Bill Text: FL S1194 | 2024 | Regular Session | Introduced


Bill Title: Insurance

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2024-03-08 - Died in Banking and Insurance [S1194 Detail]

Download: Florida-2024-S1194-Introduced.html
       Florida Senate - 2024                                    SB 1194
       
       
        
       By Senator Garcia
       
       
       
       
       
       36-00761-24                                           20241194__
    1                        A bill to be entitled                      
    2         An act relating to insurance; creating part XXIII of
    3         ch. 627, F.S., entitled “Credit Personal Property
    4         Insurance”; creating s. 627.9921, F.S.; providing the
    5         purpose of certain provisions; creating s. 627.9922,
    6         F.S.; providing the scope of certain provisions;
    7         creating s. 627.9923, F.S.; defining terms; creating
    8         s. 627.9924, F.S.; specifying certain prohibitions for
    9         credit personal property insurance; providing
   10         requirements for credit personal property insurance
   11         coverage; prohibiting the insurer from requiring
   12         bundling of other credit insurance coverages with the
   13         purchase of credit personal property insurance
   14         coverage; requiring the insurer to give certain
   15         choices to the debtor; prohibiting the insurer from
   16         using gross debt in determining certain insurance
   17         premiums; creating s. 627.9925, F.S.; requiring
   18         certain disclosures be made in writing to the debtor;
   19         providing the manner in which the disclosures must be
   20         made; requiring a certain disclosure for open-end
   21         transactions; providing that such disclosures may be
   22         given orally under certain circumstances; requiring
   23         credit personal property insurance to be evidenced by
   24         a policy or certificate of insurance; specifying
   25         requirements for such policy or certificate; requiring
   26         the delivery of the policy or certificate upon
   27         acceptance of the insurance; providing an exception;
   28         creating s. 627.9926, F.S.; providing that policy
   29         forms and certificates of insurance are subject to
   30         certain provisions; requiring that the analysis of
   31         rates include a certain determination; requiring
   32         insurers to refile rates at a specified time;
   33         requiring certain insurers, at a specified time, to
   34         report certain information to the Office of Insurance
   35         Regulation; specifying requirements for such report;
   36         creating s. 627.9927, F.S.; providing that the debtor
   37         is entitled to a refund of unearned premiums upon
   38         cancellation; creating s. 627.9928, F.S.; requiring
   39         the creditor to report all claims to the insurer;
   40         requiring the insurer to maintain adequate files;
   41         requiring all claims to be settled as soon as
   42         practicable and in accordance with the policy;
   43         specifying requirements for the payment of claims;
   44         prohibiting an insurer from making certain plans or
   45         arrangements relating to settling or adjusting claims;
   46         prohibiting the creditor from being designated as a
   47         claim representative for the insurer; specifying
   48         payment of claims for group policyholders; specifying
   49         limitations and requirements relating to the denial of
   50         claims; creating s. 627.9929, F.S.; providing
   51         severability; creating s. 627.9931, F.S.; providing
   52         enforcement and civil penalties; amending s. 635.011,
   53         F.S.; defining terms; amending and reordering s.
   54         635.021, F.S.; prohibiting mortgage guaranty insurers
   55         from transacting any other class of insurance;
   56         amending s. 635.031, F.S.; specifying requirements for
   57         real estate loans in which mortgage guaranty insurance
   58         is written; specifying certain prohibitions for
   59         mortgage guaranty insurers; providing applicability;
   60         prohibiting the mortgage guaranty insurer, holding
   61         company, and certain affiliates from maintaining funds
   62         or depositing funds under certain circumstances;
   63         prohibiting a mortgage guaranty insurer from making
   64         certain payments or conveyances of anything of value
   65         to certain entities or persons; prohibiting a mortgage
   66         guaranty insurer from making a rebate of any portion
   67         of the premium charge or making certain quotes or
   68         rates and premiums; defining the term “rebate”;
   69         amending s. 635.042, F.S.; revising capital and
   70         surplus requirements for mortgage guaranty insurers;
   71         authorizing the Financial Services Commission to
   72         reduce by rule the capital and surplus requirements
   73         under certain circumstances; authorizing the
   74         Commissioner of Insurance Regulation to waive certain
   75         requirements upon request; specifying requirements of
   76         such request; authorizing the commissioner to retain
   77         certain experts; specifying that the mortgage guaranty
   78         insurer will bear certain costs; specifying certain
   79         requirements of the waiver; specifying the
   80         considerations that must be made by the commissioner
   81         if a waiver is requested; providing applicability;
   82         amending s. 635.071, F.S.; requiring mortgage guaranty
   83         insurers to make available, on their websites or
   84         through a third-party system, premium charges for
   85         mortgage guaranty insurance; prohibiting a mortgage
   86         guaranty insurer from preparing, distributing, or
   87         assisting in preparing or distributing certain
   88         advertising, media, or communication; providing an
   89         exception; specifying requirements for records of the
   90         insurance company; specifying requirements for the
   91         mortgage guaranty insurer’s master policies;
   92         specifying requirements for clarifications or
   93         modifications of certain information; amending s.
   94         635.075, F.S.; providing that the borrower is not
   95         liable to the mortgage guaranty insurer for certain
   96         deficiencies arising from a foreclosure sale; creating
   97         s. 635.076, F.S.; prohibiting certain investments from
   98         being allowed as assets in determining the financial
   99         condition of a mortgage guaranty insurer; providing
  100         applicability; creating s. 635.077, F.S.; prohibiting
  101         a mortgage guaranty insurer from entering into captive
  102         reinsurance arrangements; authorizing a mortgage
  103         guaranty insurer to enter into reinsurance
  104         arrangements under certain circumstances; creating s.
  105         635.078, F.S.; requiring certificates of mortgage
  106         guaranty insurance to be written based on an
  107         assessment of certain evidence; requiring delegated
  108         underwriting decisions to be reviewed by the mortgage
  109         guaranty insurer; specifying requirements for control
  110         review for bulk mortgage guaranty insurance and pool
  111         mortgage guaranty insurance; requiring mortgage
  112         guaranty insurers to establish formal underwriting
  113         standards; specifying requirements for such standards;
  114         requiring a mortgage guaranty insurer to file with the
  115         office at a specified time changes to its underwriting
  116         standards and a certain analysis; specifying
  117         requirements for such analysis; creating s. 635.079,
  118         F.S.; requiring a mortgage guaranty insurer to
  119         establish a mortgage guaranty quality assurance
  120         program; providing requirements of such program;
  121         requiring that the office be provided access to a
  122         mortgage guaranty insurer’s mortgage guaranty quality
  123         assurance program; providing construction; creating s.
  124         635.0791, F.S.; authorizing a mortgage guaranty
  125         insurer to underwrite mortgage guaranty insurance
  126         originated by certain entities under certain
  127         circumstances; providing limitations on such
  128         insurance; creating s. 635.0792, F.S.; authorizing a
  129         mortgage guaranty insurer to engage in a specified
  130         educational effort with certain entities and persons
  131         for a specified purpose; amending ss. 624.605,
  132         626.9541, and 627.971, F.S.; conforming provisions to
  133         changes made by the act; providing an effective date.
  134          
  135  Be It Enacted by the Legislature of the State of Florida:
  136  
  137         Section 1. Part XXIII of chapter 627, Florida Statutes,
  138  consisting of ss. 627.9921-627.9931, Florida Statutes, is
  139  created and entitled “Credit Personal Property Insurance.”
  140         Section 2. Section 627.9921, Florida Statutes, is created
  141  to read:
  142         627.9921 Purpose.—The purpose of this part is to do all of
  143  the following:
  144         (1)Promote the public welfare by regulating credit
  145  personal property insurance.
  146         (2)Create a legal framework within which credit personal
  147  property insurance may be written in this state.
