Bill Text: FL S2176 | 2010 | Regular Session | Enrolled
Bill Title: Insurance [CPSC]
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2010-06-01 - Approved by Governor; Chapter No. 2010-175; companion bill(s) passed, see CS/CS/HB 885 (Ch. 2010-61) [S2176 Detail]
Download: Florida-2010-S2176-Enrolled.html
ENROLLED 2010 Legislature CS for CS for SB 2176, 2nd Engrossed 20102176er 1 2 An act relating to insurance; amending s. 30.2905, 3 F.S.; providing for interpretation of provisions 4 relating to workers’ compensation benefits for certain 5 services performed by off-duty deputy sheriffs; 6 authorizing sheriffs to include certain proportionate 7 costs of workers’ compensation premiums for off-duty 8 deputy sheriffs providing certain services; amending 9 s. 112.18, F.S.; providing conditions under which a 10 law enforcement officer, correctional officer, or 11 correctional probation officer who suffers from a 12 specified medical condition and has materially 13 departed from the prescribed treatment for that 14 condition shall lose a specified presumption for 15 workers’ compensation claims made on or after a 16 specified date; defining the term “prescribed course 17 of treatment”; providing for independent medical 18 examinations in certain situations; providing that 19 only claims made before or within a specified period 20 after leaving employment are eligible for a specified 21 presumption; creating s. 624.46223, F.S.; prohibiting 22 an association, fund, or pool created for the purpose 23 of forming or managing a risk management mechanism or 24 providing self-insurance for a public entity from 25 requiring its members to give more than 60 days’ 26 notice of the member’s intention to withdraw from the 27 association, fund, or pool; amending s. 627.062, F.S.; 28 exempting certain categories or types of insurance and 29 types of commercial lines risks from certain rate 30 requirements; requiring that insurers or rating 31 organizations establish and use rates, rating 32 schedules, or rating manuals allowing for a reasonable 33 rate of return on certain insurance and risks; 34 requiring that an insurer notify the Office of 35 Insurance Regulation of any changes to rates for 36 certain insurance and risks; requiring that such 37 notice contain certain information; requiring that an 38 insurer maintain certain information; providing that 39 such information is subject to examination by the 40 office; requiring that the office consider certain 41 rate factors and standards when examining such 42 information for the purpose of determining whether the 43 rate is excessive, inadequate, or unfairly 44 discriminatory; requiring that a rating organization 45 provide notice to the office of any changes to loss 46 cost for certain types of insurance within a specified 47 period after such change; providing requirements for 48 such notification; requiring that a rating 49 organization maintain certain information; providing 50 that such information is subject to examination by the 51 office; requiring that specified rate factors and 52 standards be used in such examination; authorizing the 53 office, when reviewing a rate, to require that an 54 insurer provide certain information at the insurer’s 55 expense; amending s. 627.0651, F.S.; exempting 56 commercial motor vehicle insurance from certain motor 57 vehicle insurance rate requirements; prohibiting 58 certain insurance rates from being excessive, 59 inadequate, or unfairly discriminatory; requiring that 60 insurers or rating organizations establish and use 61 rates, rating schedules, or rating manuals allowing 62 for a reasonable rate of return on certain insurance 63 and risks; requiring that an insurer notify the office 64 of any changes to rates for certain insurance and 65 risks; requiring that such notice contain certain 66 information; requiring that an insurer maintain 67 certain information; providing that such information 68 is subject to examination by the office; requiring 69 that the office consider certain rate factors and 70 standards when examining such information for the 71 purpose of determining whether the rate is excessive, 72 inadequate, or unfairly discriminatory; requiring that 73 a rating organization provide notice to the office of 74 any changes to loss cost for certain types of 75 insurance within a specified period after such change; 76 providing requirements for such notification; 77 requiring that a rating organization maintain certain 78 information; providing that such information is 79 subject to examination by the office; requiring that 80 specified rate factors and standards be used in such 81 examination; authorizing the office, when reviewing a 82 rate, to require that an insurer provide certain 83 information at the insurer’s expense; amending s. 84 626.9541, F.S.; prohibiting construction to prevent a 85 Medicare supplement insurer from granting a premium 86 credit to insureds under certain circumstances; 87 amending s. 627.6741, F.S.; specifying absence of a 88 prohibition against certain Medicare supplement policy 89 insurers from entering into agreements through a 90 network with certain facilities; specifying absence of 91 a requirement to file certain contracts with the 92 Office of Insurance Regulation; amending s. 627.6745, 93 F.S.; requiring certain insurers to factor certain 94 deductibles and premium credits into loss-ratio 95 calculation and policy premiums; amending s. 628.4615, 96 F.S., relating to specialty insurers; conforming a 97 cross-reference; amending s. 634.011, F.S.; revising 98 the definition of the term “motor vehicle service 99 agreement”; amending s. 634.031, F.S.; providing 100 penalties for certain licensure violations; amending 101 s. 634.041, F.S., relating to qualifications for 102 licensure; conforming cross-references; amending s. 103 634.095, F.S.; prohibiting service agreement companies 104 from issuing certain deceptive advertisements, 105 operating without a subsisting license, or remitting 106 premiums to a person other than the obligated service 107 agreement company; amending s. 634.121, F.S.; deleting 108 a requirement that certain service agreement forms be 109 approved by the Office of Insurance Regulation of the 110 Financial Services Commission; requiring the service 111 agreements to include certain written disclosures; 112 amending s. 634.1213, F.S.; authorizing the office to 113 order a service agreement company to stop using forms 114 that do not comply with specified requirements; 115 amending s. 634.137, F.S.; deleting a schedule for the 116 submissions of certain reports; amending s. 634.141, 117 F.S.; providing guidelines for the office to use in 118 determining whether to examine a company; amending s. 119 634.1815, F.S.; requiring certain rebates to be 120 approved by the company issuing a service agreement; 121 amending s. 634.282, F.S.; clarifying provisions 122 relating to the refund of excess premiums or charges; 123 requiring that a consumer receive a sample copy of the 124 service agreement prior to the sale of a service 125 agreement; amending s. 634.301, F.S.; revising certain 126 definitions relating home warranties; amending s. 127 634.303, F.S.; providing that it is a first-degree 128 misdemeanor for a person without a subsisting license 129 to provide or offer to provide home warranties; 130 amending s. 634.308, F.S.; providing an exception to 131 certain grounds for licensure suspension or 132 revocation; amending s. 634.312, F.S.; deleting a 133 requirement that certain home warranty agreement forms 134 be approved by the office; requiring the home warranty 135 contracts to include certain written disclosures; 136 amending s. 634.3123, F.S.; authorizing the office to 137 order a home warranty association to stop using forms 138 that do not comply with specified requirements; 139 amending s. 634.314, F.S.; providing guidelines for 140 the office to use in determining whether to examine an 141 association; amending s. 634.3205, F.S.; requiring 142 certain rebates to be approved by the association 143 issuing a service agreement; amending s. 634.336, 144 F.S.; requiring that a consumer receive a sample copy 145 of the service agreement prior to the sale of a 146 service agreement; amending s. 634.344, F.S.; 147 prohibiting certain coercive actions relating to the 148 sale of a home warranty in connection with the lending 149 of money; amending s. 634.401, F.S.; redefining the 150 term “indemnify”; amending s. 634.403, F.S.; providing 151 that it is a first-degree misdemeanor for a person 152 without a subsisting license to provide or offer to 153 provide service warranties; amending s. 634.406, F.S., 154 relating to financial requirements; conforming a 155 cross-reference; amending s. 634.414, F.S.; deleting a 156 requirement that certain service warranty forms be 157 approved by the office; deleting certain requirements 158 relating to the display of the issuing association’s 159 name on literature; requiring the service warranty 160 contracts to include certain written disclosures; 161 amending s. 634.4145, F.S.; authorizing the office to 162 order a service warranty association to stop using 163 forms that do not comply with specified requirements; 164 amending s. 634.415, F.S.; deleting a requirement that 165 associations file certain quarterly statements and 166 special reports; amending s. 634.416, F.S.; providing 167 guidelines for the office to use in determining 168 whether to examine an service warranty association; 169 amending s. 634.4225, F.S.; requiring certain rebates 170 to be approved by the association issuing a service 171 warranty; amending s. 634.436, F.S.; requiring that a 172 consumer receive a sample copy of the service 173 agreement prior to the sale of a service agreement; 174 amending s. 634.136, F.S.; deleting certain provisions 175 requiring records to be maintained by motor vehicle 176 service contract companies; amending s. 634.313, F.S.; 177 deleting certain requirements for reports relating to 178 taxes on premiums; repealing ss. 634.1216 and 179 634.3126, F.S., relating to required rate filings; 180 providing a short title; amending s. 624.310, F.S.; 181 expanding the definition of “affiliated party” to 182 include certain third-party marketers; creating s. 183 624.46223, F.S.; prohibiting a self-insurance 184 association, fund, or pool from requiring its members 185 to provide more than a specified maximum period of 186 notice of any member’s intent to withdraw; amending s. 187 626.221, F.S.; expanding the list of individuals who 188 are exempt from the requirement to pass an examination 189 before being issued a license as an agent, customer 190 representative, or adjuster; amending s. 626.025, 191 F.S.; including family members of insurance agents in 192 a prohibition related to the transaction of life 193 insurance; amending s. 626.2815, F.S.; providing an 194 exemption from certain continuing education 195 requirements to certain agents; authorizing the 196 department to take certain action in applying such 197 exemption; amending s. 626.621, F.S.; expanding 198 grounds for discretionary refusal, suspension, or 199 revocation of certain licenses; amending s. 626.641, 200 F.S.; prohibiting the Department of Financial Services 201 from issuing certain licenses in certain 202 circumstances; amending s. 626.798, F.S.; prohibiting 203 a family member of a life insurance agent from being a 204 beneficiary of certain policies; prohibiting an agent 205 or a family member of such agent from being designated 206 as a trustee or guardian or being granted power of 207 attorney unless he or she is a family member of the 208 policy owner or insured, or is a bank or trust company 209 duly authorized to act as a fiduciary; amending s. 210 626.9521, F.S.; increasing the administrative fine 211 that may be imposed for each willful violation of the 212 offenses of twisting and churning; increasing the 213 administrative fine that may be imposed for each 214 willful violation of the offense of submitting 215 fraudulent signatures on an application or policy 216 related document; requiring that a licensee make a 217 reasonable effort to ascertain a customer’s age at the 218 time of completion of an insurance application; 219 authorizing the use of video depositions in certain 220 circumstances; amending s. 626.99, F.S.; requiring 221 that the buyer’s guide for fixed annuities be in the 222 form provided by the National Association of Insurance 223 Commissioners Annuity Disclosure Model Regulation; 224 authorizing the use of a policy summary for variable 225 annuities until the NAIC or the department develops a 226 buyer’s guide; extending the unconditional refund 227 period for fixed annuity contracts and variable or 228 market value annuity contracts for customers 65 years 229 of age or older; requiring that the unconditional 230 refund amount for a variable or market value annuity 231 contract be equal to the cash surrender value provided 232 in the contract, plus any fees or charges deducted 233 from the premiums or imposed under the contract; 234 providing for applicability of certain provisions; 235 requiring that an insurer provide a prospective 236 purchaser of an annuity policy with a buyer’s guide to 237 annuities; requiring that such buyer’s guide contain 238 certain information; requiring that an insurer attach 239 a cover page to an annuity policy informing the 240 purchaser of the unconditional refund period; 241 requiring that the cover page provide other specified 242 information; amending s. 627.4554, F.S.; defining the 243 term “accredited investor”; authorizing the Department 244 of Financial Services to order an insurance agent to 245 pay monetary restitution to a senior consumer under 246 certain circumstances; limiting the amount of such 247 restitution; prohibiting an annuity contract issued to 248 a senior consumer from containing a surrender or 249 deferred sales charge for withdrawal of funds from an 250 annuity in excess of a specified maximum amount; 251 providing for the periodic reduction of such charge; 252 providing effective dates. 