State RegulationsFL specificDifficulty 1/5
Under Florida law, what does the term 'insurance transaction' include?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under Chapter 626, Florida Statutes, an insurance transaction includes soliciting or inducing interest in insurance, negotiating coverage, and effectuating contracts of insurance. Licensing obligations attach to these acts, which is why a person must be licensed by the Department of Financial Services to solicit or negotiate insurance with the public in Florida.
Why the other options are wrong
- A) Delivery of the policy is only the final step; solicitation and negotiation are also transactions.
- B) Premium collection is a servicing function, and transacting is not limited to it.
- C) Claims handling is a separate activity; the transaction definition centers on soliciting, negotiating, and effectuating coverage.
Memory hook
Transacting = solicit, negotiate, effectuate.