Opening An Auto Insurance Agency In Florida: A Guide

Opening an auto insurance agency in Florida requires careful planning and knowledge of the state's insurance laws and regulations. Florida has unique challenges in the insurance sector, including high costs, frequent natural catastrophes, and a litigation-friendly environment, which can make it a tough market to enter. However, with strong growth potential and the ever-present demand for insurance products and services, it can also be an attractive venture for aspiring entrepreneurs. Before opening an auto insurance agency in Florida, it is crucial to understand the legal and procedural requirements to ensure compliance and maintain a successful business.

Register the name of your insurance agency

When opening an auto insurance agency in Florida, registering your business name is the first step you need to take. This is done by registering with the Florida Department of State's (DOS) Division of Corporations. During the filing, you will also be required to disclose your agency's business structure.

Florida laws prevent business owners from using certain terms to avoid misleading the public. For insurance agencies, you are prohibited from choosing any word or term that implies that your business is:

• An insurance company
• A hospital service plan
• A federal or state agency
• A charitable institution
• An entity that provides advice or counsel rather than selling insurance
• An entity that engages in insurance activities not permitted under the licenses held

You also cannot apply for names that are too similar to those of already registered insurers or agencies. The use of the words Medicare and Medicaid is also prohibited.

Once you have registered your business name, you need to apply for an Employer Identification Number (EIN) with the Internal Revenue Service (IRS). You must also register with the Florida Department of Revenue to access the department's three main programs: general tax administration, property tax oversight, and child support.

Meet the licensing requirements

To meet the licensing requirements for opening an auto insurance agency in Florida, you must:

Register your agency's name:

When opening any type of business in Florida, the first step is to register its name with the Florida Department of State's (DOS) Division of Corporations. Florida laws prevent business owners from using certain terms to avoid misleading the public. For insurance agencies, you cannot choose a name that implies your business is an insurance company, a hospital service plan, a federal or state agency, a charitable institution, an entity that provides advice or counsel, or an entity that engages in insurance activities not permitted under the licenses held. You cannot use the words Medicare and Medicaid, and your chosen name cannot be too similar to those of already registered insurers or agencies.

Apply for an Employer Identification Number (EIN):

After registering your business name, you need to apply for an EIN with the Internal Revenue Service (IRS).

Obtain the necessary licenses:

All Florida businesses involved in selling insurance products and services must have the proper licenses to operate legally. You will need a 21-05 insurance agency license, which is required for all resident and non-resident insurance agencies operating in Florida. You can apply for the necessary licenses through the MyProfile portal on the Florida Department of Financial Services' (FLDFS) website.

Appoint an agent-in-charge:

All insurance agencies are required to designate an agent-in-charge, who must be licensed in the line of business the agency specializes in. If you plan to sell insurance policies in multiple lines, your agent-in-charge must hold licenses in all those lines.

Submit fingerprints:

The FLDFS requires insurance agencies to submit fingerprints for all officers and members involved in the management and control of the business, including the senior vice president and limited liability company (LLC) members. Licensed insurance agents, including the agent-in-charge, are exempt from this requirement. The fingerprinting fee costs $50.75 per person, paid directly to the vendor.

Display your insurance agency license:

Once your insurance agency license is approved, you must display it prominently and in a manner that makes it clearly visible to any customer or potential customer who enters your agency. Failure to comply may result in disciplinary action. Unlike insurance agent licenses, which must be renewed every two years, agency licenses remain valid as long as your business has a designated agent-in-charge. Without one, your Florida insurance agency license will expire after 90 days.

Apply for a certificate of authority:

If your insurance agency is incorporated in another state, you will need to apply for a certificate of authority in Florida to register your business as a foreign entity. The fees and requirements differ depending on your business structure. The FLDFS provides a checklist of the required documents and instructions for submission to the Florida DOS Division of Corporations.

Comply with naming restrictions:

Florida law prevents you from naming your agency anything that would be misleading or deceptive. The name chosen should not imply that the agency is an insurance company, governmental agency, or any other national or state organization.

Additional requirements for insurance agents:

If you plan to work as an insurance agent, you must meet specific eligibility requirements, including being at least 18 years old, a resident of Florida, and a United States citizen or legal alien with work authorization. You cannot possess a resident license from any other state, and you must complete certain education prerequisites and pass the relevant Florida Insurance License Exam(s).

Appoint an agent-in-charge

When opening an auto insurance agency in Florida, it is necessary to appoint an agent-in-charge. This professional is responsible for supervising insurance sales transactions and must be licensed in the line of business the agency specializes in. If the agency sells policies across multiple lines, the agent-in-charge must hold licenses in all those lines.

