Bill Text: FL S1398 | 2023 | Regular Session | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Consumer Protection

Spectrum: Slight Partisan Bill (? 2-1)

Status: (Introduced - Dead) 2023-05-01 - Laid on Table, companion bill(s) passed, see CS/CS/HB 1185 (Ch. 2023-130), CS/CS/CS/SB 418 (Ch. 2023-217) [S1398 Detail]

Download: Florida-2023-S1398-Comm_Sub.html
       Florida Senate - 2023                             CS for SB 1398
       
       
        
       By the Committee on Banking and Insurance; and Senator DiCeglie
       
       
       
       
       
       597-02915-23                                          20231398c1
    1                        A bill to be entitled                      
    2         An act relating to consumer protection; amending s.
    3         494.001, F.S.; revising the definition of the term
    4         “branch office”; defining the term “remote location”;
    5         authorizing a licensee under ch. 494, F.S., to allow
    6         loan originators to work from remote locations if
    7         specified conditions are met; amending s. 494.0067,
    8         F.S.; specifying that mortgage lenders may transact
    9         business from branch offices and remote locations;
   10         providing a requirement for operating remote
   11         locations; creating s. 501.2042, F.S.; defining terms;
   12         providing requirements for organizers of crowd-funding
   13         campaigns related to disasters and for crowd-funding
   14         platforms; amending s. 520.23, F.S.; revising
   15         disclosure requirements for agreements governing the
   16         sale or lease of a distributed energy generation
   17         system; amending s. 560.111, F.S.; providing a
   18         criminal penalty; amending s. 560.309, F.S.;
   19         prohibiting a licensee under ch. 560, F.S., from
   20         cashing corporate checks for certain payees where the
   21         aggregate face amount exceeds a specified amount;
   22         amending s. 626.551, F.S.; revising the timeframe in
   23         which an insurance representative must notify the
   24         Department of Financial Services of certain changes in
   25         information; amending s. 626.602, F.S.; providing
   26         applicability of provisions relating to the
   27         disapproval of insurance agency names to adjusting
   28         firm names; revising grounds on which such names may
   29         be disapproved by the department; deleting an obsolete
   30         provision; amending s. 626.854, F.S.; revising the
   31         definition of the term “public adjuster”; prohibiting
   32         public adjusters from contracting with anyone other
   33         than the named insured without the insured’s written
   34         consent; specifying a penalty for noncompliance;
   35         specifying timeframes in which an insured or a
   36         claimant may cancel a public adjuster’s contract
   37         without penalty or contract under certain
   38         circumstances; revising requirements for public
   39         adjusters’ contracts; specifying requirements for
   40         public adjusters if the insurer, within a certain
   41         timeframe, pays or commits in writing to pay to the
   42         insured the policy limit of the policy; specifying
   43         limitations on commissions received by public
   44         adjusters; amending s. 626.860, F.S.; providing that
   45         an attorney’s exemption from public adjuster licensure
   46         requirements does not apply to certain persons;
   47         amending s. 626.875, F.S.; revising recordkeeping
   48         requirements for appointed independent adjusters and
   49         licensed public adjusters; amending s. 626.8796, F.S.;
   50         revising requirements for public adjuster contracts;
   51         specifying requirements for and prohibitions on public
   52         adjusters relating to such contracts; providing
   53         construction; authorizing the department to adopt
   54         rules; amending s. 626.8797, F.S.; revising a fraud
   55         statement requirement in proof-of-loss statements;
   56         amending s. 626.9541, F.S.; adding an unfair or
   57         deceptive insurance act relating to health insurance
   58         policies; amending s. 627.4025, F.S.; revising the
   59         definition of the term “hurricane,” and defining the
   60         term “hurricane deductible,” as used in policies
   61         providing residential coverage; amending s. 627.4133,
   62         F.S.; revising conditions that apply to a specified
   63         notice requirement for, and a limitation on, the
   64         cancellation or termination of certain insurance
   65         policies; amending s. 627.4554, F.S.; revising
   66         legislative purpose; revising applicability; revising
   67         and defining terms; revising and specifying duties of
   68         insurers and agents relating to the recommendation and
   69         sale of annuity investments; specifying comparable
   70         standards that comply with such requirements;
   71         specifying agent training requirements; providing and
   72         revising construction; authorizing the department to
   73         adopt certain forms by rule; amending s. 634.041,
   74         F.S.; specifying authorized methods of paying claims
   75         for motor vehicle service agreements; amending s.
   76         634.401, F.S.; revising the definition of the term
   77         “manufacturer” for purposes of part III of ch. 634,
   78         F.S.; amending s. 634.406, F.S.; deleting a debt
   79         obligation rating requirement for certain service
   80         warranty associations or parent corporations;
   81         providing effective dates.
   82          
   83  Be It Enacted by the Legislature of the State of Florida:
   84  
   85         Section 1. Present subsections (35) through (38) of section
   86  494.001, Florida Statutes, are redesignated as subsections (36)
   87  through (39), respectively, a new subsection (35) is added to
   88  that section, and subsection (3) of that section is amended, to
   89  read:
   90         494.001 Definitions.—As used in this chapter, the term:
   91         (3) “Branch office” means a location, other than a mortgage
   92  broker’s or mortgage lender’s principal place of business or
   93  remote location:
   94         (a) The address of which appears on business cards,
   95  stationery, or advertising used by the licensee in connection
   96  with business conducted under this chapter;
   97         (b) At which the licensee’s name, advertising or
   98  promotional materials, or signage suggests that mortgage loans
   99  are originated, negotiated, funded, or serviced; or
  100         (c) At which mortgage loans are originated, negotiated,
  101  funded, or serviced by a licensee.
  102         (35)“Remote location” means a location, other than a
  103  principal place of business or a branch office, at which a loan
  104  originator of a licensee may conduct business. A licensee may
  105  allow loan originators to work from remote locations if:
  106         (a)The licensee has written policies and procedures for
  107  supervision of loan originators working from remote locations.
  108         (b)Access to company platforms and customer information is
  109  in accordance with the licensee’s comprehensive written
  110  information security plan.
  111         (c)An in-person customer interaction does not occur at a
  112  loan originator’s residence unless such residence is a licensed
  113  location.
  114         (d)Physical records are not maintained at a remote
  115  location.
  116         (e)Customer interactions and conversations about consumers
  117  will be in compliance with federal and state information
  118  security requirements, including applicable provisions under the
  119  Gramm-Leach-Bliley Act and the Safeguards Rule established by
  120  the Federal Trade Commission, set forth at 16 C.F.R. part 314,
  121  as such requirements may be amended from time to time.
  122         (f)A loan originator working at a remote location accesses
  123  the company’s secure systems, including a cloud-based system,
  124  directly from any out-of-office device such as a laptop, phone,
  125  desktop computer, or tablet, through a virtual private network
  126  or comparable system that ensures secure connectivity and that
  127  requires passwords or other forms of authentication to access.
  128         (g)The licensee ensures that appropriate security updates,
  129  patches, or other alterations to the security of all devices
  130  used at remote locations are installed and maintained.
  131         (h)The licensee is able to remotely lock or erase company
  132  related contents of any device or otherwise remotely limit all
  133  access to a company’s secure systems.
  134         (i)The registry’s record of a loan originator who works
  135  from a remote location designates the principal place of
  136  business as the loan originator’s registered location, or the
  137  loan originator has elected a licensed branch office as a
  138  registered location.
  139         Section 2. Subsection (1) of section 494.0067, Florida
  140  Statutes, is amended to read:
  141         494.0067 Requirements of mortgage lenders.—
  142         (1) A mortgage lender that makes mortgage loans on real
  143  estate in this state shall transact business from a principal
  144  place of business, branch office, or remote location. Each
  145  principal place of business, and each branch office, and remote
  146  location shall be operated under the full charge, control, and
  147  supervision of the licensee pursuant to this part.
  148         Section 3. Section 501.2042, Florida Statutes, is created
  149  to read:
  150         501.2042Unlawful acts and practices by online crowd
  151  funding campaigns.—
  152         (1)As used in this section, the term:
  153         (a)“Crowd-funding campaign” means an online fundraising
  154  initiative that is intended to receive monetary donations from
  155  donors and is created by an organizer in the interest of a
  156  beneficiary.
  157         (b)“Crowd-funding platform” means an entity doing business
  158  in this state which provides an online medium for the creation
  159  and facilitation of a crowd-funding campaign.
  160         (c)“Disaster” means any natural, technological, or civil
  161  emergency that occurs in this state and that causes damage of
  162  sufficient severity and magnitude to result in a declaration of
  163  a state of emergency by a county, the Governor, or the President
  164  of the United States.
  165         (d)“Organizer” means a person who:
  166         1.Resides or is domiciled in this state; and
  167         2.Has an account on a crowd-funding platform and has
  168  created a crowd-funding campaign either as a beneficiary or on
  169  behalf of a beneficiary, regardless of whether the beneficiary
  170  or the crowd-funding campaign has received donations.
  171         (2)When an organizer arranges a crowd-funding campaign
  172  related to a disaster, the organizer must produce to the crowd
  173  funding platform a complete and accurate accounting of all
  174  donations received and expended by the crowd-funding campaign.
  175  The crowd-funding platform must publish all received accountings
  176  on its website.
  177         Section 4. Section 520.23, Florida Statutes, is amended to
  178  read:
  179         520.23 Disclosures required.—Each agreement governing the
  180  sale or lease of a distributed energy generation system shall,
  181  at a minimum, include a written statement printed in at least
  182  12-point type that is separate from the agreement, is separately
  183  acknowledged by the buyer or lessee, and includes the following
  184  information and disclosures, if applicable:
  185         (1) The name, address, telephone number, and e-mail address
  186  of the buyer or lessee.
  187         (2) The name, address, telephone number, e-mail address,
  188  and valid state contractor license number of the person
  189  responsible for installing the distributed energy generation
  190  system.
  191         (3) The name, address, telephone number, e-mail address,
  192  and valid state contractor license number of the distributed
  193  energy generation system maintenance provider, if different from
  194  the person responsible for installing the distributed energy
  195  generation system.
  196         (4)The customer contact center phone number for the
  197  Department of Business and Professional Regulation.
  198         (5)(4) A written statement indicating whether the
  199  distributed energy generation system is being purchased or
  200  leased.
  201         (a) If the distributed energy generation system will be
  202  leased, the written statement must include a disclosure in
  203  substantially the following form: “You are entering into an
  204  agreement to lease a distributed energy generation system. You
  205  will lease (not own) the system installed on your property.”
  206         (b) If the distributed energy generation system will be
  207  purchased, the written statement must include a disclosure in
  208  substantially the following form: “You are entering into an
  209  agreement to purchase a distributed energy generation system.
  210  You will own (not lease) the system installed on your property.”
  211         (6)(5) The total cost to be paid by the buyer or lessee,
  212  including any interest, installation fees, document preparation
  213  fees, service fees, or other fees.
  214         (7)(6) A payment schedule, including any amounts owed at
  215  contract signing, at the commencement of installation, at the
  216  completion of installation, and any final payments. If the
  217  distributed energy generation system is being leased, the
  218  written statement must include the frequency and amount of each
  219  payment due under the lease and the total estimated lease
  220  payments over the term of the lease.
  221         (8)(7) Each state or federal tax incentive or rebate, if
  222  any, relied upon by the seller in determining the price of the
  223  distributed energy generation system.
  224         (9)(8) A description of the assumptions used to calculate
  225  any savings estimates provided to the buyer or lessee, and if
  226  such estimates are provided, a statement in substantially the
  227  following form: “It is important to understand that future
  228  electric utility rates are estimates only. Your future electric
  229  utility rates may vary.”
  230         (10)(9) A description of any one-time or recurring fees,
  231  including, but not limited to, estimated system removal fees,
  232  maintenance fees, Internet connection fees, and automated
  233  clearinghouse fees. If late fees may apply, the description must
  234  describe the circumstances triggering such late fees.
  235         (11)(10) A statement notifying the buyer whether the
  236  distributed energy generation system is being financed and, if
  237  so, a statement in substantially the following form: “If your
  238  system is financed, carefully read any agreements and/or
  239  disclosure forms provided by your lender. This statement does
  240  not contain the terms of your financing agreement. If you have
  241  any questions about your financing agreement, contact your
  242  finance provider before signing a contract.”
  243         (12)(11) A statement notifying the buyer whether the seller
  244  is assisting in arranging financing of the distributed energy
  245  generation system and, if so, a statement in substantially the
  246  following form: “If your system is financed, carefully read any
  247  agreements and/or disclosure forms provided by your lender. This
  248  statement does not contain the terms of your financing
  249  agreement. If you have any questions about your financing
  250  agreement, contact your finance provider before signing a
  251  contract.”
