bureau of Investigation, 200 E. Gaines Street, Tallahassee, FL 32399-0320, [phone] or [e-mail]

THE FULL TEXT OF THE PROPOSED RULE IS:

69B-210.005 Unlawful Inducements, Generally.

(1) The term “unlawful inducement” as used in this rule means, except as otherwise provided by law or by any filed or approved rates or rating manuals:

(a) Permitting, or offering to make, or making, any contract or agreement concerning a contract other than that which is plainly expressed in the insurance contract issued thereon; or

(b) Paying, allowing, or giving, or offering to pay, allow, or give, directly or indirectly, as an inducement to the insurance contract or a renewal of the insurance contract, any unlawful rebate of premiums payable on the insurance contract, any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatsoever which is not specified in the insurance contract.

(2) This rule is not applicable to the business of title insurance and does not apply to insurers. All lists contained within this rule are intended as examples and are not exhaustive.

(3) Except as otherwise expressly provided by law, by Section 626.572, F.S., and Section 626.9541(1)(m), F.S., or by any filed or approved rates or rating manuals, the following examples of inducements, when not specified by the insurance contract, are unlawful inducements and constitute unfair insurance trade practices under Sections 626.9521 and 626.9541, F.S.:

(a) Paying, crediting, allowing, or giving, or offering to pay, credit, allow, or give, directly or indirectly, an inducement to the purchase of insurance.

(b) Facilitating any discount, reduction, credit, or paying any portion of any premium, fee or cost of underwriting, policy fee, or claim cost.

(c) Facilitating any discount, reduction, credit, or paying any fee or portion of the cost of an inspection, inspection report, appraisal, or survey, including wind inspection.

(d) Bringing about any discount, reduction, credit, or paying any portion of the premium or any portion of the cost of premium financing.

(e) Making possible any lowered, credited, or discounted commission, except as provided in Section 626.572, F.S.

(f) Providing membership in any organization, society, association, guild, union, alliance or club at a discount, reduced rate, or at no cost.

(g) Making or offering to make a charitable or other tax-deductible contribution on behalf of the purchaser.

(h) Offering or providing any service or incentive in conjunction with the sale of insurance.

(i) Providing or offering stocks, bonds, securities, property, or any dividend or profit accruing or to accrue thereon.

(j) Providing or offering employment in exchange for the purchase of insurance.

(k) Providing, or offering to provide, any other payment, award, special favor, advantage, or incentive, tangible or intangible, direct or indirect, that encourages or is reasonably calculated to encourage a consumer to enter into a contract for insurance.

Rulemaking Authority 624.308 (1), 626.9611 FS. Law Implemented 626.112(8), 626.572, 626.611(11), 626.621(6), 626.753, 626.9521, 626.9541(1)(h), (m), 626.9611 FS. History–New________.

NAME OF PERSON ORIGINATING PROPOSED RULE: Lorna Noren, Division of Insurance Agent s and Agency Services
NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Alex Sink, Chief Financial Officer
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: July 22, 2010
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: March 5, 2010