Chapter 8: Florida Laws and Rules Pertinent Part 2

in florida, if a policy is made payable to a named beneficiary, a creditor can make no claim on the proceeds.

in Florida, anyone over the age of 64 will receive an additional 21 days beyond the normal policy grace period

in Florida, if an insured commits suicide within 2 years of policy issue, the beneficiary will only receive a refund of premiums paid. After 2 years, the face amount will be paid in the event of suicide.

when an insured has industrial life insurance policies with a single insurance company that total $3,000 or more in face value, the insured has the option to convert all of these policies into one ordinary life insurance policy at standard premium without evidence of insurability

an insurance company that requires an application for reinstatement has 45 days to reject the application before reinstatement is automatic. In other words, if the insurer takes no action within 45 days, the policy is considered reinstated automatically.

under Florida law, "excess business" is permitted when an agent's own company is not able to write the amount of insurance requested by the applicant. Excess business is that portion of a risk above the limits of that which the agent's own insurer will accept. A licensed life agent may place excess or rejected risks with any other authorized insurer without being required to secure an appointment as to such other insurer

excess charges occur when an agent knowingly collects money for a premium or an additional charge for insurance that is not provided for in the policy.

ERISA supersedes Florida state law relating to the employee retirement plans. the savings clause in ERISA protects the following areas of state regulation:
insurance, banking, securities.

while life insurance agents should be generally familiar with all Florida insurance regulations, the following 3 are of particular importance:

• The solicitation Law: spells out the information and procedures required of agents and insurers when proposing life insurance to a prospective buyer

• replacement rule: sets forth the requirements and procedures to be followed by insurance companies and agents when a proposal is being made in which a prospective life insurance buyer will be replacing existing insurance contracts with the proposed new insurance

• Code of ethics: establishes a broad outline defining appropriate business behavior for life insurance agents.

replacement is a strictly regulated and requires full disclosure by both the agent and the replacing insurance company. Replacement regulations exists to assure that purchasers receive specified information and it also reduces the opportunity for misrepresentation. Policy replacement is defined as a transaction in which a new policy or contract is to be purchased, and the agent is aware that an existing policy or contract has been, or will be:

• lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer or otherwise terminated

• Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values

• Modified to cause a reduction in benefits or length of policy term

in Florida, anyone over the age of 64 will receive an additional 21 days beyond the normal policy grace period

in Florida, if an insured commits suicide within 2 years of policy issue, the beneficiary will only receive a refund of premiums paid. After 2 years, the face amount will be paid in the event of suicide.

when an insured has industrial life insurance policies with a single insurance company that total $3,000 or more in face value, the insured has the option to convert all of these policies into one ordinary life insurance policy at standard premium without evidence of insurability

an insurance company that requires an application for reinstatement has 45 days to reject the application before reinstatement is automatic. In other words, if the insurer takes no action within 45 days, the policy is considered reinstated automatically.

under Florida law, "excess business" is permitted when an agent's own company is not able to write the amount of insurance requested by the applicant. Excess business is that portion of a risk above the limits of that which the agent's own insurer will accept. A licensed life agent may place excess or rejected risks with any other authorized insurer without being required to secure an appointment as to such other insurer

excess charges occur when an agent knowingly collects money for a premium or an additional charge for insurance that is not provided for in the policy.

ERISA supersedes Florida state law relating to the employee retirement plans. the savings clause in ERISA protects the following areas of state regulation:
insurance, banking, securities.

while life insurance agents should be generally familiar with all Florida insurance regulations, the following 3 are of particular importance:

• The solicitation Law: spells out the information and procedures required of agents and insurers when proposing life insurance to a prospective buyer

• replacement rule: sets forth the requirements and procedures to be followed by insurance companies and agents when a proposal is being made in which a prospective life insurance buyer will be replacing existing insurance contracts with the proposed new insurance

• Code of ethics: establishes a broad outline defining appropriate business behavior for life insurance agents.