  148         (3)Help maintain the separation between creditors and
  149  insurers.
  150         (4)Minimize the possibilities of unfair competitive
  151  practices in the sale of credit personal property insurance.
  152         (5)Address the problems arising from reverse competition
  153  in the credit insurance market.
  154         Section 3. Section 627.9922, Florida Statutes, is created
  155  to read:
  156         627.9922 Scope.—
  157         (1)This part applies to an insurer or producer transacting
  158  credit personal property insurance.
  159         (2)All credit personal property insurance written in
  160  connection with credit transactions for personal, family, or
  161  household purposes is subject to this part, excepting all of the
  162  following:
  163         (a)Insurance resulting from transactions involving
  164  extensions of credit primarily for business or commercial
  165  purposes.
  166         (b)Insurance on motor vehicles or mobile homes.
  167         (c)Insurance written in connection with a credit
  168  transaction that is secured by a real estate mortgage or deed of
  169  trust.
  170         (d)Creditor-placed insurance.
  171         (e)Title insurance.
  172         (f)Nonrecording insurance.
  173         (g)Insurance purchased by a creditor after repossession or
  174  a similar event in which the creditor gains possession of the
  175  property.
  176         (h)Insurance for which no identifiable charge is made to
  177  or collected from the debtor.
  178         Section 4. Section 627.9923, Florida Statutes, is created
  179  to read:
  180         627.9923Definitions.—As used in this part, the term:
  181         (1Closed-end transaction” means a credit transaction
  182  that does not meet the definition of an open-end transaction.
  183         (2) Collateral” means personal property in which a
  184  purchase money security interest is retained, or that is pledged
  185  as security for the satisfaction of a debt.
  186         (3) Compensation” means commissions, dividends,
  187  retrospective rate credits, service fees, expense allowances or
  188  reimbursements, gifts, furnishing of equipment, facilities,
  189  goods and services, or any other form of remuneration that is
  190  paid either directly or indirectly as a result of the sale of
  191  credit property insurance.
  192         (4) Credit agreement” means the written document that sets
  193  forth the terms of the credit transaction and includes the
  194  security agreement.
  195         (5) Credit personal property insurance” has the same
  196  meaning as in s. 624.605(1)(j).
  197         (6) Credit transaction” means a transaction by which the
  198  repayment of money loaned or credit commitment made, or payment
  199  of goods, services, or properties sold or leased, is to be made
  200  at a future date or dates.
  201         (7) Creditor” means the lender of money or vendor or
  202  lessor of goods, services, property, rights, or privileges for
  203  which payment is arranged through a credit transaction, or any
  204  successor to the right, title, or interest of a lender, vendor,
  205  or lessor and an affiliate, associate, or subsidiary of any of
  206  them or any director, officer, or employee of any of them or any
  207  person in any way associated with any of them.
  208         (8) Creditor-placed insurance” means insurance that is
  209  purchased unilaterally by the creditor, who is the named
  210  insured, subsequent to the date of the credit transaction, which
  211  provides coverage against loss, expense, or damage to the
  212  collateralized personal property as a result of fire, theft,
  213  collision, or other risks of loss that would either impair a
  214  creditor’s interest or adversely affect the value of collateral
  215  covered by dual interest insurance. The insurance is purchased
  216  according to the terms of the credit agreement as a result of
  217  the debtor’s failure to provide required insurance, with the
  218  cost of the coverage being charged to the debtor. The insurance
  219  may be either single interest insurance or dual interest
  220  insurance.
  221         (9) Debtor” means the borrower of money or a purchaser or
  222  lessee of goods, services, property, rights, or privileges for
  223  which payment is arranged through a credit transaction.
  224         (10) Dual interest insurance” means credit personal
  225  property insurance covering the creditor’s interest and at least
  226  partially the borrower’s interest in the goods purchased through
  227  the credit transaction or pledged as collateral for the credit
  228  transaction.
  229         (11) Experience” means earned premiums and incurred losses
  230  during the experience period.
  231         (12) Experience period” means the most recent period of
  232  time for which earned premiums and incurred losses are reported,
  233  but not for a period longer than 3 years.
  234         (13) Finance charge” means any charge payable directly or
  235  indirectly as an incident to or as a condition of the extension
  236  of credit, including, but not limited to, interest or time price
  237  differentials; amount payable under a discount system of
  238  additional charges; service, transaction, or carrying charges;
  239  loan fees; points or similar charges; appraisal fees; or charges
  240  incurred for investigating the credit worthiness of the
  241  consumer. The term does not include charges as a result of
  242  default, taxes, license fees, delinquency charges, or filing
  243  fees.
  244         (14) Gross debt” means the sum of the remaining payments
  245  owed to the creditor by the debtor.
  246         (15) Incurred losses” means total claims and claim
  247  adjustment expenses paid during the experience period plus any
  248  change in claim and claim adjustment expense reserves.
  249         (16) Identifiable charge” means a charge for credit
  250  personal property insurance that is made to debtors having such
  251  insurance and not made to debtors not having such insurance. It
  252  includes a charge for insurance that is disclosed in the credit
  253  or other instrument furnished to the debtor which sets out the
  254  financial elements of the credit transaction and any difference
  255  in the finance, interest, service, or other similar charge made
  256  to debtors who are in like circumstances except for the insured
  257  or noninsured status of the debtor.
  258         (17Loss ratio” means incurred losses divided by the sum
  259  of earned premiums.
  260         (18Mobile home” has the same meaning as in s. 513.01.
  261         (19) “Open-end transaction” means credit extended by a
  262  creditor under an agreement in which all the following are true:
  263         (a) The creditor reasonably contemplates repeated
  264  transactions.
  265         (b) The creditor imposes a finance charge from time to time
  266  on an outstanding unpaid balance.
  267         (c) The amount of credit that may be extended to the debtor
  268  during the term of the agreement, up to any limit set by the
  269  creditor, is generally made available to the extent that any
  270  outstanding balance is repaid.
  271         (20“Producer” means a licensed agent, broker, or
  272  insurance agency that receives compensation for insurance
  273  written or that, on behalf of an insurer or creditor, solicits,
  274  negotiates, effects, procures, delivers, renews, continues, or
  275  binds credit personal property insurance.
  276         (21Reverse competition” means competition among insurers
  277  which regularly takes the form of insurers vying with each other
  278  for the favor of persons who control, or may control, the
  279  placement of the insurance with insurers. Reverse competition
  280  tends to increase insurance premiums or prevent the lowering of
  281  premiums in order that greater compensation may be paid to
  282  persons for such business as a means of obtaining the placement
  283  of business. In these situations, the competitive pressure to
  284  obtain business by paying higher compensation to these persons
  285  overwhelms any downward pressures consumers may exert on the
  286  price of insurance, thus causing prices to rise or remain higher
  287  than they would otherwise.
  288         (22Single interest insurance” means credit personal
  289  property insurance covering only the seller’s or creditor’s
  290  interest in the goods purchased through the credit transaction
  291  or pledged as collateral in the credit transaction.
  292         Section 5. Section 627.9924, Florida Statutes, is created
  293  to read:
  294         627.9924 Amount, term, and coverage of credit personal
  295  property insurance; prohibited practices.—
  296         (1) For credit personal property insurance sold in
  297  conjunction with a closed-end transaction, an insurer may not
  298  issue credit personal property insurance coverage unless the
  299  amount financed exceeds $500.
  300         (2) Unless otherwise provided by law, for credit personal
  301  property insurance sold in conjunction with a closed-end
  302  transaction, an insurer may not issue credit personal property
  303  insurance in an amount that exceeds the amount financed in the
  304  underlying credit transaction, or with a term that exceeds in
  305  duration the scheduled term of the underlying credit
  306  transaction.
