Bill Text: FL S1046 | 2013 | Regular Session | Comm Sub
Bill Title: Insurance
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Failed) 2013-04-26 - Laid on Table, companion bill(s) passed, see CS/HB 157 (Ch. 2013-190), CS/HB 1191 (Ch. 2013-209), CS/CS/HB 7125 (Ch. 2013-160), SB 356 (Ch. 2013-125), CS/CS/SB 468 (Ch. 2013-66), CS/SB 1842 (Ch. 2013-101) [S1046 Detail]
Download: Florida-2013-S1046-Comm_Sub.html
Florida Senate - 2013 CS for CS for SB 1046 By the Committees on Appropriations; and Banking and Insurance; and Senator Brandes 576-04646-13 20131046c2 1 A bill to be entitled 2 An act relating to insurance; amending s. 215.555, 3 F.S.; postponing the date that repeals the Florida 4 Hurricane Catastrophe Fund emergency assessment 5 exemption for medical malpractice insurance premiums; 6 amending s. 316.646, F.S.; authorizing a uniform motor 7 vehicle proof-of-insurance card to be in an electronic 8 format; providing construction with respect to the 9 parameters of a person’s consent to access information 10 on an electronic device presented to provide proof of 11 insurance; providing immunity from liability to a law 12 enforcement officer for damage to an electronic device 13 presented to provide proof of insurance; authorizing 14 the Department of Highway Safety and Motor Vehicles to 15 adopt rules; amending s. 320.02, F.S.; authorizing 16 insurers to furnish uniform proof-of-purchase cards in 17 an electronic format for use by insureds to prove the 18 purchase of required insurance coverage when 19 registering a motor vehicle; amending s. 554.1021, 20 F.S.; defining the term “authorized inspection 21 agency”; amending s. 554.107, F.S.; requiring the 22 chief inspector of the state boiler inspection program 23 to issue a certificate of competency as a special 24 inspector to certain individuals; specifying how long 25 such certificate remains in effect; amending s. 26 554.109, F.S.; authorizing specified insurers to 27 contract with an authorized inspection agency for 28 boiler inspections; requiring such insurers to 29 annually report the identity of contracted authorized 30 inspection agencies to the Department of Financial 31 Services; amending s. 624.413, F.S.; revising a 32 specified time period applicable to a certified 33 examination that must be filed by a foreign or alien 34 insurer applying for a certificate of authority; 35 amending s. 626.0428, F.S.; requiring each insurance 36 agency to be under the control of an agent licensed to 37 transact certain lines of insurance; authorizing an 38 agent to be in charge of more than one branch office 39 under certain circumstances; providing requirements 40 relating to the designation of an agent in charge; 41 prohibiting an insurance agency from conducting 42 insurance business at a location without a designated 43 agent in charge; providing a definition for the term 44 “agent in charge”; providing that the designated agent 45 in charge is liable for certain acts of misconduct; 46 providing grounds for the Department of Financial 47 Services to order operations to cease at certain 48 insurance agency locations until an agent in charge is 49 properly designated; amending s. 626.112, F.S.; 50 providing licensure exemptions that allow specified 51 individuals or entities to conduct insurance business 52 at specified locations under certain circumstances; 53 revising licensure requirements and penalties with 54 respect to registered insurance agencies; providing 55 that the registration of an approved registered 56 insurance agency automatically converts to an 57 insurance agency license on a specified date; amending 58 s. 626.172, F.S.; revising requirements relating to 59 applications for insurance agency licenses; conforming 60 provisions to changes made by the act; amending s. 61 626.321, F.S.; providing that a limited license to 62 offer motor vehicle rental insurance issued to a 63 business that rents or leases motor vehicles 64 encompasses the employees of such business; amending 65 s. 626.382, F.S.; providing that an insurance agency 66 license continues in force until canceled, suspended, 67 revoked, or terminated; amending s. 626.601, F.S.; 68 revising terminology relating to investigations 69 conducted by the Department of Financial Services and 70 the Office of Insurance Regulation with respect to 71 individuals and entities involved in the insurance 72 industry; repealing s. 626.747, F.S., relating to 73 branch agencies, agents in charge, and the payment of 74 additional county tax under certain circumstances; 75 amending s. 626.8411, F.S.; conforming a cross 76 reference; amending s. 626.8805, F.S.; revising 77 insurance administrator application requirements; 78 amending s. 626.8817, F.S.; authorizing an insurer’s 79 designee to provide certain coverage information to an 80 insurance administrator; authorizing an insurer to 81 subcontract the audit of an insurance administrator; 82 amending s. 626.882, F.S.; prohibiting a person from 83 acting as an insurance administrator without a 84 specific written agreement; amending s. 626.883, F.S.; 85 requiring insurance administrators to furnish 86 fiduciary account records to an insurer’s designee; 87 providing that administrator withdrawals from a 88 fiduciary account be made according to specific 89 written agreements; providing that an insurer’s 90 designee may authorize payment of claims; amending s. 91 626.884, F.S.; revising an insurer’s right of access 92 to certain administrator records; amending s. 626.89, 93 F.S.; revising the deadline for filing certain 94 financial statements; amending s. 626.931, F.S.; 95 deleting provisions requiring a surplus lines agent to 96 file a quarterly affidavit with the Florida Surplus 97 Lines Service Office; amending s. 626.932, F.S.; 98 revising the due date of surplus lines tax; amending 99 s. 626.935, F.S.; conforming provisions to changes 100 made by the act; amending s. 626.936, F.S.; conforming 101 provisions to changes made by the act; amending s. 102 627.062, F.S.; requiring the Office of Insurance 103 Regulation to use certain models or straight averages 104 of certain models to estimate hurricane losses when 105 determining whether the rates in a rate filing are 106 excessive, inadequate, or unfairly discriminatory; 107 amending s. 627.0628, F.S.; increasing the length of 108 time during which an insurer must adhere to certain 109 findings made by the Commission on Hurricane Loss 110 Projection Methodology with respect to certain 111 methods, principles, standards, models, or output 112 ranges used in a rate finding; providing that the 113 requirement to adhere to such findings does not limit 114 an insurer from using a straight average of results of 115 certain models or output ranges under specified 116 circumstances; amending s. 627.072, F.S.; authorizing 117 retrospective rating plans relating to workers’ 118 compensation and employer’s liability insurance to 119 allow negotiations between certain employers and 120 insurers with respect to rating factors used to 121 calculate premiums; amending s. 627.281, F.S.; 122 conforming a cross-reference; amending s. 627.351, 123 F.S.; requiring Citizens Property Insurance 124 Corporation to submit a biannual report on the number 125 of residential sinkhole policies issued and declined; 126 providing legislative intent; establishing a Citizens 127 Sinkhole Stabilization Repair Program for sinkhole 128 claims; providing definitions; providing program 129 components; specifying the corporation’s liability 130 with respect to sinkhole claims; requiring the 131 corporation to offer specified deductible amounts for 132 sinkhole loss coverage; amending s. 627.3519, F.S.; 133 requiring the Florida Hurricane Catastrophe Fund and 134 Citizens Property Insurance Corporation to provide an 135 annual report to the Legislature and the Financial 136 Services Commission of their respective aggregate net 137 probable maximum losses, financing options, and 138 potential assessments; amending s. 627.4133, F.S.; 139 increasing the amount of prior notice required with 140 respect to the nonrenewal, cancellation, or 141 termination of certain insurance policies; deleting 142 certain provisions that require extended periods of 143 prior notice with respect to the nonrenewal, 144 cancellation, or termination of certain insurance 145 policies; prohibiting the cancellation of certain 146 policies that have been in effect for a specified 147 amount of time except under certain circumstances; 148 amending s. 627.4137, F.S.; adding licensed company 149 adjusters to the list of persons who may respond to a 150 claimant’s written request for information relating to 151 liability insurance coverage; amending s. 627.421, 152 F.S.; authorizing the electronic delivery of certain 153 insurance documents; amending s. 627.43141, F.S.; 154 authorizing a notice of change in policy terms to be 155 sent in a separate mailing to an insured under certain 156 circumstances; requiring an insurer to provide such 157 notice to the insured’s insurance agent; amending s. 158 627.6484, F.S.; providing that coverage for each 159 policyholder of the Florida Comprehensive Health 160 Association terminates on a specified date; requiring 161 the association to provide assistance to 162 policyholders; requiring the association to notify 163 policyholders of termination of coverage and provide 164 information concerning how to obtain other coverage; 165 requiring the association to impose a final assessment 166 or provide a refund to member insurers, sell or 167 dispose of physical assets, perform a final 168 accounting, legally dissolve the association, submit a 169 required report, and transfer all records to the 170 Department of Financial Services; repealing s. 171 627.64872, F.S., relating to the Florida Health 172 Insurance Plan; providing for the future repeal of ss. 173 627.648, 627.6482, 627.6484, 627.6486, 627.6488, 174 627.6489, 627.649, 627.6492, 627.6494, 627.6496, 175 627.6498, and 627.6499, F.S., relating to the Florida 176 Comprehensive Health Association Act, definitions, 177 termination of enrollment and availability of other 178 coverage, eligibility, the Florida Comprehensive 179 Health Association, the Disease Management Program, 180 the administrator of the health insurance plan, 181 participation of insurers, insurer assessments, 182 deferment, and assessment limitations, issuing of 183 policies, minimum benefits coverage and exclusions, 184 premiums, and deductibles, and reporting by insurers 185 and third-party administrators, respectively; amending 186 s. 627.7015, F.S.; revising the rulemaking authority 187 of the department with respect to qualifications and 188 specified types of penalties covered under the 189 property insurance mediation program; creating s. 190 627.70151, F.S.; providing criteria for an insurer or 191 policyholder to challenge the impartiality of a loss 192 appraisal umpire for purposes of disqualifying such 193 umpire; amending s. 627.706, F.S.; revising the 194 definition of the term “neutral evaluator”; amending 195 s. 627.7074, F.S.; requiring the department to adopt 196 rules relating to the certification of neutral 197 evaluators; amending s. 627.736, F.S.; revising the 198 time period for applicability of certain Medicare fee 199 schedules or payment limitations; amending s. 627.745, 200 F.S.; revising qualifications for approval as a 201 mediator by the department; providing grounds for the 202 department to deny an application, or suspend or 203 revoke approval of a mediator or certification of a 204 neutral evaluator; authorizing the department to adopt 205 rules; amending s. 627.841, F.S.; providing that an 206 insurance premium finance company may impose a fee for 207 payments returned due to insufficient funds; amending 208 s. 627.952, F.S.; providing that certain persons who 209 are not residents of this state must be licensed and 210 appointed as nonresident surplus lines agents in this 211 state in order to engage in specified activities with 212 respect to servicing insurance contracts, 213 certificates, or agreements for purchasing or risk 214 retention groups; deleting a fidelity bond requirement 215 applicable to certain nonresident agents who are 216 licensed as surplus lines agents in another state; 217 amending ss. 627.971 and 627.972, F.S.; including 218 licensed mutual insurers in financial guaranty 219 insurance corporations; amending s. 628.901, F.S.; 220 revising the definition of the term “qualifying 221 reinsurer parent company”; amending s. 628.909, F.S.; 222 providing for applicability of certain provisions of 223 the Insurance Code to specified captive insurers; 224 amending s. 634.406, F.S.; revising criteria 225 authorizing premiums of certain service warranty 226 associations to exceed their specified net assets 227 limitations; revising requirements relating to 228 contractual liability policies that insure warranty 229 associations; providing an effective date. 230 231 Be It Enacted by the Legislature of the State of Florida: 232 233 Section 1. Paragraph (b) of subsection (6) of section 234 215.555, Florida Statutes, is amended to read: 235 215.555 Florida Hurricane Catastrophe Fund.— 236 (6) REVENUE BONDS.— 237 (b) Emergency assessments— 238 1. If the board determines that the amount of revenue 239 produced under subsection (5) is insufficient to fund the 240 obligations, costs, and expenses of the fund and the 241 corporation, including repayment of revenue bonds and that 242 portion of the debt service coverage not met by reimbursement 243 premiums, the board shall direct the Office of Insurance 244 Regulation to levy, by order, an emergency assessment on direct 245 premiums for all property and casualty lines of business in this 246 state, including property and casualty business of surplus lines 247 insurers regulated under part VIII of chapter 626, but not 248 including any workers’ compensation premiums or medical 249 malpractice premiums. As used in this subsection, the term 250 “property and casualty business” includes all lines of business 251 identified on Form 2, Exhibit of Premiums and Losses, in the 252 annual statement required of authorized insurers by s. 624.424 253 and any rule adopted under this section, except for those lines 254 identified as accident and health insurance and except for 255 policies written under the National Flood Insurance Program. The 256 assessment shall be specified as a percentage of direct written 257 premium and is subject to annual adjustments by the board in 258 order to meet debt obligations. The same percentage applies 259shall applyto all policies in lines of business subject to the 260 assessment issued or renewed during the 12-month period 261 beginning on the effective date of the assessment. 262 2. A premium is not subject to an annual assessment under 263 this paragraph in excess of 6 percent of premium with respect to 264 obligations arising out of losses attributable to any one 265 contract year, and a premium is not subject to an aggregate 266 annual assessment under this paragraph in excess of 10 percent 267 of premium. An annual assessment under this paragraph continues 268shall continueas long as the revenue bonds issued with respect 269 to which the assessment was imposed are outstanding, including 270 any bonds the proceeds of which were used to refund the revenue 271 bonds, unless adequate provision has been made for the payment 272 of the bonds under the documents authorizing issuance of the 273 bonds. 