Additional Public Hearing Yields Further Revisions to Proposed Unlawful Inducement Rule by Florida Division of Agent and Agency Services
Nov 22, 2010
In response to several agent complaints relating to the broad nature of Florida’s unfair trade practices statutes, the Florida Department of Financial Services (“DFS”), Division of Agent and Agency Services recently held an additional public hearing Rule on proposed Rule 69B-210.005, entitled “Unlawful Inducements.”
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 DFS to adopt reasonable Rules as are necessary or proper to identify specific unfair methods of competition, or unfair or deceptive acts or practices that are prohibited by Section 626.9541, F.S.
Intended to further clarify the unlawful inducement statute in response to several agent complaints related to the broad nature of the statute, 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.
To view the complete text of the proposed Rule changes, which are intended to further clarify the law, click here.
Section 1 of the proposed Rule simply recites pertinent sections of the statue, while Section 2 “clarifies” that the proposed Rule does not apply to insurers or title companies because they are outside the DFS jurisdiction.
Several industry representatives who testified at the hearing expressed concerns with Section 3, which reads:
(3) For purposes of this rule, the term “interested party” means a real estate professional, real estate salesperson, mortgage broker, lender, real estate developer, builder, property appraiser, surveyor, escrow agent, closing agent, or any other person or entity involved in a real estate transaction for which title insurance could be issued; or any representative of such a person or entity. The term does not include bona fide employees of a title agent or title agency.
In response to the concerns, the DFS officials agreed to eliminate the terms “facilitating” and “bringing about,” inasmuch as they were deemed to be ambiguous and overly broad.
The DFS officials stated that they will make changes to the proposed Rule based on comments at the hearing.
To reflect these revisions, a Notice of Change will be filed with the Florida Administrative Weekly. If subsequently requested, another hearing may be held.
Title Insurance Rule Considered
A similar hearing was held in relation to the proposed Rule as applicable to title insurance.
Specifically, proposed Rule 69B-210.010, entitled “Unlawful Inducements, Title Insurance,” is designed to provide guidelines on Florida’s Unfair Trade Practices statute to title insurance agents. The proposed Rule also clarifies the law and attempts to create a level playing field for applicable businesses.
Revisions to the proposed Rule are attached for review.
Once the Division applies additional changes to reflect comments and testimony provided at the meeting, a Notice of Change will be issued with the anticipation that all interested parties will be in agreement on the Rule revisions by December 1, 2010.
Although interested parties have urged the Florida Office of Insurance Regulation to create and approve related language, the agency has indicated that it is not initiating anything until the new Cabinet is in place.
Should you have any comments or questions, please contact Colodny Fass.