For more information on this Lifespace Community® Louise Petraitis Director, Business Development 561-573-3280 (mobile)

for more information on this Lifespace Community® Louise Petraitis Director, Business Development 561-573-3280 (mobile) Louise.Petraitis@lifespacecommunities.com Louise.Petraitis@lifespacecommunities.com

1. Rest Rooms – out back door, turn left, rooms on left 2. Continuing Education Rules a) Place cell phones on vibrate or off position. No reading of newspaper, text messages, etc. during presentation b) No rest room privileges during presentation unless emergency otherwise risk not receiving credits for this course. Do not leave room unless emergency. c) Every 50 minutes we will take a 10 minute break d) Return promptly for the start of each new hour or risk not receiving credits for course. e) You MUST be present for full 5 hours in order to receive credits for course. 3. Prizes courtesy of Abbey Delray at the start of each hour. 4. At end of the C.E. Course – completion forms will be handed out to all attendees. l

Instructors: Frank D. Cummings, CFP®, MBA Claudia McKay, CFP®, CLU, ChFC, LPRT, FLMI 5 hrs CE 5-215 Credit: ID# 89555 Offering # 1008290 (replaces #1007441) - LHV Combo - Intermediate, Provider 697

Chief Financial Officer: (F.S. Chapter 17) The Chief Financial Officer is the constitutional statewide elected official who manages the state's accounting and auditing functions, monitors the investment of state funds, investigates financial fraud, licenses and exercises oversight of insurance agents and agencies, ensures that Florida businesses have workers' compensation coverage, safeguards unclaimed property, helps consumers with financial services issues and serves as the state fire marshal, Investigating arson and promoting fire safety. CFO serves as one of three members of Florida Cabinet, and head of the Department of Financial Services (DFS), http://www.myfloridacfo.com/sitePages/agency/cfo.aspx and a member of Financial Services Commission (FSC). http://www.myfloridacfo.com/sitePages/agency/cfo.aspx Regulatory Awareness Administrators jurisdiction of duties & responsibilities

The Commission is comprised of four members: the Governor, the Attorney General, the Chief Financial Officer and the Commissioner of Agriculture. The two offices within the Commission are the Office of Financial Regulation, which regulates the banking, finance and securities industries in Florida, and the Office of Insurance Regulation, which regulates insurance companies. Both offices are headed by commissioners who are appointed by the Financial Services Commission. The Financial Services Commission is responsible for final approval of rules developed by each office. All regulatory decisions. are vested with the offices Financial Services Commission: (F.S. Chapter 20.121(3) http://www.flofr.com/StaticPages/FinancialServicesCommission.htm http://www.flofr.com/StaticPages/FinancialServicesCommission.htm

The Office serves Floridians through its responsibilities for regulation, compliance and enforcement of statutes related to the business of insurance. Financial Services Commission (FSC) appoints Director of the Office of Financial Institutions & Securities Regulation. The Office is also entrusted with the duty of carefully monitoring statewide industry markets, such as 1) Company Admissions Section is responsible for the receipt of all company applications and the coordination of the Office's review of such applications prior to granting approval to a company to sell insurance in the state of Florida. 2) The Life and Health Financial Oversight unit monitors the financial condition of all regulated Life and Health entities through the use of internal financial analysis and on-site examinations. 3) The Life and Health Product Review Unit ensures that all Life and Health policy forms and rates are in compliance with Florida Statutes and regulation.. Department of Financial Services (F.S. Chapter 20.121(1) 20.121(2)4) http://www.myflorida.com/agency/25/

Florida Office of Insurance Regulation provides regulatory oversight for Florida’s financial services providers. To protect the citizens of Florida, promote a safe and sound financial marketplace, and contribute to the growth of Florida’s economy with smart, efficient and effective regulation of the financial services industry. Financial Services Commission appoints a Commissioner of Insurance Regulation who oversees the Office of Insurance Regulation (OIR). This office oversees company regulation, rates, policy forms, market conduct claims, solvency and more. Commissioner Kevin McCarthy and Deputy Commissioner Richard Koon Office of Insurance Regulation: (F.S. Chapter 20.121(3)(a)1) www.floir.com

Office of Financial Regulation provides regulatory oversight for Florida’s financial services providers. OFR is responsible to protect the citizens of Florida, promote a safe and sound financial marketplace, and contribute to the growth of Florida’s economy with smart, efficient and effective regulation of the financial services industry. The OFR reports to the Financial Services Commission, which is comprised of Florida’s cabinet. The office is headed by a commissioner appointed by the Commission. The Commission has final rule approval, but all regulatory decisions are vested with OFR. Office of Financial Regulation (OFR): (F.S. Chapter 20.121(3)(a)2) www.flofr.comwww.flofr.com

A. Requires online application: www.MyFloridaCFO.com/Division/Agents 1. 40 hour Class 2. Fingerprints 3. Fee 4. Written Exam Licensing Requirements for Life & Health (F.S. 626.171 F.S. 626.785)

1. Company must submit thru e-Appoint new and renewal appointments & terminations. 2. Cannot collect commissions or transact business until appointed by company. 3. Renewal appointments a) every 24 months b) 90 days prior to renewal date DFS sends company notice of upcoming renewal c) if not renewed within 60 days of renewal date, appointment automatically cancelled. 4. Company Termination of Appointments a) company must give the agent 60 days notice b) company has 30 days to notify DFS and give reason for termination c) agent may terminate own appointments at any time B. Company Appointments (F.S. 626.322 626.331 626.431 626.381)

5. Agents cannot sell insurance without an appointment for any line of insurance 6. If no appointments for 48 months, agent loses license (in each class) 7. Appointments are not transferrable. 8. Company must notify DFS within 15 days if it discovers one of its agents has pled guilty or no contest, or has been convicted of a felony. 9. Agents must notify DFS within 30 days of guilty plea or no contest or been convicted of a felony, or any crime that is punishable by at least 1 yr prison term. 10. Licensed agent convicted by a court for a felony, or violating insurance code, the DFS will revoke all the agent’s appointments. B. Company Appointments (F.S. 626.322 626.331 626.431 626.381) Continued

1. Contact information must be updated through MyProfile on DFS site. 2. Agents must update their contact information within 30 days of changes: name, residential address, principal business street address, mailing address, telephone number and email address (very important to keep email address updated). 3. Penalty for non-compliance: 1 st offense - $250; subsequent $500 fine, or suspension or revocation of license. 4. DFS terminates licenses and appointments for agents who move to another state. C. Contact Information (F.S. 626.541 626.551)

BREAK TIME!