274 3. Emergency assessments shall be collected from 275 policyholders. Emergency assessments shall be remitted by 276 insurers as a percentage of direct written premium for the 277 preceding calendar quarter as specified in the order from the 278 Office of Insurance Regulation. The office shall verify the 279 accurate and timely collection and remittance of emergency 280 assessments and shall report the information to the board in a 281 form and at a time specified by the board. Each insurer 282 collecting assessments shall provide the information with 283 respect to premiums and collections as may be required by the 284 office to enable the office to monitor and verify compliance 285 with this paragraph. 286 4. With respect to assessments of surplus lines premiums, 287 each surplus lines agent shall collect the assessment at the 288 same time as the agent collects the surplus lines tax required 289 by s. 626.932, and the surplus lines agent shall remit the 290 assessment to the Florida Surplus Lines Service Office created 291 by s. 626.921 at the same time as the agent remits the surplus 292 lines tax to the Florida Surplus Lines Service Office. The 293 emergency assessment on each insured procuring coverage and 294 filing under s. 626.938 shall be remitted by the insured to the 295 Florida Surplus Lines Service Office at the time the insured 296 pays the surplus lines tax to the Florida Surplus Lines Service 297 Office. The Florida Surplus Lines Service Office shall remit the 298 collected assessments to the fund or corporation as provided in 299 the order levied by the Office of Insurance Regulation. The 300 Florida Surplus Lines Service Office shall verify the proper 301 application of such emergency assessments and shall assist the 302 board in ensuring the accurate and timely collection and 303 remittance of assessments as required by the board. The Florida 304 Surplus Lines Service Office shall annually calculate the 305 aggregate written premium on property and casualty business, 306 other than workers’ compensation and medical malpractice, 307 procured through surplus lines agents and insureds procuring 308 coverage and filing under s. 626.938 and shall report the 309 information to the board in a form and at a time specified by 310 the board. 311 5. Any assessment authority not used for a particular 312 contract year may be used for a subsequent contract year. If, 313 for a subsequent contract year, the board determines that the 314 amount of revenue produced under subsection (5) is insufficient 315 to fund the obligations, costs, and expenses of the fund and the 316 corporation, including repayment of revenue bonds and that 317 portion of the debt service coverage not met by reimbursement 318 premiums, the board shall direct the Office of Insurance 319 Regulation to levy an emergency assessment up to an amount not 320 exceeding the amount of unused assessment authority from a 321 previous contract year or years, plus an additional 4 percent 322 provided that the assessments in the aggregate do not exceed the 323 limits specified in subparagraph 2. 324 6. The assessments otherwise payable to the corporation 325 under this paragraph shall be paid to the fund unlessand until326 the Office of Insurance Regulation and the Florida Surplus Lines 327 Service Officehavereceived a notice from the corporation and 328 the funda notice, which shall be conclusive and upon which they 329 may rely without further inquiry, that the corporation has 330 issued bonds and the fund has no agreements in effect with local 331 governments under paragraph (c). On or after the date of the 332 notice and until the date the corporation has no bonds 333 outstanding, the fund shall have no right, title, or interest in 334 or to the assessments, except as provided in the fund’s 335 agreement with the corporation. 336 7. Emergency assessments are not premium and are not 337 subject to the premium tax, to the surplus lines tax, to any 338 fees, or to any commissions. An insurer is liable for all 339 assessments that it collects and must treat the failure of an 340 insured to pay an assessment as a failure to pay the premium. An 341 insurer is not liable for uncollectible assessments. 342 8. IfWhenan insurer is required to return an unearned 343 premium, it shall also return any collected assessment 344 attributable to the unearned premium. A credit adjustment to the 345 collected assessment may be made by the insurer with regard to 346 future remittances that are payable to the fund or corporation, 347 but the insurer is not entitled to a refund. 348 9. IfWhena surplus lines insured or an insured who has 349 procured coverage and filed under s. 626.938 is entitled to the 350 return of an unearned premium, the Florida Surplus Lines Service 351 Office shall provide a credit or refund to the agent or such 352 insured for the collected assessment attributable to the 353 unearned premium beforeprior toremitting the emergency 354 assessment collected to the fund or corporation. 355 10. The exemption of medical malpractice insurance premiums 356 from emergency assessments under this paragraph is repealed May 357 31, 20162013, and medical malpractice insurance premiums shall 358 be subject to emergency assessments attributable to loss events 359 occurring in the contract years commencing on June 1, 20162013. 360 Section 2. Subsection (1) of section 316.646, Florida 361 Statutes, is amended, and subsection (5) is added to that 362 section, to read: 363 316.646 Security required; proof of security and display 364 thereof; dismissal of cases.— 365 (1) AAnyperson required by s. 324.022 to maintain 366 property damage liability security, required by s. 324.023 to 367 maintain liability security for bodily injury or death, or 368 required by s. 627.733 to maintain personal injury protection 369 security on a motor vehicle shall have in his or her immediate 370 possession at all times while operating such motor vehicle 371 proper proof of maintenance of the required security. Such proof 372 shall be a uniform proof-of-insurance card, in paper or 373 electronic format, in a form prescribed by the department, a 374 valid insurance policy, an insurance policy binder, a 375 certificate of insurance, or such other proof as may be 376 prescribed by the department. If a person presents an electronic 377 device to a law enforcement officer for the purpose of 378 displaying a proof-of-insurance card in an electronic format: 379 (a) The person presenting the device is not deemed to 380 consent to access to any information on the electronic device 381 other than the displayed proof-of-insurance card. 382 (b) The law enforcement officer is not liable for damage to 383 the electronic device. 384 (5) The department may adopt rules to implement this 385 section. 386 Section 3. Paragraph (a) of subsection (5) of section 387 320.02, Florida Statutes, is amended to read: 388 320.02 Registration required; application for registration; 389 forms.— 390 (5)(a) Proof that personal injury protection benefits have 391 been purchased when required under s. 627.733, that property 392 damage liability coverage has been purchased as required under 393 s. 324.022, that bodily injury or death coverage has been 394 purchased if required under s. 324.023, and that combined bodily 395 liability insurance and property damage liability insurance have 396 been purchased when required under s. 627.7415 shall be provided 397 in the manner prescribed by law by the applicant at the time of 398 application for registration of any motor vehicle that is 399 subject to such requirements. The issuing agent shall refuse to 400 issue registration if such proof of purchase is not provided. 401 Insurers shall furnish uniform proof-of-purchase cards, in paper 402 or electronic format, in a form prescribed by the department and 403 shall include the name of the insured’s insurance company, the 404 coverage identification number, and the make, year, and vehicle 405 identification number of the vehicle insured. The card must 406shallcontain a statement notifying the applicant of the penalty 407 specified in s. 316.646(4). The card or insurance policy, 408 insurance policy binder, or certificate of insurance or a 409 photocopy of any of these; an affidavit containing the name of 410 the insured’s insurance company, the insured’s policy number, 411 and the make and year of the vehicle insured; or such other 412 proof as may be prescribed by the department constitutesshall413constitutesufficient proof of purchase. If an affidavit is 414 provided as proof, it mustshallbe in substantially the 415 following form: 416 417 Under penalty of perjury, I ...(Name of insured)... do hereby 418 certify that I have ...(Personal Injury Protection, Property 419 Damage Liability, and, when required, Bodily Injury 420 Liability)... Insurance currently in effect with ...(Name of 421 insurance company)... under ...(policy number)... covering 422 ...(make, year, and vehicle identification number of 423 vehicle).... ...(Signature of Insured)... 424 425 Such affidavit shall include the following warning: 426 427 WARNING: GIVING FALSE INFORMATION IN ORDER TO OBTAIN A VEHICLE 428 REGISTRATION CERTIFICATE IS A CRIMINAL OFFENSE UNDER FLORIDA 429 LAW. ANYONE GIVING FALSE INFORMATION ON THIS AFFIDAVIT IS 430 SUBJECT TO PROSECUTION. 431 432 When an application is made through a licensed motor vehicle 433 dealer as required in s. 319.23, the original or a photostatic 434 copy of such card, insurance policy, insurance policy binder, or 435 certificate of insurance or the original affidavit from the 436 insured shall be forwarded by the dealer to the tax collector of 437 the county or the Department of Highway Safety and Motor 438 Vehicles for processing. By executing the aforesaid affidavit, 439 no licensed motor vehicle dealer will be liable in damages for 440 any inadequacy, insufficiency, or falsification of any statement 441 contained therein. A card shall also indicate the existence of 442 any bodily injury liability insurance voluntarily purchased. 443 Section 4. Subsection (8) is added to section 554.1021, 444 Florida Statutes, to read: 445 554.1021 Definitions.—As used in ss. 554.1011-554.115: 446 (8) “Authorized inspection agency” means: 447 (a) A county, city, town, or other governmental subdivision 448 that has adopted and administers, at a minimum, Section I of the 449 A.S.M.E. Boiler and Pressure Vessel Code as a legal requirement 450 and whose inspectors hold valid certificates of competency in 451 accordance with s. 554.113; or 452 (b) An insurance company that is licensed or registered by 453 an appropriate authority of any state of the United States or 454 province of Canada and whose inspectors hold valid certificates 455 of competency in accordance with s. 554.113. 456 Section 5. Section 554.107, Florida Statutes, is amended to 457 read: 458 554.107 Special inspectors.— 459 (1) Upon application byanyan authorized inspection agency 460company licensed to insure boilers in this state, the chief 461 inspector shall issue a certificate of competency as a special 462 inspector to ananyinspector employed by the agency if he or 463 shecompany, provided that such inspectorsatisfies the 464 competency requirements for inspectors as provided in s. 465 554.113. 466 (2) The certificate of competency of a special inspector 467 remainsshall remainin effect only so long as the special 468 inspector is employed by an authorized inspection agencya469company licensed to insure boilers in this state. Upon 470 termination of employment with such agencycompany, a special 471 inspector shall, in writing, notify the chief inspector of such 472 termination. Such notice shall be given within 15 days following 473 the date of termination. 474 Section 6. Subsection (1) of section 554.109, Florida 475 Statutes, is amended to read: 476 554.109 Exemptions.— 477 (1) AnAnyinsurance company that insuresinsuringa boiler 478 located in a public assembly location in this state shall 479 inspect or contract with an authorized inspection agency to 480 inspect such boilerso insured,and shall annually report to the 481 department the identity of the authorized inspection agency that 482 performs a required boiler inspection on behalf of the company. 483 Aanycounty, city, town, or other governmental subdivision that 484whichhas adopted into law the Boiler and Pressure Vessel Code 485 of the American Society of Mechanical Engineers and the National 486 Board Inspection Code for the construction, installation, 487 inspection, maintenance, and repair of boilers, regulating such 488 boilers in public assembly locations, shall inspect such boilers 489 so regulated; provided that such inspection shall be conducted 490 by a special inspector licensed pursuant to ss. 554.1011 491 554.115. Upon filing of a report of satisfactory inspection with 492 the department, such boiler is exempt from inspection by the 493 department. 494 Section 7. Paragraph (f) of subsection (1) of section 495 624.413, Florida Statutes, is amended to read: 496 624.413 Application for certificate of authority.— 497 (1) To apply for a certificate of authority, an insurer 498 shall file its application therefor with the office, upon a form 499 adopted by the commission and furnished by the office, showing 500 its name; location of its home office and, if an alien insurer, 501 its principal office in the United States; kinds of insurance to 502 be transacted; state or country of domicile; and such additional 503 information as the commission reasonably requires, together with 504 the following documents: 505 (f) If a foreign or alien insurer, a copy of the report of 506 the most recent examination of the insurer certified by the 507 public official having supervision of insurance in its state of 508 domicile or of entry into the United States. The end of the most 509 recent year covered by the examination must be within the 5-year 5103-yearperiod preceding the date of application. In lieu of the 511 certified examination report, the office may accept an audited 512 certified public accountant’s report prepared on a basis 513 consistent with the insurance laws of the insurer’s state of 514 domicile, certified by the public official having supervision of 515 insurance in its state of domicile or of entry into the United 516 States. 517 Section 8. Subsection (4) is added to section 626.0428, 518 Florida Statutes, to read: 519 626.0428 Agency personnel powers, duties, and limitations.— 520 (4)(a) Each place of business established by an agent or 521 agency, firm, corporation, or association must be in the active 522 full-time charge of a licensed and appointed agent holding the 523 required agent licenses to transact the lines of insurance being 524 handled at the location. 525 (b) Notwithstanding paragraph (a), the licensed agent in 526 charge of an insurance agency may also be the agent in charge of 527 additional branch office locations of the agency if insurance 528 activities requiring licensure as an insurance agent do not 529 occur at any location when the agent is not physically present 530 and unlicensed employees at the location do not engage in 531 insurance activities requiring licensure as an insurance agent 532 or customer representative. 