Bill Text: FL S1620 | 2012 | Regular Session | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Insurance
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2012-03-08 - Laid on Table, refer to CS/CS/HB 1101 -SJ 1040 [S1620 Detail]
Download: Florida-2012-S1620-Comm_Sub.html
Bill Title: Insurance
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2012-03-08 - Laid on Table, refer to CS/CS/HB 1101 -SJ 1040 [S1620 Detail]
Download: Florida-2012-S1620-Comm_Sub.html
Florida Senate - 2012 CS for SB 1620 By the Committee on Banking and Insurance; and Senator Richter 597-02859-12 20121620c1 1 A bill to be entitled 2 An act relating to insurance; amending s. 320.27, 3 F.S.; providing that a salvage motor vehicle dealer is 4 not required to carry certain insurance on vehicles 5 that have been issued a certificate of destruction; 6 amending s. 624.501, F.S.; conforming a cross 7 reference; amending s. 624.610, F.S.; revising 8 provisions specifying which insurers are not subject 9 to certain filing requirements relating to 10 reinsurance; amending s. 626.261, F.S.; authorizing 11 the Department of Financial Services to provide 12 examinations in Spanish; amending s. 626.321, F.S.; 13 revising provisions relating to limited licenses for 14 travel insurance; providing that a full-time salaried 15 employee of a licensed general lines agent or a 16 business entity that offers travel planning services 17 may be issued such license under certain 18 circumstances; amending s. 626.753, F.S., relating to 19 the sharing of commissions; prohibiting certain 20 rebates; creating s. 626.8675, F.S.; providing that 21 provisions relating to insurance adjusters do not 22 apply to individuals who conduct data entry into an 23 automated claims adjustment system for portable 24 electronics insurance claims; amending s. 627.351, 25 F.S.; increasing the amount of surplus required for an 26 association to qualify as a limited apportionment 27 company; creating s. 627.6011, F.S.; providing that 28 mandatory health benefits apply only to certain health 29 benefit plans; amending s. 627.7015, F.S.; revising 30 provisions relating to alternative procedures for the 31 resolution of disputed property insurance claims; 32 amending s. 627.7295, F.S.; revising provisions 33 relating to cancellation for nonpayment of premiums 34 for motor vehicle insurance; amending s. 627.736, 35 F.S.; clarifying provisions relating to the amount of 36 interest on overdue payments for personal injury 37 protection benefits; providing effective dates. 38 39 Be It Enacted by the Legislature of the State of Florida: 40 41 Section 1. Subsection (3) of section 320.27, Florida 42 Statutes, is amended to read: 43 320.27 Motor vehicle dealers.— 44 (3) APPLICATION AND FEE.—The application for the license 45 shall be in such form as may be prescribed by the department and 46 shall be subject to such rules with respect thereto as may be so 47 prescribed by it. Such application shall be verified by oath or 48 affirmation and shall contain a full statement of the name and 49 birth date of the person or persons applying therefor; the name 50 of the firm or copartnership, with the names and places of 51 residence of all members thereof, if such applicant is a firm or 52 copartnership; the names and places of residence of the 53 principal officers, if the applicant is a body corporate or 54 other artificial body; the name of the state under whose laws 55 the corporation is organized; the present and former place or 56 places of residence of the applicant; and prior business in 57 which the applicant has been engaged and the location thereof. 58 Such application shall describe the exact location of the place 59 of business and shall state whether the place of business is 60 owned by the applicant and when acquired, or, if leased, a true 61 copy of the lease shall be attached to the application. The 62 applicant shall certify that the location provides an adequately 63 equipped office and is not a residence; that the location 64 affords sufficient unoccupied space upon and within which 65 adequately to store all motor vehicles offered and displayed for 66 sale; and that the location is a suitable place where the 67 applicant can in good faith carry on such business and keep and 68 maintain books, records, and files necessary to conduct such 69 business, which will be available at all reasonable hours to 70 inspection by the department or any of its inspectors or other 71 employees. The applicant shall certify that the business of a 72 motor vehicle dealer is the principal business which shall be 73 conducted at that location. Such application shall contain a 74 statement that the applicant is either franchised by a 75 manufacturer of motor vehicles, in which case the name of each 76 motor vehicle that the applicant is franchised to sell shall be 77 included, or an independent (nonfranchised) motor vehicle 78 dealer. Such application shall contain such other relevant 79 information as may be required by the department, including 80 evidence that the applicant is insured under a garage liability 81 insurance policy or a general liability insurance policy coupled 82 with a business automobile policy, which shall include, at a 83 minimum, $25,000 combined single-limit liability coverage 84 including bodily injury and property damage protection and 85 $10,000 personal injury protection. However, a salvage motor 86 vehicle dealer as defined in subparagraph (1)(c)5. is exempt 87 from the requirements for garage liability insurance and 88 personal injury protection insurance on those vehicles that have 89 been issued a certificate of destruction and cannot be operated 90 legally on state roads, highways, or streets. Franchise dealers 91 must submit a garage liability insurance policy, and all other 92 dealers must submit a garage liability insurance policy or a 93 general liability insurance policy coupled with a business 94 automobile policy. Such policy shall be for the license period, 95 and evidence of a new or continued policy shall be delivered to 96 the department at the beginning of each license period. Upon 97 making initial application, the applicant shall pay to the 98 department a fee of $300 in addition to any other fees now 99 required by law; upon making a subsequent renewal application, 100 the applicant shall pay to the department a fee of $75 in 101 addition to any other fees now required by law. Upon making an 102 application for a change of location, the person shall pay a fee 103 of $50 in addition to any other fees now required by law. The 104 department shall, in the case of every application for initial 105 licensure, verify whether certain facts set forth in the 106 application are true. Each applicant, general partner in the 107 case of a partnership, or corporate officer and director in the 108 case of a corporate applicant, must file a set of fingerprints 109 with the department for the purpose of determining any prior 110 criminal record or any outstanding warrants. The department 111 shall submit the fingerprints to the Department of Law 112 Enforcement for state processing and forwarding to the Federal 113 Bureau of Investigation for federal processing. The actual cost 114 of state and federal processing shall be borne by the applicant 115 and is in addition to the fee for licensure. The department may 116 issue a license to an applicant pending the results of the 117 fingerprint investigation, which license is fully revocable if 118 the department subsequently determines that any facts set forth 119 in the application are not true or correctly represented. 