1) An agency must have an agency license or registration to operate an insurance agency. 2) Agency: an office or location from which insurance business is transacted with one or more agents. Can be sole proprietor, a corporation, a partnership or any other … insurers are excluded. 3) An agency name cannot be misleading or deceptive, or imply that it is an insurance company, government agency or any other state or national organization. It cannot imply that the agency provides advice and counsel rather than solicit and/or sell insurance. A. Agency Licensing (F.S. 626.015 626.172)

1) Registration: Perpetual, doesn’t have to be renewed, cannot be suspended, refused or revoked. 2) If principal(s) violate any part of the Code, agency must obtain a license. 3) If no longer qualifies for registration or denied, agency must apply for license within 30 days. 4) Registration Criteria: An incorporated agency whose voting share are traded on a securities exchange, or an agency whose primary function is offering insurance as a service or member benefit to members of a nonprofit organization, or an agency subject to supervision or inspection as a branch office under NASD rules. 5) Licensing required if the above does not meet registration criteria B. Agency Registration vs Licensing

6) Licensing: must apply thru MyProfile (DFS), must renew every 3 yrs, no fees to renew. a) Certificates can be printed b) DFS emails notices of renewal at 90 days prior and 30 days prior c) Application must include: names of owners or officers, residential addresses of same, name & address of agency, name of full time agent supervising, fingerprints of owners, officers, partners, or directors. d) Penalties for failing to apply: Registration - $5000; License: $10,000; 3 rd degree felony. Agency Registration vs Licensing (cont)

1) Must have agent in charge at each branch location 2) Insurance activities cannot take place if the agent is not physically present. 3) Agent in charge changes: notify DFS 30 days in advance via MyProfile. C. Insurance Agency (Licensed or Registered)

1) Transfer a) agents who are licensed in another state may apply to have their license transferred to Florida so they can obtain a Florida license for same line of authority. b) must become a Florida resident and have held the license for 1 yr c) submit application & fees within 90 days of becoming Florida resident d) provide original letter of clearance e) fingerprints 2) Surrender a) licenses are property of the state b) must be surrendered to DFS if requested by DFS c) if retiring or no longer selling, must surrender license d) if surrendering, mail the license ID with a letter to Bureau of Licensing D. Transfer/Surrender/Termination of Agent License (F.S. 626.292)

a) Lack of one or more of the qualifications for the license or appointment as specified in this code. b) Material misstatement, misrepresentation, or fraud in obtaining the license or appointment or in attempting to obtain the license or appointment. c) Failure to pass to the satisfaction of the department any examination required under this code. d) If the license or appointment is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code. e) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. f) If, as an adjuster, or agent licensed and appointed to adjust claims under this code, he or she has materially misrepresented to an insured or other interested party the terms and coverage of an insurance contract with intent and for the purpose of effecting settlement of claim for loss or damage or benefit under such contract on less favorable terms than those provided in and contemplated by the contract. E. Grounds for compulsory refusal, suspension or revocation of insurance/license/agency license/appointment (F.S. 626.611 69B-231 f.a.c.)

g ) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. h) Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment. i) Fraudulent or dishonest practices in the conduct of business under the license or appointment. j) Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. k) Unlawfully rebating, attempting to unlawfully rebate, or unlawfully dividing or offering to divide his or her commission with another. l) Having obtained or attempted to obtain, or having used or using, a license or appointment as agent or customer representative for the purpose of soliciting or handling “controlled business” as defined in s. 626.730 with respect to general lines agents, s. 626.784 with respect to life agents, and s. 626.830 with respect to health agents.626.730626.784626.830 m) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code. E. Grounds for compulsory refusal, suspension or revocation of insurance/license/agency license/appointment (continued) (F.S. 626.611 69B-231 f.a.c.)

n) Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country which involves moral turpitude, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases. o) Fraudulent or dishonest practice in submitting or aiding or abetting any person in the submission of an application for workers’ compensation coverage under chapter 440 containing false or misleading information as to employee payroll or classification for the purpose of avoiding or reducing the amount of premium due for such coverage. p) Sale of an unregistered security that was required to be registered, pursuant to chapter 517. q) In transactions related to viatical settlement contracts as defined in s. 626.9911: r) Commission of a fraudulent or dishonest act.626.9911 s) No longer meeting the requirements for initial licensure. t ) Having received a fee, commission, or other valuable consideration for his or her services with respect to viatical settlements that involved unlicensed viatical settlement providers or persons who offered or attempted to negotiate on behalf of another person a viatical settlement contract as defined in s. 626.9911 and who were not licensed life agents.626.9911 u) Dealing in bad faith with violators. E. Grounds for compulsory refusal, suspension or revocation of insurance/license/agency license/appointment (continued) (F.S. 626.611 69B-231 f.a.c.)