533 (c) An insurance agency and each branch place of business 534 of an insurance agency shall designate an agent in charge and 535 file the name and license number of the agent in charge and the 536 physical address of the insurance agency location with the 537 department at the department’s designated website. The 538 designation of the agent in charge may be changed at the option 539 of the agency. A change of the designated agent in charge is 540 effective upon notification to the department, which shall be 541 provided within 30 days after such change. 542 (d) For the purposes of this subsection, an “agent in 543 charge” is the licensed and appointed agent who is responsible 544 for the supervision of all individuals within an insurance 545 agency location, regardless of whether such individuals deal 546 with the general public in the solicitation or negotiation of 547 insurance contracts or the collection or accounting of moneys. 548 (e) An agent in charge of an insurance agency is 549 accountable for wrongful acts, misconduct, or violations of 550 provisions of this code committed by the agent or by any person 551 under his or her supervision while acting on behalf of the 552 agency. This section may not be construed to render the agent in 553 charge criminally liable for an act unless he or she personally 554 committed or knew or should have known of the act and of the 555 facts constituting a violation of this chapter. 556 (f) An insurance agency location may not conduct the 557 business of insurance unless the agency designates an agent in 558 charge at all times. If the agency fails to update the 559 designation of the agent in charge within 90 days after the date 560 of a change in designation, the department shall automatically 561 revoke the agency’s license. 562 Section 9. Subsection (7) of section 626.112, Florida 563 Statutes, is amended to read: 564 626.112 License and appointment required; agents, customer 565 representatives, adjusters, insurance agencies, service 566 representatives, managing general agents.— 567 (7)(a)Effective October 1, 2006,No individual, firm, 568 partnership, corporation, association, or any other entity shall 569 act in its own name or under a trade name, directly or 570 indirectly, as an insurance agency, unless it complies with s. 571 626.172 with respect to possessing an insurance agency license 572 for each place of business at which it engages in anany573 activity thatwhichmay be performed only by a licensed 574 insurance agent. However, an insurance agency that is owned and 575 operated by a single licensed agent conducting business in his 576 or her individual name and not employing or otherwise using the 577 services of or appointing other licensees is exempt from the 578 agency licensing requirements of this subsection. A branch place 579 of business that is established by a licensed agency is 580 considered a branch agency and is not required to be licensed so 581 long as it transacts business under the same name and federal 582 tax identification number as the licensed agency and has 583 designated a licensed agent in charge of the location as 584 required by s. 626.0428 and the address and telephone number of 585 the location have been submitted to the department for inclusion 586 in the licensing record of the licensed agency within 30 days 587 after insurance transactions begin at the locationEach agency588engaged in business in this state before January 1, 2003, which589is wholly owned by insurance agents currently licensed and590appointed under this chapter, each incorporated agency whose591voting shares are traded on a securities exchange, each agency592designated and subject to supervision and inspection as a branch593office under the rules of the National Association of Securities594Dealers, and each agency whose primary function is offering595insurance as a service or member benefit to members of a596nonprofit corporation may file an application for registration597in lieu of licensure in accordance with s.626.172(3).Each598agency engaged in business before October 1, 2006, shall file an599application for licensure or registration on or before October6001, 2006.601 (b)1.If an agency is required to be licensed but fails to 602 file an application for licensure in accordance with this 603 section, the department shall impose on the agency an 604 administrative penalty in an amount of up to $10,000. 6052. If an agency is eligible for registration but fails to606file an application for registration or an application for607licensure in accordance with this section, the department shall608impose on the agency an administrative penalty in an amount of609up to $5,000.610 (c)(b)Effective October 1, 2013, the department must 611 automatically convert the registration of an approveda612 registered insurance agency toshall, as a condition precedent613to continuing business, obtainan insurance agency licenseif614the department finds that, with respect to any majority owner,615partner, manager, director, officer, or other person who manages616or controls the agency, any person has:6171. Been found guilty of, or has pleaded guilty or nolo618contendere to, a felony in this state or any other state619relating to the business of insurance or to an insurance agency,620without regard to whether a judgment of conviction has been621entered by the court having jurisdiction of the cases. 6222. Employed any individual in a managerial capacity or in a623capacity dealing with the public who is under an order of624revocation or suspension issued by the department. An insurance625agency may request, on forms prescribed by the department,626verification of any person’s license status. If a request is627mailed within 5 working days after an employee is hired, and the628employee’s license is currently suspended or revoked, the agency629shall not be required to obtain a license, if the unlicensed630person’s employment is immediately terminated.6313. Operated the agency or permitted the agency to be632operated in violation of s.626.747.6334. With such frequency as to have made the operation of the634agency hazardous to the insurance-buying public or other635persons:636a. Solicited or handled controlled business. This637subparagraph shall not prohibit the licensing of any lending or638financing institution or creditor, with respect to insurance639only, under credit life or disability insurance policies of640borrowers from the institutions, which policies are subject to641part IX of chapter 627.642b. Misappropriated, converted, or unlawfully withheld643moneys belonging to insurers, insureds, beneficiaries, or others644and received in the conduct of business under the license.645c. Unlawfully rebated, attempted to unlawfully rebate, or646unlawfully divided or offered to divide commissions with647another.648d. Misrepresented any insurance policy or annuity contract,649or used deception with regard to any policy or contract, done650either in person or by any form of dissemination of information651or advertising.652e. Violated any provision of this code or any other law653applicable to the business of insurance in the course of dealing654under the license.655f. Violated any lawful order or rule of the department.656g. Failed or refused, upon demand, to pay over to any657insurer he or she represents or has represented any money coming658into his or her hands belonging to the insurer.659h. Violated the provision against twisting as defined in s.660626.9541(1)(l).661i. In the conduct of business, engaged in unfair methods of662competition or in unfair or deceptive acts or practices, as663prohibited under part IX of this chapter.664j. Willfully overinsured any property insurance risk.665k. Engaged in fraudulent or dishonest practices in the666conduct of business arising out of activities related to667insurance or the insurance agency.668l. Demonstrated lack of fitness or trustworthiness to669engage in the business of insurance arising out of activities670related to insurance or the insurance agency.671m. Authorized or knowingly allowed individuals to transact672insurance who were not then licensed as required by this code.6735. Knowingly employed any person who within the preceding 3674years has had his or her relationship with an agency terminated675in accordance with paragraph (d).6766. Willfully circumvented the requirements or prohibitions677of this code.678 Section 10. Subsections (2), (3), and (4) of section 679 626.172, Florida Statutes, are amended to read: 680 626.172 Application for insurance agency license.— 681 (2) An application for an insurance agency license must 682shallbe signed by the owner or owners of the agency. If the 683 agency is incorporated, the application mustshallbe signed by 684 the president and secretary of the corporation. The application 685 for an insurance agency license mustshallinclude: 686 (a) The name of each majority owner, partner, officer, and 687 director of the insurance agency. 688 (b) The residence address of each person required to be 689 listed in the application under paragraph (a). 690 (c) The name of the insurance agency,andits principal 691 business street address and a valid e-mail address of the 692 insurance agency. 693 (d) The physical addresslocationof each branch agency, 694 including its name, e-mail address, and telephone number and the 695 date that the branch location began transacting insuranceoffice696and the name under which each agency office conducts or will697conduct business. 698 (e) The name of each agent to be in full-time charge of an 699 agency office and specification of which office, including 700 branch locations. 701 (f) The fingerprints of each of the following: 702 1. A sole proprietor; 703 2. Each partner; 704 3. Each owner of an unincorporated agency; 705 4. Each owner who directs or participates in the management 706 or control of an incorporated agency whose shares are not traded 707 on a securities exchange; 708 5. The president, senior vice presidents, treasurer, 709 secretary, and directors of the agency; and 710 6. Any other person who directs or participates in the 711 management or control of the agency, whether through the 712 ownership of voting securities, by contract, by ownership of 713 agency bank accounts, or otherwise. 714 715 Fingerprints must be taken by a law enforcement agency or other 716 entity approved by the department and must be accompanied by the 717 fingerprint processing fee specified in s. 624.501. Fingerprints 718 mustshallbe processed in accordance with s. 624.34. However, 719 fingerprints need not be filed for ananyindividual who is 720 currently licensed and appointed under this chapter. This 721 paragraph does not apply to corporations whose voting shares are 722 traded on a securities exchange. 723 (g) Such additional information as the department requires 724 by rule to ascertain the trustworthiness and competence of 725 persons required to be listed on the application and to 726 ascertain that such persons meet the requirements of this code. 727 However, the department may not require that credit or character 728 reports be submitted for persons required to be listed on the 729 application. 730 (h)Beginning October 1, 2005,The department mustshall731 accept the uniform application for nonresident agency licensure. 732 The department may adopt by rule revised versions of the uniform 733 application. 734(3) The department shall issue a registration as an735insurance agency to any agency that files a written application736with the department and qualifies for registration. The737application for registration shall require the agency to provide738the same information required for an agency licensed under739subsection (2), the agent identification number for each owner740who is a licensed agent, proof that the agency qualifies for741registration as provided in s.626.112(7), and any other742additional information that the department determines is743necessary in order to demonstrate that the agency qualifies for744registration. The application must be signed by the owner or745owners of the agency. If the agency is incorporated, the746application must be signed by the president and the secretary of747the corporation. An agent who owns the agency need not file748fingerprints with the department if the agent obtained a license749under this chapter and the license is currently valid.750(a) If an application for registration is denied, the751agency must file an application for licensure no later than 30752days after the date of the denial of registration.753(b) A registered insurance agency must file an application754for licensure no later than 30 days after the date that any755person who is not a licensed and appointed agent in this state756acquires any ownership interest in the agency. If an agency757fails to file an application for licensure in compliance with758this paragraph, the department shall impose an administrative759penalty in an amount of up to $5,000 on the agency.760(c) Sections626.6115and626.6215do not apply to agencies761registered under this subsection.762 (3)(4)The department mustshallissue a licenseor763registrationto each agency upon approval of the application, 764 and each agency location mustshalldisplay the licenseor765registrationprominently in a manner that makes it clearly 766 visible to aanycustomer or potential customer who enters the 767 agency. 768 Section 11. Paragraph (d) of subsection (1) of section 769 626.321, Florida Statutes, is amended to read: 770 626.321 Limited licenses.— 771 (1) The department shall issue to a qualified applicant a 772 license as agent authorized to transact a limited class of 773 business in any of the following categories of limited lines 774 insurance: 775 (d) Motor vehicle rental insurance.— 776 1. License covering only insurance of the risks set forth 777 in this paragraph when offered, sold, or solicited with and 778 incidental to the rental or lease of a motor vehicle and which 779 applies only to the motor vehicle that is the subject of the 780 lease or rental agreement and the occupants of the motor 781 vehicle: 782 a. Excess motor vehicle liability insurance providing 783 coverage in excess of the standard liability limits provided by 784 the lessor in the lessor’s lease to a person renting or leasing 785 a motor vehicle from the licensee’s employer for liability 786 arising in connection with the negligent operation of the leased 787 or rented motor vehicle. 788 b. Insurance covering the liability of the lessee to the 789 lessor for damage to the leased or rented motor vehicle. 790 c. Insurance covering the loss of or damage to baggage, 791 personal effects, or travel documents of a person renting or 792 leasing a motor vehicle. 793 d. Insurance covering accidental personal injury or death 794 of the lessee and any passenger who is riding or driving with 795 the covered lessee in the leased or rented motor vehicle. 796 2. Insurance under a motor vehicle rental insurance license 797 may be issued only if the lease or rental agreement is for no 798 more than 60 days, the lessee is not provided coverage for more 799 than 60 consecutive days per lease period, and the lessee is 800 given written notice that his or her personal insurance policy 801 providing coverage on an owned motor vehicle may provide 802 coverage of such risks and that the purchase of the insurance is 803 not required in connection with the lease or rental of a motor 804 vehicle. If the lease is extended beyond 60 days, the coverage 805 may be extended one time only for a period not to exceed an 806 additional 60 days. Insurance may be provided to the lessee as 807 an additional insured on a policy issued to the licensee’s 808 employer. 