Florida Licensing and Agent Conduct for the 2-14
24% of the exam 2 min
The common Florida law behind 20 of the 85 scored questions on the 2-14: who can get the license, licensed versus appointed, continuing education, premium money, rebating, solicitation hours, unfair trade practice fines and the guaranty association.
Getting the 2-14
An applicant must be at least 18, a bona fide Florida resident, and a U.S. citizen or a legal alien with federal work authorization, and must not hold a resident license in another state (s. 626.731, F.S.). Before licensing, a life agent applicant needs 30 hours of approved coursework in life insurance, annuities and variable contracts within the previous 4 years, 3 of them on ethics (s. 626.7851, F.S.). That is half the 2-15's course, because the 2-14 leaves out health.
Licensed is not enough: appointments
No one may act as an agent unless licensed and appointed by an appropriate appointing entity (s. 626.112, F.S.). Knowingly transacting insurance without a license, or helping someone who does, is a third-degree felony (s. 626.112(10), F.S.). The appointing entity files the renewal in the agent's birth month and every 24 months after that (s. 626.381(1), F.S.).
Continuing education
Every two years an agent completes a 4-hour update course for a license held plus 20 elective hours, 24 in all. After 6 years licensed the electives drop to 16 (20 in all), and after 25 years with a CLU, CPCU or qualifying degree to 6 (10 in all) (s. 626.2815, F.S.).
Premium money, rebating and contact hours
Premiums an agent collects are trust funds held as a fiduciary: they may not be mixed with the agent's own money, and payment records must be kept at least 3 years (s. 626.561, F.S.). Rebating is legal in Florida only under five conditions, including a rebating schedule filed with the insurer and applied the same way to everyone in the same actuarial class (s. 626.572, F.S.). An agent may not start a sales call in person or by phone before 8 a.m. or after 9 p.m. the prospect's local time unless the prospect asked for it (s. 626.621(17), F.S.).
Fines and the guaranty association
Most unfair trade practices carry fines up to $12,500 per nonwillful and $100,000 per willful violation. Twisting and churning are first-degree misdemeanors with administrative fines up to $12,500 nonwillful and $187,500 willful (s. 626.9521, F.S.). If a life insurer fails, the Florida guaranty association covers up to $100,000 in life cash values, $250,000 in deferred annuity values and $300,000 in other benefits (s. 631.717(12), F.S.), and an agent may never use the association to induce a sale (s. 631.735, F.S.).
Where people lose points
✗ "Every willful unfair trade practice can be fined $187,500."
✓ The general willful maximum is $100,000; $187,500 is for twisting, churning and fraudulent signatures.
✗ "The 2-14 needs the same 60-hour course as the 2-15."
✓ The 2-14 needs 30 hours in life, annuities and variable contracts, 3 of them on ethics.
✗ "A license lets you sell for any insurer."
✓ You need an appointment from each insurer or agency you write for.
✗ "Mentioning the guaranty association reassures clients and is good practice."
✓ It may never be used in advertising or solicitation to induce a purchase.
Numbers to memorize
| 2-14 prelicensing course | 30 hours of approved coursework in life insurance, annuities and variable contracts, 3 hours on ethics, within the 4 years before the application (s. 626.7851, F.S.) |
| Minimum age and residency for licensure | At least 18, bona fide Florida resident, U.S. citizen or legal alien with federal work authorization (s. 626.731, F.S.); must not hold a resident license in another state |
| Transacting insurance without a license | Knowingly transacting insurance, or aiding an unlicensed person, is a felony of the third degree (s. 626.112(10), F.S.) |
| Appointment renewal | Renewal request filed by the appointing entity in the appointee's birth month (natural persons), and every 24 months thereafter (s. 626.381(1), F.S.) |
| Continuing education — standard | 4-hour update course specific to a license held + 20 elective hours every 2 years = 24 hours (s. 626.2815, F.S.) |
| CE after 6 or more years licensed | 4-hour update + 16 electives = 20 hours (s. 626.2815, F.S.) |
| CE after 25 or more years licensed with CLU, CPCU or qualifying degree | 4-hour update + 6 electives = 10 hours (s. 626.2815, F.S.) |
| Premium trust funds | Trust funds received in a fiduciary capacity; no commingling; preserve records of premium payments at least 3 years after payment (s. 626.561(1)–(2), F.S.) |
| Premium diversion — criminal tiers | $300 or less: 1st-degree misdemeanor; more than $300 but less than $20,000: 3rd-degree felony; $20,000 or more but less than $100,000: 2nd-degree felony; $100,000 or more: 1st-degree felony (s. 626.561(3), F.S.) |
| Rebating — the five conditions | Available to all insureds in the same actuarial class; per a rebating schedule filed with the issuing insurer; applied uniformly by policy and amount; not given where the insurer prohibits agent rebating; schedule prominently displayed in public view with a free copy on request (s. 626.572, F.S.) |
| Lawful solicitation hours | No in-person or telephone solicitation after 9 p.m. or before 8 a.m. local time of the prospective customer, unless the prospective customer requested it (s. 626.621(17), F.S.) |
| Reporting a felony plea or conviction | Within 30 days; failure is a discretionary ground (s. 626.621(10), F.S.) |
| Unfair trade practice fines (general) | Up to $12,500 per nonwillful and $100,000 per willful violation; aggregate $50,000 nonwillful and $500,000 willful for violations arising out of the same action (s. 626.9521(2), F.S.) |
| Twisting or churning penalty | 1st-degree misdemeanor; administrative fine up to $12,500 nonwillful, up to $187,500 willful if fraudulent; aggregate $125,000 / $625,000 for the same action (s. 626.9521(3)(a) and (3)(d), F.S.) |
| Guaranty association — life insurance | $100,000 in net cash surrender and net cash withdrawal values (s. 631.717(12)(a), F.S.) |
| Guaranty association — deferred annuity | $250,000 in net cash surrender and net cash withdrawal values (s. 631.717(12)(b), F.S.) |
| Guaranty association — all other benefits | $300,000 including cash values (s. 631.717(12)(c), F.S.); the association may never be used in advertising or solicitation to induce a purchase (s. 631.735, F.S.) |
Test yourself
No answers here on purpose — retrieving them is the practice. Drill this domain if any of these stall you.
- What must be true before a licensed agent can transact insurance for an insurer?
- How many CE hours does an agent owe every two years in the first 6 years?
- What is the willful fine maximum for twisting, and for unfair trade practices in general?
- Between what hours may an agent start an unrequested sales call?
- What are the guaranty association limits for life cash values and deferred annuities?