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In This Issue:
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March
2007
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LEGISLATIVE AND REGULATORY REPORT
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NAIFA Analysis of Proposed FY 08 Federal Budget --
Impact on Members
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Legislative Day On The Hill March 12-13, You Are
Needed
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Idearaiser -- Prior to DOH Luncheon
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DFS NO LONGER MAILING 90-DAY CE REMINDER
LETTERS TO AGENTS
Over the past five years, the DFS has used advances in technology
to keep agents informed of various requirements and deadlines
affecting their licensure status. The Agent Education Database was
designed to allow licensees to track their continuing education
requirements, verify their continuing education status, view the
courses they have completed, and search for continuing education
and pre-licensing courses. Additionally, the database is designed to
remind licensees of their continuing education requirement 90 days
prior to their due date. Licensees can customize the online
reminders and increase the frequency of online notifications. Log
on to www.agents-florida.com, click on My Profile under For
Agents and Adjusters, and then log on to the website. In the past,
the department also mailed a 90-day continuing education reminder
letter to licensees.
Due to the online notification system, the department will no
longer mail the 90-day continuing education reminder letter. If
you have questions regarding this change in procedure call the
Bureau of Licensing at 850-413-3137.
FAIFA is contacting the DFS to determine if agents may elect to
continue obtaining a standard U.S. Postal Service letter at their
option. Some agents change e-mail addresses or have not fully
automated their offices to date, and may miss these reminders. We
will keep members informed of our progress.
2007 FLORIDA LEGISLATURE CONVENES MARCH 6
The 2007 Florida Legislature will convene on Tuesday, March 6, 2007. We have a
lot of business to attend to and so it is vitally important that
you participate in every way you can and make your support visible
and vocal in helping FAIFA address issues that are important to
you.
FAIFA needs you to be on the look-out for requests to call, visit,
or write your local legislators or to come and testify, if need be,
on legislation which directly impacts you or our industry whether
in a good way or a bad way.
Each week during Session we will send you, by e-mail only, the
FAIFA Session Dispatch newsletter tracking the progress of FAIFA
issues and initiatives. We will provide you with weblinks to
legislation and other important information throughout the session
so that you can have the resources you need to follow the issues
and participate in the broader debate. Please do your part and
read the weekly Session Dispatch so that you can stay informed on
fast-developing changes relating to insurance issues.
Also, we need to make an impressive showing at FAIFA Legislative
Day On The Hill, March
12-13, 2007, in Tallahassee so please come
and get an even better understanding of the legislative process and
the very important role that you play in ensuring FAIFA has success
with its initiatives. For registration information, see the form
located in this issue of FAIFA Advisor.
2007 LEGISLATIVE SESSION FORECAST
The 2007 Legislative Session will be a busy one for agent-related
and financial advisor-related issues. We are fighting potential
filing of legislation to reduce the pre-licensing education hours
for life insurance agentsour top priority! Already, numerous new
bills which provide for costly mandated benefits have been
pre-filed.
Mandate legislation relating to health insurance is being proposed
for: the Human Pamplona Virus (HPV) vaccine, HMO subscriber direct
access to physical therapists, a pilot small business rebate
program, and others. From previous sessions, several repeat bills
creating mandated benefits have also been pre-filed relating to:
autism, cystic fibrosis, study of craniofacial anomalies, infant
eye examinations, prostate cancer screening, and mental health
parity, among others.
Last month, I mentioned that the sunset of personal injury
protection (PIP) auto insurance is imminent. This means that the
Legislature will allow current law, which provides for Floridas
no-fault automobile insurance system, to expire if it does not
reenact the law. If it does not reenact the law, Florida could
return to a fault-based automobile insurance system. I am sure that
you recognize this will be a very closely-followed issue since it
impacts a large segment of consumers, the insurance industry, the
medical-health care industry, and the legal community. I am
concerned about the current level of PIP fraud, but dont want auto
accident costs to fall on admitted market health insurers, further
increasing health insurance rates.
A bill has been filed, which would require voter approval, amending
the State Constitution creating a new Department of Insurance and
making the Insurance Commissioner an elected member of the Florida
Cabinet. Currently, the Insurance Commissioner is appointed by the
Governor and Cabinet and serves under the Financial Services
Commission.
Other issues that I expect will receive consideration during the
upcoming Session include: consumer identity theft protections,
additional requirements for nonresident title insurance agents,
and, of course, issues relating to property insurance.