809 3. The license may be issued only to the full-time salaried 810 employee of a licensed general lines agent or to a business 811 entity that offers motor vehicles for rent or lease if insurance 812 sales activities authorized by the license are in connection 813 with and incidental to the rental or lease of a motor vehicle. 814 a. A license issued to a business entity that offers motor 815 vehicles for rent or lease encompasses each office, branch 816 office, employee, or place of business making use of the 817 entity’s business name in order to offer, solicit, and sell 818 insurance pursuant to this paragraph. 819 b. The application for licensure must list the name, 820 address, and phone number for each office, branch office, or 821 place of business that is to be covered by the license. The 822 licensee shall notify the department of the name, address, and 823 phone number of any new location that is to be covered by the 824 license before the new office, branch office, or place of 825 business engages in the sale of insurance pursuant to this 826 paragraph. The licensee must notify the department within 30 827 days after closing or terminating an office, branch office, or 828 place of business. Upon receipt of the notice, the department 829 shall delete the office, branch office, or place of business 830 from the license. 831 c. A licensed and appointed entity is directly responsible 832 and accountable for all acts of the licensee’s employees. 833 Section 12. Section 626.382, Florida Statutes, is amended 834 to read: 835 626.382 Continuation, expiration of license; insurance 836 agencies.—An insurance agency license continuesThe license of837any insurance agencyshall be issued for a period of 3 years and838shall continuein force until it is canceled, suspended, 839 revoked, or otherwise terminated.A license may be renewed by840submitting a renewal request to the department on a form adopted841by department rule.842 Section 13. Section 626.601, Florida Statutes, is amended 843 to read: 844 626.601 Improper conduct; inquiry; fingerprinting.— 845 (1) The department or office may, upon its own motion or 846 upon a written complaint signed by ananyinterested person and 847 filed with the department or office, inquire into any alleged 848 improper conduct of aanylicensed, approved, or certified 849 insurance agency, agent, adjuster, service representative, 850 managing general agent, customer representative, title insurance 851 agent, title insurance agency, mediator, neutral evaluator, 852 continuing education course provider, instructor, school 853 official, or monitor group under this code. The department or 854 office may thereafter initiate an investigation ofanysuch 855 individual or entitylicenseeif it has reasonable cause to 856 believe that the individual or entitylicenseehas violated any 857 provision of the insurance code. During the course of its 858 investigation, the department or office shall contact the 859 individual or entitylicenseebeing investigated unless it 860 determines that contacting such individual or entityperson861 could jeopardize the successful completion of the investigation 862 or cause injury to the public. 863 (2) In the investigation by the department or office of the 864 alleged misconduct, the individual or entitylicenseeshall, 865 whenever so required by the department or office, cause the 866 individual’s or entity’shis or herbooks and records to be open 867 for inspection for the purpose of such inquiries. 868 (3) The complaints against an individual or entityany869licenseemay be informally alleged and are not required to 870 include languageneed not be in any such language as is871 necessary to charge a crime on an indictment or information. 872 (4) The expense foranyhearings or investigations 873 conducted under this law, as well as the fees and mileage of 874 witnesses, may be paid out of the appropriate fund. 875 (5) If the department or office, after investigation, has 876 reason to believe that an individuala licenseemay have been 877 found guilty of or pleaded guilty or nolo contendere to a felony 878 or a crime related to the business of insurance in this or any 879 other state or jurisdiction, the department or office may 880 require the individuallicenseeto file with the department or 881 office a complete set of his or her fingerprints, which must 882shallbe accompanied by the fingerprint processing fee set forth 883 in s. 624.501. The fingerprints shall be taken by an authorized 884 law enforcement agency or other department-approved entity. 885 (6) The complaint andanyinformation obtained pursuant to 886 the investigation by the department or office are confidential 887 and are exempt fromthe provisions ofs. 119.07, unless the 888 department or office files a formal administrative complaint, 889 emergency order, or consent order against the individual or 890 entitylicensee.Nothing inThis subsection does notshall be891construed toprevent the department or office from disclosing 892 the complaint or such information as it deems necessary to 893 conduct the investigation, to update the complainant as to the 894 status and outcome of the complaint, or to share such 895 information with aanylaw enforcement agency. 896 Section 14. Section 626.747, Florida Statutes, is repealed. 897 Section 15. Paragraph (b) of subsection (1) of section 898 626.8411, Florida Statutes, is amended to read: 899 626.8411 Application of Florida Insurance Code provisions 900 to title insurance agents or agencies.— 901 (1) The following provisions of part II applicable to 902 general lines agents or agencies also apply to title insurance 903 agents or agencies: 904 (b) Section 626.0428(4)(a) and (b)626.747, relating to 905 branch agencies. 906 Section 16. Paragraph (c) of subsection (2) and subsection 907 (3) of section 626.8805, Florida Statutes, is amended to read: 908 626.8805 Certificate of authority to act as administrator.— 909 (2) The administrator shall file with the office an 910 application for a certificate of authority upon a form to be 911 adopted by the commission and furnished by the office, which 912 application shall include or have attached the following 913 information and documents: 914 (c) The names, addresses, official positions, and 915 professional qualifications of the individuals who are employed 916 or retained by the administrator and who are responsible for the 917 conduct of the affairs of the administrator, including all 918 members of the board of directors, board of trustees, executive 919 committee, or other governing board or committee, and the 920 principal officers in the case of a corporation or,the partners 921 or members in the case of a partnership or association of the 922 administrator, and any other person who exercises control or923influence over the affairs of the administrator. 924 (3) The applicant shall make available for inspection by 925 the office copies of all contracts relating to services provided 926 by the administrator towithinsurers or other persons utilizing 927 the services of the administrator. 928 Section 17. Subsections (1) and (3) of section 626.8817, 929 Florida Statutes, are amended to read: 930 626.8817 Responsibilities of insurance company with respect 931 to administration of coverage insured.— 932 (1) If an insurer uses the services of an administrator, 933 the insurer is responsible for determining the benefits, premium 934 rates, underwriting criteria, and claims payment procedures 935 applicable to the coverage and for securing reinsurance, if any. 936 The rules pertaining to these matters shall be provided,in 937 writing,by the insurer, or its designee, to the administrator. 938 The responsibilities of the administrator as to any of these 939 matters shall be set forth in athewritten agreement binding 940 uponbetweenthe administrator and the insurer. 941 (3) In cases in which an administrator administers benefits 942 for more than 100 certificateholders on behalf of an insurer, 943 the insurer shall, at least semiannually, conduct a review of 944 the operations of the administrator. At least one such review 945 must be an onsite audit of the operations of the administrator. 946 The insurer may contract with a qualified third party to conduct 947 such examination. 948 Section 18. Subsections (1) and (4) of section 626.882, 949 Florida Statutes, are amended to read: 950 626.882 Agreement between administrator and insurer; 951 required provisions; maintenance of records.— 952 (1) ANoperson may not act as an administrator without a 953 written agreement, as required under s. 626.8817, which 954 specifies the rights, duties and obligations of thebetween such955person asadministrator andaninsurer. 956 (4) If a policy is issued to a trustee or trustees, a copy 957 of the trust agreement and any amendments to that agreement 958 shall be furnished to the insurer or its designee by the 959 administrator and shall be retained as part of the official 960 records of both the administrator and the insurer for the 961 duration of the policy and for 5 years thereafter. 962 Section 19. Subsections (3), (4), and (5) of section 963 626.883, Florida Statutes, are amended to read: 964 626.883 Administrator as intermediary; collections held in 965 fiduciary capacity; establishment of account; disbursement; 966 payments on behalf of insurer.— 967 (3) If charges or premiums deposited in a fiduciary account 968 have been collected on behalf of or for more than one insurer, 969 the administrator shall keep records clearly recording the 970 deposits in and withdrawals from such account on behalf of or 971 for each insurer. The administrator shall, upon request of an 972 insurer or its designee, furnish such insurer with copies of 973 records pertaining to deposits and withdrawals on behalf of or 974 for such insurer. 975 (4) The administrator may not pay aanyclaim by 976 withdrawals from a fiduciary account. Withdrawals from such 977 account shall be made as provided in the written agreement 978 required under ss. 626.8817 and 626.882between the979administrator and the insurerfor any of the following: 980 (a) Remittance to an insurer entitled to such remittance. 981 (b) Deposit in an account maintained in the name of such 982 insurer. 983 (c) Transfer to and deposit in a claims-paying account, 984 with claims to be paid as provided by such insurer. 985 (d) Payment to a group policyholder for remittance to the 986 insurer entitled to such remittance. 987 (e) Payment to the administrator of the commission, fees, 988 or charges of the administrator. 989 (f) Remittance of return premium to the person or persons 990 entitled to such return premium. 991 (5) All claims paid by the administrator from funds 992 collected on behalf of the insurer shall be paid only on drafts 993 of, and as authorized by, such insurer or its designee. 994 Section 20. Subsection (3) of section 626.884, Florida 995 Statutes, is amended to read: 996 626.884 Maintenance of records by administrator; access; 997 confidentiality.— 998 (3) The insurer shall retain the right of continuing access 999 to books and records maintained by the administrator sufficient 1000 to permit the insurer to fulfill all of its contractual 1001 obligations to insured persons, subject to any restrictions in 1002 the written agreement pertaining tobetween the insurer and the1003administrator onthe proprietary rights of the parties in such 1004 books and records. 1005 Section 21. Subsections (1) and (2) of section 626.89, 1006 Florida Statutes, are amended to read: 1007 626.89 Annual financial statement and filing fee; notice of 1008 change of ownership.— 1009 (1) Each authorized administrator shall file with the 1010 office a full and true statement of its financial condition, 1011 transactions, and affairs. The statement shall be filed annually 1012 on or before AprilMarch1 or within such extension of time 1013 therefor as the office for good cause may have granted and shall 1014 be for the preceding calendar year or fiscal year, if the 1015 administrator’s accounting is on a fiscal year basis. The 1016 statement shall be in such form and contain such matters as the 1017 commission prescribes and shall be verified by at least two 1018 officers of such administrator.An administrator whose sole1019stockholder is an association representing health care providers1020which is not an affiliate of an insurer, an administrator of a1021pooled governmental self-insurance program, or an administrator1022that is a university may submit the preceding fiscal year’s1023statement within 2 months after its fiscal year end.1024 (2) Each authorized administrator shall also file an 1025 audited financial statement performed by an independent 1026 certified public accountant. The audited financial statement 1027 shall be filed with the office on or before JulyJune1 for the 1028 preceding calendar or fiscal yearending December 31.An1029administrator whose sole stockholder is an association1030representing health care providers which is not an affiliate of1031an insurer, an administrator of a pooled governmental self1032insurance program, or an administrator that is a university may1033submit the preceding fiscal year’s audited financial statement1034within 5 months after the end of its fiscal year.An audited 1035 financial statement prepared on a consolidated basis must 1036 include a columnar consolidating or combining worksheet that 1037 must be filed with the statement and must comply with the 1038 following: 1039 (a) Amounts shown on the consolidated audited financial 1040 statement must be shown on the worksheet; 1041 (b) Amounts for each entity must be stated separately; and 1042 (c) Explanations of consolidating and eliminating entries 1043 must be included. 1044 Section 22. Section 626.931, Florida Statutes, is amended 1045 to read: 1046 626.931Agent affidavit andInsurer reporting 1047 requirements.— 1048(1) Each surplus lines agent shall on or before the 45th1049day following each calendar quarter file with the Florida1050Surplus Lines Service Office an affidavit, on forms as1051prescribed and furnished by the Florida Surplus Lines Service1052Office, stating that all surplus lines insurance transacted by1053him or her during such calendar quarter has been submitted to1054the Florida Surplus Lines Service Office as required.1055(2) The affidavit of the surplus lines agent shall include1056efforts made to place coverages with authorized insurers and the1057results thereof.1058 (1)(3)Each foreign insurer accepting premiums shall, on or 1059 before the end of the month following each calendar quarter, 1060 file with the Florida Surplus Lines Service Office a verified 1061 report of all surplus lines insurance transacted by such insurer 1062 for insurance risks located in this state during such calendar 1063 quarter. 