Bill Text: FL S1260 | 2014 | Regular Session | Comm Sub
Bill Title: Insurance
Spectrum: Bipartisan Bill
Status: (Failed) 2014-05-01 - Laid on Table, companion bill(s) passed, see HB 291 (Ch. 2014-111), CS/CS/HB 321 (Ch. 2014-112), CS/CS/HB 633 (Ch. 2014-123), CS/HB 785 (Ch. 2014-131), CS/CS/HB 7005 (Ch. 2014-216), CS/CS/CS/SB 542 (Ch. 2014-80), CS/CS/SB 708 (Ch. 2014-86), CS/CS/SB 1308 (Ch. 2014-101), CS/CS/SB 1344 (Ch. 2014-103), CS/CS/SB 1672 (Ch. 2014-104) [S1260 Detail]
Download: Florida-2014-S1260-Comm_Sub.html
Florida Senate - 2014 CS for CS for SB 1260
By the Committees on Appropriations; and Banking and Insurance;
and Senators Brandes and Soto
576-04548-14 20141260c2
1 A bill to be entitled
2 An act relating to insurance; amending s. 624.4625,
3 F.S.; revising requirements for corporations not for
4 profit to qualify to form a self-insurance fund;
5 amending s. 624.501, F.S.; revising original
6 appointment and renewal fees related to certain
7 insurance representatives; amending s. 626.015, F.S.;
8 defining the term “unaffiliated insurance agent”;
9 amending s. 626.0428, F.S.; requiring a branch place
10 of business to have an agent in charge; authorizing an
11 agent to be in charge of more than one branch office
12 under certain circumstances; providing requirements
13 relating to the designation of an agent in charge;
14 prohibiting an insurance agency from conducting
15 insurance business at a location without a designated
16 agent in charge; providing that the agent in charge is
17 accountable for misconduct and violations committed by
18 the licensee and any person under his or her
19 supervision; amending s. 626.112, F.S.; prohibiting
20 limited customer representative licenses from being
21 issued after a specified date; providing licensure
22 exemptions that allow specified individuals or
23 entities to conduct insurance business at specified
24 locations under certain circumstances; revising
25 licensure requirements and penalties with respect to
26 registered insurance agencies; providing that the
27 registration of an approved registered insurance
28 agency automatically converts to an insurance agency
29 license on a specified date; amending s. 626.172,
30 F.S.; revising requirements relating to applications
31 for insurance agency licenses; conforming provisions
32 to changes made by the act; amending s. 626.311, F.S.;
33 limiting the types of business that may be transacted
34 by certain agents; amending s. 626.321, F.S.;
35 providing that a limited license to offer motor
36 vehicle rental insurance issued to a business that
37 rents or leases motor vehicles encompasses the
38 employees of such business; amending s. 626.382, F.S.;
39 providing that an insurance agency license continues
40 in force until canceled, suspended, revoked,
41 terminated, or expired; amending s. 626.601, F.S.;
42 revising terminology relating to investigations
43 conducted by the Department of Financial Services and
44 the Office of Insurance Regulation with respect to
45 individuals and entities involved in the insurance
46 industry; revising a confidentiality provision;
47 amending s. 626.621, F.S.; providing an additional
48 ground for disciplinary action against the license or
49 appointment of certain insurance-related personnel for
50 accepting compensation for referring the owner of a
51 property to an inspector or inspection company;
52 repealing s. 626.747, F.S., relating to branch
53 agencies, agents in charge, and the payment of
54 additional county tax under certain circumstances;
55 amending s. 626.8411, F.S.; conforming a cross
56 reference; amending s. 626.854, F.S.; deleting the
57 requirement that a 48 hours’ notice be provided before
58 scheduling an onsite inspection of insured property;
59 conforming a cross-reference; amending s. 626.8805,
60 F.S.; revising insurance administrator application
61 requirements; amending s. 626.8817, F.S.; authorizing
62 an insurer’s designee to provide certain coverage
63 information to an insurance administrator; authorizing
64 an insurer to subcontract the review of an insurance
65 administrator; amending s. 626.882, F.S.; prohibiting
66 a person from acting as an insurance administrator
67 without a specific written agreement; amending s.
68 626.883, F.S.; requiring an insurance administrator to
69 furnish fiduciary account records to an insurer;
70 requiring administrator withdrawals from a fiduciary
71 account to be made according to a specific written
72 agreement; providing that an insurer’s designee may
73 authorize payment of claims; amending s. 626.884,
74 F.S.; revising an insurer’s right of access to certain
75 administrator records; amending s. 626.89, F.S.;
76 revising the deadline for filing certain financial
77 statements; deleting provisions allowing an extension
78 for administrator to submit certain financial
79 statements; amending s. 626.931, F.S.; deleting
80 provisions requiring a surplus lines agent to file a
81 quarterly affidavit with the Florida Surplus Lines
82 Service Office; amending s. 626.932, F.S.; revising
83 the due date of surplus lines tax; amending ss.
84 626.935 and 626.936, F.S.; conforming provisions to
85 changes made by the act; amending s. 626.9541, F.S.;
86 revising provisions for unfair methods of competition
87 and unfair or deceptive acts relating to conducting
88 certain insurance transactions through credit card
89 facilities; amending s. 627.062, F.S.; authorizing the
90 Office of Insurance Regulation to use a straight
91 average of model results or output ranges to estimate
92 hurricane losses when determining whether the rates in
93 a rate filing are excessive, inadequate, or unfairly
94 discriminatory; amending s. 627.0628, F.S.; increasing
95 the length of time during which an insurer must adhere
96 to certain findings made by the Commission on
97 Hurricane Loss Projection Methodology with respect to
98 certain methods, principles, standards, models, or
99 output ranges used in a rate filing; providing that
100 the requirement to adhere to such findings does not
101 limit an insurer from using straight averages of model
102 results or output ranges under specified
103 circumstances; amending s. 627.0651, F.S.; revising
104 provisions for making and use of rates for motor
105 vehicle insurance; amending s. 627.0653, F.S.;
106 authorizing the office to approve motor vehicle
107 premium discounts for vehicles equipped with
108 electronic crash avoidance technology; amending s.
109 627.072, F.S.; authorizing retrospective rating plans
110 relating to workers’ compensation and employer’s
111 liability insurance to allow negotiations between
112 certain employers and insurers with respect to rating
113 factors used to calculate premiums; amending s.
114 627.281, F.S.; conforming a cross-reference; amending
115 s. 627.311, F.S.; providing that certain dividends may
116 be retained by the joint underwriting plan for future
117 use; amending s. 627.3518, F.S.; conforming a cross
118 reference; repealing s. 627.3519, F.S., relating to an
119 annual report on the aggregate report of maximum
120 losses of the Florida Hurricane Catastrophe Fund and
121 Citizens Property Insurance Corporation; amending s.
122 627.409, F.S.; providing that a claim for residential
123 property insurance may not be denied based on certain
124 credit information; amending s. 627.4133, F.S.;
125 extending the period for prior notice required with
126 respect to the nonrenewal, cancellation, or
127 termination of certain insurance policies; deleting
128 certain provisions that require extended periods of
129 prior notice with respect to the nonrenewal,
130 cancellation, or termination of certain insurance
131 policies; prohibiting the cancellation of certain
132 policies that have been in effect for a specified
133 amount of time, except under certain circumstances;
134 prohibiting the cancellation of a policy or contract
135 that has been in effect for a specified amount of time
136 based on certain credit information; amending s.
137 627.4137, F.S.; adding licensed company adjusters to
138 the list of persons who may respond to a claimant’s
139 written request for information relating to liability
140 insurance coverage; amending s. 627.421, F.S.;
141 authorizing a policyholder of personal lines insurance
142 to affirmatively elect delivery of policy documents by
143 electronic means; amending s. 627.43141, F.S.;
144 authorizing a notice of change in policy terms to be
145 sent in a separate mailing to an insured under certain
146 circumstances; requiring an insurer to provide such
147 notice to the insured’s insurance agent; creating s.
148 627.4553, F.S.; providing requirements for the
149 recommendation to surrender an annuity or life
150 insurance policy; amending s. 627.7015, F.S.; revising
151 the rulemaking authority of the department with
152 respect to qualifications and specified types of
153 penalties covered under the property insurance
154 mediation program; creating s. 627.70151, F.S.;
155 providing criteria for an insurer or policyholder to
156 challenge the impartiality of a loss appraisal umpire
157 for purposes of disqualifying such umpire; amending s.
158 627.706, F.S.; revising the definition of the term
159 “neutral evaluator”; amending s. 627.7074, F.S.;
160 revising notification requirements for participation
161 in the neutral evaluation program; providing grounds
162 for the department to deny an application, or suspend
163 or revoke certification, of a neutral evaluator;
164 requiring the department to adopt rules relating to
165 certification of neutral evaluators; amending s.
166 627.711, F.S.; revising verification requirements for
167 uniform mitigation verification forms; amending s.
168 627.7283, F.S.; providing for the electronic transfer
169 of unearned premiums returned when a policy is
170 canceled; amending s. 627.736, F.S.; revising the time
171 period for applicability of certain Medicare fee
172 schedules or payment limitations; amending s. 627.744,
173 F.S.; revising preinsurance inspection requirements
174 for private passenger motor vehicles; amending s.
175 627.745, F.S.; revising qualifications for approval as
176 a mediator by the department; providing grounds for
177 the department to deny an application, or suspend or
178 revoke approval of a mediator or certification of a
179 neutral evaluator; authorizing the department to adopt
180 rules; amending s. 627.782, F.S.; revising the date by
181 which title insurance agencies and certain insurers
182 must annually submit specified information to the
183 Office of Insurance Regulation; amending s. 628.461,
184 F.S.; revising filing requirements relating to the
185 acquisition of controlling stock; revising the amount
186 of outstanding voting securities of a domestic stock
187 insurer or a controlling company that a person is
188 prohibited from acquiring unless certain requirements
189 have been met; prohibiting persons acquiring a certain
190 percentage of voting securities from acquiring certain
191 securities; providing that a presumption of control
192 may be rebutted by filing a disclaimer of control;
193 deleting a definition; amending ss. 631.717 and
194 631.734, F.S.; transferring a provision relating to
195 the obligations of the Florida Life and Health
196 Insurance Guaranty Association; amending s. 634.406,
197 F.S.; revising criteria authorizing premiums of
198 certain service warranty associations to exceed their
199 specified net assets limitations; revising
200 requirements relating to contractual liability
201 policies that insure warranty associations; providing
202 effective dates.
203
204 Be It Enacted by the Legislature of the State of Florida:
205
206 Section 1. Paragraph (b) of subsection (1) of section
207 624.4625, Florida Statutes, is amended to read:
208 624.4625 Corporation not for profit self-insurance funds.—
209 (1) Notwithstanding any other provision of law, any two or
210 more corporations not for profit located in and organized under
211 the laws of this state may form a self-insurance fund for the
212 purpose of pooling and spreading liabilities of its group
213 members in any one or combination of property or casualty risk,
214 provided the corporation not for profit self-insurance fund that
215 is created:
216 (b) Requires for qualification that each participating
217 member receive at least 75 percent of its revenues from local,
218 state, or federal governmental sources or a combination of such
219 sources, or qualify as a publicly supported organization under
220 s. 501(c)(3) or s. 4947(a)(1) of the United States Internal
221 Revenue Code which normally receives a substantial part of its
222 support from a governmental unit or from the general public as
223 evidenced on the organization’s most recently filed Internal
224 Revenue Service Form 990 or 990-EZ, Schedule A.
225 Section 2. Paragraphs (a) and (c) of subsection (6) and
226 subsections (7) and (8) of section 624.501, Florida Statutes,
227 are amended to read:
228 624.501 Filing, license, appointment, and miscellaneous
229 fees.—The department, commission, or office, as appropriate,
230 shall collect in advance, and persons so served shall pay to it
231 in advance, fees, licenses, and miscellaneous charges as
232 follows:
233 (6) Insurance representatives, property, marine, casualty,
234 and surety insurance.
235 (a) Agent’s original appointment and biennial renewal or
236 continuation thereof, each insurer or unaffiliated agent making
237 an appointment:
238 Appointment fee...........................................$42.00
239 State tax..................................................12.00
240 County tax..................................................6.00
241 Total.....................................................$60.00
242 (c) Nonresident agent’s original appointment and biennial
243 renewal or continuation thereof, appointment fee, each insurer
244 or unaffiliated agent making an appointment...............$60.00
245 (7) Life insurance agents.
246 (a) Agent’s original appointment and biennial renewal or
247 continuation thereof, each insurer or unaffiliated agent making
248 an appointment:
249 Appointment fee...........................................$42.00
250 State tax..................................................12.00
251 County tax..................................................6.00
252 Total.....................................................$60.00
253 (b) Nonresident agent’s original appointment and biennial
254 renewal or continuation thereof, appointment fee, each insurer
255 or unaffiliated agent making an appointment...............$60.00
256 (8) Health insurance agents.
257 (a) Agent’s original appointment and biennial renewal or
258 continuation thereof, each insurer or unaffiliated agent making
259 an appointment:
260 Appointment fee...........................................$42.00
261 State tax..................................................12.00
262 County tax..................................................6.00
263 Total.....................................................$60.00
264 (b) Nonresident agent’s original appointment and biennial
265 renewal or continuation thereof, appointment fee, each insurer
266 or unaffiliated agent making an appointment...............$60.00
267 Section 3. Present subsection (18) of section 626.015,
268 Florida Statutes, is renumbered as subsection (19), and a new
269 subsection (18) is added to that section, to read:
270 626.015 Definitions.—As used in this part:
271 (18) “Unaffiliated insurance agent” means a licensed
272 insurance agent, except a limited lines agent, who is self
273 appointed and who practices as an independent consultant in the
274 business of analyzing or abstracting insurance policies,
275 providing insurance advice or counseling, or making specific
276 recommendations or comparisons of insurance products for a fee
277 established in advance by written contract signed by the
278 parties. An unaffiliated insurance agent may not be affiliated
279 with an insurer, insurer-appointed insurance agent, or insurance
280 agency contracted with or employing insurer-appointed insurance
281 agents.