  307         (3) Credit personal property insurance coverage must, at a
  308  minimum, include the coverages in the standard fire policy with
  309  coverage attachment and extended coverage endorsement. Credit
  310  personal property insurance must cover a substantial risk of
  311  loss of or damage to the property related to the credit
  312  transaction.
  313         (4)An insurer may not require the bundling of other credit
  314  insurance coverages with the purchase of credit personal
  315  property insurance coverage. An insurer must give a debtor the
  316  choice to purchase credit personal property insurance separately
  317  from other credit insurance coverage.
  318         (5) An insurer may not use gross debt as an exposure base
  319  in determining credit personal property insurance premiums.
  320         Section 6. Section 627.9925, Florida Statutes, is created
  321  to read:
  322         627.9925 Disclosure to debtors; provisions of policies;
  323  certificates of insurance.—
  324         (1)All of the following must be disclosed in writing to
  325  the debtor:
  326         (a)That the purchase of credit personal property insurance
  327  through the creditor is optional and not a condition of
  328  obtaining credit approval.
  329         (b) If more than one kind of credit insurance is being made
  330  available to the debtor, that the debtor can purchase credit
  331  personal property insurance separately.
  332         (c) That if the consumer has other insurance that covers
  333  the risk, he or she may not want or need credit personal
  334  property insurance.
  335         (d) That within the first 30 days after receiving the
  336  individual policy or certificate of insurance, the debtor may
  337  cancel the coverage and have all of his or her paid premiums
  338  refunded or credited. Thereafter, the debtor may cancel the
  339  policy at any time during the term of the loan and receive a
  340  refund of any unearned premium. However, if the creditor
  341  requires evidence of insurance for the extension of credit, the
  342  debtor may be required to offer evidence of alternative
  343  insurance acceptable to the creditor at the time of
  344  cancellation.
  345         (e) If not already contained in the certificate or policy
  346  the debtor received at the time of the credit transaction, a
  347  brief description of the coverage, including a description of
  348  the major perils and exclusions, any deductible, to whom the
  349  benefits would be paid, and the premium or premium rate for the
  350  credit personal property coverage.
  351         (f) If the premium or insurance charge is financed, that it
  352  will be subject to finance charges at the rate applicable to the
  353  credit transaction.
  354         (2) The disclosures required in subsection (1) must be
  355  provided in the manner specified in this subsection.
  356         (a) In connection with credit personal property insurance
  357  offered concurrently with the extension of credit or offered
  358  through direct mail advertisements, the disclosures must be made
  359  in writing and presented to the consumer in a clear and
  360  conspicuous manner.
  361         (b) When the offer of credit personal property insurance is
  362  subsequent to the extension of credit or not offered by direct
  363  mail advertisements, the disclosures may be provided in
  364  conjunction with the offer either orally or electronically so
  365  long as written disclosures are provided to the debtor no later
  366  than the earlier of either of the following:
  367         1. Ten days after the election to purchase the credit
  368  personal property insurance.
  369         2. The date any other written material is provided to the
  370  debtor.
  371         (3)(a) An offer to extend coverage for an open-end
  372  transaction shall include, at the time of the invitation to
  373  contract, the following written disclosure in at least 12-point
  374  type: “This coverage might duplicate existing coverage if you
  375  have a residential property insurance policy. It applies to any
  376  item of covered property on which you owe a debt. This coverage
  377  is primary, so it is the first source to be used in the event of
  378  a loss on property it covers. You may cancel this coverage at
  379  any time by calling the insurer at the telephone number provided
  380  to you, or by writing to the insurer. We are charging you a
  381  premium that may be based on things for which a claim cannot be
  382  made, such as services, meals or other consumables,
  383  entertainment, finance or service fees, loan interest, delivery
  384  charges, or other insurance premiums.”
  385         (b)If the solicitation as specified in paragraph (a) is
  386  made by telephone, the disclosure may be summarized and given
  387  orally, provided that written disclosure is mailed to the debtor
  388  within 10 days after enrollment.
  389         (4)All credit personal property insurance must be
  390  evidenced by an individual policy or a certificate of insurance
  391  that must be delivered to the debtor. The individual policy or
  392  certificate of insurance must, in addition to other requirements
  393  of law, set forth all of the following:
  394         (a) The name and home office address of the insurer.
  395         (b) The name or names of the debtor or debtors, or, in the
  396  case of a certificate of insurance, the identity by name or
  397  otherwise of the debtor or debtors.
  398         (c) The premium or amount of payment by the debtor, except
  399  that for open-end transactions, the premium rate and balance to
  400  which the rate applies shall be specified.
  401         (d) A full description of the coverage or coverages,
  402  including the amount and term, and any exceptions, limitations,
  403  and exclusions.
  404         (e) A statement that the benefits shall be paid to the
  405  creditor to reduce or extinguish the unpaid debt or to repair or
  406  replace the property and, whenever the amount of loss payment
  407  exceeds the unpaid debt, that any excess payment is payable to
  408  the debtor.
  409         (f) If the scheduled term of the insurance is less than the
  410  scheduled term of the credit transaction, a statement to that
  411  effect on the face of the individual policy or certificate of
  412  insurance in at least 12-point boldface type.
  413         (g) If the policy is issued to cover open-end transactions,
  414  it must provide that the policyholder or certificateholder will
  415  be furnished the following disclosure notice with the account
  416  statement at least annually, printed in no smaller than 12-point
  417  type: “You are paying a credit property insurance premium based
  418  on the outstanding balance of this account. You may cancel this
  419  coverage at any time by calling the insurer at the telephone
  420  number the insurer has provided to you, or by writing to the
  421  insurer. Your premium may be based on things for which a claim
  422  cannot be made, such as services, meals or other consumables,
  423  entertainment, finance or service fees, loan interest, delivery
  424  charges, or other insurance premiums.”
  425         (5)Except as provided in subsection (6), the individual
  426  policy or group certificate must be delivered to the debtor upon
  427  acceptance of the insurance by the insurer.
  428         (6) An individual policy or group certificate delivered in
  429  conjunction with an open-end credit agreement or any credit
  430  personal property insurance requested by the debtor after the
  431  date the indebtedness was incurred must be delivered within 30
  432  days after the date the insurance is requested by the debtor.
  433         Section 7. Section 627.9926, Florida Statutes, is created
  434  to read:
  435         627.9926 Filing, approval, and withdrawal of forms and
  436  rates.—
  437         (1)Except as otherwise provided in this part, all policy
  438  forms and certificates of insurance to be delivered or issued
  439  for delivery in this state are subject to the applicable
  440  provisions of s. 627.410, and the schedules of premium rates
  441  pertaining thereto are subject to the applicable provisions of
  442  s. 627.062.
  443         (2)With respect to any analysis of rates in accordance
  444  with s. 627.062(1), the analysis must also include a
  445  determination as to whether expenses included by the insurer in
  446  the rate are appropriate.
  447         (3)Notwithstanding s. 627.0645, insurers subject to this
  448  part shall refile credit personal property insurance rates at
  449  least once every 3 years.
  450         (4)By April 1 of each year, each insurer with at least
  451  $100,000 in direct written premium for personal credit
  452  protection insurance in this state during the prior calendar
  453  year shall report to the office all of the following information
  454  for the prior calendar year:
  455         (a)Actual loss ratio.
  456         (b)Earned premium.
  457         (c)Any aggregate schedule rating debit or credit to earned
  458  premium.
  459         (d)Itemized expenses.
  460         (e)Paid losses.
  461         (f)Loss reserves, including case reserves and reserves for
  462  incurred but not reported losses.
  463  
  464  The report must be separately produced for each credit personal
  465  protection insurance program and presented on both an
  466  individual-jurisdiction and nationwide basis.
  467         Section 8. Section 627.9927, Florida Statutes, is created
  468  to read:
  469         627.9927 Cancellation and refund of unearned premium.—Upon
  470  cancellation for any reason, the debtor is entitled to a refund
  471  of unearned premiums calculated on a daily pro rata basis. The
  472  creditor is not required to refund less than $1 of unearned
  473  premium.