253 254 Be It Enacted by the Legislature of the State of Florida: 255 256 Section 1. Subsection (2) of section 30.2905, Florida 257 Statutes, is amended to read: 258 30.2905 Program to contract for employment of off-duty 259 deputies for security services.— 260 (2)(a) Any such public or private employer of a deputy 261 sheriff shall be responsible for the acts or omissions of the 262 deputy sheriff while performing services for that employer while 263 off duty, including workers’ compensation benefits. 264 (b) However, for the workers’ compensation purposes of this 265 section:,266 1. A deputy sheriff so employed who sustains an injury 267 while enforcing the criminal, traffic, or penal laws of this 268 state shall be regarded as working on duty. 269 2. The term “enforcing the criminal, traffic, or penal laws 270 of this state” shall be interpreted to include, but is not 271 limited to, providing security, patrol, or traffic direction for 272 a private or public employer. 273 3. A sheriff may include the sheriff’s proportionate costs 274 of workers’ compensation premiums for the off-duty deputy 275 sheriffs providing such services. 276 Section 2. Section 112.18, Florida Statutes, is amended to 277 read: 278 112.18 Firefighters and law enforcement or correctional 279 officers; special provisions relative to disability.— 280 (1)(a) Any condition or impairment of health of any Florida 281 state, municipal, county, port authority, special tax district, 282 or fire control district firefighter or any law enforcement 283 officer,orcorrectional officer, or correctional probation 284 officer as defined in s. 943.10(1), (2), or (3) caused by 285 tuberculosis, heart disease, or hypertension resulting in total 286 or partial disability or death shall be presumed to have been 287 accidental and to have been suffered in the line of duty unless 288 the contrary be shown by competent evidence. However, any such 289 firefighter or law enforcement officer mustshallhave 290 successfully passed a physical examination upon entering into 291 any such service as a firefighter or law enforcement officer, 292 which examination failed to reveal any evidence of any such 293 condition. Such presumption doesshallnot apply to benefits 294 payable under or granted in a policy of life insurance or 295 disability insurance, unless the insurer and insured have 296 negotiated for such additional benefits to be included in the 297 policy contract. 298 (b)1. For any workers’ compensation claim filed under this 299 section and chapter 440 occurring on or after July 1, 2010, a 300 law enforcement officer, correctional officer, or correctional 301 probation officer as defined in s. 943.10(1), (2), or (3) 302 suffering from tuberculosis, heart disease, or hypertension is 303 presumed not to have incurred such disease in the line of duty 304 as provided in this section if the law enforcement officer, 305 correctional officer, or correctional probation officer: 306 a. Departed in a material fashion from the prescribed 307 course of treatment of his or her personal physician and the 308 departure is demonstrated to have resulted in a significant 309 aggravation of the tuberculosis, heart disease, or hypertension 310 resulting in disability or increasing the disability or need for 311 medical treatment; or 312 b. Was previously compensated pursuant to this section and 313 chapter 440 for tuberculosis, heart disease, or hypertension and 314 thereafter sustains and reports a new compensable workers’ 315 compensation claim under this section and chapter 440, and the 316 law enforcement officer, correctional officer, or correctional 317 probation officer has departed in a material fashion from the 318 prescribed course of treatment of an authorized physician for 319 the preexisting workers’ compensation claim and the departure is 320 demonstrated to have resulted in a significant aggravation of 321 the tuberculosis, heart disease, or hypertension resulting in 322 disability or increasing the disability or need for medical 323 treatment. 324 2. As used in this paragraph, “prescribed course of 325 treatment” means prescribed medical courses of action and 326 prescribed medicines for the specific disease or diseases 327 claimed and as documented in the prescribing physician’s medical 328 records. 329 3. If there is a dispute as to the appropriateness of the 330 course of treatment prescribed by a physician under sub 331 subparagraph 1.a. or sub-subparagraph 1.b. or whether a 332 departure in a material fashion from the prescribed course of 333 treatment is demonstrated to have resulted in a significant 334 aggravation of the tuberculosis, heart disease, or hypertension 335 resulting in disability or increasing the disability or need for 336 medical treatment, the law enforcement officer, correctional 337 officer, or correctional probation officer is entitled to seek 338 an independent medical examination pursuant to s. 440.13(5). 339 4. A law enforcement officer, correctional officer, or 340 correctional probation officer is not entitled to the 341 presumption provided in this section unless a claim for benefits 342 is made prior to or within 180 days after leaving the employment 343 of the employing agency. 344 (2) This section authorizes each governmental entity 345 specified in subsection (1)shall be construed to authorize the346above governmental entitiesto negotiate policy contracts for 347 life and disability insurance to include accidental death 348 benefits or double indemnity coverage which shall include the 349 presumption that any condition or impairment of health of any 350 firefighter, law enforcement officer, or correctional officer 351 caused by tuberculosis, heart disease, or hypertension resulting 352 in total or partial disability or death was accidental and 353 suffered in the line of duty, unless the contrary be shown by 354 competent evidence. 355 Section 3. Section 624.46223, Florida Statutes, is created 356 to read: 357 624.46223 Notice of intent to withdraw.—An association, 358 fund, or pool authorized under Florida law and created for the 359 purpose of forming or managing a risk management mechanism or 360 providing self-insurance for a public entity in this state may 361 not require its members, as a prerequisite for withdrawing from 362 the association, fund, or pool, to give more than 60 days’ 363 notice of the member’s intention to withdraw from the 364 association, fund, or pool. 365 Section 4. Paragraph (d) is added to subsection (3) of 366 section 627.062, Florida Statutes, to read: 367 627.062 Rate standards.— 368 (3) 369 (d)1. The following categories or kinds of insurance and 370 types of commercial lines risks are not subject to paragraph 371 (2)(a) or paragraph (2)(f): 372 a. Excess or umbrella. 373 b. Surety and fidelity. 374 c. Boiler and machinery and leakage and fire extinguishing 375 equipment. 376 d. Errors and omissions. 377 e. Directors and officers, employment practices, and 378 management liability. 379 f. Intellectual property and patent infringement liability. 380 g. Advertising injury and Internet liability insurance. 381 h. Property risks rated under a highly protected risks 382 rating plan. 383 i. Any other commercial lines categories or kinds of 384 insurance or types of commercial lines risks that the office 385 determines should not be subject to paragraph (2)(a) or 386 paragraph (2)(f) because of the existence of a competitive 387 market for such insurance, similarity of such insurance to other 388 categories or kinds of insurance not subject to paragraph (2)(a) 389 or paragraph (2)(f), or to improve the general operational 390 efficiency of the office. 391 2. Insurers or rating organizations shall establish and use 392 rates, rating schedules, or rating manuals to allow the insurer 393 a reasonable rate of return on insurance and risks described in 394 subparagraph 1. which are written in this state. 395 3. An insurer must notify the office of any changes to 396 rates for insurance and risks described in subparagraph 1. no 397 later than 30 days after the effective date of the change. The 398 notice must include the name of the insurer, the type or kind of 399 insurance subject to rate change, total premium written during 400 the immediately preceding year by the insurer for the type or 401 kind of insurance subject to the rate change, and the average 402 statewide percentage change in rates. Underwriting files, 403 premiums, losses, and expense statistics with regard to 404 insurance and risks described in subparagraph 1. written by an 405 insurer shall be maintained by the insurer and subject to 406 examination by the office. Upon examination, the office shall, 407 in accordance with generally accepted and reasonable actuarial 408 techniques, consider the rate factors in paragraphs (2)(b), (c), 409 and (d) and the standards in paragraph (2)(e) to determine if 410 the rate is excessive, inadequate, or unfairly discriminatory. 411 4. A rating organization must notify the office of any 412 changes to loss cost for insurance and risks described in 413 subparagraph 1. no later than 30 days after the effective date 414 of the change. The notice must include the name of the rating 415 organization, the type or kind of insurance subject to a loss 416 cost change, loss costs during the immediately preceding year 417 for the type or kind of insurance subject to the loss cost 418 change, and the average statewide percentage change in loss 419 cost. Loss and exposure statistics with regard to risks 420 applicable to loss costs for a rating organization not subject 421 to paragraph (2)(a) or paragraph (2)(f) shall be maintained by 422 the rating organization and are subject to examination by the 423 office. Upon examination, the office shall, in accordance with 424 generally accepted and reasonable actuarial techniques, consider 425 the rate factors in paragraphs (2)(b)-(d) and the standards in 426 paragraph (2)(e) to determine if the rate is excessive, 427 inadequate, or unfairly discriminatory. 428 5. In reviewing a rate, the office may require the insurer 429 to provide at the insurer’s expense all information necessary to 430 evaluate the condition of the company and the reasonableness of 431 the rate according to the applicable criteria described in this 432 section. 433 Section 5. Subsection (14) is added to section 627.0651, 434 Florida Statutes, to read: 435 627.0651 Making and use of rates for motor vehicle 436 insurance.— 437 (14)(a) Commercial motor vehicle insurance covering a fleet 438 of 20 or more self-propelled vehicles is not subject to 439 subsection (1), subsection (2), or subsection (9) or s. 440 627.0645. 441 (b) The rates for insurance described in this subsection 442 may not be excessive, inadequate, or unfairly discriminatory. 443 (c) Insurers shall establish and use rates, rating 444 schedules, or rating manuals to allow the insurer a reasonable 445 rate of return on commercial motor vehicle insurance written in 446 this state covering a fleet of 20 or more self-propelled 447 vehicles. 448 (d) An insurer must notify the office of any changes to 449 rates for type of insurance described in this subsection no 450 later than 30 days after the effective date of the change. The 451 notice shall include the name of the insurer, the type or kind 452 of insurance subject to rate change, total premium written 453 during the immediately preceding year by the insurer for the 454 type or kind of insurance subject to the rate change, and the 455 average statewide percentage change in rates. Underwriting 456 files, premiums, losses, and expense statistics for the type of 457 insurance described in this subsection shall be maintained by 458 the insurer and subject to examination by the office. Upon 459 examination, the office shall, in accordance with generally 460 accepted and reasonable actuarial techniques, consider the 461 factors in paragraphs (2)(a)–(l) and apply subsections (3)-(8) 462 to determine if the rate is excessive, inadequate, or unfairly 463 discriminatory. 