Florida Statutes, Rules and Regulations for the 2-15 Exam
33% of the exam
Florida law is 33% of the 2-15 exam — 13% common to all lines, 10% life and annuity, 10% health — the single largest block and the one national study guides get wrong most often. Seven cycles cover the regulators, licensing and CE, agent money duties, the unfair-practices list, mandatory vs discretionary discipline, and Florida's specific life, annuity and health contract rules.
Who regulates what: CFO, DFS, the Commission, OIR and OFR
Three bodies, three jobs. 1. The Department of Financial Services (DFS), headed by the elected Chief Financial Officer, licenses, appoints and disciplines PEOPLE — agents, agencies, adjusters. 2. The Financial Services Commission is the Governor, Attorney General, CFO and Commissioner of Agriculture acting together. Commission action is by majority vote consisting of at least three affirmative votes (s. 20.121(3), F.S.). 3. Two offices sit under the Commission. The Office of Insurance Regulation (OIR) regulates COMPANIES: certificates of authority, rates, policy forms, solvency, market conduct. The Office of Financial Regulation (OFR) regulates banks, credit unions, finance companies and securities — not insurance. Each office is headed by a director, appointed and removable by the Commission by at least three affirmative votes, with both the Governor and the CFO on the prevailing side (s. 20.121(3), F.S.). The OIR director is also known as the Commissioner of Insurance Regulation. Rule of thumb: people problems go to DFS, company problems go to OIR.
Insurer classifications and the guaranty association
Where a company was FORMED sets its label (s. 624.06, F.S.): - Domestic — formed under the laws of Florida. - Foreign — formed under the laws of another U.S. state, district, territory or commonwealth. - Alien — any insurer that is neither domestic nor foreign, i.e. formed outside the United States. Separately, AUTHORIZED (admitted) means the insurer holds a certificate of authority from OIR; unauthorized (non-admitted) does not. The two questions are independent: an alien insurer can be authorized in Florida. Ownership form: stock insurers are owned by stockholders and pay taxable dividends; mutual insurers are owned by policyowners and pay nontaxable dividends (a return of premium). Fraternal benefit societies are nonprofit lodge-system organizations that issue certificates (ch. 632, F.S.). If an admitted insurer fails, the Florida Life and Health Insurance Guaranty Association pays, but only up to caps set BY BENEFIT TYPE for any one life (s. 631.717(12), F.S.): - Life insurance — $100,000 in net cash surrender and net cash withdrawal values - Deferred annuity contracts — $250,000 in net cash surrender and net cash withdrawal values - All other benefits, including long-term care — $300,000 including cash values - Basic hospital, medical-surgical or major medical expense coverage — $500,000 An unauthorized insurer gets no guaranty protection at all. You may never use the association's existence to sell (s. 631.735, F.S.).
Getting licensed, appointed, and staying that way
Statutory qualifications (s. 626.731, F.S.): at least 18 years old, a bona fide Florida resident, and a U.S. citizen or legal alien with federal work authorization. DFS also requires that you not hold a resident license in another state. Education for the 2-15 line (DFS licensing requirements, prelicensing rules in ch. 69B-227, F.A.C.): a 60-hour approved insurance course in life and health including variable annuity, completed within four years of the application date. License vs appointment — you need BOTH: 1. A license is state permission to hold yourself out as an agent. 2. An appointment is an individual insurer's authorization to represent it. Knowingly transacting insurance without a license is a felony of the third degree (s. 626.112(10), F.S.). Appointments continue in force subject to a renewal request filed by the appointing entity in the appointee's birth month, and every 24 months thereafter (s. 626.381(1), F.S.). Continuing education (s. 626.2815, F.S.): a 4-hour update course specific to a license held, every 2 years, PLUS elective hours — 20 electives normally (24 total), reduced to 16 electives once licensed 6 or more years (20 total).
Premium money, controlled business, and lawful rebating
Every premium you touch is a trust fund received in a fiduciary capacity — it is not your money (s. 626.561(1), F.S.). Account for it and pay it to whoever is entitled in the regular course of business, and do not commingle. Records of premium payments must be preserved at least 3 years after payment (s. 626.561(2), F.S.). Diverting those funds is a crime, and the degree scales with the amount (s. 626.561(3), F.S.): - $300 or less → first-degree misdemeanor - more than $300 but less than $20,000 → third-degree felony - $20,000 or more but less than $100,000 → second-degree felony - $100,000 or more → first-degree felony Controlled business is insurance on yourself, your family, or firms you are associated with. It is a violation when commissions on controlled business exceed 50 percent of your aggregate commissions during any 12-month period (s. 626.730(3), F.S.). Rebating is not automatically illegal in Florida — but it is lawful only if EVERY one of the five conditions in s. 626.572, F.S. is met: same actuarial class, a schedule filed with the issuing insurer, uniform application, the insurer does not prohibit rebating, and the schedule is prominently displayed in public view.
