Paul Sanchez
Florida has a set of guidelines to help insurance agents identify unauthorized insurers. These guidelines include checking a company's authorization status and authorization type, as well as being vigilant for common scams and red flags. For example, an insurer with an Active status and Permit authorization type has only begun the authorization process and is not authorized to conduct insurance business. Additionally, agents should be cautious of impressive sales materials and fabricated letters from regulators, which may be signs of an unauthorized or bogus health plan. Unauthorized insurers in Florida are also identified by their eligibility to write certain property and casualty insurance businesses that are not typically written by admitted/authorized insurers.
| Characteristics | Values |
|---|---|
| Authorization Status | "Active" |
| Authorization Type | "Permit" |
| Warning Signs | Use of trade associations, unions, or affinity groups that a consumer must join to be eligible for coverage |
| Use of the phrase "Multiple Employer Welfare Arrangement" (MEWA) | |
| Claims that their plan is a federal plan or an Employee Retirement Income Security Act (ERISA) plan and is exempt from state regulation | |
| Surplus Lines Insurers | Eligible to write certain property and casualty insurance business not written by an admitted/authorized insurer |
| Surplus Lines – Federally Authorized Insurers | Do not provide detailed background information on its officers/directors/certain shareholders |
| Are not subject to a financial review by OIR prior to conducting business in Florida | |
| Surplus Lines – Aviation/Wet Marine Companies | Eligible to write aviation/wet marine insurance business not written by an admitted/authorized insurer |
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What You'll Learn
Verify the company's license and complete name
When verifying an insurance company's license or whether an investment is registered, it is imperative to have the correct and complete name of the company. This is because scammers often use names similar to licensed companies to create confusion and trick unsuspecting individuals. Thus, it is essential to verify the company's license and complete name before proceeding with any transactions.
To verify the company's license, individuals can refer to the website of the Division of Insurance Agent & Agency Services. This website provides a list of authorized insurers involved in the insurance business in Florida. If a company is not listed on this website, it is not authorized to conduct insurance business in the state. It is worth noting that even if a company is authorized at the time of verification, its status may change in the future, so it is always advisable to check regularly.
The website also provides information on the different types of authorizations and their meanings. For instance, an insurance company with an Authorization Status of "Active" and an Authorization Type of "Permit" has only initiated the authorization process and is not yet authorized to conduct insurance business. Therefore, it is crucial to pay attention to the authorization status and type when verifying a company's license.
Additionally, individuals should be aware of common scams and warning signs of unauthorized or bogus health plans. For example, marketers may offer cheaper health insurance plans or guaranteed investments that seem too good to be true. Sometimes, they may use fabricated letters from regulators to create an appearance of legitimacy. Another red flag is the use of the phrase "Multiple Employer Welfare Arrangement" (MEWA). While MEWAs can be legitimate, they must be licensed by the state, which most are not. Marketers may also claim exemptions from state regulation, which is another warning sign.
By following these guidelines and staying vigilant, individuals can protect themselves from becoming victims of unauthorized insurers and ensure they are dealing with legitimate and properly licensed companies.
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Check the Authorization Status and Type
To check the authorization status and type of an insurer in Florida, you can refer to the official website of the Division of Insurance Agent & Agency Services. This website provides a list of authorized insurers permitted to conduct insurance business in Florida. If an insurance company is not listed on this website, it should be assumed that they are not authorized.
It is important to verify the authorization status and type of an insurance company before selling or purchasing an insurance policy. Some scammers may use names similar to licensed companies to create confusion and deceive potential customers. Therefore, it is crucial to have the correct and complete name of the insurance company when checking their authorization status.
When checking the authorization status, pay attention to the following:
- An insurance company with an Authorization Status of "Active" and an Authorization Type of "Permit" has only initiated the authorization process and is not yet authorized to conduct insurance business.
- Surplus Lines insurers are unauthorized insurers that have been made eligible by the Office of Insurance Regulation (OIR) to write certain property and casualty insurance business that authorized insurers do not cover. These include Surplus Lines – Aviation/Wet Marine companies, which are eligible to write aviation and wet marine insurance not provided by authorized insurers.
- Surplus Lines – Federally Authorized insurers do not file an application with OIR and do not provide detailed background information on their officers, directors, or certain shareholders. They are also not subject to a financial review by OIR before conducting business in Florida. People insured by these carriers do not have the protection of the Florida Insurance Guaranty Act regarding any right or recovery for the obligation of an insolvent unlicensed insurer.
By following these guidelines and regularly checking the official website, you can help protect yourself and others from unauthorized insurers in Florida. Remember, it is always better to verify before you sell or purchase an insurance policy.
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Beware of impressive sales materials and fabricated letters
Florida is home to many different types of insurance scams, including identity theft, auto insurance fraud, and property insurance fraud. To protect yourself from unauthorized insurers, it is important to be cautious of impressive sales materials and fabricated letters.
Unlicensed contractors or repairmen may approach you door-to-door, especially after a storm, offering shoddy work or not completing the work at all. They may even fabricate the need for repairs or exaggerate the damage. These unethical contractors may ask you to sign over your insurance benefits, allowing them to collect claim payments directly from insurers. They may then falsify or exaggerate claims and file lawsuits against the insurer without your knowledge or consent. Remember, it is your responsibility to verify that any contractor you hire is licensed and insured before allowing them to inspect your property or start any work.
