State RegulationsFL specificDifficulty 2/5
A Florida agent tells an applicant that, in addition to the premium, a $50 'policy processing fee' must be paid directly to the agent for a service the insurer already compensates through commissions. Under Florida law, this is
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Chapter 626, Florida Statutes, an agent may not charge an insured an additional fee for a service for which the agent is already compensated by commission. Tacking on unauthorized 'processing' or 'service' charges inflates the cost of insurance and is treated as an unfair trade practice subject to DFS discipline, regardless of disclosure or amount.
Why the other options are wrong
- A) Disclosure does not authorize a duplicate charge; the extra fee itself is the violation.
- B) The $100 figure is the advertising-gift ceiling, not a license to double-bill for commissioned services.
- D) DFS imposes no such fee on insureds; the charge is purely the agent's invention.
Memory hook
Commissioned service = no second bill to the customer.