282 Section 4. Effective January 1, 2015, section 626.0428,
283 Florida Statutes, is amended to read:
284 626.0428 Agency personnel powers, duties, and limitations.—
285 (1) An individual employed by an agent or agency on salary
286 who devotes full time to clerical work, with incidental taking
287 of insurance applications or quoting or receiving premiums on
288 incoming inquiries in the office of the agent or agency, is not
289 deemed to be an agent or customer representative if his or her
290 compensation does not include in whole or in part any
291 commissions on such business and is not related to the
292 production of applications, insurance, or premiums.
293 (2) An employee or authorized representative located at a
294 designated branch of an agent or agency may not bind insurance
295 coverage unless licensed and appointed as an agent or customer
296 representative.
297 (3) An employee or authorized representative of an agent or
298 agency may not initiate contact with any person for the purpose
299 of soliciting insurance unless licensed and appointed as an
300 agent or customer representative. As to title insurance, an
301 employee of an agent or agency may not initiate contact with any
302 individual proposed insured for the purpose of soliciting title
303 insurance unless licensed as a title insurance agent or exempt
304 from such licensure pursuant to s. 626.8417(4).
305 (4)(a) Each place of business established by an agent or
306 agency, firm, corporation, or association must be in the active
307 full-time charge of a licensed and appointed agent holding the
308 required agent licenses to transact the lines of insurance being
309 handled at the location.
310 (b) Notwithstanding paragraph (a), the licensed agent in
311 charge of an insurance agency may also be the agent in charge of
312 additional branch office locations of the agency if insurance
313 activities requiring licensure as an insurance agent do not
314 occur at any location when an agent is not physically present
315 and unlicensed employees at the location do not engage in
316 insurance activities requiring licensure as an insurance agent
317 or customer representative.
318 (c) An insurance agency and each branch place of business
319 of an insurance agency shall designate an agent in charge and
320 file the name and license number of the agent in charge and the
321 physical address of the insurance agency location with the
322 department and the department’s website. The designation of the
323 agent in charge may be changed at the option of the agency. A
324 change of the designated agent in charge is effective upon
325 notice to the department. Notice to the department must be
326 provided within 30 days after such change.
327 (d) An insurance agency location may not conduct the
328 business of insurance unless an agent in charge is designated by
329 and providing services to the agency at all times. If the agent
330 in charge designated with the department ends his or her
331 affiliation with the agency for any reason and the agency fails
332 to designate another agent in charge within 30 days as provided
333 in paragraph (c) and such failure continues for 90 days, the
334 agency license automatically expires on the 91st day after the
335 date the designated agent in charge ended his or her affiliation
336 with the agency.
337 (e) For purposes of this subsection, an “agent in charge”
338 is the licensed and appointed agent responsible for the
339 supervision of all individuals within an insurance agency
340 location, regardless of whether the agent in charge handles a
341 specific transaction or deals with the general public in the
342 solicitation or negotiation of insurance contracts or the
343 collection or accounting of money.
344 (f) An agent in charge of an insurance agency is
345 accountable for the wrongful acts, misconduct, or violations of
346 this code committed by the licensee or by any person under his
347 or her supervision while acting on behalf of the agency.
348 However, an agent in charge is not criminally liable for any act
349 unless the agent in charge personally committed the act or knew
350 or should have known of the act and of the facts constituting a
351 violation of this code.
352 Section 5. Paragraph (b) of subsection (1) and subsection
353 (7) of section 626.112, Florida Statutes, is amended to read:
354 626.112 License and appointment required; agents, customer
355 representatives, adjusters, insurance agencies, service
356 representatives, managing general agents.—
357 (1)
358 (b) Except as provided in subsection (6) or in applicable
359 department rules, and in addition to other conduct described in
360 this chapter with respect to particular types of agents, a
361 license as an insurance agent, service representative, customer
362 representative, or limited customer representative is required
363 in order to engage in the solicitation of insurance. Effective
364 October 1, 2014, limited customer representative licenses may
365 not be issued. For purposes of this requirement, as applicable
366 to any of the license types described in this section, the
367 solicitation of insurance is the attempt to persuade any person
368 to purchase an insurance product by:
369 1. Describing the benefits or terms of insurance coverage,
370 including premiums or rates of return;
371 2. Distributing an invitation to contract to prospective
372 purchasers;
373 3. Making general or specific recommendations as to
374 insurance products;
375 4. Completing orders or applications for insurance
376 products;
377 5. Comparing insurance products, advising as to insurance
378 matters, or interpreting policies or coverages; or
379 6. Offering or attempting to negotiate on behalf of another
380 person a viatical settlement contract as defined in s. 626.9911.
381
382 However, an employee leasing company licensed under pursuant to
383 chapter 468 which is seeking to enter into a contract with an
384 employer that identifies products and services offered to
385 employees may deliver proposals for the purchase of employee
386 leasing services to prospective clients of the employee leasing
387 company setting forth the terms and conditions of doing
388 business; classify employees as permitted by s. 468.529; collect
389 information from prospective clients and other sources as
390 necessary to perform due diligence on the prospective client and
391 to prepare a proposal for services; provide and receive
392 enrollment forms, plans, and other documents; and discuss or
393 explain in general terms the conditions, limitations, options,
394 or exclusions of insurance benefit plans available to the client
395 or employees of the employee leasing company were the client to
396 contract with the employee leasing company. Any advertising
397 materials or other documents describing specific insurance
398 coverages must identify and be from a licensed insurer or its
399 licensed agent or a licensed and appointed agent employed by the
400 employee leasing company. The employee leasing company may not
401 advise or inform the prospective business client or individual
402 employees of specific coverage provisions, exclusions, or
403 limitations of particular plans. As to clients for which the
404 employee leasing company is providing services pursuant to s.
405 468.525(4), the employee leasing company may engage in
406 activities permitted by ss. 626.7315, 626.7845, and 626.8305,
407 subject to the restrictions specified in those sections. If a
408 prospective client requests more specific information concerning
409 the insurance provided by the employee leasing company, the
410 employee leasing company must refer the prospective business
411 client to the insurer or its licensed agent or to a licensed and
412 appointed agent employed by the employee leasing company.
413 Section 6. Effective January 1, 2015, subsection (7) of
414 section 626.112, Florida Statutes, is amended to read:
415 626.112 License and appointment required; agents, customer
416 representatives, adjusters, insurance agencies, service
417 representatives, managing general agents.—
418 (7)(a) An Effective October 1, 2006, no individual, firm,
419 partnership, corporation, association, or any other entity may
420 not shall act in its own name or under a trade name, directly or
421 indirectly, as an insurance agency, unless it possesses complies
422 with s. 626.172 with respect to possessing an insurance agency
423 license issued pursuant to s. 626.172 for each place of business
424 at which it engages in any activity that which may be performed
425 only by a licensed insurance agent. However, an insurance agency
426 that is owned and operated by a single licensed agent conducting
427 business in his or her individual name and not employing or
428 otherwise using the services of or appointing other licensees is
429 exempt from the agency licensing requirements of this
430 subsection.
431 (b) A branch place of business which is established by a
432 licensed agency is considered a branch agency and is not
433 required to be licensed if it transacts business under the same
434 name and federal tax identification number as the licensed
435 agency, has designated a licensed agent in charge of the
436 location as required by s. 626.0428, and has submitted the
437 address and telephone number of the location to the department
438 for inclusion in the licensing record of the licensed agency
439 within 30 days after insurance transactions begin at the
440 location Each agency engaged in business in this state before
441 January 1, 2003, which is wholly owned by insurance agents
442 currently licensed and appointed under this chapter, each
443 incorporated agency whose voting shares are traded on a
444 securities exchange, each agency designated and subject to
445 supervision and inspection as a branch office under the rules of
446 the National Association of Securities Dealers, and each agency
447 whose primary function is offering insurance as a service or
448 member benefit to members of a nonprofit corporation may file an
449 application for registration in lieu of licensure in accordance
450 with s. 626.172(3). Each agency engaged in business before
451 October 1, 2006, shall file an application for licensure or
452 registration on or before October 1, 2006.
453 (c)1. If an agency is required to be licensed but fails to
454 file an application for licensure in accordance with this
455 section, the department shall impose on the agency an
456 administrative penalty in an amount of up to $10,000.
457 2. If an agency is eligible for registration but fails to
458 file an application for registration or an application for
459 licensure in accordance with this section, the department shall
460 impose on the agency an administrative penalty in an amount of
461 up to $5,000.
462 (d)(b) Effective October 1, 2015, the department must
463 automatically convert the registration of an approved a
464 registered insurance agency to shall, as a condition precedent
465 to continuing business, obtain an insurance agency license if
466 the department finds that, with respect to any majority owner,
467 partner, manager, director, officer, or other person who manages
468 or controls the agency, any person has:
469 1. Been found guilty of, or has pleaded guilty or nolo
470 contendere to, a felony in this state or any other state
471 relating to the business of insurance or to an insurance agency,
472 without regard to whether a judgment of conviction has been
473 entered by the court having jurisdiction of the cases.
474 2. Employed any individual in a managerial capacity or in a
475 capacity dealing with the public who is under an order of
476 revocation or suspension issued by the department. An insurance
477 agency may request, on forms prescribed by the department,
478 verification of any person’s license status. If a request is
479 mailed within 5 working days after an employee is hired, and the
480 employee’s license is currently suspended or revoked, the agency
481 shall not be required to obtain a license, if the unlicensed
482 person’s employment is immediately terminated.
483 3. Operated the agency or permitted the agency to be
484 operated in violation of s. 626.747.
485 4. With such frequency as to have made the operation of the
486 agency hazardous to the insurance-buying public or other
487 persons:
488 a. Solicited or handled controlled business. This
489 subparagraph shall not prohibit the licensing of any lending or
490 financing institution or creditor, with respect to insurance
491 only, under credit life or disability insurance policies of
492 borrowers from the institutions, which policies are subject to
493 part IX of chapter 627.
494 b. Misappropriated, converted, or unlawfully withheld
495 moneys belonging to insurers, insureds, beneficiaries, or others
496 and received in the conduct of business under the license.
497 c. Unlawfully rebated, attempted to unlawfully rebate, or
498 unlawfully divided or offered to divide commissions with
499 another.
500 d. Misrepresented any insurance policy or annuity contract,
501 or used deception with regard to any policy or contract, done
502 either in person or by any form of dissemination of information
503 or advertising.
504 e. Violated any provision of this code or any other law
505 applicable to the business of insurance in the course of dealing
506 under the license.
507 f. Violated any lawful order or rule of the department.
508 g. Failed or refused, upon demand, to pay over to any
509 insurer he or she represents or has represented any money coming
510 into his or her hands belonging to the insurer.
511 h. Violated the provision against twisting as defined in s.
512 626.9541(1)(l).
513 i. In the conduct of business, engaged in unfair methods of
514 competition or in unfair or deceptive acts or practices, as
515 prohibited under part IX of this chapter.
516 j. Willfully overinsured any property insurance risk.
517 k. Engaged in fraudulent or dishonest practices in the
518 conduct of business arising out of activities related to
519 insurance or the insurance agency.
520 l. Demonstrated lack of fitness or trustworthiness to
521 engage in the business of insurance arising out of activities
522 related to insurance or the insurance agency.
523 m. Authorized or knowingly allowed individuals to transact
524 insurance who were not then licensed as required by this code.
525 5. Knowingly employed any person who within the preceding 3
526 years has had his or her relationship with an agency terminated
527 in accordance with paragraph (d).
528 6. Willfully circumvented the requirements or prohibitions
529 of this code.
530 Section 7. Subsections (2), (3), and (4) of section
531 626.172, Florida Statutes, are amended to read:
532 626.172 Application for insurance agency license.—
533 (2) An application for an insurance agency license must
534 shall be signed by an individual required to be listed in the
535 application under paragraph (a) the owner or owners of the
536 agency. If the agency is incorporated, the application shall be
537 signed by the president and secretary of the corporation. An
538 insurance agency may allow a third party to complete, submit,
539 and sign an application on the insurance agency’s behalf, but
540 the insurance agency is responsible for ensuring that the
541 information on the application is true and correct and is
542 accountable for any misstatements or misrepresentations. The
543 application for an insurance agency license must shall include:
544 (a) The name of each majority owner, partner, officer, and
545 director, president, senior vice president, secretary,
546 treasurer, and limited liability company member, who directs or
547 participates in the management or control of the insurance
548 agency, whether through ownership of voting securities, by
549 contract, by ownership of an agency bank account, or otherwise.
550 (b) The residence address of each person required to be
551 listed in the application under paragraph (a).
552 (c) The name, principal business street address, and e-mail
553 address of the insurance agency and the name, address, and e
554 mail address of the agency’s registered agent or person or
555 company authorized to accept service on behalf of the agency its
556 principal business address.
557 (d) The name, physical address, e-mail address, and
558 telephone number location of each branch agency and the date
559 that the branch location begins transacting insurance office and
560 the name under which each agency office conducts or will conduct
561 business.
562 (e) The name of each agent to be in full-time charge of an
563 agency office and specification of which office, including
564 branch locations.