  252         (13)(12) A provision notifying the buyer or lessee of the
  253  right to rescind the agreement for a period of at least 3
  254  business days after the agreement is signed. This subsection
  255  does not apply to a contract to sell or lease a distributed
  256  energy generation system in a solar community in which the
  257  entire community has been marketed as a solar community and all
  258  of the homes in the community are intended to have a distributed
  259  energy generation system, or a solar community in which the
  260  developer has incorporated solar technology for purposes of
  261  meeting the Florida Building Code in s. 553.73.
  262         (14)(13) A description of the distributed energy generation
  263  system design assumptions, including the make and model of the
  264  major components, system size, estimated first-year energy
  265  production, and estimated annual energy production decreases,
  266  including the overall percentage degradation over the estimated
  267  life of the distributed energy generation system, and the status
  268  of utility compensation for excess energy generated by the
  269  system at the time of contract signing. A seller who provides a
  270  warranty or guarantee of the energy production output of the
  271  distributed energy generation system may provide a description
  272  of such warranty or guarantee in lieu of a description of the
  273  system design and components.
  274         (15)(14) A description of any performance or production
  275  guarantees.
  276         (16)(15) A description of the ownership and transferability
  277  of any tax credits, rebates, incentives, or renewable energy
  278  certificates associated with the distributed energy generation
  279  system, including a disclosure as to whether the seller will
  280  assign or sell any associated renewable energy certificates to a
  281  third party.
  282         (17)(16) A statement in substantially the following form:
  283  “You are responsible for property taxes on property you own.
  284  Consult a tax professional to understand any tax liability or
  285  eligibility for any tax credits that may result from the
  286  purchase of your distributed energy generation system.”
  287         (18)(17) The approximate start and completion dates for the
  288  installation of the distributed energy generation system.
  289         (19)(18) A disclosure as to whether maintenance and repairs
  290  of the distributed energy generation system are included in the
  291  purchase price.
  292         (20)(19) A disclosure as to whether any warranty or
  293  maintenance obligations related to the distributed energy
  294  generation system may be sold or transferred by the seller to a
  295  third party and, if so, a statement in substantially the
  296  following form: “Your contract may be assigned, sold, or
  297  transferred without your consent to a third party who will be
  298  bound to all the terms of the contract. If a transfer occurs,
  299  you will be notified if this will change the address or phone
  300  number to use for system maintenance or repair requests.”
  301         (21)(20) If the distributed energy generation system will
  302  be purchased, a disclosure notifying the buyer of the
  303  requirements for interconnecting the system to the utility
  304  system.
  305         (22)(21) A disclosure notifying the buyer or lessee of the
  306  party responsible for obtaining interconnection approval.
  307         (23)(22) A description of any roof warranties.
  308         (24)A statement in substantially the following form: “You
  309  should consider the age and remaining life of your roof prior to
  310  installing a distributed energy generation system. Replacement
  311  of your roof may require reinstallment of the distributed energy
  312  generation system.”
  313         (25)(23) A disclosure notifying the lessee whether the
  314  seller will insure a leased distributed energy generation system
  315  against damage or loss and, if applicable, the circumstances
  316  under which the seller will not insure the system against damage
  317  or loss.
  318         (26)(24) A statement, if applicable, in substantially the
  319  following form: “You are responsible for obtaining insurance
  320  policies or coverage for any loss of or damage to the system.
  321  Consult an insurance professional to understand how to protect
  322  against the risk of loss or damage to the system.”
  323         (27)A statement in substantially the following form:
  324  “Placing a distributed energy generation system on your roof may
  325  impact your future insurance premiums. You are responsible for
  326  contacting your insurance carrier, prior to entering into a
  327  purchase or lease agreement, to confirm whether your current
  328  policy or coverage will need to be modified upon installing the
  329  distributed energy generation system onto your dwelling.”
  330         (28)(25) A disclosure notifying the buyer or lessee whether
  331  the seller or lessor will place a lien on the buyer’s or
  332  lessee’s home or other property as a result of entering into a
  333  purchase or lease agreement for the distributed energy
  334  generation system.
  335         (29)(26) A disclosure notifying the buyer or lessee whether
  336  the seller or lessor will file a fixture filing or a State of
  337  Florida Uniform Commercial Code Financing Statement Form (UCC-1)
  338  on the distributed energy generation system.
  339         (30)(27) A disclosure identifying whether the agreement
  340  contains any restrictions on the buyer’s or lessee’s ability to
  341  modify or transfer ownership of a distributed energy generation
  342  system, including whether any modification or transfer is
  343  subject to review or approval by a third party.
  344         (31)(28) A disclosure as to whether the lease agreement may
  345  be transferred to a purchaser upon sale of the home or real
  346  property to which the system is affixed, and any conditions for
  347  such transfer.
  348         (32)(29) A blank section that allows the seller to provide
  349  additional relevant disclosures or explain disclosures made
  350  elsewhere in the disclosure form.
  351  
  352  The requirement to provide a written statement under this
  353  section may be satisfied by the electronic delivery of a
  354  document within 24 hours after execution of the written
  355  statement containing the required statement if the intended
  356  recipient of the electronic document affirmatively acknowledges
  357  its receipt. An electronic document satisfies the font and other
  358  formatting standards required for the written statement if the
  359  format and the relative size of characters of the electronic
  360  document are reasonably similar to those required in the written
  361  document or if the information is otherwise displayed in a
  362  reasonably conspicuous manner.
  363         Section 5. Subsection (6) of section 560.111, Florida
  364  Statutes, is amended to read:
  365         560.111 Prohibited acts.—
  366         (6) A person who knowingly and willfully violates s.
  367  560.309(11) or s. 560.310(2)(d) commits a felony of the third
  368  degree, punishable as provided in s. 775.082, s. 775.083, or s.
  369  775.084.
  370         Section 6. Subsection (11) is added to section 560.309,
  371  Florida Statutes, to read:
  372         560.309 Conduct of business.—
  373         (11) A licensee may not cash corporate checks where the
  374  aggregate face amount of all corporate checks cashed for each
  375  payee exceeds 200 percent of the payee’s workers’ compensation
  376  policy coverage amount during the same dates as the workers’
  377  compensation policy coverage period.
  378         Section 7. Section 626.551, Florida Statutes, is amended to
  379  read:
  380         626.551 Notice of change of address, name.—A licensee must
  381  notify the department, in writing, within 5 30 days after a
  382  change of name, residence address, principal business street
  383  address, mailing address, contact telephone numbers, including a
  384  business telephone number, or e-mail address. A licensee who has
  385  moved his or her principal place of residence and principal
  386  place of business from this state shall have his or her license
  387  and all appointments immediately terminated by the department.
  388  Failure to notify the department within the required time shall
  389  result in a fine not to exceed $250 for the first offense and a
  390  fine of at least $500 or suspension or revocation of the license
  391  pursuant to s. 626.611, s. 626.6115, s. 626.621, or s. 626.6215
  392  for a subsequent offense. The department may adopt rules to
  393  administer and enforce this section.
  394         Section 8. Section 626.602, Florida Statutes, is amended to
  395  read:
  396         626.602 Insurance agency and adjusting firm names;
  397  disapproval.—The department may disapprove the use of any true
  398  or fictitious name, other than the bona fide natural name of an
  399  individual, by any insurance agency or adjusting firm on any of
  400  the following grounds:
  401         (1) The name interferes with or is too similar to a name
  402  already filed and in use by another agency, adjusting firm, or
  403  insurer.
  404         (2)The use of the name may mislead the public in any
  405  respect.
  406         (3) The name states or implies that the agency or adjusting
  407  firm is an insurer, motor club, hospital service plan, state or
  408  federal agency, charitable organization, or entity that
  409  primarily provides advice and counsel rather than sells or
  410  solicits insurance, settles claims, or is entitled to engage in
  411  insurance activities not permitted under licenses held or
  412  applied for. This provision does not prohibit the use of the
  413  word “state” or “states” in the name of the agency. The use of
  414  the word “state” or “states” in the name of an agency or
  415  adjusting firm does not in and of itself imply that the agency
  416  or adjusting firm is a state agency.
  417         (4) The name contains the word “Medicare” or “Medicaid.” An
  418  insurance agency whose name contains the word “Medicare” or
  419  “Medicaid” but which is licensed as of July 1, 2021, may
  420  continue to use that name until June 30, 2023, provided that the
  421  agency’s license remains valid. If the agency’s license expires
  422  or is suspended or revoked, the agency may not be relicensed
  423  using that name. Licenses for agencies with names containing
  424  either of these words automatically expire on July 1, 2023,
  425  unless these words are removed from the name.
  426         Section 9. Section 626.854, Florida Statutes, is amended to
  427  read:
  428         626.854 “Public adjuster” defined; prohibitions.—The
  429  Legislature finds that it is necessary for the protection of the
  430  public to regulate public insurance adjusters and to prevent the
  431  unauthorized practice of law.
  432         (1) A “public adjuster” is any person, except a duly
  433  licensed attorney at law as exempted under s. 626.860, who, for
  434  money, commission, or any other thing of value, directly or
  435  indirectly prepares, completes, or files an insurance claim for
  436  an insured or third-party claimant, regardless of how that
  437  person describes or presents his or her services, or who, for
  438  money, commission, or any other thing of value, acts on behalf
  439  of, or aids an insured or third-party claimant in negotiating
  440  for or effecting the settlement of a claim or claims for loss or
  441  damage covered by an insurance contract, regardless of how that
  442  person describes or presents his or her services, or who
  443  advertises for employment as an adjuster of such claims. The
  444  term also includes any person who, for money, commission, or any
  445  other thing of value, directly or indirectly solicits,
  446  investigates, or adjusts such claims on behalf of a public
  447  adjuster, an insured, or a third-party claimant. The term does
  448  not include a person who photographs or inventories damaged
  449  personal property or business personal property or a person
  450  performing duties under another professional license, if such
  451  person does not otherwise solicit, adjust, investigate, or
  452  negotiate for or attempt to effect the settlement of a claim.
  453         (2) This definition does not apply to:
  454         (a) A licensed health care provider or employee thereof who
  455  prepares or files a health insurance claim form on behalf of a
  456  patient.
  457         (b) A licensed health insurance agent who assists an
  458  insured with coverage questions, medical procedure coding
  459  issues, balance billing issues, understanding the claims filing
  460  process, or filing a claim, as such assistance relates to
  461  coverage under a health insurance policy.
  462         (c) A person who files a health claim on behalf of another
  463  and does so without compensation.
  464         (3) A public adjuster may not give legal advice or act on
  465  behalf of or aid any person in negotiating or settling a claim
  466  relating to bodily injury, death, or noneconomic damages.
  467         (4) For purposes of this section, the term “insured”
  468  includes only the policyholder and any beneficiaries named or
  469  similarly identified in the policy.
  470         (5) A public adjuster may not directly or indirectly
  471  through any other person or entity solicit an insured or
  472  claimant by any means except on Monday through Saturday of each
  473  week and only between the hours of 8 a.m. and 8 p.m. on those
  474  days.
  475         (6)(a) When entering a contract for adjuster services after
  476  July 1, 2023, a public adjuster may not contract with anyone
  477  other than the named insured unless the named insured provides
  478  written consent, subsequent to entering a contract for public
  479  adjusting services.
  480         (b) If a public adjuster contracts with a third party in
  481  settling the named insured’s claim without first obtaining the
  482  insured’s written consent, payment of the third party’s fees
  483  must be made from the public adjuster’s fee.
  484         (7)(6) An insured or claimant may cancel a public
  485  adjuster’s contract to adjust a claim without penalty or
  486  obligation within 10 days after the date on which the contract
  487  is executed. If the contract was entered into based on events
  488  that are the subject of a declaration of a state of emergency by
  489  the Governor, an insured or claimant may cancel the public
  490  adjuster’s contract to adjust a claim without penalty or
  491  obligation within 30 days after the date of the event or 10 days
  492  after the date on which the contract is executed, whichever is
  493  longer. The public adjuster’s contract must contain the
  494  following language in minimum 18-point bold type immediately
  495  before the space reserved in the contract for the signature of
  496  the insured or claimant: “You, the insured, may cancel this
  497  contract for any reason without penalty or obligation to you
  498  within 10 days after the date of this contract. If this contract
  499  was entered into based on events that are the subject of a
  500  declaration of a state of emergency by the Governor, you may
  501  cancel this contract for any reason without penalty or
  502  obligation to you within 30 days after the date of the event or
  503  10 days after the date on which the contract is executed,
  504  whichever is longer. You may also cancel the contract without
  505  penalty or obligation to you if I, as your public adjuster, fail
  506  to provide you and your insurer a copy of a written estimate
  507  within 60 days of the execution of the contract in accordance
  508  with s. 626.854(14)(b), Florida Statutes.” The by providing
  509  notice of cancellation shall be provided to ...(name of public
  510  adjuster)..., submitted in writing and sent by certified mail,
  511  return receipt requested, or other form of mailing that provides
  512  proof thereof, at the address specified in the contract.