1064 (2)(4)Each alien insurer accepting premiums shall, on or 1065 before June 30 of each year, file with the Florida Surplus Lines 1066 Service Office a verified report of all surplus lines insurance 1067 transacted by such insurer for insurance risks located in this 1068 state during the preceding calendar year. 1069 (3)(5)The department may waive the filing requirements 1070 described in subsections (1)(3)and (2)(4). 1071 (4)(6)Each insurer’s report and supporting information 1072 shall be in a computer-readable format as determined by the 1073 Florida Surplus Lines Service Office or shall be submitted on 1074 forms prescribed by the Florida Surplus Lines Service Office and 1075 shall show for each applicable agent: 1076 (a) A listing of all policies, certificates, cover notes, 1077 or other forms of confirmation of insurance coverage or any 1078 substitutions thereof or endorsements thereto and the 1079 identifying number; and 1080 (b) Any additional information required by the department 1081 or Florida Surplus Lines Service Office. 1082 Section 23. Paragraph (a) of subsection (2) of section 1083 626.932, Florida Statutes, is amended to read: 1084 626.932 Surplus lines tax.— 1085 (2)(a) The surplus lines agent shall make payable to the 1086 department the tax related to each calendar quarter’s business 1087 as reported to the Florida Surplus Lines Service Office, and 1088 remit the tax to the Florida Surplus Lines Service Office on or 1089 before the 45th day following each calendar quarterat the same1090time as provided for the filing of the quarterly affidavit,1091under s.626.931. The Florida Surplus Lines Service Office shall 1092 forward to the department the taxes and any interest collected 1093 pursuant to paragraph (b), within 10 days afterofreceipt. 1094 Section 24. Subsection (1) of section 626.935, Florida 1095 Statutes, is amended to read: 1096 626.935 Suspension, revocation, or refusal of surplus lines 1097 agent’s license.— 1098 (1) The department shall deny an application for, suspend, 1099 revoke, or refuse to renew the appointment of a surplus lines 1100 agent and all other licenses and appointments held by the 1101 licensee under this code, on any of the following grounds: 1102 (a) Removal of the licensee’s office from the licensee’s 1103 state of residence. 1104 (b) Removal of the accounts and records of his or her 1105 surplus lines business from this state or the licensee’s state 1106 of residence during the period when such accounts and records 1107 are required to be maintained under s. 626.930. 1108 (c) Closure of the licensee’s office for more than 30 1109 consecutive days. 1110(d) Failure to make and file his or her affidavit or1111reports when due as required by s.626.931.1112 (d)(e)Failure to pay the tax or service fee on surplus 1113 lines premiums, as provided in the Surplus Lines Law. 1114 (e)(f)Suspension, revocation, or refusal to renew or 1115 continue the license or appointment as a general lines agent, 1116 service representative, or managing general agent. 1117 (f)(g)Lack of qualifications as for an original surplus 1118 lines agent’s license. 1119 (g)(h)Violation of this Surplus Lines Law. 1120 (h)(i)For any other applicable cause for which the license 1121 of a general lines agent could be suspended, revoked, or refused 1122 under s. 626.611 or s. 626.621. 1123 Section 25. Subsection (1) of section 626.936, Florida 1124 Statutes, is amended to read: 1125 626.936 Failure to file reports or pay tax or service fee; 1126 administrative penalty.— 1127 (1) AAnylicensed surplus lines agent who neglects to file 1128 a reportor an affidavitin the form and within the time 1129 required or provided for in the Surplus Lines Law may be fined 1130 up to $50 per day for each day the neglect continues, beginning 1131 the day after the reportor affidavitwas due until the date the 1132 reportor affidavitis received. All sums collected under this 1133 section shall be deposited into the Insurance Regulatory Trust 1134 Fund. 1135 Section 26. Paragraph (b) of subsection (2) of section 1136 627.062, Florida Statutes, is amended to read: 1137 627.062 Rate standards.— 1138 (2) As to all such classes of insurance: 1139 (b) Upon receiving a rate filing, the office shall review 1140 the filing to determine if a rate is excessive, inadequate, or 1141 unfairly discriminatory. In making that determination, the 1142 office shall, in accordance with generally accepted and 1143 reasonable actuarial techniques, consider the following factors: 1144 1. Past and prospective loss experience within and without 1145 this state. 1146 2. Past and prospective expenses. 1147 3. The degree of competition among insurers for the risk 1148 insured. 1149 4. Investment income reasonably expected by the insurer, 1150 consistent with the insurer’s investment practices, from 1151 investable premiums anticipated in the filing, plus any other 1152 expected income from currently invested assets representing the 1153 amount expected on unearned premium reserves and loss reserves. 1154 The commission may adopt rules using reasonable techniques of 1155 actuarial science and economics to specify the manner in which 1156 insurers calculate investment income attributable to classes of 1157 insurance written in this state and the manner in which 1158 investment income is used to calculate insurance rates. Such 1159 manner must contemplate allowances for an underwriting profit 1160 factor and full consideration of investment income which produce 1161 a reasonable rate of return; however, investment income from 1162 invested surplus may not be considered. 1163 5. The reasonableness of the judgment reflected in the 1164 filing. 1165 6. Dividends, savings, or unabsorbed premium deposits 1166 allowed or returned to Florida policyholders, members, or 1167 subscribers. 1168 7. The adequacy of loss reserves. 1169 8. The cost of reinsurance. The office may not disapprove a 1170 rate as excessive solely due to the insurer having obtained 1171 catastrophic reinsurance to cover the insurer’s estimated 250 1172 year probable maximum loss or any lower level of loss. 1173 9. Trend factors, including trends in actual losses per 1174 insured unit for the insurer making the filing. 1175 10. Conflagration and catastrophe hazards, if applicable. 1176 11. Projected hurricane losses, if applicable, which must 1177 be estimated using a model or method, or a straight average of 1178 model results or output ranges, independently found to be 1179 acceptable or reliable by the Florida Commission on Hurricane 1180 Loss Projection Methodology, and as further provided in s. 1181 627.0628. 1182 12. A reasonable margin for underwriting profit and 1183 contingencies. 1184 13. The cost of medical services, if applicable. 1185 14. Other relevant factors that affect the frequency or 1186 severity of claims or expenses. 1187 Section 27. Paragraph (d) of subsection (3) of section 1188 627.0628, Florida Statutes, is amended to read: 1189 627.0628 Florida Commission on Hurricane Loss Projection 1190 Methodology; public records exemption; public meetings 1191 exemption.— 1192 (3) ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.— 1193 (d) With respect to a rate filing under s. 627.062, an 1194 insurer shall employ and may not modify or adjust actuarial 1195 methods, principles, standards, models, or output ranges found 1196 by the commission to be accurate or reliable in determining 1197 hurricane loss factors for use in a rate filing under s. 1198 627.062. An insurer shall employ and may not modify or adjust 1199 models found by the commission to be accurate or reliable in 1200 determining probable maximum loss levels pursuant to paragraph 1201 (b) with respect to a rate filing under s. 627.062 made more 1202 than 18060days after the commission has made such findings. 1203 This paragraph does not prohibit an insurer from using a 1204 straight average of model results or output ranges or using 1205 straight averages for the purposes of a rate filing under s. 1206 627.062. 1207 Section 28. Present subsections (2) through (4) of section 1208 627.072, Florida Statutes, are renumbered as subsections (3) 1209 through (5), respectively, and a new subsection (2) is added to 1210 that section, to read: 1211 627.072 Making and use of rates.— 1212 (2) A retrospective rating plan may contain a provision 1213 that allows negotiation between the employer and the insurer to 1214 determine the retrospective rating factors used to calculate the 1215 premium for employers that have exposure in more than one state, 1216 an estimated annual standard premium in this state of $175,000, 1217 and an estimated annual countrywide standard premium of $1 1218 million or more for workers’ compensation. 1219 Section 29. Subsection (2) of section 627.281, Florida 1220 Statutes, is amended to read: 1221 627.281 Appeal from rating organization; workers’ 1222 compensation and employer’s liability insurance filings.— 1223 (2) If such appeal is based upon the failure of the rating 1224 organization to make a filing on behalf of such member or 1225 subscriber which is based on a system of expense provisions 1226 which differs, in accordance with the right granted in s. 1227 627.072(3)627.072(2), from the system of expense provisions 1228 included in a filing made by the rating organization, the office 1229 shall, if it grants the appeal, order the rating organization to 1230 make the requested filing for use by the appellant. In deciding 1231 such appeal, the office shall apply the applicable standards set 1232 forth in ss. 627.062 and 627.072. 1233 Section 30. Paragraphs (gg), (hh), and (ii) are added to 1234 subsection (6) of section 627.351, Florida Statutes, to read: 1235 627.351 Insurance risk apportionment plans.— 1236 (6) CITIZENS PROPERTY INSURANCE CORPORATION.— 1237 (gg) At least once every 6 months, the corporation shall 1238 submit a report to the office and the Insurance Consumer 1239 Advocate disclosing: 1240 1. The total number of requests received for residential 1241 sinkhole loss coverage; 1242 2. The total number of policies issued for residential 1243 sinkhole loss coverage; 1244 3. The total number of requests declined for residential 1245 sinkhole loss coverage; and 1246 4. The reasons for declining the requests for residential 1247 sinkhole loss coverage. 1248 (hh) The Legislature finds that it is in the public 1249 interest that sinkhole loss claims are resolved by stabilizing 1250 the land and structure and making repairs to the foundation of 1251 the damaged structure. Therefore, a Citizens Sinkhole 1252 Stabilization Repair Program is established by the corporation. 1253 By March 31, 2014, any claim against a corporation policy that 1254 covers residential sinkhole loss for which it is determined that 1255 such loss has occurred must be included in and governed by the 1256 repair program for the purpose of stabilizing the land and 1257 structure and making repairs to the foundation. 1258 1. As used in this paragraph, the terms: 1259 a. “Engineering report” means the report issued pursuant to 1260 s. 627.7073(1). 1261 b. “Recommendation of the engineer” means the 1262 recommendation of the engineer engaged by the corporation 1263 pursuant to s. 627.7073(1)(a)5. 1264 c. “Stabilization repairs” means stabilizing the land and 1265 structure and making repairs to the foundation. 1266 d. “Stabilization repair contractor” means a contractor who 1267 stabilizes the land and structure and makes repairs to the 1268 foundation of the damaged structure. 1269 2. The repair program may be managed by the corporation or 1270 a third-party administrator and, at a minimum, must include the 1271 following components: 1272 a. The corporation may not require the policyholder to 1273 advance payment for repairs. 1274 b. Stabilization repairs shall be conducted by 1275 stabilization repair contractors selected from an approved 1276 stabilization repair contractor pool procured by the corporation 1277 pursuant to an open and transparent process. Each stabilization 1278 repair contractor within the pool must be qualified and approved 1279 by the corporation based upon criteria including the following 1280 minimum requirements: 1281 (I) The stabilization repair contractor must be certified 1282 as a contractor pursuant s. 489.113(1). 1283 (II) The stabilization repair contractor corporate entity 1284 must demonstrate experience in stabilization of sinkhole 1285 activity pursuant to requirements to be established by the 1286 corporation. 1287 (III) The stabilization repair contractor must demonstrate 1288 capacity to be bonded and provide performance, surety, or other 1289 bonds as described in this section which may be supplemented by 1290 additional requirements as determined by the corporation. 1291 (IV) The stabilization repair contractor must demonstrate 1292 insurance coverage requirements, including, but not limited to, 1293 commercial general liability coverage and workers’ compensation, 1294 to be established by the corporation. 1295 (V) The stabilization repair contractor must maintain a 1296 valid drug-free workplace program. 1297 (VI) Such other requirements as established by the 1298 corporation. 1299 c. Pursuant to the stabilization repair program, qualified 1300 stabilization repair contractors shall be selected from the 1301 approved stabilization repair contractor pool to stabilize the 1302 land and structure and repair the foundation of the damaged 1303 structure pursuant to a fixed-price contract between the 1304 contractor and the corporation. Such contracts are not subject 1305 to paragraph (6)(e) or s. 287.057. Pursuant to the terms of the 1306 contract, the selected stabilization repair contractor is solely 1307 responsible for the performance of all necessary stabilization 1308 repairs specified in the engineering report and recommendations 1309 of the engineer. 1310 d. The corporation shall develop a standard stabilization 1311 repair contract for the purpose of stabilizing the land and 1312 structure and repairing the foundation of all properties within 1313 the program. The contract must include the following minimum 1314 requirements: 1315 (I) The assigned stabilization repair contractor must agree 1316 to make all stabilization repairs identified in the engineering 1317 report based upon a fixed price. 1318 (II) Each stabilization repair contractor must post a 1319 payment bond in favor of the corporation as obligee for each 1320 project assigned and must post a performance bond, secured by a 1321 third-party surety, in favor of the corporation as obligee, in a 1322 principal amount equal to the total cost of all fixed-price 1323 contracts annually awarded to that contractor. 1324 (III) In addition to the required performance bond, each 1325 stabilization repair contractor must also provide a warranty, 1326 secured by a third-party surety, to the policyholder which 1327 covers all repairs provided by the stabilization repair 1328 contractor for at least 5 years after completion of the 1329 stabilization repairs. 1330 (IV) Throughout the course of the stabilization repairs 1331 performed by the contractor, the engineer shall monitor the 1332 property and confirm that stabilization has been satisfactorily 1333 completed and that no further stabilization is necessary to 1334 remedy the damage identified in the engineering report and 1335 recommendation of the engineer. 