565 (f) The fingerprints of each of the following:
566 1. A sole proprietor;
567 2. Each individual required to be listed in the application
568 under paragraph (a) partner; and
569 3. Each owner of an unincorporated agency;
570 3.4. Each individual owner who directs or participates in
571 the management or control of an incorporated agency whose shares
572 are not traded on a securities exchange;
573 5. The president, senior vice presidents, treasurer,
574 secretary, and directors of the agency; and
575 6. Any other person who directs or participates in the
576 management or control of the agency, whether through the
577 ownership of voting securities, by contract, or otherwise.
578
579 Fingerprints must be taken by a law enforcement agency or other
580 entity approved by the department and must be accompanied by the
581 fingerprint processing fee specified in s. 624.501. Fingerprints
582 must shall be processed in accordance with s. 624.34. However,
583 fingerprints need not be filed for an any individual who is
584 currently licensed and appointed under this chapter. This
585 paragraph does not apply to corporations whose voting shares are
586 traded on a securities exchange.
587 (g) Such additional information as the department requires
588 by rule to ascertain the trustworthiness and competence of
589 persons required to be listed on the application and to
590 ascertain that such persons meet the requirements of this code.
591 However, the department may not require that credit or character
592 reports be submitted for persons required to be listed on the
593 application.
594 (3)(h) Beginning October 1, 2005, The department must shall
595 accept the uniform application for nonresident agency licensure.
596 The department may adopt by rule revised versions of the uniform
597 application.
598 (3) The department shall issue a registration as an
599 insurance agency to any agency that files a written application
600 with the department and qualifies for registration. The
601 application for registration shall require the agency to provide
602 the same information required for an agency licensed under
603 subsection (2), the agent identification number for each owner
604 who is a licensed agent, proof that the agency qualifies for
605 registration as provided in s. 626.112(7), and any other
606 additional information that the department determines is
607 necessary in order to demonstrate that the agency qualifies for
608 registration. The application must be signed by the owner or
609 owners of the agency. If the agency is incorporated, the
610 application must be signed by the president and the secretary of
611 the corporation. An agent who owns the agency need not file
612 fingerprints with the department if the agent obtained a license
613 under this chapter and the license is currently valid.
614 (a) If an application for registration is denied, the
615 agency must file an application for licensure no later than 30
616 days after the date of the denial of registration.
617 (b) A registered insurance agency must file an application
618 for licensure no later than 30 days after the date that any
619 person who is not a licensed and appointed agent in this state
620 acquires any ownership interest in the agency. If an agency
621 fails to file an application for licensure in compliance with
622 this paragraph, the department shall impose an administrative
623 penalty in an amount of up to $5,000 on the agency.
624 (c) Sections 626.6115 and 626.6215 do not apply to agencies
625 registered under this subsection.
626 (4) The department must shall issue a license or
627 registration to each agency upon approval of the application,
628 and each agency location must shall display the license or
629 registration prominently in a manner that makes it clearly
630 visible to any customer or potential customer who enters the
631 agency location.
632 Section 8. Present subsection (6) of section 626.311,
633 Florida Statutes, is redesignated as subsection (7), and a new
634 subsection (6) is added to that section, to read:
635 626.311 Scope of license.—
636 (6) An agent who appoints his or her license as an
637 unaffiliated insurance agent may not hold an appointment from an
638 insurer for any license he or she holds; transact, solicit, or
639 service an insurance contract on behalf of an insurer; interfere
640 with commissions received or to be received by an insurer
641 appointed insurance agent or an insurance agency contracted with
642 or employing insurer-appointed insurance agents; or receive
643 compensation or any other thing of value from an insurer, an
644 insurer-appointed insurance agent, or an insurance agency
645 contracted with or employing insurer-appointed insurance agents
646 for any transaction or referral occurring after the date of
647 appointment as an unaffiliated insurance agent. An unaffiliated
648 insurance agent may continue to receive commissions on sales
649 that occurred before the date of appointment as an unaffiliated
650 insurance agent if the receipt of such commissions is disclosed
651 when making recommendations or evaluating products for a client
652 that involve products of the entity from which the commissions
653 are received.
654 Section 9. Paragraph (d) of subsection (1) of section
655 626.321, Florida Statutes, is amended to read:
656 626.321 Limited licenses.—
657 (1) The department shall issue to a qualified applicant a
658 license as agent authorized to transact a limited class of
659 business in any of the following categories of limited lines
660 insurance:
661 (d) Motor vehicle rental insurance.—
662 1. License covering only insurance of the risks set forth
663 in this paragraph when offered, sold, or solicited with and
664 incidental to the rental or lease of a motor vehicle and which
665 applies only to the motor vehicle that is the subject of the
666 lease or rental agreement and the occupants of the motor
667 vehicle:
668 a. Excess motor vehicle liability insurance providing
669 coverage in excess of the standard liability limits provided by
670 the lessor in the lessor’s lease to a person renting or leasing
671 a motor vehicle from the licensee’s employer for liability
672 arising in connection with the negligent operation of the leased
673 or rented motor vehicle.
674 b. Insurance covering the liability of the lessee to the
675 lessor for damage to the leased or rented motor vehicle.
676 c. Insurance covering the loss of or damage to baggage,
677 personal effects, or travel documents of a person renting or
678 leasing a motor vehicle.
679 d. Insurance covering accidental personal injury or death
680 of the lessee and any passenger who is riding or driving with
681 the covered lessee in the leased or rented motor vehicle.
682 2. Insurance under a motor vehicle rental insurance license
683 may be issued only if the lease or rental agreement is for up to
684 no more than 60 days, the lessee is not provided coverage for
685 more than 60 consecutive days per lease period, and the lessee
686 is given written notice that his or her personal insurance
687 policy providing coverage on an owned motor vehicle may provide
688 coverage of such risks and that the purchase of the insurance is
689 not required in connection with the lease or rental of a motor
690 vehicle. If the lease is extended beyond 60 days, the coverage
691 may be extended one time only once for up to a period not to
692 exceed an additional 60 days. Insurance may be provided to the
693 lessee as an additional insured on a policy issued to the
694 licensee’s employer.
695 3. The license may be issued only to the full-time salaried
696 employee of a licensed general lines agent or to a business
697 entity that offers motor vehicles for rent or lease if insurance
698 sales activities authorized by the license are in connection
699 with and incidental to the rental or lease of a motor vehicle.
700 a. A license issued to a business entity that offers motor
701 vehicles for rent or lease encompasses each office, branch
702 office, employee, authorized representative located at a
703 designated branch, or place of business making use of the
704 entity’s business name in order to offer, solicit, and sell
705 insurance pursuant to this paragraph.
706 b. The application for licensure must list the name,
707 address, and phone number for each office, branch office, or
708 place of business which that is to be covered by the license.
709 The licensee shall notify the department of the name, address,
710 and phone number of any new location that is to be covered by
711 the license before the new office, branch office, or place of
712 business engages in the sale of insurance pursuant to this
713 paragraph. The licensee must notify the department within 30
714 days after closing or terminating an office, branch office, or
715 place of business. Upon receipt of the notice, the department
716 shall delete the office, branch office, or place of business
717 from the license.
718 c. A licensed and appointed entity is directly responsible
719 and accountable for all acts of the licensee’s employees.
720 Section 10. Effective January, 1, 2015, section 626.382,
721 Florida Statutes, is amended to read:
722 626.382 Continuation, expiration of license; insurance
723 agencies.—The license of an any insurance agency shall be issued
724 for a period of 3 years and shall continue in force until
725 canceled, suspended, or revoked, or until it is otherwise
726 terminated or becomes expired by operation of law. A license may
727 be renewed by submitting a renewal request to the department on
728 a form adopted by department rule.
729 Section 11. Section 626.601, Florida Statutes, is amended
730 to read:
731 626.601 Improper conduct; investigation inquiry;
732 fingerprinting.—
733 (1) The department or office may, upon its own motion or
734 upon a written complaint signed by an any interested person and
735 filed with the department or office, inquire into the any
736 alleged improper conduct of any licensed, approved, or certified
737 licensee, insurance agency, agent, adjuster, service
738 representative, managing general agent, customer representative,
739 title insurance agent, title insurance agency, mediator, neutral
740 evaluator, navigator, continuing education course provider,
741 instructor, school official, or monitor group under this code.
742 The department or office may thereafter initiate an
743 investigation of any such individual or entity licensee if it
744 has reasonable cause to believe that the individual or entity
745 licensee has violated any provision of the insurance code.
746 During the course of its investigation, the department or office
747 shall contact the individual or entity licensee being
748 investigated unless it determines that contacting such
749 individual or entity person could jeopardize the successful
750 completion of the investigation or cause injury to the public.
751 (2) In the investigation by the department or office of the
752 alleged misconduct, the individual or entity licensee shall, if
753 whenever so required by the department or office, open the
754 individual’s or entity’s cause his or her books and records to
755 be open for inspection for the purpose of such investigation
756 inquiries.
757 (3) The Complaints against an individual or entity any
758 licensee may be informally alleged and are not required to
759 include need not be in any such language as is necessary to
760 charge a crime on an indictment or information.
761 (4) The expense for any hearings or investigations
762 conducted pursuant to this section under this law, as well as
763 the fees and mileage of witnesses, may be paid out of the
764 appropriate fund.
765 (5) If the department or office, after investigation, has
766 reason to believe that an individual a licensee may have been
767 found guilty of or pleaded guilty or nolo contendere to a felony
768 or a crime related to the business of insurance in this or any
769 other state or jurisdiction, the department or office may
770 require the individual licensee to file with the department or
771 office a complete set of his or her fingerprints, which shall be
772 accompanied by the fingerprint processing fee set forth in s.
773 624.501. The fingerprints shall be taken by an authorized law
774 enforcement agency or other department-approved entity.
775 (6) The complaint and any information obtained pursuant to
776 the investigation by the department or office are confidential
777 and are exempt from the provisions of s. 119.07, unless the
778 department or office files a formal administrative complaint,
779 emergency order, or consent order against the individual or
780 entity licensee. Nothing in This subsection does not shall be
781 construed to prevent the department or office from disclosing
782 the complaint or such information as it deems necessary to
783 conduct the investigation, to update the complainant as to the
784 status and outcome of the complaint, or to share such
785 information with any law enforcement agency or other regulatory
786 body.
787 Section 12. Subsection (15) is added to section 626.621,
788 Florida Statutes, to read:
789 626.621 Grounds for discretionary refusal, suspension, or
790 revocation of agent’s, adjuster’s, customer representative’s,
791 service representative’s, or managing general agent’s license or
792 appointment.—The department may, in its discretion, deny an
793 application for, suspend, revoke, or refuse to renew or continue
794 the license or appointment of any applicant, agent, adjuster,
795 customer representative, service representative, or managing
796 general agent, and it may suspend or revoke the eligibility to
797 hold a license or appointment of any such person, if it finds
798 that as to the applicant, licensee, or appointee any one or more
799 of the following applicable grounds exist under circumstances
800 for which such denial, suspension, revocation, or refusal is not
801 mandatory under s. 626.611:
802 (15) Directly or indirectly accepting any compensation,
803 inducement, or reward from an inspector or inspection company
804 for referring the owner of property requiring inspection to the
805 inspector or inspection company. This prohibition applies to any
806 inspection of property intended for submission to a carrier in
807 order to obtain insurance coverage or to determine the
808 appropriate amount of the insurance premium.
809 Section 13. Effective January 1, 2015, section 626.747,
810 Florida Statutes, is repealed.
811 Section 14. Effective January 1, 2015, subsection (1) of
812 section 626.8411, Florida Statutes, is amended to read:
813 626.8411 Application of Florida Insurance Code provisions
814 to title insurance agents or agencies.—
815 (1) The following provisions of part II applicable to
816 general lines agents or agencies also apply to title insurance
817 agents or agencies:
818 (a) Section 626.734, relating to liability of certain
819 agents.
820 (b) Section 626.0428(4)(a) and (b) 626.747, relating to
821 branch agencies.
822 (c) Section 626.749, relating to place of business in
823 residence.
824 (d) Section 626.753, relating to sharing of commissions.
825 (e) Section 626.754, relating to rights of agent following
826 termination of appointment.
827 Section 15. Subsections (14) and (18) of section 626.854,
828 Florida Statutes, are amended to read:
829 626.854 “Public adjuster” defined; prohibitions.—The
830 Legislature finds that it is necessary for the protection of the
831 public to regulate public insurance adjusters and to prevent the
832 unauthorized practice of law.
833 (14) A company employee adjuster, independent adjuster,
834 attorney, investigator, or other persons acting on behalf of an
835 insurer that needs access to an insured or claimant or to the
836 insured property that is the subject of a claim must provide at
837 least 48 hours’ notice to the insured or claimant, public
838 adjuster, or legal representative before scheduling a meeting
839 with the claimant or an onsite inspection of the insured
840 property. The insured or claimant may deny access to the
841 property if the notice has not been provided. The insured or
842 claimant may waive the 48-hour notice.
843 (17)(18) The provisions of Subsections (5)-(16) (5)-(17)
844 apply only to residential property insurance policies and
845 condominium unit owner policies as defined in s. 718.111(11).
846 Section 16. Paragraph (c) of subsection (2) and subsection
847 (3) of section 626.8805, Florida Statutes, are amended to read:
848 626.8805 Certificate of authority to act as administrator.—
849 (2) The administrator shall file with the office an
850 application for a certificate of authority upon a form to be
851 adopted by the commission and furnished by the office, which
852 application shall include or have attached the following
853 information and documents:
854 (c) The names, addresses, official positions, and
855 professional qualifications of the individuals employed or
856 retained by the administrator who are responsible for the
857 conduct of the affairs of the administrator, including all
858 members of the board of directors, board of trustees, executive
859 committee, or other governing board or committee, and the
860 principal officers in the case of a corporation or, the partners
861 or members in the case of a partnership or association, and any
862 other person who exercises control or influence over the affairs
863 of the administrator.