  513         (8)(7) It is an unfair and deceptive insurance trade
  514  practice pursuant to s. 626.9541 for a public adjuster or any
  515  other person to circulate or disseminate any advertisement,
  516  announcement, or statement containing any assertion,
  517  representation, or statement with respect to the business of
  518  insurance which is untrue, deceptive, or misleading.
  519         (a) The following statements, made in any public adjuster’s
  520  advertisement or solicitation, are considered deceptive or
  521  misleading:
  522         1. A statement or representation that invites an insured
  523  policyholder to submit a claim when the policyholder does not
  524  have covered damage to insured property.
  525         2. A statement or representation that invites an insured
  526  policyholder to submit a claim by offering monetary or other
  527  valuable inducement.
  528         3. A statement or representation that invites an insured
  529  policyholder to submit a claim by stating that there is “no
  530  risk” to the policyholder by submitting such claim.
  531         4. A statement or representation, or use of a logo or
  532  shield, that implies or could mistakenly be construed to imply
  533  that the solicitation was issued or distributed by a
  534  governmental agency or is sanctioned or endorsed by a
  535  governmental agency.
  536         (b) For purposes of this paragraph, the term “written
  537  advertisement” includes only newspapers, magazines, flyers, and
  538  bulk mailers. The following disclaimer, which is not required to
  539  be printed on standard size business cards, must be added in
  540  bold print and capital letters in typeface no smaller than the
  541  typeface of the body of the text to all written advertisements
  542  by a public adjuster:
  543  
  544         “THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD
  545         A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU
  546         ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU
  547         MAY DISREGARD THIS ADVERTISEMENT.”
  548  
  549         (9)(8) A public adjuster, a public adjuster apprentice, or
  550  any person or entity acting on behalf of a public adjuster or
  551  public adjuster apprentice may not give or offer to give a
  552  monetary loan or advance to a client or prospective client.
  553         (10)(9) A public adjuster, public adjuster apprentice, or
  554  any individual or entity acting on behalf of a public adjuster
  555  or public adjuster apprentice may not give or offer to give,
  556  directly or indirectly, any article of merchandise having a
  557  value in excess of $25 to any individual for the purpose of
  558  advertising or as an inducement to entering into a contract with
  559  a public adjuster.
  560         (11) If the insurer, not later than 14 days after the date
  561  on which the loss is reported to the insurer, either pays or
  562  commits in writing to pay to the insured the policy limit of the
  563  insurance policy, the public adjuster shall:
  564         (a) Inform the insured that, due to the insurer’s payment
  565  or commitment to pay the policy limit, the loss recovery amount
  566  might not be increased by the insurer.
  567         (b) Not receive a commission consisting of a percentage of
  568  the total amount of the timely paid or committed policy limits.
  569         (c) Be entitled only up to $1,000 from the insured for any
  570  time spent or expenses incurred on the claim by the public
  571  adjuster, until the claim is paid or the insured receives a
  572  written commitment to pay from the insurer.
  573         (12) Except as provided in paragraphs (11)(b) and (c), if
  574  the public adjuster enters into a contract with an insured or
  575  claimant after the insured or claimant unsuccessfully negotiates
  576  an insurance claim payment and the public adjuster is successful
  577  in obtaining a higher insurance claim payment, the public
  578  adjuster shall receive a commission consisting of 10 percent of
  579  the difference between the initial insurance claim payment offer
  580  made to the insured and the final insurance claim payment
  581  obtained through the work of the public adjuster after entering
  582  into the contract with the insured or claimant.
  583         (13)(a)(10)(a) If a public adjuster enters into a contract
  584  with an insured or claimant to reopen a claim or file a
  585  supplemental claim that seeks additional payments for a claim
  586  that has been previously paid in part or in full or settled by
  587  the insurer, the public adjuster may not charge, agree to, or
  588  accept from any source compensation, payment, commission, fee,
  589  or any other thing of value based on a previous settlement or
  590  previous claim payments by the insurer for the same cause of
  591  loss. The charge, compensation, payment, commission, fee, or any
  592  other thing of value must be based only on the claim payments or
  593  settlements paid to the insured, exclusive of attorney fees and
  594  costs, obtained through the work of the public adjuster after
  595  entering into the contract with the insured or claimant.
  596  Compensation for the reopened or supplemental claim may not
  597  exceed 20 percent of the reopened or supplemental claim payment.
  598  In no event shall the contracts described in this paragraph
  599  exceed the limitations in paragraph (b).
  600         (b) A public adjuster may not charge, agree to, or accept
  601  from any source compensation, payment, commission, fee, or any
  602  other thing of value in excess of:
  603         1. Ten percent of the amount of insurance claim payments or
  604  settlements, exclusive of attorney fees and costs, paid to the
  605  insured by the insurer for claims based on events that are the
  606  subject of a declaration of a state of emergency by the
  607  Governor. This provision applies to claims made during the year
  608  after the declaration of emergency. After that year, the
  609  limitations in subparagraph 2. apply.
  610         2. Twenty percent of the amount of insurance claim payments
  611  or settlements, exclusive of attorney fees and costs, paid to
  612  the insured by the insurer for claims that are not based on
  613  events that are the subject of a declaration of a state of
  614  emergency by the Governor.
  615         (c) Insurance claim payments made by the insurer do not
  616  include policy deductibles, and public adjuster compensation may
  617  not be based on the deductible portion of a claim.
  618         (d) Public adjuster compensation may not be based on
  619  amounts attributable to additional living expenses, unless such
  620  compensation is affirmatively agreed to in a separate agreement
  621  that includes a disclosure in substantially the following form:
  622  “I agree to retain and compensate the public adjuster for
  623  adjusting my additional living expenses and securing payment
  624  from my insurer for amounts attributable to additional living
  625  expenses payable under the policy issued on my (home/mobile
  626  home/condominium unit).”
  627         (e) Public adjuster rate of compensation may not be
  628  increased based solely on the fact that the claim is litigated.
  629         (f) Any maneuver, shift, or device through which the limits
  630  on compensation set forth in this subsection are exceeded is a
  631  violation of this chapter punishable as provided under s.
  632  626.8698.
  633         (14)(a)(11) Each public adjuster must provide to the
  634  claimant or insured a written estimate of the loss to assist in
  635  the submission of a proof of loss or any other claim for payment
  636  of insurance proceeds within 60 days after the date of the
  637  contract. The written estimate must include an itemized, per
  638  unit estimate of the repairs, including itemized information on
  639  equipment, materials, labor, and supplies, in accordance with
  640  accepted industry standards. The public adjuster shall retain
  641  such written estimate for at least 5 years and shall make the
  642  estimate available to the claimant or insured, the insurer, and
  643  the department upon request.
  644         (b) An insured may cancel the contract with no additional
  645  penalties or fees charged by the public adjuster if such an
  646  estimate is not provided within 60 days after executing the
  647  contract, subject to the cancellation notice requirement in this
  648  section.
  649         (15)(12) A public adjuster, public adjuster apprentice, or
  650  any person acting on behalf of a public adjuster or apprentice
  651  may not accept referrals of business from any person with whom
  652  the public adjuster conducts business if there is any form or
  653  manner of agreement to compensate the person, directly or
  654  indirectly, for referring business to the public adjuster. A
  655  public adjuster may not compensate any person, except for
  656  another public adjuster, directly or indirectly, for the
  657  principal purpose of referring business to the public adjuster.
  658         (16)(13) A company employee adjuster, independent adjuster,
  659  attorney, investigator, or other persons acting on behalf of an
  660  insurer that needs access to an insured or claimant or to the
  661  insured property that is the subject of a claim must provide at
  662  least 48 hours’ notice to the insured or claimant, public
  663  adjuster, or legal representative before scheduling a meeting
  664  with the claimant or an onsite inspection of the insured
  665  property. The insured or claimant may deny access to the
  666  property if the notice has not been provided. The insured or
  667  claimant may waive the 48-hour notice.
  668         (17)(14) The public adjuster must ensure that prompt notice
  669  is given of the claim to the insurer, the public adjuster’s
  670  contract is provided to the insurer, the property is available
  671  for inspection of the loss or damage by the insurer, and the
  672  insurer is given an opportunity to interview the insured
  673  directly about the loss and claim. The insurer must be allowed
  674  to obtain necessary information to investigate and respond to
  675  the claim.
  676         (a) The insurer may not exclude the public adjuster from
  677  its in-person meetings with the insured. The insurer shall meet
  678  or communicate with the public adjuster in an effort to reach
  679  agreement as to the scope of the covered loss under the
  680  insurance policy. The public adjuster shall meet or communicate
  681  with the insurer in an effort to reach agreement as to the scope
  682  of the covered loss under the insurance policy. This section
  683  does not impair the terms and conditions of the insurance policy
  684  in effect at the time the claim is filed.
  685         (b) A public adjuster may not restrict or prevent an
  686  insurer, company employee adjuster, independent adjuster,
  687  attorney, investigator, or other person acting on behalf of the
  688  insurer from having reasonable access at reasonable times to any
  689  insured or claimant or to the insured property that is the
  690  subject of a claim.
  691         (c) A public adjuster may not act or fail to reasonably act
  692  in any manner that obstructs or prevents an insurer or insurer’s
  693  adjuster from timely conducting an inspection of any part of the
  694  insured property for which there is a claim for loss or damage.
  695  The public adjuster representing the insureds may be present for
  696  the insurer’s inspection, but if the unavailability of the
  697  public adjuster otherwise delays the insurer’s timely inspection
  698  of the property, the public adjuster or the insureds must allow
  699  the insurer to have access to the property without the
  700  participation or presence of the public adjuster or insureds in
  701  order to facilitate the insurer’s prompt inspection of the loss
  702  or damage.
  703         (18)(15) A licensed contractor under part I of chapter 489,
  704  or a subcontractor of such licensee, may not advertise, solicit,
  705  offer to handle, handle, or perform public adjuster services as
  706  provided in subsection (1) unless licensed and compliant as a
  707  public adjuster under this chapter. The prohibition against
  708  solicitation does not preclude a contractor from suggesting or
  709  otherwise recommending to a consumer that the consumer consider
  710  contacting his or her insurer to determine if the proposed
  711  repair is covered under the consumer’s insurance policy, except
  712  as it relates to solicitation prohibited in s. 489.147. In
  713  addition, the contractor may discuss or explain a bid for
  714  construction or repair of covered property with the residential
  715  property owner who has suffered loss or damage covered by a
  716  property insurance policy, or the insurer of such property, if
  717  the contractor is doing so for the usual and customary fees
  718  applicable to the work to be performed as stated in the contract
  719  between the contractor and the insured.
  720         (19)(16) A public adjuster shall not acquire any interest
  721  in salvaged property, except with the written consent and
  722  permission of the insured through a signed affidavit.
  723         (20)(17) A public adjuster, a public adjuster apprentice,
  724  or a person acting on behalf of an adjuster or apprentice may
  725  not enter into a contract or accept a power of attorney that
  726  vests in the public adjuster, the public adjuster apprentice, or
  727  the person acting on behalf of the adjuster or apprentice the
  728  effective authority to choose the persons or entities that will
  729  perform repair work in a property insurance claim or provide
  730  goods or services that will require the insured or third-party
  731  claimant to expend funds in excess of those payable to the
  732  public adjuster under the terms of the contract for adjusting
  733  services.
  734         (21)(18) Subsections (5)-(20) (5)-(17) apply only to
  735  residential property insurance policies and condominium unit
  736  owner policies as described in s. 718.111(11).
  737         (22)(19) Except as otherwise provided in this chapter, no
  738  person, except an attorney at law or a licensed public adjuster,
  739  may for money, commission, or any other thing of value, directly
  740  or indirectly:
  741         (a) Prepare, complete, or file an insurance claim for an
  742  insured or a third-party claimant;
  743         (b) Act on behalf of or aid an insured or a third-party
  744  claimant in negotiating for or effecting the settlement of a
  745  claim for loss or damage covered by an insurance contract;
  746         (c) Offer to initiate or negotiate a claim on behalf of an
  747  insured;
  748         (d) Advertise services that require a license as a public
  749  adjuster; or
  750         (e) Solicit, investigate, or adjust a claim on behalf of a
  751  public adjuster, an insured, or a third-party claimant.
  752         (23)(20) The department may take administrative actions and
  753  impose fines against any persons performing claims adjusting,
  754  soliciting, or any other services described in this section
  755  without the licensure required under this section or s. 626.112.
