Are You Properly Appointed? Florida DFS Announces New Rules!

Are You Properly Appointed? If Not, You Could Lose Your License!
Florida Department of Financial Services Tightens Appointment Rules

If you are a Florida-licensed adjuster, it is quite likely that you have never heard the word, and there is an even better than even chance that you don’t understand what it means, why it is important, or what to do about it if you find you are not properly appointed.

What’s an ‘appointment’? As defined by the DFS, an appointment is defined as:

"a formal work authorization made by an insurance company to the State.
It authorizes the agent to write business for that insurance company.”

[Source: DFS Website-Frequently Asked Questions/Agent & Adjuster General Licensing]

But what does an appointment mean to an adjuster?

DFS Rules do not answer the question; but generally speaking, an "adjuster" appointment can best be described as "a formal work authorization by an insurance company, adjusting firm, or independent adjuster to the State. It authorizes an adjuster to adjust claims for the appointing entity.

While appropriate licensure is an important first step in the job of adjusting, a proper appointment is may be even more critical than licensure, because, if not properly maintained, failure to properly appointed can jeopardize one’s licensure.

Unfortunately, the issue of appointment has never been clearly or routinely addressed by the DFS; nor have the issues of when and by whom an adjuster is appointed, if or when such an appointment is terminated, notification of lack of appointment, or notification of how to manage your appointments.

What is even worse, you can be "properly appointed” for years, and then suddenly find out that your license was terminated, or is in jeopardy of being terminated because your appointment is no longer valid, or that it was terminated years ago, and you never received any notice of termination.

How do I know? Because after more than 20 years of proper appointment, both I and your Association's Chairman suddenly, and quite by accident, found out that our own appointments had expired, without notice or reason, more than a year ago.  We were able to successfully reappointment ourselves without adverse consequences, but had we not found out about our lack of appointment, we could have lost our licenses without knowing it.

Unfortunately, the rule of appointment is not clearly stated anywhere in the law or administrative rules. The rule that is expressed, but not often communicated, is found in the DFS FAQ cited above as follows:

17. When does my license expire?
Licenses will expire if more than 48 months elapse without an appointment. Failure to complete continuing education may result in cancellation of appointment(s).

In Florida, an adjuster license never expires or will never be terminated unless:

• The adjuster goes unappointed for more than 4 years; or,
• An adjuster’s appointment is cancelled for not maintaining proper CE.

So if "appointment” is so critical to licensure, why is not more clearly explained in the rules? Why are licensees not notified if or when an appointment is terminated or is in jeopardy of expiration?

We have no answer to that question; but what we DO have is the latest DFS communique’ of December 22, 2012 regarding appointments; and as you can see, there are HUGE penalties attached for failure to properly maintain your appointment.  These rules take effect January 18th, 2012.  We strongly suggest you read them carefully.

If you have questions that cannot be answered in the DFS FAQ’s, ask your employer, or if you are an independent adjuster, we suggest you contact the DFS.

Here is the text of the DFS’ 12/22/2012 email:

Important Changes Regarding Appointments in Florida

Beginning on January 18, 2012 at 5 p.m. Eastern The Florida Department of Financial Services, Division of Agent and Agency Services, announces important changes regarding appointments in Florida and its eAppoint system that are expected to take place the evening of January 18, 2012. Below is a summary of those changes.

Appointment Renewals When a Licensee Has an Invalid Address
Starting after 5 p.m. EST on January 18, 2012, if a licensee/appointee has an invalid address on file with the Department, then no appointing entity will be able to renew the licensee's appointment. This process is already in place for initiating original appointments and will now be incorporated into the appointment renewal process. When the licensee updates their address(es) in their MyProfile account, then the licensee will be able to have their appointment(s) renewed. The addresses included in this process are email, home, business and mailing.

Late Fees for Late Original and Late Renewal Appointments
Starting after 5 p.m. EST on January 18, 2012, we will begin assessing appointing entities the statutory $250 late fee in addition to the statutory $60 appointment fee for each initial/original appointment submitted late. A late original appointment is any initial/original appointment that has a requested effective date more than 45 days before the submittal date.

For example, if on March 1, 2012, an appointing entity submits an initial/original appointment with an effective date of January 2, 2012 (more than 45 days from the submittal date) for a licensee, the appointing entity will be required to pay the $60 original appointment fee and the statutory $250 late fee. On the other hand, if on March 1, 2012, an appointing entity submits an initial/original appointment with an effective date of February 1, 2012 (less than 45 days from the submittal date), the appointing entity will pay only the $60 original appointment fee.

Additionally, we will begin assessing appointing entities the statutory $25 late fee in addition to the statutory $60 appointment fee for each appointment renewed late. A late renewal appointment is one that is paid after the renewal month.

The late fees must be paid by the appointing entity and cannot be charged back to the appointee.[See sections 624.501, 626.371, and 626.381, Florida Statutes]

Appointment Renewal Timeline and Notification Changes
Starting after 5 p.m. EST on January 18, 2012, we will begin sending an email notification to an appointing entity 90 days before an appointment is up for renewal, in addition to posting the renewal invoice in their eAppoint account, which will indicate any appointee with an invalid address. An insurance agency that has appointed a customer representative will receive a similar email notification at the same time. This serves as a reminder and provides the appointing entity time to make modifications to the list of appointments they will be renewing such as reminding any appointee with an invalid address to update it with the Department.

Another email notification will be sent to the appointing entity on the first day of the renewal month informing them that they can now access the appointment(s) that need to be renewed and make payment via eAppoint. Licensees that self-appoint will be sent a similar email notification at the same time. The renewal invoice will become available for payment on the first day of the renewal month and can be paid through the last day of the renewal month without late fees being assessed.

On the first day of the month following the expiration date of an appointment, an email notification will be sent to the appointing entity advising payment was not received, late fees have been assessed, and the invoice will continue to be available for 45 more days for payment, including late fees, otherwise the appointment will be cancelled. If the appointment is not renewed after this 45-day period, the appointment will be cancelled for non-renewal and an email notification will be sent to the appointing entity and the licensee notifying them of the appointment cancellation along with information on the process for reappointment and the late fee.

For example, if an appointment expiration date were March 31, 2012, the invoice would become available for payment on March 1, 2012, without late fees being assessed. On April 1, 2012, late fees are assessed at $25 per appointment and the invoice remains available for payment until May 15, 2012. On May 16, 2012, if payment has not been received, the appointment is cancelled.

If the appointing entity wishes to reinstate an appointment after it has been cancelled for non-renewal, and no lapse in appointment coverage is desired, the appointing entity will be required to process an initial/original appointment submission and enter the requested effective date. If the initial/original appointment's requested effective date is more than 45 days from the submittal date, then the statutory $250 late fee described above will be assessed.

**Note: Notice the "notification changes" cited in the last section of the following communique', re: email notification to appointing entities. This is the way it has been for a number of years. Unfortunately, the notifications to appointing entities seem to have stopped at some time during the past couple few years.

There is only one thing more to say on this subject:  "Forewarned is forearmed!"