  474         Section 9. Section 627.9928, Florida Statutes, is created
  475  to read:
  476         627.9928 Claims.—
  477         (1) The creditor must report all claims to the insurer or
  478  its designated claim representative, and the insurer must
  479  maintain adequate claim files. The insurer shall settle all
  480  claims as soon as practicable and in accordance with the terms
  481  of the insurance policy provisions.
  482         (2) All claims must be paid either by draft drawn upon the
  483  insurer, by electronic funds transfer, or by check of the
  484  insurer to the order of the claimant to whom payment of the
  485  claim is due pursuant to the insurance policy provisions, or
  486  upon direction of the claimant to the party specified by the
  487  claimant.
  488         (3) An insurer may not make a plan or arrangement whereby
  489  any person, firm, or corporation other than the insurer or its
  490  designated claim representative is authorized to settle or
  491  adjust claims. The creditor may not be designated as a claim
  492  representative for the insurer in adjusting claims. However, a
  493  group policyholder may, by arrangement with the group insurer,
  494  draw drafts, checks, or electronic transfers in payment of
  495  claims due to the group policyholder subject to audit and review
  496  by the insurer.
  497         (4) A claim may not be denied because the debtor was
  498  ineligible for coverage later than 90 days after the initiation
  499  of coverage unless the debtor misrepresented a material fact. If
  500  a claim is denied because the debtor was ineligible for coverage
  501  within 90 days after initiation of coverage or because the
  502  debtor misrepresented a material fact for coverage, the insurer
  503  shall refund to the debtor all premiums paid and the creditor
  504  shall refund any finance charge paid on the premium.
  505         Section 10. Section 627.9929, Florida Statutes, is created
  506  to read:
  507         627.9929Severability.—If any provision of this part or its
  508  application to any person or circumstance is held invalid, the
  509  invalidity does not affect other provisions or applications of
  510  this part which can be given effect without the invalid
  511  provision or application, and to this end the provisions of this
  512  part are severable.
  513         Section 11. Section 627.9931, Florida Statutes, is created
  514  to read:
  515         627.9931 Enforcement; proceedings; penalties.—The office
  516  has all rights and powers to enforce the provisions of this part
  517  as provided by s. 624.307. All proceedings must be conducted in
  518  accordance with chapter 120. Any penalty must be assessed in
  519  accordance with s. 624.4211.
  520         Section 12. Section 635.011, Florida Statutes, is reordered
  521  and amended, to read:
  522         635.011 Definitions.—As used in this chapter, the term:
  523         (1)(a)“Authorized real estate security” means an amortized
  524  note, bond, or other instrument of indebtedness, except for
  525  reverse mortgage loans, evidencing a loan, not exceeding 103
  526  percent of the fair market value of the real estate, secured by
  527  a mortgage, deed of trust, or other instrument that constitutes,
  528  or is equivalent to, a first lien or junior lien or charge on
  529  real estate, with any percentage in excess of 100 percent being
  530  used to finance the fees and closing costs on such indebtedness.
  531  The lien may be subject to and subordinate to other liens,
  532  leases, rights, restrictions, easements, covenants, conditions,
  533  or regulations of use that do not impair the use of the real
  534  estate for its intended purpose.
  535         (b)Notwithstanding paragraph (a), an authorized real
  536  estate security may exceed 103 percent of the fair market value
  537  of the real estate if the mortgage guaranty insurer has
  538  approved, for loss mitigation purposes, a request to refinance a
  539  loan that constitutes an existing risk in force for the insurer.
  540         (c)The term includes an amortized note, bond, or other
  541  instrument of indebtedness evidencing a loan secured by an
  542  ownership interest in, and a proprietary lease from, a
  543  corporation or partnership formed for the purpose of the
  544  cooperative ownership of real estate and at the time the loan
  545  does not exceed 103 percent of the fair market value of the
  546  ownership interest and proprietary lease.
  547         (2)“Bulk mortgage guaranty insurance” means mortgage
  548  guaranty insurance that provides coverage under a single
  549  transaction on each mortgage loan included in a defined
  550  portfolio of loans that have already been originated.
  551         (3)“Certificate of insurance” means a document issued by a
  552  mortgage guaranty insurer to the initial insured to evidence
  553  that it has insured a particular authorized real estate security
  554  under a master policy, identifying the terms, conditions, and
  555  representations, in addition to those contained in the master
  556  policy and endorsements, applicable to such coverage.
  557         (5)“Effective guaranty” means the assumed backing of
  558  existing or future holders of securities by virtue of their
  559  issuer’s conservatorship or perceived access to credit from the
  560  U.S. Treasury, as opposed to the direct full faith and credit
  561  guarantee provided by the Federal Government.
  562         (6)“Loss” means losses and loss adjustment expenses.
  563         (7)“Master policy” means a document issued by a mortgage
  564  guaranty insurer which establishes the terms and conditions of
  565  mortgage guaranty insurance coverage provided, including any
  566  endorsements.
  567         (8) “Mortgage guaranty insurance” means a form of casualty
  568  insurance insuring lenders against:
  569         (a) Financial loss by reason of nonpayment of principal,
  570  interest, and other sums agreed to be paid under the terms of
  571  any note, bond, or other evidence of indebtedness secured by a
  572  mortgage, deed of trust, or other instrument constituting a lien
  573  or charge on real estate which contains a residential building
  574  or a building designed to be occupied for industrial or
  575  commercial purposes.
  576         (b) Financial loss by reason of nonpayment of rent and
  577  other sums agreed to be paid under the terms of a written lease
  578  for the possession, use, or occupancy of real estate, provided
  579  such real estate is designed to be occupied for industrial or
  580  commercial purposes.
  581         (4)(2) “Contingency reserve” means a special premium
  582  reserve which is in addition to other premium reserves required
  583  by law and which is established for the protection of
  584  policyholders against the effect of adverse economic cycles.
  585         (9)Mortgage guaranty quality assurance program” means an
  586  early detection warning system for potential underwriting
  587  compliance issues which could potentially impact solvency or
  588  operational risk within a mortgage guaranty insurer.
  589         (10)Pool mortgage guaranty insurance” means mortgage
  590  guaranty insurance that provides coverage under a single
  591  transaction or a defined series of transactions on a defined
  592  portfolio of loans for losses up to an aggregate limit.
  593         (11)“Right of rescission” means a remedy available to a
  594  mortgage guaranty insurer to void a certificate and restore
  595  parties to their original position, based on inaccurate,
  596  incomplete, or misleading information provided to, or
  597  information omitted or concealed from, the mortgage guaranty
  598  insurer in connection with the insurance application, resulting
  599  in an insured loan that did not meet the mortgage guaranty
  600  insurer’s eligibility requirements in effect on the date of
  601  submission of the insurance application.
  602         (12)“Risk in force” means the mortgage guaranty insurance
  603  coverage percentage applied to the unpaid principal balance.
  604         Section 13. Section 635.021, Florida Statutes, is amended
  605  to read:
  606         635.021 Authority to transact mortgage guaranty insurance.
  607  Mortgage guaranty insurance may be transacted by a stock
  608  casualty insurer or a stock surety insurer holding a certificate
  609  of authority for the transaction of mortgage guaranty insurance
  610  in this state. A mortgage guaranty insurer that holds a
  611  certificate of authority for the transaction of mortgage
  612  guaranty insurance in this state may not transact any other
  613  class of insurance.