464 (e) A rating organization must notify the office of any 465 changes to loss cost for the type of insurance described in this 466 subsection no later than 30 days after the effective date of the 467 change. The notice shall include the name of the rating 468 organization, the type or kind of insurance subject to a loss 469 cost change, loss costs during the immediately preceding year 470 for the type or kind of insurance subject to the loss cost 471 change, and the average statewide percentage change in loss 472 cost. Loss and exposure statistics with regard to risks 473 applicable to loss costs for a rating organization not subject 474 to subsection (1), subsection (2), or subsection (9) shall be 475 maintained by the rating organization and are subject to 476 examination by the office. Upon examination, the office shall, 477 in accordance with generally accepted and reasonable actuarial 478 techniques, consider the rate factors in paragraphs (2)(a)-(l) 479 and apply subsections (3)-(8) to determine if the rate is 480 excessive, inadequate, or unfairly discriminatory. 481 (f) In reviewing the rate, the office may require the 482 insurer to provide at the insurer’s expense all information 483 necessary to evaluate the condition of the company and the 484 reasonableness of the rate according to the applicable criteria 485 described herein. 486 Section 6. Subsection (3) is added to section 626.9541, 487 Florida Statutes, to read: 488 626.9541 Unfair methods of competition and unfair or 489 deceptive acts or practices defined.— 490 (3) INPATIENT FACILITY NETWORK.—This section may not be 491 construed to prohibit a Medicare supplement insurer from 492 granting a premium credit to insureds for using an in-network 493 inpatient facility. 494 Section 7. Subsection (6) is added to section 627.6741, 495 Florida Statutes, to read: 496 627.6741 Issuance, cancellation, nonrenewal, and 497 replacement.— 498 (6) An insurer offering a Medicare supplement policy under 499 this part is not prohibited from entering into an agreement 500 through a network with inpatient facilities that agree to waive 501 the Medicare Part A deductible in whole or in part. An insurer 502 is not required to file a copy of the network agreement with, 503 and such network agreements are not subject to approval of, the 504 office. 505 Section 8. Subsection (8) is added to section 627.6745, 506 Florida Statutes, to read: 507 627.6745 Loss ratio standards; public rate hearings.— 508 (8) For an insurer that enters into a network agreement 509 pursuant to s. 627.6741(6), the waiver of the Medicare Part A 510 deductible and premium credit shall be factored into the 511 insurer’s loss-ratio calculation and policy premium. 512 Section 9. Effective upon this act becoming a law, 513 paragraph (b) of subsection (1) of section 628.4615, Florida 514 Statutes, is amended to read: 515 628.4615 Specialty insurers; acquisition of controlling 516 stock, ownership interest, assets, or control; merger or 517 consolidation.— 518 (1) For the purposes of this section, the term “specialty 519 insurer” means any person holding a license or certificate of 520 authority as: 521 (b) A home warranty association authorized to issue “home 522 warranties” as those terms are defined in s. 634.301(3) and (4); 523 Section 10. Effective upon this act becoming a law, 524 subsection (8) of section 634.011, Florida Statutes, is amended 525 to read: 526 634.011 Definitions.—As used in this part, the term: 527 (8) “Motor vehicle service agreement” or “service 528 agreement” means any contract or agreement indemnifying the 529 service agreement holder for the motor vehicle listed on the 530 service agreement and arising out of the ownership, operation, 531 and use of the motor vehicle against loss caused by failure of 532 any mechanical or other component part, or any mechanical or 533 other component part that does not function as it was originally 534 intended; however, nothing in this part shall prohibit or affect 535 the giving, free of charge, of the usual performance guarantees 536 by manufacturers or dealers in connection with the sale of motor 537 vehicles. Transactions exempt under s. 624.125 are expressly 538 excluded from this definition and are exempt from the provisions 539 of this part. Service agreements that are sold to persons other 540 than consumers and that cover motor vehicles used for commercial 541 purposes are excluded from this definition and are exempt from 542 regulation under the Florida Insurance Code. The term “motor 543 vehicle service agreement” includes any contract or agreement 544 that provides: 545 (a) For the coverage or protection defined in this 546 subsection and which is issued or provided in conjunction with 547 an additive product applied to the motor vehicle that is the 548 subject of such contract or agreement; 549 (b) For payment of vehicle protection expenses. 550 1.a. “Vehicle protection expenses” means a preestablished 551 flat amount payable for the loss of or damage to a vehicle or 552 expenses incurred by the service agreement holder for loss or 553 damage to a covered vehicle, including, but not limited to, 554 applicable deductibles under a motor vehicle insurance policy; 555 temporary vehicle rental expenses; expenses for a replacement 556 vehicle that is at least the same year, make, and model of the 557 stolen motor vehicle; sales taxes or registration fees for a 558 replacement vehicle that is at least the same year, make, and 559 model of the stolen vehicle; or other incidental expenses 560 specified in the agreement. 561 b. “Vehicle protection product” means a product or system 562 installed or applied to a motor vehicle or designed to prevent 563 the theft of the motor vehicle or assist in the recovery of the 564 stolen motor vehicle. 565 2. Vehicle protection expenses shall be payable in the 566 event of loss or damage to the vehicle as a result of the 567 failure of the vehicle protection product to prevent the theft 568 of the motor vehicle or to assist in the recovery of the stolen 569 motor vehicle. Vehicle protection expenses covered under the 570 agreement shall be clearly stated in the service agreement form, 571 unless the agreement provides for the payment of a 572 preestablished flat amount, in which case the service agreement 573 form shall clearly identify such amount. 574 3. Motor vehicle service agreements providing for the 575 payment of vehicle protection expenses shall either: 576 a. Reimburse a service agreement holder for the following 577 expenses, at a minimum: deductibles applicable to comprehensive 578 coverage under the service agreement holder’s motor vehicle 579 insurance policy; temporary vehicle rental expenses; sales taxes 580 and registration fees on a replacement vehicle that is at least 581 the same year, make, and model of the stolen motor vehicle; and 582 the difference between the benefits paid to the service 583 agreement holder for the stolen vehicle under the service 584 agreement holder’s comprehensive coverage and the actual cost of 585 a replacement vehicle that is at least the same year, make, and 586 model of the stolen motor vehicle; or 587 b. Pay a preestablished flat amount to the service 588 agreement holder. 589 590 Payments shall not duplicate any benefits or expenses paid to 591 the service agreement holder by the insurer providing 592 comprehensive coverage under a motor vehicle insurance policy 593 covering the stolen motor vehicle; however, the payment of 594 vehicle protection expenses at a preestablished flat amount of 595 $5,000 or less does not duplicate any benefits or expenses 596 payable under any comprehensive motor vehicle insurance policy; 597 or 598 (c)1. For the payment for paintless dent-removal services 599 provided by a company whose primary business is providing such 600 services. 601 2. “Paintless dent-removal” means the process of removing 602 dents, dings, and creases, including hail damage, from a vehicle 603 without affecting the existing paint finish, but does not 604 include services that involve the replacement of vehicle body 605 panels or sanding, bonding, or painting. 606 Section 11. Effective upon this act becoming a law, 607 subsection (7) is added to section 634.031, Florida Statutes, to 608 read: 609 634.031 License required.— 610 (7) Any person who violates this section commits, in 611 addition to any other violation, a misdemeanor of the first 612 degree, punishable as provided in s. 775.082 or s. 775.083. 613 Section 12. Effective upon this act becoming a law, 614 paragraph (b) of subsection (8) and paragraph (b) of subsection 615 (11) of section 634.041, Florida Statutes, are amended to read: 616 634.041 Qualifications for license.—To qualify for and hold 617 a license to issue service agreements in this state, a service 618 agreement company must be in compliance with this part, with 619 applicable rules of the commission, with related sections of the 620 Florida Insurance Code, and with its charter powers and must 621 comply with the following: 622 (8) 623 (b) A service agreement company does not have to establish 624 and maintain an unearned premium reserve if it purchases and 625 maintains contractual liability insurance in accordance with the 626 following: 627 1. The insurance covers 100 percent of its claim exposure 628 and is obtained from an insurer approved by the office which 629 holds a certificate of authority to do business within this 630 state. 631 2. If the service agreement company does not meet its 632 contractual obligations, the contractual liability insurance 633 policy binds its issuer to pay or cause to be paid to the 634 service agreement holder all legitimate claims and cancellation 635 refunds for all service agreements issued by the service 636 agreement company while the policy was in effect. This 637 requirement also applies to those service agreements for which 638 no premium has been remitted to the insurer. 639 3. If the issuer of the contractual liability policy is 640 fulfilling the service agreements covered by the contractual 641 liability policy and the service agreement holder cancels the 642 service agreement, the issuer must make a full refund of 643 unearned premium to the consumer, subject to the cancellation 644 fee provisions of s. 634.121(3)(5). The sales representative and 645 agent must refund to the contractual liability policy issuer 646 their unearned pro rata commission. 647 4. The policy may not be canceled, terminated, or 648 nonrenewed by the insurer or the service agreement company 649 unless a 90-day written notice thereof has been given to the 650 office by the insurer before the date of the cancellation, 651 termination, or nonrenewal. 652 5. The service agreement company must provide the office 653 with the claims statistics. 654 655 All funds or premiums remitted to an insurer by a motor vehicle 656 service agreement company under this part shall remain in the 657 care, custody, and control of the insurer and shall be counted 658 as an asset of the insurer; provided, however, this requirement 659 does not apply when the insurer and the motor vehicle service 660 agreement company are affiliated companies and members of an 661 insurance holding company system. If the motor vehicle service 662 agreement company chooses to comply with this paragraph but also 663 maintains a reserve to pay claims, such reserve shall only be 664 considered an asset of the covered motor vehicle service 665 agreement company and may not be simultaneously counted as an 666 asset of any other entity. 667 (11) 668 (b) Notwithstanding any other requirement of this part, a 669 service agreement company maintaining an unearned premium 670 reserve on all service agreements in accordance with paragraph 671 (8)(a) may offer service agreements providing vehicle protection 672 expenses if it maintains contractual liability insurance only on 673 all service agreements providing vehicle protection expenses and 674 continues to maintain the 50-percent reserve for all service 675 agreements not providing vehicle protection expenses. A service 676 agreement company maintaining contractual liability insurance 677 for all service agreements providing vehicle protection expenses 678 and the 50-percent reserve for all other service agreements 679 must, in the service agreement register as required under s. 680 634.136(2)(4), distinguish between insured service agreements 681 providing vehicle protection expenses and service agreements not 682 providing vehicle protection expenses. 