FLORIDA ASSOCIATION OF INSURANCE AND FINANCIAL ADVISORS
FAIFA 2006 LEGISLATIVE AGENDA
1. Oppose decreasing the 40 hours pre-licensing requirement!
Senate Bill 2526 lowers the 40 hour pre-licensing educational requirement down to 20 hours for life insurance agent licensure. FAIFA strongly opposes decreasing the training for new agents that desire to sell complex life insurance products to Florida’s consumers. Almost half the states have a requirement of more than 20 hours for pre-licensing classroom education. Florida must not become a haven for those that seek to sell life insurance with substandard and inadequate training. Our large vulnerable senior citizen population must be protected from the unwitting purchase of unsuitable life insurance and annuities.
2. Support Long Term Care Insurance Partnership Incentives
House Bill 947 by Representative Legg, and Senate Bill 1924 by Senator Fasano, contain important language implementing Federal Legislation adopted in 2005 that allow states to adopt and implement the Long Term Care Partnership Program. FAIFA strong supports this legislation implementing incentives to purchase long term care insurance. This program allows purchasers of qualified long term care insurance policies to protect some or all of their assets from Medicaid’s “spend down” requirements when qualifying for Medicaid coverage for payment of long term care expenses. This legislation will provide a huge incentive for consumers to purchase long term care insurance as a means of protecting their assets later in life when long term care insurance benefits are ultimately exhausted and they are about to enter the Medicaid program. We oppose any amendments to require a standardized long term care policy as a part of this process, however. Insurers must maintain flexibility to offer innovative and differing products.
3. Fund the Florida Health Insurance Plan.
FAIFA supports funding the Florida Health Insurance Plan (“FHIP”) out of general revenue or a broad based funding mechanism. Only those that are uninsurable should be eligible for coverage. Premiums for FHIP participants should be as competitive as possible with private marketplace rates, and be based upon a scale that recognizes the participant’s ability to pay. The FHIP should only receive funding for deficits through a broad-based income source such as general revenue, and not from a tax or assessment placed only on health insurers in the admitted market. At a minimum, a tax or assessment on insurers must also extend to employee programs funded by self-insured employers under the provisions of ERISA. Agents should receive a fair commission for two years on business placed in the CHA.
4. Stop Investor Owned Life Insurance from proliferating in Florida.
Investor Owned Life Insurance (“IOLI”) is a program that allows out of state investors to participate in life insurance and annuity’s on the lives of Florida citizens, without having any other legitimate insurable interest on the person being insured. A small percentage of the proceeds go to a university affiliated charity, while investors reap annual annuity payments, and ultimately, a payout on permanent life insurance upon the death of the insured. President Bush has already proposed a 25 percent excise tax on these deals, paving the way for Congress to consider taxing other forms of life insurance. A small payment to a charity does not offset the potential risk to millions of widows, orphans, retiree’s and others that depend upon life insurance. FAIFA opposes these investor owned life insurance schemes, and other methods of subverting Florida’s insurable interest laws.
5. Oppose efforts to force direct writing agents to disclose their commissions.
Recent abuses uncovered at major national insurance brokers are opposed by FAIFA. However, the abuse by any insurance broker should not be used to support legislation placing burdensome regulations on agents. Legislators must understand the difference between a licensed broker (a designation that doesn’t exist in Florida) that only accepts compensation from the policyholder, and a licensed agent, that accepts commission from an insurer. Broad attempts to mandate commission disclosure beyond that proposed by the NAIC model act on producer compensation should be strongly opposed in Florida. We are willing to indicate generally that we are paid a commission, but will not agree to set forth what that commission is.
6. Oppose mandated coverage’s or providers.
FAIFA continues to oppose adding mandated benefits or mandated providers in the health insurance/HMO market. Rising costs of health insurance and increasing numbers of people choosing or being forced to go without health insurance coverage require that insurers and HMO’s be allowed to offer basic major medical coverage’s without requiring expensive mandated benefits. Mandated coverage’s in the admitted market raises the differential in cost between the admitted and the self insured ERISA market, where fewer protections for insured’s exist.
5. Allowing mandatory arbitration clauses in Life Insurance contracts
DFS is advocating legislation for the third session to ban mandatory arbitration clauses in life insurance contracts. FAIFA supports the current ability of insurers to resolve disputes with policyholders in the less costly and more expedient arbitration setting.
6. Personal Injury Protection (PIP) reform
The current statutory PIP scheme is scheduled to sunset. The Legislature is studying the issue of whether to repeal the current $10,000 minimum. In particular, they are trying to control fraud. Carriers are split on whether to repeal the law or reenact (and fix) it, while the trial bar, chiropractors, and doctors want to maintain the status quo. FAIFA opposes any resolution that would transfer these health care costs to the voluntary health insurance market, thereby increasing the cost of health insurance. FAIFA is neutral on whether Florida should reform and maintain PIP or switch to a mandatory bodily injury coverage system.
7. Homeowner's/Citizens/FIGA.
Major hurricanes during the past two years have caused the Legislature to undertake an overhaul of the property insurance market. Both the Citizen’s and the CAT fund are facing deficits. Citizen’s has also been plagued with management and operational issues. Several levels of assessment are possible in the homeowners market. According to a statement released on 2/1/06, Citizens Property Insurance Corporation notified the Legislature this week it is facing a deficit of more than $1.4 billion and, according to one media report, a "close to a 20 percent" statewide assessment later this year. Citizens also estimates it will quality for $399 million in recovery from the Florida Hurricane Catastrophe Fund, which might trigger or increase a Cat Fund deficit for 2005. FAIFA supports continuing consumer choice legislation, asking insurers to handle claims adjudication on behalf of Citizens and other reforms to bring stability to Florida’s homeowners insurance marketplace.
8. Eliminate Duplicative Agent Fingerprinting.
The Jessica Lunsford Act enacted in 2005 required fingerprint background screening for all contractors entering school grounds. This could be construed to apply to insurance agents and company personnel. The problem is that the application and accompanying fee must be done in each county school board where a contractor does business. There was no central information sharing provision in the original law. FAIFA supports an amendment to this Act to centralize the fingerprint check so that it does not need to be repeated by each county school board that a contractor does business with. Agents with fingerprints on file with one county or governmental entity should not be required to be fingerprinted again, for each governmental entity with which they do business.
9. Health Care Information and Transparency
Support legislation to improve data collection to assist consumers in purchasing decisions regarding health care quality, patient safety, and drug costs. This web-based information will assist health care purchasers in making informed decisions concerning health insurance and will be instrumental lowering the cost of health care coverage.
10. Oppose legislative or regulatory involvement in agent commission or contract issues.
FAIFA retains its long-held policy opposing government regulation or interference in agent commissions. Similarly, agents must maintain the unfettered free market ability to enter into contracts of their choosing with insurers and others. Governmental involvement in agents’ commissions or contracts could result in either increases, or decreases, to agent compensation and freedom.
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