FLOOD INSURANCE TRAINING FOR INSURANCE AGENTS
The DFS has announced a new training requirement for all
Florida-licensed insurance agents selling flood insurance through
the National Flood Insurance Program (NFIP). ALL FLORIDA LICENSED
INSURANCE AGENTS WHO CURRENTLY SELL OR MAY SELL FLOOD INSURANCE
THROUGH THE NFIP MUST COMPLETE A ONE-TIME TRAINING COURSE ABOUT THE
NFIP.
This requirement was adopted by the United States Congress in
Section 207 of the Flood Insurance Reform Act of 2004. The Federal
Emergency Management Agency (FEMA), which administers the NFIP in
cooperation with state insurance regulators, has developed a flood
insurance training requirement which is designed to ensure that
insurance agents selling flood insurance through the NFIP are
properly trained and educated about the program.
FEMAs flood insurance training program has been approved by the
Floridas DFS for three hours of continuing education credit. These
three hours are not required in addition to the normal number of
credit hours required for each agent.
This course is available as an online course at http://training.nfipstat.com/portal2/site_map.asp.
From this page, first click register. After registering, login,
and then proceed to the Basic Agent Training course. The failure
to comply with this flood insurance training requirement may
jeopardize an insurance agents authority to write flood insurance
through the NFIP. Insurance agents can obtain more information
about the NFIP by visiting http://www.fema.gov/business/nfip/qanda.shtm.
If you have questions regarding this training requirement, contact
the Bureau of Licensing at (850) 413-3137.
LEGISLATION CREATING LIMITED LICENSE FOR TRAVEL PROTECTION
INSURANCE PASSES OUT OF HOUSE INSURANCE COMMITTEE
The Florida House of Representatives Committee on Insurance passed
legislation which provides for a limited license to transact
business relating to selling travel protection insurance. The bill
authorizes the DFS to issue a limited license to qualified
entities for the purpose of transacting travel protection
insurance. A significant amount of this insurance is already sold
in the marketplace.
FAIFA views this legislation as narrowly tailored and does not
result in competition for our life and health member agents selling
similar products. The bill combines the limited travel protection
license with the limited personal accident license. It makes
individuals and entities eligible to receive a personal accident
license eligible to receive a travel protection insurance license.
Additionally, timeshare developers, exchange companies, timeshare
managing entities, sellers of travel, and their subsidiaries or
affiliates are eligible to receive a travel protection insurance
license.
Travel protection insurance covers losses such as accidental death
and dismemberment; travel cancellations, interruptions, or delays;
and emergency health-related expenses incurred while traveling. The
travel protection insurance policy or certificate would be issued
for a term longer than 60 days, but each policy or certificate
would be limited to coverage for travel or use of accommodations of
no longer than 60 days. The bill exempts the timeshare and seller of
travel entities (and their subsidiaries or affiliates) from
fingerprint requirements and requires employee initial training
from a qualified general lines agent or an authorized insurer.
BROWARD INSURANCE AGENT SUSPENDED CFO IMPOSES RESTITUTION OF
MORE THAN $100,000
CFO Alex Sink has suspended the license of a South Florida
insurance agent for twisting and misrepresenting the terms and
conditions of life insurance and annuity products, scheming
customers out of thousands of investment dollars. He is now
required to pay over $100,000 in restitution to those consumers.
Following an investigation, the DFS filed administrative charges
against Shawn Roberts, 47, of Plantation, alleging that he placed
his clients into life insurance and annuity products which were
unsuitable for them, given their risk tolerance and investment
objectives.
Misrepresentation of insurance and annuity products may include not
only misrepresenting the terms and conditions of a product or
transaction, but also failing to disclose material information
about those products or transactions. Investigators say that
Roberts did both, which resulted in hundreds of thousands of
dollars in losses to consumers, including surrender charges or
other penalties. Roberts, in turn, generated nearly $73,000 in
commissions from the sale of the products.
In lieu of an administrative hearing, Roberts agreed to a
settlement involving suspension and restitution to consumers.
Roberts' insurance license and appointments have been suspended for
nine months, and he has agreed to pay eight consumers restitution
totaling in excess of $107,000. Additionally, Roberts must pay an
administrative fine in the amount of $2,500 to help defray the
Department's costs associated with the investigation.
GENERAL MILLIGAN IS NEW INSURANCE CONSUMER ADVOCATE
General and former State Comptroller Bob Milligan is Floridas new
Insurance Consumer Advocate. General Milligan will formally assume
his new role in time for the Legislative Session, starting March 6, 2007.