120 Section 2. Paragraph (b) of subsection (9) of section 121 624.501, Florida Statutes, is amended to read: 122 624.501 Filing, license, appointment, and miscellaneous 123 fees.—The department, commission, or office, as appropriate, 124 shall collect in advance, and persons so served shall pay to it 125 in advance, fees, licenses, and miscellaneous charges as 126 follows: 127 (9) 128 (b) For all limited appointments as agent, as providedfor129 in s. 626.321(1)(c) and (d)626.321(1)(d), the agent’s original 130 appointment and biennial renewal or continuation thereof for 131 each insurer isshall beequal to the number of offices, branch 132 offices, or places of business covered by the license multiplied 133 by the fees set forth in paragraph (a). 134 Section 3. Paragraph (c) of subsection (11) of section 135 624.610, Florida Statutes, is amended to read: 136 624.610 Reinsurance.— 137 (11) 138 (c) This subsection applies to cessions of directly written 139 risk or loss. This subsection does not apply to contracts of 140 facultative reinsurance or to any ceding insurer that has awith141 surplus as to policyholders whichthatexceeds $100 million as 142 of the immediately preceding December 31. AAdditionally, any143 ceding insurer otherwise subject to this section which hadwith144 less than $500,000 in direct premiums written in this state 145 during the preceding calendar year and no more than $250,000 in 146 direct premiums written in this state during the preceding 147 calendar quarter, or which had fewerwithlessthan 1,000 148 policyholders at the end of the preceding calendar year, is 149 exempt fromthe requirements ofthis subsection.However, any150ceding insurer otherwise subject to this section with more than151$250,000 in direct premiums written in this state during the152preceding calendar quarter is not exempt from the requirements153of this subsection.154 Section 4. Subsection (5) is added to section 626.261, 155 Florida Statutes, to read: 156 626.261 Conduct of examination.— 157 (5) The department may provide licensure examinations in 158 Spanish. Applicants requesting examination or reexamination in 159 Spanish must bear the full cost of the department’s development, 160 preparation, administration, grading, and evaluation of the 161 Spanish-language examination. When determining whether it is in 162 the public interest to allow the examination to be translated 163 into and administered in Spanish, the department shall consider 164 the percentage of the population who speak Spanish. 165 Section 5. Paragraph (c) of subsection (1) of section 166 626.321, Florida Statutes, is amended to read: 167 626.321 Limited licenses.— 168 (1) The department shall issue to a qualified individual, 169 or a qualified individual or entity under paragraphs (c), (d), 170 (e), and (i), a license as agent authorized to transact a 171 limited class of business in any of the following categories: 172 (c) Travel insurance.—License covering only policies and 173 certificates of travel insurance, which are subject to review by 174 the officeunder s.624.605(1)(q). Policies and certificates of 175 travel insurance may provide coverage for risks incidental to 176 travel, planned travel, or accommodations while traveling, 177 including, but not limited to, accidental death and 178 dismemberment of a traveler; trip or event cancellation, 179 interruption, or delay; loss of or damage to personal effects or 180 travel documents; damages to travel accommodations; baggage 181 delay; emergency medical travel or evacuation of a traveler; or 182 medical, surgical, and hospital expenses related to an illness 183 or emergency of a traveler.AnySuch policy or certificate may 184 be issued for terms longer than 9060days, buteach policy or185certificate, other than a policy or certificate providing 186 coverage for air ambulatory services only, each policy or 187 certificate must be limited to coverage for travel or use of 188 accommodations of no longer than 9060days. The license may be 189 issued only: 190 1. To a full-time salaried employee of a common carrier or 191 a full-time salaried employee or owner of a transportation 192 ticket agency and may authorize the sale of such ticket policies 193 only in connection with the sale of transportation tickets, or 194 to the full-time salaried employee of such an agent.NoSuch 195 policy may notshallbe fora duration ofmore than 48 hours or 196 more thanforthe duration of a specified one-way trip or round 197 trip. 198 2. To an entity or individual that is: 199 a. The developer of a timeshare plan that is the subject of 200 an approved public offering statement under chapter 721; 201 b. An exchange company operating an exchange program 202 approved under chapter 721; 203 c. A managing entity operating a timeshare plan approved 204 under chapter 721; 205 d. A seller of travel as defined in chapter 559; or 206 e. A subsidiary or affiliate of any of the entities 207 described in sub-subparagraphs a.-d. 208 3. To a full-time salaried employee of a licensed general 209 lines agent or to a business entity that offers travel planning 210 services if insurance sales activities authorized by the license 211 are in connection with, and incidental to, travel. 212 a. A license issued to a business entity that offers travel 213 planning services must encompass each office, branch office, or 214 place of business making use of the entity’s business name in 215 order to offer, solicit, and sell insurance pursuant to this 216 paragraph. 217 b. The application for licensure must list the name, 218 address, and phone number for each office, branch office, or 219 place of business that is to be covered by the license. The 220 licensee shall notify the department of the name, address, and 221 phone number of any new location that is to be covered by the 222 license before the new office, branch office, or place of 223 business engages in the sale of insurance pursuant to this 224 paragraph. The licensee shall notify the department within 30 225 days after the closing or terminating of an office, branch 226 office, or place of business. Upon receipt of the notice, the 227 department shall delete the office, branch office, or place of 228 business from the license. 229 c. A licensed and appointed entity is directly responsible 230 and accountable for all acts of the licensee’s employees and 231 parties with whom the licensee has entered into a contractual 232 agreement to offer travel insurance. 