When dealing with insurance companies, always verify their license and authorization to conduct business in Florida. Don't be fooled by impressive sales materials or fabricated letters from regulators, as these are common tactics used by unauthorized entities. Be wary of health plans that require you to join trade associations, unions, or affinity groups to be eligible for coverage. Also, look out for the use of the phrase "Multiple Employer Welfare Arrangement" (MEWA). While MEWAs can be legitimate, they must be licensed by the state, and most are not. Marketers may claim their plan is exempt from state regulation, which is a definite red flag.
To verify an insurance company's license, make sure you have the correct and complete name, as scam companies often use names similar to licensed firms to create confusion. Use the website provided by the Division of Insurance Agent & Agency Services to check the authorization status of insurance companies. If a company is not listed on the website or does not have the appropriate authorization type, it is not authorized to conduct insurance business in Florida. Remember, it is your responsibility to conduct due diligence and protect yourself from unauthorized insurers.
Surplus Lines insurers are unauthorized insurers that have been made eligible by the Office of Insurance Regulation (OIR) to write certain property and casualty insurance business not covered by admitted/authorized insurers. Surplus Lines – Federally Authorized insurers do not file an application with the OIR and are not subject to the same financial reviews. As a result, individuals insured by these unauthorized insurers do not have the same protections as those insured by admitted/authorized insurers. Always check the authorization status and understand the risks before purchasing insurance.
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Look out for the use of trade associations, unions or affinity groups
When it comes to identifying unauthorized insurers in Florida, it is crucial to be vigilant for the use of trade associations, unions, or affinity groups. This is because such groups are often employed by bogus health plans to create an illusion of legitimacy and exclusivity. Consumers may be led to believe that they must join these organizations to be eligible for coverage, which is a deceptive tactic.
To protect yourself and your clients, it is essential to thoroughly verify any insurance company before engaging with them. This includes confirming that the company is listed and authorized to conduct the specific line of business in question. The website https://companysearch.myfloridacfo.gov is a valuable resource for this purpose, providing a list of insurance companies authorized to operate in Florida. If a company is not listed on this website, it should be considered unauthorized.
One common tactic used by unauthorized insurers is to choose names similar to legitimate, licensed companies to confuse potential victims. Therefore, it is crucial to verify that you have the correct and complete name of the insurance company before conducting any business with them. The simple act of verifying the company's name and authorization status can help identify unauthorized insurers and protect yourself from becoming a victim of fraud.
Additionally, be cautious of impressive sales materials and fabricated letters of legitimacy. Unauthorized insurers may use sophisticated marketing tactics, including letters purportedly from regulators, to mislead consumers. If you encounter an insurer claiming to offer a "Multiple Employer Welfare Arrangement" (MEWA), be aware that while legitimate, MEWAs must be licensed by the state, and only a small number are. Marketers may also claim exemption from state regulation, which is a significant red flag.
By following these guidelines and remaining vigilant for the use of trade associations, unions, or affinity groups, you can better identify unauthorized insurers in Florida and protect yourself and your clients from potential harm. Remember, it is always better to verify before you sell.
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Understand the difference between Surplus Lines and Federally Authorized insurers
In Florida, unauthorized insurers are identified by agents who are encouraged to verify an insurance company's license before selling. They can do this by checking the website that lists authorized insurers involved in insurance business in Florida. If the insurer is not listed on the website, they are not authorized.
Surplus lines insurance is a type of insurance that covers financial hazards that are often considered nonstandard risks by conventional insurers. Surplus lines insurance can be purchased by individuals or companies and is often more expensive than regular insurance. This is because surplus lines insurance covers risks that are greater or less common, and therefore conventional insurers are reluctant to take them on due to a lack of historical data to price policies effectively. Surplus lines insurers are subject to different regulations from those that govern admitted or standard carriers. They are also often based outside of the United States.
Federally Authorized insurers are a type of surplus lines insurer. They do not file an application with the Office of Insurance Regulation (OIR) and do not provide detailed background information on their officers, directors, or shareholders. They are also not subject to a financial review by the OIR prior to conducting business in Florida. A person insured by a Federally Authorized insurer does not have the protection of the Florida Insurance Guaranty Act.
Surplus lines insurers, on the other hand, are eligible to write certain property and casualty insurance business not written by an admitted/authorized insurer. They must file an application with the OIR, providing detailed background information and are subject to a financial review. Surplus lines insurers do not have the protection of the Florida Insurance Guaranty Act either.
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Frequently asked questions
A Surplus Lines insurer is an unauthorized insurer that is eligible to write certain property and casualty insurance business that is not written by an admitted/authorized insurer.
A Surplus Lines insurer that has been made eligible by OIR files an application with the office, provides detailed background information on its officers/directors/certain shareholders, and is subject to a financial review as part of the application process. On the other hand, a Surplus Lines – Federally Authorized insurer does not file an application with OIR and does not provide detailed background information on its officers/directors/certain shareholders. It is also not subject to a financial review by OIR prior to conducting business in Florida.
One warning sign is the use of trade associations, unions, or affinity groups that a consumer must join to be eligible for coverage.
Another warning sign is the use of the phrase "Multiple Employer Welfare Arrangement" (MEWA). While MEWAs can be legitimate, they must be licensed by the state, and not many are.
Make sure that you have the correct and complete name as some scams will use names similar to licensed companies to create confusion.
