Florida 214 (book summary definitions ) FLORIDA INSURANCE LAWS (unit 18 & 19) / 100% VERIFIED
Solicitation - CORRECT ANSWER - Each insurer shall maintain at its home office or principal office a
complete file containing one copy of each document authorized by the insurer. Such file shall contain
one copy of each authorized form for a period of 3 years following the date of its last authorized use
An agent shall inform the prospective purchaser, prior to commencing a life insurance sales presentation
that he or she is acting as a life insurance agent and shall inform the prospective purchaser of the full
name of the insurance company which the agent is representing
Agents that solicit and sell life insurance products are regulated by the Chief Financial Officer through
the power of the Florida Insurance Code. It is stated in the Insurance Code that no life insurance agent
shall ever refer to themselves as or attempt to represent to a prospect that he or she is a "financial
planner", "financial consultant", "financial counseling" or "financial advisor"
Any reference to policy dividends must include a statement that dividends are not guaranteed
If a replacement policy is proposed by any insurer to a prospective purchaser which would be issued in
any rating class other than the most favorable rating class for a person of the same age and gender as
the prospective purchaser, the replacing insurer shall provide to the prospective purchaser any
disclosure and rate comparison required by law in insurance replacement transactions
Replacement - CORRECT ANSWER - - Any transaction in which new life insurance is to be purchased, and
it is known or should be known to the proposing agent or to the proposing insurer that by reason of
such transaction, existing life insurance has been or is to be:
Lapsed, forfeited, surrendered, 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;
,Amended so as to effect either a reduction in benefits or in the term for which coverage would
otherwise remain in force or for which benefits would be paid;
Reissued with any reduction in cash value; or
Pledged as collateral or subjected to borrowing, whether in a single loan or under a schedule of
borrowing over a period of time, for amounts in aggregate exceeding twenty-five percent (25%) of the
loan value set forth in the policy.
Agent's Duties Regarding Replacement of Life Insurance - CORRECT ANSWER - At the time of application,
or sooner, the agent must present the applicant with a "Notice to Applicant Regarding Replacement of
Life Insurance," and must be signed by both the agent and applicant.
The applicant keeps this notice for personal records
Agent must leave copies of all sales proposals with the applicant
Agent must submit to the replacing insurer a completed copy of the "Notice to Applicant Regarding
Replacement of Life Insurance," as well as a copy of all sales proposals given to the applicant
Churning - CORRECT ANSWER - `- The practice whereby policy values in an existing life insurance policy
or annuity contract, including, but not limited to, cash, loan values, or dividend values, and in any riders
to that policy or contract, are directly or indirectly used to purchase another insurance policy or annuity
contract with that same insurer for the purpose of earning additional premiums, fees, commissions, or
other compensation:
without an objectively reasonable basis for believing that the replacement or extraction will result in an
actual and demonstrable benefit to the policyholder;
, in a fashion that is fraudulent, deceptive, or otherwise misleading or that involves a deceptive omission;
when the applicant is not informed that the policy values including cash values, dividends, and other
assets of the existing policy or contract will be reduced, forfeited, or used in the purchase of the
replacing or additional policy or contract, if this is the case; or
without informing the applicant that the replacing or additional policy or contract will not be a paid-up
policy or that additional premiums will be due, if this is the case.
Florida Viatical Settlement Act - CORRECT ANSWER - Regulates viatical settlement contracts and
providers and prohibits any future viatical settlement licenses to be issued after 2005.
As a result, only licensed life insurance agents may offer or attempt to negotiate on behalf of another
individual in a viatical settlement contract.
Incontestable Clause - CORRECT ANSWER - -During a life insurance policy's contestable period, if an
insurer finds that fraud or misrepresentation has occurred, they may demand the policy be returned and
any premiums paid by the policyowner be refunded.
A life insurance policy may only be contested within its first 2 years, starting on its inception date.
Once this period has passed, an insurer cannot contest the policy's validity, even if fraud or
misrepresentation did actually occur.
Suicide Clause - CORRECT ANSWER - In the event the insured commits suicide after the policy becomes
incontestable, policy proceeds are paid to the named beneficiary of the policy.
However, if the insured commits suicide before the policy's contestable period ends, the beneficiary will
not be paid the face amount of the insurance policy, but rather only premiums paid into the contract
itself.