233 234 A licensee shall require each individualemployeewho offers 235 policies or certificates under subparagraph 2. or subparagraph 236 3.this subparagraphto receive initial training from a general 237 lines agent or an insurer authorized under chapter 624 to 238 transact insurance within this state. For an entity applying for 239 a license as a travel insurance agent, the fingerprinting 240 requirement of this section applies only to the president, 241 secretary, and treasurer and to any other officer or person who 242 directs or controls the travel insurance operations of the 243 entity. 244 Section 6. Present subsection (4) of section 626.753, 245 Florida Statutes, is renumbered as subsection (6), and new 246 subsections (4) and (5) are added to that section to read: 247 626.753 Sharing commissions; penalty.— 248 (4) Any patronage dividend or other payment, discount, or 249 credit provided to a member of a production credit association 250 or federal land bank association which is directly or indirectly 251 calculated on the basis of the premium charged to that member 252 for crop hail or multiple-peril crop insurance is an unlawful 253 rebate in violation of ss. 626.572 and 626.9541(1)(h). 254 (5) An agent who engages in commission sharing with a 255 production credit association or federal land bank association, 256 and who has knowledge that the association provides patronage 257 dividends or other payments, discounts, or credits that 258 constitute unlawful rebates as described in subsection (4), is 259 participating in a violation of this section. 260 Section 7. Section 626.8675, Florida Statutes, is created 261 to read: 262 626.8675 Portable electronics insurance claims employee 263 exemption.— 264 (1) This part does not apply to individuals who collect 265 claims information from, or furnish claims information to, 266 insureds or claimants, and who conduct data entry, including 267 entering data into an automated claims adjudication system, if 268 such individuals are employees of a business entity licensed 269 under this chapter, or its affiliate, where up to 25 such 270 individuals are under the supervision of a licensed independent 271 adjuster or licensed agent who is exempt from licensure pursuant 272 to s. 626.862. For purposes of this section, “automated claims 273 adjudication system” means a preprogrammed computer system 274 designed for the collection, data entry, calculation, and final 275 resolution of portable electronics insurance claims that: 276 (a) May be used only by a licensed independent adjuster, 277 licensed agent, or supervised individual operating pursuant to 278 this section; 279 (b) Must comply with all claims payment requirements of the 280 insurance code; and 281 (c) Must be certified as compliant with this section by a 282 licensed independent adjuster who is an officer of a licensed 283 business entity under this chapter. 284 (2) Notwithstanding any other provision of law, a resident 285 of Canada may not be licensed as a nonresident independent 286 adjuster for purposes of adjusting portable electronics 287 insurance claims unless that person has successfully obtained an 288 adjuster license in another state. 289 Section 8. Paragraph (b) of subsection (2) of section 290 627.351, Florida Statutes, is amended to read: 291 627.351 Insurance risk apportionment plans.— 292 (2) WINDSTORM INSURANCE RISK APPORTIONMENT.— 293 (b) The department shall require all insurers holding a 294 certificate of authority to transact property insurance on a 295 direct basis in this state, other than joint underwriting 296 associations and other entities formed pursuant to this section, 297 to provide windstorm coverage to applicants from areas 298 determined to be eligible pursuant to paragraph (c) who in good 299 faith are entitled to, but are unable to procure, such coverage 300 through ordinary means; or it shall adopt a reasonable plan or 301 plans for the equitable apportionment or sharing among such 302 insurers of windstorm coverage, which may include formation of 303 an association for this purpose. As used in this subsection, the 304 term “property insurance” means insurance on real or personal 305 property, as defined in s. 624.604, including insurance for 306 fire, industrial fire, allied lines, farmowners multiperil, 307 homeowners’ multiperil, commercial multiperil, and mobile homes, 308 and including liability coverages on all such insurance, but 309 excluding inland marine as defined in s. 624.607(3) and 310 excluding vehicle insurance as defined in s. 624.605(1)(a) other 311 than insurance on mobile homes used as permanent dwellings. The 312 department shall adopt rules that provide a formula for the 313 recovery and repayment of any deferred assessments. 314 1. For the purpose of this section, properties eligible for 315 such windstorm coverage are defined as dwellings, buildings, and 316 other structures, including mobile homes which are used as 317 dwellings and which are tied down in compliance with mobile home 318 tie-down requirements prescribed by the Department of Highway 319 Safety and Motor Vehicles pursuant to s. 320.8325, and the 320 contents of all such properties. An applicant or policyholder is 321 eligible for coverage only if an offer of coverage cannot be 322 obtained by or for the applicant or policyholder from an 323 admitted insurer at approved rates. 324 2.a.(I) All insurers required to be members of such 325 association shall participate in its writings, expenses, and 326 losses. Surplus of the association shall be retained for the 327 payment of claims and shall not be distributed to the member 328 insurers. Such participation by member insurers shall be in the 329 proportion that the net direct premiums of each member insurer 330 written for property insurance in this state during the 331 preceding calendar year bear to the aggregate net direct 332 premiums for property insurance of all member insurers, as 333 reduced by any credits for voluntary writings, in this state 334 during the preceding calendar year. For the purposes of this 335 subsection, the term “net direct premiums” means direct written 336 premiums for property insurance, reduced by premium for 337 liability coverage and for the following if included in allied 338 lines: rain and hail on growing crops; livestock; association 339 direct premiums booked; National Flood Insurance Program direct 340 premiums; and similar deductions specifically authorized by the 341 plan of operation and approved by the department. A member’s 342 participation shall begin on the first day of the calendar year 343 following the year in which it is issued a certificate of 344 authority to transact property insurance in the state and shall 345 terminate 1 year after the end of the calendar year during which 346 it no longer holds a certificate of authority to transact 347 property insurance in the state. The commissioner, after review 348 of annual statements, other reports, and any other statistics 349 that the commissioner deems necessary, shall certify to the 350 association the aggregate direct premiums written for property 351 insurance in this state by all member insurers. 352 (II) Effective July 1, 2002, the association shall operate 353 subject to the supervision and approval of a board of governors 354 who are the same individuals that have been appointed by the 355 Treasurer to serve on the board of governors of the Citizens 356 Property Insurance Corporation. 