683 Section 13. Effective upon this act becoming a law, 684 paragraph (d) is added to subsection (3) of section 634.095, 685 Florida Statutes, and subsection (7) is added to that section, 686 to read: 687 634.095 Prohibited acts.—Any service agreement company or 688 salesperson that engages in one or more of the following acts 689 is, in addition to any applicable denial, suspension, 690 revocation, or refusal to renew or continue any appointment or 691 license, guilty of a misdemeanor of the second degree, 692 punishable as provided in s. 775.082 or s. 775.083: 693 (3) Issuing or causing to be issued any advertisement 694 which: 695 (d) Is false, deceptive, or misleading with respect to: 696 1. The service agreement company’s affiliation with a motor 697 vehicle manufacturer; 698 2. The service agreement company’s possession of 699 information regarding a motor vehicle owner’s current motor 700 vehicle manufacturer’s original equipment warranty; 701 3. The expiration of a motor vehicle owner’s current motor 702 vehicle manufacturer’s original equipment warranty; or 703 4. Any requirement that the motor vehicle owner register 704 for a new motor vehicle service agreement with the company in 705 order to maintain coverage under the current motor vehicle 706 service agreement or manufacturer’s original equipment warranty. 707 (7) Remitting premiums received on motor vehicle service 708 agreements sold to any person other than the licensed service 709 agreement company that is obligated to perform under such 710 agreement, if the agreement between such company and the 711 salesperson requires that premiums be submitted directly to the 712 service agreement company. 713 Section 14. Effective upon this act becoming a law, section 714 634.121, Florida Statutes, is amended to read: 715 634.121Filing ofForms, required procedures, provisions.— 716(1) A service agreement form or related form may not be717issued or used in this state unless it has been filed with and718approved by the office. Upon application for a license, the719office shall require the applicant to submit for approval each720brochure, pamphlet, circular, form letter, advertisement, or721other sales literature or advertising communication addressed or722intended for distribution. The office shall disapprove any723document which is untrue, deceptive, or misleading or which724contains misrepresentations or omissions of material facts.725(a) After an application has been approved, a licensee is726not required to submit brochures or advertisement to the office727for approval; however, a licensee may not have published, and a728person may not publish, any brochure or advertisement which is729untrue, deceptive, or misleading or which contains730misrepresentations or omissions of material fact.731(b) For purposes of this section, brochures and advertising732includes, but is not limited to, any report, circular, public733announcement, certificate, or other printed matter or734advertising material which is designed or used to solicit or735induce any persons to enter into any motor vehicle service736agreement.737(c) The office shall disapprove any service agreement form738providing vehicle protection expenses which does not clearly739indicate either the method for calculating the benefit to be740paid or provided to the service agreement holder or the741preestablished flat amount payable pursuant to the terms of the742service agreement. All service agreement forms providing vehicle743protection expenses shall clearly indicate the term of the744service agreement, whether new or used cars are eligible for the745vehicle protection product, and that the service agreement746holder may not make any claim against the Florida Insurance747Guarantee Association for vehicle protection expenses. The748service agreement shall be provided to a service agreement749holder on a form that provides only vehicle protection expenses.750A service agreement form providing vehicle protection expenses751must state that the service agreement holder must have in force752at the time of loss comprehensive motor vehicle insurance753coverage as a condition precedent to requesting payment of754vehicle protection expenses.755(2) Every filing required under this section must be made756not less than 30 days in advance of issuance or use. At the757expiration of 30 days from the date of filing, a form so filed758becomes approved unless prior thereto it has been affirmatively759disapproved by written notice of the office. The office may760extend by not more than an additional 15 days the period within761which it may affirmatively approve or disapprove any form by762giving notice of extension before the expiration of the initial76330-day period. At the expiration of any period as so extended764and in the absence of prior affirmative disapproval, the form765becomes approved.766 (1)(3)Before the sale of any service agreement, written 767 notice must be given to the prospective purchaser by the service 768 agreement company or its agent or salesperson, on an office769approved form,that purchase of the service agreement is not 770 required in order to purchase or obtain financing for a motor 771 vehicle. 772 (2)(4)All motor vehicle service agreements are assignable 773 in a consumer transaction and must contain a statement in 774 conspicuous, boldfaced type, informing the purchaser of the 775 service agreement of her or his right to assign it to a 776 subsequent retail purchaser of the motor vehicle covered by the 777 service agreement and all conditions on such right of transfer. 778 The assignment must occur within a period of time specified in 779 the agreement, which period may not expire earlier than 15 days 780 after the date of the sale or transfer of the motor vehicle. The 781 service agreement company may charge an assignment fee not to 782 exceed $40. 783 (3)(5)(a) Each service agreement must contain a 784 cancellation provision. Any service agreement is cancelable by 785 the purchaser within 60 days after purchase. The refund must be 786 100 percent of the gross premium paid, less any claims paid on 787 the agreement. A reasonable administrative fee may be charged 788 not to exceed 5 percent of the gross premium paid by the 789 agreement holder. 790 (b) After the service agreement has been in effect for 60 791 days, it may not be canceled by the insurer or service agreement 792 company unless: 793 1. There has been a material misrepresentation or fraud at 794 the time of sale of the service agreement; 795 2. The agreement holder has failed to maintain the motor 796 vehicle as prescribed by the manufacturer; 797 3. The odometer has been tampered with or disabled and the 798 agreement holder has failed to repair the odometer; or 799 4. For nonpayment of premium by the agreement holder, in 800 which case the service agreement company shall provide the 801 agreement holder notice of cancellation by certified mail. 802 803 If the service agreement is canceled by the insurer or service 804 agreement company, the return of premium must not be less than 805 100 percent of the paid unearned pro rata premium, less any 806 claims paid on the agreement. If, after 60 days, the service 807 agreement is canceled by the service agreement holder, the 808 insurer or service agreement company shall return directly to 809 the agreement holder not less than 90 percent of the unearned 810 pro rata premium, less any claims paid on the agreement. The 811 service agreement company remains responsible for full refunds 812 to the consumer on canceled service agreements. However, the 813 salesperson and agent are responsible for the refund of the 814 unearned pro rata commission. A service agreement company may 815 effectuate refunds through the issuing salesperson or agent. 816 (4)(6)If the service agreement is canceled, pursuant to an 817 order of liquidation, the salesperson or agent is responsible 818 for refunding, and must refund, to the receiver the unearned pro 819 rata commission. 820 (5)(7)If a service agreement company violates any lawful 821 order of the office or fails to meet its contractual obligations 822 under this part, upon notice from the office, the sales 823 representative or agent must refund to the service agreement 824 holder the unearned pro rata commission, unless the sales 825 representative or agent has made other arrangements, 826 satisfactory to the office, with the service agreement holder. 827 (6)(8)Each service agreement, which includes a copy of the 828 application form, must be mailed or delivered to the agreement 829 holder within 45 days after the date of purchase. 830 (7)(9)Each service agreement form must contain in 831 conspicuous, boldfaced type any statement or clause that places 832 restrictions or limitations on the benefits offered or disclose 833 such restrictions or limitations in regular type in a section of 834 the service agreement containing a conspicuous, boldfaced type 835 heading. 836 (8)(10)If an insurer or service agreement company intends 837 to use or require the use of remanufactured or used replacement 838 parts, each service agreement form as well as all service 839 agreement brochures must contain in conspicuous, boldfaced type 840 a statement to that effect. 841 (9)(11)Each service agreement form as well as all service 842 agreement company sales brochures must clearly identify the 843 name, address, and Florida license number of the licensed 844 insurer or service agreement company. 845 (10)(12)If a service agreement contains a rental car 846 provision, it must disclose the terms and conditions of this 847 benefit in conspicuous, boldfaced type or disclose such 848 restrictions or limitations in regular type in a section of the 849 service agreement containing a conspicuous, boldfaced type 850 heading. 851 (11) By July 1, 2011, each service agreement sold in this 852 state must be accompanied by a written disclosure to the 853 consumer that the rate charged for the service agreement is not 854 subject to regulation by the office. A service agreement company 855 may comply with this requirement by including such disclosure in 856 its service agreement form or in a separate written notice 857 provided to the consumer at the time of sale. 858 Section 15. Effective upon this act becoming a law, section 859 634.1213, Florida Statutes, is amended to read: 860 634.1213 Noncompliant formsGrounds for disapproval.—The 861 office may order a service agreement company to stop using 862disapproveany service agreement form thator service agreement863company sales brochures filed under s.634.121, or withdraw any864previous approval thereof, if the form or brochure: 865 (1) Is in any respect in violation of or does not comply 866 with this part, any applicable provision of the Florida 867 Insurance Code, or any applicable rule of the officecommission. 868 (2) Contains or incorporates by reference when such 869 incorporation is otherwise permissible, any inconsistent, 870 ambiguous, or misleading clauses, or exceptions and conditions 871 which deceptively affect the risk purported to be assumed in the 872 general coverage of the service agreement. 873 (3) Has any title, heading, or other indication of its 874 provisions which is misleading. 875 (4) Is printed or otherwise reproduced in such manner as to 876 render any material provision of the form substantially 877 illegible. 878 (5) Contains any provision which is unfair or inequitable 879 or which encourages misrepresentation. 880 (6) Contains any provision which makes it difficult to 881 determine the actual insurer or service agreement company 882 issuing the form. 883 (7) Contains any provision for reducing claim payments due 884 to depreciation of parts, except for marine engines. 885 Section 16. Effective upon this act becoming a law, 886 subsection (1) of section 634.137, Florida Statutes, is amended 887 to read: 888 634.137 Financial and statistical reporting requirements.— 889 (1) By March 1 of each year, each service agreement company 890 shall submit to the office annual financial reports on forms 891 prescribed by the commission and furnished by the officeas892follows:893(a) Reports for a period ending December 31 are due by894March 1.895(b) Reports for a period ending March 31 are due by May 15.896(c) Reports for a period ending June 30 are due by August89715.898(d) Reports for a period ending September 30 are due by899November 15. 900 Section 17. Effective upon this act becoming a law, section 901 634.141, Florida Statutes, is amended to read: 902 634.141 Examination of companies.— 903 (1) Motor vehicle service agreement companies licensed 904 under this part mayshallbe subject to periodic examination by 905 the office in the same manner and subject to the same terms and 906 conditions as applies to insurers under part II of chapter 624. 