The unfair methods of competition list
Section 626.9541(1), F.S. enumerates the prohibited practices. Learn each by its trigger: - (a) Misrepresentations and false advertising — false statements about benefits, dividends or an insurer's financial condition. - (c) Defamation — false or maliciously critical statements about a person or insurer. - (d) Boycott, coercion and intimidation — concerted acts tending toward unreasonable restraint of trade or monopoly. - (g) Unfair discrimination — different rates or terms within the same actuarial class. - (h) Unlawful rebates — inducements not specified in the contract. - (l) Twisting — knowingly misleading representations, incomplete or fraudulent comparisons, or fraudulent material omissions that induce a person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or convert a policy, or to take out a policy in another insurer. - (n) Free insurance prohibited — advertising or providing free insurance as an inducement to the purchase or sale of real or personal property or related services. - (o) Illegal dealings in premiums; excess charges for insurance. - (z) Sliding — charging for, or adding, ancillary coverage the consumer never knowingly consented to, or falsely saying it is required by law. - (aa) Churning — existing policy or annuity values used to buy another contract with that SAME insurer to earn additional premiums, fees or commissions. Twisting and churning carry an enhanced penalty: a first-degree misdemeanor, plus an administrative fine up to $12,500 per nonwillful violation and up to $187,500 per willful violation if fraudulent (s. 626.9521(3)(a), F.S.).
Discipline: 626.611 mandatory vs 626.621 discretionary
Two lists, one verb apart. Under s. 626.611, F.S. the department SHALL deny, suspend, revoke or refuse to renew or continue — it has no choice. Grounds include lack of qualifications (a), material misstatement or fraud in obtaining the license (b), willful misrepresentation of policies or annuity contracts (e), demonstrated lack of fitness or trustworthiness (g), fraudulent or dishonest practices (i), misappropriation or unlawful withholding of funds (j), unlawful rebating (k), controlled business (l), and disqualifying convictions (n). Under s. 626.621, F.S. the department MAY act in its discretion. Grounds include violating any code provision or lawful order (2)–(3), failure to pay over money belonging to an insurer (4), twisting (5), unfair competition or deceptive practice (6), failure to report a felony plea or conviction within 30 days (10), child-support noncompliance (13), and initiating in-person or telephone solicitation after 9 p.m. or before 8 a.m. local time of the prospective customer unless the customer requested it (17). General unfair-trade-practice fines: up to $12,500 per nonwillful violation and $100,000 per willful violation, capped in the aggregate at $50,000 nonwillful and $500,000 willful for violations arising out of the same action (s. 626.9521(2), F.S.). License discipline is separate from criminal exposure. The same conduct can trigger both — recall the premium-diversion tiers of s. 626.561(3), F.S.: $300 or less is a first-degree misdemeanor, more than $300 but less than $20,000 is a third-degree felony.
Florida contract provisions, replacement and best interest
Free look is the most-tested grid, and it changes by product: - Individual life — 14 days (s. 626.99(4)(a), F.S.) - Annuity — 21 days (s. 626.99(4)(b), F.S.) - Individual health — 10 days from delivery (Rule 69O-154.003, F.A.C.) - Medicare supplement — 30 days (s. 627.674(4)(d), F.S.) - Long-term care — 30 days after delivery (s. 627.9407(8), F.S.) Other core numbers: individual life grace period is not less than 30 days (s. 627.453, F.S.); incontestability is 2 years from date of issue (s. 627.455, F.S.); group life converts on application and first premium within 31 days after termination of eligibility, without evidence of insurability, though the group policy may exclude the option to elect term (s. 627.566, F.S.). Replacement of life insurance and annuities: the old agent-duty rules (69O-151.005 and .006) were REPEALED effective January 4, 2024. The operative duties now sit on the replacing insurer under Rule 69O-151.007, F.A.C., which requires the agent to submit a completed Form OIR-B2-312 with the application. Forms are adopted by Rule 69O-151.010, F.A.C. Do not confuse that with s. 627.4553, F.S., which is triggered only when the agent recommends surrender and does NOT recommend that the proceeds fund another annuity or life policy — a surrender-only disclosure, not a replacement rule. Every annuity recommendation must meet the best-interest standard of s. 627.4554, F.S. ("Suitability in annuity transactions") — the obligations of care, disclosure, conflict of interest and documentation (s. 627.4554(5)(a), F.S.). For a consumer age 65 or older, a surrender or deferred sales charge on a withdrawal may not exceed 10 percent of the amount withdrawn (s. 627.4554(9), F.S.).