864 (3) The applicant shall make available for inspection by
865 the office copies of all contracts relating to services provided
866 by the administrator to with insurers or other persons using
867 utilizing the services of the administrator.
868 Section 17. Subsections (1) and (3) of section 626.8817,
869 Florida Statutes, are amended to read:
870 626.8817 Responsibilities of insurance company with respect
871 to administration of coverage insured.—
872 (1) If an insurer uses the services of an administrator,
873 the insurer is responsible for determining the benefits, premium
874 rates, underwriting criteria, and claims payment procedures
875 applicable to the coverage and for securing reinsurance, if any.
876 The rules pertaining to these matters shall be provided, in
877 writing, by the insurer or its designee to the administrator.
878 The responsibilities of the administrator as to any of these
879 matters shall be set forth in a the written agreement binding
880 upon between the administrator and the insurer.
881 (3) If In cases in which an administrator administers
882 benefits for more than 100 certificateholders on behalf of an
883 insurer, the insurer shall, at least semiannually, conduct a
884 review of the operations of the administrator. At least one such
885 review must be an onsite audit of the operations of the
886 administrator. The insurer may contract with a qualified third
887 party to conduct such review.
888 Section 18. Subsections (1) and (4) of section 626.882,
889 Florida Statutes, are amended to read:
890 626.882 Agreement between administrator and insurer;
891 required provisions; maintenance of records.—
892 (1) A No person may not act as an administrator without a
893 written agreement, as required under s. 626.8817, which
894 specifies the rights, duties, and obligations of the between
895 such person as administrator and an insurer.
896 (4) If a policy is issued to a trustee or trustees, a copy
897 of the trust agreement and any amendments to that agreement
898 shall be furnished to the insurer or its designee by the
899 administrator and shall be retained as part of the official
900 records of both the administrator and the insurer for the
901 duration of the policy and for 5 years thereafter.
902 Section 19. Subsections (3), (4), and (5) of section
903 626.883, Florida Statutes, are amended to read:
904 626.883 Administrator as intermediary; collections held in
905 fiduciary capacity; establishment of account; disbursement;
906 payments on behalf of insurer.—
907 (3) If charges or premiums deposited in a fiduciary account
908 have been collected on behalf of or for more than one insurer,
909 the administrator shall keep records clearly recording the
910 deposits in and withdrawals from such account on behalf of or
911 for each insurer. The administrator shall, upon request of an
912 insurer or its designee, furnish such insurer or designee with
913 copies of records pertaining to deposits and withdrawals on
914 behalf of or for such insurer.
915 (4) The administrator may not pay any claim by withdrawals
916 from a fiduciary account. Withdrawals from such account shall be
917 made as provided in the written agreement required under ss.
918 626.8817 and 626.882 between the administrator and the insurer
919 for any of the following:
920 (a) Remittance to an insurer entitled to such remittance.
921 (b) Deposit in an account maintained in the name of such
922 insurer.
923 (c) Transfer to and deposit in a claims-paying account,
924 with claims to be paid as provided by such insurer.
925 (d) Payment to a group policyholder for remittance to the
926 insurer entitled to such remittance.
927 (e) Payment to the administrator of the commission, fees,
928 or charges of the administrator.
929 (f) Remittance of return premium to the person or persons
930 entitled to such return premium.
931 (5) All claims paid by the administrator from funds
932 collected on behalf of the insurer shall be paid only on drafts
933 of, and as authorized by, such insurer or its designee.
934 Section 20. Subsection (3) of section 626.884, Florida
935 Statutes, is amended to read:
936 626.884 Maintenance of records by administrator; access;
937 confidentiality.—
938 (3) The insurer shall retain the right of continuing access
939 to books and records maintained by the administrator sufficient
940 to permit the insurer to fulfill all of its contractual
941 obligations to insured persons, subject to any restrictions in
942 the written agreement pertaining to between the insurer and the
943 administrator on the proprietary rights of the parties in such
944 books and records.
945 Section 21. Subsections (1) and (2) of section 626.89,
946 Florida Statutes, are amended to read:
947 626.89 Annual financial statement and filing fee; notice of
948 change of ownership.—
949 (1) Each authorized administrator shall annually file with
950 the office a full and true statement of its financial condition,
951 transactions, and affairs within 3 months after the end of the
952 administrator’s fiscal year. The statement shall be filed
953 annually on or before March 1 or within such extension of time
954 therefor as the office for good cause may have granted. The
955 statement must and shall be for the preceding fiscal calendar
956 year and must. The statement shall be in such form and contain
957 such matters as the commission prescribes and must shall be
958 verified by at least two officers of the such administrator. An
959 administrator whose sole stockholder is an association
960 representing health care providers which is not an affiliate of
961 an insurer, an administrator of a pooled governmental self
962 insurance program, or an administrator that is a university may
963 submit the preceding fiscal year’s statement within 2 months
964 after its fiscal year end.
965 (2) Each authorized administrator shall also file an
966 audited financial statement performed by an independent
967 certified public accountant. The audited financial statement
968 shall be filed with the office within 5 months after the end of
969 the administrator’s fiscal year and be on or before June 1 for
970 the preceding fiscal calendar year ending December 31. An
971 administrator whose sole stockholder is an association
972 representing health care providers which is not an affiliate of
973 an insurer, an administrator of a pooled governmental self
974 insurance program, or an administrator that is a university may
975 submit the preceding fiscal year’s audited financial statement
976 within 5 months after the end of its fiscal year. An audited
977 financial statement prepared on a consolidated basis must
978 include a columnar consolidating or combining worksheet that
979 must be filed with the statement and must comply with the
980 following:
981 (a) Amounts shown on the consolidated audited financial
982 statement must be shown on the worksheet;
983 (b) Amounts for each entity must be stated separately; and
984 (c) Explanations of consolidating and eliminating entries
985 must be included.
986 Section 22. Section 626.931, Florida Statutes, is amended
987 to read:
988 626.931 Agent affidavit and Insurer reporting
989 requirements.—
990 (1) Each surplus lines agent shall on or before the 45th
991 day following each calendar quarter file with the Florida
992 Surplus Lines Service Office an affidavit, on forms as
993 prescribed and furnished by the Florida Surplus Lines Service
994 Office, stating that all surplus lines insurance transacted by
995 him or her during such calendar quarter has been submitted to
996 the Florida Surplus Lines Service Office as required.
997 (2) The affidavit of the surplus lines agent shall include
998 efforts made to place coverages with authorized insurers and the
999 results thereof.
1000 (1)(3) Each foreign insurer accepting premiums shall, on or
1001 before the end of the month following each calendar quarter,
1002 file with the Florida Surplus Lines Service Office a verified
1003 report of all surplus lines insurance transacted by such insurer
1004 for insurance risks located in this state during the such
1005 calendar quarter.
1006 (2)(4) Each alien insurer accepting premiums shall, on or
1007 before June 30 of each year, file with the Florida Surplus Lines
1008 Service Office a verified report of all surplus lines insurance
1009 transacted by such insurer for insurance risks located in this
1010 state during the preceding calendar year.
1011 (3)(5) The department may waive the filing requirements
1012 described in subsections (1) (3) and (2) (4).
1013 (4)(6) Each insurer’s report and supporting information
1014 shall be in a computer-readable format as determined by the
1015 Florida Surplus Lines Service Office or shall be submitted on
1016 forms prescribed by the Florida Surplus Lines Service Office and
1017 shall show for each applicable agent:
1018 (a) A listing of all policies, certificates, cover notes,
1019 or other forms of confirmation of insurance coverage or any
1020 substitutions thereof or endorsements thereto and the
1021 identifying number; and
1022 (b) Any additional information required by the department
1023 or Florida Surplus Lines Service Office.
1024 Section 23. Paragraph (a) of subsection (2) of section
1025 626.932, Florida Statutes, is amended to read:
1026 626.932 Surplus lines tax.—
1027 (2)(a) The surplus lines agent shall make payable to the
1028 department the tax related to each calendar quarter’s business
1029 as reported to the Florida Surplus Lines Service Office, and
1030 remit the tax to the Florida Surplus Lines Service Office on or
1031 before the 45th day after each calendar quarter at the same time
1032 as provided for the filing of the quarterly affidavit, under s.
1033 626.931. The Florida Surplus Lines Service Office shall forward
1034 to the department the taxes and any interest collected pursuant
1035 to paragraph (b), within 10 days after of receipt.
1036 Section 24. Subsection (1) of section 626.935, Florida
1037 Statutes, is amended to read:
1038 626.935 Suspension, revocation, or refusal of surplus lines
1039 agent’s license.—
1040 (1) The department shall deny an application for, suspend,
1041 revoke, or refuse to renew the appointment of a surplus lines
1042 agent and all other licenses and appointments held by the
1043 licensee under this code, on any of the following grounds:
1044 (a) Removal of the licensee’s office from the licensee’s
1045 state of residence.
1046 (b) Removal of the accounts and records of his or her
1047 surplus lines business from this state or the licensee’s state
1048 of residence during the period when such accounts and records
1049 are required to be maintained under s. 626.930.
1050 (c) Closure of the licensee’s office for more than 30
1051 consecutive days.
1052 (d) Failure to make and file his or her affidavit or
1053 reports when due as required by s. 626.931.
1054 (d)(e) Failure to pay the tax or service fee on surplus
1055 lines premiums, as provided in the Surplus Lines Law.
1056 (e)(f) Suspension, revocation, or refusal to renew or
1057 continue the license or appointment as a general lines agent,
1058 service representative, or managing general agent.
1059 (f)(g) Lack of qualifications as for an original surplus
1060 lines agent’s license.
1061 (g)(h) Violation of this Surplus Lines Law.
1062 (h)(i) For Any other applicable cause for which the license
1063 of a general lines agent could be suspended, revoked, or refused
1064 under s. 626.611 or s. 626.621.
1065 Section 25. Subsection (1) of section 626.936, Florida
1066 Statutes, is amended to read:
1067 626.936 Failure to file reports or pay tax or service fee;
1068 administrative penalty.—
1069 (1) A Any licensed surplus lines agent who neglects to file
1070 a report or an affidavit in the form and within the time
1071 required under or provided for in the Surplus Lines Law may be
1072 fined up to $50 per day for each day the neglect continues,
1073 beginning the day after the report or affidavit was due until
1074 the date the report or affidavit is received. All sums collected
1075 under this section shall be deposited into the Insurance
1076 Regulatory Trust Fund.
1077 Section 26. Paragraph (q) of subsection (1) of section
1078 626.9541, Florida Statutes, is amended to read:
1079 626.9541 Unfair methods of competition and unfair or
1080 deceptive acts or practices defined.—
1081 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
1082 ACTS.—The following are defined as unfair methods of competition
1083 and unfair or deceptive acts or practices:
1084 (q) Certain insurance transactions through credit card
1085 facilities prohibited.—
1086 1. Except as provided in subparagraph 3., no person shall
1087 knowingly solicit or negotiate any insurance; seek or accept
1088 applications for insurance; issue or deliver any policy;
1089 receive, collect, or transmit premiums, to or for an any
1090 insurer; or otherwise transact insurance in this state, or
1091 relative to a subject of insurance resident, located, or to be
1092 performed in this state, through the arrangement or facilities
1093 of a credit card facility or organization, for the purpose of
1094 insuring credit card holders or prospective credit card holders.
1095 The term “credit card holder” as used in this paragraph means a
1096 any person who may pay the charge for purchases or other
1097 transactions through the credit card facility or organization,
1098 whose credit with such facility or organization is evidenced by
1099 a credit card identifying such person as being one whose charges
1100 the credit card facility or organization will pay, and who is
1101 identified as such upon the credit card either by name, account
1102 number, symbol, insignia, or any other method or device of
1103 identification. This subparagraph does not apply as to health
1104 insurance or to credit life, credit disability, or credit
1105 property insurance.
1106 2. If Whenever any person does or performs in this state
1107 any of the acts in violation of subparagraph 1. for or on behalf
1108 of an any insurer or credit card facility, such insurer or
1109 credit card facility shall be deemed held to be doing business
1110 in this state and, if an insurer, shall be subject to the same
1111 state, county, and municipal taxes as insurers that have been
1112 legally qualified and admitted to do business in this state by
1113 agents or otherwise are subject, the same to be assessed and
1114 collected against such insurers; and such person so doing or
1115 performing any of such acts is shall be personally liable for
1116 all such taxes.
1117 3. A licensed agent or insurer may solicit or negotiate any
1118 insurance; seek or accept applications for insurance; issue or
1119 deliver any policy; receive, collect, or transmit premiums, to
1120 or for an any insurer; or otherwise transact insurance in this
1121 state, or relative to a subject of insurance resident, located,
1122 or to be performed in this state, through the arrangement or
1123 facilities of a credit card facility or organization, for the
1124 purpose of insuring credit card holders or prospective credit
1125 card holders if:
1126 a. The insurance or policy which is the subject of the
1127 transaction is noncancelable by any person other than the named
1128 insured, the policyholder, or the insurer;
1129 b. Any refund of unearned premium is made directly to the
1130 credit card holder by mail or electronic transfer; and
1131 c. The credit card transaction is authorized by the
1132 signature of the credit card holder or other person authorized
1133 to sign on the credit card account.
1134
1135 The conditions enumerated in sub-subparagraphs a.-c. do not
1136 apply to health insurance or to credit life, credit disability,
1137 or credit property insurance; and sub-subparagraph c. does not
1138 apply to property and casualty insurance if so long as the
1139 transaction is authorized by the insured.
