Customer Representative Q&A

The following questions and answers deal with issues pertaining to those who hold the Customer Representative (CR) license or the Limited Customer Representative license. Florida Administrative Code rules 69O-213 and 69O-228, and Florida Statutes, 626.2815, 626.7351, 626.7352, 626.7353, and 626.7354 are supporting sources for this fact sheet.

#1. Question. What's the difference in a Customer Representative and a Limited Customer Representative license?

Answer. A Customer Representative (CR) license is the Florida 4-40 license and holders of that license may transact insurance on any property and casualty product, as well as health insurance if their supervising agent is appointed for health insurance. The Limited Customer Representative license (4-42) allows individuals to transact only personal auto insurance.

#2. Question. How does one qualify to obtain the CR license?

Answer. There are a variety of ways to qualify. 1> Having six months all lines experience; 2> Completing a 100-hour qualification course; 3> Hold a professional designation such as CCSR, ACSR, AAI, CISR, or CPSR. Those qualifying by methods #1 or #2 must sit for the Department of Financial Services (DFS) exam, while those who qualify by designation are not required to sit for the DFS exam. The candidate must be a resident of Florida, Georgia, or Alabama. The minimum age to obtain the license is 18.

#3. Question. What's the difference in the CR license and the agent's (2-20) license?

Answer. A CR can solicit insurance and conduct sales work only from inside the office, while an agent can solicit and conduct sales work from inside or outside the office.

#4. Question. Can a CR go outside the office to take photos or perform other clerical tasks?

Answer. Yes. A CR may perform any job-related task outside the office as long as they do not solicit insurance or conduct sales work.

#5. Question. How is a CR appointed?

Answer. Insurance companies appoint agents. A general lines agent, surplus lines agent or general lines agency appoints those holding the CR license. Again, CRs are not appointed by insurance companies, they are appointed by agents or agencies. CRs are appointed on-line via the DFS web site, www.fldfs.com. Paper appointment forms are no longer accepted. Additionally, once the on-line appointment is made the supervising agent must manually complete the "Designation of Supervising Agent Form" (DFS-H2-1124) which is available at the DFS web site. This form is not mailed to the DFS, but is kept on file at the agency, to be produced at the request of the DFS. Without a valid appointment the CR is not permitted to transact insurance.

#6. Question. How long does a CR have to obtain an initial appointment or obtain a new appointment if employers change?

Answer. If an active appointment is not maintained the license is suspended after four years. Appointment status may be checked at the DFS web site.

#7. Question. What lines of insurance may a CR transact?

Answer. The lines that their supervising agent is appointed for, including health insurance. The CR may never transact life insurance, unless the CR also obtains that license.

#8. Question. May a CR sign an application?

Answer. A "qualified" yes. The CR may sign an application in his/her own name. However, unless written instructions from the supervising agent state otherwise the supervising agent must cosign any applications. With written instructions the CR may be the sole signer of applications. Note that this is a DFS rule and insurance companies and/or agencies may have policies more restrictive than this.

#9. Question. May a CR sign a certificate of liability insurance, binder, or other document?

Answer. The statutes are silent on this issue. Company and/or agency guidelines should be consulted on an individual basis.

#10. Question. Can a CR use a rubber stamp of the agent's signature on documents?

Answer. There is nothing in the statutes addressing this so agency and company procedures will govern. If a stamp is used instructions should be provided for its use, and it should be properly secured to prevent unauthorized use.

#11. Question. How many hours of CE does a CR need?

Answer. If the only license held is the 4-40 or 4-42, ten hours are required. A 4-40 licensee may receive credit for any general lines course or a course approved for "generic." Up to 50% of the hours may come from a class approved for "health only." A course approved for "life and health" may not be taken for CE credit. Holders of the 4-42 license may only receive credit for a course approved for "personal auto." For both the 4-40 and 4-42 license, courses approved for basic, intermediate, or advanced may be taken and the ten hours must be obtained every two years. Those licensed as a CR and also holding a life insurance license would be required to have 24 hours of CE, which must be split between P&C and life insurance. For more detailed discussion of the CE law check the document titled "Continuing Education Q&A" in FAIA's on-line Education Library.

#12. Question. May a CR receive commission?