907 The commission may by rule establish provisions whereby a 908 company may be exempted from examination. 909 (2) The office shall determine whether to conduct an 910 examination of a company by considering: 911 (a) The amount of time that the company has been 912 continuously licensed and operating under the same management 913 and control. 914 (b) The company’s history of compliance with applicable 915 law. 916 (c) The number of consumer complaints against the company. 917 (d) The financial condition of the company, demonstrated by 918 the financial reports submitted pursuant to s. 634.137. 919 Section 18. Effective upon this act becoming a law, 920 paragraph (b) of subsection (1) of section 634.1815, Florida 921 Statutes, is amended to read: 922 634.1815 Rebating; when allowed.— 923 (1) No salesperson shall rebate any portion of his or her 924 commission except as follows: 925 (b) The rebate shall be in accordance with a rebating 926 schedule filed with and approved by thesalesperson with the927 service agreement company issuing the service agreement to which 928 the rebate applies. The service agreement company shall maintain 929 a copy of all rebating schedules for a period of 3 years. 930 Section 19. Effective upon this act becoming a law, 931 subsection (13) of section 634.282, Florida Statutes, is 932 amended, and subsection (17) is added to that section, to read: 933 634.282 Unfair methods of competition and unfair or 934 deceptive acts or practices defined.—The following methods, 935 acts, or practices are defined as unfair methods of competition 936 and unfair or deceptive acts or practices: 937 (13) ILLEGAL DEALINGS IN PREMIUMS; EXCESS OR REDUCED 938 CHARGES FOR MOTOR VEHICLE SERVICE AGREEMENTS.— 939 (a) Knowingly collecting any sum as a premium or charge for 940 a motor vehicle service agreement, which is not then provided, 941 or is not in due course to be provided, subject to acceptance of 942 the risk by a service agreement company or an insurer, by a 943 motor vehicle service agreement issued by a service agreement 944 company or an insurer as permitted by this part. 945 (b) Knowingly collecting as a premium or charge for a motor 946 vehicle service agreement any sum in excess of or less than the 947 premium or charge applicable to such motor vehicle service 948 agreement,in accordance with the applicable classifications and949rates as filed with the office, andas specified in the motor 950 vehicle service agreement. However, there is no violation of 951 this subsection if excess premiums or charges are refunded to 952 the service agreement holder within 45 days after receipt of the 953 agreement by the service agreement company or if the licensed 954 sales representative’s commission is reduced by the amount of 955 any premium undercharge. 956 (17) FAILURE TO PROVIDE TERMS AND CONDITIONS PRIOR TO 957 SALE.—Failing to provide a consumer with a complete sample copy 958 of the terms and conditions of the service agreement prior to 959 the time of sale upon a request for the same by the consumer. A 960 service agreement company may comply with this subsection by 961 providing the consumer with a sample copy of the terms and 962 conditions of the service agreement or by directing the consumer 963 to a website that displays a complete sample of the terms and 964 conditions of the service agreement. 965 966 No provision of this section shall be deemed to prohibit a 967 service agreement company or a licensed insurer from giving to 968 service agreement holders, prospective service agreement 969 holders, and others for the purpose of advertising, any article 970 of merchandise having a value of not more than $25. 971 Section 20. Effective upon this act becoming a law, section 972 634.301, Florida Statutes, as amended by section 1 of chapter 973 2007-235, Laws of Florida, is amended to read: 974 634.301 Definitions.—As used in this part, the term: 975 (1) “Gross written premiums” means the total amount of 976 premiums, paid for the entire period of the home warranty, 977 inclusive of commissions, for which the association is obligated 978 under home warranties issued. 979(2) “Home improvement” means major remodeling, enclosure of980a garage, addition of a room, addition of a pool, and other like981items that add value to the residential property. The term does982not include normal maintenance for items such as painting,983reroofing, and other like items subject to normal wear and tear.984 (2)(3)“Home warranty” or “warranty” means any contract or 985 agreement:986(a) Offered in connection with the sale of residential987property;988(b) Offered in connection with a loan of $5,000 or more989which is secured by residential property that is the subject of990the warranty, but not in connection with the sale of such991property;992(c) Offered in connection with a home improvement of $7,500993or more for residential property that is the subject of the994warranty, but not in connection with the sale of such property;995or996(d) Offered in connection with a home inspection service as997defined under s.468.8311(4) or a mold assessment as defined998under s.468.8411(3);999 1000 whereby a person undertakes to indemnify the warranty holder 1001 against the cost of repair or replacement, or actually furnishes 1002 repair or replacement, of any structural component or appliance 1003 of a home, necessitated by wear and tear or an inherent defect 1004 of any such structural component or appliance or necessitated by 1005 the failure of an inspection to detect the likelihood of any 1006 such loss. However, this part does not prohibit the giving of 1007 usual performance guarantees by either the builder of a home or 1008 the manufacturer or seller of an appliance, as long as no 1009 identifiable charge is made for such guarantee. This part does 1010 not permit the provision of indemnification against 1011 consequential damages arising from the failure of any structural 1012 component or appliance of a home, which practice constitutes the 1013 transaction of insurance subject to all requirements of the 1014 insurance code. This part does not apply to service contracts 1015 entered into between consumers and nonprofit organizations or 1016 cooperatives the members of which consist of condominium 1017 associations and condominium owners and which perform repairs 1018 and maintenance for appliances or maintenance of the residential 1019 property. This part does not apply to a contract or agreement 1020 offeredin connection with a sale of residential propertyby a 1021 warranty association in compliance with part III, provided such 1022 contract or agreement only relates to the systems and appliances 1023 of the covered residential property and does not cover any 1024 structural component of the residential property. 1025 (3)(4)“Home warranty association” means any corporation or 1026 any other organization, other than an authorized insurer, 1027 issuing home warranties. 1028 (4)(5)“Impaired” means having liabilities in excess of 1029 assets. 1030 (5)(6)“Insolvent” means the inability of a corporation to 1031 pay its debts as they become due in the usual course of its 1032 business. 1033 (6)(7)“Insurance code” means the Florida Insurance Code. 1034 (7)(8)“Insurer” means any property or casualty insurer 1035 duly authorized to transact such business in this state. 1036 (8)(9)“Listing period” means the period of time 1037 residential property is listed for sale with a licensed real 1038 estate broker, beginning on the date the residence is first 1039 listed for sale and ending on either the date the sale of the 1040 residence is closed, the date the residence is taken off the 1041 market, or the date the listing contract with the real estate 1042 broker expires. 1043 (9)(10)“Net assets” means the amount by which the total 1044 statutory assets of an association exceed the total liabilities 1045 of the association. 1046 (10)(11)“Person” includes an individual, company, 1047 corporation, association, insurer, agent, and every other legal 1048 entity. 1049 (11)(12)“Premium” means the total consideration received, 1050 or to be received, by an insurer or home warranty association 1051 for or related to the issuance and delivery of any binder or 1052 warranty, including any charges designated as assessments or 1053 fees for policies, surveys, inspections, or service or any other 1054 charges. 1055 (12)(13)“Sales representative” means any person with whom 1056 an insurer or home inspection or warranty association has a 1057 contract and who is utilized by such insurer or association for 1058 the purpose of selling or issuing home warranties. The term 1059 includes all employees of an insurer or association engaged 1060 directly in the sale or issuance of home warranties. 1061 (13)(14)“Structural component” means the roof, plumbing 1062 system, electrical system, foundation, basement, walls, 1063 ceilings, or floors of a home. 1064 Section 21. Effective upon this act becoming a law, 1065 subsection (4) is added to section 634.303, Florida Statutes, to 1066 read: 1067 634.303 License required.— 1068 (4) Any person who provides, offers to provide, or holds 1069 oneself out as providing or offering to provide home warranties 1070 in this state or from this state without holding a subsisting 1071 license commits, in addition to any other violation, a 1072 misdemeanor of the first degree, punishable as provided in s. 1073 775.082 or s. 775.083. 1074 Section 22. Effective upon this act becoming a law, 1075 paragraph (f) of subsection (2) of section 634.308, Florida 1076 Statutes, is amended to read: 1077 634.308 Grounds for suspension or revocation of license.— 1078 (2) The license of any home warranty association shall be 1079 suspended, revoked, or not renewed if it is determined that such 1080 association: 1081 (f) Has issued warranty contracts which renewal contracts 1082 provide that the cost of renewal exceeds the then-current cost 1083 for new warranty contracts, unless the increase is supported by 1084 the claims history or claims cost data, or impose a fee for 1085 inspection of the premises. 1086 Section 23. Effective upon this act becoming a law, section 1087 634.312, Florida Statutes, is amended to read: 1088 634.312 Forms; required provisions and proceduresFiling;1089approval of forms.— 1090(1) No warranty form or related form shall be issued or1091used in this state unless it has been filed with and approved by1092the office. Also upon application for a license, the office1093shall require the applicant to submit for approval each1094brochure, pamphlet, circular, form letter, advertisement, or1095other sales literature or advertising communication addressed or1096intended for distribution. Approval of the application1097constitutes approval of such documents, unless the applicant has1098consented otherwise in writing. The office shall disapprove any1099document which is untrue, deceptive, or misleading or which1100contains misrepresentations or omissions of material facts.1101(a) After an application has been approved, a licensee is1102not required to submit brochures or advertisement to the office1103for approval; however, a licensee may not have published, and a1104person may not publish, any brochure or advertisement which is1105untrue, deceptive, or misleading or which contains1106misrepresentations or omissions of material fact.1107(b) For purposes of this section, brochures and advertising1108includes, but is not limited to, any report, circular, public1109announcement, certificate, or other printed matter or1110advertising material which is designed or used to solicit or1111induce any persons to enter into any home warranty agreement.1112(2) Every such filing shall be made not less than 30 days1113in advance of issuance or use. At the expiration of 30 days from1114date of filing, a form so filed shall be deemed approved unless1115prior thereto it has been affirmatively approved or disapproved1116by written order of the office.1117(3) The office shall not approve any such form that imposes1118a fee for inspection of the premises.1119 (1)(4)All home warranty contracts are assignable in a 1120 consumer transaction and must contain a statement informing the 1121 purchaser of the home warranty of her or his right to assign it, 1122 at least within 15 days from the date the home is sold or 1123 transferred, to a subsequent retail purchaser of the home 1124 covered by the home warranty and all conditions on such right of 1125 transfer. The home warranty company may charge an assignment fee 1126 not to exceed $40. Home warranty assignments include, but are 1127 not limited to, the assignment from a home builder who purchased 1128 the home warranty to a subsequent home purchaser. 