The department shall deny, suspend, revoke, or refuse to continue the license of any insurance agency if it finds, as to any insurance agency or as to any majority owner, partner, manager, director, officer, or other person who manages or controls such agency, that any of the following applicable grounds exist: (F.S. 626.61 a) Lack by the agency of one or more of the qualifications for the license as specified in this code. b) Material misstatement, misrepresentation, or fraud in obtaining the license or in attempting to obtain the license. c) Denial, suspension, or revocation of a license to practice or conduct any regulated profession, business, or vocation relating to the business of insurance by this state, any other state, any nation, any possession or district of the United States, any court, or any lawful agency thereof. However, the existence of grounds for administrative action against a licensed agency does not constitute grounds for action against any other licensed agency, including an agency that owns, is under common ownership with, or is owned by, in whole or in part, the agency for which grounds for administrative action exist. F. Grounds for compulsory refusal, suspension, or revocation of insurance agency license (F.S. 626.6115)

a) Any cause for which issuance of the license or appointment could have been refused had it then existed and been known to the department. b) Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or appointment. c) Violation of any lawful order or rule of the department, commission, or office. d) Failure or refusal, upon demand, to pay over to any insurer he or she represents or has represented any money coming into his or her hands belonging to the insurer. e) Violation of the provision against twisting, as defined in s. 626.9541(1)(l).626.9541 G. Grounds for discretionary refusal, suspension, or revocation of agent’s, adjuster’s, customer service representative’s, service representative’s, or managing genral agent’s license or appointment (F.S. 626.621)

f) In the conduct of business under the license or appointment, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public. g) Willful over insurance of any property or health insurance risk. h) Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases. i) If a life agent, violation of the code of ethics. j) Cheating on an examination required for licensure or violating test center or examination procedures published orally, in writing, or electronically at the test site by authorized representatives of the examination program administrator. Communication of test center and examination procedures must be clearly established and documented. G. Grounds for discretionary refusal, suspension, or revocation of agent’s, adjuster’s, customer service representative’s, service representative’s, or managing genral agent’s license or appointment (F.S. 626.621)

k) Failure to inform the department in writing within 30 days after pleading guilty or nolo contendere to, or being convicted or found guilty of, any felony or a crime punishable by imprisonment of 1 year or more under the law of the United States or of any state thereof, or under the law of any other country without regard to whether a judgment of conviction has been entered by the court having jurisdiction of the case. l) Knowingly aiding, assisting, procuring, advising, or abetting any person in the violation of or to violate a provision of the insurance code or any order or rule of the department, commission, or office m) Has been the subject of or has had a license, permit, appointment, registration, or other authority to conduct business subject to any decision, finding, injunction, suspension, prohibition, revocation, denial, judgment, final agency action, or administrative order by any court of competent jurisdiction, administrative law proceeding, state agency, federal agency, national securities, commodities, or option exchange, or national securities, commodities, or option association involving a violation of any federal or state securities or commodities law or any rule or regulation adopted thereunder, or a violation of any rule or regulation of any national securities, commodities, or options exchange or national securities, commodities, or options association. n) Failure to comply with any civil, criminal, or administrative action taken by the child support enforcement program under Title IV-D of the Social Security Act, 42 U.S.C. ss. 651 et seq., to determine paternity or to establish, modify, enforce, or collect support. G. Grounds for discretionary refusal, suspension, or revocation of agent’s, adjuster’s, customer service representative’s, service representative’s, or managing general agent’s license or appointment (F.S. 626.621)

BREAK TIME

Unlicensed Agency Personnel - Powers & Limitations a) An individual employed by an agent or agency on salary who devotes full time to clerical work, with incidental taking of insurance applications or quoting or receiving premiums on incoming inquiries in the office of the agent or agency, is not deemed to be an agent or customer representative if his or her compensation does not include in whole or in part any commissions on such business and is not related to the production of applications, insurance, or premiums. b) An employee of an agent or agency may not bind insurance coverage unless licensed and appointed as an agent or customer representative. c) An employee of an agent or agency may not initiate contact with any person for the purpose of soliciting insurance unless licensed and appointed as an agent or customer representative. As to title insurance, an employee of an agent or agency may not initiate contact with any individual proposed insured for the purpose of soliciting title insurance unless licensed as a title insurance agent or exempt from such licensure pursuant to s. 626.8417(4).626.8417 Duties of Licensed vs Unlicensed Personnel (F.S. 626.342)

Unlicensed Agent - Prohibition against unlicensed transaction of variable life insurance. An individual may not solicit or sell variable life insurance, variable annuity contracts, or any other indeterminate value or variable contract as defined in s. 627.8015, unless the individual has successfully completed a627.8015 licensure examination relating to variable annuity contracts authorized and approved by the department. Unlicensed Agent shall not: a) Solicit insurance or annuities or procure applications; b) In this state, engage or hold himself or herself out as engaging in the business of analyzing or abstracting insurance policies or of counseling or advising or giving opinions to persons relative to insurance or insurance contracts other than: 1) As a consulting actuary advising an insurer; or 2) As to the counseling and advising of labor unions, associations, trustees, employers, or other business entities, the subsidiaries and affiliates of each, relative to their interests and those of their members or employees under insurance benefit plans; or c) In this state, from this state, or with a resident of this state, offer or attempt to negotiate on behalf of another person a viatical settlement contract as defined in s. 626.9911.626.9911 Duties of Licensed vs Unlicensed Personnel (continued) (F.S. 626.342)

B. Licensed Agents 1) No life or health insurer or licensed life or health agent shall pay directly or indirectly any commission or other valuable consideration to any person for services as a life or health insurance agent within this state, unless such person holds a currently valid license (life, health or life/health) and appointment to act as a life or health insurance agent as required by the laws of this state; except that a life or health insurer may pay such commission or other valuable consideration to, and a licensed and appointed life or health insurance agent may share any commission or other valuable consideration with, an incorporated insurance agency in which all employees, stockholders, directors, or officers who solicit, negotiate, or effectuate life insurance contracts are qualified life or health insurance agents holding currently valid licenses and appointments. 2) No person other than a licensed and appointed life or health agent shall accept any such commission or other valuable consideration, except as provided in subsection (1). 3) This section shall not prevent the payment or receipt of renewal or other deferred commissions or pensions to or by any person solely because such person has ceased to hold a license or appointment to act as a life insurance agent and shall not prevent the payment of renewal or other deferred commissions to any incorporated insurance agency solely because any of its stockholders has ceased to hold a license or appointment to act as a life insurance agent. Duties of Licensed vs Unlicensed Personnel (continued) (F.S. 626.342)