357 (III) The plan of operation shall provide a formula whereby 358 a company voluntarily providing windstorm coverage in affected 359 areas will be relieved wholly or partially from apportionment of 360 a regular assessment pursuant to sub-sub-subparagraph d.(I) or 361 sub-sub-subparagraph d.(II). 362 (IV) A company which is a member of a group of companies 363 under common management may elect to have its credits applied on 364 a group basis, and any company or group may elect to have its 365 credits applied to any other company or group. 366 (V) There shall be no credits or relief from apportionment 367 to a company for emergency assessments collected from its 368 policyholders under sub-sub-subparagraph d.(III). 369 (VI) The plan of operation may also provide for the award 370 of credits, for a period not to exceed 3 years, from a regular 371 assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub 372 subparagraph d.(II) as an incentive for taking policies out of 373 the Residential Property and Casualty Joint Underwriting 374 Association. In order to qualify for the exemption under this 375 sub-sub-subparagraph, the take-out plan must provide that at 376 least 40 percent of the policies removed from the Residential 377 Property and Casualty Joint Underwriting Association cover risks 378 located in Miami-Dade, Broward, and Palm Beach Counties or at 379 least 30 percent of the policies so removed cover risks located 380 in Miami-Dade, Broward, and Palm Beach Counties and an 381 additional 50 percent of the policies so removed cover risks 382 located in other coastal counties, and must also provide that no 383 more than 15 percent of the policies so removed may exclude 384 windstorm coverage. With the approval of the department, the 385 association may waive these geographic criteria for a take-out 386 plan that removes at least the lesser of 100,000 Residential 387 Property and Casualty Joint Underwriting Association policies or 388 15 percent of the total number of Residential Property and 389 Casualty Joint Underwriting Association policies, provided the 390 governing board of the Residential Property and Casualty Joint 391 Underwriting Association certifies that the take-out plan will 392 materially reduce the Residential Property and Casualty Joint 393 Underwriting Association’s 100-year probable maximum loss from 394 hurricanes. With the approval of the department, the board may 395 extend such credits for an additional year if the insurer 396 guarantees an additional year of renewability for all policies 397 removed from the Residential Property and Casualty Joint 398 Underwriting Association, or for 2 additional years if the 399 insurer guarantees 2 additional years of renewability for all 400 policies removed from the Residential Property and Casualty 401 Joint Underwriting Association. 402 b. Assessments to pay deficits in the association under 403 this subparagraph shall be included as an appropriate factor in 404 the making of rates as provided in s. 627.3512. 405 c. The Legislature finds that the potential for unlimited 406 deficit assessments under this subparagraph may induce insurers 407 to attempt to reduce their writings in the voluntary market, and 408 that such actions would worsen the availability problems that 409 the association was created to remedy. It is the intent of the 410 Legislature that insurers remain fully responsible for paying 411 regular assessments and collecting emergency assessments for any 412 deficits of the association; however, it is also the intent of 413 the Legislature to provide a means by which assessment 414 liabilities may be amortized over a period of years. 415 d.(I) When the deficit incurred in a particular calendar 416 year is 10 percent or less of the aggregate statewide direct 417 written premium for property insurance for the prior calendar 418 year for all member insurers, the association shall levy an 419 assessment on member insurers in an amount equal to the deficit. 420 (II) When the deficit incurred in a particular calendar 421 year exceeds 10 percent of the aggregate statewide direct 422 written premium for property insurance for the prior calendar 423 year for all member insurers, the association shall levy an 424 assessment on member insurers in an amount equal to the greater 425 of 10 percent of the deficit or 10 percent of the aggregate 426 statewide direct written premium for property insurance for the 427 prior calendar year for member insurers. Any remaining deficit 428 shall be recovered through emergency assessments under sub-sub 429 subparagraph (III). 430 (III) Upon a determination by the board of directors that a 431 deficit exceeds the amount that will be recovered through 432 regular assessments on member insurers, pursuant to sub-sub 433 subparagraph (I) or sub-sub-subparagraph (II), the board shall 434 levy, after verification by the department, emergency 435 assessments to be collected by member insurers and by 436 underwriting associations created pursuant to this section which 437 write property insurance, upon issuance or renewal of property 438 insurance policies other than National Flood Insurance policies 439 in the year or years following levy of the regular assessments. 440 The amount of the emergency assessment collected in a particular 441 year shall be a uniform percentage of that year’s direct written 442 premium for property insurance for all member insurers and 443 underwriting associations, excluding National Flood Insurance 444 policy premiums, as annually determined by the board and 445 verified by the department. The department shall verify the 446 arithmetic calculations involved in the board’s determination 447 within 30 days after receipt of the information on which the 448 determination was based. Notwithstanding any other provision of 449 law, each member insurer and each underwriting association 450 created pursuant to this section shall collect emergency 451 assessments from its policyholders without such obligation being 452 affected by any credit, limitation, exemption, or deferment. The 453 emergency assessments so collected shall be transferred directly 454 to the association on a periodic basis as determined by the 455 association. The aggregate amount of emergency assessments 456 levied under this sub-sub-subparagraph in any calendar year may 457 not exceed the greater of 10 percent of the amount needed to 458 cover the original deficit, plus interest, fees, commissions, 459 required reserves, and other costs associated with financing of 460 the original deficit, or 10 percent of the aggregate statewide 461 direct written premium for property insurance written by member 462 insurers and underwriting associations for the prior year, plus 463 interest, fees, commissions, required reserves, and other costs 464 associated with financing the original deficit. The board may 465 pledge the proceeds of the emergency assessments under this sub 466 sub-subparagraph as the source of revenue for bonds, to retire 467 any other debt incurred as a result of the deficit or events 468 giving rise to the deficit, or in any other way that the board 469 determines will efficiently recover the deficit. The emergency 470 assessments under this sub-sub-subparagraph shall continue as 471 long as any bonds issued or other indebtedness incurred with 472 respect to a deficit for which the assessment was imposed remain 473 outstanding, unless adequate provision has been made for the 474 payment of such bonds or other indebtedness pursuant to the 475 document governing such bonds or other indebtedness. Emergency 476 assessments collected under this sub-sub-subparagraph are not 477 part of an insurer’s rates, are not premium, and are not subject 478 to premium tax, fees, or commissions; however, failure to pay 479 the emergency assessment shall be treated as failure to pay 480 premium. 