Additional Florida Statutes, Rules and Regulations — practice questions

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Surplus lines, chapter 440 workers' compensation, motor vehicle financial responsibility, flood, fraud and the federal backstops — about 10 of the 160 scored questions. The smallest domain on the exam, and almost every item is a hard number you either know or you do not.

Where people lose points

• Still teaching diligent effort. Chapter 2025-145, Laws of Florida struck the diligent-effort and declination condition out of s. 626.916, F.S. What survives are the rate, form, deductible and signed-disclosure conditions — the disclosure warning the insured that surplus lines policyholders are not protected by the Florida Insurance Guaranty Act and that surplus lines rates and forms are not approved by any Florida regulator. The premium tax is still 4.94% of gross premium under s. 626.932, F.S.
• Running the workers' compensation deadlines together. The employee has 30 days to advise the employer (s. 440.185(1), F.S.); the employer then has 7 days to report to its carrier (s. 440.185(2)); and the carrier must pay the first installment or deny by the 14th day after the employer is notified (s. 440.20(2)(a)). A workers' compensation policy cannot be canceled until 30 days after notice to the department and the employer (s. 440.42(3)).
• Paying the first week of disability. Section 440.12(1), F.S. withholds compensation for the first 7 days of disability — medical benefits under s. 440.13 are payable from the outset — and that week is paid retroactively only if the disability lasts more than 21 days. Temporary total disability is 66⅔% of the average weekly wage, capped by the printed statute at 104 weeks.
• Using the 20% public adjuster cap after a hurricane. Section 626.854(11)(b), F.S. caps compensation at 10% of claim payments for claims based on events subject to the Governor's state-of-emergency declaration, for claims made during the year after that declaration; 20% is the cap for everything else. The insured may cancel the contract within 10 days of signing — or, for an emergency-declared event, the longer of 30 days after the date of loss or 10 days after signing.
• Grading insurance fraud by the amount demanded. Section 817.234(11), F.S. grades by the value of the property involved: less than $20,000 is a third-degree felony, $20,000 to less than $100,000 is second degree, and $100,000 or more is first degree.

Questions and answers, explained

All 9 questions above, with the correct answer and why it is correct. Everything here is on additional florida statutes, rules and regulations.

1. In 2026 a surplus lines agent places a commercial client's unusual manufacturing exposure with an eligible surplus lines insurer. Which statement correctly describes what Florida law requires of the agent in connection with that placement?

   • AShe must document rejections from at least three authorized insurers currently writing this type of coverage before the risk may be exported
   • BShe must obtain advance written approval of the placement from the Office of Insurance Regulation before binding
   • CShe must obtain the insured's signed or documented acknowledgment of the statutory surplus lines disclosureCorrect
   • DShe must verify that the exported premium rate is lower than the rate in actual and current use by a majority of authorized insurers

   Why: Section 626.916(1)(d), F.S., conditions export on the insured having signed or otherwise provided documented acknowledgment of a disclosure in substantially this form: 'You are agreeing to place coverage in the surplus lines market. Coverage may be available in the admitted market. Persons insured by surplus lines carriers are not protected under the Florida Insurance Guaranty Act with respect to any right of recovery for the obligation of an insolvent unlicensed insurer. Additionally, surplus lines insurers' policy rates and forms are not approved by any Florida regulatory agency.' Option A is the trap, and it is the single most common error in outdated study material: until 2025 s. 626.914, F.S., defined 'diligent effort' as seeking coverage from and being rejected by at least three authorized insurers currently writing the coverage, and s. 626.916, F.S., made that documented search a condition of export. HB 1549, signed in June 2025, repealed the definition and removed the requirement, so there is no longer any market-search prerequisite to exporting a Florida risk. Option D inverts s. 626.916(1)(a): the exported rate must NOT be lower than the rate in actual and current use by a majority of authorized insurers for the same coverage on a similar risk. OIR makes surplus lines insurers eligible; it does not pre-approve individual placements, which disposes of B.

   Reference s. 626.916(1), F.S. (diligent effort repealed by HB 1549, 2025)

2. An insurer that writes covered residential property policies in Florida asks whether it can decline to participate in the Florida Hurricane Catastrophe Fund in order to reduce its costs. What should the agent explain?

