How many years must a US insurance company maintain all necessary records on transactions involving insurance products?

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Surplus Lines - Statute Effective January 1, 2022

Please be reminded that the following law was enacted under Senate Bill 1598:

Effective January 1, 2022, pursuant to s. 626.916(1)(e), F.S., no coverage shall be eligible for export unless the insured has signed or otherwise provided documented acknowledgment of a disclosure in substantially the following form:

"You are agreeing to place coverage in the surplus lines market. Coverage may be available in the admitted market. Persons insured by surplus lines carriers are not protected under the Florida Insurance Guaranty Act with respect to any right of recovery for the obligation of an insolvent unlicensed insurer."

This requirement does not apply to wet marine, transportation or aviation risks that are subject to s. 626.917, F.S.

Reminder: Supervising General Lines Agents Must Submit and Maintain DFS Form Regarding Customer Representatives

It has come to our attention that many agencies, agents in charge and supervising general lines agents are not aware of the requirement for a customer representative's supervising general lines agent to submit and maintain form DFS-H2-1124, Designation or Deletion of Supervising General Lines Agent for Customer Representatives or Limited Customer Representatives. Completed forms must be sent to the Bureau of Licensing at the street or email address on the form, and a copy should be maintained in the agency's records.

See Rule 69B-213.060, F.A.C. - Appointment of Customer Representative and Designation of Supervising Agent for more information.

Record Retention Requirements

As an agent or adjuster transacting insurance in this state, you must maintain in your office the documents required by the Florida Insurance Code. These documents may include your daily reports, applications, change endorsements, adjusting contracts, indemnitor agreements, and documents signed or initialed by your insureds concerning such documents. These documents may be maintained electronically as long as the documents will be available when needed by the department, your policyholders or the appropriate insurers. ( s. 626.748, F.S.)

Every licensee shall preserve books, accounts, and records pertaining to a premium payment for at least 3 years after payment; provided, however, the preservation of records by computer or photographic reproductions or records in photographic form shall constitute compliance with this requirement. (s. 626.561, F.S.)

The insurance agency agent shall maintain a copy of all rebate schedules for the most recent 5 years and their effective dates. (s. 626.572, F.S.) A copy of every contract for compensation shall be retained by the licensee for not less than 3 years after such services have been fully performed. (s. 626.593, F.S.) This wording needs to be reviewed and polished.

Adjusters

Each appointed independent adjuster and licensed public adjuster must maintain a place of business in this state which is accessible to the public and keep therein the usual and customary records pertaining to transactions under the license. This provision does not prohibit maintenance of such an office in the home of the licensee.

The records of the adjuster relating to a particular claim or loss shall be so retained in the adjuster's place of business for a period of not less than 5 years after completion of the adjustment. This provision shall not be deemed to prohibit return or delivery to the insurer or insured of documents furnished to or prepared by the adjuster and required by the insurer or insured to be returned or delivered thereto. (s. 626.875, F.S.)

A public adjuster shall retain such written estimate for at least 5 years and shall make the estimate available to the claimant or insured, the insurer, and the department upon request. (s. 626.854(11), F.S.)

Bail Bond Agents

Each licensee must maintain in his or her office such records of bail bonds executed or countersigned by him or her to enable the department to obtain all necessary information concerning such bail bonds for at least 3 years after the liability of the surety has been terminated. Such records shall be open to examination, inspection, and photographic reproduction by the department or an authorized representative of the insurer or managing general agent, or agents of the department, at all times, and the department may at any time require the licensee to furnish to it, in such manner or form as it requires, any information concerning the bail bond business of such licensee. (s. 648.36, F.S.)

Title Agents

General Records

Title agents must maintain records for 7 years pursuant to section s. 627.7845(2), F.S., which states:
"The title insurer shall cause the evidence of the determination of insurability and the reasonable title search or search of the records of a Uniform Commercial Code filing office to be preserved and retained in its files or in the files of its title insurance agent or agency for a period of not less than 7 years after the title insurance commitment, title insurance policy, or guarantee of title was issued. The title insurer must produce the evidence required to be maintained by this subsection at its offices upon the demand of the office. Instead of retaining the original evidence, the title insurer may, in the regular course of business, establish a system under which all or part of the evidence is recorded, copied, or reproduced by any photographic, photo static, microfilm, micro card, miniature photographic, or other process which accurately reproduces or forms a durable medium for reproducing the original."