1336 (V) If the engineer concludes that additional stabilization 1337 repair is necessary to complete the repairs specified in the 1338 engineering report and recommendations of the engineer, the 1339 stabilization repair contractor must perform the additional 1340 stabilization repairs at no cost to the corporation or the 1341 policyholder. The contract between the corporation and the 1342 contractor must contain provisions specifying the remedy and 1343 sanctions for failing to perform such additional repairs. 1344 e. The corporation shall enter into contracts to perform 1345 repairs pursuant to a process that includes, but is not limited 1346 to, the following requirements: 1347 (I) Within 30 days after the completion of the engineering 1348 report, the report shall be identified on a list which shall be 1349 made available to all stabilization contractors. 1350 (II) The corporation shall establish a selection process 1351 for assigning stabilization repair contractors to perform 1352 repairs for each property within the program. The selection 1353 process must include: 1354 (A) All stabilization repair contractors within the 1355 stabilization repair contractor pool shall be provided with an 1356 opportunity to submit an offer, that includes an itemized 1357 statement of work, to perform the stabilization repairs 1358 recommended in the engineering report. 1359 (B) The corporation shall review the offers and provide the 1360 policyholder with a list of stabilization repair contractors 1361 from which the policyholder shall be provided a reasonable time, 1362 not to exceed 30 days, to participate in the selection by 1363 choosing the stabilization repair contractor from among those 1364 qualified contractors on the list provided by the corporation. 1365 (C) If the policyholder has not made such a selection 1366 within the 30-day period described herein, the corporation may 1367 make the selection. 1368 (D) The corporation may reserve the right to include any or 1369 all contractors on the list provided to the policyholder based 1370 upon quality, cost-effectiveness, and such other criteria as the 1371 corporation shall determine. 1372 (III) If no stabilization repair contractor submits an 1373 offer to perform the stabilization repairs for a property within 1374 the program or all offers are above the policyholder’s policy 1375 limit, the corporation may enter the property into the selection 1376 process again or the corporation may pay the policyholder an 1377 amount up to the policy limits on the structure. 1378 f. The corporation is not responsible for serving as a 1379 stabilization repair contractor. The corporation’s obligations 1380 pursuant to the repair program are not an election to repair by 1381 the corporation and therefore do not imply or result in a new 1382 contractual relationship with the policyholder. 1383 g. The corporation’s liability related to repair activity, 1384 including stabilization repairs pursuant to the sinkhole 1385 stabilization program and all other repairs to the structure in 1386 accordance with the terms of the policy, is no greater than the 1387 policy limits on the structure. 1388 h. This section does not prohibit the corporation from 1389 establishing a managed repair program for other repairs to the 1390 structure in accordance with the terms of the policy. 1391 i. If a dispute arises between the corporation and the 1392 policyholder as to the nature or extent of stabilization repairs 1393 to be conducted under the program, the sole remedy for resolving 1394 such disputes shall be specific performance. 1395 j. This section supersedes s. 627.707(5), except for 1396 paragraph (5)(e). 1397 3. The corporation shall pay for other repairs to the 1398 structure and contents in accordance with the terms of the 1399 policy. 1400 (ii) A policy for residential property insurance issued by 1401 the corporation must include a deductible amount applicable to 1402 sinkhole losses, offered in amounts equal to 2 percent, 5 1403 percent, and 10 percent of the policy dwelling limits, with 1404 appropriate premium discounts offered with each deductible 1405 amount. 1406 Section 31. Section 627.3519, Florida Statutes, is amended 1407 to read: 1408 627.3519 Annual report of aggregate net probable maximum 1409 losses, financing options, and potential assessments.—No later 1410 than February 1 of each year, the Florida Hurricane Catastrophe 1411 Fund and Citizens Property Insurance CorporationFinancial1412Services Commissionshall provide to the Legislature and the 1413 Financial Services Commission a report of their respectivethe1414 aggregate net probable maximum losses, financing options, and 1415 potential assessmentsof the Florida Hurricane Catastrophe Fund1416and Citizens Property Insurance Corporation. The report of the 1417 fund and the corporation must include theirtherespective 50 1418 year, 100-year, and 250-year probable maximum lossesof the fund1419and the corporation; analysis of all reasonable financing 1420 strategies for each such probable maximum loss, including the 1421 amount and term of debt instruments; specification of the 1422 percentage assessments that would be needed to support each of 1423 the financing strategies; and calculations of the aggregate 1424 assessment burden on Florida property and casualty policyholders 1425 for each of the probable maximum losses.The commission shall1426require the fund and the corporation to provide the commission1427with such data and analysis as the commission considers1428necessary to prepare the report.1429 Section 32. Paragraph (b) of subsection (2) of section 1430 627.4133, Florida Statutes, is amended to read: 1431 627.4133 Notice of cancellation, nonrenewal, or renewal 1432 premium.— 1433 (2) With respect to any personal lines or commercial 1434 residential property insurance policy, including, but not 1435 limited to, any homeowner’s, mobile home owner’s, farmowner’s, 1436 condominium association, condominium unit owner’s, apartment 1437 building, or other policy covering a residential structure or 1438 its contents: 1439 (b) The insurer shall give the first-named insured written 1440 notice of nonrenewal, cancellation, or termination at least 120 1441100days before the effective date of the nonrenewal, 1442 cancellation, or termination.However, the insurer shall give at1443least 100 days’ written notice, or written notice by June 1,1444whichever is earlier, for any nonrenewal, cancellation, or1445termination that would be effective between June 1 and November144630.The notice must include the reason or reasons for the 1447 nonrenewal, cancellation, or termination, except that: 14481. The insurer shall give the first-named insured written1449notice of nonrenewal, cancellation, or termination at least 1201450days prior to the effective date of the nonrenewal,1451cancellation, or termination for a first-named insured whose1452residential structure has been insured by that insurer or an1453affiliated insurer for at least a 5-year period immediately1454prior to the date of the written notice.1455 1.2.If cancellation is for nonpayment of premium, at least 1456 10 days’ written notice of cancellation accompanied by the 1457 reason therefor must be given. As used in this subparagraph, the 1458 term “nonpayment of premium” means failure of the named insured 1459 to discharge when due her or his obligations forin connection1460withthe payment of premiums on a policy or ananyinstallment 1461 of such premium, whether the premium is payable directly to the 1462 insurer or its agent or indirectly under aanypremium finance 1463 plan or extension of credit, or failure to maintain membership 1464 in an organization if such membership is a condition precedent 1465 to insurance coverage. The term also means the failure of a 1466 financial institution to honor an insurance applicant’s check 1467 after delivery to a licensed agent for payment of a premium, 1468 even if the agent has previously delivered or transferred the 1469 premium to the insurer. If a dishonored check represents the 1470 initial premium payment, the contract and all contractual 1471 obligations are void ab initio unless the nonpayment is cured 1472 within the earlier of 5 days after actual notice by certified 1473 mail is received by the applicant or 15 days after notice is 1474 sent to the applicant by certified mail or registered mail., and1475 If the contract is void, any premium received by the insurer 1476 from a third party must be refunded to that party in full. 1477 2.3.Ifsuchcancellation or termination occurs during the 1478 first 90 days the insurance is in force and the insurance is 1479 canceled or terminated for reasons other than nonpayment of 1480 premium, at least 20 days’ written notice of cancellation or 1481 termination accompanied by the reason therefor must be given 1482 unless there has been a material misstatement or 1483 misrepresentation or failure to comply with the underwriting 1484 requirements established by the insurer. 1485 3. After the policy has been in effect for 90 days, the 1486 policy may not be canceled by the insurer unless there has been 1487 a material misstatement, a nonpayment of premium, a failure to 1488 comply with underwriting requirements established by the insurer 1489 within 90 days after the date of effectuation of coverage, a 1490 substantial change in the risk covered by the policy, or the 1491 cancellation is for all insureds under such policies for a given 1492 class of insureds. This subparagraph does not apply to 1493 individually rated risks having a policy term of less than 90 1494 days. 14954. The requirement for providing written notice by June 11496of any nonrenewal that would be effective between June 1 and1497November 30 does not apply to the following situations, but the1498insurer remains subject to the requirement to provide such1499notice at least 100 days before the effective date of1500nonrenewal:1501a. A policy that is nonrenewed due to a revision in the1502coverage for sinkhole losses and catastrophic ground cover1503collapse pursuant to s.627.706.1504 4.b.A policy that is nonrenewed by Citizens Property 1505 Insurance Corporation, pursuant to s. 627.351(6), for a policy 1506 that has been assumed by an authorized insurer offering 1507 replacement coverage to the policyholder is exempt from the 1508 notice requirements of paragraph (a) and this paragraph. In such 1509 cases, the corporation must give the named insured written 1510 notice of nonrenewal at least 45 days before the effective date 1511 of the nonrenewal. 1512 1513After the policy has been in effect for 90 days, the policy may1514not be canceled by the insurer unless there has been a material1515misstatement, a nonpayment of premium, a failure to comply with1516underwriting requirements established by the insurer within 901517days after the date of effectuation of coverage, or a1518substantial change in the risk covered by the policy or if the1519cancellation is for all insureds under such policies for a given1520class of insureds. This paragraph does not apply to individually1521rated risks having a policy term of less than 90 days.1522 5. Notwithstanding any other provision of law, an insurer 1523 may cancel or nonrenew a property insurance policy after at 1524 least 45 days’ notice if the office finds that the early 1525 cancellation of some or all of the insurer’s policies is 1526 necessary to protect the best interests of the public or 1527 policyholders and the office approves the insurer’s plan for 1528 early cancellation or nonrenewal of some or all of its policies. 1529 The office may base such finding upon the financial condition of 1530 the insurer, lack of adequate reinsurance coverage for hurricane 1531 risk, or other relevant factors. The office may condition its 1532 finding on the consent of the insurer to be placed under 1533 administrative supervision pursuant to s. 624.81 or to the 1534 appointment of a receiver under chapter 631. 1535 6. A policy covering both a home and motor vehicle may be 1536 nonrenewed for any reason applicable toeitherthe property or 1537 motor vehicle insurance after providing 90 days’ notice. 1538 Section 33. Subsection (1) of section 627.4137, Florida 1539 Statutes, is amended to read: 1540 627.4137 Disclosure of certain information required.— 1541 (1) Each insurer that provideswhich doesor may provide 1542 liability insurance coverage to pay all or a portion of aany1543 claim thatwhichmight be made shall provide, within 30 days 1544 afterofthe written request of the claimant, a statement, under 1545 oath, of a corporate officer or the insurer’s claims manager,or1546 superintendent, or licensed company adjuster setting forth the 1547 following information with regard to each known policy of 1548 insurance, including excess or umbrella insurance: 1549 (a) The name of the insurer. 1550 (b) The name of each insured. 1551 (c) The limits of the liability coverage. 1552 (d) A statement of any policy or coverage defense that the 1553which suchinsurer reasonably believes is available to thesuch1554 insurer at the time of filing such statement. 1555 (e) A copy of the policy. 1556 1557 In addition, the insured, or her or his insurance agent, upon 1558 written request of the claimant or the claimant’s attorney, 1559 shall disclose the name and coverage of each known insurer to 1560 the claimant and shall forward such request for information as 1561 required by this subsection to all affected insurers. The 1562 insurer shall then supply the information required in this 1563 subsection to the claimant within 30 days afterofreceipt of 1564 such request. 1565 Section 34. Subsection (1) of section 627.421, Florida 1566 Statutes, is amended to read: 1567 627.421 Delivery of policy.— 1568 (1) Subject to the insurer’s requirement as to payment of 1569 premium, every policy shall be mailed or delivered to the 1570 insured or to the person entitled thereto not later than 60 days 1571 after the effectuation of coverage. Notwithstanding any other 1572 provision of law, an insurer may allow a policyholder of 1573 personal lines insurance to affirmatively elect delivery of the 1574 policy documents, including, but not limited to, policies, 1575 endorsements, notices, or documents, by electronic means in lieu 1576 of delivery by mail. 1577 Section 35. Subsection (2) of section 627.43141, Florida 1578 Statutes, is amended to read: 1579 627.43141 Notice of change in policy terms.— 1580 (2) A renewal policy may contain a change in policy terms. 1581 If a renewal policy containsdoes containsuch change, the 1582 insurer must give the named insured written notice of the 1583 change, which may eithermustbe enclosed along with the written 1584 notice of renewal premium required by ss. 627.4133 and 627.728 1585 or sent in a separate notice that complies with the nonrenewal 1586 mailing time requirement for that particular line of business. 1587 The insurer must also provide a sample copy of the notice to the 1588 insured’s insurance agent before or at the same time that notice 1589 is given to the insured. Such notice shall be entitled “Notice 1590 of Change in Policy Terms.” 1591 Section 36. Section 627.6484, Florida Statutes, is amended 1592 to read: 1593 627.6484 Dissolution of association; termination of 1594 enrollment; availability of other coverage.