HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 233 Countersignature
SPONSOR(S): Regulatory Affairs Committee; Insurance & Banking Subcommittee; Santiago
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 12 Y, 0 N, As
CS
Haston Cooper
2) Regulatory Affairs Committee 17 Y, 0 N, As
CS
Haston Hamon
SUMMARY ANALYSIS
Under current law, a property, casualty, or surety insurance policy must contain a countersignature by a
Florida-licensed agent. Subject to a few exceptions, the current law provides that insurance companies are not
to assume direct liability for any property, casualty, or surety insurance policy unless it contains a proper
countersignature.
Prior to 2003, the law required these insurance policies to be countersigned by a Florida-licensed agent who
was also a Florida resident. This served the law’s intended purpose of protecting the public by ensuring a local
agent was present for policyholders who previously encountered difficulties dealing with out-of-state insurance
companies. However, the distinction based solely on residency between Florida-licensed resident agents and
Florida-licensed non-resident agents for purposes of countersignatures was deemed unconstitutional in 2003
by the United States District Court for the Northern District of Florida in Council of Insurance Agents and
Brokers v. Gallagher. In response to this ruling, the legislature removed the agent’s residency requirement
from the countersignature law, maintaining the requirement that the policy be countersigned by a Floridalicensed agent.
Though property, casualty, and surety insurance policies are required by statute to contain countersignatures,
this requirement can be waived by insurance companies when they accept payment under the policy. Thus,
insurance companies can be bound by a contract of insurance in the absence of a countersignature. However,
it is currently unclear whether policyholders can similarly be bound by a contract of insurance in the absence of
a countersignature.
The bill provides that the absence of a countersignature does not affect the validity of the insurance policy. The
bill clarifies that an omission from a third party to the contract (the Florida-licensed agent) does not impact the
validity of the contract of insurance as between the insurance company and the policyholder. Despite this
change, the bill does not remove the statutory requirement that insurance companies seek countersignatures
for their property, casualty, and surety insurance policies. As such, insurance companies could still be subject
to review and potential penalties from the Office of Insurance Regulation (OIR) for failure to comply with the
countersignature requirement.
The bill also makes a grammatical change to the language of the countersignature statute.
This bill has no fiscal impact on the public sector. The bill may have an indeterminate impact on the private
sector.
This bill provides an effective date of July 1, 2015.

This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0233b.RAC
DATE: 4/16/2015

FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background Information on Countersignatures
A countersignature is a “signature attesting to the authenticity of a document already signed.”1 Subject
to a few exceptions,2 Florida law requires a countersignature by a Florida-licensed agent for any
property, casualty, or surety insurance policies.3
In 2004, following a constitutional ruling on s. 624.425, F.S., the Florida Legislature removed a
requirement in the statute that the countersigning agent be a Florida resident. Prior to this change, s.
624.425, F.S., required a countersignature by a Florida-licensed agent who was also a Florida resident.
This distinction based solely on residency was overturned on constitutional grounds in Council of
Insurance Agents and Brokers v. Gallagher.
4
In that decision, the United States District Court for the
Northern District of Florida declared that s. 624.425, F.S., “violate[d] the Privileges and Immunities
Clause and Equal Protection Clause of the United States Constitution to the extent that [it denied] to
Florida-licensed nonresident insurance agents the same rights and privileges [afforded] to Floridalicensed resident agents.”5

Shortly after the Gallagher decision, the Department of Financial Services (DFS) released an
informational bulletin advising that as a result of the holding, “[p]roperty, casualty and surety policies
written through Florida-licensed nonresident agents are no longer required by law to be countersigned
by a Florida resident insurance agent. Policies must be signed by the insurer and by a properly
licensed resident or nonresident agent.”6
In 2004, the legislature amended s. 624.425, F.S., removing the language that required the
countersigning agent to be a Florida resident, but maintaining the requirement that the policy be
countersigned by a Florida-licensed agent.7 This amendment marked the most recent change to s.
624.425, F.S.
The original purpose of the countersignature requirement was to “assure the presence of local agents
to serve the needs of policyholders who had previously encountered difficulties in dealing with
insurance companies headquartered out of state.”8 However, since the countersigning agent is no
longer required to be a Florida resident, it is less clear whether this purpose is being served today.9