Contractual agreements between the title agent and the insurer that require the agent to maintain such records are NOT regulated by the bureau.

Escrow Account Records

Escrow Account records must be maintained in accordance with rule 69O-186.009, F.A.C., states "Every licensed title insurance agent shall maintain a monthly reconciliation of every escrow account required to be maintained pursuant to section 626.8473, F.S., and shall, on a monthly basis, report such reconciliation together with appropriate supporting documentation to each title insurer which licensed the agent during the reconciliation period. The reconciliation shall be supported by appropriate documentation, including a monthly bank statement, a list of all outstanding checks as of the date of the reconciliation which is not shown on the monthly bank statement, and a trial balance of the escrow ledger records required to be maintained by subsection (2). Licensed title insurance agents and title insurers shall provide a copy of the monthly escrow account reconciliation to the Office upon Its request. Such records shall be maintained by the title insurer for a period of five years." Also part (2) states, "Every licensed title insurance agent shall maintain a separate ledger card for each real estate closing transaction for which funds are received in escrow. The ledger card shall contain chronological entries of dates and amounts of moneys received and disbursed including the name of the remitter and payee and each check number issued on such escrow account. Such records shall be maintained by the title insurance agent for a period of three years. The ledger card required by this rule may be maintained in computer storage with a print-out available upon request of a title insurer or the Office of Insurance Regulation (OIR)."

Surplus Lines Agents

Each surplus lines agent shall keep in his or her office in this state, or in the agent's state of residence for a nonresident who does not have an office in this state, a full and true record for a period of 5 years of each surplus lines contract, including applications and all certificates, cover notes, and other forms of confirmation of insurance coverage and any substitutions thereof or endorsements thereto relative to said contract procured by the agent. (s. 626.930, F.S.)

Life agents with securities license

Life agents must maintain copies of the proposal required to be provided to the prospect. The proposal shall consist of a prospectus describing the investment feature and a full illustration of any life insurance feature. The proposal shall be prepared in duplicate, dated, and signed by the licensee. The original shall be left with the prospect, the duplicate shall be retained by the licensee for a period of not less than 3 years, and a copy shall be furnished to the department upon its request. (s. 626.9541(1)(v), F.S.)

There are other periods for viaticals, life expectancy providers, etc.

Reinsurance intermediary Broker

For at least 10 years after expiration of each contract of reinsurance transacted by the reinsurance intermediary broker, the reinsurance intermediary broker must keep a complete record for each transaction (s. 626.7492(5), F.S.)

Suitability and Disclosure in Annuity Investments

If you make a recommendation to a consumer and it results in a transaction involving an annuity product, you have certain responsibilities mandated by law. Rule 69B-162.011, F.A.C., requires certain disclosures and an objective comparison of annuity contracts when you recommend the exchange or replacement of an annuity. As the agent, you will be required to complete several forms including an Annuity Suitability Questionnaire to assist in determining the suitability of your recommendation.

Required Forms:
Disclosure and Comparison of Annuity Contracts, DFS-H1-1981
Annuity Suitability Questionnaire, DFS-H1-1980

Unless you are exempted by section 627.4554, F.S., and required by the Financial Industry Regulatory Authority (FINRA) to perform an alternative suitability analysis, you must use the state required form(s).
Misrepresenting whether an annuity is being replaced and failing to complete and submit the required suitability and disclosure forms (and the required replacement form) or to comply with FINRA's suitability rules is a serious violation and could result in enforcement action, up to and including revocation of your Department licenses.

Compliance Information

Department licensees and consumers can access compliance information at the Division of Insurance Agent and Agency Services' web page under Compliance Information. Additional information is available by license type on our Frequently Asked Questions web page.

Note: Some information in archived articles may now be out of date or superseded by changes in Florida law. Please be sure you refer to the most current law.

Make Sure You Don't Miss Important Information From Us

We highly recommend licensees routinely check their MyProfile accounts for messages from the Department. We send licensees important emails to keep you informed on issues regarding application, license, continuing education, or when appointment(s) occur. We suggest adding our domains dfs.state.fl.us and MyFloridaCFO.com to your email software's Trusted or Safe Senders List to ensure you receive email notifications from us.

Update your contact information TODAY through your MyProfile account to ensure you remain informed. You are required to abide by the Florida Insurance Code regardless of whether you read the information we provide.

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