   • AParticipation is voluntary, and most insurers decline because private reinsurance is cheaper
   • BParticipation is mandatory, and the insurer must select a reimbursement level of 45, 75, or 90 percentCorrect
   • CParticipation is mandatory, but every participating insurer is reimbursed at 100 percent
   • DParticipation is required only of insurers that write windstorm coverage in Citizens

   Why: Section 215.555, F.S., creates the Florida Hurricane Catastrophe Fund as a state trust fund under the direction and control of the State Board of Administration, and makes participation a condition of doing business in Florida for every insurer writing covered residential property policies. Each participating insurer signs a reimbursement contract and elects a reimbursement level of 45, 75, or 90 percent, with all members of an insurer group required to elect the same percentage. The fund is financed by actuarially indicated reimbursement premiums and, if those prove insufficient, by emergency assessments on most property and casualty premiums written in the state, with workers' compensation and medical malpractice excluded. Because the fund provides mandatory, comparatively low-cost reinsurance capacity, C overstates it — no participating insurer is reimbursed at 100 percent.

   Reference s. 215.555, F.S.

3. Before exporting a risk, a surplus lines agent must confirm the unauthorized insurer has been made an eligible surplus lines insurer. Which requirement does s. 626.918, F.S., impose on that insurer?

   • AIt must hold a Florida certificate of authority and file its rates and forms for prior approval
   • BIt must keep surplus as to policyholders of at least $15 million and be authorized at home for 3 yearsCorrect
   • CIt must keep surplus as to policyholders of at least $4 million and be domiciled inside the United States
   • DIt must belong to the Florida Insurance Guaranty Association and join the Hurricane Catastrophe Fund

   Why: Section 626.918(2), F.S., sets the eligibility conditions the Office applies. Under (2)(a) the insurer must currently be an authorized insurer in the state or country of its domicile for the kinds of insurance to be placed, and must have been so authorized for not less than the 3 years next preceding, although the Office may waive the 3-year test if the insurer offers a product not readily available to Florida consumers or has operated successfully for at least 1 year with capital and surplus of not less than $25 million. Under (2)(c)1.a. the insurer must have and maintain surplus as to policyholders of not less than $15 million, and an alien insurer must additionally maintain a United States trust fund of not less than $5.4 million. Option A is the classic trap: an eligible surplus lines insurer is by definition unauthorized in Florida, and its rates and forms are not approved by any Florida regulatory agency. Option D reverses the whole point of the surplus lines market, since s. 626.916(1)(d) requires the insured to acknowledge that surplus lines policyholders are not protected by the Florida Insurance Guaranty Association.

   Reference s. 626.918(2), F.S.

4. A warehouse employee injures his shoulder lifting a pallet on Monday morning. Under ch. 440, F.S., what are the two reporting deadlines that follow the accident?

   • AThe employee has 7 days to tell the employer; the employer has 30 days to report to its carrier
   • BThe employee has 60 days to tell the employer; the employer has 14 days to report to its carrier
   • CThe employee has 30 days to tell the employer; the employer has 7 days to report to its carrierCorrect
   • DThe employee has 90 days to tell the employer; the employer has 21 days to report to its carrier

   Why: Section 440.185(1), F.S., bars a claim unless the employee advises the employer of the injury within 30 days after the date of, or the initial manifestation of, the injury, subject to limited excuses such as the employer already having actual knowledge or the condition being an occupational disease. Section 440.185(2) then gives the employer 7 days after actual knowledge of the injury or death to report it to its carrier. Option B is the near-miss a half-prepared candidate falls for because 14 days is genuinely in this chain, but under s. 440.185(4) it is the carrier's deadline to file the required injury information with the department, measured from the employer's receipt of the form reporting the injury, not the employer's deadline to notify the carrier. Where the employer sits on the form, those two dates diverge. A fourth number completes the chain: s. 440.185(3) gives the carrier 3 business days after the employer or the employee informs it of an injury to send the injured worker a department-approved informational brochure. Nothing in the section uses 21, 60, or 90 days for either of the two steps asked about.

   Reference s. 440.185(1), (2) and (4), F.S.