— 1595 (1) The association shall accept applications for insurance 1596 only until June 30, 1991, after which date no further 1597 applications may be accepted.Upon receipt of an application for1598insurance, the association shall issue coverage for an eligible1599applicant. When appropriate, the administrator shall forward a1600copy of the application to a market assistance plan created by1601the office, which shall conduct a diligent search of the private1602marketplace for a carrier willing to accept the application.1603 (2) Coverage for each policyholder of the association 1604 terminates at midnight, June 30, 2014, or on the date that 1605 health insurance coverage is effective with another insurer, 1606 whichever occurs first, and such coverage may not be renewed. 1607 (3) The association shall provide assistance to each 1608 policyholder concerning how to obtain health insurance coverage. 1609 Such assistance must include: 1610 (a) The identification of insurers and health maintenance 1611 organizations offering coverage in the individual market, 1612 including coverage inside and outside of the Health Insurance 1613 Exchange; 1614 (b) A basic explanation of the levels of coverage 1615 available; and 1616 (c) Specific information relating to local and online 1617 sources from which a policyholder may obtain detailed policy and 1618 premium comparisons and directly obtain coverage. 1619 (4) The association shall provide written notice to all 1620 policyholders by September 1, 2013, which informs each 1621 policyholder with respect to: 1622 (a) The date that coverage with the association is 1623 terminated and that such coverage may not be renewed. 1624 (b) The opportunity for the policyholder to obtain 1625 individual health insurance coverage on a guaranteed-issue 1626 basis, regardless of policyholder’s health status, from a health 1627 insurer or health maintenance organization that offers coverage 1628 in the individual market, including the dates of open enrollment 1629 periods for obtaining such coverage. 1630 (c) How to access coverage through the Health Insurance 1631 Exchange established for this state pursuant to the Patient 1632 Protection and Affordable Care Act and the potential for 1633 obtaining reduced premiums and cost-sharing provisions depending 1634 on the policyholder’s family income level. 1635 (d) Contact information for a representative of the 1636 association who is able to provide additional information about 1637 obtaining individual health insurance coverage both inside and 1638 outside of the Health Insurance Exchange. 1639 (5) After termination of coverage, the association must 1640 continue to receive and process timely submitted claims in 1641 accordance with the laws of this state. 1642 (6) By March 15, 2015, the association shall determine the 1643 final assessment to be collected from insurers for funding 1644 claims and administrative expenses of the association or, if 1645 surplus funds remain, shall determine the refund amount to be 1646 provided to each insurer based on the same pro rata formula used 1647 for determining each insurer’s assessment. 1648 (7) By September 1, 2015, the board must: 1649 (a) Complete performance of all program responsibilities. 1650 (b) Sell or otherwise dispose of all physical assets of the 1651 association. 1652 (c) Make a final accounting of the finances of the 1653 association. 1654 (d) Transfer all records to the Department of Financial 1655 Services, which shall serve as custodian of such records. 1656 (e) Execute a legal dissolution of the association and 1657 report such action to the Chief Financial Officer, the Insurance 1658 Commissioner, the President of the Senate, and the Speaker of 1659 the House of Representatives. 1660(2) The office shall, after consultation with the health1661insurers licensed in this state, adopt a market assistance plan1662to assist in the placement of risks of Florida Comprehensive1663Health Association applicants. All health insurers and health1664maintenance organizations licensed in this state shall1665participate in the plan.1666(3) Guidelines for the use of such program shall be a part1667of the association’s plan of operation. The guidelines shall1668describe which types of applications are to be exempt from1669submission to the market assistance plan. An exemption shall be1670based upon a determination that due to a specific health1671condition an applicant is ineligible for coverage in the1672standard market. The guidelines shall also describe how the1673market assistance plan is to be conducted, and how the periodic1674reviews to depopulate the association are to be conducted.1675(4) If a carrier is found through the market assistance1676plan, the individual shall apply to that company. If the1677individual’s application is accepted, association coverage shall1678terminate upon the effective date of the coverage with the1679private carrier. For the purpose of applying a preexisting1680condition limitation or exclusion, any carrier accepting a risk1681pursuant to this section shall provide coverage as if it began1682on the date coverage was effectuated on behalf of the1683association, and shall be indemnified by the association for1684claims costs incurred as a result of utilizing such effective1685date.1686(5) The association shall establish a policyholder1687assistance program by July 1, 1991, to assist in placing1688eligible policyholders in other coverage programs, including1689Medicare and Medicaid.1690 Section 37. Section 627.64872, Florida Statutes, is 1691 repealed. 1692 Section 38. Effective October 1, 2015, sections 627.648, 1693 627.6482, 627.6484, 627.6486, 627.6488, 627.6489, 627.649, 1694 627.6492, 627.6494, 627.6496, 627.6498, and 627.6499, Florida 1695 Statutes, are repealed. 1696 Section 39. Paragraph (b) of subsection (4) of section 1697 627.7015, Florida Statutes, is amended to read: 1698 627.7015 Alternative procedure for resolution of disputed 1699 property insurance claims.— 1700 (4) The department shall adopt by rule a property insurance 1701 mediation program to be administered by the department or its 1702 designee. The department may also adopt special rules which are 1703 applicable in cases of an emergency within the state. The rules 1704 shall be modeled after practices and procedures set forth in 1705 mediation rules of procedure adopted by the Supreme Court. The 1706 rules shall provide for: 1707 (b) Qualifications, denial of application, suspension, 1708 revocation, and other penalties forofmediators as provided in 1709 s. 627.745 and in the Florida Rules of Certified and Court 1710 Appointed Mediators, and for such other individuals as are1711qualified by education, training, or experience as the1712department determines to be appropriate. 1713 Section 40. Section 627.70151, Florida Statutes, is created 1714 to read: 1715 627.70151 Appraisal; conflicts of interest.—An insurer that 1716 offers residential coverage, as defined in s. 627.4025, or a 1717 policyholder that uses an appraisal clause in the property 1718 insurance contract to establish a process of estimating or 1719 evaluating the amount of the loss through the use of an 1720 impartial umpire may challenge the umpire’s impartiality and 1721 disqualify the proposed umpire only if: 1722 (1) A familial relationship within the third degree exists 1723 between the umpire and any party or a representative of any 1724 party; 1725 (2) The umpire has previously represented any party or a 1726 representative of any party in a professional capacity in the 1727 same or a substantially related matter; 1728 (3) The umpire has represented another person in a 1729 professional capacity on the same or a substantially related 1730 matter, which includes the claim, same property, or an adjacent 1731 property and that other person’s interests are materially 1732 adverse to the interests of any party; or 1733 (4) The umpire has worked as an employer or employee of any 1734 party within the preceding 5 years. 1735 Section 41. Paragraph (c) of subsection (2) of section 1736 627.706, Florida Statutes, is amended to read: 1737 627.706 Sinkhole insurance; catastrophic ground cover 1738 collapse; definitions.— 1739 (2) As used in ss. 627.706-627.7074, and as used in 1740 connection with any policy providing coverage for a catastrophic 1741 ground cover collapse or for sinkhole losses, the term: 1742 (c) “Neutral evaluator” means a professional engineer or a 1743 professional geologist who has completed a course of study in 1744 alternative dispute resolution designed or approved by the 1745 department for use in the neutral evaluation process,andwho is 1746 determined by the department to be fair and impartial, and who 1747 is not otherwise ineligible for certification as provided in s. 1748 627.7074. 1749 Section 42. Subsection (1) of section 627.7074, Florida 1750 Statutes, is amended to read: 1751 627.7074 Alternative procedure for resolution of disputed 1752 sinkhole insurance claims.— 1753 (1) The department shall: 1754 (a) Certify and maintain a list of persons who are neutral 1755 evaluators. 1756 (b) Adopt rules for certifying, denying certification, 1757 suspending certification, and revoking certification as a 1758 neutral evaluator, in keeping with qualifications specified in 1759 this section and ss. 627.706 and 627.745(4). 1760 (c)(b)Prepare a consumer information pamphlet for 1761 distribution by insurers to policyholders which clearly 1762 describes the neutral evaluation process and includes 1763 information necessary for the policyholder to request a neutral 1764 evaluation. 1765 Section 43. Paragraph (a) of subsection (5) of section 1766 627.736, Florida Statutes, is amended to read: 1767 627.736 Required personal injury protection benefits; 1768 exclusions; priority; claims.— 1769 (5) CHARGES FOR TREATMENT OF INJURED PERSONS.— 1770 (a) A physician, hospital, clinic, or other person or 1771 institution lawfully rendering treatment to an injured person 1772 for a bodily injury covered by personal injury protection 1773 insurance may charge the insurer and injured party only a 1774 reasonable amount pursuant to this section for the services and 1775 supplies rendered, and the insurer providing such coverage may 1776 pay for such charges directly to such person or institution 1777 lawfully rendering such treatment if the insured receiving such 1778 treatment or his or her guardian has countersigned the properly 1779 completed invoice, bill, or claim form approved by the office 1780 upon which such charges are to be paid for as having actually 1781 been rendered, to the best knowledge of the insured or his or 1782 her guardian. However, such a charge may not exceed the amount 1783 the person or institution customarily charges for like services 1784 or supplies. In determining whether a charge for a particular 1785 service, treatment, or otherwise is reasonable, consideration 1786 may be given to evidence of usual and customary charges and 1787 payments accepted by the provider involved in the dispute, 1788 reimbursement levels in the community and various federal and 1789 state medical fee schedules applicable to motor vehicle and 1790 other insurance coverages, and other information relevant to the 1791 reasonableness of the reimbursement for the service, treatment, 1792 or supply. 1793 1. The insurer may limit reimbursement to 80 percent of the 1794 following schedule of maximum charges: 1795 a. For emergency transport and treatment by providers 1796 licensed under chapter 401, 200 percent of Medicare. 1797 b. For emergency services and care provided by a hospital 1798 licensed under chapter 395, 75 percent of the hospital’s usual 1799 and customary charges. 1800 c. For emergency services and care as defined by s. 395.002 1801 provided in a facility licensed under chapter 395 rendered by a 1802 physician or dentist, and related hospital inpatient services 1803 rendered by a physician or dentist, the usual and customary 1804 charges in the community. 1805 d. For hospital inpatient services, other than emergency 1806 services and care, 200 percent of the Medicare Part A 1807 prospective payment applicable to the specific hospital 1808 providing the inpatient services. 1809 e. For hospital outpatient services, other than emergency 1810 services and care, 200 percent of the Medicare Part A Ambulatory 1811 Payment Classification for the specific hospital providing the 1812 outpatient services. 1813 f. For all other medical services, supplies, and care, 200 1814 percent of the allowable amount under: 1815 (I) The participating physicians fee schedule of Medicare 1816 Part B, except as provided in sub-sub-subparagraphs (II) and 1817 (III). 1818 (II) Medicare Part B, in the case of services, supplies, 1819 and care provided by ambulatory surgical centers and clinical 1820 laboratories. 1821 (III) The Durable Medical Equipment Prosthetics/Orthotics 1822 and Supplies fee schedule of Medicare Part B, in the case of 1823 durable medical equipment. 1824 1825 However, if such services, supplies, or care is not reimbursable 1826 under Medicare Part B, as provided in this sub-subparagraph, the 1827 insurer may limit reimbursement to 80 percent of the maximum 1828 reimbursable allowance under workers’ compensation, as 1829 determined under s. 440.13 and rules adopted thereunder which 1830 are in effect at the time such services, supplies, or care is 1831 provided. Services, supplies, or care that is not reimbursable 1832 under Medicare or workers’ compensation is not required to be 1833 reimbursed by the insurer. 1834 2. For purposes of subparagraph 1., the applicable fee 1835 schedule or payment limitation under Medicare is the fee 1836 schedule or payment limitation in effect on March 1 of the year 1837 in which the services, supplies, or care is rendered and for the 1838 area in which such services, supplies, or care is rendered, and 1839 the applicable fee schedule or payment limitation applies from 1840 March 1 until the last day of the following Februarythroughout1841the remainder of that year, notwithstanding any subsequent 1842 change made to the fee schedule or payment limitation, except 1843 that it may not be less than the allowable amount under the 1844 applicable schedule of Medicare Part B for 2007 for medical 1845 services, supplies, and care subject to Medicare Part B. 1846 3. Subparagraph 1. does not allow the insurer to apply any 1847 limitation on the number of treatments or other utilization 1848 limits that apply under Medicare or workers’ compensation. An 1849 insurer that applies the allowable payment limitations of 1850 subparagraph 1. must reimburse a provider who lawfully provided 1851 care or treatment under the scope of his or her license, 1852 regardless of whether such provider is entitled to reimbursement 1853 under Medicare due to restrictions or limitations on the types 1854 or discipline of health care providers who may be reimbursed for 1855 particular procedures or procedure codes. However, subparagraph 1856 1. does not prohibit an insurer from using the Medicare coding 1857 policies and payment methodologies of the federal Centers for 1858 Medicare and Medicaid Services, including applicable modifiers, 1859 to determine the appropriate amount of reimbursement for medical 1860 services, supplies, or care if the coding policy or payment 1861 methodology does not constitute a utilization limit. 