Answer. No. According to Florida Statute 626.7354(3):"A customer representative shall be a salaried employee of the agent or agency. His or her compensation shall not include commissions and shall not be primarily based on the production of applications, insurance, or premiums."

#13. Question. If a CR can't receive commission how may they be compensated?

Answer. Statutes state that a CR must be compensated "primarily by salary." This means that at least 50.1% of their total compensation must be from salary. The other 49.9% may come from some measure that rewards performance. For example, a CR may be paid $10 per policy written, or $5.00 per account review. Or, a monthly, quarterly, or annual bonus may be given to the CR to reward their performance. What's not permitted is telling a CR something such as, "I'll pay you 3% of the premium on every policy you sell or endorsement you add." It's a fine line between commission and "rewarding performance" and agencies should use caution when compensating CRs.

#14. Question. If a licensed CR wants to obtain an agent's license what is required?

Answer. Nothing is different from any unlicensed person qualifying. Holding the CR license does not waive any qualification requirements. Applicants must be a Florida resident and at least 18 years of age. Methods to qualify for the general lines agent (2-20) license are: 1> Complete a 200-hour course; 2> Have one year "all lines" insurance experience. (See our Education Library article "Qualifying for the DOI/DFS Exam by Experience.") 3> Have one year's experience in an agency in any P&C lines (all lines not required) and complete a 40-hour "conversion class" (FAIA offers this course). 4> Have a Bachelor of Science degree in insurance or risk management from an accredited university; 5> Complete a correspondence course and have six months all lines experience; 6> Hold the CPCU designation, in which case the DFS exam is waived. Exams are required for those qualifying by any other method.

#15. Question. If an individual holds only the ACSR or CCSR designation and is not yet licensed what duties may they perform in the agency?

Answer. Since the individual is not licensed they cannot "transact" insurance. This means they can't discuss or bind coverages. They can perform clerical duties such as answering the phone, filing, and serving as a receptionist. Professional designations are not insurance licenses. On an "incidental basis" (less than 10% of the time is spent on the task and the exact amount of work and timing is unpredictable) an unlicensed person can give a quote (as long as it does not involve application of judgment, binding, policy interpretation, signing the application, giving insurance advice, or other such similar activities), explain procedures, or call a client back at the direction of a licensed person to convey a message. On an incidental basis the non-licensed person may also take an application with the same restrictions imposed for giving a quote, and receive premiums. An unlicensed person may never solicit insurance, advise clients on insurance needs, or bind coverage.

#16. Question. What are the permitted duties of a CR?

Answer. The Florida Administrative Code is shown below. Note that these are permitted per the DFS and individual companies and/or agencies may not permit all such activity.

69O-213.130 The Customer Representative's Authority; Limitations.
(1) A duly licensed and appointed customer representative may, subject to specific limits set forth in this rule chapter, perform the following functions:
(a) Take insurance applications.
(b) Give quotes.
(c) Interpret policies.
(d) Explain procedures.
(e) Give insurance advice.
(f) Solicit new customers at the agent's office or by telephone from that office.
(g) Bind new or additional coverages.
(h) A customer representative may perform preliminary work to assist in processing a claim, as by taking claims statements, getting estimates, advising claimants as to procedures, preparing claims paperwork, taking photos, and assembling or ordering claims files. However, a customer representative cannot make or sign the actual substantive determination of the amount of a claim, loss, or damage payable, nor conduct settlement negotiations, make settlement of a claim, or issue or sign claims checks or drafts.

(i) Any other function consistent with assisting agents in the transaction of property and casualty insurance and which is not otherwise prohibited by law or rule of the Department.
(2) All applications and/or binders initiated by the customer representative must be co-signed by the designated supervising agent, unless otherwise delineated in the written instructions conveyed to the customer representative by the designated supervising agent.
(3) A customer representative may not solicit or conduct sales work outside of the agent's office. The customer representative must work solely at the supervising agent's principal place of business when doing any work covered by their customer representative license. However, a customer representative may leave the agent's office for clerical or administrative tasks not requiring licensure, such as taking photos of a car for the agent or going to the post office.
(4) A customer representative can, under the supervision of the supervising agent, and only at that agent's principal place of business, conduct customer representative work that assists or supports other agents.
(5) A customer representative must always identify himself/herself as a customer representative working for the named agent, and must never make or allow the impression that the customer representative is an agent.

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