  756         (24)(21) A public adjuster, public adjuster apprentice, or
  757  public adjusting firm that solicits a claim and does not enter
  758  into a contract with an insured or a third-party claimant
  759  pursuant to paragraph (13)(a) (10)(a) may not charge an insured
  760  or a third-party claimant or receive payment by any other source
  761  for any type of service related to the insured or third-party
  762  claimant’s claim.
  763         (25)(a)(22)(a) Any following act by a public adjuster, a
  764  public adjuster apprentice, or a person acting on behalf of a
  765  public adjuster or public adjuster apprentice is prohibited and
  766  shall result in discipline as applicable under this part:
  767         1. Offering to a residential property owner a rebate, gift,
  768  gift card, cash, coupon, waiver of any insurance deductible, or
  769  any other thing of value in exchange for:
  770         a. Allowing a contractor, a public adjuster, a public
  771  adjuster apprentice, or a person acting on behalf of a public
  772  adjuster or public adjuster apprentice to conduct an inspection
  773  of the residential property owner’s roof; or
  774         b. Making an insurance claim for damage to the residential
  775  property owner’s roof.
  776         2. Offering, delivering, receiving, or accepting any
  777  compensation, inducement, or reward for the referral of any
  778  services for which property insurance proceeds would be used for
  779  roofing repairs or replacement.
  780         (b) Notwithstanding the fine set forth in s. 626.8698, a
  781  public adjuster or public adjuster apprentice may be subject to
  782  a fine not to exceed $10,000 per act for a violation of this
  783  subsection and a fine not to exceed $20,000 per act for a
  784  violation of this subsection that occurs during a state of
  785  emergency declared by executive order or proclamation of the
  786  Governor pursuant to s. 252.36.
  787         (c) A person who engages in an act prohibited by this
  788  subsection and who is not a public adjuster or a public adjuster
  789  apprentice, or is not otherwise exempt from licensure, is guilty
  790  of the unlicensed practice of public adjusting and may be:
  791         1. Subject to all applicable penalties set forth in this
  792  part.
  793         2. Notwithstanding subparagraph 1., subject to a fine not
  794  to exceed $10,000 per act for a violation of this subsection and
  795  a fine not to exceed $20,000 per act for a violation of this
  796  subsection that occurs during a state of emergency declared by
  797  executive order or proclamation of the Governor pursuant to s.
  798  252.36.
  799         Section 10. Section 626.860, Florida Statutes, is amended
  800  to read:
  801         626.860 Attorneys at law; exemption.—Attorneys at law duly
  802  licensed to practice law in the courts of this state, and in
  803  good standing with The Florida Bar, shall not be required to be
  804  licensed under the provisions of this code to authorize them to
  805  adjust or participate in the adjustment of any claim, loss, or
  806  damage arising under policies or contracts of insurance. This
  807  exemption does not extend to the employees, interns, volunteers,
  808  or contractors of an attorney or of a law firm.
  809         Section 11. Section 626.875, Florida Statutes, is amended
  810  to read:
  811         626.875 Office and records.—
  812         (1)(a) Each appointed independent adjuster and licensed
  813  public adjuster must maintain a place of business in this state
  814  which is accessible to the public and keep therein the usual and
  815  customary records pertaining to transactions under the license.
  816  This provision does not prohibit maintenance of such an office
  817  in the home of the licensee.
  818         (b) A license issued under this chapter must at all times
  819  be posted in a conspicuous place in the principal place of
  820  business of the license holder. If the licensee is conducting
  821  business away from the place of business such that the license
  822  cannot be posted, the licensee shall have such license in his or
  823  her actual possession at the time of carrying on such business.
  824         (2) The records of the adjuster relating to a particular
  825  claim or loss shall be so retained in the adjuster’s place of
  826  business for a period of not less than 5 years after completion
  827  of the adjustment and shall be available for inspection by the
  828  department at all times. This provision shall not be deemed to
  829  prohibit return or delivery to the insurer or insured of
  830  documents furnished to or prepared by the adjuster and required
  831  by the insurer or insured to be returned or delivered thereto.
  832  At a minimum, the following records must be maintained for a
  833  period of not less than 5 years:
  834         (a) Name, address, telephone number, and e-mail address of
  835  the insured, and the name of the attorney representing the
  836  insured, if applicable.
  837         (b) The date, location, and amount of the loss.
  838         (c) An unaltered copy of the executed disclosure document
  839  required by s. 626.8796.
  840         (d) An unaltered copy of the executed public adjuster
  841  contract required by s. 626.8796.
  842         (e) A copy of the estimate of damages provided to the
  843  insurer.
  844         (f) The name of the insurer; the name of the claims
  845  representative of the insurer; and the amount, expiration date,
  846  and number of each policy under which the loss is covered.
  847         (g) An itemized statement of the recoveries by the insured
  848  from the sources known to the adjuster.
  849         (h) An itemized statement of all compensation received by
  850  the public adjuster from any source in connection with the loss.
  851         (i) A register of all money received, deposited, disbursed,
  852  and withdrawn in connection with a transaction with the insured,
  853  including fees, transfers, and disbursements in connection with
  854  the loss.
  855         Section 12. Section 626.8796, Florida Statutes, is amended
  856  to read:
  857         626.8796 Public adjuster contracts; disclosure statement;
  858  fraud statement.—
  859         (1) All contracts for public adjuster services must be in
  860  writing in at least 12-point type, be titled “Public Adjuster
  861  Contract,” and prominently display the following statement on
  862  the contract in minimum 18-point bold type before the space
  863  reserved in the contract for the signature of the insured:
  864  “Pursuant to s. 817.234, Florida Statutes, any person who, with
  865  the intent to injure, defraud, or deceive an insurer or insured,
  866  prepares, presents, or causes to be presented a proof of loss or
  867  estimate of cost or repair of damaged property in support of a
  868  claim under an insurance policy knowing that the proof of loss
  869  or estimate of claim or repairs contains false, incomplete, or
  870  misleading information concerning any fact or thing material to
  871  the claim commits a felony of the third degree, punishable as
  872  provided in s. 775.082, s. 775.083, or s. 775.084, Florida
  873  Statutes.”
  874         (2) A public adjuster contract relating to a property and
  875  casualty claim must contain the full name, permanent business
  876  address, phone number, e-mail address, and license number of the
  877  public adjuster; the full name of the public adjusting firm; and
  878  the insured’s full name, and street address, phone number, and
  879  e-mail address, together with a brief description of the loss.
  880  The contract must state the percentage of compensation for the
  881  public adjuster’s services in minimum 18-point bold type before
  882  the space reserved in the contract for the signature of the
  883  insured; the type of claim, including an emergency claim,
  884  nonemergency claim, or supplemental claim; the initials of the
  885  named insured on each page that does not contain the insured’s
  886  signature; the signatures of the public adjuster and all named
  887  insureds; and the signature date. If all of the named insureds’
  888  signatures are not available, the public adjuster must submit an
  889  affidavit signed by the available named insureds attesting that
  890  they have authority to enter into the contract and settle all
  891  claim issues on behalf of the named insureds. An unaltered copy
  892  of the executed contract must be remitted to the insured at the
  893  time of execution and to the insurer within 10 30 days after
  894  execution. A public adjusting firm that adjusts claims primarily
  895  for commercial entities with operations in more than one state
  896  and that does not directly or indirectly perform adjusting
  897  services for insurers or individual homeowners is deemed to
  898  comply with the requirements of this subsection if, at the time
  899  a proof of loss is submitted, the public adjusting firm remits
  900  to the insurer an affidavit signed by the public adjuster or
  901  public adjuster apprentice that identifies:
  902         (a) The full name, permanent business address, phone
  903  number, e-mail address, and license number of the public
  904  adjuster or public adjuster apprentice.
  905         (b) The full name of the public adjusting firm.
  906         (c) The insured’s full name, and street address, phone
  907  number, and e-mail address, together with a brief description of
  908  the loss.
  909         (d) An attestation that the compensation for public
  910  adjusting services will not exceed the limitations provided by
  911  law.
  912         (e) The type of claim, including an emergency claim,
  913  nonemergency claim, or supplemental claim.
  914         (3) The public adjuster shall not provide services until
  915  both the insured and insurer have been provided with unaltered
  916  copies of the executed contract.
  917         (4) The insured may rescind the contract for public
  918  adjuster services if the public adjuster has not submitted a
  919  written estimate to the insurer within 60 days after executing
  920  the contract.
  921         (5) Before the signing of the contract, the public adjuster
  922  shall provide the insured with a separate disclosure document to
  923  be signed by the insured, on a form adopted by the department,
  924  regarding the claim process which accomplishes the following:
  925         (a) Defines the following types of adjusters who may be
  926  involved in the claim process: company adjuster, independent
  927  adjuster, and public adjuster.
  928         (b) Explains that the public adjuster is not a
  929  representative or employee of the insurer.
  930         (c) Explains that the insured is not required to hire a
  931  public adjuster, but has a right to do so.
  932         (d) Explains that an insured has a right to initiate direct
  933  communications with the insured’s attorney, the insurer, the
  934  company adjuster, the insurer’s attorney, or any person
  935  regarding the settlement of the insured’s claim.
  936         (e) Explains that the public adjuster’s salary, fee,
  937  commission, or other consideration to be paid to a public
  938  adjuster is the insured’s responsibility.
  939         (f) Explains that the public adjuster is required to
  940  provide the insured an unaltered copy of the executed contract
  941  at the time of execution.
  942         (g)Explains that if the contract was entered into based on
  943  events that are the subject of a declaration of a state of
  944  emergency by the Governor, an insured or a claimant may cancel
  945  the public adjuster’s contract to adjust a claim without penalty
  946  or obligation within 30 days after the date of the event or 10
  947  days after the date on which the contract is executed, whichever
  948  is longer.
  949         (h) The public adjuster shall provide an unaltered copy of
  950  the executed disclosure document to the insured at the time of
  951  execution.
  952         (6) A contract that does not comply with this section is
  953  invalid and unenforceable.
  954         (7) The department may adopt rules pursuant to ss.
  955  120.536(1) and 120.54 to implement this section, including rules
  956  to adopt forms required by this section.
  957         Section 13. Section 626.8797, Florida Statutes, is amended
  958  to read:
  959         626.8797 Proof of loss; fraud statement.—All proof-of-loss
  960  statements must prominently display the following statement in
  961  minimum 18-point bold type before the space reserved in the
  962  contract for the signature of the insured: “Pursuant to s.
  963  817.234, Florida Statutes, any person who, with the intent to
  964  injure, defraud, or deceive any insurer or insured, prepares,
  965  presents, or causes to be presented a proof of loss or estimate
  966  of cost or repair of damaged property in support of a claim
  967  under an insurance policy knowing that the proof of loss or
  968  estimate of claim or repairs contains any false, incomplete, or
  969  misleading information concerning any fact or thing material to
  970  the claim commits a felony of the third degree, punishable as
  971  provided in s. 775.082, s. 775.083, or s. 775.084, Florida
  972  Statutes.”
  973         Section 14. Paragraph (a) of subsection (1) of section
  974  626.9541, Florida Statutes, is amended to read:
  975         626.9541 Unfair methods of competition and unfair or
  976  deceptive acts or practices defined.—
  977         (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
  978  ACTS.—The following are defined as unfair methods of competition
  979  and unfair or deceptive acts or practices:
  980         (a) Misrepresentations and false advertising of insurance
  981  policies.—Knowingly making, issuing, circulating, or causing to
  982  be made, issued, or circulated, any estimate, illustration,
  983  circular, statement, sales presentation, omission, comparison,
  984  or property and casualty certificate of insurance altered after
  985  being issued, which:
  986         1. Misrepresents the benefits, advantages, conditions, or
  987  terms of any insurance policy.
  988         2. Misrepresents the dividends or share of the surplus to
  989  be received on any insurance policy.
  990         3. Makes any false or misleading statements as to the
  991  dividends or share of surplus previously paid on any insurance
  992  policy.
  993         4. Is misleading, or is a misrepresentation, as to the
  994  financial condition of any person or as to the legal reserve
  995  system upon which any life insurer operates.
  996         5. Uses any name or title of any insurance policy or class
  997  of insurance policies misrepresenting the true nature thereof.
  998         6. Is a misrepresentation for the purpose of inducing, or
  999  tending to induce, the lapse, forfeiture, exchange, conversion,
 1000  or surrender of any insurance policy.
 1001         7. Is a misrepresentation for the purpose of effecting a
 1002  pledge or assignment of, or effecting a loan against, any
 1003  insurance policy.
 1004         8. Misrepresents any insurance policy as being shares of
 1005  stock or misrepresents ownership interest in the company.
 1006         9. Uses any advertisement that would mislead or otherwise
 1007  cause a reasonable person to believe mistakenly that the state
 1008  or the Federal Government is responsible for the insurance sales
 1009  activities of any person or stands behind any person’s credit or
 1010  that any person, the state, or the Federal Government guarantees
 1011  any returns on insurance products or is a source of payment of
 1012  any insurance obligation of or sold by any person.