The Florida Department of Financial Services (FLDFS) outlines the following steps to appoint an agent-in-charge:

Check licensing requirements: The agent-in-charge must possess the appropriate licenses for the types of insurance the agency will be selling. These could include:

• Health and life, including variable annuity
• Life, including variable annuity

• Designate the agent-in-charge: When applying for an agency license, designate the agent-in-charge for each location of the agency. This can be done through the agency's MyProfile account.
• Understand responsibilities and accountability: The agent-in-charge is responsible for supervising all individuals within an insurance agency location and is accountable for any misconduct or violations of the Florida Insurance Code committed by the agency or agents under their supervision.
• Ensure presence during insurance sales: If there are multiple locations, the same agent-in-charge can be designated for each, but they must be present whenever an insurance sales transaction is conducted.
• Notify of any changes: If there is a change in the agent-in-charge, the agency must notify the Florida Department of Financial Services within 30 days through the agency's MyProfile account.

It is important to carefully select and appoint a qualified agent-in-charge as they play a crucial role in ensuring compliance with Florida's insurance laws and regulations.

Submit fingerprints for senior leadership

To open an auto insurance agency in Florida, you'll need to submit fingerprints for your insurance agency's senior leadership. Here's a detailed, step-by-step guide on how to do this:

Understand the Requirement:

Florida law mandates that insurance agencies submit fingerprints for specific individuals within their senior leadership. This is a crucial part of the licensing process and ensures a comprehensive background check.

Identify the Individuals:

Not all members of your insurance agency need to submit fingerprints. The requirement applies to officers and members who will be involved in the management and control of the business. This typically includes the following positions:

• Senior vice-president
• Limited Liability Company (LLC) members
• President
• Secretary
• Treasurer

Choose a Submission Method:

The Florida Department of Financial Services (FLDFS) offers two methods for submitting fingerprints:

• LiveScan: This electronic submission method is faster and more convenient. You need to register with IdentoGO, a designated fingerprint vendor, and visit one of their locations to submit your fingerprints electronically.
• Fingerprint Cards: If there isn't a LiveScan location nearby, you can opt to submit fingerprint cards by mail. This method may take longer for processing.

Register and Pay the Fee:

Regardless of the submission method, you must register with IdentoGO and pay the fingerprinting fee. The cost is $50.75 per person, plus any applicable local Florida county sales tax. This fee is paid directly to the vendor, IdentoGO.

Submit Fingerprints:

For LiveScan submissions, visit the designated IdentoGO location at your scheduled appointment time. They will electronically capture your fingerprints and submit them to the Florida Department of Law Enforcement.

For Fingerprint Cards submissions, you will receive a fingerprinting packet from IdentoGO after registration and payment. This packet will include instructions and fingerprint cards with a pre-printed label. You must have your fingerprints taken by a technician within a law enforcement agency or an entity approved by the Florida Department of Financial Services. Once completed, mail the fingerprint cards to the address provided by IdentoGO.

Await Processing and Results:

After submitting your fingerprints, the Florida Department of Law Enforcement will conduct a criminal history background check. The results will be submitted electronically to the Florida Department of Financial Services. You will be notified about the status of your application via email and your MyProfile account.

It is important to note that fingerprint results are only valid for a specific period. For applicants without a valid Florida Insurance Agent license, the results are valid for one year. For individuals with a valid license, the results remain valid for 48 months from the processing date.

Display your insurance agency license

Once you have obtained your insurance agency license, you must display it in your office. This is a legal requirement for all Florida insurance agencies. The license must be displayed prominently and clearly, so that any customer or potential customer who enters the premises can see it. The purpose of this is to provide consumers with the information they need to verify your license status before they make a financial decision. Failure to display your license may result in disciplinary action against your agency.

To obtain your license, you must first apply for it through the MyProfile portal on the Florida Department of Financial Services (FLDFS) website. You will need to create an account to log in and submit your application. Once your application has been approved, you can download a copy of your license for printing.

It is important to note that insurance agent licenses and agency licenses are different. Insurance agent licenses must be renewed every two years, whereas agency licenses are valid for as long as your business has a designated agent-in-charge. If you do not have a designated agent-in-charge, your agency license will expire after 90 days.

In addition to displaying your license, you must also comply with other legal requirements when operating an insurance agency in Florida. For example, you must designate a licensed agent-in-charge who holds the relevant licenses for the lines of insurance your business specializes in. You must also submit fingerprints for all officers and members of your agency who are involved in management and control, and you must notify the relevant authorities of any changes to your business information within 30 days.

Frequently asked questions