Insurance Kickbacks

[thession]

That's a lot to answer, I'll get back to you.

Declaratory statement....notice it was by a preferred citizens inspection co.
click on list of declaratory statements.

[escanlan]

Originally Posted by thession

That's a lot to answer, I'll get back to you.

Declaratory statement....notice it was by a preferred citizens inspection co.
click on list of declaratory statements.

From that link, which links to a list of Declaratory Statements, I would expect you are referring to this one Statement http://www.myfloridalicense.com/dbpr...4_2013-039.pdf . That was a very interesting read actually. To save some of the viewers time these are some of the relevant highlights of this statement. Since there is quite an abundance of legalese in it I'll add my opinions as I read them. Naturally I'm not an Attorney but the concepts and wording are fairly clear to me.

• Page 5 & 6 #'s 16, 17, 18, 19 - According to this there is question as to the use of the titles "Broker" and "Agent" and as a result these titles are not being applied to insurance Brokers and Agents with regard to this rule/Statute. As a result this sets the stage to allow referral fees to insurance Brokers and Agents. Here is an interesting part as in Texas Insurance Brokers/Agents are considered "Settlement Service Providers" and within our "Ethics Rules" we are not allowed to pay them a referral fee for any inspections. But that is only with reference to an inspection performed for a real estate purchase/sale of a property. If the inspection is being performed for an owner of a property that would not apply.
• Page 6 & 7, #'s 20, 21, 22, 23, 24, 25, 26 - Here DBPR is defining what an "Inspection" is and has determined that these wind mitigation reviews (??) are not classified as an "Inspection" basically under any circumstance. This further muddles the water with regards to any other licensing for "Inspectors" that might be present in Florida. Although I might not agree with that definition it is obviously not mine to make neither here in Texas and obviously not in Florida.
• Page 7 & 8, #'s 27 - Explains that since the insurance underwriter does not benefit from an improperly performed Wind Mitigation review (remember it is not an "Inspection") that there are no expectations that the review is being performed to obtain "positive results" since positive results would trigger an insurance discounts and therefor does not result in a conflict of interests. That is certainly an understandable viewpoint to take as a proper review that found many non-compliant conditions would result in not only no insurance discount but might also result in higher premiums than if the review had not taken place.
• Page 8, #'s 29, 30, 31 - The final determination is very interesting. The determination is that none of the groups that perform these reviews, INCLUDING HOME INSPECTORS, would not be in violation of any rule to offer referral fees or advertise that they do offer referral fees.
• Pages 10 - 15 - This is the original request for the Declaratory Statement. What is very interesting here is that one of the firms requesting this appears to be a licensed Home Inspection company themselves as noted by their WEB site advertisements. It appears that they have asked for this opinion as they are investigating the use of the method to advertise and obtain referrals for this type of service.

I will thank you for such an interesting read! As to your initial question of "Is this ethical even though it is legal. ". We go back to my original post where I stated that "ethics are relative". Your ethical stance on this matter is different than those that are providing the referral fees as they see nothing ethically wrong with the practice. My opinion is, and has always been, I will never pay referral fees or receive any compensation either directly or indirectly to/from anyone or business to obtain referrals. Of course that is my ethical beliefs which are different from yours and the companies asking for the declaratory statement.

By the way, one of the companies that has asked for this declaratory statement advertises that they belong to the same Home Inspector Association that you do. According to that association's ethics requirements this is a questionable practice. Have you brought it to your Home Inspector Association's attention for a review since they do have a procedure for filing a report/grievance for this type of concern? I will state again that we should be working to clean up our own professions first and that will send a clear signal to the consumers that we are a true Profession and not just another business out for their money!