  614         Section 14. Subsection (2) of section 635.031, Florida
  615  Statutes, is amended, and subsections (3) through (7) are added
  616  to that section, to read:
  617         635.031 Additional limitations.—In addition to laws
  618  otherwise applicable, mortgage guaranty insurers are subject to
  619  the following limitations:
  620         (2) Mortgage guaranty insurance may be written with respect
  621  to real estate loans only on those loans which a bank, a savings
  622  and loan association, or an insurance company regulated by this
  623  state or an agency of the Federal Government is authorized to
  624  make. Such loans must only finance the acquisition, initial
  625  construction, or refinancing of real estate that is one of the
  626  following:
  627         (a)A residential building designed for occupancy by not
  628  more than four families, a single-family residential condominium
  629  or unit in a planned unit development, or any other single
  630  family residential unit to which title may be conveyed freely.
  631         (b)A mixed-use building with only one nonresidential use
  632  and one single-family dwelling unit.
  633         (c)A building or buildings designed for occupancy by five
  634  or more families or designed to be occupied for industrial or
  635  commercial purposes.
  636         (3)A mortgage guaranty insurer may not insure loans
  637  secured by a single risk in excess of 10 percent of the
  638  insurer’s aggregate capital, surplus, and contingency reserve. A
  639  mortgage guaranty insurer may not have more than 20 percent of
  640  its total insurance in force in any one metropolitan statistical
  641  area. This subsection does not apply to a mortgage guaranty
  642  insurer until it has possessed a certificate of authority in
  643  this state for 3 years.
  644         (4)Except for commercial checking accounts and deposits in
  645  support of an active bank line of credit, a mortgage guaranty
  646  insurer, holding company, or any affiliate of such insurer or
  647  company may not maintain funds on deposit with the lender for
  648  which the mortgage guaranty insurer has insured loans. Any
  649  deposit account bearing interest at rates less than what is
  650  currently being paid other depositors on similar deposits or any
  651  deposit in excess of amounts insured by an agency of the Federal
  652  Government shall be presumed to be an account in violation of
  653  this section. Furthermore, a mortgage guaranty insurance company
  654  may not use compensating balances, special deposit accounts, or
  655  engage in any practice that unduly delays its receipt of moneys
  656  due or that involves the use of its financial resources for the
  657  benefit of any owner, mortgagee of the real property or any
  658  interest therein, or any person who is acting as agent,
  659  representative, attorney, or employee of the owner, purchaser,
  660  or mortgagee as a means of circumventing any part of this
  661  section.
  662         (5)A mortgage guaranty insurer may not pay or cause to be
  663  paid either directly or indirectly, to any owner, purchaser,
  664  lessor, lessee, mortgagee, or prospective mortgagee of the real
  665  property that secures the authorized real estate security or
  666  that is the fee of an insured lease, or any interest therein, or
  667  to any person who is acting as an agent, representative,
  668  attorney, or employee of such owner, purchaser, lessor, lessee,
  669  or mortgagee, any commission, any part of its premium charges,
  670  or any other consideration as an inducement for or as
  671  compensation on any mortgage guaranty insurance business.
  672         (6)In connection with the placement of any mortgage
  673  guaranty insurance, a mortgage guaranty insurer may not cause or
  674  permit the conveyance of anything of value, including, but not
  675  limited to, any commission, fee, premium adjustment,
  676  remuneration, or other form of compensation of any kind to be
  677  paid to or received by an insured lender or lessor; any
  678  subsidiary or affiliate of an insured; an officer, director, or
  679  employee of an insured or any member of the person’s immediate
  680  family; a corporation, partnership, trust, trade association in
  681  which an insured is a member, or other entity in which an
  682  insured or an officer, director, or employee or any member of
  683  the person’s immediate family has a financial interest; or any
  684  designee, trustee, nominee, or other agent or representative of
  685  any of the foregoing, except for the value of the insurance
  686  itself or claim payments as provided by contract or settlement.
  687         (7)A mortgage guaranty insurer may not make a rebate of
  688  any portion of the premium charge. A mortgage guaranty insurer
  689  may not quote any rate or premium charge to a person which is
  690  different than that currently available to others for the same
  691  type of coverage. As used in this subsection, “rebate” includes
  692  a premium charge that is less than the current schedule of
  693  premium charges.
  694         Section 15. Section 635.042, Florida Statutes, is amended
  695  to read:
  696         635.042 Minimum surplus and capital requirements
  697  requirement.—
  698         (1) A mortgage guaranty insurer may not transact the
  699  business of mortgage guaranty insurance unless, if it is a stock
  700  insurance company, it has paid-in capital of at least $10
  701  million and paid-in surplus of at least $15 million, or if it is
  702  a mutual insurance company, a minimum initial surplus of $25
  703  million. A stock insurance company or a mutual insurance company
  704  must, at all times thereafter, maintain a minimum policyholders’
  705  surplus of at least $20 million A mortgage guaranty insurer
  706  shall maintain a minimum surplus of not less than the greater of
  707  $4 million or 10 percent of the insurer’s total outstanding
  708  liabilities other than the required contingency reserve. A
  709  mortgage guaranty insurer is not required to have a surplus as
  710  to policyholders greater than $100 million.
  711         (2) The commission may by rule reduce the minimum amount of
  712  capital and surplus or minimum policyholders’ surplus required
  713  under subsection (1) under all of the following circumstances:
  714         (a)For an affiliated reinsurer that is a mortgage guaranty
  715  insurer and that is or will be engaged solely in the assumption
  716  of risks from affiliated mortgage guaranty insurers, provided
  717  that the affiliated reinsurer is in run-off and the office finds
  718  that the business plan and other relevant circumstances of the
  719  affiliated reinsurer justify the proposed reduction in
  720  requirements.
  721         (b)For mortgage guaranty insurers that are in run-off and
  722  not writing new business, provided the office finds that such
  723  insurers are justified in a business plan.
  724         (3)(a) A mortgage guaranty insurer must possess sufficient
  725  capital and surplus so that the total outstanding aggregate
  726  exposure net of reinsurance under mortgage guaranty policies
  727  written by the insurer does not exceed 25 times its paid-in
  728  capital, surplus, and contingency reserve combined. A mortgage
  729  guaranty insurer shall disclose in the audited financial reports
  730  required under s. 624.424(8), the total aggregate exposure net
  731  of reinsurance under mortgage guaranty policies written by the
  732  insurer. The Commissioner of Insurance Regulation may waive
  733  permit a temporary exception to the requirements of this
  734  subsection at the written request of a mortgage guaranty insurer
  735  upon a finding that the mortgage guaranty insurer’s financial
  736  position is reasonable in relationship to the mortgage guaranty
  737  insurer’s aggregate insured risk and financial needs.
  738         (b)The request for a waiver must be made in writing at
  739  least 90 days before the date that the mortgage guaranty insurer
  740  expects to not meet the requirement of paragraph (a) and shall,
  741  at a minimum, address the factors specified in paragraph (e).
  742         (c)The commissioner may retain accountants, actuaries, or
  743  other experts to assist in the review of the mortgage guaranty
  744  insurer’s request submitted pursuant to paragraph (b). The
  745  mortgage guaranty insurer shall bear the commissioner’s cost of
  746  retaining those persons.
  747         (d)Any waiver shall be all of the following:
  748         1.For a specified period of time, not to exceed 2 years.
  749         2.Subject to any terms and conditions that the
  750  commissioner deems best suited to restoring the mortgage
  751  guaranty insurer’s minimum policyholders position required by
  752  paragraph (a).
  753         (e)In determining whether a mortgage guaranty insurer’s
  754  policyholders position is reasonable in relation to the mortgage
  755  guaranty insurer’s aggregate insured risk in force and adequate
  756  to its financial needs, all of the following factors, among
  757  others, may be considered:
  758         1.The size of the mortgage guaranty insurer, as measured
  759  by its assets, capital and surplus, reserves, premium writings,
  760  insurance in force, and other appropriate criteria.
  761         2.The extent to which the mortgage guaranty insurer’s
  762  business is diversified across time, geography, credit quality,
  763  origination, and distribution channels.