481 (IV) Each member insurer’s share of the total regular 482 assessments under sub-sub-subparagraph (I) or sub-sub 483 subparagraph (II) shall be in the proportion that the insurer’s 484 net direct premium for property insurance in this state, for the 485 year preceding the assessment bears to the aggregate statewide 486 net direct premium for property insurance of all member 487 insurers, as reduced by any credits for voluntary writings for 488 that year. 489 (V) If regular deficit assessments are made under sub-sub 490 subparagraph (I) or sub-sub-subparagraph (II), or by the 491 Residential Property and Casualty Joint Underwriting Association 492 under sub-subparagraph (6)(b)3.a.or sub-subparagraph493(6)(b)3.b., the association shall levy upon the association’s 494 policyholders, as part of its next rate filing, or by a separate 495 rate filing solely for this purpose, a market equalization 496 surcharge in a percentage equal to the total amount of such 497 regular assessments divided by the aggregate statewide direct 498 written premium for property insurance for member insurers for 499 the prior calendar year. Market equalization surcharges under 500 this sub-sub-subparagraph are not considered premium and are not 501 subject to commissions, fees, or premium taxes; however, failure 502 to pay a market equalization surcharge shall be treated as 503 failure to pay premium. 504 e. The governing body of any unit of local government, any 505 residents of which are insured under the plan, may issue bonds 506 as defined in s. 125.013 or s. 166.101 to fund an assistance 507 program, in conjunction with the association, for the purpose of 508 defraying deficits of the association. In order to avoid 509 needless and indiscriminate proliferation, duplication, and 510 fragmentation of such assistance programs, any unit of local 511 government, any residents of which are insured by the 512 association, may provide for the payment of losses, regardless 513 of whether or not the losses occurred within or outside of the 514 territorial jurisdiction of the local government. Revenue bonds 515 may not be issued until validated pursuant to chapter 75, unless 516 a state of emergency is declared by executive order or 517 proclamation of the Governor pursuant to s. 252.36 making such 518 findings as are necessary to determine that it is in the best 519 interests of, and necessary for, the protection of the public 520 health, safety, and general welfare of residents of this state 521 and the protection and preservation of the economic stability of 522 insurers operating in this state, and declaring it an essential 523 public purpose to permit certain municipalities or counties to 524 issue bonds as will provide relief to claimants and 525 policyholders of the association and insurers responsible for 526 apportionment of plan losses. Any such unit of local government 527 may enter into such contracts with the association and with any 528 other entity created pursuant to this subsection as are 529 necessary to carry out this paragraph. Any bonds issued under 530 this sub-subparagraph shall be payable from and secured by 531 moneys received by the association from assessments under this 532 subparagraph, and assigned and pledged to or on behalf of the 533 unit of local government for the benefit of the holders of such 534 bonds. The funds, credit, property, and taxing power of the 535 state or of the unit of local government shall not be pledged 536 for the payment of such bonds. If any of the bonds remain unsold 537 60 days after issuance, the department shall require all 538 insurers subject to assessment to purchase the bonds, which 539 shall be treated as admitted assets; each insurer shall be 540 required to purchase that percentage of the unsold portion of 541 the bond issue that equals the insurer’s relative share of 542 assessment liability under this subsection. An insurer shall not 543 be required to purchase the bonds to the extent that the 544 department determines that the purchase would endanger or impair 545 the solvency of the insurer. The authority granted by this sub 546 subparagraph is additional to any bonding authority granted by 547 subparagraph 6. 548 3. The plan shall also provide that any member with a 549 surplus as to policyholders of $25$20million or less writing 550 25 percent or more of its total countrywide property insurance 551 premiums in this state may petition the department, within the 552 first 90 days of each calendar year, to qualify as a limited 553 apportionment company. The apportionment of such a member 554 company in any calendar year for which it is qualified shall not 555 exceed its gross participation, which shall not be affected by 556 the formula for voluntary writings. In no event shall a limited 557 apportionment company be required to participate in any 558 apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I) 559 or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds 560 $50 million after payment of available plan funds in any 561 calendar year. However, a limited apportionment company shall 562 collect from its policyholders any emergency assessment imposed 563 under sub-sub-subparagraph 2.d.(III). The plan shall provide 564 that, if the department determines that any regular assessment 565 will result in an impairment of the surplus of a limited 566 apportionment company, the department may direct that all or 567 part of such assessment be deferred. However, there shall be no 568 limitation or deferment of an emergency assessment to be 569 collected from policyholders under sub-sub-subparagraph 570 2.d.(III). 571 4. The plan shall provide for the deferment, in whole or in 572 part, of a regular assessment of a member insurer under sub-sub 573 subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but not 574 for an emergency assessment collected from policyholders under 575 sub-sub-subparagraph 2.d.(III), if, in the opinion of the 576 commissioner, payment of such regular assessment would endanger 577 or impair the solvency of the member insurer. In the event a 578 regular assessment against a member insurer is deferred in whole 579 or in part, the amount by which such assessment is deferred may 580 be assessed against the other member insurers in a manner 581 consistent with the basis for assessments set forth in sub-sub 582 subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II). 