5. An injured worker with no catastrophic injury is placed on a no-work status by the authorized physician. Under the text of s. 440.15(2)(a), F.S., what is the temporary total disability benefit rate and its maximum number of weeks?

   • A80 percent of the average weekly wage, payable for a maximum of 260 weeks of temporary disability
   • B66 2/3 percent of the average weekly wage, payable for a maximum of 104 weeks of temporary disabilityCorrect
   • C50 percent of the average weekly wage, payable for a maximum of 156 weeks of temporary disability
   • D100 percent of the average weekly wage, payable for a maximum of 52 weeks of temporary disability

   Why: Section 440.15(2)(a), F.S., pays 66 2/3 or 66.67 percent of the average weekly wage during a disability that is total in character but temporary in quality, not to exceed 104 weeks. Once the worker reaches either the 104-week maximum or the date of maximum medical improvement, whichever comes first, temporary disability benefits cease and the permanent impairment rating is determined. Option A is the strongest distractor because both of its numbers are real. Eighty percent appears in the statute twice over: s. 440.15(2)(b) pays an enhanced 80 percent rate to a worker who has lost an arm, leg, hand or foot, has been rendered paraplegic, paraparetic, quadriplegic or quadriparetic, or has lost the sight of both eyes, and that enhancement runs no more than 6 months from the accident; and the temporary partial formula in s. 440.15(4) uses 80 percent of the difference between 80 percent of the average weekly wage and post-injury earnings, capped at the 66 2/3 percent rate. Neither figure fits this non-catastrophic worker, so option A fails on its rate. Know one thing beyond the printed text. The 260 weeks in option A is a judicially live number: in Westphal v. City of St. Petersburg, 194 So. 3d 311 (Fla. 2016), the Florida Supreme Court held the 104-week cap unconstitutional as applied, under the access-to-courts guarantee of art. I, s. 21, Fla. Const., to a worker who is still totally disabled when the 104 weeks run out and has not yet reached maximum medical improvement. The remedy was revival of the pre-1994 limit of 260 weeks, and the Legislature has never amended s. 440.15(2)(a) to conform. The exam tests the statute as written, which is why this item asks for the statutory figure, but in the field 260 weeks controls the Westphal fact pattern.

   Reference s. 440.15(2)(a) and (b), F.S.; Westphal v. City of St. Petersburg, 194 So. 3d 311 (Fla. 2016)

6. An employee is injured on the job. A post-accident test confirms an unlawfully used controlled substance, and the employer maintains a qualified drug-free workplace program. What is the effect on the claim?

   • ABenefits remain payable in full, because Florida workers' compensation is a purely no-fault system
   • BA presumption arises that the drug caused the injury, and compensation may be deniedCorrect
   • CBenefits are reduced by 25 percent but can never be denied outright on a positive test
   • DThe claim becomes compensable only after the employee finishes an approved rehabilitation program

   Why: Section 440.09(3), F.S., states that compensation is not payable if the injury was occasioned primarily by the intoxication of the employee or by the influence of a drug unlawfully used. Section 440.09(7) supplies the evidentiary shortcut: a positive confirmed drug test, or a blood alcohol level at or above the level in s. 316.193, raises a presumption that the injury was occasioned primarily by that intoxication or drug influence, and refusal to submit to testing raises the same presumption. Where the employer has implemented a drug-free workplace program under s. 440.102, the employee can rebut the presumption only with evidence that there is no reasonable hypothesis that the intoxication or drug influence contributed to the injury; without such a program the burden is clear and convincing evidence that it did not contribute. Option A is the tempting one because the system is indeed no-fault as to ordinary negligence, but ch. 440 preserves express conduct defenses, including intoxication, unlawful drug use, willful intent to injure oneself or another, and certain horseplay.

   Reference ss. 440.09(3) and (7), F.S.; s. 440.102, F.S.

7. A Florida corporation with a four-vehicle fleet wants to prove financial responsibility without buying a primary liability policy. What does s. 324.031, F.S., require of it?