C. Advertising (F.S. 626.887 626.9531 f.a.c. 69B-150) 1) Approval by insurer.—An administrator may use only such advertising pertaining to the business underwritten by an insurer as has been approved in writing by such insurer in advance of its use 2) Advertising materials and other communications developed by insurers, or other risk bearing entities authorized under this code and approved by the office to do business in this state, regarding insurance products shall clearly indicate that the communication relates to insurance products. When soliciting or selling insurance products, agents shall clearly indicate to prospective insureds that they are acting as insurance agents with regard to insurance products and identified insurers, or other risk bearing entities authorized under this code and approved by the office to do business in this state. 3) Communications include: newspapers, magazines, pamphlets, letters, posters, billboards, sales presentations, TV, radio. Social media rules (Facebook, Twitter, etc) are not as clear. 4) Ad should not misrepresent the benefits, advantages, conditions, or terms of a policy, dividends or share of surplus to be received on a policy or that were previously paid. 5) Ad should not misrepresent an insurer’s financial condition, or its legal reserve. 6) Ad should not misrepresent policy as being shares of stock which causes a person to believe mistakenly that the state or federal government guarantees payment or returns on insurance policies. Duties of Licensed vs Unlicensed Personnel (continued) (F.S. 626.342) - Other Requirements

C. Advertising (F.S. 626.887 626.9531 f.a.c. 69B-150).. continued 7) Any ads for LTC and Medicare Supplements must be filed with the OIR before they can be used. 8) Ads must not only identify the insurer but identify the policy as: “life insurance policy”, “annuity contract”, “health insurance policy”. Ads must refer to the generic name of products. 9) Ads must disclose the policy renewability, cancellation terms, termination provisions. 10) Ads must be accurate regarding insurer’s assets, financial standing, position in the industry. 11) Ads cannot be misleading/misrepresenting testimonials, use of certain phrases: “no red tape”, “safe driver awards (health ads), “special rates, etc.. D. Recordkeeping F.S. 627.4554(6) 1) Life insurance and annuities paperwork, all records regarding the sale must be kept for at least 5 years. 2) Can be electronic, photographic, and readily accessible so that DFS can examine at any time. 3) Must keep records of all the policies sold in agent office. Must be available to policyholders and the DFS 4) Advertising Files: companies/agencies must keep every advertisement showing the distribution method for at least 4 yrs or until their next regular exam by OIR. Duties of Licensed vs Unlicensed Personnel (continued) (F.S. 626.342) - Other Requirements

Department Communication --- MyProfile - https://dice.fldfs.com/public/pb_index.aspxhttps://dice.fldfs.com/public/pb_index.aspx

Department Communication --- MyProfile - https://dice.fldfs.com/public/pb_index.aspxhttps://dice.fldfs.com/public/pb_index.aspx 1) It allows agent: a) View license(s), registration(s), appointment(s), continuing education information, and deficiencies on a pending application. b) View licensing requirements c) Make an address, phone, email, name change. d) Apply for an agent or adjuster examination. e) Apply for an agent or adjuster license. f) Apply for an agency license or update agency information. g) Apply for a branch license. h) Apply for navigator registration. i) Print a duplicate license. j) Apply for a Letter of Certification and a Letter of Clearance. k) Apply to be a Pre-licensing or Continuing Education Provider or Instructor.

Department Communication --- http://wwwmyfloridacfo.comhttp://wwwmyfloridacfo.com Website address of Florida CFO Agency Access varied divisions within DFS Industry Alerts, Enforcement, Financial Guide, CFO’s Initiatives, Press Releases, Fraud & Consumer Protection, Transparency Florida (financial report, fund balances, etc.) Insurance Insights – is Regulatory Newsletter (online) covering Enforcement Actions, Education Central, Appointments, Case Notes, Legislative Roundup, Compliance, Statutes & Rules. Transparency Florida – tracks government spending & contracts, financial reports, fund balances.

Department Communication --- http://www.floir.comhttp://www.floir.com Website address Florida Office Insurance Regulation Access varied documents: List of companies authorized to do business in FL, rate & form filings, Industry Data Reports, Rate Comparison Tools for all lines of insurance.

Department Communication --- http://www.myfloridacfo.com/OnGuard/#.U5movG_D_mIhttp://www.myfloridacfo.com/OnGuard/#.U5movG_D_mI Website address for On Guard for Seniors Important site allowing seniors opportunity to access information regarding annuities, reverse mortgages, long term care, consumer alerts, resources, etc.

The purpose is to protect policyowners, insureds, beneficiaries, annuitants, payees, and assignees of life insurance policies, health insurance policies, annuity contracts, and supplemental contracts, subject to certain limitations, against the failure of an insurer issuing such policies or contracts to perform its contractual obligations due to its impairment or insolvency. All 50 states, the District of Columbia & Puerto Rio, have life & health insurance guaranty associations. They work together for policyholder protection. All insurers licensed in Florida to sell direct life, accident, health insurance and certain annuities. Florida Life and Health Insurance Guaranty Association = FLAHIGA. Florida Statute Chapter 631 Protects when life or health insurer is determined to require liquidation. Receiver collects premiums, administers policies, pays all valid claims, then will transfer policies to sound insurer. FLAHIGA can cancel policies, can offer substitute policies Products not covered: health maintenance insurance, dental service plan insurance, pharmaceutical service plan insurance, optometric service plan insurance, ambulance service association insurance, pre-need funeral insurance, pre-paid health clinic insurance; certain federal employees group policies, any annuity contract or group annuity contract that is not issue to and owned by an individual. Florida Guaranty Association – Life & Health Insurance – Fl Statutes: 631.711-631.737 631.811-631.828