 1013         10. Fails to disclose a third party that receives
 1014  royalties, referral fees, or other remuneration for sponsorship,
 1015  marketing, or use of third-party branding for a policy of health
 1016  insurance as defined in s. 624.603.
 1017         Section 15. Paragraph (c) of subsection (2) of section
 1018  627.4025, Florida Statutes, is amended, and paragraph (d) is
 1019  added to that subsection, to read:
 1020         627.4025 Residential coverage and hurricane coverage
 1021  defined.—
 1022         (2) As used in policies providing residential coverage:
 1023         (c) “Hurricane” for purposes of paragraphs (a) and (b)
 1024  means a storm system that has been declared to be a hurricane by
 1025  the National Hurricane Center of the National Weather Service.
 1026  The duration of the hurricane includes the time period, in
 1027  Florida:
 1028         1. Beginning at the time a hurricane watch or hurricane
 1029  warning is issued for any part of Florida by the National
 1030  Hurricane Center of the National Weather Service; and
 1031         2. Continuing for the time period during which the
 1032  hurricane conditions exist anywhere in Florida; and
 1033         3. Ending 24 72 hours following the termination of the last
 1034  hurricane watch or hurricane warning issued for any part of
 1035  Florida by the National Hurricane Center of the National Weather
 1036  Service.
 1037         (d) “Hurricane deductible” means the deductible applicable
 1038  to loss caused by a hurricane.
 1039         Section 16. Paragraph (b) of subsection (1) and paragraph
 1040  (b) of subsection (2) of section 627.4133, Florida Statutes, are
 1041  amended to read:
 1042         627.4133 Notice of cancellation, nonrenewal, or renewal
 1043  premium.—
 1044         (1) Except as provided in subsection (2):
 1045         (b) An insurer issuing a policy providing coverage for
 1046  property, casualty, except mortgage guaranty, surety, or marine
 1047  insurance, other than motor vehicle insurance subject to s.
 1048  627.728 or s. 627.7281, shall give the first-named insured
 1049  written notice of cancellation or termination other than
 1050  nonrenewal at least 45 days prior to the effective date of the
 1051  cancellation or termination, including in the written notice the
 1052  reason or reasons for the cancellation or termination, except
 1053  that:
 1054         1. When cancellation is for nonpayment of premium, at least
 1055  10 days’ written notice of cancellation accompanied by the
 1056  reason therefor shall be given. As used in this subparagraph and
 1057  s. 440.42(3), the term “nonpayment of premium” means failure of
 1058  the named insured to discharge when due any of her or his
 1059  obligations in connection with the payment of premiums on a
 1060  policy or any installment of such premium, whether the premium
 1061  is payable directly to the insurer or its agent or indirectly
 1062  under any premium finance plan or extension of credit, or
 1063  failure to maintain membership in an organization if such
 1064  membership is a condition precedent to insurance coverage.
 1065  “Nonpayment of premium” also means the failure of a financial
 1066  institution to honor an insurance applicant’s check after
 1067  delivery to a licensed agent for payment of a premium, even if
 1068  the agent has previously delivered or transferred the premium to
 1069  the insurer. If a dishonored check represents the initial
 1070  premium payment, the contract and all contractual obligations
 1071  shall be void ab initio unless the nonpayment is cured within
 1072  the earlier of 5 days after actual notice by certified mail is
 1073  received by the applicant or 15 days after notice is sent to the
 1074  applicant by certified mail or registered mail, and if the
 1075  contract is void, any premium received by the insurer from a
 1076  third party shall be refunded to that party in full; and
 1077         2. When such cancellation or termination occurs during the
 1078  first 60 90 days during which the insurance is in force and the
 1079  insurance is canceled or terminated for reasons other than
 1080  nonpayment of premium, at least 20 days’ written notice of
 1081  cancellation or termination accompanied by the reason therefor
 1082  shall be given except where there has been a material
 1083  misstatement or misrepresentation or failure to comply with the
 1084  underwriting requirements established by the insurer.
 1085  
 1086  After the policy has been in effect for 60 90 days, no such
 1087  policy shall be canceled by the insurer except when there has
 1088  been a material misstatement, a nonpayment of premium, a failure
 1089  to comply with underwriting requirements established by the
 1090  insurer within 60 90 days of the date of effectuation of
 1091  coverage, or a substantial change in the risk covered by the
 1092  policy or when the cancellation is for all insureds under such
 1093  policies for a given class of insureds. This subsection does not
 1094  apply to individually rated risks having a policy term of less
 1095  than 90 days.
 1096         (2) With respect to any personal lines or commercial
 1097  residential property insurance policy, including, but not
 1098  limited to, any homeowner, mobile home owner, farmowner,
 1099  condominium association, condominium unit owner, apartment
 1100  building, or other policy covering a residential structure or
 1101  its contents:
 1102         (b) The insurer shall give the first-named insured written
 1103  notice of nonrenewal, cancellation, or termination at least 120
 1104  days before the effective date of the nonrenewal, cancellation,
 1105  or termination. The notice must include the reason for the
 1106  nonrenewal, cancellation, or termination, except that:
 1107         1. If cancellation is for nonpayment of premium, at least
 1108  10 days’ written notice of cancellation accompanied by the
 1109  reason therefor must be given. As used in this subparagraph, the
 1110  term “nonpayment of premium” means failure of the named insured
 1111  to discharge when due her or his obligations for paying the
 1112  premium on a policy or an installment of such premium, whether
 1113  the premium is payable directly to the insurer or its agent or
 1114  indirectly under a premium finance plan or extension of credit,
 1115  or failure to maintain membership in an organization if such
 1116  membership is a condition precedent to insurance coverage. The
 1117  term also means the failure of a financial institution to honor
 1118  an insurance applicant’s check after delivery to a licensed
 1119  agent for payment of a premium even if the agent has previously
 1120  delivered or transferred the premium to the insurer. If a
 1121  dishonored check represents the initial premium payment, the
 1122  contract and all contractual obligations are void ab initio
 1123  unless the nonpayment is cured within the earlier of 5 days
 1124  after actual notice by certified mail is received by the
 1125  applicant or 15 days after notice is sent to the applicant by
 1126  certified mail or registered mail. If the contract is void, any
 1127  premium received by the insurer from a third party must be
 1128  refunded to that party in full.
 1129         2. If cancellation or termination occurs during the first
 1130  60 90 days the insurance is in force and the insurance is
 1131  canceled or terminated for reasons other than nonpayment of
 1132  premium, at least 20 days’ written notice of cancellation or
 1133  termination accompanied by the reason therefor must be given
 1134  unless there has been a material misstatement or
 1135  misrepresentation or a failure to comply with the underwriting
 1136  requirements established by the insurer.
 1137         3. After the policy has been in effect for 60 90 days, the
 1138  policy may not be canceled by the insurer unless there has been
 1139  a material misstatement; a nonpayment of premium; a failure to
 1140  comply, within 60 90 days after the date of effectuation of
 1141  coverage, with underwriting requirements established by the
 1142  insurer before the date of effectuation of coverage; or a
 1143  substantial change in the risk covered by the policy or unless
 1144  the cancellation is for all insureds under such policies for a
 1145  given class of insureds. This subparagraph does not apply to
 1146  individually rated risks that have a policy term of less than 90
 1147  days.
 1148         4. After a policy or contract has been in effect for more
 1149  than 60 90 days, the insurer may not cancel or terminate the
 1150  policy or contract based on credit information available in
 1151  public records.
 1152         5. A policy that is nonrenewed by Citizens Property
 1153  Insurance Corporation, pursuant to s. 627.351(6), for a policy
 1154  that has been assumed by an authorized insurer offering
 1155  replacement coverage to the policyholder is exempt from the
 1156  notice requirements of paragraph (a) and this paragraph. In such
 1157  cases, the corporation must give the named insured written
 1158  notice of nonrenewal at least 45 days before the effective date
 1159  of the nonrenewal.
 1160         6. Notwithstanding any other provision of law, an insurer
 1161  may cancel or nonrenew a property insurance policy after at
 1162  least 45 days’ notice if the office finds that the early
 1163  cancellation of some or all of the insurer’s policies is
 1164  necessary to protect the best interests of the public or
 1165  policyholders and the office approves the insurer’s plan for
 1166  early cancellation or nonrenewal of some or all of its policies.
 1167  The office may base such finding upon the financial condition of
 1168  the insurer, lack of adequate reinsurance coverage for hurricane
 1169  risk, or other relevant factors. The office may condition its
 1170  finding on the consent of the insurer to be placed under
 1171  administrative supervision pursuant to s. 624.81 or to the
 1172  appointment of a receiver under chapter 631.
 1173         7. A policy covering both a home and a motor vehicle may be
 1174  nonrenewed for any reason applicable to the property or motor
 1175  vehicle insurance after providing 90 days’ notice.
 1176         Section 17. Effective January 1, 2024, section 627.4554,
 1177  Florida Statutes, is amended to read:
 1178         627.4554 Suitability in annuity transactions investments.—
 1179         (1) PURPOSE.—The purpose of this section is to require
 1180  agents to act in the best interest of the consumer when making a
 1181  recommendation of an annuity and to require insurers to
 1182  establish and maintain a system to supervise so set forth
 1183  standards and procedures for making recommendations to consumers
 1184  which result in transactions involving annuity products, and to
 1185  establish a system for supervising such recommendations in order
 1186  to ensure that the insurance needs and financial objectives of
 1187  consumers are effectively appropriately addressed at the time of
 1188  the transaction.
 1189         (2) SCOPE.—This section applies to any sale or
 1190  recommendation of made to a consumer to purchase, exchange, or
 1191  replace an annuity by an insurer or its agent, and which results
 1192  in the purchase, exchange, or replacement recommended.
 1193         (3) DEFINITIONS.—As used in this section, the term:
 1194         (a) “Agent” means a person or entity required to be
 1195  licensed under the laws of this state to sell, solicit, or
 1196  negotiate insurance, including annuities. For purposes of this
 1197  section, the term includes an insurer when no agent is involved
 1198  has the same meaning as provided in s. 626.015.
 1199         (b) “Annuity” means an insurance product under state law
 1200  which is individually solicited, whether classified as an
 1201  individual or group annuity.
 1202         (c) “Cash compensation” means any discount, concession,
 1203  fee, service fee, commission, sales charge, loan, override, or
 1204  cash benefit received by an agent from an insurer or
 1205  intermediary or directly from the consumer in connection with
 1206  the recommendation or sale of an annuity.
 1207         (d) “Consumer profile information” means information that
 1208  is reasonably appropriate to determine whether a recommendation
 1209  addresses the consumer’s financial situation, insurance needs,
 1210  and financial objectives, including, at a minimum, the
 1211  following:
 1212         1. Age.
 1213         2. Annual income.
 1214         3. Financial situation and needs, including debts and other
 1215  obligations.
 1216         4. Financial experience.
 1217         5. Insurance needs.
 1218         6. Financial objectives.
 1219         7. Intended use of the annuity.
 1220         8. Financial time horizon.
 1221         9. Existing assets or financial products, including
 1222  investment, annuity, and insurance holdings.
 1223         10. Liquidity needs.
 1224         11. Liquid net worth.
 1225         12. Risk tolerance, including, but not limited to,
 1226  willingness to accept nonguaranteed elements in the annuity.
 1227         13. Financial resources used to fund the annuity.
 1228         14. Tax status.
 1229         (e)(c) “FINRA” means the Financial Industry Regulatory
 1230  Authority or a succeeding agency.
 1231         (f)(d) “Insurer” has the same meaning as provided in s.
 1232  624.03.
 1233         (g) “Intermediary” means an entity contracted directly with
 1234  an insurer or with another entity contracted with an insurer to
 1235  facilitate the sale of the insurer’s annuities by agents.
 1236         (h) “Material conflict of interest” means a financial
 1237  interest of the agent in the sale of an annuity which a
 1238  reasonable person would expect to influence the impartiality of
 1239  a recommendation. The term does not include cash compensation or
 1240  noncash compensation.
 1241         (i) “Noncash compensation” means any form of compensation
 1242  that is not cash compensation, including, but not limited to,
 1243  health insurance, office rent, office support, and retirement
 1244  benefits.
 1245         (j) “Nonguaranteed elements” means the premiums; credited
 1246  interest rates, including any bonus; benefits; values;
 1247  dividends; noninterest-based credits; charges; or elements of
 1248  formulas used to determine any of these, which are subject to
 1249  company discretion and are not guaranteed at issue. An element
 1250  is considered nonguaranteed if any of the underlying
 1251  nonguaranteed elements are used in its calculation.