583 5.a. The plan of operation may include deductibles and 584 rules for classification of risks and rate modifications 585 consistent with the objective of providing and maintaining funds 586 sufficient to pay catastrophe losses. 587 b. It is the intent of the Legislature that the rates for 588 coverage provided by the association be actuarially sound and 589 not competitive with approved rates charged in the admitted 590 voluntary market such that the association functions as a 591 residual market mechanism to provide insurance only when the 592 insurance cannot be procured in the voluntary market. The plan 593 of operation shall provide a mechanism to assure that, beginning 594 no later than January 1, 1999, the rates charged by the 595 association for each line of business are reflective of approved 596 rates in the voluntary market for hurricane coverage for each 597 line of business in the various areas eligible for association 598 coverage. 599 c. The association shall provide for windstorm coverage on 600 residential properties in limits up to $10 million for 601 commercial lines residential risks and up to $1 million for 602 personal lines residential risks. If coverage with the 603 association is sought for a residential risk valued in excess of 604 these limits, coverage shall be available to the risk up to the 605 replacement cost or actual cash value of the property, at the 606 option of the insured, if coverage for the risk cannot be 607 located in the authorized market. The association must accept a 608 commercial lines residential risk with limits above $10 million 609 or a personal lines residential risk with limits above $1 610 million if coverage is not available in the authorized market. 611 The association may write coverage above the limits specified in 612 this subparagraph with or without facultative or other 613 reinsurance coverage, as the association determines appropriate. 614 d. The plan of operation must provide objective criteria 615 and procedures, approved by the department, to be uniformly 616 applied for all applicants in determining whether an individual 617 risk is so hazardous as to be uninsurable. In making this 618 determination and in establishing the criteria and procedures, 619 the following shall be considered: 620 (I) Whether the likelihood of a loss for the individual 621 risk is substantially higher than for other risks of the same 622 class; and 623 (II) Whether the uncertainty associated with the individual 624 risk is such that an appropriate premium cannot be determined. 625 626 The acceptance or rejection of a risk by the association 627 pursuant to such criteria and procedures must be construed as 628 the private placement of insurance, and the provisions of 629 chapter 120 do not apply. 630 e. If the risk accepts an offer of coverage through the 631 market assistance program or through a mechanism established by 632 the association, either before the policy is issued by the 633 association or during the first 30 days of coverage by the 634 association, and the producing agent who submitted the 635 application to the association is not currently appointed by the 636 insurer, the insurer shall: 637 (I) Pay to the producing agent of record of the policy, for 638 the first year, an amount that is the greater of the insurer’s 639 usual and customary commission for the type of policy written or 640 a fee equal to the usual and customary commission of the 641 association; or 642 (II) Offer to allow the producing agent of record of the 643 policy to continue servicing the policy for a period of not less 644 than 1 year and offer to pay the agent the greater of the 645 insurer’s or the association’s usual and customary commission 646 for the type of policy written. 647 648 If the producing agent is unwilling or unable to accept 649 appointment, the new insurer shall pay the agent in accordance 650 with sub-sub-subparagraph (I). Subject to the provisions of s. 651 627.3517, the policies issued by the association must provide 652 that if the association obtains an offer from an authorized 653 insurer to cover the risk at its approved rates under either a 654 standard policy including wind coverage or, if consistent with 655 the insurer’s underwriting rules as filed with the department, a 656 basic policy including wind coverage, the risk is no longer 657 eligible for coverage through the association. Upon termination 658 of eligibility, the association shall provide written notice to 659 the policyholder and agent of record stating that the 660 association policy must be canceled as of 60 days after the date 661 of the notice because of the offer of coverage from an 662 authorized insurer. Other provisions of the insurance code 663 relating to cancellation and notice of cancellation do not apply 664 to actions under this sub-subparagraph. 665 f. When the association enters into a contractual agreement 666 for a take-out plan, the producing agent of record of the 667 association policy is entitled to retain any unearned commission 668 on the policy, and the insurer shall: 669 (I) Pay to the producing agent of record of the association 670 policy, for the first year, an amount that is the greater of the 671 insurer’s usual and customary commission for the type of policy 672 written or a fee equal to the usual and customary commission of 673 the association; or 674 (II) Offer to allow the producing agent of record of the 675 association policy to continue servicing the policy for a period 676 of not less than 1 year and offer to pay the agent the greater 677 of the insurer’s or the association’s usual and customary 678 commission for the type of policy written. 679 680 If the producing agent is unwilling or unable to accept 681 appointment, the new insurer shall pay the agent in accordance 682 with sub-sub-subparagraph (I). 683 6.a. The plan of operation may authorize the formation of a 684 private nonprofit corporation, a private nonprofit 685 unincorporated association, a partnership, a trust, a limited 686 liability company, or a nonprofit mutual company which may be 687 empowered, among other things, to borrow money by issuing bonds 688 or by incurring other indebtedness and to accumulate reserves or 689 funds to be used for the payment of insured catastrophe losses. 690 The plan may authorize all actions necessary to facilitate the 691 issuance of bonds, including the pledging of assessments or 692 other revenues. 