1140 4. No person may use or disclose information resulting from
1141 the use of a credit card in conjunction with the purchase of
1142 insurance if, when such information is to the advantage of the
1143 such credit card facility or an insurance agent, or is to the
1144 detriment of the insured or any other insurance agent; except
1145 that this provision does not prohibit a credit card facility
1146 from using or disclosing such information in a any judicial
1147 proceeding or consistent with applicable law on credit
1148 reporting.
1149 5. No Such insurance may not shall be sold through a credit
1150 card facility in conjunction with membership in any automobile
1151 club. The term “automobile club” means a legal entity that
1152 which, in consideration of dues, assessments, or periodic
1153 payments of money, promises its members or subscribers to assist
1154 them in matters relating to the ownership, operation, use, or
1155 maintenance of a motor vehicle; however, the term definition of
1156 automobile clubs does not include persons, associations, or
1157 corporations that which are organized and operated solely for
1158 the purpose of conducting, sponsoring, or sanctioning motor
1159 vehicle races, exhibitions, or contests upon racetracks, or upon
1160 race courses established and marked as such for the duration of
1161 such particular event. The words “motor vehicle” used herein
1162 shall be the same as defined in chapter 320.
1163 Section 27. Paragraph (b) of subsection (2) of section
1164 627.062, Florida Statutes, is amended to read:
1165 627.062 Rate standards.—
1166 (2) As to all such classes of insurance:
1167 (b) Upon receiving a rate filing, the office shall review
1168 the filing to determine whether the if a rate is excessive,
1169 inadequate, or unfairly discriminatory. In making that
1170 determination, the office shall, in accordance with generally
1171 accepted and reasonable actuarial techniques, consider the
1172 following factors:
1173 1. Past and prospective loss experience within and without
1174 this state.
1175 2. Past and prospective expenses.
1176 3. The degree of competition among insurers for the risk
1177 insured.
1178 4. Investment income reasonably expected by the insurer,
1179 consistent with the insurer’s investment practices, from
1180 investable premiums anticipated in the filing, plus any other
1181 expected income from currently invested assets representing the
1182 amount expected on unearned premium reserves and loss reserves.
1183 The commission may adopt rules using reasonable techniques of
1184 actuarial science and economics to specify the manner in which
1185 insurers calculate investment income attributable to classes of
1186 insurance written in this state and the manner in which
1187 investment income is used to calculate insurance rates. Such
1188 manner must contemplate allowances for an underwriting profit
1189 factor and full consideration of investment income that which
1190 produce a reasonable rate of return; however, investment income
1191 from invested surplus may not be considered.
1192 5. The reasonableness of the judgment reflected in the
1193 filing.
1194 6. Dividends, savings, or unabsorbed premium deposits
1195 allowed or returned to Florida policyholders, members, or
1196 subscribers.
1197 7. The adequacy of loss reserves.
1198 8. The cost of reinsurance. The office may not disapprove a
1199 rate as excessive solely due to the insurer’s insurer having
1200 obtained catastrophic reinsurance to cover the insurer’s
1201 estimated 250-year probable maximum loss or any lower level of
1202 loss.
1203 9. Trend factors, including trends in actual losses per
1204 insured unit for the insurer making the filing.
1205 10. Conflagration and catastrophe hazards, if applicable.
1206 11. Projected hurricane losses, if applicable, which must
1207 be estimated using a model or method, or a straight average of
1208 model results or output ranges, which are independently found to
1209 be acceptable or reliable by the Florida Commission on Hurricane
1210 Loss Projection Methodology, and as further provided in s.
1211 627.0628.
1212 12. A reasonable margin for underwriting profit and
1213 contingencies.
1214 13. The cost of medical services, if applicable.
1215 14. Other relevant factors that affect the frequency or
1216 severity of claims or expenses.
1217 Section 28. Paragraph (d) of subsection (3) of section
1218 627.0628, Florida Statutes, is amended to read:
1219 627.0628 Florida Commission on Hurricane Loss Projection
1220 Methodology; public records exemption; public meetings
1221 exemption.—
1222 (3) ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.—
1223 (d) With respect to a rate filing under s. 627.062, an
1224 insurer shall employ and may not modify or adjust actuarial
1225 methods, principles, standards, models, or output ranges found
1226 by the commission to be accurate or reliable in determining
1227 hurricane loss factors for use in a rate filing under s.
1228 627.062. An insurer shall employ and may not modify or adjust
1229 models found by the commission to be accurate or reliable in
1230 determining probable maximum loss levels pursuant to paragraph
1231 (b) with respect to a rate filing under s. 627.062 made more
1232 than 180 60 days after the commission has made such findings.
1233 This paragraph does not prohibit an insurer from using a
1234 straight average of model results or output ranges or using
1235 straight averages for the purposes of a rate filing under s.
1236 627.062.
1237 Section 29. Subsection (8) of section 627.0651, Florida
1238 Statutes, is amended to read:
1239 627.0651 Making and use of rates for motor vehicle
1240 insurance.—
1241 (8) Rates are not unfairly discriminatory if averaged
1242 broadly among members of a group; nor are rates unfairly
1243 discriminatory even though they are lower than rates for
1244 nonmembers of the group. However, such rates are unfairly
1245 discriminatory if they are not actuarially measurable and
1246 credible and sufficiently related to actual or expected loss and
1247 expense experience of the group so as to ensure assure that
1248 nonmembers of the group are not unfairly discriminated against.
1249 Use of a single United States Postal Service zip code as a
1250 rating territory shall be deemed unfairly discriminatory unless
1251 filed pursuant to paragraph (1)(a) and such rating territory
1252 incorporates sufficient actual or expected loss and loss
1253 adjustment expense experience so as to be actuarially measurable
1254 and credible.
1255 Section 30. Subsection (6) is added to section 627.0653,
1256 Florida Statutes, to read:
1257 627.0653 Insurance discounts for specified motor vehicle
1258 equipment.—
1259 (6) The office may approve a premium discount applicable to
1260 any rates, rating schedules, or rating manuals for liability,
1261 personal injury protection, and collision coverages for motor
1262 vehicle insurance policies filed with the office for vehicles
1263 equipped with electronic vehicle crash avoidance technology that
1264 is factory installed or with a retrofitted system that complies
1265 with National Highway Traffic Safety Administration standards.
1266 Section 31. Present subsections (2) through (4) of section
1267 627.072, Florida Statutes, are redesignated as subsections (3)
1268 through (5), respectively, and a new subsection (2) is added to
1269 that section, to read:
1270 627.072 Making and use of rates.—
1271 (2) A retrospective rating plan may contain a provision
1272 that allows for the negotiation of premium between the employer
1273 and the insurer for employers having exposure in more than one
1274 state, an estimated annual standard premium in this state of
1275 $100,000 or more for workers’ compensation, and an estimated
1276 annual countrywide standard premium of $750,000 or more for
1277 workers’ compensation. Provisions within a retrospective rating
1278 plan which authorize negotiated premiums are exempt from
1279 subsection (1). Such plans and associated forms must be filed by
1280 a rating organization and approved by the office. However, a
1281 premium negotiated between the employer and the insurer pursuant
1282 to an approved retrospective rating plan is not subject to this
1283 part. Only insurers having at least $500 million in surplus as
1284 to policyholders may engage in the negotiation of premium with
1285 eligible employers.
1286 Section 32. Subsection (2) of section 627.281, Florida
1287 Statutes, is amended to read:
1288 627.281 Appeal from rating organization; workers’
1289 compensation and employer’s liability insurance filings.—
1290 (2) If the such appeal is based on upon the failure of the
1291 rating organization to make a filing on behalf of a such member
1292 or subscriber which is based on a system of expense provisions
1293 which differs, in accordance with the right granted in s.
1294 627.072(3) 627.072(2), differs from the system of expense
1295 provisions included in a filing made by the rating organization,
1296 the office shall, if it grants the appeal, order the rating
1297 organization to make the requested filing for use by the
1298 appellant. In deciding such appeal, the office shall apply the
1299 applicable standards set forth in ss. 627.062 and 627.072.
1300 Section 33. Paragraph (h) of subsection (5) of section
1301 627.311, Florida Statutes, is amended to read:
1302 627.311 Joint underwriters and joint reinsurers; public
1303 records and public meetings exemptions.—
1304 (5)
1305 (h) Any premium or assessments collected by the plan in
1306 excess of the amount necessary to fund projected ultimate
1307 incurred losses and expenses of the plan and not paid to
1308 insureds of the plan in conjunction with loss prevention or
1309 dividend programs shall be retained by the plan for future use.
1310 Any state funds received by the plan in excess of the amount
1311 necessary to fund deficits in subplan D or any tier shall be
1312 returned to the state. Any dividend payable to a former insured
1313 of the plan may be retained by the plan for future use upon such
1314 terms as set forth in the declaration of dividend.
1315 Section 34. Subsection (9) of section 627.3518, Florida
1316 Statutes, is amended to read:
1317 627.3518 Citizens Property Insurance Corporation
1318 policyholder eligibility clearinghouse program.—The purpose of
1319 this section is to provide a framework for the corporation to
1320 implement a clearinghouse program by January 1, 2014.
1321 (9) The 45-day notice of nonrenewal requirement set forth
1322 in s. 627.4133(2)(b)5. 627.4133(2)(b)4.b. applies when a policy
1323 is nonrenewed by the corporation because the risk has received
1324 an offer of coverage pursuant to this section which renders the
1325 risk ineligible for coverage by the corporation.
1326 Section 35. Section 627.3519, Florida Statutes, is
1327 repealed.
1328 Section 36. Section 627.409, Florida Statutes, is amended
1329 to read:
1330 627.409 Representations in applications; warranties.—
1331 (1) Any statement or description made by or on behalf of an
1332 insured or annuitant in an application for an insurance policy
1333 or annuity contract, or in negotiations for a policy or
1334 contract, is a representation and is not a warranty. Except as
1335 provided in subsection (3), a misrepresentation, omission,
1336 concealment of fact, or incorrect statement may prevent recovery
1337 under the contract or policy only if any of the following apply:
1338 (a) The misrepresentation, omission, concealment, or
1339 statement is fraudulent or is material either to the acceptance
1340 of the risk or to the hazard assumed by the insurer.
1341 (b) If the true facts had been known to the insurer
1342 pursuant to a policy requirement or other requirement, the
1343 insurer in good faith would not have issued the policy or
1344 contract, would not have issued it at the same premium rate,
1345 would not have issued a policy or contract in as large an
1346 amount, or would not have provided coverage with respect to the
1347 hazard resulting in the loss.
1348 (2) A breach or violation by the insured of a any warranty,
1349 condition, or provision of a any wet marine or transportation
1350 insurance policy, contract of insurance, endorsement, or
1351 application therefor does not void the policy or contract, or
1352 constitute a defense to a loss thereon, unless such breach or
1353 violation increased the hazard by any means within the control
1354 of the insured.
1355 (3) For residential property insurance, if a policy or
1356 contract is in effect for more than 90 days, a claim filed by
1357 the insured may not be denied based on credit information
1358 available in public records.
1359 Section 37. Paragraph (b) of subsection (2) of section
1360 627.4133, Florida Statutes, is amended to read:
1361 627.4133 Notice of cancellation, nonrenewal, or renewal
1362 premium.—
1363 (2) With respect to a any personal lines or commercial
1364 residential property insurance policy, including a, but not
1365 limited to, any homeowner’s, mobile home owner’s, farmowner’s,
1366 condominium association, condominium unit owner’s, apartment
1367 building, or other policy covering a residential structure or
1368 its contents:
1369 (b) The insurer shall give the first-named insured written
1370 notice of nonrenewal, cancellation, or termination at least 120
1371 100 days before the effective date of the nonrenewal,
1372 cancellation, or termination. However, the insurer shall give at
1373 least 100 days’ written notice, or written notice by June 1,
1374 whichever is earlier, for any nonrenewal, cancellation, or
1375 termination that would be effective between June 1 and November
1376 30. The notice must include the reason or reasons for the
1377 nonrenewal, cancellation, or termination, except that:
1378 1. The insurer shall give the first-named insured written
1379 notice of nonrenewal, cancellation, or termination at least 120
1380 days prior to the effective date of the nonrenewal,
1381 cancellation, or termination for a first-named insured whose
1382 residential structure has been insured by that insurer or an
1383 affiliated insurer for at least a 5-year period immediately
1384 prior to the date of the written notice.
1385 1.2. If cancellation is for nonpayment of premium, at least
1386 10 days’ written notice of cancellation accompanied by the
1387 reason therefor must be given. As used in this subparagraph, the
1388 term “nonpayment of premium” means failure of the named insured
1389 to discharge when due her or his obligations for paying the
1390 premium in connection with the payment of premiums on a policy
1391 or an any installment of such premium, whether the premium is
1392 payable directly to the insurer or its agent or indirectly under
1393 any premium finance plan or extension of credit, or failure to
1394 maintain membership in an organization if such membership is a
1395 condition precedent to insurance coverage. The term also means
1396 the failure of a financial institution to honor an insurance
1397 applicant’s check after delivery to a licensed agent for payment
1398 of a premium, even if the agent has previously delivered or
1399 transferred the premium to the insurer. If a dishonored check
1400 represents the initial premium payment, the contract and all
1401 contractual obligations are void ab initio unless the nonpayment
1402 is cured within the earlier of 5 days after actual notice by
1403 certified mail is received by the applicant or 15 days after
1404 notice is sent to the applicant by certified mail or registered
1405 mail., and If the contract is void, any premium received by the
1406 insurer from a third party must be refunded to that party in
1407 full.