 1252         (k)(e) “Recommendation” means advice provided by an insurer
 1253  or its agent to an individual a consumer which was intended to
 1254  result or does result which would result in a the purchase, an
 1255  exchange, or a replacement of an annuity in accordance with that
 1256  advice. The term does not include general communication to the
 1257  public, generalized customer services, assistance or
 1258  administrative support, general educational information and
 1259  tools, prospectuses, or other product and sales material.
 1260         (l)(f) “Replacement” means a transaction in which a new
 1261  annuity policy or contract is to be purchased and it is known or
 1262  should be known to the proposing insurer or its agent, or to the
 1263  proposing insurer whether or not an agent is involved, that by
 1264  reason of such transaction an existing annuity or other
 1265  insurance policy has been or is to be any of the following or
 1266  contract will be:
 1267         1. Lapsed, forfeited, surrendered or partially surrendered,
 1268  assigned to the replacing insurer, or otherwise terminated;
 1269         2. Converted to reduced paid-up insurance, continued as
 1270  extended term insurance, or otherwise reduced in value due to
 1271  the use of nonforfeiture benefits or other policy values;
 1272         3. Amended so as to effect a reduction in benefits or the
 1273  term for which coverage would otherwise remain in force or for
 1274  which benefits would be paid;
 1275         4. Reissued with a reduction in cash value; or
 1276         5. Used in a financed purchase.
 1277         (m) “SEC” means the United States Securities and Exchange
 1278  Commission.
 1279         (g) “Suitability information” means information related to
 1280  the consumer which is reasonably appropriate to determine the
 1281  suitability of a recommendation made to the consumer, including
 1282  the following:
 1283         1. Age;
 1284         2. Annual income;
 1285         3. Financial situation and needs, including the financial
 1286  resources used for funding the annuity;
 1287         4. Financial experience;
 1288         5. Financial objectives;
 1289         6. Intended use of the annuity;
 1290         7. Financial time horizon;
 1291         8. Existing assets, including investment and life insurance
 1292  holdings;
 1293         9. Liquidity needs;
 1294         10. Liquid net worth;
 1295         11. Risk tolerance; and
 1296         12. Tax status.
 1297         (4) EXEMPTIONS.—Unless otherwise specifically included,
 1298  this section does not apply to transactions involving:
 1299         (a) Direct-response solicitations where there is no
 1300  recommendation based on information collected from the consumer
 1301  pursuant to this section;
 1302         (b) Contracts used to fund:
 1303         1. An employee pension or welfare benefit plan that is
 1304  covered by the federal Employee Retirement and Income Security
 1305  Act;
 1306         2. A plan described by s. 401(a), s. 401(k), s. 403(b), s.
 1307  408(k), or s. 408(p) of the Internal Revenue Code, if
 1308  established or maintained by an employer;
 1309         3. A government or church plan defined in s. 414 of the
 1310  Internal Revenue Code, a government or church welfare benefit
 1311  plan, or a deferred compensation plan of a state or local
 1312  government or tax-exempt organization under s. 457 of the
 1313  Internal Revenue Code; or
 1314         4. A nonqualified deferred compensation arrangement
 1315  established or maintained by an employer or plan sponsor;
 1316         (c)5. Settlements or assumptions of liabilities associated
 1317  with personal injury litigation or a dispute or claim-resolution
 1318  process; or
 1319         (d)6. Formal prepaid funeral contracts.
 1320         (5) DUTIES OF INSURERS AND AGENTS.—
 1321         (a) An agent, when making a recommendation of an annuity,
 1322  shall act in the best interest of the consumer under the
 1323  circumstances known at the time the recommendation is made,
 1324  without placing the financial interest of the agent or insurer
 1325  ahead of the consumer’s interest. An agent has acted in the best
 1326  interest of the consumer if the agent has satisfied the
 1327  following obligations regarding care, disclosure, conflict of
 1328  interest, and documentation:
 1329         1.a. The agent, in making a recommendation, shall exercise
 1330  reasonable diligence, care, and skill to:
 1331         (I) Know the financial situation, insurance needs, and
 1332  financial objectives of the customer.
 1333         (II) Understand the available options after making a
 1334  reasonable inquiry into options available to the agent.
 1335         (III) Have a reasonable basis to believe the recommended
 1336  option effectively addresses the consumer’s financial situation,
 1337  insurance needs, and financial objectives over the life of the
 1338  product, as evaluated in light of the consumer profile
 1339  information.
 1340         (IV) Communicate the reason or reasons for the
 1341  recommendation.
 1342         b. The requirements of sub-subparagraph a. include:
 1343         (I) Making reasonable efforts to obtain consumer profile
 1344  information from the consumer before the recommendation of an
 1345  annuity.
 1346         (II) Requiring an agent to consider the types of products
 1347  the agent is authorized and licensed to recommend or sell which
 1348  address the consumer’s financial situation, insurance needs, and
 1349  financial objectives. This does not require analysis or
 1350  consideration of any products outside the authority and license
 1351  of the agent or other possible alternative products or
 1352  strategies available in the market at the time of the
 1353  recommendation. Agents shall be held to standards applicable to
 1354  agents with similar authority and licensure.
 1355         (III) Having a reasonable basis to believe the consumer
 1356  would benefit from certain features of the annuity, such as
 1357  annuitization, death or living benefit, or other insurance
 1358  related features.
 1359         c. The requirements of this subsection do not create a
 1360  fiduciary obligation or relationship and only create a
 1361  regulatory obligation as provided in this section.
 1362         d. The consumer profile information, characteristics of the
 1363  insurer, and product costs, rates, benefits, and features are
 1364  those factors generally relevant in making a determination
 1365  whether an annuity effectively addresses the consumer’s
 1366  financial situation, insurance needs, and financial objectives,
 1367  but the level of importance of each factor under the care
 1368  obligation of this paragraph may vary depending on the facts and
 1369  circumstances of a particular case. However, each factor may not
 1370  be considered in isolation.
 1371         e. The requirements under sub-subparagraph a. apply to the
 1372  particular annuity as a whole and the underlying subaccounts to
 1373  which funds are allocated at the time of purchase or exchange of
 1374  an annuity, and riders and similar product enhancements, if any.
 1375         f. Sub-subparagraph a. does not require that the annuity
 1376  with the lowest one-time occurrence compensation structure or
 1377  multiple occurrence compensation structure shall necessarily be
 1378  recommended.
 1379         g. Sub-subparagraph a. does not require the agent to have
 1380  ongoing monitoring obligations under the care obligation,
 1381  although such an obligation may be separately owed under the
 1382  terms of a fiduciary, consulting, investment, advising, or
 1383  financial planning agreement between the consumer and the agent.
 1384         h. In the case of an exchange or replacement of an annuity,
 1385  the agent shall consider the whole transaction, which includes
 1386  taking into consideration whether:
 1387         (I) The consumer will incur a surrender charge; be subject
 1388  to the commencement of a new surrender period; lose existing
 1389  benefits, such as death, living, or other contractual benefits;
 1390  or be subject to increased fees, investment advisory fees, or
 1391  charges for riders and similar product enhancements.
 1392         (II) The replacing product would substantially benefit the
 1393  consumer in comparison to the replaced product over the life of
 1394  the product.
 1395         (III) The consumer has had another annuity exchange or
 1396  replacement and, in particular, an exchange or replacement
 1397  within the preceding 60 months.
 1398         i. This section does not require an agent to obtain any
 1399  license other than an agent license with the appropriate line of
 1400  authority to sell, solicit, or negotiate insurance in this
 1401  state, including, but not limited to, any securities license, in
 1402  order to fulfill the duties and obligations contained in this
 1403  section; provided, the agent does not give advice or provide
 1404  services that are otherwise subject to securities laws or engage
 1405  in any other activity requiring other professional licenses.
 1406         2.a. Before the recommendation or sale of an annuity, the
 1407  agent shall prominently disclose to the consumer, on a form
 1408  substantially similar to that posted on the office website as
 1409  Appendix A, related to an insurance agent disclosure for
 1410  annuities:
 1411         (I) A description of the scope and terms of the
 1412  relationship with the consumer and the role of the agent in the
 1413  transaction.
 1414         (II) An affirmative statement on whether the agent is
 1415  licensed and authorized to sell the following products:
 1416         (A) Fixed annuities.
 1417         (B) Fixed indexed annuities.
 1418         (C) Variable annuities.
 1419         (D) Life insurance.
 1420         (E) Mutual funds.
 1421         (F) Stocks and bonds.
 1422         (G) Certificates of deposit.
 1423         (III) An affirmative statement describing the insurers for
 1424  which the agent is authorized, contracted, or appointed, or
 1425  otherwise able to sell insurance products, using the following
 1426  descriptions:
 1427         (A) From one insurer;
 1428         (B) From two or more insurers; or
 1429         (C) From two or more insurers, although primarily
 1430  contracted with one insurer.
 1431         (IV) A description of the sources and types of cash
 1432  compensation and noncash compensation to be received by the
 1433  agent, including whether the agent is to be compensated for the
 1434  sale of a recommended annuity by commission as part of premium
 1435  or other remuneration received from the insurer, intermediary,
 1436  or other agent, or by fee as a result of a contract for advice
 1437  or consulting services.
 1438         (V) A notice of the consumer’s right to request additional
 1439  information regarding cash compensation described in sub
 1440  subparagraph b.
 1441         b. Upon request of the consumer or the consumer’s
 1442  designated representative, the agent shall disclose:
 1443         (I) A reasonable estimate of the amount of cash
 1444  compensation to be received by the agent, which may be stated as
 1445  a range of amounts or percentages.
 1446         (II) Whether the cash compensation is a one-time or
 1447  multiple occurrence amount; and if a multiple occurrence amount,
 1448  the frequency and amount of the occurrence, which may be stated
 1449  as a range of amounts or percentages. When recommending the
 1450  purchase or exchange of an annuity to a consumer which results
 1451  in an insurance transaction or series of insurance transactions,
 1452  the agent, or the insurer where no agent is involved, must have
 1453  reasonable grounds for believing that the recommendation is
 1454  suitable for the consumer, based on the consumer’s suitability
 1455  information, and that there is a reasonable basis to believe all
 1456  of the following:
 1457         c.1.Before or at the time of the recommendation or sale of
 1458  an annuity, the agent shall have a reasonable basis to believe
 1459  the consumer has been reasonably informed of various features of
 1460  the annuity, such as the potential surrender period and
 1461  surrender charge; potential tax penalty if the consumer sells,
 1462  exchanges, surrenders, or annuitizes the annuity; mortality and
 1463  expense fees; any annual fees; investment advisory fees;
 1464  potential charges for and features of riders or other options of
 1465  the annuity; limitations on interest returns; potential changes
 1466  in nonguaranteed elements of the annuity; insurance and
 1467  investment components; and market risk.
 1468         2. The consumer would benefit from certain features of the
 1469  annuity, such as tax-deferred growth, annuitization, or the
 1470  death or living benefit.
 1471         3. An agent shall identify and avoid or reasonably manage
 1472  and disclose material conflicts of interest, including material
 1473  conflicts of interest related to an ownership interest.
 1474         4. An agent shall at the time of the recommendation or
 1475  sale:
 1476         a. Make a written record of any recommendation and the
 1477  basis for the recommendation, subject to this section.
 1478         b. Obtain a consumer-signed statement on a form
 1479  substantially similar to that posted on the office website as
 1480  Appendix B, related to a consumer’s refusal to provide
 1481  information, documenting:
 1482         (I) A customer’s refusal to provide the consumer profile
 1483  information, if any.
 1484         (II) A customer’s understanding of the ramifications of not
 1485  providing his or her consumer profile information or providing
 1486  insufficient consumer profile information.
 1487         c. Obtain a consumer-signed statement on a form
 1488  substantially similar to that posted on the office website as
 1489  Appendix C, related to a consumer’s decision to purchase an
 1490  annuity not based on a recommendation, acknowledging the annuity
 1491  transaction is not recommended if a customer decides to enter
 1492  into an annuity transaction that is not based on the agent’s
 1493  recommendation.
 1494         5. Any requirement applicable to an agent under this
 1495  subsection applies to every agent who has exercised material
 1496  control or influence in the making of a recommendation and has
 1497  received direct compensation as a result of the recommendation
 1498  or sale, regardless of whether the agent has had any direct
 1499  contact with the consumer. Activities such as providing or
 1500  delivering marketing or education materials, product wholesaling
 1501  or other back office product support, and general supervision of
 1502  an agent do not, in and of themselves, constitute material
 1503  control or influence.
 1504         3. The particular annuity as a whole, the underlying
 1505  subaccounts to which funds are allocated at the time of purchase
 1506  or exchange of the annuity, and riders and similar product
 1507  enhancements, if any, are suitable; and, in the case of an
 1508  exchange or replacement, the transaction as a whole is suitable
 1509  for the particular consumer based on his or her suitability
 1510  information.