Where people lose points
✗ Twisting and churning both move a client out of a policy, so the words get used interchangeably.
✓ Twisting is about the MISREPRESENTATION: knowingly misleading representations, incomplete or fraudulent comparisons, or fraudulent material omissions that induce a lapse, forfeiture, surrender, termination, retention, pledge, assignment, loan or conversion — s. 626.9541(1)(l), F.S. Churning is about the FUNDING SOURCE: values already inside the client's policy or annuity are used to buy another contract with that SAME insurer to generate new premiums, fees or commissions — s. 626.9541(1)(aa), F.S. Same insurer plus existing policy values equals churning, even if nothing false was said.
✗ Sliding sounds like high-pressure selling, so candidates mark it as coercion.
✓ Sliding, s. 626.9541(1)(z), F.S., is a deception aimed at one consumer's understanding: telling an applicant that a specific ancillary coverage or product is required by law when it is not, saying it is included at no additional charge when a charge is required, charging for it without informed consent, or binding a policy without the owner's prior informed consent. Coercion, s. 626.9541(1)(d), F.S., is a market offense: agreements or concerted action producing boycott, coercion or intimidation that tends toward unreasonable restraint of trade or monopoly. Sliding harms a customer; coercion distorts the market.
✗ Both s. 626.611 and s. 626.621 list misconduct and both can cost a license, so candidates guess between them.
✓ The verb decides it. 626.611 uses SHALL — mandatory action: lack of qualifications, fraud in obtaining the license, willful misrepresentation, lack of fitness or trustworthiness, misappropriating funds, unlawful rebating, controlled business, disqualifying convictions. 626.621 uses MAY — discretionary action: violating a code provision or lawful order, failure to pay over an insurer's money, twisting, unfair competition, not reporting a felony plea or conviction within 30 days, child-support noncompliance, soliciting outside 8 a.m.–9 p.m. If the stem asks whether the department MUST act, the answer lives in 626.611.
✗ Students treat 'the state of Florida' as one insurance regulator and send every complaint to the same place.
✓ DFS, headed by the elected CFO, regulates PEOPLE: licensing, appointment, continuing education and discipline of agents, agencies and adjusters. OIR, under the Financial Services Commission, regulates COMPANIES: certificates of authority, rates, policy forms, solvency, market conduct. OFR regulates banks, credit unions, finance companies and securities and touches no insurance at all. An unlicensed-agent complaint goes to DFS; a disputed rate or form filing goes to OIR; a securities question goes to OFR.
✗ Candidates memorize one free-look number for Florida and apply it to every product.
✓ There are five: individual life 14 days, annuity 21 days, individual health 10 days, Medicare supplement 30 days, long-term care 30 days. Identify the product before answering. Also keep free look separate from the grace period: free look is a return-and-refund right running from delivery of the contract, while the grace period (not less than 30 days on individual life, s. 627.453, F.S.) is extra time to pay an overdue premium during which coverage stays in force.
✗ Older courses and many websites still say Florida requires a 5-hour law and ethics update every two years.
✓ The update course was 5 hours under older law, but s. 626.2815, F.S. now requires a 4-hour update course specific to a license held; DFS enforces the 4-hour version for compliance cycles ending on or after 1/31/2022. Adding to the confusion, DFS still designates the life-and-health update course '5-215' — that is a course category code, not a number of hours. The remaining hours are electives: 20 normally (24 total), 16 once you have held the license 6 or more years (20 total).
✗ Candidates assume s. 627.4553, F.S. requires a surrender-disclosure form on every replacement.