General Milligan was elected Florida's Comptroller from 1994 until
2002. He served in the U.S. Marine Corps for 35 years, rising to
the rank of lieutenant general (3 stars). While a member of the
Florida Cabinet, General Milligan helped create the current
position of Chief Financial Officer.
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As a member
of FAIFA, your voice is needed in Tallahassee! Your professional
association needs as many members as possible to attend the annual
FAIFA Legislative Day On The Hill, March 12-13, 2007 in
Tallahassee. FAIFA members from across Florida will come together
to visit their legislators to discuss various bills which impact
you and your insurance clients in Florida.
FAIFA is the ONLY voice for those who sell life and health
insurance, annuities, and financial products and services. FAIFA's
voice is heard before the Florida House, Senate, Department of
Financial Services, and the Governor's office. Insurance is
regulated at the State level, so your membership and involvement
are critical to the sales environment of insurance and financial
products.
Imagine if FAIFA didn't exist. A new 6% state tax on your
commissions would be the very least of your concerns if there
wasn't a voice representing you to keep lawmakers and regulators at
bay.
Each year, hundreds of bills which impact you and your clients are
introduced before the Florida legislature. Legislators want our
input -- the input of agents and advisors. Without it they are more
likely to vote against us.
Other reasons you need to attend FAIFA Legislative Day On The Hill
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--- Be more successful in your business by understanding how
insurance laws and regulations come about.
--- Become more valuable to your clients by knowing new Florida
laws and pending legislation.
--- Take your networking to another level by establishing
relationships with Florida legislators (House and Senate) who have
influence with others. (You will visit your legislators in group
fashion with other FAIFA members from your community.)
--- There's no better way to become familiar with the political
process and gain understanding as to how insurance laws are passed
than by visiting the Florida Capital during the Legislative
Session.
--- Your voice is needed to ensure your clients are not harmed by
legislation which is not in their best interest.
FAIFA Legislative Day on the Hill begins on March 12th at 11:30 a.m. with an
oritentation luncheon where you'll be given easy-to-use talking
points by FAIFA Lobbyist Tim Meenan. Following the luncheon, team
up with other members from your area and visit (in group fashion)
legislators in their Capitol offices. That evening at 5:30, go to the new Captol's
22nd floor observation gallery for an informal cocktail reception
with legislators, aides, and officials from the Department of
Financial Services (DFS). Finish legislator appointments on
Tuesday, March 13th.
Sorry, FAIFA Legislative Day on the Hill particiaption is limited
to FAIFA members only (except evening reception).
Register now by downloading and completing the attached
registration form. Or register online at www.faifa.org. See you in
Tallahassee March 12-13.
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(A message from FAIFA CEO Sharon
Heierman, CAE)
FAIFA will host its first-ever Idearaiser prior to the Day on the
Hill Luncheon on Monday, March 12, 2007 from 11:00 to 11:30 a.m. at
the Tallahassee-Leon County Civic Center. This will be YOUR
opportunity to help ensure FAIFA's future agenda will be driven by
innovative ideas and what our members really want and need. What is
it that you wish we could or should do for you?
On Tuesday,
March 13, 2007, the day following FAIFA's
Legislative Day On The Hill, your FAIFA Board of Directors will
chart a bold new future and direction for FAIFA at our Strategic
Planning Session. We need your innovative ideas and suggestions!
If you cant attend "Idearaiser" prior to the Day on the
Hill luncheon, visit the FAIFA website at www.faifa.org to find out
more and to share your innovative ideas and suggestions. Or send us
an email to ideas@faifa.org.
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(by Jill Edwards, NAIFA Director of Federal
Relations)
On February 5th, President Bush released his revenue proposals for
the Fiscal Year 2008. After a preliminary analysis of the budget,
following is a summary of the proposals which would impact NAIFA
members. Please keep in mind that these recommendations are only
proposals and it remains unclear which of these proposals, if any,
that Congress will latch on to and attempt to pass. However, we
must be proactive to keep many of the proposals at bay: such as the
LSA (Lifetime Savings Account), RSA (Retirement Savings Account),
ERSA (Employer Retirement Savings Account) savings vehicles and
permanent repeal of the estate tax. We are still early in this
process for the 110th Congress but stay tuned for future calls to
action.
Tax reform:
--- The budget proposes to make permanent certain temporary tax
relief measures enacted in 2003 and 2001 including: the reductions
in the capital gains and dividend tax rates for individuals;
increased expensing for small businesses; and all 2001 tax relief
measures that were set to expire at the end of 2010. Among the 2001
tax relief measures that would be made permanent are lower ordinary
income tax rates for individuals, an increased child tax credit,
and partial marriage penalty relief.