1408 2.3. If such cancellation or termination occurs during the
1409 first 90 days the insurance is in force and the insurance is
1410 canceled or terminated for reasons other than nonpayment of
1411 premium, at least 20 days’ written notice of cancellation or
1412 termination accompanied by the reason therefor must be given
1413 unless there has been a material misstatement or
1414 misrepresentation or failure to comply with the underwriting
1415 requirements established by the insurer.
1416 3. After the policy has been in effect for 90 days, the
1417 insurer may not cancel the policy unless there has been a
1418 material misstatement, a nonpayment of premium, a failure to
1419 comply with underwriting requirements established by the insurer
1420 within 90 days after the date of effectuation of coverage, or a
1421 substantial change in the risk covered by the policy or the
1422 cancellation is for all insureds under such policies for a class
1423 of insureds. This subparagraph does not apply to individually
1424 rated risks having a policy term of less than 90 days.
1425 4. After a policy or contract has been in effect for 90
1426 days, the insurer may not cancel or terminate the policy or
1427 contract based on credit information available in public
1428 records. The requirement for providing written notice by June 1
1429 of any nonrenewal that would be effective between June 1 and
1430 November 30 does not apply to the following situations, but the
1431 insurer remains subject to the requirement to provide such
1432 notice at least 100 days before the effective date of
1433 nonrenewal:
1434 a. A policy that is nonrenewed due to a revision in the
1435 coverage for sinkhole losses and catastrophic ground cover
1436 collapse pursuant to s. 627.706.
1437 5.b. A policy that is nonrenewed by Citizens Property
1438 Insurance Corporation, pursuant to s. 627.351(6), for a policy
1439 that has been assumed by an authorized insurer offering
1440 replacement coverage to the policyholder is exempt from the
1441 notice requirements of paragraph (a) and this paragraph. In such
1442 cases, the corporation must give the named insured written
1443 notice of nonrenewal at least 45 days before the effective date
1444 of the nonrenewal.
1445
1446 After the policy has been in effect for 90 days, the policy may
1447 not be canceled by the insurer unless there has been a material
1448 misstatement, a nonpayment of premium, a failure to comply with
1449 underwriting requirements established by the insurer within 90
1450 days after the date of effectuation of coverage, or a
1451 substantial change in the risk covered by the policy or if the
1452 cancellation is for all insureds under such policies for a given
1453 class of insureds. This paragraph does not apply to individually
1454 rated risks having a policy term of less than 90 days.
1455 6.5. Notwithstanding any other provision of law, an insurer
1456 may cancel or nonrenew a property insurance policy after at
1457 least 45 days’ notice if the office finds that the early
1458 cancellation of some or all of the insurer’s policies is
1459 necessary to protect the best interests of the public or
1460 policyholders and the office approves the insurer’s plan for
1461 early cancellation or nonrenewal of some or all of its policies.
1462 The office may base such finding upon the financial condition of
1463 the insurer, lack of adequate reinsurance coverage for hurricane
1464 risk, or other relevant factors. The office may condition its
1465 finding on the consent of the insurer to be placed under
1466 administrative supervision pursuant to s. 624.81 or to the
1467 appointment of a receiver under chapter 631.
1468 7.6. A policy covering both a home and a motor vehicle may
1469 be nonrenewed for any reason applicable to either the property
1470 or motor vehicle insurance after providing 90 days’ notice.
1471 Section 38. Subsection (1) of section 627.4137, Florida
1472 Statutes, is amended to read:
1473 627.4137 Disclosure of certain information required.—
1474 (1) Each insurer that provides which does or may provide
1475 liability insurance coverage to pay all or a portion of a any
1476 claim that which might be made shall provide, within 30 days
1477 after of the written request of the claimant, provide a
1478 statement, under oath, of a corporate officer or the insurer’s
1479 claims manager, or superintendent, or licensed company adjuster
1480 setting forth the following information with regard to each
1481 known policy of insurance, including excess or umbrella
1482 insurance:
1483 (a) The name of the insurer.
1484 (b) The name of each insured.
1485 (c) The limits of the liability coverage.
1486 (d) A statement of any policy or coverage defense that the
1487 which such insurer reasonably believes is available to the such
1488 insurer at the time of filing such statement.
1489 (e) A copy of the policy.
1490
1491 In addition, The insured, or her or his insurance agent, upon
1492 written request of the claimant or the claimant’s attorney,
1493 shall also disclose the name and coverage of each known insurer
1494 to the claimant and shall forward the such request for
1495 information as required by this subsection to all affected
1496 insurers. The insurer shall then supply the required information
1497 required in this subsection to the claimant within 30 days after
1498 of receipt of such request.
1499 Section 39. Subsection (1) of section 627.421, Florida
1500 Statutes, is amended to read:
1501 627.421 Delivery of policy.—
1502 (1) Subject to the insurer’s requirement as to payment of
1503 premium, every policy shall be mailed, delivered, or
1504 electronically transmitted to the insured or to the person
1505 entitled thereto within not later than 60 days after the
1506 effectuation of coverage. Notwithstanding any other provision of
1507 law, an insurer may allow a policyholder of personal lines
1508 insurance to affirmatively elect delivery of the policy
1509 documents, including policies, endorsements, notices, or other
1510 documents, by electronic means in lieu of delivery by mail.
1511 Electronic transmission of a policy for commercial risks,
1512 including, but not limited to, workers’ compensation and
1513 employers’ liability, commercial automobile liability,
1514 commercial automobile physical damage, commercial lines
1515 residential property, commercial nonresidential property, farm
1516 owners’ insurance, and the types of commercial lines risks set
1517 forth in s. 627.062(3)(d), constitute shall constitute delivery
1518 to the insured or to the person entitled to delivery, unless the
1519 insured or the person entitled to delivery communicates to the
1520 insurer in writing or electronically that he or she does not
1521 agree to delivery by electronic means. Electronic transmission
1522 must shall include a notice to the insured or to the person
1523 entitled to delivery of a policy of his or her right to receive
1524 the policy via United States mail rather than via electronic
1525 transmission. A paper copy of the policy shall be provided to
1526 the insured or to the person entitled to delivery at his or her
1527 request.
1528 Section 40. Subsection (2) of section 627.43141, Florida
1529 Statutes, is amended to read:
1530 627.43141 Notice of change in policy terms.—
1531 (2) A renewal policy may contain a change in policy terms.
1532 If a renewal policy contains does contain such change, the
1533 insurer must give the named insured written notice of the
1534 change, which may must be enclosed along with the written notice
1535 of renewal premium required by ss. 627.4133 and 627.728 or be
1536 sent in a separate notice that complies with the nonrenewal
1537 mailing time requirement for that particular line of business.
1538 The insurer must also provide a sample copy of the notice to the
1539 insured’s insurance agent before or at the same time that notice
1540 is given to the insured. Such notice shall be entitled “Notice
1541 of Change in Policy Terms.”
1542 Section 41. Section 627.4553, Florida Statutes, is created
1543 to read:
1544 627.4553 Recommendations to surrender.—If an insurance
1545 agent recommends the surrender of an annuity or life insurance
1546 policy containing a cash value and is not recommending that the
1547 proceeds from the surrender be used to fund or purchase another
1548 annuity or life insurance policy, before execution of the
1549 surrender, the insurance agent, or the insurance company if no
1550 agent is involved, shall provide, on a form adopted by rule by
1551 the department, information concerning the annuity or policy to
1552 be surrendered, including the amount of any surrender charge,
1553 the loss of any minimum interest rate guarantees, the amount of
1554 any tax consequences resulting from the surrender, the amount of
1555 any forfeited death benefit, and the value of any other
1556 investment performance guarantees being forfeited as a result of
1557 the surrender. This section also applies to a person performing
1558 insurance agent activities pursuant to an exemption from
1559 licensure under this part.
1560 Section 42. Paragraph (b) of subsection (4) of section
1561 627.7015, Florida Statutes, is amended to read:
1562 627.7015 Alternative procedure for resolution of disputed
1563 property insurance claims.—
1564 (4) The department shall adopt by rule a property insurance
1565 mediation program to be administered by the department or its
1566 designee. The department may also adopt special rules which are
1567 applicable in cases of an emergency within the state. The rules
1568 shall be modeled after practices and procedures set forth in
1569 mediation rules of procedure adopted by the Supreme Court. The
1570 rules must shall provide for:
1571 (b) Qualifications, denial of application, suspension,
1572 revocation of approval, and other penalties for of mediators as
1573 provided in s. 627.745 and in the Florida Rules for of Certified
1574 and Court-Appointed Court Appointed Mediators, and for such
1575 other individuals as are qualified by education, training, or
1576 experience as the department determines to be appropriate.
1577 Section 43. Section 627.70151, Florida Statutes, is created
1578 to read:
1579 627.70151 Appraisal; conflicts of interest.—An insurer that
1580 offers residential coverage, as defined in s. 627.4025, or a
1581 policyholder that uses an appraisal clause in the property
1582 insurance contract to establish a process for estimating or
1583 evaluating the amount of the loss through the use of an
1584 impartial umpire may challenge the umpire’s impartiality and
1585 disqualify the proposed umpire only if:
1586 (1) A familial relationship within the third degree exists
1587 between the umpire and a party or a representative of a party;
1588 (2) The umpire has previously represented a party or a
1589 representative of a party in a professional capacity in the same
1590 or a substantially related matter;
1591 (3) The umpire has represented another person in a
1592 professional capacity on the same or a substantially related
1593 matter, which includes the claim, same property, or an adjacent
1594 property and that other person’s interests are materially
1595 adverse to the interests of any party; or
1596 (4) The umpire has worked as an employer or employee of a
1597 party within the preceding 5 years.
1598 Section 44. Paragraph (c) of subsection (2) of section
1599 627.706, Florida Statutes, is amended to read:
1600 627.706 Sinkhole insurance; catastrophic ground cover
1601 collapse; definitions.—
1602 (2) As used in ss. 627.706-627.7074, and as used in
1603 connection with any policy providing coverage for a catastrophic
1604 ground cover collapse or for sinkhole losses, the term:
1605 (c) “Neutral evaluator” means a professional engineer or a
1606 professional geologist who has completed a course of study in
1607 alternative dispute resolution designed or approved by the
1608 department for use in the neutral evaluation process, and who is
1609 determined by the department to be fair and impartial, and who
1610 is not otherwise ineligible for certification as provided in s.
1611 627.7074.
1612 Section 45. Subsections (3), (7), and (18) of section
1613 627.7074, Florida Statutes, are amended to read:
1614 627.7074 Alternative procedure for resolution of disputed
1615 sinkhole insurance claims.—
1616 (3) Following the receipt of the report required provided
1617 under s. 627.7073 or the denial of a claim for a sinkhole loss,
1618 the insurer shall notify the policyholder of his or her right to
1619 participate in the neutral evaluation program under this section
1620 if coverage is available under the policy and the claim was
1621 submitted within the timeframe provided in s. 627.706(5).
1622 Neutral evaluation supersedes the alternative dispute resolution
1623 process under s. 627.7015 but does not invalidate the appraisal
1624 clause of the insurance policy. The insurer shall provide to the
1625 policyholder the consumer information pamphlet prepared by the
1626 department pursuant to subsection (1) electronically or by
1627 United States mail.
1628 (7) Upon receipt of a request for neutral evaluation, the
1629 department shall provide the parties a list of certified neutral
1630 evaluators. The department shall allow the parties to submit
1631 requests for disqualifying to disqualify evaluators on the list
1632 for cause.
1633 (a) The department shall disqualify neutral evaluators for
1634 cause based only on any of the following grounds:
1635 1. A familial relationship exists between the neutral
1636 evaluator and either party or a representative of either party
1637 within the third degree.
1638 2. The proposed neutral evaluator has, in a professional
1639 capacity, previously represented either party or a
1640 representative of either party, in the same or a substantially
1641 related matter.
1642 3. The proposed neutral evaluator has, in a professional
1643 capacity, represented another person in the same or a
1644 substantially related matter and that person’s interests are
1645 materially adverse to the interests of the parties. The term
1646 “substantially related matter” means participation by the
1647 neutral evaluator on the same claim, property, or adjacent
1648 property.
1649 4. The proposed neutral evaluator has, within the preceding
1650 5 years, worked as an employer or employee of a any party to the
1651 case.
1652 (b) The department shall deny an application, or suspend or
1653 revoke the certification, of a neutral evaluator to serve in the
1654 neutral evaluator capacity if the department finds that one or
1655 more of the following grounds exist:
1656 1. Lack of one or more of the qualifications for
1657 certification specified in this section.
1658 2. Material misstatement, misrepresentation, or fraud in
1659 obtaining or attempting to obtain the certification.
1660 3. Demonstrated lack of fitness or trustworthiness to act
1661 as a neutral evaluator.
1662 4. Fraudulent or dishonest practices in the conduct of an
1663 evaluation or in the conduct of business in the financial
1664 services industry.
1665 5. Violation of any provision of this code or of a lawful
1666 order or rule of the department or aiding, instructing, or
1667 encouraging another party to commit such violation.
1668 (c)(b) The parties shall appoint a neutral evaluator from
1669 the department list and promptly inform the department. If the
1670 parties cannot agree to a neutral evaluator within 14 business
1671 days, the department shall appoint a neutral evaluator from the
1672 list of certified neutral evaluators. The department shall allow
1673 each party to disqualify two neutral evaluators without cause.
1674 Upon selection or appointment, the department shall promptly
1675 refer the request to the neutral evaluator.
1676 (d)(c) Within 14 business days after the referral, the
1677 neutral evaluator shall notify the policyholder and the insurer
1678 of the date, time, and place of the neutral evaluation
1679 conference. The conference may be held by telephone, if feasible
1680 and desirable. The neutral evaluator shall make reasonable
1681 efforts to hold the conference within 90 days after the receipt
1682 of the request by the department. Failure of the neutral
1683 evaluator to hold the conference within 90 days does not
1684 invalidate either party’s right to neutral evaluation or to a
1685 neutral evaluation conference held outside this timeframe.