Advertising Prohibition Policy – FLAHIGA (FS 631.735): No person shall make, publish, disseminate, Circulate, or place before the public, or cause directly or indirectly to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other way any advertisement, announcement or statement which uses the existence of the (FLAHIGA) of this state for the purposes of sales, solicitation, r inducement to purchase any form of insurance covered by the FLAHIGA. If FLAHIGA determines company insolvent & must be liquidated, receiver or FLAHIGA notifies policyholders www.floir.com/companysearch/. Click consumer resources to access Insurance company licensed, in www.floir.com/companysearch/ receivership, liquidation, federal health care reform information, PIP, etc. www.flahiga.org for insolvencies. www.flahiga.org Florida Guaranty Association – Life & Health Insurance – Fl Statutes: 631.711-631.737 631.811-631.828

New Florida Laws take effect July 1, 2014 unless vetoed by Governor. Visit Industry alerts on http://www.myfloridacfo.com/Division/Agents/#.U5nM0W_D_mJhttp://www.myfloridacfo.com/Division/Agents/#.U5nM0W_D_mJ Proposed Rules are also posted that should be reviewed so as not to be caught off guard Sale of Annuities: Revises Florida consumer protection laws relating to sales of annuities by incorporating the 2010 National Association of Insurance Commissioners (NAIC) model regulation on annuity protections. The bill expands the scope of the consumer protection laws to generally include all consumers purchasing annuities. Current law only applies the protections to consumers aged 65 and older. The law also retains current law limiting the surrender charges and deferred sales charges that may be imposed upon senior consumers. The following are primary consumer protections contained in the law: Suitability of Annuities – The law requires an insurer or insurance agent recommending the purchase or exchange of an annuity that results in an insurance transaction to have reasonable grounds for believing the recommendation is suitable for the consumer, based on the consumer’s suitability information. The law imposes additional duties on insurers and insurance agents when a transaction involves the exchange or replacement of an annuity. Documentation of Sales Transaction – requires agents and agent representatives to record recommendations made to a consumer. Insurance Laws & Updates (Senate Bill 166)

Prohibitions on Agents – The law prohibits agents from dissuading or attempting to dissuade a consumer from truthfully responding to the insurer’s request for suitability information, filing a complaint, or cooperating with the investigation of a complaint. Unconditional Refund Period – The law expands to 21 from 14 days the unconditional refund period for all purchasers of fixed and variable annuities. Limit on Surrender Charges – The law retains the prohibition against surrender charges or deferred sales charges in annuity contracts issued to a senior consumer exceeding 10 percent of the amount withdrawn. The charge must be reduced so that no surrender or deferred sales charge exists after the end of the 10th policy year or 10 years after the premium is paid, whichever is later. Penalties – Authorizes the imposition of corrective action, appropriate penalties, and sanctions on insurers, agents, managing general agencies, or insurance agencies that violate the requirements of s. 627.4554, F.S. An insurance agent must pay restitution to a consumer whose money the agent misappropriates, converts, or unlawfully withholds. Insurance Laws & Updates (Senate Bill 166)

New 5 hr Law & Ethics C.E. Requirement … mandatory for all licenses who compliance periods ending October 2014 and later. Replaces current requirement. Must be taken every compliance period. Agent must select the course based on the license you hold. If multi-licensed, choose the course of the license agent uses most frequently. Extensions available for agents on short-term disability, military duty or illness. New Florida Law on Beneficiary Designations and Divorce: does not apply if federal or state law provides otherwise if ex-spouse was designated as an irrevocable beneficiary or as a beneficiary after the divorce is final, or if court order requires a person to maintain the asset for the benefit of a former spouse, or the person remarries an ex-spouse they remain married until the person’s death, or an asset is held jointly in 2 or more names, the death of one of the co-owners vests ownership of the assets in the surviving co-owner(s). New Florida Law on Health Choices. Agents can register & assist clients to obtain quotes, select carriers & enroll employees. When an agent enrolls a group, the marketplace will notify the insurer which will pay the agent’s commission. Florida Health Choices created in 2008 to help Florida small businesses (less than 50) to purchase affordable group health insurance. http://www.myfloridachoices.org/http://www.myfloridachoices.org/ Insurance Laws & Updates (Senate Bill 166)

Dependents can remain on parents’ health plan to age 26, expanded free preventative care, guaranteed issue (no pre-existing), guaranteed rating limits. Individual & small group premiums can vary based on type of coverage applying for: individual, family, geographic, age, tobacco use. Law requires most individuals to carry health insurance or pay penalty. Individual subsidies available through health exchanges. Health Exchanges can be a state’s own exchange or allow federal government to set up and operate exchange. Employer mandate … updated 1/1/2014 Navigator duties FSA Contributions now limited Creation of Federal Insurance Office within the Treasury department. Federal Law Updates: Patient Protection & Affordable Care Act.

BREAK TIME!

Code of Ethics DFS All applicants for license as life & health agents shall subscribe to the code of ethics. Understand & observe the laws governing insurance Accurately present facts that impact the clients’ decisions. Be fair when working with colleagues and competitors Always place the policyholders’ interest first Insurance & financial services industry is a matter of public trust Unethical: a) twisting: misrepresent the terms and conditions of a product – to induce someone to lapse, forfeit, surrender, or terminate an insurance policy in order to take one out with another insurer. b) rebating: this is permitted in Florida only under very limited circumstances. c) defamations – publishing or circulation a false or misleading statement which might be maliciously critical of or derogatory to the financial condition of an insurer when deigned to injure anyone in the business. Can be written or oral. d) misrepresentations: a lie or an untruth pertaining to dividends, financial condition of insurer, publish or circulate false, deceptive, or misleading statements about anyone involved in business, incorrect information about features or benefits of the product. e) use of designations – can only use designations from an organization which maintains standards for assuring that its certificants are competent in the specific subject matter. Cannot use unearned designations. Ethical Requirements (F.S. 626.797 F.A.C. 69B-215 - 69B-230)

Fiduciary duties Honesty & integrity Full disclosure Loyalty Good faith Fairness Duty of service and standard of care Marketing Regulatory & Ethical Guidelines for Florida Licensed Insurance Professionals (F.A.C. 69B-240.001)