1
See Countersign, MERRIAM-WEBSTER DICTIONARY (11th ed. 2003), available at http://www.merriam-webster.com.
2 Excepted from the countersignature requirement are: contracts of reinsurance, policies of insurance on the rolling stock of railroad
companies doing a general freight and passenger business; United States Customs surety bonds that are issued by a corporate surety
approved by the United States Department of Treasury and that name the United States as the beneficiary; policies of insurance issued
by insurers whose agents represent only one company or group of companies under common ownership if a company within one
group is transferring policies to another company within the same group and the agent of record remains the same; and policies of
insurance issued by insurers whose agents represent, as to property, casualty, and surety insurance, only one company or group of
companies under common ownership and for which the application has been lawfully submitted to the insurer. s. 624.426, F.S.
3
s. 624.425, F.S.
4
287 F. Supp. 2d 1302, 1304 (N.D. Fla. 2003).
5
Id. at 1313.
6 DFS-03-004, “Policy Countersignature – To All Property, Casualty and Surety Insurers and General Lines Insurance Agents” (Nov.
12, 2003), http://www.myfloridacfo.com/Division/Agents/Industry/Bulletins-Memos/default.htm#.VMZuh2xOncs.
7
See SB 2588 (2004).
8 Colonial Penn Communities, Inc. v. Crosley, 443 So. 2d 1030, 1032 (Fla. 5th DCA 1983); see also Wolfe v. Aetna Ins. Co., 463 So.
2d 997, 999 (Fla. 5th DCA 1983) (noting purpose of countersignature requirement was to “protect the public in purchasing insurance
policies by requiring such policies to be issued by resident, licensed agents over whom the state can exercise control and thus prevent
abuses.”).
9
Information obtained through telephone conversation with FCCI Insurance Group, 1/28/2015 (notes on file with Insurance &
Banking Subcommittee).

DFS is responsible for licensing and regulating insurance agents.10 The agent’s countersignature on
the policy provides DFS with a responsible party to contact in the event of non-compliance or any other
issues that may arise.11 The countersignatures also establish that someone familiar with Florida
insurance law has attested to the specific policy’s validity.12
The Office of Insurance Regulation (OIR) is responsible for licensing and regulating insurance
companies.13 As often as it deems necessary, OIR conducts Market Conduct Examinations where it
determines whether insurance companies are complying with Florida law.14 One factor surveyed in
these Market Conduct Examinations is whether insurance companies are complying with the
countersignature requirement.15
Current Situation
Currently, Florida law provides that insurers are not to assume direct liability unless the insurance
policy contains a proper countersignature.16 The relevant portion of the statute reads as follows:
Except as stated in s. 624.426, no authorized property, casualty, or surety insurer
shall assume direct liability as to a subject of insurance resident, located, or to be
performed in this state unless the policy or contract of insurance is issued by or
through, and is countersigned by, an agent who is regularly commissioned and
licensed currently as an agent and appointed as an agent for the insurer under
this code.17
Though the policy is statutorily required to be countersigned by a Florida-licensed agent, the
countersignature requirement can be waived.18 Currently, if an insurer collects payment on a policy that
lacks a countersignature, the insurer has waived the countersignature requirement and cannot then
raise as a defense to a claim the invalidity of the policy due to the absence of a countersignature.
19
Thus, an insurer can presently be bound by a contract of insurance in the absence of a
countersignature.
However, it is currently unclear whether policyholders can be similarly bound by contracts of insurance
in the absence of a countersignature. There are cases currently pending in which a defendant
policyholder has raised an invalidity defense to policies that were not countersigned in response to an
insurance company’s breach of contract claim seeking collection from the policyholder.20
Effect of the Bill on Countersignatures