1686 (18) The department shall adopt rules of procedure for the
1687 neutral evaluation process and for certifying, denying or
1688 suspending the certification of, and revoking certification as,
1689 a neutral evaluator.
1690 Section 46. Subsection (8) of section 627.711, Florida
1691 Statutes, is amended to read:
1692 627.711 Notice of premium discounts for hurricane loss
1693 mitigation; uniform mitigation verification inspection form.—
1694 (8) At its expense, the insurer may require that a uniform
1695 mitigation verification form provided by a policyholder, a
1696 policyholder’s agent, or an authorized mitigation inspector or
1697 inspection company be independently verified by an inspector, an
1698 inspection company, or an independent third-party quality
1699 assurance provider that which possesses a quality assurance
1700 program before accepting the uniform mitigation verification
1701 form as valid. The insurer may exempt from additional
1702 independent verification any uniform mitigation verification
1703 form provided by a policyholder, a policyholder’s agent, an
1704 authorized mitigation inspector, or an inspection company that
1705 possesses a quality assurance program that meets the standards
1706 established by the insurer. A uniform mitigation verification
1707 form provided by a policyholder, a policyholder’s agent, an
1708 authorized mitigation inspector, or an inspection company to
1709 Citizens Property Insurance Corporation is not subject to
1710 additional verification, and the property is not subject to
1711 reinspection by the corporation, absent material changes to the
1712 structure for the term stated on the form if the form signed by
1713 a qualified inspector was submitted to, reviewed, and verified
1714 by a quality assurance program approved by the corporation
1715 before submission to the corporation.
1716 Section 47. Subsections (1), (2), and (3) of section
1717 627.7283, Florida Statutes, are amended to read:
1718 627.7283 Cancellation; return of premium.—
1719 (1) If the insured cancels a policy of motor vehicle
1720 insurance, the insurer must mail or electronically transfer the
1721 unearned portion of any premium paid within 30 days after the
1722 effective date of the policy cancellation or receipt of notice
1723 or request for cancellation, whichever is later. This
1724 requirement applies to a cancellation initiated by an insured
1725 for any reason.
1726 (2) If an insurer cancels a policy of motor vehicle
1727 insurance, the insurer must mail or electronically transfer the
1728 unearned premium portion of any premium within 15 days after the
1729 effective date of the policy cancellation.
1730 (3) If the unearned premium is not mailed or electronically
1731 transferred within the applicable period, the insurer must pay
1732 to the insured 8 percent interest on the amount due. If the
1733 unearned premium is not mailed or electronically transferred
1734 within 45 days after the applicable period, the insured may
1735 bring an action against the insurer pursuant to s. 624.155.
1736 Section 48. Paragraph (a) of subsection (5) of section
1737 627.736, Florida Statutes, is amended to read:
1738 627.736 Required personal injury protection benefits;
1739 exclusions; priority; claims.—
1740 (5) CHARGES FOR TREATMENT OF INJURED PERSONS.—
1741 (a) A physician, hospital, clinic, or other person or
1742 institution lawfully rendering treatment to an injured person
1743 for a bodily injury covered by personal injury protection
1744 insurance may charge the insurer and injured party only a
1745 reasonable amount pursuant to this section for the services and
1746 supplies rendered, and the insurer providing such coverage may
1747 directly pay for such charges directly to the such person or
1748 institution lawfully rendering such treatment if the insured
1749 receiving such treatment or his or her guardian has
1750 countersigned the properly completed invoice, bill, or claim
1751 form approved by the office upon which such charges are to be
1752 paid for as having actually been rendered, to the best knowledge
1753 of the insured or his or her guardian. However, such a charge
1754 may not exceed the amount the person or institution customarily
1755 charges for like services or supplies. In determining whether a
1756 charge for a particular service, treatment, or otherwise is
1757 reasonable, consideration may be given to evidence of usual and
1758 customary charges and payments accepted by the provider involved
1759 in the dispute, reimbursement levels in the community and
1760 various federal and state medical fee schedules applicable to
1761 motor vehicle and other insurance coverages, and other
1762 information relevant to the reasonableness of the reimbursement
1763 for the service, treatment, or supply.
1764 1. The insurer may limit reimbursement to 80 percent of the
1765 following schedule of maximum charges:
1766 a. For emergency transport and treatment by providers
1767 licensed under chapter 401, 200 percent of Medicare.
1768 b. For emergency services and care provided by a hospital
1769 licensed under chapter 395, 75 percent of the hospital’s usual
1770 and customary charges.
1771 c. For emergency services and care as defined by s. 395.002
1772 provided in a facility licensed under chapter 395 rendered by a
1773 physician or dentist, and related hospital inpatient services
1774 rendered by a physician or dentist, the usual and customary
1775 charges in the community.
1776 d. For hospital inpatient services, other than emergency
1777 services and care, 200 percent of the Medicare Part A
1778 prospective payment applicable to the specific hospital
1779 providing the inpatient services.
1780 e. For hospital outpatient services, other than emergency
1781 services and care, 200 percent of the Medicare Part A Ambulatory
1782 Payment Classification for the specific hospital providing the
1783 outpatient services.
1784 f. For all other medical services, supplies, and care, 200
1785 percent of the allowable amount under:
1786 (I) The participating physicians fee schedule of Medicare
1787 Part B, except as provided in sub-sub-subparagraphs (II) and
1788 (III).
1789 (II) Medicare Part B, in the case of services, supplies,
1790 and care provided by ambulatory surgical centers and clinical
1791 laboratories.
1792 (III) The Durable Medical Equipment Prosthetics/Orthotics
1793 and Supplies fee schedule of Medicare Part B, in the case of
1794 durable medical equipment.
1795
1796 However, if such services, supplies, or care is not reimbursable
1797 under Medicare Part B, as provided in this sub-subparagraph, the
1798 insurer may limit reimbursement to 80 percent of the maximum
1799 reimbursable allowance under workers’ compensation, as
1800 determined under s. 440.13 and rules adopted thereunder which
1801 are in effect at the time such services, supplies, or care is
1802 provided. Services, supplies, or care that is not reimbursable
1803 under Medicare or workers’ compensation is not required to be
1804 reimbursed by the insurer.
1805 2. For purposes of subparagraph 1., the applicable fee
1806 schedule or payment limitation under Medicare is the fee
1807 schedule or payment limitation in effect on March 1 of the year
1808 in which the services, supplies, or care is rendered and for the
1809 area in which such services, supplies, or care is rendered, and
1810 the applicable fee schedule or payment limitation applies from
1811 March 1 until the last day of February throughout the remainder
1812 of the following that year, notwithstanding any subsequent
1813 change made to the fee schedule or payment limitation, except
1814 that it may not be less than the allowable amount under the
1815 applicable schedule of Medicare Part B for 2007 for medical
1816 services, supplies, and care subject to Medicare Part B.
1817 3. Subparagraph 1. does not allow the insurer to apply a
1818 any limitation on the number of treatments or other utilization
1819 limits that apply under Medicare or workers’ compensation. An
1820 insurer that applies the allowable payment limitations of
1821 subparagraph 1. must reimburse a provider who lawfully provided
1822 care or treatment under the scope of his or her license,
1823 regardless of whether such provider is entitled to reimbursement
1824 under Medicare due to restrictions or limitations on the types
1825 or discipline of health care providers who may be reimbursed for
1826 particular procedures or procedure codes. However, subparagraph
1827 1. does not prohibit an insurer from using the Medicare coding
1828 policies and payment methodologies of the federal Centers for
1829 Medicare and Medicaid Services, including applicable modifiers,
1830 to determine the appropriate amount of reimbursement for medical
1831 services, supplies, or care if the coding policy or payment
1832 methodology does not constitute a utilization limit.
1833 4. If an insurer limits payment as authorized by
1834 subparagraph 1., the person providing such services, supplies,
1835 or care may not bill or attempt to collect from the insured any
1836 amount in excess of such limits, except for amounts that are not
1837 covered by the insured’s personal injury protection coverage due
1838 to the coinsurance amount or maximum policy limits.
1839 5. Effective July 1, 2012, An insurer may limit payment as
1840 authorized by this paragraph only if the insurance policy
1841 includes a notice at the time of issuance or renewal that the
1842 insurer may limit payment pursuant to the schedule of charges
1843 specified in this paragraph. A policy form approved by the
1844 office satisfies this requirement. If a provider submits a
1845 charge for an amount less than the amount allowed under
1846 subparagraph 1., the insurer may pay the amount of the charge
1847 submitted.
1848 Section 49. Subsection (1) and paragraphs (a) and (b) of
1849 subsection (2) of section 627.744, Florida Statutes, are amended
1850 to read:
1851 627.744 Required preinsurance inspection of private
1852 passenger motor vehicles.—
1853 (1) A private passenger motor vehicle insurance policy
1854 providing physical damage coverage, including collision or
1855 comprehensive coverage, may not be issued in this state unless
1856 the insurer has inspected the motor vehicle in accordance with
1857 this section. Physical damage coverage on a motor vehicle may
1858 not be suspended during the term of the policy due to the
1859 applicant’s failure to provide required documents. However,
1860 payment of a claim may be conditioned upon the insurer’s receipt
1861 of the required documents, and physical damage loss occurring
1862 after the effective date of coverage is not payable until the
1863 documents are provided to the insurer.
1864 (2) This section does not apply:
1865 (a) To a policy for a policyholder who has been insured for
1866 2 years or longer, without interruption, under a private
1867 passenger motor vehicle policy that which provides physical
1868 damage coverage for any vehicle, if the agent of the insurer
1869 verifies the previous coverage.
1870 (b) To a new, unused motor vehicle purchased or leased from
1871 a licensed motor vehicle dealer or leasing company, if the
1872 insurer is provided with:
1873 1. A bill of sale, or buyer’s order, or lease agreement
1874 that which contains a full description of the motor vehicle,
1875 including all options and accessories; or
1876 2. A copy of the title or registration that which
1877 establishes transfer of ownership from the dealer or leasing
1878 company to the customer and a copy of the window sticker or the
1879 dealer invoice showing the itemized options and equipment and
1880 the total retail price of the vehicle.
1881
1882 For the purposes of this paragraph, the physical damage coverage
1883 on the motor vehicle may not be suspended during the term of the
1884 policy due to the applicant’s failure to provide the required
1885 documents. However, payment of a claim is conditioned upon the
1886 receipt by the insurer of the required documents, and no
1887 physical damage loss occurring after the effective date of the
1888 coverage is payable until the documents are provided to the
1889 insurer.
1890 Section 50. Paragraph (b) of subsection (3) of section
1891 627.745, Florida Statutes, is amended, present subsections (4)
1892 and (5) of that section are redesignated as subsections (5) and
1893 (6), respectively, and a new subsection (4) is added to that
1894 section, to read:
1895 627.745 Mediation of claims.—
1896 (3)
1897 (b) To qualify for approval as a mediator, an individual a
1898 person must meet one of the following qualifications:
1899 1. Possess an active certification as a Florida Supreme
1900 Court certified circuit court mediator. A circuit court mediator
1901 whose certification is in a lapsed, suspended, or decertified
1902 status is not eligible to participate in the program a masters
1903 or doctorate degree in psychology, counseling, business,
1904 accounting, or economics, be a member of The Florida Bar, be
1905 licensed as a certified public accountant, or demonstrate that
1906 the applicant for approval has been actively engaged as a
1907 qualified mediator for at least 4 years prior to July 1, 1990.
1908 2. Be an approved department mediator as of July 1, 2014,
1909 and have conducted at least one mediation on behalf of the
1910 department within the 4 years immediately preceding that the
1911 date the application for approval is filed with the department,
1912 have completed a minimum of a 40-hour training program approved
1913 by the department and successfully passed a final examination
1914 included in the training program and approved by the department.
1915 The training program shall include and address all of the
1916 following:
1917 a. Mediation theory.
1918 b. Mediation process and techniques.
1919 c. Standards of conduct for mediators.
1920 d. Conflict management and intervention skills.
1921 e. Insurance nomenclature.
1922 (4) The department shall deny an application, or suspend or
1923 revoke its approval of a mediator or certification of a neutral
1924 evaluator to serve in such capacity, if the department finds
1925 that any of the following grounds exist:
1926 (a) Lack of one or more of the qualifications for approval
1927 or certification specified in this section.
1928 (b) Material misstatement, misrepresentation, or fraud in
1929 obtaining, or attempting to obtain, the approval or
1930 certification.
1931 (c) Demonstrated lack of fitness or trustworthiness to act
1932 as a mediator or neutral evaluator.
1933 (d) Fraudulent or dishonest practices in the conduct of
1934 mediation or neutral evaluation or in the conduct of business in
1935 the financial services industry.
1936 (e) Violation of any provision of this code or of a lawful
1937 order or rule of the department, violation of the Florida Rules
1938 of Certified and Court Appointed Mediators, or aiding,
1939 instructing, or encouraging another party in committing such a
1940 violation.
1941
1942 The department may adopt rules to administer this subsection.
1943 Section 51. Subsection (8) of section 627.782, Florida
1944 Statutes, is amended to read:
1945 627.782 Adoption of rates.—
1946 (8) Each title insurance agency and insurer licensed to do
1947 business in this state and each insurer’s direct or retail
1948 business in this state shall maintain and submit information,
1949 including revenue, loss, and expense data, as the office
1950 determines necessary to assist in the analysis of title
1951 insurance premium rates, title search costs, and the condition
1952 of the title insurance industry in this state. This information
1953 must be transmitted to the office annually by May March 31 of
1954 the year after the reporting year. The commission shall adopt
1955 rules regarding the collection and analysis of the data from the
1956 title insurance industry.