Adhere to NAIFA Code of Ethics as adopted by Florida PREAMBLE: Helping my clients protect their assets and establish financial security, independence and economic freedom for themselves and those they care about is a noble endeavor and deserves my promise to support high standards of integrity, trust and professionalism throughout my career as an insurance and financial professional. With these principles as a foundation, I freely accept the following obligations: To help maintain my clients’ confidences and protect their right to privacy. To work diligently to satisfy the needs of my clients. To present, accurately and honestly, all facts essential to my clients’ financial decisions. To render timely and proper service to my clients and ultimately their beneficiaries. To continually enhance professionalism by developing my skills and increasing my knowledge through education. To obey the letter and spirit of all laws and regulations which govern my profession. To conduct all business dealings in a manner which would reflect favorably on NAIFA and my profession. To cooperate with others whose services best promote the interests of my clients. To protect the financial interests of my clients, their financial products and my profession, through political advocacy. Marketing Regulatory & Ethical Guidelines for Florida Licensed Insurance Professionals (F.A.C. 69B-240.001)

Annuity Investments: “Annuity” means an insurance product under state law which is individually solicited, whether classified as an individual or group annuity. Understanding Industry Products & Suitability of Sales and Service (F.S. 627.455) (F.A.C. 69B-151.201 69B-162.011)

Duties of Insurers & Insurance Agents Applies to any recommendation made to a consumer to purchase, exchange, or replace annnuity by an insurer or its agent, and which results in the purchase, exchange, or replacement recommended. Prior to executing a purchase, exchange, or replacement, at a minimum the agent must collect the following information: Age, Annual Income, Financial Situation & Needs, Who Will Pay for Annuity, Financial Experience & Objectives, Intended Use, Financial Time Horizon, Existing Assets (including other investments and life insurance), Liquidity needs, Liquid Net Worth, Risk Tolerance, Tax Status. Agent must inform consumer of the features of annuity including potential surrender period. Surrender charges & tax penalties if the consumer sells, exchanges, surrenders, or annuitizes the annuity, cost of riders, limitations on interest returns, market risk, any underlying subaccounts. Also, agent must determine if there has been any other annuity exchanges or replacements within the preceding 36 months. Understanding Industry Products & Suitability of Sales and Service (F.S. 627.455) (F.A.C. 69B-151.201 69B-162.011)

Duties of Insurers & Insurance Agents (continued) Suitability questionnaire must be completed to ensure minimum-required information is collected. Form DFS-H1-1980. www.myfloridacfo.com/agents/Licensure/Forms/www.myfloridacfo.com/agents/Licensure/Forms/ Completed & signed by the applicant & agent Font size 12-point type Sufficiently clear so as to be readily understandable by both the agent & consumer True & correct copy shall be provided to the insurer or 3 rd party within 10 days of signature Copy to consumer no later than date of delivery. If consumer refuses to provide complete & accurate requested information on the form, or ignore the agent’s advice or recommendation … may be limiting protections afforded to them by the new law.. rescission of the policy or contract, full refund of premiums or accumulation value, etc. Understanding Industry Products & Suitability of Sales and Service (F.S. 627.455) (F.A.C. 69B-151.201 69B-162.011)

Duties of Insurers & Insurance Agents (continued) If consumer currently holds an annuity(ies) but not replacing or exchanging.. agent must also determine: type of contract(s), issue date(s), maturity date(s) or annuitization date(s) & allocation of funds within the contract, terms of surrender charges including dollar amount & surrender charge percentage, number of ears in length, comparison to life expectancy of applicant, waiver of surrender charge provision, contract riders or endorsements, liquidity of contract – prior to & at maturity. If consumer is replacing or exchanging annuity: agent shall provide from containing information explaining the differences between each existing annuity and the annuity being recommended in order to determine the suitability of the recommendation and its benefit to consumer. Provide a correct & true executed copy to the insurer or 3 rd party within 10 days after execution of the form, and provide a copy to the consumer no later than the date of delivery. The information in the form shall contain at minimum: comparison of benefits, limitations, terms, fees and charges, qualified versus non- qualified, written basis for the recommended exchange, including overall advantages and disadvantages for the consumer if the recommendation is followed. Such other information used or considered to be relevant by the insurance agent or the insurer in making recommendations to the consumer or exchange of an annuity contract. Form to be used: Disclosure & Comparison Form. DFS-H1-1981can be found at www.myfloridacfo.com/agents/Licensure/Forms/www.myfloridacfo.com/agents/Licensure/Forms/ Understanding Industry Products & Suitability of Sales and Service (F.S. 627.455) (F.A.C. 69B-151.201 69B-162.011)

Duties of Insurers & Insurance Agents (continued) Insurer must provide: crediting methods and potential tax implications: source of interest credits, income taxation of interest credits, when income tax deferral is advantageous, crediting formulas, guaranteed interest credits; risk factors: loss of principal, known versus expected interest, reallocation limitations, changes in market or company financial conditions. All prospective purchasers should receive a Buyer’s Guide to Annuities, Contract Summary and Prospectus (if variable product) provided by company. Agent shall prior to purchase or exchange of an annuity resulting from a recommendation disclose that the purchase or exchange may have tax consequences, and that the purchaser should contact his or her tax advisor for more information. Insurer, Insurance Agency or Managing Agent must develop supervisory systems for its agents to achieve compliance with the law including but not limited to: maintain written procedures, conduct periodic reviews of the records Understanding Industry Products & Suitability of Sales and Service (F.S. 627.455) (F.A.C. 69B-151.201 69B-162.011)