--- As mentioned in his State of the Union address, the President
seeks to address what he characterizes as a "bias" in the
tax code in favor of individuals who get health insurance from
their employers. The budget proposes a change in the way money
spent on health insurance is taxed. In place of the present
unlimited exclusion for employer-sponsored health insurance
premiums, there will be a new deduction for the purchase of health
insurance for everyone who has purchased at least catastrophic
health coverage. The deduction will be $7,500 for individual
coverage and $15,000 for family coverage starting in 2009. And the
full deduction would apply regardless of how much money the
taxpayer spends on health insurance.
--- A one year extension of the alternative minimum tax (AMT)
relief is proposed, increasing the AMT exemption amounts for
individuals, married taxpayers, estates and trusts through the 2007
tax year.
Estate tax:
--- The budget proposes to make permanent the estate tax relief
that is set to expire at the end of 2010. That estate tax relief
measure includes the repeal of the estate tax that is scheduled to
occur in 2010.
Retirement savings issues:
--- The budget proposes to replace the various types of Individual
Retirement Accounts (IRAs) with Lifetime Savings Accounts (LSAs)
and Retirement Savings Accounts (RSAs) that will have simpler
eligibility and withdrawal restrictions than those for IRAs. For
example, regardless of age or income, individuals could make annual
nondeductible contributions of $2000 to an LSA and $5000 to an RSA.
--- Simplification of employer-based retirement savings accounts is
proposed, consolidating 401(k), SIMPLE 401(k), 403(b) and 457 plans
among others, into Employee Retirement Savings Accounts (ERSAs)
that would be available to all employers and subject to a more
simplified set of rules.
--- The budget accounts for the estimated impact of the President's
earlier proposal to allow workers to use a portion of their social
security taxes to fund voluntary private retirement accounts. Under
the President's proposal, beginning in 2012 workers can use up to
four percent of their social security taxable earnings, with a
maximum $1300 annual limit, to fund their private retirement
accounts; the $1300 cap will be increased by $100 each year through
2017.
--- The budget proposes to extend permanently tax-free withdrawals
from IRAs for charitable purposes.
Health savings accounts:
--- The budget also includes proposals to expand and make HSAs more
flexible. Specifically, the proposal calls for:
--- Plans with 50 percent coinsurance would qualify as HDHPs
--- For HSA purposes, include as qualified medical expenses any
medical expense incurred on or after the first day of HSA
eligibility in a year
--- Allow larger employer contributions for the chronically ill
--- Allow family coverage to include coverage where each individual
in the family can receive benefits once they have reached the
minimum deductible for an individual HDHP
--- If both spouses are eligible individuals, allow both spouses to
contribute the catch-up contribution to a single HSA owned by one
spouse.
Association health plans:
--- The President re-proposes the establishment of association
health plans that would allow small employers, civic groups, and
community organizations to band together to negotiate lower-priced
coverage for their employees, members, and their families.
Health insurance generally:
--- The budget proposes to allow the purchase of health insurance
across state lines, reintroducing this element of a plan previously
proposed by the President to restructure health insurance markets.
--- The budget notes that the President has directed the Secretary
of Health and Human Services to work with Congress and the states
on an gAffordable Choicesh initiative that would subsidize the
purchase of private health insurance for low-income individuals.
The budget further notes that this reform would be state-based and
federal budget neutral, with redirected institutional payments
providing the source for the subsidies.
--- The budget contains a proposal to align military health care
premiums and copayments for retirees under 65 years of age with
general health insurance plans. FY 2008 Budget (Department of
Defense) at 48.
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Maximize Efficiency and Minimize Stress
The first key to maximizing efficiency and minimizing stress is to
create a perfect day. Ask yourself:
--- When am I most energetic, happy and enthusiastic? Am I a
morning person or an afternoon person?
--- How long do my appointments take?
--- How many people can I see per day and efficiently process into
my system?
--- When do I want to be home at night?
Answering these questions allows us to see people when we are at
out best, when we want to see them, where we want to see them and
how many times we want to and can see in a day.
(From MDRT's Great Sales Ideas)
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FLORIDA ASSOCIATION OF INSURANCE AND FINANCIAL
ADVISORS
1836 Hermitage Boulevard, Suite 200 * Tallahassee, FL 32308 *
E-mail: ashley@faifa.org
Phone (850) 422-1701 * FAX (850) 422-2762 FAIFA FAIFA Website
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