 1511         4. In the case of an exchange or replacement of an annuity,
 1512  the exchange or replacement is suitable after considering
 1513  whether the consumer:
 1514         a. Will incur a surrender charge; be subject to the
 1515  commencement of a new surrender period; lose existing benefits,
 1516  such as death, living, or other contractual benefits; or be
 1517  subject to increased fees, investment advisory fees, or charges
 1518  for riders and similar product enhancements;
 1519         b. Would benefit from product enhancements and
 1520  improvements; and
 1521         c. Has had another annuity exchange or replacement,
 1522  including an exchange or replacement within the preceding 36
 1523  months.
 1524         (b) Before executing a purchase, exchange, or replacement
 1525  of an annuity resulting from a recommendation, an insurer or its
 1526  agent must make reasonable efforts to obtain the consumer’s
 1527  suitability information. The information shall be collected on
 1528  form DFS-H1-1980, which is hereby incorporated by reference, and
 1529  completed and signed by the applicant and agent. Questions
 1530  requesting this information must be presented in at least 12
 1531  point type and be sufficiently clear so as to be readily
 1532  understandable by both the agent and the consumer. A true and
 1533  correct executed copy of the form must be provided by the agent
 1534  to the insurer, or to the person or entity that has contracted
 1535  with the insurer to perform this function as authorized by this
 1536  section, within 10 days after execution of the form, and shall
 1537  be provided to the consumer no later than the date of delivery
 1538  of the contract or contracts.
 1539         (c) Except as provided under paragraph (d), an insurer may
 1540  not issue an annuity recommended to a consumer unless there is a
 1541  reasonable basis to believe the annuity is suitable based on the
 1542  consumer’s suitability information.
 1543         (b)1.(d)Except as provided under subparagraph 2., An
 1544  insurer’s issuance of an annuity must be reasonable based on all
 1545  the circumstances actually known to the insurer at the time the
 1546  annuity is issued. However, an insurer or its agent does not
 1547  have does not have an obligation to a consumer related to an
 1548  annuity transaction under subparagraph (a)1. paragraph (a) or
 1549  paragraph (c) if:
 1550         a.1. A recommendation has not been made;
 1551         b.2. A recommendation was made and is later found to have
 1552  been based on materially inaccurate information provided by the
 1553  consumer;
 1554         c.3. A consumer refuses to provide relevant consumer
 1555  profile suitability information and the annuity transaction is
 1556  not recommended; or
 1557         d.4. A consumer decides to enter into an annuity
 1558  transaction that is not based on a recommendation of the an
 1559  insurer or its agent.
 1560         2. An insurer’s issuance of an annuity subject to
 1561  subparagraph 1. must be reasonable under all the circumstances
 1562  actually known to the insurer at the time the annuity is issued.
 1563         (c)1. Except as permitted under paragraph (b), an insurer
 1564  may not issue an annuity recommended to a consumer unless there
 1565  is a reasonable basis to believe the annuity would effectively
 1566  address the particular consumer’s financial situation, insurance
 1567  needs, and financial objectives based on the consumer’s consumer
 1568  profile information.
 1569         (e) At the time of sale, the agent or the agent’s
 1570  representative must:
 1571         1. Make a record of any recommendation made to the consumer
 1572  pursuant to paragraph (a);
 1573         2. Obtain the consumer’s signed statement documenting his
 1574  or her refusal to provide suitability information, if
 1575  applicable; and
 1576         3. Obtain the consumer’s signed statement acknowledging
 1577  that an annuity transaction is not recommended if he or she
 1578  decides to enter into an annuity transaction that is not based
 1579  on the insurer’s or its agent’s recommendation, if applicable.
 1580         (f) Before executing a replacement or exchange of an
 1581  annuity contract resulting from a recommendation, the agent must
 1582  provide on form DFS-H1-1981, which is hereby incorporated by
 1583  reference, information that compares the differences between the
 1584  existing annuity contract and the annuity contract being
 1585  recommended in order to determine the suitability of the
 1586  recommendation and its benefit to the consumer. A true and
 1587  correct executed copy of this form must be provided by the agent
 1588  to the insurer, or to the person or entity that has contracted
 1589  with the insurer to perform this function as authorized by this
 1590  section, within 10 days after execution of the form, and must be
 1591  provided to the consumer no later than the date of delivery of
 1592  the contract or contracts.
 1593         2.(g) An insurer shall establish and maintain a supervision
 1594  system that is reasonably designed to achieve the insurer’s and
 1595  its agent’s compliance with this section, including, but not
 1596  limited to, the following:.
 1597         1. Such system must include, but is not limited to:
 1598         a. The insurer shall establish and maintain Maintaining
 1599  reasonable procedures to inform its agents of the requirements
 1600  of this section and incorporating those requirements into
 1601  relevant agent training manuals.;
 1602         b. The insurer shall establish and maintain Establishing
 1603  standards for agent product training and shall establish and
 1604  maintain reasonable procedures to require its agents to comply
 1605  with the requirements of subsection (6).;
 1606         c. The insurer shall provide Providing product-specific
 1607  training and training materials that explain all material
 1608  features of its annuity products to its agents.;
 1609         d. The insurer shall establish and maintain Maintaining
 1610  procedures for the review of each recommendation before issuance
 1611  of an annuity which are designed to ensure that there is a
 1612  reasonable basis to determine the recommended annuity would
 1613  effectively address the particular consumer’s financial
 1614  situation, insurance needs, and financial objectives for
 1615  determining that a recommendation is suitable. Such review
 1616  procedures may use a screening system for identifying selected
 1617  transactions for additional review and may be accomplished
 1618  electronically or through other means, including, but not
 1619  limited to, physical review. Such electronic or other system may
 1620  be designed to require additional review only of those
 1621  transactions identified for additional review using established
 1622  selection criteria.;
 1623         e. The insurer shall establish and maintain Maintaining
 1624  reasonable procedures to detect recommendations that are not in
 1625  compliance with paragraphs (a)-(e). This may include, but is not
 1626  limited to, suitable, such as confirmation of consumer profile
 1627  suitability information, systematic customer surveys, agent and
 1628  consumer interviews, confirmation letters, agent statements or
 1629  attestations, and internal monitoring programs. This sub
 1630  subparagraph does not prevent an insurer from using sampling
 1631  procedures or from confirming the consumer profile suitability
 1632  information after the issuance or delivery of the annuity.; and
 1633         f. The insurer shall establish and maintain reasonable
 1634  procedures to assess, prior to or upon issuance or delivery of
 1635  an annuity, whether an agent has provided to the consumer the
 1636  information required to be provided under this subsection.
 1637         g. The insurer shall establish and maintain reasonable
 1638  procedures to identify and address suspicious consumer refusals
 1639  to provide consumer profile information.
 1640         h. The insurer shall establish and maintain reasonable
 1641  procedures to identify and eliminate any sales contests, sales
 1642  quotas, bonuses, and noncash compensation that are based on the
 1643  sales of specific annuities within a limited period of time. The
 1644  requirements of this sub-subparagraph are not intended to
 1645  prohibit the receipt of health insurance, office rents, office
 1646  support, retirement benefits, or other employee benefits by
 1647  employees, as long as those benefits are not based upon the
 1648  volume of sales of a specific annuity within a limited period of
 1649  time.
 1650         i.f.The insurer shall annually provide providing a written
 1651  report to senior managers, including the senior manager who is
 1652  responsible for audit functions, which details a review, along
 1653  with appropriate testing, which is reasonably designed to
 1654  determine the effectiveness of the supervision system, the
 1655  exceptions found, and corrective action taken or recommended, if
 1656  any.
 1657         3.2. An insurer is not required to include in its
 1658  supervision system:
 1659         a. Agent recommendations to consumers of products other
 1660  than the annuities offered by the insurer; or
 1661         b. Consideration of or comparison to options available to
 1662  the agent or compensation relating to those options other than
 1663  annuities or other products offered by the insurer.
 1664         4.3. An insurer may contract for performance of a function,
 1665  including maintenance of procedures, required under subparagraph
 1666  1.
 1667         a. An insurer’s supervision system under this subsection
 1668  shall include supervision of contractual performance under this
 1669  subsection, which includes, but is If an insurer contracts for
 1670  the performance of a function, the insurer must include the
 1671  supervision of contractual performance as part of those
 1672  procedures listed in subparagraph 1. These include, but are not
 1673  limited to:
 1674         (I) Monitoring and, as appropriate, conducting audits to
 1675  ensure that the contracted function is properly performed; and
 1676         (II) Annually obtaining a certification from a senior
 1677  manager who has responsibility for the contracted function that
 1678  the manager has a reasonable basis to represent, and does
 1679  represent, for representing that the function is being properly
 1680  performed.
 1681         b. An insurer is responsible for taking appropriate
 1682  corrective action and may be subject to sanctions and penalties
 1683  pursuant to subsection (8) (7) regardless of whether the insurer
 1684  contracts for performance of a function and regardless of the
 1685  insurer’s compliance with sub-subparagraph a.
 1686         (d)(h)Neither an agent nor an insurer shall may not
 1687  dissuade, or attempt to dissuade, a consumer from:
 1688         1. Truthfully responding to an insurer’s request for
 1689  confirmation of consumer profile suitability information;
 1690         2. Filing a complaint; or
 1691         3. Cooperating with the investigation of a complaint.
 1692         (e)1.(i)Recommendations and sales made in compliance with
 1693  comparable standards shall FINRA requirements pertaining to the
 1694  suitability and supervision of annuity transactions satisfy the
 1695  requirements of this section. This applies to all
 1696  recommendations and FINRA broker-dealer sales of variable
 1697  annuities made by financial professionals in compliance with
 1698  business rules, controls, and procedures that satisfy a
 1699  comparable standard even if such standard would not otherwise
 1700  apply to the product or recommendation at issue and fixed
 1701  annuities if the suitability and supervision is similar to those
 1702  applied to variable annuity sales. However, this paragraph does
 1703  not limit the ability of the office or the department to
 1704  investigate and enforce, including investigate, the provisions
 1705  of this section.
 1706         2. Subparagraph 1. does not limit the insurer’s obligation
 1707  to comply with subparagraph (c)1., although the insurer may base
 1708  its analysis on information received from either the financial
 1709  professional or the entity supervising the financial
 1710  professional.
 1711         3. For subparagraph 1. this paragraph to apply, an insurer
 1712  must:
 1713         a.1. Monitor relevant conduct of the financial professional
 1714  seeking to rely on subparagraph 1. or the entity responsible for
 1715  supervising the financial professional, such as the financial
 1716  professional’s broker-dealer or an investment adviser registered
 1717  under federal or state securities law, the FINRA member broker
 1718  dealer using information collected in the normal course of an
 1719  insurer’s business; and
 1720         b.2. Provide to the entity responsible for supervising the
 1721  financial professional seeking to rely on subparagraph 1., such
 1722  as the financial professional’s broker-dealer or investment
 1723  adviser registered under federal or state securities laws, FINRA
 1724  member broker-dealer information and reports that are reasonably
 1725  appropriate to assist such entity the FINRA member broker-dealer
 1726  in maintaining its supervision system.
 1727         4. For purposes of this paragraph, the term:
 1728         a. “Comparable standards” means:
 1729         (I) With respect to broker-dealers and registered
 1730  representatives of broker-dealers, applicable SEC and FINRA
 1731  rules pertaining to best interest obligations and supervision of
 1732  annuity recommendations and sales, including, but not limited
 1733  to, Regulation Best Interest, 17 C.F.R. s. 240.15l–1, and any
 1734  amendments or successor regulations thereto;
 1735         (II) With respect to investment advisers registered under
 1736  federal or state securities laws or investment adviser
 1737  representatives, the fiduciary duties and all other requirements
 1738  imposed on such investment advisers or investment adviser
 1739  representatives by contract or under the Investment Advisers Act
 1740  of 1940 or applicable state securities laws, including, but not
 1741  limited to, Form ADV and interpretations; and
 1742         (III) With respect to plan fiduciaries or fiduciaries, the
 1743  duties, obligations, prohibitions, and all other requirements
 1744  attendant to such status under the Employee Retirement Income
 1745  Security Act of 1974 or the Internal Revenue Code and any
 1746  amendments or successor statutes thereto.
 1747         b. “Financial professional” means an agent that is
 1748  regulated and acting as:
 1749         (I) A broker-dealer registered under federal or state
 1750  securities laws or a registered representative of a broker
 1751  dealer;
 1752         (II) An investment adviser registered under federal or
 1753  state securities laws or an investment adviser representative
 1754  associated with the federal or state registered investment
 1755  adviser; or
 1756         (III) A plan fiduciary under s. 3(21) of the Employee
 1757  Retirement Income Security Act of 1974 or fiduciary under s.
 1758  4975(e)(3) of the Internal Revenue Code or any amendments or
 1759  successor statutes thereto.
