Consumer Protection, Replacement and Unfair Trade Practices (Florida)
Replacement
A replacement occurs whenever a new life policy or annuity is bought and an existing policy is lapsed, surrendered, converted, reduced or used to fund the purchase. The agent must present and read the Notice Regarding Replacement, obtain the applicant's signature, list every policy being replaced, leave a copy with the applicant, and submit it with the application. The insurer then notifies the existing insurer, which may send conservation material to the policyholder. Replacement policies carry an extended free look so the client can reconsider. Annuity replacements must also satisfy best-interest and suitability standards.
Unfair trade practices
Know the list: misrepresentation, false advertising, twisting, churning, rebating and illegal inducement, defamation, boycott, coercion or intimidation, unfair discrimination, transactions with unauthorized insurers, commingling funds, failure to remit premiums, and unfair claim settlement practices - failing to acknowledge a claim promptly, failing to state the reason for denial, or offering substantially less than the amount owed.
Consumer protection machinery
DFS's Division of Consumer Services is the complaint intake point for Florida policyholders. Insurance fraud is investigated by the Division of Investigative and Forensic Services, with an anti-fraud reward and limited immunity for good-faith reporting. Florida's bad-faith remedy generally requires a Civil Remedy Notice filed with DFS at least 60 days before litigation. Privacy obligations arise under HIPAA and the Gramm-Leach-Bliley Act, and Florida's telemarketing and do-not-call rules apply to sales calls.
Trap: rebating is prohibited in Florida even when the client asks for it, and twisting requires a misrepresentation that actually induces the lapse - do not confuse it with churning.