replacement is a strictly regulated and requires full disclosure by both the agent and the replacing insurance company. Replacement regulations exists to assure that purchasers receive specified information and it also reduces the opportunity for misrepresentation. Policy replacement is defined as a transaction in which a new policy or contract is to be purchased, and the agent is aware that an existing policy or contract has been, or will be:

• lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer or otherwise terminated

• Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values

• Modified to cause a reduction in benefits or length of policy term

• subjected to loans exceeding 25% of the cash value

• Reissued with a reduction in cash value

• Used in a financed purchase

age, annual income, financial situation and needs financial experience, financial objectives, intended use of the annuity, financial time horizon, existing assets, liquidity needs, net worth, risk tolerance, tax status, present income.

the grace period for health and accident insurance is required to be no less than 7 days for weekly premium policies, 10 days for monthly premium policies, and 31 days for all other policies.

when replacing an individual health policy in Florida, the required replacement notice to the applicant must include notice that pre-existing conditions may not be covered.
An individual's waiting period for pre-existing conditions is reduced when he or she has "creditable coverage" creditable coverage is previous coverage under another group or individual health plan when there has not been a break in coverage of 63 days. the 63-day period begins when the individual's previous coverage ended. It ends when coverage under your plan begins, or, if earlier, when your group's waiting period for eligibility begins.
Under HIPAA requirements 18 months of creditable coverage are required in order for a person who does not have access to other health insurance to be given the opportunity to purchase an individual health insurance policy.

written notice of a claim must be given with 20 days after a covered loss starts or as soon as reasonably possible.

A small employer is one that employs 1-50 full-time equivalent employees. When offering a health benefit plan to small employers, the carrier MUST offer at least the standard plan. A small employer carrier that offers health coverage in the small employer group market shall renew or continue in force that plan at the option of the small employer. Insurers/agents must disclose, as part of its solicitation and sales materials, of the availability of information. Denial by a small employer insurer of an application for coverage from a small employer shall be in writing and shall state the reason or reasons for the denial. Insurers/agents that market in Florida cannot discourage small employers from applying because of the health status, claims experience, industry, occupation, or geographic location of the small employer. The health plan must be renewable for all eligible employees and dependents under the Renewability and Portability act. Insurers/agents must, in Florida, offer and issue all small employer health plans on a guaranteed-issue basis.

written proof for any loss must be given to the insurance company within 90 days

the time payment of claims provision allows insurers 45 days after receiving notice and proof of loss in which to pay or deny the claim. The minimum schedule of time in which claims MUST be made to an insured under an individual disability policy is monthly.

health insurance policies must provide a minimum free-look period of 10 days upon policy delivery. This allows the policyowner time to decide whether or not to keep it. The policyowner decides not to keep the policy within the 10 days allowed, a full refund will be given. A person who is eligible for Medicare has a free-look period of 30 days

no legal action can be initiated within 60 days after proof of loss has been submitted to the insurance company. In addition, no legal action can be initiated after 5 years from the initial time written proof of loss has been provided

Florida law prohibits individual health insurance policies (other than disability income insurance) from excluding coverage for preexisting conditions for longer than 24 months following the effective date of coverage, based upon a condition that had manifested itself during the previous 24-months period in such a manner as would cause an ordinarily prudent person o seek medical advice or treatment?

for group health insurance: pre-existing conditions (conditions for which medical advise, diagnosis, care or treatment was recommended or received in the 6 months prior to the effective date of enrollment) may be exclude for a maximum of 12 months from the date of enrollment (18 months for late enrollees). Creditable coverage will be used to reduce the exclusion period, unless the individual has a coverage gap of 63 days prior to enrollment in the group plan.
-The underwriting and issuance of a master group health policy in Florida requires that all employees or members must be eligible to participate regardless of individual health history.

when replacing an individual health policy in Florida, the required replacement notice to the applicant must include notice that pre-existing conditions may not be covered.
An individual's waiting period for pre-existing conditions is reduced when he or she has "creditable coverage" creditable coverage is previous coverage under another group or individual health plan when there has not been a break in coverage of 63 days. the 63-day period begins when the individual's previous coverage ended. It ends when coverage under your plan begins, or, if earlier, when your group's waiting period for eligibility begins.

all health plans that provide coverage to family members of the insured, must provide coverage for the insured's newborn child from the moment of birth for a period of 18 months.

