The Florida Senate

626.988  Financial institutions; agents and solicitors prohibited from employment; exceptions.--

(1)  For the purpose of this section, the following definitions shall apply:

(a)  "Financial institution" means any bank, bank holding company, savings and loan association, savings and loan association holding company, or savings and loan association service corporation or any subsidiary, affiliate, or foundation of any of the foregoing. This definition shall not, however, include any financial institution which has been granted an exemption by the Board of Governors of the Federal Reserve System pursuant to s. 4(d) of the federal Bank Holding Company Act of 1956, as amended, or any financial institution which neither owns more than 10 percent of the capital stock, nor exercises effective control, of a bank, savings and loan association, or entity licensed under chapter 494 and licensed or authorized to transact business in this state. Specifically excluded from this definition is any bank which is located in a city having a population of less than 5,000 according to the last preceding census.

(b)  "Insurance agency activities" means the procurement of applications for, or the solicitation, negotiation, selling, effectuating, or servicing of, any policy or contract of insurance other than credit life insurance and credit disability insurance.

(c)  "Financial institution agency" means any person, firm, partnership, or corporate entity which is engaged in insurance agency activities, as herein defined, and is associated with, or owned, controlled, employed, or retained by, a financial institution as herein defined.

(2)  No insurance agent or solicitor licensed by the Department of Insurance under the provisions of this chapter who is associated with, under contract with, retained by, owned or controlled by, to any degree, directly or indirectly, or employed by, a financial institution shall engage in insurance agency activities as an employee, officer, director, agent, or associate of a financial institution agency.

(3)  Notwithstanding any other provision of this section, an insurance agent or solicitor licensed by the Department of Insurance under the provisions of this chapter who is affiliated with, under contract with, retained by, or owned or controlled directly or indirectly to any degree by, a bank holding company subsidiary or affiliate, which is not a bank, licensed and operating primarily under ss. 494.001-494.0077, may engage in insurance agency activities if permitted by the Board of Governors of the Federal Reserve System, but only to the extent that such activities are directly related to the extension of credit, specifically real estate mortgage loans made or brokered by licensees under ss. 494.001-494.0077, and only to the extent necessary to protect the real property which is subject to the mortgage loan against loss or damage. With respect only to residential property consisting of not more than four individual dwelling units, such agent or solicitor may offer a policy affording insurance on the primary residence, appurtenant structures, personal property, and personal liability, but excluding any insurance customarily written under an inland marine form. In addition, such agent may offer decreasing term life insurance on the life of the borrower not to exceed the amount and term of the mortgage.

(4)  The Department of Insurance shall not grant, renew, continue, or permit to exist any license as such agent or solicitor as to any applicant therefor or licensee thereunder if it finds that the license has been, is being, or will probably be used by the applicant or licensee for any purpose prohibited by this section.

(5)  Notwithstanding any provision of this section, the Department of Insurance shall permit the continued operation under the same ownership and control of all financial institution agencies which were in existence and engaged in insurance agency activities as of April 2, 1974. To make possible such continuation, the Department of Insurance may license agents and solicitors who are otherwise qualified, as successors to those agents and solicitors who are exempt from the provisions of this section and their successors, for so long as the specified financial institution agency continues to function as it was constituted on April 2, 1974. However, no agent or solicitor so licensed under this section shall be permitted to be employed, or controlled to any degree, directly or indirectly, by any financial institution agency except the particular agency for which he or she was so licensed as a successor for the purposes of this section.

(6)  This section shall not prevent an agent or solicitor from serving as an officer or director of a financial institution, provided he or she conducts all of his or her insurance activities free of ownership or control of the financial institution and provided further that the financial institution does not participate directly or indirectly in the earnings from his or her insurance activities.

(7)  This section shall not apply to agents or solicitors who were engaged as of April 2, 1974, in activities prohibited by this section and who have been continuously so engaged since that date, but this exemption applies only with respect to the specific type of license held and the financial institution with which the agent or solicitor was associated on said date.

(8)  In the event that a national bank is authorized, other than as authorized by 12 U.S.C. s. 92, to sell one or more types of annuities in Florida pursuant to federal law, then Florida chartered banks, savings and loan associations and savings banks, and federally chartered savings and loan associations and savings banks shall be authorized to sell the same type of annuities notwithstanding the provisions of this section; provided, however, that any such sales by any bank, savings bank, or savings and loan association shall be made in compliance with all other applicable requirements of the Florida Insurance Code and that such sales are made through a licensed resident agent. Nothing in this subsection is intended to grant national banks, federal savings and loan associations, or federal savings banks any power or authority in addition to those granted under federal law nor to provide that federal law supersedes this section. Nothing herein shall be construed to limit the Florida Comptroller's authority pursuant to chapters 655, 658, and 665. Prior to any financial institution employing or contracting with a licensed resident agent to sell annuities, the financial institution shall notify the Department of Insurance and shall obtain approval to sell annuities from the Department of Banking and Finance. The prohibition set forth in subsection (2) of this section shall apply with respect to any agent during any period in which any financial institution is enjoined from selling annuities in Florida with respect to its authority to do so under federal law or Florida statute. For the purposes of this subsection, "national bank" means a bank authorized and regulated pursuant to the National Bank Act, 12 U.S.C. ss. 21 et seq.

(9)  An insurance transaction not prohibited by this section shall be conducted only by a Florida-licensed insurance agent representing a Florida-authorized insurer or representing a Florida-eligible surplus lines insurer.

History.--s. 1, ch. 74-35; s. 1, ch. 77-174; s. 807, ch. 82-243; ss. 188, 206, 207, ch. 90-363; s. 59, ch. 91-245; s. 4, ch. 91-429; s. 4, ch. 96-168; s. 1728, ch. 97-102.