Providing Value-Added Products/Services in Florida

The Florida Legislature has amended the state’s insurance code on providing value-added products or services.

It is not considered unlawful discrimination or an unlawful rebate by the company or a broker to offer a value-added product or service at no or reduced cost when the product or service is not specified in the insurance policy, if the product or service relates to the insurance coverage and is primarily designed to do one or more of the following:

• Provide loss mitigation or loss control;
• Reduce claim or claim settlement costs;
• Provide education about reducing risk of loss to persons or property;
• Enhance health or financial wellness
• Provide post-loss services;
• Promote behavioral changes to improve the health or reduce the risk of death or disability; or
• Assist in the administration of employee or retiree benefit insurance coverage. 

Additionally, the cost of the value-added product or service must be reasonable in comparison to the customer’s premiums or insurance coverage and the producer must provide to the customer contact information to assist the customer with questions regarding the product or service.

The availability of the product or service must be based on documented objective evidence maintained by the producer and must be offered in a manner that is not unfairly discriminatory. If the producer has a good faith belief that the product or service meets the specified criteria, but does not have sufficient evidence to demonstrate it, the producer may provide the product or service as part of a pilot program for up to one year.

The producer must notify the Office of Insurance Regulation (OIR) or the Department of Financial Services (DFS) of the pilot program before commencing and may proceed with it unless the OIR or the DFS objects to the program within 21 days.

The company, broker or other representatives may not offer or provide insurance as an inducement to purchase another policy or otherwise use the words “free,” “no cost,” or similar words in an advertisement.

If you have a hierarchy of producers, you must share this e-mail with any producers who may not have received it.

If you have questions regarding this compliance update, please contact the Florida Office of Insurance Regulation at (850) 413-3140 or by email at InsuranceCommissioner@floir.com.