Duties of Insurers & Insurance Agents (continued) Suitability: The appropriateness of recommended transaction when considering the risks associated with a transaction relative to customer assets, current insurance holdings, financial institution (income and net worth), intended use, financial needs and investment objectives. In 2008 = The legislature passed new law dealing with suitability of annuity sales addressing the issue of inappropriate sales to senior citizens by unscrupulous agents lending strong consumer protections to those age 65 & older. In 2013 = Legislature passed bill incorporating it into F.S. 626.4554, replacing SB 2082 (2008 & 2010), essentially making suitability requirement applicable to all consumers. Legislature created “Safeguard Our Seniors” task force which reviewed and recommended solutions to better protect Florida Seniors against financial fraud. This is now known as “On Guard for Seniors”. This website contains a wealth of information for seniors. http://www.myfloridacfo.com/OnGuard/#.U583Sm_D_mI http://www.myfloridacfo.com/OnGuard/#.U583Sm_D_mI Understanding Industry Products & Suitability of Sales and Service (F.S. 627.455) (F.A.C. 69B-151.201 69B-162.011)

Duties of Insurers & Insurance Agents (continued) Recordkeeping Insurers & Agents (F.S. 626-4554(6) 1) Insurers & Agents must maintain records for 5 years after transaction is completed by the insurer. 2) Records consists of: any information collected from consumer and other information use in making recommendations such as applications, questionnaires, illustrations, correspondence, account review documents, account statements, any other documentation used in making the recommendations that were the basis for the transaction. Records required to be maintained in the form of paper, photographic, micro-process, magnetic, mechanical, or electronic media, or by any process that accurately reproduces the actual document. Understanding Industry Products & Suitability of Sales and Service (F.S. 627.455) (F.A.C. 69B-151.201 69B-162.011)

Duties of Insurers & Insurance Agents (continued) Exemptions: Direct-response solicitations where there is no recommendation collected form the senior consumer Contracts used to fund: employee pension or welfare benefit plan that is covered by ERISA, government or church plans or a deferred comp plan of a state or local government or tax exempt organization as defined by IRS, non-qualified deferred comp arranged, established, or maintained by an employer, settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process, pre-paid funeral contracts. Registered Members of FINRA : F.S. 6267-4554(8) Any person who is registered with a member of FINRA who is required to make a suitability determination and who makes and documents such determination satisfies the requirements under this law for the recommendation of annuities. Understanding Industry Products & Suitability of Sales and Service (F.S. 627.455) (F.A.C. 69B-151.201 69B-162.011)

BREAK TIME! ………. only 1 hr to go!

Life Insurance Ethical Requirements – Florida Life Insurance Solicitation Law a) Cannot use terms such as “financial planner”, “investment advisor”, or “financial consultant” implying that they are in advisory business when their compensation is related to sales, unless they derive compensation via other means. b) Misrepresent via lie or an untruth which could include material omission. Lack of knowledge about a product or service does not exclude misrepresentations. c) sliding which is selling a coverage or product without the client’s knowledge or informed consent d) Boycott, Coercion and Intimidation is prohibited. e) Twisting & Churning (as noted in earlier discussion of annuities investment) f) Unfair discrimination relative to premiums, benefits &/or dividends. Understanding Industry Products & Suitability of Sales & Services (continued) (F.A.C. 69B-151.201)

Life Insurance Ethical Requirements – Florida Life Insurance Solicitation Law (continued) Penalties for committing unfair trade and marketing practices: license suspension, revocation, non-renew, fines than can run from $2,500 for non-willful violation to $75,000 for willful violation relative to twisting, churning, fraudulent signatures, insurance fraud (pertaining to claim & application for insurance). Following verbiage to discourage insurance fraud must be printed on application or claim form: “Any person who knowingly and with intent to injure, defraud, or deceive any insurer files a statement of claim or an application containing any false, incomplete, or misleading information is guilty of a felony of the third degree”. Understanding Industry Products & Suitability of Sales & Services (continued) (F.A.C. 69B-151.201)

Life Insurance – Replacement. a) may need new evidence of insurability b) new policy may have terms that are less favorable than in existing policy c) may have new contestability period (2 yrs) d) may have new suicide period e) new policy may not have current cash alues’ f) avoid twisting and turning when replacing g) complete “Notice Regarding Replacement” form. Copy of all documents used in transaction must be sent to the replacing insurer Understanding Industry Products & Suitability of Sales & Services (continued) (F.A.C. 69B-151.201)

A. Florida Life Insurance Solicitation requires a Buyer’s Guide & Policy Summary must be given to client on or before policy delivery. There is a 30 day Free Look in Florida. B. Life or disability insurance; illegal dealings.— 1) No life or disability insurer shall refuse to renew, sell, or issue a life or disability insurance policy, establish or charge a premium or rate to an applicant or a prospective policyholder, or establish or charge an unfair, discriminatory premium or rate to such person solely on the ground that the applicant or policyholder suffers from a severe disability. 2) “Severe disability,” as used in this section, means any spinal cord disease or injury resulting in permanent and total disability, amputation of any extremity that requires prosthesis, permanent visual acuity of 20/200 or worse in the better eye with the best correction, a peripheral field so contracted that the widest diameter of such field subtends an angular distance no greater than 20 degrees, or neurosensory deafness. 3) Nothing in this section should be construed as requiring an insurer to provide insurance coverage against a severe disability which the applicant or policyholder has already sustained. Unfair Methods of Competition & Unfair or Deceptive Acts (F.S. 626.9521 626.9541 626.99)

C. Life & or disability insurance; discrimination on basis of sickle-cell trait prohibited.— (1) No insurer authorized to transact insurance in this state shall refuse to issue and deliver any policy of life or disability insurance solely because the person to be insured has the sickle-cell trait. (2) No life or disability insurance policy issued and delivered in this state shall carry a higher premium rate or charge solely because the person to be insured has the sickle-cell trait. Understanding Required Premium Discounts Rating for Life & Health Insurance discounts allowing life & health insurers to offer lower premiums for preferred risks and higher premiums for increased risks. Insurers can offer lower premiums for those enrolled in group health wellness programs (weight loss, stop smoking). Unfair Methods of Competition & Unfair or Deceptive Acts (F.S. 626.9521 626.9541 626.99) (continued)