10 s. 626.013, F.S.
11 Information confirmed through e-mail communication with DFS, 1/29/2015 (e-mail on file with Insurance & Banking
Subcommittee).
12 Information confirmed through e-mail communication with DFS, 1/29/2015 (e-mail on file with Insurance & Banking
Subcommittee).
13 s. 20.121(3)(a)1., F.S.
14 s. 624.3161, F.S.
15 Rule 69O-142.011(11)(a)11, F.A.C.
16 s. 624.425(1), F.S.
17 s. 624.425(1), F.S.
18 See Wolfe v. Aetna Ins. Co., 463 So. 2d 997, 1000 (Fla. 5th DCA 1983) (holding that the absence of a countersignature on a policy
of insurance “does not, as a matter of law, invalidate it, because the absence of a countersignature may be waived [by the insurer], and
does not, in and of itself, control the effectiveness of the insurance.”); Meltsner v. Aetna Cas. & Sur. Co. of Hartford, Conn., 233 So.
2d 849, 850 (Fla. 3d DCA 1969) (noting that there can be a “waiver of the requirement that the insurance policy be countersigned by a
local producing agent”); see also 30B Fla. Jur. 2d Insurance s. 1546 (2014).
19 Information confirmed through telephone conversation with FCCI Insurance Group, 1/28/2015 (notes on file with Insurance &
Banking Subcommittee).
20 See FCCI Ins. Co. v. Gulfwind Companies, LLC, 2013 CC 003056 NC (Fla. Sarasota Cty. Ct.); FCCI Ins. Co. v. Zareth Metal
Framing, Inc., 2013 CA 002540 (Fla. Sarasota Cty. Ct.).

DFS is responsible for licensing and regulating insurance agents.10 The agent’s countersignature on
the policy provides DFS with a responsible party to contact in the event of non-compliance or any other
issues that may arise.11 The countersignatures also establish that someone familiar with Florida
insurance law has attested to the specific policy’s validity.12
The Office of Insurance Regulation (OIR) is responsible for licensing and regulating insurance
companies.13 As often as it deems necessary, OIR conducts Market Conduct Examinations where it
determines whether insurance companies are complying with Florida law.14 One factor surveyed in
these Market Conduct Examinations is whether insurance companies are complying with the
countersignature requirement.15
Current Situation
Currently, Florida law provides that insurers are not to assume direct liability unless the insurance
policy contains a proper countersignature.16 The relevant portion of the statute reads as follows:
Except as stated in s. 624.426, no authorized property, casualty, or surety insurer
shall assume direct liability as to a subject of insurance resident, located, or to be
performed in this state unless the policy or contract of insurance is issued by or
through, and is countersigned by, an agent who is regularly commissioned and
licensed currently as an agent and appointed as an agent for the insurer under
this code.17
Though the policy is statutorily required to be countersigned by a Florida-licensed agent, the
countersignature requirement can be waived.18 Currently, if an insurer collects payment on a policy that
lacks a countersignature, the insurer has waived the countersignature requirement and cannot then
raise as a defense to a claim the invalidity of the policy due to the absence of a countersignature.
19
Thus, an insurer can presently be bound by a contract of insurance in the absence of a
countersignature.
However, it is currently unclear whether policyholders can be similarly bound by contracts of insurance
in the absence of a countersignature. There are cases currently pending in which a defendant
policyholder has raised an invalidity defense to policies that were not countersigned in response to an
insurance company’s breach of contract claim seeking collection from the policyholder.20
Effect of the Bill on Countersignatures