[thession]

Originally Posted by escanlan

Let me see if I understand this then? According to the DBPR Rules For Inspectors a Home Inspector is only required to have 14 hours total of continuing education for the two year period before they renew their license (See Here). Of that 14 hours ONLY two of those hours must relate to this Hurricane Mitigation program which is the bases for your original post. Also according to the State Statute controlling the Hurricane Mitigation inspection program (which can be found here) Home Inspectors are initially only required to have 3 hours of training and a basic test to be qualified to perform these. So the State DBPR which regulates Home Inspectors have actually conceded training hours from the home inspection licensing program to allow Home Inspectors to not have to take an extra two hours every two years if they wanted to perform this Hurricane Mitigation inspection (original was 14 hours for Home Inspector renewal and now is 12 hours plus 2 more for the Hurricane Mitigation program). So in essence Home Inspectors are being required to take the Hurricane Mitigation program two hours worth of training anyhow as part of their Home Inspection renewal education requirements.

Also in the Hurricane Mitigation program Statute noted above there is no requirement for the other qualified persons (Engineers, licensed contractors, etc.) to perform any required annual training or have criminal background checks for this program and yet according to Citizens insurance (click on the paragraph to link to the Citizen's site):

Correct...including their employees.

In addition to meeting the Florida Office of Insurance Regulation's minimum licensing standards, Citizens-endorsed inspectors have passed criminal background checks, and Citizens' three endorsed inspection companies provide, and their inspectors are required to attend, annual industry training courses.

So Citizens has chosen three companies that also met the Home Inspector's licensing requirements with respect to criminal background checks and annual training. These are actions they are not required to do and yet it is something they spend the money on to meet Citizen's preferences. In other words they have added fees that the Home Inspector is already doing for their Home Inspection license. Also we do not know how many hours of training these three companies require their employees to perform annually? Are they much more than 2 hours a year that the Home Inspector is performing but only performing anyhow to renew their license?

I'm sure they do but from what I have heard it's mostly company policies training and the inspectors pay for this.

So to point 1 above where you "ROFLMAO" these companies are indeed incurring additional expenses above what the Home Inspector incurs to offer this Hurricane Mitigation inspection service.

Sure if your counting Referral fees, lobbying fees, Etc.

Just as a side note the Hurricane Mitigation program Statute noted above also states this:



According to the Citizens insurance site they have not exercised their right to exclude anyone that has been qualified under the Hurricane Mitigation Statute but only offer their customers the names of three firms they feel are more qualified and meet their requirements. But again they are not excluding any of the other potential Inspectors.

Nope, but being a public entity, you would think citizens would shy away from the appearance of preferential treatment.

To respond to your question on criminal background checks of:

Criminal background checks were performed at licensing. Must we submit them yearly.

No in fact I do not believe that the licensee should have to resubmit them annually. I do however believe that the licensing agency should be performing annual basic background checks with their own State departments that do maintain criminal records! I believe that all of the State licensing agencies should be doing this to protect consumers!! Instead the licensing agencies only accept the renewal applications with a sworn statement by the applicant that they have not run afoul of the law and take their word for it unless someone, usually a consumer after the consumer has been wronged, brings it to their attention. If you stop and think about it the process is so easy and can be seen whenever a person is stopped by local Law Enforcement who might quickly run a check on a person to see if they have any warrants on them or do have a criminal history. Local LEO can quickly do this with on board computer equipment demonstrating it is highly feasible. If you would like to see how easy it is for a licensee to lie to a State licensing agency you can review the Texas enforcement actions on the Texas Real Estate Commission WEB site. You will find more than enough examples where licensees have lied on renewal applications and eventually been caught. But how many times has that licensee who lied harmed a consumer before they were caught?

Probably as many times as an illegal voter has been caught...

In your original post you are stating that these Big 3 are paying kickbacks to Citizens for the business and that DBPR has approved of this with a "Declaratory statement". It would help your original post and others reading this if you posted a link to this.

Not sure I said that, only that it appears they are poised too. There are instances where some insurance companies/agents have turned away licensed home inspectors 1802 forms because they were not one of the 3 , only to be told they must accept them by law. I believe this has been rectified though.

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I feel for you in Texas...I only hope the florida home inspection business doesn't go the way Texas has.

Anyway by the responses to my concerns, it doesn't seem to bother the Fl. consumers.