1862 4. If an insurer limits payment as authorized by 1863 subparagraph 1., the person providing such services, supplies, 1864 or care may not bill or attempt to collect from the insured any 1865 amount in excess of such limits, except for amounts that are not 1866 covered by the insured’s personal injury protection coverage due 1867 to the coinsurance amount or maximum policy limits. 1868 5. Effective July 1, 2012, an insurer may limit payment as 1869 authorized by this paragraph only if the insurance policy 1870 includes a notice at the time of issuance or renewal that the 1871 insurer may limit payment pursuant to the schedule of charges 1872 specified in this paragraph. A policy form approved by the 1873 office satisfies this requirement. If a provider submits a 1874 charge for an amount less than the amount allowed under 1875 subparagraph 1., the insurer may pay the amount of the charge 1876 submitted. 1877 Section 44. Subsection (3) of section 627.745, Florida 1878 Statutes, is amended, present subsections (4) and (5) of that 1879 section are renumbered as subsections (5) and (6), respectively, 1880 and a new subsection (4) is added to that section, to read: 1881 627.745 Mediation of claims.— 1882 (3)(a) The department shall approve mediators to conduct 1883 mediations pursuant to this section. All mediators must file an 1884 application under oath for approval as a mediator. 1885 (b) To qualify for approval as a mediator, an individuala1886personmust meet one of the following qualifications: 1887 1. Possess an active certification as a Florida Circuit 1888 Court Mediator. A Florida Circuit Court Mediator in a lapsed, 1889 suspended, or decertified status is not eligible to participate 1890 in the mediation programa masters or doctorate degree in1891psychology, counseling, business, accounting, or economics, be a1892member of The Florida Bar, be licensed as a certified public1893accountant, or demonstrate that the applicant for approval has1894been actively engaged as a qualified mediator for at least 41895years prior to July 1, 1990. 1896 2. Be an approved department mediator as of July 1, 2013, 1897 and have conducted at least one mediation on behalf of the 1898 department within 4 years immediately preceding thatthedate 1899the application for approval is filed with the department, have1900completed a minimum of a 40-hour training program approved by1901the department and successfully passed a final examination1902included in the training program and approved by the department. 1903The training program shall include and address all of the1904following:1905a. Mediation theory.1906b. Mediation process and techniques.1907c. Standards of conduct for mediators.1908d. Conflict management and intervention skills.1909e. Insurance nomenclature.1910 (4) The department shall deny an application, or suspend or 1911 revoke its approval of a mediator or its certification of a 1912 neutral evaluator to serve in such capacity, if it finds that 1913 any of the following grounds exist: 1914 (a) Lack of one or more of the qualifications specified in 1915 this section for approval or certification. 1916 (b) Material misstatement, misrepresentation, or fraud in 1917 obtaining or attempting to obtain the approval or certification. 1918 (c) Demonstrated lack of fitness or trustworthiness to act 1919 as a mediator or neutral evaluator. 1920 (d) Fraudulent or dishonest practices in the conduct of 1921 mediation or neutral evaluation or in the conduct of business in 1922 the financial services industry. 1923 (e) Violation of any provision of this code, a lawful order 1924 or rule of the department, the Florida Rules for Certified and 1925 Court-Appointed Mediators, or aiding, instructing, or 1926 encouraging another party in committing such a violation. 1927 1928 The department may adopt rules to administer this subsection. 1929 Section 45. Subsection (4) of section 627.841, Florida 1930 Statutes, is amended to read: 1931 627.841 Delinquency, collection, cancellation, and payment 1932checkreturn chargecharges; attorneyattorney’sfees.— 1933 (4) In the event that a payment is made to a premium 1934 finance company by debit, credit, electronic funds transfer, 1935 check, or draft and such paymentthe instrumentis returned, 1936 declined, or cannot be processed due tobecause ofinsufficient 1937 fundsto pay it, the premium finance company may, if the premium 1938 finance agreement so provides, impose a return payment charge of 1939 $15. 1940 Section 46. Paragraph (b) of subsection (1) of section 1941 627.952, Florida Statutes, is amended to read: 1942 627.952 Risk retention and purchasing group agents.— 1943 (1) Any person offering, soliciting, selling, purchasing, 1944 administering, or otherwise servicing insurance contracts, 1945 certificates, or agreements for any purchasing group or risk 1946 retention group to aanyresident of this state, either directly 1947 or indirectly, by the use of mail, advertising, or other means 1948 of communication, shall obtain a license and appointment to act 1949 as a resident general lines agent, if a resident of this state, 1950 or a nonresident general lines agent if not a resident. Any such 1951 person shall be subject to all requirements of the Florida 1952 Insurance Code. 1953 (b) AAnyperson required to be licensed and appointed 1954 under this subsection, in order to place business through 1955 Florida eligible surplus lines carriers, must, if a resident of 1956 this state, be licensed and appointed as a surplus lines agent. 1957 If not a resident of this state, such person must be licensed 1958 and appointed as a nonresident surplus lines agent in thisher1959or hisstateof residence and file and maintain a fidelity bond1960in favor of the people of the State of Florida executed by a1961surety company admitted in this state and payable to the State1962of Florida; however, such nonresident is limited to the1963provision of insurance for purchasing groups.The bond must be1964continuous in form and in the amount of not less than $50,000,1965aggregate liability. The bond must remain in force and effect1966until the surety is released from liability by the department or1967until the bond is canceled by the surety. The surety may cancel1968the bond and be released from further liability upon 30 days’1969prior written notice to the department. The cancellation does1970not affect any liability incurred or accrued before the1971termination of the 30-day period. Upon receipt of a notice of1972cancellation, the department shall immediately notify the agent.1973 Section 47. Subsection (6) of section 627.971, Florida 1974 Statutes, is amended to read: 1975 627.971 Definitions.—As used in this part: 1976 (6) “Financial guaranty insurance corporation” means a 1977 stock or mutual insurer licensed to transact financial guaranty 1978 insurance business in this state. 1979 Section 48. Subsection (1) of section 627.972, Florida 1980 Statutes, is amended to read: 1981 627.972 Organization; financial requirements.— 1982 (1) A financial guaranty insurance corporation must be 1983 organized and licensed in the manner prescribed in this code for 1984 stock or mutual property and casualty insurers except that: 1985 (a) A corporation organized to transact financial guaranty 1986 insurance may, subject to the provisions of this code, be 1987 licensed to transact: 1988 1. Residual value insurance, as defined by s. 624.6081; 1989 2. Surety insurance, as defined by s. 624.606; 1990 3. Credit insurance, as defined by s. 624.605(1)(i); and 1991 4. Mortgage guaranty insurance as defined in s. 635.011, 1992 provided that the provisions of chapter 635 are met. 1993 (b)1. BeforePrior tothe issuance of a license, a 1994 corporation must submit to the office for approval,a plan of 1995 operation detailing: 1996 a. The types and projected diversification of guaranties to 1997 be issued; 1998 b. The underwriting procedures to be followed; 1999 c. The managerial oversight methods; 2000 d. The investment policies; and 2001 e.AnyOther matters prescribed by the office; 2002 2. An insurer which is writing only the types of insurance 2003 allowed under this part on July 1, 1988, and otherwise meets the 2004 requirements of this part, is exempt from the requirements of 2005 this paragraph. 2006 (c) An insurer transacting financial guaranty insurance is 2007 subject to all provisions of this code that are applicable to 2008 property and casualty insurers to the extent that those 2009 provisions are not inconsistent with this part. 2010 (d) The investments of an insurer transacting financial 2011 guaranty insurance in ananyentity insured by the corporation 2012 may not exceed 2 percent of its admitted assets as of the end of 2013 the prior calendar year. 2014 (e) An insurer transacting financial guaranty insurance may 2015 only assume those lines of insurance for which it is licensed to 2016 write direct business. 2017 Section 49. Subsection (13) of section 628.901, Florida 2018 Statutes, is amended to read: 2019 628.901 Definitions.—As used in this part, the term: 2020 (13) “Qualifying reinsurer parent company” means a 2021 reinsurer thatwhichcurrently holds a certificate of authority 2022 or qualifies for credit reinsurance under s. 624.610(3) and 2023 possesses, letter of eligibilityor is an accredited or a2024satisfactory non-approved reinsurer in this state possessinga 2025 consolidated GAAP net worth of at least $500 million and a 2026 consolidated debt to total capital ratio of not greater than 2027 0.50. 2028 Section 50. Paragraph (a) of subsection (2) and paragraph 2029 (a) of subsection (3) of section 628.909, Florida Statutes, are 2030 amended to read: 2031 628.909 Applicability of other laws.— 2032 (2) The following provisions of the Florida Insurance Code 2033 apply to captive insurers who are not industrial insured captive 2034 insurers to the extent that such provisions are not inconsistent 2035 with this part: 2036 (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085, 2037 624.40851, 624.4095, 624.411, 624.425, and 624.426. 2038 (3) The following provisions of the Florida Insurance Code 2039 apply to industrial insured captive insurers to the extent that 2040 such provisions are not inconsistent with this part: 2041 (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085, 2042 624.40851, 624.4095, 624.411, 624.425, 624.426, and 624.609(1). 2043 Section 51. Subsection (8) of section 634.406, Florida 2044 Statutes, is renumbered as subsection (7), and present 2045 subsections (6) and (7) of that section are amended, to read: 2046 634.406 Financial requirements.— 2047 (6) An association thatwhichholds a license under this 2048 partand which does not hold any other license under this2049chaptermay allow its premiums for service warranties written 2050 under this part to exceed the ratio to net assets limitations of 2051 this section if the association meets all of the following: 2052 (a) Maintains net assets of at least $750,000. 2053 (b) Utilizes a contractual liability insurance policy 2054 approved by the office which: 2055 1. Reimburses the service warranty association for 100 2056 percent of its claims liability and is issued by an insurer that 2057 maintains a policyholder surplus of at least $100 million; or 2058 2. Complies with the requirements of subsection (3) and is 2059 issued by an insurer that maintains a policyholder surplus of at 2060 least $200 million. 2061 (c) The insurer issuing the contractual liability insurance 2062 policy: 20631. Maintains a policyholder surplus of at least $1002064million.2065 1.2.Is rated “A” or higher by A.M. Best Company or an 2066 equivalent rating by another national rating service acceptable 2067 to the office. 20683. Is in no way affiliated with the warranty association.2069 2.4.In conjunction with the warranty association’s filing 2070 of the quarterly and annual reports, provides, on a form 2071 prescribed by the commission, a statement certifying the gross 2072 written premiums in force reported by the warranty association 2073 and a statement that all of the warranty association’s gross 2074 written premium in force is covered under the contractual 2075 liability policy, whether or not it has been reported. 2076(7) A contractual liability policy must insure 100 percent2077of an association’s claims exposure under all of the2078association’s service warranty contracts, wherever written,2079unless all of the following are satisfied:2080(a) The contractual liability policy contains a clause that2081specifically names the service warranty contract holders as sole2082beneficiaries of the contractual liability policy and claims are2083paid directly to the person making a claim under the contract;2084(b) The contractual liability policy meets all other2085requirements of this part, including subsection (3) of this2086section, which are not inconsistent with this subsection;2087(c) The association has been in existence for at least 52088years or the association is a wholly owned subsidiary of a2089corporation that has been in existence and has been licensed as2090a service warranty association in the state for at least 52091years, and:20921. Is listed and traded on a recognized stock exchange; is2093listed in NASDAQ (National Association of Security Dealers2094Automated Quotation system) and publicly traded in the over-the2095counter securities market; is required to file either of Form209610-K, Form 100, or Form 20-G with the United States Securities2097and Exchange Commission; or has American Depository Receipts2098listed on a recognized stock exchange and publicly traded or is2099the wholly owned subsidiary of a corporation that is listed and2100traded on a recognized stock exchange; is listed in NASDAQ2101(National Association of Security Dealers Automated Quotation2102system) and publicly traded in the over-the-counter securities2103market; is required to file Form 10-K, Form 100, or Form 20-G2104with the United States Securities and Exchange Commission; or2105has American Depository Receipts listed on a recognized stock2106exchange and is publicly traded;21072. Maintains outstanding debt obligations, if any, rated in2108the top four rating categories by a recognized rating service;21093. Has and maintains at all times a minimum net worth of2110not less than $10 million as evidenced by audited financial2111statements prepared by an independent certified public2112accountant in accordance with generally accepted accounting2113principles and submitted to the office annually; and21144. Is authorized to do business in this state; and2115(d) The insurer issuing the contractual liability policy:21161. Maintains and has maintained for the preceding 5 years,2117policyholder surplus of at least $100 million and is rated “A”2118or higher by A.M. Best Company or has an equivalent rating by2119another rating company acceptable to the office;21202. Holds a certificate of authority to do business in this2121state and is approved to write this type of coverage; and21223. Acknowledges to the office quarterly that it insures all2123of the association’s claims exposure under contracts delivered2124in this state.2125 2126If all the preceding conditions are satisfied, then the scope of2127coverage under a contractual liability policy shall not be2128required to exceed an association’s claims exposure under2129service warranty contracts delivered in this state.2130 Section 52. Except as otherwise expressly provided in this 2131 act, this act shall take effect upon becoming a law.