Florida Warns Against Unlicensed Health Plans

Gallagher says he will move to revoke licenses of any agents knowingly selling unlicensed insurance, and that he will also pursue criminal charges. The Florida Legislature this year passed a law increasing the penalty for a licensed agent selling unauthorized insurance to a third-degree felony punishable by up to five years in jail, up from a first-degree misdemeanor, Gallagher says.

Because unlicensed entities do not participate in the state guaranty fund, which pays claims for insolvent carriers, the failure of unlicensed plans leaves policyholders flat, the Florida department says.

Under Florida law, if an unlicensed insurer fails to pay claims, the agents who sold the coverage may have to pay the claims.

The Florida department is not the first to complain about a boom in unlicensed health plans. The Texas Department of Insurance warned Texas insurance agents and brokers about a surge in unlicensed plans in Texas earlier this year.