   • AAn audited financial statement showing a net worth of at least $500,000, filed with the department
   • BA recorded mortgage on Florida real property with equity of at least $50,000 for each vehicle
   • CAn irrevocable letter of credit from a Florida bank equal to $10,000 for each vehicle it owns
   • DA deposit of $30,000 per vehicle up to $120,000, plus excess coverage of 125/250/50Correct

   Why: Section 324.031, F.S., gives an owner three ways to prove financial responsibility: satisfactory evidence of a motor vehicle liability policy as defined in ss. 324.021(8) and 324.151; a certificate of self-insurance showing a deposit of cash under s. 324.161; or a certificate of self-insurance issued by the department under s. 324.171. The statute then adds a specific rule for any person other than a natural person, including a corporation, that elects the deposit method: it must furnish a certificate of deposit equal to the number of vehicles owned times $30,000, to a maximum of $120,000, and it must in addition maintain excess insurance above 10/20/10 or a $30,000 combined single limit, with minimum excess limits of $125,000/$250,000/$50,000 or $300,000 combined single limits. Option A is the tempting one because self-insurance really is available to a well-capitalized fleet owner, but it comes through a department-issued certificate under s. 324.171, not by simply filing a net-worth statement, and no dollar net-worth figure appears in s. 324.031.

   Reference s. 324.031, F.S.

8. Settling a first-party partial loss, an adjuster reduces the estimate because the replacement tire is better than the worn tire it replaces. What does Florida's motor vehicle claim settlement rule require?

   • AThe reduction must be itemized and specific in the file, and explained in writing on requestCorrect
   • BBetterment deductions are barred outright on first-party motor vehicle physical damage claims
   • CBetterment may be taken only if the insured agrees in writing before the repairs are authorized
   • DBetterment must be capped at 25 percent of the replacement cost of the part being installed

   Why: Section 626.9743(6), F.S., permits betterment and depreciation deductions but conditions them on documentation: when the amount offered in settlement reflects a reduction for betterment or depreciation, the information pertaining to the reduction must be maintained with the insurer's claim file, the deductions must be itemized and specific as to dollar amount and accurately reflect the value assigned, and the basis for any deduction must be explained to the claimant in writing if requested, with a copy kept in the file. Option B is the near-miss because the section reads as consumer protection and a candidate expects a prohibition, but the rule regulates the deduction rather than banning it. The same section also bars an insurer from requiring replacement parts that are not at least equivalent in kind and quality to the damaged parts in fit, appearance and performance, requires that a copy of the written estimate be supplied to the insured on a partial loss, and allows sales tax on a total loss to be deferred until the claimant actually incurs it.

   Reference s. 626.9743(6), F.S.

9. An agency owner wants to hire an applicant who was previously convicted of a felony involving breach of trust. What does federal law require before that person may work in insurance?

   • ANothing; only Florida s. 626.611 governs whether the agency may employ this applicant
   • BThe hire is barred for life, because no waiver exists for a felony involving breach of trust
   • CHe may not engage in the business of insurance without the insurance regulator's written consentCorrect
   • DHe may keep working in insurance while a written-consent request is pending with the regulator

   Why: Under 18 U.S.C. s. 1033(e)(1), a person who has been convicted of any criminal felony involving dishonesty or a breach of trust, or of an offense under s. 1033 itself, commits a federal crime by willfully engaging in the business of insurance whose activities affect interstate commerce, and it is a separate crime for any person to willfully permit such a prohibited person to participate. Section 1033(e)(2) allows the prohibited person to apply to the appropriate state insurance regulator for written consent, commonly called a 1033 waiver, so option B overstates the bar: it is a consent requirement, not a lifetime ban. Option D is the sharpest distractor because it gets the waiver mechanism right and the timing wrong; the person may not participate in the business of insurance while the consent request is pending. Section 1034 gives the United States Attorney General civil enforcement authority with civil penalties, and imprisonment of up to 5 years is available under s. 1033(e). Florida's own character and fitness grounds in ss. 626.611 and 626.621 operate in addition to the federal bar, not instead of it.

   Reference 18 U.S.C. ss. 1033(e) and 1034

Topics inside this domain

• Citizens eligibility and the 20 percent rule

Drill other domains

• Types of Property Policies (14%)
• Property Insurance Terms and Related Concepts (9.5%)
• Property Policy Provisions and Contract Law (8%)
• Types of Casualty Policies, Bonds, and Related Terms (15%)
• Casualty Insurance Terms and Related Concepts (9.5%)
• Casualty Policy Provisions (8%)

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