1129 (2)(5)Subject to the insurer’s or home warranty 1130 association’s requirement as to payment of premium, every home 1131 warranty shall be mailed or delivered to the warranty holder not 1132 later than 45 days after the effectuation of coverage, and the 1133 application is part of the warranty contract document. 1134 (3)(6)All home warranty contracts must state in 1135 conspicuous, boldfaced type that the home warranty may not 1136 provide listing period coverage free of charge. 1137 (4)(7)All home warranty contracts must disclose any 1138 exclusions, restrictions, or limitations on the benefits offered 1139 or the coverage provided by the home warranty contract in 1140 boldfaced type, and must contain, in boldfaced type, a statement 1141 on the front page of the contract substantially similar to the 1142 following: “Certain items and events are not covered by this 1143 contract. Please refer to the exclusions listed on page .... of 1144 this document.” 1145 (5)(8)Each home warranty contract shall contain a 1146 cancellation provision. Any home warranty agreement may be 1147 canceled by the purchaser within 10 days after purchase. The 1148 refund must be 100 percent of the gross premium paid, less any 1149 claims paid on the agreement. A reasonable administrative fee 1150 may be charged, not to exceed 5 percent of the gross premium 1151 paid by the warranty agreement holder. After the home warranty 1152 agreement has been in effect for 10 days, if the contract is 1153 canceled by the warranty holder, a return of premium shall be 1154 based upon 90 percent of unearned pro rata premium less any 1155 claims that have been paid. If the contract is canceled by the 1156 association for any reason other than for fraud or 1157 misrepresentation, a return of premium shall be based upon 100 1158 percent of unearned pro rata premium, less any claims paid on 1159 the agreement. 1160 (6) By July 1, 2011, each home warranty contract sold in 1161 this state must be accompanied by a written disclosure to the 1162 consumer that the rate charged for the contract is not subject 1163 to regulation by the office. A home warranty association may 1164 comply with this requirement by including such disclosure in its 1165 home warranty contract form or in a separate written notice 1166 provided to the consumer at the time of sale. 1167 Section 24. Effective upon this act becoming a law, section 1168 634.3123, Florida Statutes, is amended to read: 1169 634.3123 NoncompliantGrounds for disapproval offorms.—The 1170 office may order a home warranty association to stop using any 1171 contractshall disapproveanyform thatfiled under s.634.3121172or withdraw any previous approval if the form: 1173 (1) Is in violation of or does not comply with this part. 1174 (2) Contains or incorporates by reference, when such 1175 incorporation is otherwise permissible, any inconsistent, 1176 ambiguous, or misleading clauses or exceptions or conditions 1177 which deceptively affect the risk purported to be assumed in the 1178 general coverage of the contract. 1179 (3) Has any title, heading, or other indication of its 1180 provisions which is misleading. 1181 (4) Is printed or otherwise reproduced in such a manner as 1182 to render any material provision of the form illegible. 1183 (5) Provides that the cost of renewal exceeds the then 1184 current cost for new warranty contracts, unless the increase is 1185 supported by the claims history or claims cost data, or impose a 1186 fee for inspection of the premises. 1187 Section 25. Effective upon this act becoming a law, section 1188 634.314, Florida Statutes, is amended to read: 1189 634.314 Examination of associations.— 1190 (1) Home warranty associations licensed under this part may 1191shallbe subject to periodic examinations by the office, in the 1192 same manner and subject to the same terms and conditions as 1193 apply to insurers under part II of chapter 624 of the insurance 1194 code. 1195 (2) The office shall determine whether to conduct an 1196 examination of a home warranty association by considering: 1197 (a) The amount of time that the association has been 1198 continuously licensed and operating under the same management 1199 and control. 1200 (b) The association’s history of compliance with applicable 1201 law. 1202 (c) The number of consumer complaints against the 1203 association. 1204 (d) The financial condition of the association, 1205 demonstrated by the financial reports submitted pursuant to s. 1206 634.313. 1207 Section 26. Effective upon this act becoming a law, 1208 paragraph (b) of subsection (1) of section 634.3205, Florida 1209 Statutes, is amended to read: 1210 634.3205 Rebating; when allowed.— 1211 (1) No sales representative shall rebate any portion of his 1212 or her commission except as follows: 1213 (b) The rebate shall be in accordance with a rebating 1214 schedule filed with and approved by thesales representative1215with thehome warranty association issuing the home warranty to 1216 which the rebate applies. The home warranty association shall 1217 maintain a copy of all rebating schedules for a period of 3 1218 years. 1219 Section 27. Effective upon this act becoming a law, 1220 subsection (8) of section 634.336, Florida Statutes, is amended, 1221 and subsection (9) is added to that section, to read: 1222 634.336 Unfair methods of competition and unfair or 1223 deceptive acts or practices defined.—The following methods, 1224 acts, or practices are defined as unfair methods of competition 1225 and unfair or deceptive acts or practices: 1226 (8) COERCION OF DEBTORS.—When a home warranty is soldas1227authorized by s.634.301(3)(b): 1228 (a) Requiring, as a condition precedent or condition 1229 subsequent to the lending of the money or the extension of the 1230 credit or any renewal thereof, that the person to whom such 1231 credit is extended purchase a home warranty; or 1232 (b) Failing to provide the advice required by s. 634.344. 1233 (9) FAILURE TO PROVIDE TERMS AND CONDITIONS PRIOR TO SALE. 1234 Failing to provide a consumer with a complete sample copy of the 1235 terms and conditions of the home warranty contract prior to the 1236 time of sale upon a request for the same by the consumer. A home 1237 warranty association may comply with this subsection by 1238 providing the consumer with a sample copy of the terms and 1239 conditions of the home warranty contract or by directing the 1240 consumer to a website that displays a complete sample of the 1241 terms and conditions of the contract. 1242 Section 28. Effective upon this act becoming a law, section 1243 634.344, Florida Statutes, is amended to read: 1244 634.344 Coercion of debtor prohibited.— 1245 (1) When a home warranty is sold in connection with the 1246 lending of moneyas authorized by s.634.301(3)(b), anoperson 1247 may not require, as a condition precedent or condition 1248 subsequent to the lending of the money or the extension of the 1249 credit or any renewal thereof, that the person to whom such 1250 money or credit is extended purchase a home warranty. 1251 (2) When a home warranty is purchased in connection with 1252 the lending of moneyas authorized by s.634.301(3)(b), the 1253 insurer or home warranty association or the sales representative 1254 of the insurer or home warranty association shall advise the 1255 borrower or purchaser in writing that Florida law prohibits the 1256 lender from requiring the purchase of a home warranty as a 1257 condition precedent or condition subsequent to the making of the 1258 loan. 1259 Section 29. Effective upon this act becoming a law, 1260 subsection (5) of section 634.401, Florida Statutes, is amended 1261 to read: 1262 634.401 Definitions.—As used in this part, the term: 1263 (5) “Indemnify” means to undertake repair or replacement of 1264 a consumer product, or pay compensation for such repair or 1265 replacement by cash, check, store credit, gift card, or other 1266 similar means, in return for the payment of a segregated 1267 premium, when such consumer product suffers operational failure. 1268 Section 30. Effective upon this act becoming a law, 1269 subsection (5) is added to section 634.403, Florida Statutes, to 1270 read: 1271 634.403 License required.— 1272 (5) Any person who provides, offers to provide, or holds 1273 oneself out as providing or offering to provide a service 1274 warranty in this state or from this state without holding a 1275 subsisting license commits, in addition to any other violation, 1276 a misdemeanor of the first degree, punishable as provided in s. 1277 775.082 or s. 775.083. 1278 Section 31. Effective upon this act becoming a law, 1279 paragraph (e) of subsection (3) of section 634.406, Florida 1280 Statutes, is amended to read: 1281 634.406 Financial requirements.— 1282 (3) An association will not be required to establish an 1283 unearned premium reserve if it has purchased contractual 1284 liability insurance which demonstrates to the satisfaction of 1285 the office that 100 percent of its claim exposure is covered by 1286 such policy. The contractual liability insurance shall be 1287 obtained from an insurer that holds a certificate of authority 1288 to do business within the state. For the purposes of this 1289 subsection, the contractual liability policy shall contain the 1290 following provisions: 1291 (e) In the event the issuer of the contractual liability 1292 policy is fulfilling the service warranty covered by policy and 1293 in the event the service warranty holder cancels the service 1294 warranty, it is the responsibility of the contractual liability 1295 policy issuer to effectuate a full refund of unearned premium to 1296 the consumer. This refund shall be subject to the cancellation 1297 fee provisions of s. 634.414(3). The salesperson or agent shall 1298 refund to the contractual liability policy issuer the unearned 1299 pro rata commission. 1300 Section 32. Effective upon this act becoming a law, section 1301 634.414, Florida Statutes, is amended to read: 1302 634.414 Forms; required provisionsFiling; approval of1303forms.— 1304(1) No service warranty form or related form shall be1305issued or used in this state unless it has been filed with and1306approved by the office. Upon application for a license, the1307office shall require the applicant to submit for approval each1308brochure, pamphlet, circular, form letter, advertisement, or1309other sales literature or advertising communication addressed or1310intended for distribution. The office shall disapprove any1311document which is untrue, deceptive, or misleading or which1312contains misrepresentations or omissions of material facts.1313(a) After an application has been approved, a licensee is1314not required to submit brochures or advertisement to the office1315for approval; however, a licensee may not have published, and a1316person may not publish, any brochure or advertisement which is1317untrue, deceptive, or misleading or which contains1318misrepresentations or omissions of material fact.1319(b) For purposes of this section, brochures and advertising1320includes, but is not limited to, any report, circular, public1321announcement, certificate, or other printed matter or1322advertising material which is designed or used to solicit or1323induce any persons to enter into any service warranty agreement.1324(2) Each filing shall be made not less than 30 days in1325advance of its issuance or use. At the expiration of 30 days1326from date of filing, a form so filed shall be deemed approved1327unless prior thereto it has been affirmatively disapproved by1328written order of the office.1329 (1)(3)Each service warranty contract shall contain a 1330 cancellation provision. IfIn the eventthe contract is canceled 1331 by the warranty holder, return of premium shall be based upon no 1332 less than 90 percent of unearned pro rata premium less any 1333 claims that have been paid or less the cost of repairs made on 1334 behalf of the warranty holder. IfIn the eventthe contract is 1335 canceled by the association, return of premium shall be based 1336 upon 100 percent of unearned pro rata premium, less any claims 1337 paid or the cost of repairs made on behalf of the warranty 1338 holder. 1339 (2) By July 1, 2011, each service warranty contract sold in 1340 this state must be accompanied by a written disclosure to the 1341 consumer that the rate charged for the contract is not subject 1342 to regulation by the office. A service warranty association may 1343 comply with this requirement by including such disclosure in its 1344 service warranty contract form or in a separate written notice 1345 provided to the consumer at the time of sale. 1346(4) The name of the service warranty association issuing1347the contract must be more prominent than any other company name1348or program name on the service warranty form or sales brochure.1349 Section 33. Effective upon this act becoming a law, section 1350 634.4145, Florida Statutes, is amended to read: 1351 634.4145 NoncompliantGrounds for disapproval offorms.