 1760         (6) AGENT TRAINING.—
 1761         (a) An agent shall not solicit the sale of an annuity
 1762  product unless the agent has adequate knowledge of the product
 1763  to recommend the annuity and the agent is in compliance with the
 1764  insurer’s standards for product training. An agent may rely on
 1765  insurer-provided, product-specific training standards and
 1766  materials to comply with this subsection.
 1767         (b)1.a. An agent who engages in the sale of annuity
 1768  products shall complete a one-time 4-hour training course. This
 1769  requirement is not part of an agent’s continuing education
 1770  requirement in s. 626.2815; however, if a course provider
 1771  submits and receives approval from the department, the course is
 1772  eligible for continuing education credit pursuant to s.
 1773  626.2815.
 1774         b. Agents who hold a life insurance line of authority on
 1775  January 1, 2024, and who desire to sell annuities shall complete
 1776  the requirements of this subsection by July 1, 2024. Individuals
 1777  who obtain a life insurance line of authority after January 1,
 1778  2024, may not engage in the sale of annuities until the annuity
 1779  training course required under this subsection has been
 1780  completed.
 1781         2. The minimum length of the training required under this
 1782  subsection is 4 hours.
 1783         3. The training required under this subsection shall
 1784  include information on the following topics:
 1785         a. The types of annuities and various classifications of
 1786  annuities.
 1787         b. Identification of the parties to an annuity.
 1788         c. How product-specific annuity contract features affect
 1789  consumers.
 1790         d. The application of income taxation of qualified and
 1791  nonqualified annuities.
 1792         e.The primary uses of annuities.
 1793         f. The appropriate standard of conduct, sales practices,
 1794  replacement, and disclosure requirements.
 1795         4. Providers of courses intended to comply with this
 1796  subsection shall cover all topics listed in the prescribed
 1797  outline and shall not present any marketing information or
 1798  provide training on sales techniques or provide specific
 1799  information about a particular insurer’s products. Additional
 1800  topics may be offered in conjunction with and in addition to the
 1801  required outline.
 1802         5. An agent who has completed an annuity training course
 1803  before January 1, 2024, shall, by July 1, 2024, complete either:
 1804         a. A new 4-hour training course; or
 1805         b. An additional 1-hour training course on appropriate
 1806  sales practices, replacement, and disclosure requirements under
 1807  this section.
 1808         6. Annuity training courses may be conducted and completed
 1809  by classroom or self-study methods.
 1810         7. Providers of annuity training shall issue certificates
 1811  of completion.
 1812         8. The satisfaction of the training requirements of another
 1813  state that are substantially similar to the provisions of this
 1814  subsection shall be deemed to satisfy the training requirements
 1815  of this subsection in this state.
 1816         9. The satisfaction of the training requirements of any
 1817  course or courses with components substantially similar to the
 1818  provisions of this subsection shall be deemed to satisfy the
 1819  training requirements of this subsection in this state.
 1820         10. An insurer shall verify that an agent has completed the
 1821  annuity training course required under this subsection before
 1822  allowing the agent to sell an annuity product for that insurer.
 1823         (7)(6) RECORDKEEPING.—
 1824         (a) Insurers and agents must maintain or be able to make
 1825  available to the office or department records of the information
 1826  collected from the consumer and other information used in making
 1827  the recommendations that were the basis for insurance
 1828  transactions for 5 years after the insurance transaction is
 1829  completed by the insurer. An insurer may maintain the
 1830  documentation on behalf of its agent.
 1831         (b) Records required to be maintained under this subsection
 1832  may be maintained in paper, photographic, microprocess,
 1833  magnetic, mechanical, or electronic media, or by any process
 1834  that accurately reproduces the actual document.
 1835         (8)(7) COMPLIANCE MITIGATION; PENALTIES.—
 1836         (a) An insurer is responsible for compliance with this
 1837  section. If a violation occurs because of the action or inaction
 1838  of the insurer or its agent which results in harm to a consumer,
 1839  the office may order the insurer to take reasonably appropriate
 1840  corrective action for the consumer and may impose appropriate
 1841  penalties and sanctions.
 1842         (b) The department may order:
 1843         1. An insurance agent to take reasonably appropriate
 1844  corrective action for a consumer harmed by a violation of this
 1845  section by the insurance agent, including monetary restitution
 1846  of penalties or fees incurred by the consumer, and impose
 1847  appropriate penalties and sanctions.
 1848         2. A managing general agency or insurance agency that
 1849  employs or contracts with an insurance agent to sell or solicit
 1850  the sale of annuities to consumers to take reasonably
 1851  appropriate corrective action for a consumer harmed by a
 1852  violation of this section by the insurance agent.
 1853         (c) In addition to any other penalty authorized under
 1854  chapter 626, the department shall order an insurance agent to
 1855  pay restitution to a consumer who has been deprived of money by
 1856  the agent’s misappropriation, conversion, or unlawful
 1857  withholding of moneys belonging to the consumer in the course of
 1858  a transaction involving annuities. The amount of restitution
 1859  required to be paid may not exceed the amount misappropriated,
 1860  converted, or unlawfully withheld. This paragraph does not limit
 1861  or restrict a person’s right to seek other remedies as provided
 1862  by law.
 1863         (d) Any applicable penalty under the Florida Insurance Code
 1864  for a violation of this section shall be reduced or eliminated
 1865  according to a schedule adopted by the office or the department,
 1866  as appropriate, if corrective action for the consumer was taken
 1867  promptly after a violation was discovered.
 1868         (e) A violation of this section does not create or imply a
 1869  private cause of action.
 1870         (9)(8) PROHIBITED CHARGES.—An annuity contract issued to a
 1871  senior consumer age 65 or older may not contain a surrender or
 1872  deferred sales charge for a withdrawal of money from an annuity
 1873  exceeding 10 percent of the amount withdrawn. The charge shall
 1874  be reduced so that no surrender or deferred sales charge exists
 1875  after the end of the 10th policy year or 10 years after the date
 1876  of each premium payment if multiple premiums are paid, whichever
 1877  is later. This subsection does not apply to annuities purchased
 1878  by an accredited investor, as defined in Regulation D as adopted
 1879  by the United States Securities and Exchange Commission, or to
 1880  those annuities specified in paragraph (4)(b).
 1881         (10)(9) RULES.—The department and the commission may adopt
 1882  rules to administer this section. The department may adopt by
 1883  rule the forms prescribed in the National Association of
 1884  Insurance Commissioners Suitability in Annuity Transactions
 1885  Model Regulation Appendix A - Insurance Agent (Producer)
 1886  Disclosure for Annuities, Appendix B - Consumer Refusal to
 1887  Provide Information, and Appendix C - Consumer Decision to
 1888  Purchase an Annuity Not Based on a Recommendation.
 1889         Section 18. Paragraph (b) of subsection (8) of section
 1890  634.041, Florida Statutes, is amended to read:
 1891         634.041 Qualifications for license.—To qualify for and hold
 1892  a license to issue service agreements in this state, a service
 1893  agreement company must be in compliance with this part, with
 1894  applicable rules of the commission, with related sections of the
 1895  Florida Insurance Code, and with its charter powers and must
 1896  comply with the following:
 1897         (8)
 1898         (b) A service agreement company does not have to establish
 1899  and maintain an unearned premium reserve if it secures and
 1900  maintains contractual liability insurance in accordance with the
 1901  following:
 1902         1. Coverage of 100 percent of the claim exposure is
 1903  obtained from an insurer approved by the office, which holds a
 1904  certificate of authority under s. 624.401 to do business within
 1905  this state, or secured through a risk retention group, which is
 1906  authorized to do business within this state under s. 627.943 or
 1907  s. 627.944. Such insurer or risk retention group must maintain a
 1908  surplus as regards policyholders of at least $15 million.
 1909         2. If the service agreement company does not meet its
 1910  contractual obligations, the contractual liability insurance
 1911  policy binds its issuer to pay or cause to be paid to the
 1912  service agreement holder all legitimate claims and cancellation
 1913  refunds for all service agreements issued by the service
 1914  agreement company while the policy was in effect. This
 1915  requirement also applies to those service agreements for which
 1916  no premium has been remitted to the insurer.
 1917         3. If the issuer of the contractual liability policy is
 1918  fulfilling the service agreements covered by the contractual
 1919  liability policy and the service agreement holder cancels the
 1920  service agreement, the issuer must make a full refund of
 1921  unearned premium to the consumer, subject to the cancellation
 1922  fee provisions of s. 634.121(3). The sales representative and
 1923  agent must refund to the contractual liability policy issuer
 1924  their unearned pro rata commission.
 1925         4. The policy may not be canceled, terminated, or
 1926  nonrenewed by the insurer or the service agreement company
 1927  unless a 90-day written notice thereof has been given to the
 1928  office by the insurer before the date of the cancellation,
 1929  termination, or nonrenewal.
 1930         5. The service agreement company must provide the office
 1931  with the claims statistics.
 1932         6. A policy issued in compliance with this paragraph may
 1933  either pay 100 percent of claims as they are incurred, or 100
 1934  percent of claims due in the event of the failure of the service
 1935  agreement company to pay such claims when due.
 1936  
 1937  All funds or premiums remitted to an insurer by a motor vehicle
 1938  service agreement company under this part shall remain in the
 1939  care, custody, and control of the insurer and shall be counted
 1940  as an asset of the insurer; provided, however, this requirement
 1941  does not apply when the insurer and the motor vehicle service
 1942  agreement company are affiliated companies and members of an
 1943  insurance holding company system. If the motor vehicle service
 1944  agreement company chooses to comply with this paragraph but also
 1945  maintains a reserve to pay claims, such reserve shall only be
 1946  considered an asset of the covered motor vehicle service
 1947  agreement company and may not be simultaneously counted as an
 1948  asset of any other entity.
 1949         Section 19. Paragraphs (d), (e), and (f) of subsection (17)
 1950  of section 634.401, Florida Statutes, are amended to read:
 1951         634.401 Definitions.—As used in this part, the term:
 1952         (17) “Manufacturer” means any entity or its affiliate
 1953  which:
 1954         (d)Maintains outstanding debt obligations, if any, rated
 1955  in the top four rating categories by a recognized rating
 1956  service;
 1957         (d)(e) Has and maintains at all times, a minimum net worth
 1958  of at least $100 $10 million as evidenced by certified financial
 1959  statements prepared by an independent certified public
 1960  accountant in accordance with generally accepted accounting
 1961  principles; and
 1962         (e)(f) Is authorized to do business in this state.
 1963         Section 20. Paragraph (a) of subsection (7) of section
 1964  634.406, Florida Statutes, is amended to read:
 1965         634.406 Financial requirements.—
 1966         (7) An association licensed under this part and holding no
 1967  other license under part I or part II of this chapter is not
 1968  required to establish an unearned premium reserve or maintain
 1969  contractual liability insurance and may allow its premiums to
 1970  exceed the ratio to net assets limitation of this section if the
 1971  association complies with the following:
 1972         (a) The association or, if the association is a direct or
 1973  indirect wholly owned subsidiary of a parent corporation, its
 1974  parent corporation has, and maintains at all times, a minimum
 1975  net worth of at least $100 million and provides the office with
 1976  the following:
 1977         1. A copy of the association’s annual audited financial
 1978  statements or the audited consolidated financial statements of
 1979  the association’s parent corporation, prepared by an independent
 1980  certified public accountant in accordance with generally
 1981  accepted accounting principles, which clearly demonstrate the
 1982  net worth of the association or its parent corporation to be
 1983  $100 million and a quarterly written certification to the office
 1984  that such entity continues to maintain the net worth required
 1985  under this paragraph.
 1986         2. The association’s, or its parent corporation’s, Form 10
 1987  K, Form 10-Q, or Form 20-F as filed with the United States
 1988  Securities and Exchange Commission or such other documents
 1989  required to be filed with a recognized stock exchange, which
 1990  shall be provided on a quarterly and annual basis within 10 days
 1991  after the last date each such report must be filed with the
 1992  Securities and Exchange Commission, the National Association of
 1993  Security Dealers Automated Quotation system, or other recognized
 1994  stock exchange.
 1995  
 1996  Failure to timely file the documents required under this
 1997  paragraph may, at the discretion of the office, subject the
 1998  association to suspension or revocation of its license under
 1999  this part. An association or parent corporation demonstrating
 2000  compliance with subparagraphs 1. and 2. must maintain
 2001  outstanding debt obligations, if any, rated in the top four
 2002  rating categories by a recognized rating service.
 2003         Section 21. Except as otherwise expressly provided in this
 2004  act, this act shall take effect July 1, 2023.

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