693 b. Any entity created under this subsection, or any entity 694 formed for the purposes of this subsection, may sue and be sued, 695 may borrow money; issue bonds, notes, or debt instruments; 696 pledge or sell assessments, market equalization surcharges and 697 other surcharges, rights, premiums, contractual rights, 698 projected recoveries from the Florida Hurricane Catastrophe 699 Fund, other reinsurance recoverables, and other assets as 700 security for such bonds, notes, or debt instruments; enter into 701 any contracts or agreements necessary or proper to accomplish 702 such borrowings; and take other actions necessary to carry out 703 the purposes of this subsection. The association may issue bonds 704 or incur other indebtedness, or have bonds issued on its behalf 705 by a unit of local government pursuant to subparagraph (6)(q)2., 706 in the absence of a hurricane or other weather-related event, 707 upon a determination by the association subject to approval by 708 the department that such action would enable it to efficiently 709 meet the financial obligations of the association and that such 710 financings are reasonably necessary to effectuate the 711 requirements of this subsection. Any such entity may accumulate 712 reserves and retain surpluses as of the end of any association 713 year to provide for the payment of losses incurred by the 714 association during that year or any future year. The association 715 shall incorporate and continue the plan of operation and 716 articles of agreement in effect on the effective date of chapter 717 76-96, Laws of Florida, to the extent that it is not 718 inconsistent with chapter 76-96, and as subsequently modified 719 consistent with chapter 76-96. The board of directors and 720 officers currently serving shall continue to serve until their 721 successors are duly qualified as provided under the plan. The 722 assets and obligations of the plan in effect immediately prior 723 to the effective date of chapter 76-96 shall be construed to be 724 the assets and obligations of the successor plan created herein. 725 c. In recognition of s. 10, Art. I of the State 726 Constitution, prohibiting the impairment of obligations of 727 contracts, it is the intent of the Legislature that no action be 728 taken whose purpose is to impair any bond indenture or financing 729 agreement or any revenue source committed by contract to such 730 bond or other indebtedness issued or incurred by the association 731 or any other entity created under this subsection. 732 7. On such coverage, an agent’s remuneration shall be that 733 amount of money payable to the agent by the terms of his or her 734 contract with the company with which the business is placed. 735 However, no commission will be paid on that portion of the 736 premium which is in excess of the standard premium of that 737 company. 738 8. Subject to approval by the department, the association 739 may establish different eligibility requirements and operational 740 procedures for any line or type of coverage for any specified 741 eligible area or portion of an eligible area if the board 742 determines that such changes to the eligibility requirements and 743 operational procedures are justified due to the voluntary market 744 being sufficiently stable and competitive in such area or for 745 such line or type of coverage and that consumers who, in good 746 faith, are unable to obtain insurance through the voluntary 747 market through ordinary methods would continue to have access to 748 coverage from the association. When coverage is sought in 749 connection with a real property transfer, such requirements and 750 procedures shall not provide for an effective date of coverage 751 later than the date of the closing of the transfer as 752 established by the transferor, the transferee, and, if 753 applicable, the lender. 754 9. Notwithstanding any other provision of law: 755 a. The pledge or sale of, the lien upon, and the security 756 interest in any rights, revenues, or other assets of the 757 association created or purported to be created pursuant to any 758 financing documents to secure any bonds or other indebtedness of 759 the association shall be and remain valid and enforceable, 760 notwithstanding the commencement of and during the continuation 761 of, and after, any rehabilitation, insolvency, liquidation, 762 bankruptcy, receivership, conservatorship, reorganization, or 763 similar proceeding against the association under the laws of 764 this state or any other applicable laws. 765 b. No such proceeding shall relieve the association of its 766 obligation, or otherwise affect its ability to perform its 767 obligation, to continue to collect, or levy and collect, 768 assessments, market equalization or other surcharges, projected 769 recoveries from the Florida Hurricane Catastrophe Fund, 770 reinsurance recoverables, or any other rights, revenues, or 771 other assets of the association pledged. 772 c. Each such pledge or sale of, lien upon, and security 773 interest in, including the priority of such pledge, lien, or 774 security interest, any such assessments, emergency assessments, 775 market equalization or renewal surcharges, projected recoveries 776 from the Florida Hurricane Catastrophe Fund, reinsurance 777 recoverables, or other rights, revenues, or other assets which 778 are collected, or levied and collected, after the commencement 779 of and during the pendency of or after any such proceeding shall 780 continue unaffected by such proceeding. 781 d. As used in this subsection, the term “financing 782 documents” means any agreement, instrument, or other document 783 now existing or hereafter created evidencing any bonds or other 784 indebtedness of the association or pursuant to which any such 785 bonds or other indebtedness has been or may be issued and 786 pursuant to which any rights, revenues, or other assets of the 787 association are pledged or sold to secure the repayment of such 788 bonds or indebtedness, together with the payment of interest on 789 such bonds or such indebtedness, or the payment of any other 790 obligation of the association related to such bonds or 791 indebtedness. 792 e. Any such pledge or sale of assessments, revenues, 793 contract rights or other rights or assets of the association 794 shall constitute a lien and security interest, or sale, as the 795 case may be, that is immediately effective and attaches to such 796 assessments, revenues, contract, or other rights or assets, 797 whether or not imposed or collected at the time the pledge or 798 sale is made. Any such pledge or sale is effective, valid, 799 binding, and enforceable against the association or other entity 800 making such pledge or sale, and valid and binding against and 801 superior to any competing claims or obligations owed to any 802 other person or entity, including policyholders in this state, 803 asserting rights in any such assessments, revenues, contract, or 804 other rights or assets to the extent set forth in and in 805 accordance with the terms of the pledge or sale contained in the 806 applicable financing documents, whether or not any such person 807 or entity has notice of such pledge or sale and without the need 808 for any physical delivery, recordation, filing, or other action. 809 f. There shall be no liability on the part of, and no cause 810 of action of any nature shall arise against, any member insurer 811 or its agents or employees, agents or employees of the 812 association, members of the board of directors of the 813 association, or the department or its representatives, for any 814 action taken by them in the performance of their duties or 815 responsibilities under this subsection. Such immunity does not 816 apply to actions for breach of any contract or agreement 817 pertaining to insurance, or any willful tort. 818 Section 9. Section 627.6011, Florida Statutes, is created 819 to read: 820 627.6011 Mandated coverages.