✓ Read the trigger. s. 627.4553, F.S. applies only when the agent recommends surrender of an annuity or cash-value life policy AND does NOT recommend that the proceeds fund or purchase another annuity or life policy. In that surrender-only case the agent must, before the surrender executes, give written information on the estimated surrender charge, loss of minimum interest rate guarantees, possible tax consequences, any forfeited death benefit and other forfeited performance guarantees — and keep a copy plus the date it was provided. A true replacement is the opposite fact pattern: there s. 627.4553 does not apply, and you are in Rule 69O-151.007, F.A.C. (Form OIR-B2-312) plus the best-interest and documentation duties of s. 627.4554, F.S.
✗ Students memorize '$300,000' as the single guaranty association limit for any one life.
✓ There is no single number. s. 631.717(12), F.S. caps aggregate liability with respect to any one life by BENEFIT TYPE: life insurance, $100,000 in net cash surrender and net cash withdrawal values; deferred annuity contracts, $250,000 in net cash surrender and net cash withdrawal values; all other benefits, including long-term care, $300,000 including cash values; and basic hospital, medical-surgical or major medical expense coverage, $500,000. Match the product to its cap before you answer, and remember the association never covers an unauthorized insurer.
Numbers to memorize
| 2-15 prelicensing course | 60-hour approved insurance course in life and health including variable annuity, completed within 4 years of the application date (DFS 2-15 license requirements; prelicensing rules ch. 69B-227, F.A.C.) |
| 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 |
| 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.) |
| 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.) |
| Free look — individual life | Unconditional refund for at least 14 days (s. 626.99(4)(a), F.S.) |
| Free look — annuity | Unconditional refund for at least 21 days (s. 626.99(4)(b), F.S.) |
| Free look — individual health | 10 days from delivery; does not apply to single-premium nonrenewable or travel accident policies (Rule 69O-154.003, F.A.C.) |
| Free look — Medicare supplement | Prominently displayed no-loss cancellation clause: return within 30 days after receiving the policy or certificate, full refund of premium paid (s. 627.674(4)(d), F.S.) |
| Free look — long-term care | 30 days after delivery, premium refunded (s. 627.9407(8), F.S.) |
| Grace period — individual life | Not less than 30 days for any premium after the first; policy continues in force (s. 627.453, F.S.) |
| Incontestability — individual life | Incontestable after in force during the insured's lifetime for 2 years from date of issue (s. 627.455, F.S.) |
| Senior lapse secondary notice | Insured 64 or older and policy in force at least 1 year: at least 21 days notice before lapse to the policyowner, any designated secondary addressee and the agent of record (s. 627.4555, F.S.) |
| Group life conversion | Apply and pay the first premium within 31 days after termination of eligibility, without evidence of insurability; the group policy may exclude the option to elect term insurance (s. 627.566, F.S.) |
| Replacement — forms | Form OIR-B2-312, Notice to Applicant Regarding Replacement of Life Insurance (rev. 07/23), and Form OIR-B2-313, Comparative Information Form (rev. 07/23), adopted by Rule 69O-151.010, F.A.C. |
| Replacement — duties of the replacing insurer | Require the completed Form OIR-B2-312 from the agent with the application; send a copy to the existing insurer immediately upon receipt at its home or regional office; send Form OIR-B2-313 within 5 working days when requested; retain forms, sales proposals and a cross-indexed replacement register at least 3 years (Rule 69O-151.007, F.A.C.) |
| Repealed replacement rules | 69O-151.005 (Duties of Agent) and 69O-151.006 (Duties of Replacing Agent) repealed effective January 4, 2024 |
| Annuity best interest standard | Obligations of care, disclosure, conflict of interest and documentation (s. 627.4554(5)(a), F.S.) |
| Annuity surrender charge — consumer 65 or older | May not exceed 10% of the amount withdrawn (s. 627.4554(9), F.S.) |
| Recommendation to surrender (no replacement recommended) | Before the surrender executes, give written information on estimated surrender charge, loss of minimum interest rate guarantees, possible tax consequences, forfeited death benefit and other forfeited performance guarantees; keep a copy and the date provided (s. 627.4553, F.S.) |
| Controlled business limit | Commissions on controlled business exceeding 50% of aggregate commissions in any 12-month period (s. 626.730(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.) |
| Rebating — prohibited factors and record retention | Percentage may not be based on age, sex, place of residence, race, nationality, ethnic origin, marital status, occupation of the insured, or location of the risk; keep all rebate schedules and effective dates for the most recent 5 years (s. 626.572, 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.) |
| 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.) |
| 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.) |