A small employer is one that employs 1-50 full-time equivalent employees. When offering a health benefit plan to small employers, the carrier MUST offer at least the standard plan. A small employer carrier that offers health coverage in the small employer group market shall renew or continue in force that plan at the option of the small employer. Insurers/agents must disclose, as part of its solicitation and sales materials, of the availability of information. Denial by

Under Florida Law, there is no specific minimum percentage participation for employees covered by employee group health insurance.

is any person, corporation, partnership, or any other entity that, in return for a prepayment, undertakes to provide or arrange for, or provide access to, the provision of a limited health service to enrollees through an exclusive panel of providers for the following services: Ambulance, dental care, vision care, mental health, substance abuse, chiropractic, podiatric, and pharmaceutical services.

a federal law that requires employers with 20 or more employees to include a continuation of benefits provision for former employees and their dependents. COBRA guarantees that the participant can continue the group coverage (at their own expense) at group rates if their participation in the group plan is terminated because of a qualifying event.

include the death of the employee, termination of employment (except termination because of gross misconduct) or a reduction in work hours, which results in the participant no longer qualifying for group coverage.
Note: it is important to remember that COBRA benefits apply only to group health insurance, not group life insurance.

employees who have been covered under a group health plan for at least 3 months before their termination to be eligible to continue their coverage under COBRA. They must request continuation within 31 days following termination

Florida's health insurance coverage continuation act (mini cobra) applies to employers who employ less than 20 employees.

the purpose of this act is to make group health insurance available to employers with 50 or fewer employees.
the provisions of the florida employee health care access act require that all small group health benefit plans be issued on a "guaranteed-issue" basis

florida healthy kids offers health insurance for children ages 5-18. health kids is designed to provide quality, affordable health insurance for families not eligible for Medicaid. Families with children covered by the Florida health kids corporation program pay only a portion of the premium.

an outline of coverage is required and provides a very brief description of the important features of the policy. It is considered a summary of coverage. It requires:

• A summary of the policy's principal exclusions and limitations

• A statement of the policy's renewal and cancellation provisions

• A description of the policy's principal benefits and coverage.

individual long-term care insurance policies shall contain an appropriately captioned renewability provision on the first page of the policy form. the renewability provision shall clearly state that the coverage is guaranteed renewable or noncancellable

are those for which medical advice or treatment was recommended by or received from a health provider within 6 months preceding the effective date of an individual long-term care policy.

LTC policies must pay for "at home" care at the same daily amount as paid for a nursing home if the insured meets the qualifications for nursing home care

exclusion or limitation of benefits on the basis of alzheimers disease is NOT permitted, however, limits and exclusions may be placed on: pre-existing conditions or diseases, alcoholism and drug addiction war or acts of war, participation in a felony, riot, or insurrection, suicide or self-inflicted injury, aviation (except for fare-paying passengers)

-free look period for medicare supplement is 30 days, the open enrollment period for medicare and medicare supplements begin 3 months before your 65th birthday and lasts for 7 months

Member: a person who makes a contract or on whose behalf a contract is made with a health maintenance organization for health care services.
Provider: any person, including a physician or hospital, who is licensed or otherwise authorized in this state to provide health care services.
Subscriber: a person who makes a contract with a health maintenance organization, either directly or through an insurer or marketing organization, under which the person or other designated persons are entitled to the health care services.
Individual Contract: a contractual agreement for the provision of health care services on a prepaid basis entered into between an HMO and a subscriber and the subscriber's dependents.
-An insurer may NOT issue an HMO contract