10 s. 626.013, F.S.
11 Information confirmed through e-mail communication with DFS, 1/29/2015 (e-mail on file with Insurance & Banking
Subcommittee).
12 Information confirmed through e-mail communication with DFS, 1/29/2015 (e-mail on file with Insurance & Banking
Subcommittee).
13 s. 20.121(3)(a)1., F.S.
14 s. 624.3161, F.S.
15 Rule 69O-142.011(11)(a)11, F.A.C.
16 s. 624.425(1), F.S.
17 s. 624.425(1), F.S.
18 See Wolfe v. Aetna Ins. Co., 463 So. 2d 997, 1000 (Fla. 5th DCA 1983) (holding that the absence of a countersignature on a policy
of insurance “does not, as a matter of law, invalidate it, because the absence of a countersignature may be waived [by the insurer], and
does not, in and of itself, control the effectiveness of the insurance.”); Meltsner v. Aetna Cas. & Sur. Co. of Hartford, Conn., 233 So.
2d 849, 850 (Fla. 3d DCA 1969) (noting that there can be a “waiver of the requirement that the insurance policy be countersigned by a
local producing agent”); see also 30B Fla. Jur. 2d Insurance s. 1546 (2014).
19 Information confirmed through telephone conversation with FCCI Insurance Group, 1/28/2015 (notes on file with Insurance &
Banking Subcommittee).
20 See FCCI Ins. Co. v. Gulfwind Companies, LLC, 2013 CC 003056 NC (Fla. Sarasota Cty. Ct.); FCCI Ins. Co. v. Zareth Metal
Framing, Inc., 2013 CA 002540 (Fla. Sarasota Cty. Ct.).
STORAGE NAME: h0233b.RAC PAGE: 4
DATE: 4/16/2015
This bill affects property, casualty, and surety insurance policcies that have not been countersigned,
adding the following language to s. 624.425(1), F.S.: “However, the absence of a countersignature
does not affect the validity of the policy or contract.”
The bill would give insurance companies the same rights as policyholders to enforce an otherwise valid
policy in the event the policy or contract lacks a countersignature. The contract of insurance is between
the insurance company and the policyholder. Thus, the effect of this bill is such that the omission of a
countersignature by a licensed agent – a third party to the insurance contract – would not impact the
validity of the insurance policy as between the insurer and the policyholder.21

Under the proposed law, insurance companies would still be required to obtain countersignatures,
despite the fact that the absence of a countersignature would not invalidate the policy.22 Those
insurance companies that do not obtain countersignatures on their policies would still be subject to
review and possible penalties from OIR through Market Conduct Examinations.23 Such penalties range
from reprimands to fines to the suspension or revocation of an insurance license.24
This bill also does not relieve the agent of their obligation to countersign insurance policies.25 Though
DFS has the statutory authority to sanction agents,
26 it typically does not fine agents for failing to
countersign policies.27 DFS believes that agents have enough incentive to comply with the
countersignature law through the possibility of commissions or additional face time with consumers.28
This bill also makes a grammatical change to the language of s. 624.425(1), F.S.
B. SECTION DIRECTORY:
Section 1. Amends s. 624.425(1), F.S., relating to agent countersignature required, property, casualty,
surety insurance.
Section 2. Provides an effective date of July 1, 2015.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:

21 Information obtained through telephone conversation with FCCI Insurance Group, 1/28/2015 (notes on file with Insurance &
Banking Subcommittee).
22 Information confirmed through telephone conversation with FCCI Insurance Group, 1/28/15 (notes on file with Insurance &
Banking Subcommittee); Information confirmed through e-mail communication with OIR, 1/29/15 (e-mail on file with Insurance &
Banking Subcommittee).
23 Rule 69O-142.011(11)(a)11, F.A.C.; Information confirmed through e-mail communication with OIR, 1/29/15 (e-mail on file with
Insurance & Banking Subcommittee).
24 Rule 69O-142.011, F.A.C.
25 Information confirmed through e-mail communication with DFS, 1/29/2015 (e-mail on file with Insurance & Banking
Subcommittee).
26 s. 624.307, F.S.
27 Information confirmed through e-mail communication with DFS, 1/29/2015 (e-mail on file with Insurance & Banking
Subcommittee).
28 Information confirmed through e-mail communication with DFS, 1/29/2015 (e-mail on file with Insurance & Banking
Subcommittee)

1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Uncertain. To the extent that there may be less of an incentive for an insurance company to seek a
countersignature, some Florida-licensed agents may no longer receive the economic or social benefit
of being a counter-signatory. However, even though the lack of a countersignature would not affect the
validity of the policy, insurers would still have to seek countersignatures in order to comply with the
letter of the law.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to: require counties or municipalities to spend funds or take
an action requiring the expenditure of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of a state tax shared with counties or
municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On February 4, 2015, the Insurance & Banking Subcommittee adopted one amendment and reported
the bill favorably as a committee substitute. The amendment replaced the words “that may be insured”
with the words “proper to insure” and the word “the” with the word “any,” thereby reinstating current law.
The amendment also corrected a scrivener’s error by replacing “of” with “or.”
On April 14, 2015, the Regulatory Affairs Committee considered a proposed committee substitute
(PCS) and reported the bill favorably as a committee substitute. The PCS changed the title from “An
act relating to insurance” to “An act relating to countersignature.”
The staff analysis is drafted to reflect the committee substitute.
https://www.flsenate.gov/Session/Bill/2015/233/Analyses/h0233b.RAC.PDF