Recent Violations of Florida Licensed Insurance Professionals An investigation of a life, health and variable annuity agent revealed that she submitted two life insurance applications on individuals whom she had never met with prior to or during the sale to earn commissions. According to the documents provided by a company SIU investigator, the agent submitted the two applications with fraudulent applicant signatures, incorrect health information, and she also provided saliva samples that were not from the named insureds. Disposition: License suspended for 12 months. The Department was informed of an action taken against a life & annuity agent by the Financial Industry Regulatory Authority (FINRA). The agent failed to cooperate with FINRA during an investigation by not completing an on-the-record interview regarding a client. He failed to give testimony on whether he provided a client with documents overstating the client's account value. Therefore, FINRA barred him from associating with any FINRA member in any capacity. In addition, the agent failed to report this action to the Department within the 30 day requirement per Florida Statutes. The agent also failed to update his contact information with the Department within 30 days of it changing. Disposition: License suspended for 12 months. For more information on recent violations … www.myfloridacfo.com Insurance Insightswww.myfloridacfo.com Disciplinary and Industry Trends – Industry Insights by DFS – monthly issues contain more case studies.

Copies of enforcement action documents can be located by searching the Division of Legal Services' database. After clicking the Locate link below and the database opens, click on Final Orders on the left, followed by Dept of Financial Services, then Agent and Agency Services, then Final Orders 2014. You will then be able to locate the document by the first letter of the individual's last name or business name. For further information, you may make a public records request via email or contact the Public Records Unit. May 22, 2014: TALLAHASSEE - Florida Chief Financial Officer Jeff Atwater today announced the arrest of Booker T. Wade, 56, an insurance agent accused of stealing insurance premium payments from an elderly client. If convicted, he faces up to five years in prison and will be permanently barred from the insurance industry. Wade the owner of Ibis Insurance Associates in Lauderhill, Florida, surrendered to the Florida Department of Financial Services’ Division of Insurance Fraud. An investigation revealed that he stole insurance premiums from one of his elderly clients and deposited the money in his personal account. Recent Enforcement Actions of Florida Licensed Insurance Professionals

Case: A referral received from the Division of Rehabilitation and Liquidation indicated that delinquency proceedings began against National Group Insurance Company as a result of the parent company, National Group, being placed in receivership in Puerto Rico. When the Division of Rehabilitation and Liquidation began their process with National Group Insurance Company they learned that a Miami-based insurance agency that was acting in the capacity of a Managing General Agent for National Group had a backlog of four months in issuing new business policies. In addition, the agency was refusing to submit the premiums due National Group which was more than $1,000,000 because National Group was placed in rehabilitation in Puerto Rico. The Florida Department of Financial Services was appointed Receiver of National Group in Coral Gables for the purposes of rehabilitation. The Division of Rehabilitation and Liquidation informed our Bureau of Investigation that the agency had paid all of the monies owed to National Group except for a remaining balance of $500,000, in premiums and unearned commissions. The agency entered into a settlement repayment agreement with the Division of Rehabilitation and Liquidation. Subsequently, legal counsel for a large insurance company notified the Department that they had met with the agency's president and co-owners of the agency who owed them $376,317.14 in premiums. During their meeting, the president and co-owners informed the legal counsel that they had misappropriated premiums for other companies to pay the Department's Division of Rehabilitation and Liquidation the monies the agency owed the receiver. The President further stated that they owed $570,000 in unearned commissions, which they had only been able to pay $200,000 and another $150,000 for unearned commissions for a separate month. The Department received two other referrals where this agency owed one insurance company $315,000 in premiums and another insurance company $210,000; all of these premiums were allegedly misappropriated as well. Furthermore, several premium finance companies were also affected for the agent's failure to return unearned premium. Lastly, the Department was notified by the Division of Rehabilitation and Liquidation as the receiver for National Group that the agency defaulted in payment and the Receiver made a demand for the unpaid balance of $297,268.63. Disposition: The co-owner/vice president/agent in charge of the agency and agency were permanently banned from the business of insurance in Florida. In addition, cease and desist orders were issued against the unlicensed agency's president, as well as the agency. Recent Enforcement Actions of Florida Licensed Insurance Professionals

Beware Florida Agents – Verify Before You Sell It is illegal for companies or individuals to market insurance in Florida without a license. Agents must be licensed and must have active appointments with specific companies in order to legally sell insurance products. Following are Unauthorized Entities that were ordered to Cease & Desist. United States Contractors Trust and Access for transacting unlicensed and unauthorized insurance business in state of Florida American Assurance Underwriters Group – doing business as an insurer without holding Certificate of Authority. For more information on Unauthorized Entities: http://www.floir.com/Sections/MarketInvestigations/ue_regulatory_entities_date.aspx Penalties for Agents representing or aiding an unauthorized insurer: 3 rd degree felony, fines, payment of unpaid claims, loss of license. Unauthorized Products & Entities Involved in Florida Commerce (Florida Insurance Licensing Association – _American Safety Council, Inc. – Lesson 19.2.1)

Agent-in-charge Authorized Insurer eAppoint Department of Financial Services … www.myfloridacfo.comwww.myfloridacfo.com Compliance for agents, adjusters, agencies Industry Alerts Notice of Proposed Rules Insurance Insights Unauthorized Entities Suitability Navigators MyProfile Office of Insurance Regulation (OIR) …www.floir.com Florida Health Choices Marketplace New & Other Important Terminology Applicable to Florida Licensed Insurance Professionals

REMEMBER!

Completion Forms Each attendee that stayed for full 5 hours Completion Forms available as you leave NAIFA – Palm Beaches will file these earned credits with DFS within next 5 days. Questions/Concerns: Claire Gamelin 561-588-5444

Visit us! www.pbaifa.org The power-point presentation for this course has been uploaded to www.pbaifa.org website for you to access. Click on Articles & Outlines button.www.pbaifa.org

For more information on this Lifespace Community® Louise Petraitis Director, Business Development 561-573-3280 (mobile)

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For more information on this Lifespace Community® Louise Petraitis Director, Business Development 561-573-3280 (mobile)

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