| Fraudulent signature on an application | Willfully submitting a fraudulent signature is a felony of the third degree plus an administrative fine up to $187,500 per violation (s. 626.9521(3)(b), 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, including long-term care policies (s. 631.717(12)(c), F.S.) |
| Guaranty association — basic hospital, medical-surgical or major medical | $500,000 (s. 631.717(12)(d), F.S.); the association may never be used in advertising or solicitation to induce a purchase (s. 631.735, F.S.) |
| Medicare supplement open enrollment | 6-month period beginning with the first month the individual is 65 and enrolled in Medicare Part B; must also be offered to those under 65 eligible for Medicare by disability or ESRD; no medical or health-status underwriting or pricing during the window (s. 627.6741, F.S.) |
| Medicare supplement preexisting condition limit | No longer than 6 months, and no more restrictive than a condition for which advice or treatment was given within 6 months before the effective date (s. 627.6741(2)(b), F.S.) |
| Long-term care unintentional lapse protection | Insurer must notify the policyholder at least annually of the right to designate a secondary addressee; no cancellation for nonpayment without 30 days notice after the grace period, and notice may not be given until 30 days after a premium is due and unpaid (s. 627.94073, F.S.) |
| Long-term care reinstatement for cognitive impairment | Not less than 5 months after cancellation to demonstrate the nonpayment was unintentional and due to cognitive impairment, loss of functional capacity or continuous confinement (s. 627.94073, F.S.) |
| Small employer definition | Employed an average of at least 1 but not more than 50 employees on business days during the preceding calendar year; an annual 30-day open enrollment period must be offered (s. 627.6699, F.S.) |
| Eligible employee — small group | Works full time with a normal workweek of 25 or more hours (s. 627.6699, F.S.) |
| Florida KidCare / Healthy Kids | A child who has not reached 19 with family income at or below 300% of the federal poverty level is eligible (s. 409.814, F.S.); the Florida Healthy Kids Corporation is created as a not-for-profit corporation by s. 624.91, F.S. |
| HIV testing for insurance | Insurer must disclose its intent to test and obtain written informed consent; strict confidentiality of results; sexual orientation may not be used in underwriting or to determine who is tested (s. 627.429, F.S.) |
| Life proceeds and cash values vs creditors | Proceeds are exempt from the claims of the insured's creditors unless the policy or a valid assignment provides otherwise; if payable to the insured or the insured's estate they become part of the estate (s. 222.13, F.S.). Cash surrender values of life policies and proceeds of annuity contracts are exempt from legal process (s. 222.14, F.S.) |
| Effect of divorce on a beneficiary designation | A designation naming the decedent's former spouse is void as of the time the marriage was judicially dissolved or declared invalid, subject to statutory exceptions (s. 732.703, F.S.) |
| Reporting a felony plea or conviction | Within 30 days; failure is a discretionary ground (s. 626.621(10), 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.) |
Test yourself
No answers here on purpose — retrieving them is the practice. Drill this domain if any of these stall you.
- Name the four members of the Financial Services Commission, state how many affirmative votes are required for it to act, and say which two offices report to it.
- Define domestic, foreign and alien insurer, and explain how each differs from the separate question of whether an insurer is authorized or unauthorized in Florida.
- State the four guaranty association caps per life by benefit type, and say which one applies to a deferred annuity.
- Distinguish twisting, churning and sliding, and give the statutory citation for each.
- List four grounds under s. 626.611, F.S. and four under s. 626.621, F.S., and state which section requires the department to act.
- State the free-look period for individual life, annuity, individual health, Medicare supplement and long-term care, then explain how a free look differs from a grace period.
- Explain the five conditions that make a rebate lawful in Florida, the factors that may never determine the rebate percentage, and how long rebate schedules must be kept.
- Give the four criminal tiers for premium diversion by dollar amount, and state the CE requirement — update hours plus electives — for an agent licensed 3 years and for one licensed 10 years.
- A group life insured loses eligibility. Give the conversion deadline, the underwriting requirement, and the one product the group policy is permitted to exclude from the conversion options.
- Name the replacement form and the rule that adopts it, state which party Rule 69O-151.007, F.A.C. imposes duties on, and explain when s. 627.4553, F.S. applies and when it does not.
- Describe the Medicare supplement open enrollment period in Florida, who under age 65 must be offered a policy, the maximum preexisting-condition limitation, and whether health-status underwriting is permitted during that window.