Statutes, codes, and regulations
Florida Statutes
•••
Part III - AUTHORIZATION OF INSURERS AND GENERAL REQUIREMENTS
Section 624.425 - Agent countersignature required, property, casualty, surety insurance
Fla. Stat. § 624.425
Current through Chapter 35 of the 2021 Legislative Session
Section 624.425 - Agent countersignature required, property, casualty, surety insurance
(1) Except as stated in s. 624.426, no authorized property, casualty, or surety insurer shall assume direct liability as to a subject of insurance resident, located, or to be performed in this state unless the policy or contract of insurance is issued by or through, and is countersigned by, an agent who is regularly commissioned and licensed currently as an agent and appointed as an agent for the insurer under this code. If two or more authorized insurers issue a single policy of insurance against legal liability for loss or damage to person or property caused by the nuclear energy hazard, or a single policy insuring against loss or damage to property by radioactive contamination, whether or not also insuring against one or more other perils proper to insure against in this state, such policy if otherwise lawful may be countersigned on behalf of all of the insurers by a licensed and appointed agent of any insurer appearing thereon. The producing agent shall receive on each policy or contract the full and usual commission allowed and paid by the insurer to its agents on business written or transacted by them for the insurer.
(2) If any subject of insurance referred to in subsection (1) is insured under a policy, or contract, or certificate of renewal or continuation thereof, issued in another state and covering also property and risks outside this state, a certificate evidencing such insurance as to subjects located, resident, or to be performed in this state, shall be issued by or through and shall be countersigned by the insurer's commissioned and appointed producing agent.
(3) An agent shall not sign or countersign in blank any policy to be issued outside her or his office, or countersign in blank any countersignature endorsement therefor, or certificate issued thereunder. An agent may give a written power of attorney to the issuing insurance company to countersign such documents by imprinting her or his name, or the name of the agency or other entity with which the agent may be sharing commission pursuant to s. 626.753(1)(a) and (2), thereon in lieu of manually countersigning such documents; but an agent shall not give a power of attorney to any other person to countersign any such document in her or his name unless the person so authorized is directly employed by the agent and by no other person, and is so employed in the office of the agent.
(4) This section shall not be deemed to prohibit insurers from using salaried licensed and appointed agents for the production and servicing of business in this state and the issuance and countersignature by such agents of insurance policies or contracts, when required under subsection (1), and without payment of commission therefor.
(5) This section shall not be deemed to prohibit an insurer from authorizing an agent who is not regularly commissioned and appointed currently as an agent of the insurer from countersigning a policy or contract of insurance issued pursuant to the provisions of ss. 627.311 and 627.351. This section does not apply to reissuance of insurance policies or endorsements thereto which are part of a mass reissuance of such policies or endorsements and do not involve a change of premium or payment of agent's commissions.
(6) The absence of a countersignature required under this section does not affect the validity of a policy or contract of insurance.
Fla. Stat. § 624.425

Amended by 2015 Fla. Laws, ch. 42,s 4, eff. 7/1/2015.
s. 69, ch. 59-205; s. 1, ch. 74-64; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 59, 64, 809(1st), ch. 82-243; s. 6, ch. 83-288; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s.187, ch. 97-102; s.1, ch. 98-199; s.37, ch. 99-7; s.1, ch. 2004-374.
https://casetext.com/statute/florida-statutes/title-xxxvii-insurance/chapter-624-insurance-code-administration-and-general-provisions/part-iii-authorization-of-insurers-and-general-requirements/section-624425-agent-countersignature-required-property-casualty-surety-insurance

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