—The 1352 office may order a service warranty association to stop using 1353 any contractshall disapprove anyform thatfiled under s.1354634.414if the form: 1355 (1) Violates this part; 1356 (2) Is misleading in any respect; 1357 (3) Is reproduced so that any material provision is 1358 substantially illegible; or 1359 (4) Contains provisions which are unfair or inequitable or 1360 which encourage misrepresentation. 1361 Section 34. Effective upon this act becoming a law, section 1362 634.415, Florida Statutes, is amended to read: 1363 634.415 Tax on premiums; annual statement; reports;1364quarterly statements.— 1365 (1) In addition to the license fees provided in this part 1366 for service warranty associations and license taxes as provided 1367 in the insurance code as to insurers, each such association and 1368 insurer shall, annually on or before March 1, file with the 1369 office its annual statement, in the form prescribed by the 1370 commission, showing all premiums or assessments received by it 1371 in connection with the issuance of service warranties in this 1372 state during the preceding calendar year and using accounting 1373 principles which will enable the office to ascertain whether the 1374 financial requirements set forth in s. 634.406 have been 1375 satisfied. 1376 (2) The gross amount of premiums and assessments is subject 1377 to the sales tax imposed by s. 212.0506. 1378 (3) The office may levy a fine of up to $100 a day for each 1379 day an association neglects to file the annual statement in the 1380 form and within the time provided by this part. The amount of 1381 the fine shall be established by rules adopted by the 1382 commission. The office shall deposit all sums collected by it 1383 under this section to the credit of the Insurance Regulatory 1384 Trust Fund. 1385(4) In addition to an annual statement, the office may1386require of licensees, under oath and in the form prescribed by1387it, quarterly statements or special reports which it deems1388necessary to the proper supervision of licensees under this1389part. For manufacturers as defined in s.634.401, the office1390shall require only the annual audited financial statements of1391the warranty operations and corporate reports as filed by the1392manufacturer with the Securities and Exchange Commission,1393provided that the office may require additional reporting by1394manufacturers upon a showing by the office that annual reporting1395is insufficient to protect the interest of purchasers of service1396warranty agreements in this state or fails to provide sufficient1397proof of the financial status required by this part.1398 (4)(5)The office may suspend or revoke the license of a 1399 service warranty association failing to file its annual 1400 statementor quarterly reportwhen due. 1401 (5)(6)The commission may by rule require each service 1402 warranty association to submit to the office, as the commission 1403 may designate, all or part of the information contained in the 1404 financial statements and reports required by this section in a 1405 computer-readable form compatible with the electronic data 1406 processing system specified by the office. 1407 Section 35. Effective upon this act becoming a law, section 1408 634.416, Florida Statutes, is amended to read: 1409 634.416 Examination of associations.— 1410 (1)(a) Service warranty associations licensed under this 1411 part may bearesubject to periodic examination by the office, 1412 in the same manner and subject to the same terms and conditions 1413 that apply to insurers under part II of chapter 624. 1414 (b) The office shall determine whether to conduct an 1415 examination of a service warranty association by considering: 1416 1. The amount of time that the association has been 1417 continuously licensed and operating under the same management 1418 and control. 1419 2. The association’s history of compliance with applicable 1420 law. 1421 3. The number of consumer complaints against the 1422 association. 1423 4. The financial condition of the association, demonstrated 1424 by the financial reports submitted pursuant to s. 634.313. 1425 (2)However,The rate charged a service warranty 1426 association by the office for examination may be adjusted to 1427 reflect the amount collected for the Form 10-K filing fee as 1428 provided in this section. 1429 (3) On or before May 1 of each year, an association may 1430 submit to the office the Form 10-K, as filed with the United 1431 States Securities and Exchange Commission pursuant to the 1432 Securities Exchange Act of 1934, as amended. Upon receipt and 1433 review of the most current Form 10-K, the office may waive the 1434 examination requirement; if the office determines not to waive 1435 the examination, such examination will be limited to that 1436 examination necessary to ensure compliance with this part. The 1437 Form 10-K shall be accompanied by a filing fee of $2,000 to be 1438 deposited into the Insurance Regulatory Trust Fund. 1439 (4)(2)The office is not required to examine an association 1440 that has less than $20,000 in gross written premiums as 1441 reflected in its most recent annual statement. The office may 1442 examine such an association if it has reason to believe that the 1443 association may be in violation of this part or is otherwise in 1444 an unsound financial condition. If the office examines an 1445 association that has less than $20,000 in gross written 1446 premiums, the examination fee may not exceed 5 percent of the 1447 gross written premiums of the association. 1448 Section 36. Effective upon this act becoming a law, 1449 paragraph (b) of subsection (1) of section 634.4225, Florida 1450 Statutes, is amended to read: 1451 634.4225 Rebating; when allowed.— 1452 (1) No sales representative shall rebate any portion of his 1453 or her commission except as follows: 1454 (b) The rebate shall be in accordance with a rebating 1455 schedule filed with and approved by thesales representative1456with theassociation issuing the service warranty to which the 1457 rebate applies. The association shall maintain a copy of all 1458 rebating schedules for a period of 3 years. 1459 Section 37. Effective upon this act becoming a law, 1460 subsection (9) is added to section 634.436, Florida Statutes, to 1461 read: 1462 634.436 Unfair methods of competition and unfair or 1463 deceptive acts or practices defined.—The following methods, 1464 acts, or practices are defined as unfair methods of competition 1465 and unfair or deceptive acts or practices: 1466 (9) FAILURE TO PROVIDE TERMS AND CONDITIONS PRIOR TO SALE. 1467 Failing to provide a consumer with a complete sample copy of the 1468 terms and conditions of the service warranty prior to before the 1469 time of sale upon a request for the same by the consumer. A 1470 service warranty association may comply with this subsection by 1471 providing the consumer with a sample copy of the terms and 1472 conditions of the warranty contract or by directing the consumer 1473 to a website that displays a complete sample of the terms and 1474 conditions of the contract. 1475 Section 38. Effective upon this act becoming a law, 1476 subsections (2), (3), (4), and (5) of section 634.136, Florida 1477 Statutes, are amended to read: 1478 634.136 Office records required.—Each licensed motor 1479 vehicle service contract company, as a minimum requirement for 1480 permanent office records, shall maintain: 1481(2) Memorandum journals showing the blank service agreement1482forms issued to the company salespersons and recording the1483delivery of the forms to the dealer.1484(3) Memorandum journals showing the service contract forms1485received by the motor vehicle dealers and indicating the1486disposition of the forms by the dealer.1487 (2)(4)A detailed service agreement register, in numerical 1488 order by service agreement number, of agreements in force, which 1489 register shall include the following information: service 1490 agreement number, date of issue, issuing dealer, name of 1491 agreement holder, whether the agreement is covered by 1492 contractual liability insurance or the unearned premium reserve 1493 account, description of motor vehicle, service agreement period 1494 and mileage, gross premium, commission to salespersons, 1495 commission to dealer, and net premium. 1496 (3)(5)A detailed claims register, in numerical order by 1497 service agreement number, which register shall include the 1498 following information: service agreement number, date of issue, 1499 date of claim, type of claim, issuing dealer, amount of claim, 1500 date claim paid, and, if applicable, disposition other than 1501 payment and reason therefor. 1502 Section 39. Effective upon this act becoming a law, 1503 subsections (4) and (5) of section 634.313, Florida Statutes, 1504 are amended to read: 1505 634.313 Tax on premiums; annual statement; reports.— 1506(4) In addition to an annual statement, the office may1507require of licensees, under oath and in the form prescribed by1508it, such additional regular or special reports as it may deem1509necessary to the proper supervision of licensees under this1510part.1511 (4)(5)The commission may by rule require each home 1512 warranty association to submit to the office, as the commission 1513 may designate, all or part of the information contained in the 1514 financial reports required by this section in a computer 1515 readable form compatible with the electronic data processing 1516 system specified by the office. 1517 Section 40. Effective upon this act becoming a law, 1518 sections 634.1216 and 634.3126, Florida Statutes, are repealed. 1519 Section 41. This act may be cited as the “Safeguard Our 1520 Seniors Act.” 1521 Section 42. Paragraph (a) of subsection (1) of section 1522 624.310, Florida Statutes, is amended to read: 1523 624.310 Enforcement; cease and desist orders; removal of 1524 certain persons; fines.— 1525 (1) DEFINITIONS.—For the purposes of this section, the 1526 term: 1527 (a) “Affiliated party” means any person who directs or 1528 participates in the conduct of the affairs of a licensee and who 1529 is: 1530 1. A director, officer, employee, trustee, committee 1531 member, or controlling stockholder of a licensee or a subsidiary 1532 or service corporation of the licensee, other than a controlling 1533 stockholder which is a holding company, or an agent of a 1534 licensee or a subsidiary or service corporation of the licensee; 1535 2. A person who has filed or is required to file a 1536 statement or any other information required to be filed under s. 1537 628.461 or s. 628.4615; 1538 3. A stockholder, other than a stockholder that is a 1539 holding company of the licensee, who participates in the conduct 1540 of the affairs of the licensee;or1541 4. An independent contractor who: 1542 a. Renders a written opinion required by the laws of this 1543 state under her or his professional credentials on behalf of the 1544 licensee, which opinion is reasonably relied on by the 1545 department or office in the performance of its duties; or 1546 b. Affirmatively and knowingly conceals facts, through a 1547 written misrepresentation to the department or office, with 1548 knowledge that such misrepresentation: 1549 (I) Constitutes a violation of the insurance code or a 1550 lawful rule or order of the department, commission, or office; 1551 and 1552 (II) Directly and materially endangers the ability of the 1553 licensee to meet its obligations to policyholders; or.1554 5. A third-party marketer who aids or abets a licensee in a 1555 violation of the insurance code relating to the sale of an 1556 annuity to a person 65 years of age or older. 1557 1558 For the purposes of this subparagraph, any representation of 1559 fact made by an independent contractor on behalf of a licensee, 1560 affirmatively communicated as a representation of the licensee 1561 to the independent contractor, shall not be considered a 1562 misrepresentation by the independent contractor. 1563 Section 43. Section 624.46223, Florida Statutes, is created 1564 to read: 1565 624.46223 Notice of intent to withdraw.—Any association, 1566 fund, or pool authorized by state law and created for the 1567 purpose of forming a risk-management mechanism or providing self 1568 insurance for public entities in this state may not require its 1569 members to provide more than 45 days’ notice of the member’s 1570 intention to withdraw as a prerequisite for withdrawing from the 1571 association, fund, or pool. 1572 Section 44. Paragraph (j) of subsection (2) of section 1573 626.221, Florida Statutes, is amended to read: 1574 626.221 Examination requirement; exemptions.