1957 Section 52. Subsections (1), (3), (10), and (12) of section
1958 628.461, Florida Statutes, are amended to read:
1959 628.461 Acquisition of controlling stock.—
1960 (1) A person may not, individually or in conjunction with
1961 an any affiliated person of such person, acquire directly or
1962 indirectly, conclude a tender offer or exchange offer for, enter
1963 into any agreement to exchange securities for, or otherwise
1964 finally acquire 10 5 percent or more of the outstanding voting
1965 securities of a domestic stock insurer or of a controlling
1966 company, unless:
1967 (a) The person or affiliated person has filed with the
1968 office and sent to the insurer and controlling company a letter
1969 of notification regarding the transaction or proposed
1970 transaction within no later than 5 days after any form of tender
1971 offer or exchange offer is proposed, or within no later than 5
1972 days after the acquisition of the securities if no tender offer
1973 or exchange offer is involved. The notification must be provided
1974 on forms prescribed by the commission containing information
1975 determined necessary to understand the transaction and identify
1976 all purchasers and owners involved;
1977 (b) The person or affiliated person has filed with the
1978 office a statement as specified in subsection (3). The statement
1979 must be completed and filed within 30 days after:
1980 1. Any definitive acquisition agreement is entered;
1981 2. Any form of tender offer or exchange offer is proposed;
1982 or
1983 3. The acquisition of the securities, if no definitive
1984 acquisition agreement, tender offer, or exchange offer is
1985 involved; and
1986 (c) The office has approved the tender or exchange offer,
1987 or acquisition if no tender offer or exchange offer is involved,
1988 and approval is in effect.
1989
1990 In lieu of a filing as required under this subsection, a party
1991 acquiring less than 10 percent of the outstanding voting
1992 securities of an insurer may file a disclaimer of affiliation
1993 and control. The disclaimer shall fully disclose all material
1994 relationships and basis for affiliation between the person and
1995 the insurer as well as the basis for disclaiming the affiliation
1996 and control. After a disclaimer has been filed, the insurer
1997 shall be relieved of any duty to register or report under this
1998 section which may arise out of the insurer’s relationship with
1999 the person unless and until the office disallows the disclaimer.
2000 The office shall disallow a disclaimer only after furnishing all
2001 parties in interest with notice and opportunity to be heard and
2002 after making specific findings of fact to support the
2003 disallowance. A filing as required under this subsection must be
2004 made as to any acquisition that equals or exceeds 10 percent of
2005 the outstanding voting securities.
2006 (3) The statement to be filed with the office under
2007 subsection (1) and furnished to the insurer and controlling
2008 company must shall contain the following information and any
2009 additional information as the office deems necessary to
2010 determine the character, experience, ability, and other
2011 qualifications of the person or affiliated person of such person
2012 for the protection of the policyholders and shareholders of the
2013 insurer and the public:
2014 (a) The identity of, and the background information
2015 specified in subsection (4) on, each natural person by whom, or
2016 on whose behalf, the acquisition is to be made; and, if the
2017 acquisition is to be made by, or on behalf of, a corporation,
2018 association, or trust, as to the corporation, association, or
2019 trust and as to any person who controls either directly or
2020 indirectly controls the corporation, association, or trust, the
2021 identity of, and the background information specified in
2022 subsection (4) on, each director, officer, trustee, or other
2023 natural person performing duties similar to those of a director,
2024 officer, or trustee for the corporation, association, or trust;
2025 (b) The source and amount of the funds or other
2026 consideration used, or to be used, in making the acquisition;
2027 (c) Any plans or proposals that which such persons may have
2028 made to liquidate such insurer, to sell any of its assets or
2029 merge or consolidate it with any person, or to make any other
2030 major change in its business or corporate structure or
2031 management; and any plans or proposals that which such persons
2032 may have made to liquidate any controlling company of such
2033 insurer, to sell any of its assets or merge or consolidate it
2034 with any person, or to make any other major change in its
2035 business or corporate structure or management;
2036 (d) The number of shares or other securities which the
2037 person or affiliated person of such person proposes to acquire,
2038 the terms of the proposed acquisition, and the manner in which
2039 the securities are to be acquired; and
2040 (e) Information as to any contract, arrangement, or
2041 understanding with any party with respect to any of the
2042 securities of the insurer or controlling company, including, but
2043 not limited to, information relating to the transfer of any of
2044 the securities, option arrangements, puts or calls, or the
2045 giving or withholding of proxies, which information names the
2046 party with whom the contract, arrangement, or understanding has
2047 been entered into and gives the details thereof.
2048 (10) Upon notification to the office by the domestic stock
2049 insurer or a controlling company that any person or any
2050 affiliated person of such person has acquired 10 5 percent or
2051 more of the outstanding voting securities of the domestic stock
2052 insurer or controlling company without complying with the
2053 provisions of this section, the office shall order that the
2054 person and any affiliated person of such person cease
2055 acquisition of any further securities of the domestic stock
2056 insurer or controlling company; however, the person or any
2057 affiliated person of such person may request a proceeding, which
2058 proceeding shall be convened within 7 days after the rendering
2059 of the order for the sole purpose of determining whether the
2060 person, individually or in connection with an any affiliated
2061 person of such person, has acquired 10 5 percent or more of the
2062 outstanding voting securities of a domestic stock insurer or
2063 controlling company. Upon the failure of the person or
2064 affiliated person to request a hearing within 7 days, or upon a
2065 determination at a hearing convened pursuant to this subsection
2066 that the person or affiliated person has acquired voting
2067 securities of a domestic stock insurer or controlling company in
2068 violation of this section, the office may order the person and
2069 affiliated person to divest themselves of any voting securities
2070 so acquired.
2071 (12)(a) A presumption of control may be rebutted by filing
2072 a disclaimer of control. A person may file a disclaimer of
2073 control with the office. The disclaimer must fully disclose all
2074 material relationships and bases for affiliation between the
2075 person and the insurer as well as the basis for disclaiming the
2076 affiliation. The disclaimer of control shall be filed on a form
2077 prescribed by the office, or a person or acquiring party may
2078 file with the office a copy of a Schedule 13G on file with the
2079 Securities and Exchange Commission pursuant to Rule 13d-1(b) or
2080 Rule 13d-1(c) under the Securities Exchange Act of 1934, as
2081 amended. After a disclaimer is filed, the insurer is relieved of
2082 any duty to register or report under this section which may
2083 arise out of the insurer’s relationship with the person, unless
2084 the office disallows the disclaimer. For the purpose of this
2085 section, the term “affiliated person” of another person means:
2086 1. The spouse of such other person;
2087 2. The parents of such other person and their lineal
2088 descendants and the parents of such other person’s spouse and
2089 their lineal descendants;
2090 3. Any person who directly or indirectly owns or controls,
2091 or holds with power to vote, 5 percent or more of the
2092 outstanding voting securities of such other person;
2093 4. Any person 5 percent or more of the outstanding voting
2094 securities of which are directly or indirectly owned or
2095 controlled, or held with power to vote, by such other person;
2096 5. Any person or group of persons who directly or
2097 indirectly control, are controlled by, or are under common
2098 control with such other person;
2099 6. Any officer, director, partner, copartner, or employee
2100 of such other person;
2101 7. If such other person is an investment company, any
2102 investment adviser of such company or any member of an advisory
2103 board of such company;
2104 8. If such other person is an unincorporated investment
2105 company not having a board of directors, the depositor of such
2106 company; or
2107 9. Any person who has entered into an agreement, written or
2108 unwritten, to act in concert with such other person in acquiring
2109 or limiting the disposition of securities of a domestic stock
2110 insurer or controlling company.
2111 (b) For the purposes of this section, the term “controlling
2112 company” means any corporation, trust, or association owning,
2113 directly or indirectly, 25 percent or more of the voting
2114 securities of one or more domestic stock insurance companies.
2115 Section 53. Subsection (11) of section 631.717, Florida
2116 Statutes, is amended to read:
2117 631.717 Powers and duties of the association.—
2118 (11) The association is shall not be liable for any civil
2119 action under s. 624.155 arising from any acts alleged to have
2120 been committed by a member insurer before prior to its
2121 liquidation. This subsection does not affect the association’s
2122 obligation to pay valid insurance policy or contract claims if
2123 warranted after its independent de novo review of the policies,
2124 contracts, and claims presented to it, whether domestic or
2125 foreign, after a Florida domestic rehabilitation or a
2126 liquidation.
2127 Section 54. Section 631.737, Florida Statutes, is amended
2128 to read:
2129 631.737 Rescission and review generally.—The association
2130 shall review claims and matters regarding covered policies based
2131 upon the record available to it on and after the date of
2132 liquidation. Notwithstanding any other provision of this part,
2133 in order to allow for orderly claims administration by the
2134 association, entry of a liquidation order by a court of
2135 competent jurisdiction tolls shall be deemed to toll for 1 year
2136 any rescission or noncontestable period allowed by the contract,
2137 the policy, or by law. The association’s obligation is to pay
2138 any valid insurance policy or contract claims, if warranted,
2139 after its independent de novo review of the policies, contracts,
2140 and claims presented to it, whether domestic or foreign, after a
2141 rehabilitation or a liquidation.
2142 Section 55. Subsections (6) and (7) of section 634.406,
2143 Florida Statutes, are amended to read:
2144 634.406 Financial requirements.—
2145 (6) An association that which holds a license under this
2146 part and which does not hold any other license under this
2147 chapter may allow its premiums for service warranties written
2148 under this part to exceed the ratio to net assets limitations of
2149 this section if the association meets all of the following
2150 conditions:
2151 (a) Maintains net assets of at least $750,000.
2152 (b) Uses Utilizes a contractual liability insurance policy
2153 approved by the office that: which
2154 1. Reimburses the service warranty association for 100
2155 percent of its claims liability and is issued by an insurer that
2156 maintains a policyholder surplus of at least $100 million; or
2157 2. Complies with subsection (3) and is issued by an insurer
2158 that maintains a policyholder surplus of at least $200 million.
2159 (c) The insurer issuing the contractual liability insurance
2160 policy:
2161 1. Maintains a policyholder surplus of at least $100
2162 million.
2163 1.2. Is rated “A” or higher by A.M. Best Company or an
2164 equivalent rating by another national rating service acceptable
2165 to the office.
2166 3. Is in no way affiliated with the warranty association.
2167 2.4. In conjunction with the warranty association’s filing
2168 of the quarterly and annual reports, provides, on a form
2169 prescribed by the commission, a statement certifying the gross
2170 written premiums in force reported by the warranty association
2171 and a statement that all of the warranty association’s gross
2172 written premium in force is covered under the contractual
2173 liability policy, regardless of whether or not it has been
2174 reported.
2175 (7) A contractual liability policy must insure 100 percent
2176 of an association’s claims exposure under all of the
2177 association’s service warranty contracts, wherever written,
2178 unless all of the following are satisfied:
2179 (a) The contractual liability policy contains a clause that
2180 specifically names the service warranty contract holders as sole
2181 beneficiaries of the contractual liability policy and claims are
2182 paid directly to the person making a claim under the contract;
2183 (b) The contractual liability policy meets all other
2184 requirements of this part, including subsection (3) of this
2185 section, which are not inconsistent with this subsection;
2186 (c) The association has been in existence for at least 5
2187 years or the association is a wholly owned subsidiary of a
2188 corporation that has been in existence and has been licensed as
2189 a service warranty association in the state for at least 5
2190 years, and:
2191 1. Is listed and traded on a recognized stock exchange; is
2192 listed in NASDAQ (National Association of Security Dealers
2193 Automated Quotation system) and publicly traded in the over-the
2194 counter securities market; is required to file either of Form
2195 10-K, Form 100, or Form 20-G with the United States Securities
2196 and Exchange Commission; or has American Depository Receipts
2197 listed on a recognized stock exchange and publicly traded or is
2198 the wholly owned subsidiary of a corporation that is listed and
2199 traded on a recognized stock exchange; is listed in NASDAQ
2200 (National Association of Security Dealers Automated Quotation
2201 system) and publicly traded in the over-the-counter securities
2202 market; is required to file Form 10-K, Form 100, or Form 20-G
2203 with the United States Securities and Exchange Commission; or
2204 has American Depository Receipts listed on a recognized stock
2205 exchange and is publicly traded;
2206 2. Maintains outstanding debt obligations, if any, rated in
2207 the top four rating categories by a recognized rating service;
2208 3. Has and maintains at all times a minimum net worth of
2209 not less than $10 million as evidenced by audited financial
2210 statements prepared by an independent certified public
2211 accountant in accordance with generally accepted accounting
2212 principles and submitted to the office annually; and
2213 4. Is authorized to do business in this state; and
2214 (d) The insurer issuing the contractual liability policy:
2215 1. Maintains and has maintained for the preceding 5 years,
2216 policyholder surplus of at least $100 million and is rated “A”
2217 or higher by A.M. Best Company or has an equivalent rating by
2218 another rating company acceptable to the office;
2219 2. Holds a certificate of authority to do business in this
2220 state and is approved to write this type of coverage; and
2221 3. Acknowledges to the office quarterly that it insures all
2222 of the association’s claims exposure under contracts delivered
2223 in this state.
2224
2225 If all the preceding conditions are satisfied, then the scope of
2226 coverage under a contractual liability policy shall not be
2227 required to exceed an association’s claims exposure under
2228 service warranty contracts delivered in this state.
2229 Section 56. Except as otherwise expressly provided in this
2230 act, this act shall take effect July 1, 2014.