  764         3.The nature and extent of the mortgage guaranty insurer’s
  765  reinsurance program.
  766         4.The quality, diversification, and liquidity of the
  767  mortgage guaranty insurer’s assets and its investment portfolio.
  768         5.The historical and forecasted trend in the size of the
  769  mortgage guaranty insurer’s policyholders position.
  770         6.The policyholders position maintained by other
  771  comparable mortgage guaranty insurers in relation to the nature
  772  of their respective insured risks.
  773         7.The adequacy of the mortgage guaranty insurer’s
  774  reserves.
  775         8.The quality and liquidity of investments in affiliates.
  776  The commissioner may treat any such investment as a nonadmitted
  777  asset for purposes of determining the adequacy of surplus as
  778  regards policyholders.
  779         9.The quality of the mortgage guaranty insurer’s earnings
  780  and the extent to which the reported earnings of the mortgage
  781  guaranty insurer include extraordinary items.
  782         10.An independent actuary’s opinion as to the
  783  reasonableness and adequacy of the mortgage guaranty insurer’s
  784  historical and projected policyholders position.
  785         11.The capital contributions that have been infused or are
  786  available for future infusion into the mortgage guaranty
  787  insurer.
  788         12.The historical and projected trends in the components
  789  of the mortgage guaranty insurer’s aggregate insured risk,
  790  including, but not limited to, the quality and type of the risks
  791  included in the aggregate insured risk.
  792         Section 16. The amendments made to s. 635.042, Florida
  793  Statutes, by this act do not apply to mortgage guaranty insurers
  794  formed before July 1, 2024, until July 1, 2025.
  795         Section 17. Section 635.071, Florida Statutes, is amended
  796  to read:
  797         635.071 Filings, approval of forms; rate filings; records.—
  798         (1) No policy form or related form may be issued or used in
  799  this state unless it has been filed with and approved by the
  800  office as provided by laws applicable to casualty or surety
  801  insurance.
  802         (2) Each insurer shall file with the office for
  803  informational purposes the rate to be charged and the premium to
  804  be paid by the policyholder, including all modifications of
  805  rates and premiums. Every mortgage guaranty insurer shall make
  806  available to insureds the premium charges for mortgage guaranty
  807  insurance policies on its website or through an integration with
  808  a third-party system. The premium rate provided must show the
  809  entire amount of premium charge for the type of mortgage
  810  guaranty insurance policy to be issued by the insurance company.
  811         (3) An insurer may not insure mortgages that are offered
  812  for sale to the public by advertisement, whether in newspapers,
  813  brochures, direct mailings, or similar media, if the
  814  advertisement expressly or impliedly represents or stresses that
  815  the worth, value, or safety of the mortgage investment arises by
  816  virtue of the proposed mortgage guaranty insurance rather than
  817  by virtue of the safety inherent in the value of the underlying
  818  security as it relates to the face value of the mortgage debt,
  819  or if the advertisement stresses the fact that the mortgage
  820  guaranty insurance is regulated by an agency of the state or
  821  Federal Government. A mortgage guaranty insurer may not prepare
  822  or distribute or assist in preparing or distributing any
  823  advertising, media, or communication stating that the real
  824  estate investments of any financial institution are insured
  825  investments, unless the advertising, media, or communication
  826  clearly states that the loans are insured by a mortgage guaranty
  827  insurer possessing a certificate of authority to transact
  828  mortgage guaranty insurance in this state or are insured by an
  829  agency of the Federal Government.
  830         (4)(a)A licensed mortgage guaranty insurer shall maintain
  831  its records in a manner which allows the office to readily
  832  ascertain during an examination the insurer’s compliance with
  833  the Florida Insurance Code and rules adopted by the commission,
  834  including, but not limited to, records regarding the insurer’s
  835  management, operations, policy issuance and servicing,
  836  marketing, underwriting, rating, and claims practices.
  837         (b)Policy and claim records shall be retained for the
  838  period during which the certificate or claim is active plus 5
  839  years, unless otherwise specified by the commission.
  840         (c)Any record required to be maintained by a mortgage
  841  guaranty insurer may be created and stored in the form of paper,
  842  photograph, magnetic, mechanical, or electronic medium.
  843         (d)A mortgage guaranty insurer shall comply with all of
  844  the following:
  845         1.The mortgage guaranty insurer shall provide for record
  846  storage in a location that will allow the records to be
  847  reasonably produced for examination within the time period
  848  required.
  849         2.If using a third party for storage of records, the
  850  mortgage guaranty insurer shall ensure that a written agreement
  851  is made with such third party to maintain a copy of the
  852  agreement and to make a copy of the agreement available for
  853  purposes of examination.
  854         (5)All mortgage guaranty insurers’ master policies shall
  855  include a detailed description of provisions governing
  856  rescissions, repricing, and cancellations which specify the
  857  insurer’s and insured’s rights, obligations, and eligibility
  858  terms under which those actions may occur to ensure
  859  transparency.
  860         (6)Any contract, letter agreement, or other arrangement
  861  used to clarify any terms, conditions, or interpretations of a
  862  master policy or certificate shall be documented in writing. Any
  863  contractual or letter agreements used to modify or clarify
  864  general business practices and administrative, underwriting,
  865  claim submission, or other information exchange processes shall
  866  not contain provisions that override or significantly undermine
  867  the intent of key provisions of this part, including mortgage
  868  guaranty insurer discretion, rights, and responsibilities
  869  related to all of the following:
  870         (a)Underwriting standards.
  871         (b)Quality assurance.
  872         (c)Rescission.
  873         Section 18. Section 635.075, Florida Statutes, is amended
  874  to read:
  875         635.075 Defaults Restoration of property.—Mortgage guaranty
  876  insurance policies issued for delivery in this state shall
  877  contain, as a condition precedent to payment in the event of
  878  default, a provision that the insured must restore the property
  879  to its condition at the time of issuance of the policy, except
  880  for reasonable wear and tear. With respect to owner-occupied,
  881  single-family dwellings or mixed-use buildings as described in
  882  s. 635.031(2) which are owner-occupied at the time of loan
  883  origination and for at least 50 percent of the days within the
  884  12 consecutive months before borrower default, the borrower is
  885  not liable to the mortgage guaranty insurer for any deficiency
  886  arising from a foreclosure sale.
  887         Section 19. Section 635.076, Florida Statutes, is created
  888  to read:
  889         635.076 Investment limitation.—Investments in notes or
  890  other evidence of indebtedness secured by a mortgage or other
  891  liens upon residential real property may not be allowed as
  892  assets in any determination of the financial condition of a
  893  mortgage guaranty insurer. This section does not apply to any of
  894  the following:
  895         (1)Obligations secured by real property, or contracts for
  896  the sale of real property, which obligations or contracts for
  897  sale are acquired in the course of good faith settlement of
  898  claims under policies of insurance issued by the mortgage
  899  guaranty insurer or in the good faith disposition of real
  900  property so acquired.
  901         (2)Investments backed by the full faith and credit of the
  902  Federal Government or investments with the effective guaranty of
  903  the Federal Government.
  904         (3)Investments held by a mortgage guaranty insurer before
  905  July 1, 2024.
  906         Section 20. Section 635.077, Florida Statutes, is created
  907  to read:
  908         635.077 Reinsurance.—
  909         (1)A mortgage guaranty insurer may not enter into captive
  910  reinsurance arrangements that involve the direct or indirect
  911  ceding of any portion of its insurance risks or obligations to a
  912  reinsurer owned or controlled by an insured; any subsidiary or
  913  affiliate of an insured; an officer, director, or employee of an
  914  insured or any member of the person’s immediate family; a
  915  corporation, partnership, trust, trade association in which an
  916  insured is a member, or other entity owned or controlled by an
  917  insured or an insured’s officer, director, or employee or any
  918  member of the person’s immediate family that has a financial
  919  interest; or any designee, trustee, nominee, or other agent or
  920  representative of any of the foregoing.