—Mandatory health benefits 821 regulated under this chapter which must be covered by an insurer 822 are intended to apply only to the type of health benefit plan 823 defined in s. 627.6699(3), issued in any market, unless 824 specifically designated otherwise. For purposes of this section, 825 the term “mandatory health benefits” means those benefits set 826 forth in ss. 627.6401-627.64193 and any cross-references to 827 these sections, and any other mandatory treatment or health 828 coverages or benefits enacted on or after July 1, 2012. 829 Section 10. Subsections (1), (2), (7), and (9) of section 830 627.7015, Florida Statutes, are amended to read: 831 627.7015 Alternative procedure for resolution of disputed 832 property insurance claims.— 833 (1)PURPOSE AND SCOPE.—This section sets forth a 834 nonadversarial alternative dispute resolution procedure for a 835 mediated claim resolution conference prompted by the need for 836 effective, fair, and timely handling of property insurance 837 claims. There is a particular need for an informal, 838 nonthreatening forum for helping parties who elect this 839 procedure to resolve their claims disputes because most 840 homeowner’s and commercial residential insurance policies 841 obligate policyholdersinsuredsto participate in a potentially 842 expensive and time-consuming adversarial appraisal process 843 beforeprior tolitigation. The procedure set forth in this 844 section is designed to bring the parties together for a mediated 845 claims settlement conference without any of the trappings or 846 drawbacks of an adversarial process. Before resorting to these 847 procedures, policyholdersinsuredsand insurers are encouraged 848 to resolve claims as quickly and fairly as possible. This 849 section is available with respect to claims under personal lines 850 and commercial residential policies beforefor all claimants and851insurers prior tocommencing the appraisal process, or before 852 commencing litigation. Mediation may be requested only by the 853 policyholder, as a first-party claimant, or the insurer. If 854 requested by the policyholderinsured, participation by legal 855 counsel or any other person having relevant information isshall856bepermitted. Mediation under this section is also available to 857 litigants referred to the department by a county court or 858 circuit court. This section does not apply to commercial 859 coverages, to private passenger motor vehicle insurance 860 coverages, or to disputes relating to liability coverages in 861 policies of property insurance. 862 (2) At the time a first-party claim within the scope of 863 this section is filed by the policyholder, the insurer shall 864 notify the policyholderall first-party claimantsof itstheir865 right to participate in the mediation program under this 866 section. The department shall prepare a consumer information 867 pamphlet for distribution to persons participating in mediation 868under this section. 869 (7) If the insurer fails to comply with subsection (2) by 870 failing to notify a policyholderfirst-party claimantof its 871 right to participate in the mediation program under this section 872 or if the insurer requests the mediation, and the mediation 873 results are rejected by either party, the policyholder is 874insured shallnotberequired to submit to or participate in any 875 contractual loss appraisal process of the property loss damage 876 as a precondition to legal action for breach of contract against 877 the insurer for its failure to pay the policyholder’s claims 878 covered by the policy. 879 (9) For purposes of this section, the term “claim” refers 880 to any dispute between an insurer and a policyholderan insured881 relating to a material issue of fact other than a dispute: 882 (a) With respect to which the insurer has a reasonable 883 basis to suspect fraud; 884 (b) Where, based on agreed-upon facts as to the cause of 885 loss, there is no coverage under the policy; 886 (c) With respect to which the insurer has a reasonable 887 basis to believe that the policyholderclaimanthas 888 intentionally made a material misrepresentation of fact which is 889 relevant to the claim, and the entire request for payment of a 890 loss has been denied on the basis of the material 891 misrepresentation;or892 (d) With respect to which the amount in controversy is less 893 than $500, unless the parties agree to mediate a dispute 894 involving a lesser amount; or.895 (e) Where the notice of loss is reported to the insurer 896 more than 36 months after the declaration of a state of 897 emergency by the Governor in response to a hurricane that makes 898 landfall in this state. 899 Section 11. Effective upon this act becoming a law, 900 subsection (4) of section 627.7295, Florida Statutes, is amended 901 to read: 902 627.7295 Motor vehicle insurance contracts.— 903 (4)If subsection (7) does not apply,The insurer may 904 cancel the policy in accordance with this code except that, 905 notwithstanding s. 627.728, an insurer may not cancel a new 906 policy or binder during the first 60 days immediately following 907 the effective date of the policy or binderexceptfor nonpayment 908 of premium unless the reason for the cancellation is the 909 issuance of a check for the premium that is dishonored for any 910 reason or any other type of premium payment that was 911 subsequently determined to be rejected or invalid. 912 Section 12. Effective upon this act becoming a law, 913 paragraph (d) of subsection (4) of section 627.736, Florida 914 Statutes, is amended to read: 915 627.736 Required personal injury protection benefits; 916 exclusions; priority; claims.— 917 (4) BENEFITS; WHEN DUE.—Benefits due from an insurer under 918 ss. 627.730-627.7405 shall be primary, except that benefits 919 received under any workers’ compensation law shall be credited 920 against the benefits provided by subsection (1) and shall be due 921 and payable as loss accrues, upon receipt of reasonable proof of 922 such loss and the amount of expenses and loss incurred which are 923 covered by the policy issued under ss. 627.730-627.7405. When 924 the Agency for Health Care Administration provides, pays, or 925 becomes liable for medical assistance under the Medicaid program 926 related to injury, sickness, disease, or death arising out of 927 the ownership, maintenance, or use of a motor vehicle, benefits 928 under ss. 627.730-627.7405 shall be subject to the provisions of 929 the Medicaid program. 930 (d) All overdue paymentsshallbear simple interest fixed 931 at the rate established under s. 55.03 or the rate established 932 in the insurance contract, whichever is greater, in effect on 933 the datefor the year in whichthe payment became overdue, 934 calculated from the date the insurer was furnished with written 935 notice of the amount of covered loss. Interest isshall bedue 936 at the time payment of the overdue claim is made. 937 Section 13. Except as otherwise expressly provided in this 938 act and except for this section, which shall take effect upon 939 this act becoming a law, this act shall take effect July 1, 940 2012.