  921         (2)A mortgage guaranty insurer may, by written contract,
  922  reinsure any insurance that it transacts, except that no
  923  mortgage guaranty insurer may enter into reinsurance
  924  arrangements designed to circumvent s. 625.041. The unearned
  925  premium reserve and the reserves for payment of losses required
  926  by s. 625.041 must be established and maintained by the direct
  927  insurer or by the assuming reinsurer so that the aggregate
  928  reserves are equal to or greater than the reserves required by
  929  direct writer.
  930         Section 21. Section 635.078, Florida Statutes, is created
  931  to read:
  932         635.078 Sound underwriting practices.—
  933         (1)All certificates of mortgage guaranty insurance,
  934  excluding policies of reinsurance, must be written based on an
  935  assessment of evidence that prudent underwriting standards have
  936  been met by the originator of the mortgage. Delegated
  937  underwriting decisions must be reviewed by the mortgage guaranty
  938  insurer based on a reasonable method of sampling of post-closing
  939  loan documentation to ensure compliance with the mortgage
  940  guaranty insurer’s underwriting standards.
  941         (2)Control reviews for bulk mortgage guaranty insurance
  942  and pool mortgage guaranty insurance must be based on a
  943  reasonable method of sampling of post-closing loan documentation
  944  for delegated underwriting decisions to ensure compliance with
  945  the representations and warranties of the creditors or creditors
  946  originating the loans and with the mortgage guaranty insurer’s
  947  underwriting standards.
  948         (3)Mortgage guaranty insurers shall establish formal
  949  underwriting standards which set forth the basis for concluding
  950  that prudent underwriting standards have been met.
  951         (4)A mortgage guaranty insurance company’s underwriting
  952  standards shall be:
  953         (a)Reviewed and approved by executive management,
  954  including, but not limited to, the highest-ranking executive
  955  officer and financial officer; and
  956         (b)Communicated across the organization to promote
  957  consistent business practices with respect to underwriting.
  958         (5)On or before March 1 of each year, a mortgage guaranty
  959  insurer shall file with the office changes to its underwriting
  960  standards and an analysis of the changes implemented during the
  961  course of the immediately preceding year. The annual analysis of
  962  material underwriting standards changes should include any
  963  change associated with loan to value ratios, debt to income
  964  ratios, borrower credit standing, or maximum loan amount which
  965  has resulted in a material impact on net premium written from
  966  the preceding year.
  967         Section 22. Section 635.079, Florida Statutes, is created
  968  to read:
  969         635.079 Quality assurance program.—
  970         (1)A mortgage guaranty insurer shall establish a formal
  971  internal mortgage guaranty quality assurance program. This
  972  mortgage guaranty quality assurance program shall provide for
  973  the documentation, monitoring, evaluation, and reporting on the
  974  integrity of the ongoing loan origination process based on
  975  indicators of potential underwriting inadequacies or
  976  noncompliance. The program shall meet all of the following
  977  requirements:
  978         (a)Administration of the quality assurance program shall
  979  be delegated to designated risk management, quality assurance,
  980  or internal audit personnel, who are technically trained and
  981  independent from underwriting activities that they audit.
  982         (b)Quality assurance personnel shall provide periodic
  983  quality assurance reports to an enterprise risk management
  984  committee or other equivalent senior management level oversight
  985  body.
  986         (c)Quality assurance personnel shall provide periodic
  987  quality assurance reports to the board of directors or a
  988  designated committee of directors established to facilitate the
  989  board’s oversight.
  990         (d)A mortgage guaranty quality assurance program,
  991  excluding policies and procedures of reinsurance, shall be
  992  formally established and documented to define scope, roles, and
  993  responsibilities.
  994         (e)Quality assurance review shall include an examination
  995  of underwriting risks, including classification of risk and
  996  compliance with risk tolerance levels.
  997         (f)Quality assurance monitoring provisions shall include
  998  an assessment of lender performance.
  999         (g)Quality assurance monitoring provisions shall assess
 1000  compliance with underwriting standards.
 1001         (h)Quality assurance monitoring provisions shall assess
 1002  prospective risks associated with timely loan payment, including
 1003  delinquency, default inventory, foreclosure, and persistency
 1004  trends.
 1005         (i)Underwriting system program changes shall be monitored
 1006  to ensure the integrity of underwriting and pricing programs,
 1007  which impact automated underwriting system decisionmaking.
 1008         (j)Pricing controls shall be monitored to ensure that
 1009  business segment pricing supports applicable performance goals.
 1010         (k)Periodic internal audits shall be conducted to validate
 1011  compliance with the mortgage guaranty quality assurance program.
 1012         (2)The office shall be provided access to a mortgage
 1013  guaranty insurer’s mortgage guaranty quality assurance program
 1014  for review at any reasonable time upon request and during any
 1015  financial regulatory examination. This section may not be
 1016  construed to limit a regulator’s right to access any of the
 1017  records of an insurer in an examination or as otherwise
 1018  necessary to meet regulatory responsibilities.
 1019         Section 23. Section 635.0791, Florida Statutes, is created
 1020  to read:
 1021         635.0791 Conflict of interest.—A mortgage guaranty insurer
 1022  may underwrite mortgage guaranty insurance on mortgages
 1023  originated by the holding company system or affiliate or on
 1024  mortgages originated by any mortgage lender to which credit is
 1025  extended, directly or indirectly, by the holding company system
 1026  or affiliate only if the insurance is underwritten on the same
 1027  basis, for the same consideration, and subject to the same
 1028  insurability requirements as insurance provided to nonaffiliated
 1029  lenders. Mortgage guaranty insurance underwritten on mortgages
 1030  originated by the holding company system or affiliate or on
 1031  mortgages originated by any mortgage lender to which credit is
 1032  extended, directly or indirectly, by the holding company system
 1033  or affiliate shall be limited to 50 percent of the insurer’s
 1034  direct premium written in any calendar year, or such higher
 1035  percentage established by rule by the commission.
 1036         Section 24. Section 635.0792, Florida Statutes, is created
 1037  to read:
 1038         635.0792 Educational efforts and promotional materials
 1039  permitted.—A mortgage guaranty insurer may engage in any
 1040  educational effort with borrowers, members of the general
 1041  public, and officers, directors, employees, contractors, and
 1042  agents of insured lenders which may reasonably be expected to
 1043  reduce its risk of loss or promote its operational efficiency
 1044  and may distribute promotional materials of minor value.
 1045         Section 25. Paragraph (j) of subsection (1) of section
 1046  624.605, Florida Statutes, is amended to read:
 1047         624.605 “Casualty insurance” defined.—
 1048         (1) “Casualty insurance” includes:
 1049         (j) Credit personal property insurance.—Credit personal
 1050  property insurance is a limited line of insurance providing
 1051  coverage on personal property used as collateral for securing a
 1052  loan or on personal property purchased under an installment
 1053  sales agreement. Credit personal property insurance shall not be
 1054  considered to be property insurance. The coverage shall be
 1055  issued on an inland marine policy form, and coverage limits
 1056  shall be restricted to the initial amount of the loan or the
 1057  amount of the installment sale.
 1058         Section 26. Paragraph (q) of subsection (1) of section
 1059  626.9541, Florida Statutes, is amended to read:
 1060         626.9541 Unfair methods of competition and unfair or
 1061  deceptive acts or practices defined.—
 1062         (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
 1063  ACTS.—The following are defined as unfair methods of competition
 1064  and unfair or deceptive acts or practices:
 1065         (q) Certain insurance transactions through credit card
 1066  facilities prohibited.—
 1067         1. Except as provided in subparagraph 3., no person shall
 1068  knowingly solicit or negotiate insurance; seek or accept
 1069  applications for insurance; issue or deliver any policy;
 1070  receive, collect, or transmit premiums, to or for an insurer; or
 1071  otherwise transact insurance in this state, or relative to a
 1072  subject of insurance resident, located, or to be performed in
 1073  this state, through the arrangement or facilities of a credit
 1074  card facility or organization, for the purpose of insuring
 1075  credit card holders or prospective credit card holders. The term
 1076  “credit card holder” as used in this paragraph means a person
 1077  who may pay the charge for purchases or other transactions
 1078  through the credit card facility or organization, whose credit
 1079  with such facility or organization is evidenced by a credit card
 1080  identifying such person as being one whose charges the credit
 1081  card facility or organization will pay, and who is identified as
 1082  such upon the credit card by name, account number, symbol,
 1083  insignia, or other method or device of identification. This
 1084  subparagraph does not apply as to health insurance or to credit
 1085  life, credit disability, or credit personal property insurance.
 1086         2. If any person does or performs in this state any of the
 1087  acts in violation of subparagraph 1. for or on behalf of an
 1088  insurer or credit card facility, such insurer or credit card
 1089  facility shall be deemed to be doing business in this state and,
 1090  if an insurer, shall be subject to the same state, county, and
 1091  municipal taxes as insurers that have been legally qualified and
 1092  admitted to do business in this state by agents or otherwise are
 1093  subject, the same to be assessed and collected against such
 1094  insurers; and such person so doing or performing any of such
 1095  acts is personally liable for all such taxes.
 1096         3. A licensed agent or insurer may solicit or negotiate
 1097  insurance; seek or accept applications for insurance; issue or
 1098  deliver any policy; receive, collect, or transmit premiums, to
 1099  or for an insurer; or otherwise transact insurance in this
 1100  state, or relative to a subject of insurance resident, located,
 1101  or to be performed in this state, through the arrangement or
 1102  facilities of a credit card facility or organization, for the
 1103  purpose of insuring credit card holders or prospective credit
 1104  card holders if:
 1105         a. The insurance or policy which is the subject of the
 1106  transaction is noncancelable by any person other than the named
 1107  insured, the policyholder, or the insurer;
 1108         b. Any refund of unearned premium is made to the credit
 1109  card holder by mail or electronic transfer; and
 1110         c. The credit card transaction is authorized by the
 1111  signature of the credit card holder or other person authorized
 1112  to sign on the credit card account.
 1113  
 1114  The conditions enumerated in sub-subparagraphs a.-c. do not
 1115  apply to health insurance or to credit life, credit disability,
 1116  or credit personal property insurance; and sub-subparagraph c.
 1117  does not apply to property and casualty insurance if the
 1118  transaction is authorized by the insured.
 1119         4. No person may use or disclose information resulting from
 1120  the use of a credit card in conjunction with the purchase of
 1121  insurance if such information is to the advantage of the credit
 1122  card facility or an insurance agent, or is to the detriment of
 1123  the insured or any other insurance agent; except that this
 1124  provision does not prohibit a credit card facility from using or
 1125  disclosing such information in a judicial proceeding or
 1126  consistent with applicable law on credit reporting.
 1127         5. Such insurance may not be sold through a credit card
 1128  facility in conjunction with membership in any automobile club.
 1129  The term “automobile club” means a legal entity that, in
 1130  consideration of dues, assessments, or periodic payments of
 1131  money, promises its members or subscribers to assist them in
 1132  matters relating to the ownership, operation, use, or
 1133  maintenance of a motor vehicle; however, the term does not
 1134  include persons, associations, or corporations that are
 1135  organized and operated solely for the purpose of conducting,
 1136  sponsoring, or sanctioning motor vehicle races, exhibitions, or
 1137  contests upon racetracks, or upon race courses established and
 1138  marked as such for the duration of such particular event. The
 1139  words “motor vehicle” used herein shall be the same as defined
 1140  in chapter 320.
 1141         Section 27. Paragraph (b) of subsection (1) of section
 1142  627.971, Florida Statutes, is amended to read:
 1143         627.971 Definitions.—As used in this part:
 1144         (1)
 1145         (b) However, “financial guaranty insurance” does not
 1146  include:
 1147         1. Insurance of a loss resulting from an event described in
 1148  paragraph (a), if the loss is payable only upon the occurrence
 1149  of any of the following, as specified in a surety bond,
 1150  insurance policy, or indemnity contract:
 1151         a. A fortuitous physical event;
 1152         b. A failure of or deficiency in the operation of
 1153  equipment; or
 1154         c. An inability to extract or recover a natural resource;
 1155         2. An individual or schedule public official bond;
 1156         3. A court bond required in connection with judicial,
 1157  probate, bankruptcy, or equity proceedings, including a waiver,
 1158  probate, open estate, or life tenant bond;
 1159         4. A bond running to a federal, state, county, municipal
 1160  government, or other political subdivision, as a condition
 1161  precedent to the granting of a license to engage in a particular
 1162  business or of a permit to exercise a particular privilege;
 1163         5. A loss security bond or utility payment indemnity bond
 1164  running to a governmental unit, railroad, or charitable
 1165  organization;
 1166         6. A lease, purchase and sale, or concessionaire surety
 1167  bond;
 1168         7. Credit unemployment insurance on a debtor in connection
 1169  with a specific loan or other credit transaction, to provide
 1170  payments to a creditor in the event of unemployment of the
 1171  debtor for the installments or other periodic payments becoming
 1172  due while a debtor is unemployed;
 1173         8. Credit insurance indemnifying a manufacturer, merchant,
 1174  or educational institution which extends credit against loss or
 1175  damage resulting from nonpayment of debts owed to her or him for
 1176  goods or services provided in the normal course of her or his
 1177  business;
 1178         9. Guaranteed investment contracts that are issued by life
 1179  insurance companies and that provide that the life insurer will
 1180  make specified payments in exchange for specific premiums or
 1181  contributions;
 1182         10. Mortgage guaranty insurance as defined in s. 635.011 s.
 1183  635.011(1) or s. 635.021;
 1184         11. Indemnity contracts or similar guaranties, to the
 1185  extent that they are not otherwise limited or proscribed by this
 1186  part, in which a life insurer guarantees:
 1187         a. Its obligations or indebtedness or the obligations or
 1188  indebtedness of a subsidiary of which it owns more than 50
 1189  percent, other than a financial guaranty insurance corporation,
 1190  if:
 1191         (I) For any such obligations or indebtedness that are
 1192  backed by specific assets, such assets are at all times owned by
 1193  the insurer or the subsidiary; and
 1194         (II) For the obligations or indebtedness of the subsidiary
 1195  that are not backed by specific assets of the life insurer, the
 1196  guaranty terminates once the subsidiary ceases to be a
 1197  subsidiary; or
 1198         b. The obligations or indebtedness, including the
 1199  obligation to substitute assets where appropriate, with respect
 1200  to specific assets acquired by a life insurer in the course of
 1201  normal investment activities and not for the purpose of resale
 1202  with credit enhancement, or guarantees obligations or
 1203  indebtedness acquired by its subsidiary, provided that the
 1204  assets so acquired have been:
 1205         (I) Acquired by a special purpose entity where the sole
 1206  purpose is to acquire specific assets of the life insurer or the
 1207  subsidiary and issue securities or participation certificates
 1208  backed by such assets; or
 1209         (II) Sold to an independent third party; or
 1210         c. The obligations or indebtedness of an employee or agent
 1211  of the life insurer;
 1212         12. Any form of surety insurance as defined in s. 624.606;
 1213         13. Guarantees of higher education loans, unless written by
 1214  a financial guaranty insurance corporation; or
 1215         14. Any other form of insurance covering risks which the
 1216  office determines to be substantially similar to any of the
 1217  foregoing.
 1218         Section 28. This act shall take effect July 1, 2024.

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