— 1575 (2) However, no such examination shall be necessary in any 1576 of the following cases: 1577 (j) An applicant for license as a customer representative 1578 who has earned the designation of Accredited Advisor in 1579 Insurance (AAI) from the Insurance Institute of America, the 1580 designation of Certified Insurance Counselor (CIC) from the 1581 Society of Certified Insurance Service Counselors, the 1582 designation of Accredited Customer Service Representative (ACSR) 1583 from the Independent Insurance Agents of America, the 1584 designation of Certified Professional Service Representative 1585 (CPSR) from the National Foundation for Certified Professional 1586 Service Representatives, the designation of Certified Insurance 1587 Service Representative (CISR) from the Society of Certified 1588 Insurance Service Representatives, or the designation of 1589 Certified Insurance Representative (CIR) from the National 1590 Association of Christian Catastrophe Insurance Adjusters. Also, 1591 an applicant for license as a customer representative who has 1592 earned an associate degree or bachelor’s degree from an 1593 accredited college or university with at least 9 academic hours 1594 of property and casualty insurance curriculum, or the 1595 equivalent, or has earned the designation of Certified Customer 1596 Service Representative (CCSR) from the Florida Association of 1597 Insurance Agents, or the designation of Registered Customer 1598 Service Representative (RCSR) from a regionally accredited 1599 postsecondary institution in this state, or the designation of 1600 Professional Customer Service Representative (PCSR) from the 1601 Professional Career Institute, whose curriculum has been 1602 approved by the department and whose curriculum includes 1603 comprehensive analysis of basic property and casualty lines of 1604 insurance and testing at least equal to that of standard 1605 department testing for the customer representative license. The 1606 department shall adopt rules establishing standards for the 1607 approval of curriculum. 1608 Section 45. Subsection (13) of section 626.025, Florida 1609 Statutes, is amended to read: 1610 626.025 Consumer protections.—To transact insurance, agents 1611 shall comply with consumer protection laws, including the 1612 following, as applicable: 1613 (13) The prohibition against the designation of a life 1614 insurance agent or his or her family member as the beneficiary 1615 of life insurance policy sold to an individual other than a 1616 family member under s. 626.798. 1617 Section 46. Paragraph (k) of subsection (3) of section 1618 626.2815, Florida Statutes, is amended to read: 1619 626.2815 Continuing education required; application; 1620 exceptions; requirements; penalties.— 1621 (3) 1622 (k) Any person who holds a license to solicit or sell life 1623 insurance in this state must complete a minimum of 3 hours in 1624 continuing education, approved by the department, on the subject 1625 of suitability in annuity and life insurance transactions. This 1626 requirement does not apply to an agent who does not have any 1627 active life insurance or annuity contracts. In applying this 1628 exemption, the department may require the filing of a 1629 certification attesting that the agent has not sold life 1630 insurance or annuities during the continuing education 1631 compliance cycle in question and does not have any active life 1632 insurance or annuity contracts. A licensee may use the hours 1633 obtained under this paragraph to satisfy the requirement for 1634 continuing education in ethics under paragraph (a). 1635 Section 47. Subsection (13) is added to section 626.621, 1636 Florida Statutes, to read: 1637 626.621 Grounds for discretionary refusal, suspension, or 1638 revocation of agent’s, adjuster’s, customer representative’s, 1639 service representative’s, or managing general agent’s license or 1640 appointment.—The department may, in its discretion, deny an 1641 application for, suspend, revoke, or refuse to renew or continue 1642 the license or appointment of any applicant, agent, adjuster, 1643 customer representative, service representative, or managing 1644 general agent, and it may suspend or revoke the eligibility to 1645 hold a license or appointment of any such person, if it finds 1646 that as to the applicant, licensee, or appointee any one or more 1647 of the following applicable grounds exist under circumstances 1648 for which such denial, suspension, revocation, or refusal is not 1649 mandatory under s. 626.611: 1650 (13) Has been the subject of or has had a license, permit, 1651 appointment, registration, or other authority to conduct 1652 business subject to any decision, finding, injunction, 1653 suspension, prohibition, revocation, denial, judgment, final 1654 agency action, or administrative order by any court of competent 1655 jurisdiction, administrative law proceeding, state agency, 1656 federal agency, national securities, commodities, or option 1657 exchange, or national securities, commodities, or option 1658 association involving a violation of any federal or state 1659 securities or commodities law or any rule or regulation adopted 1660 thereunder, or a violation of any rule or regulation of any 1661 national securities, commodities, or options exchange or 1662 national securities, commodities, or options association. 1663 Section 48. Subsection (3) of section 626.641, Florida 1664 Statutes, is amended to read: 1665 626.641 Duration of suspension or revocation.— 1666 (3)(a) If any of an individual’s licenses as an agent or 1667 customer representative, or the eligibility to hold such license 1668 or licenses hassame, as to the same individual havebeen 1669 revoked at two separate times, the department mayshallnot 1670 thereafter grant or issue any license under this codeasto such 1671 individual. 1672 (b) If a license as an agent or customer representative or 1673 the eligibility to hold such a license has been revoked 1674 resulting from the solicitation or sale of an insurance product 1675 to a person 65 years of age or older, the department may not 1676 thereafter grant or issue any license under this code to such 1677 individual. 1678 Section 49. Section 626.798, Florida Statutes, is amended 1679 to read: 1680 626.798 Life agent as beneficiary; prohibition.—No life 1681 agent shall, with respect to the placement of life insurance 1682 coverage with a life insurer covering the life of a person who 1683 is not a family member of the agent, handle in his or her 1684 capacity as a life agent the placement of such coverage when the 1685 agent placing the coverage or a family member of such agent 1686receives a commission therefor andis the named beneficiary 1687 under the life insurance policy, unless the life agent or family 1688 member has an insurable interest in the life of such person. 1689 However, the agent or a family member of such agent may not be 1690 designated as a trustee or guardian or be granted power of 1691 attorney unless he or she is a family member of the policy owner 1692 or insured, or is a bank or trust company duly authorized to act 1693 as a fiduciary. For the purposes of this section, the phrase 1694 “not a family member,” with respect to a life agent, means an 1695 individual who is not related to the life agent as father, 1696 mother, son, daughter, brother, sister, grandfather, 1697 grandmother, uncle, aunt, first cousin, nephew, niece, husband, 1698 wife, father-in-law, mother-in-law, brother-in-law, sister-in 1699 law, stepfather, stepmother, stepson, stepdaughter, stepbrother, 1700 stepsister, half brother, or half sister. For the purposes of 1701 this section, the term “insurable interest” means that the life 1702 agent has an actual, lawful, and substantial economic interest 1703 in the safety and preservation of the life of the insured or a 1704 reasonable expectation of benefit or advantage from the 1705 continued life of the insured. 1706 Section 50. Paragraphs (a) and (b) of subsection (3) of 1707 section 626.9521, Florida Statutes, are amended, and subsections 1708 (4) and (5) are added to that section, to read: 1709 626.9521 Unfair methods of competition and unfair or 1710 deceptive acts or practices prohibited; penalties.— 1711 (3)(a) If a person violates s. 626.9541(1)(l), the offense 1712 known as “twisting,” or violates s. 626.9541(1)(aa), the offense 1713 known as “churning,” the person commits a misdemeanor of the 1714 first degree, punishable as provided in s. 775.082, and an 1715 administrative fine not greater than $5,000 shall be imposed for 1716 each nonwillful violation or an administrative fine not greater 1717 than $75,000$40,000shall be imposed for each willful 1718 violation. To impose an administrative fine for a willful 1719 violationcriminal penaltiesunder this paragraph, the practice 1720 of “churning” or “twisting” must involve fraudulent conduct. 1721 (b) If a person violates s. 626.9541(1)(ee) by willfully 1722 submitting fraudulent signatures on an application or policy 1723 related document, the person commits a felony of the third 1724 degree, punishable as provided in s. 775.082, and an 1725 administrative fine not greater than $5,000 shall be imposed for 1726 each nonwillful violation or an administrative fine not greater 1727 than $75,000$40,000shall be imposed for each willful 1728 violation. 1729 (4) A licensee must make all reasonable efforts to 1730 ascertain the consumer’s age at the time an insurance 1731 application is completed. 1732 (5) If a consumer who is a senior citizen is a victim, a 1733 video deposition of the victim may be used for any purpose in 1734 any administrative proceeding conducted pursuant to chapter 120 1735 if all parties are given proper notice of the deposition in 1736 accordance with the Florida Rules of Civil Procedure. 1737 Section 51. Subsection (4) of section 626.99, Florida 1738 Statutes, is amended to read: 1739 626.99 Life insurance solicitation.— 1740 (4) DISCLOSURE REQUIREMENTS.— 1741 (a) The insurer shall provide to each prospective purchaser 1742 a buyer’s guide and a policy summary prior to accepting the 1743 applicant’s initial premium or premium deposit, unless the 1744 policy for which application is made provides an unconditional 1745 refund for a period of at least 14 days, or unless the policy 1746 summary contains an offer of such an unconditional refund.,In 1747 these instances,which eventthe buyer’s guide and policy 1748 summary must be delivered with the policy or prior to delivery 1749 of the policy. 1750 (b) With respect to fixed and variable annuities,the1751insurer shall provide to each prospective purchaser a buyer’s1752guide to annuities and a contract summary as provided inthe1753National Association of Insurance Commissioners (NAIC) Model1754Annuity and Deposit Fund Regulation andthe policy must provide 1755 an unconditional refund for a period of at least 14 days. For 1756 fixed annuities, the buyer’s guide shall be in the form as 1757 provided by the National Association of Insurance Commissioners 1758 (NAIC) Annuity Disclosure Model Regulation, until such time as a 1759 buyer’s guide is developed by the department, at which time the 1760 department guide must be used. For variable annuities, a policy 1761 summary may be used, which may be contained in a prospectus, 1762 until such time as a buyer’s guide is developed by NAIC or the 1763 department, at which time one of those guides must be used. If 1764 the prospective owner of an annuity contract is 65 years of age 1765 or older: 1766 1. An unconditional refund of premiums paid for a fixed 1767 annuity contract, including any contract fees or charges, must 1768 be available for a period of 21 days; and 1769 2. An unconditional refund for variable or market value 1770 annuity contracts must be available for a period of 21 days. The 1771 unconditional refund shall be equal to the cash surrender value 1772 provided in the annuity contract, plus any fees or charges 1773 deducted from the premiums or imposed under the contract. This 1774 subparagraph does not apply if the prospective owner is an 1775 accredited investor, as defined in Regulation D as adopted by 1776 the United States Securities and Exchange Commission. 1777 (c) The insurer shall attach a cover page to any annuity 1778 policy informing the purchaser of the unconditional refund 1779 period prescribed in paragraph (b). The cover page must also 1780 provide contact information for the issuing company and the 1781 selling agent, the department’s toll-free help line, and any 1782 other information required by the department by rule. The cover 1783 page is part of the policy and is subject to review by the 1784 office pursuant to s. 627.410. 1785 (d)(b)The insurer shall provide a buyer’s guide and a 1786 policy summary to any prospective purchaser upon request. 1787 Section 52. Subsections (3) and (5) of section 627.4554, 1788 Florida Statutes, as amended by section 9 of chapter 2008-237, 1789 Laws of Florida, are amended, present subsection (9) of that 1790 section is renumbered as subsection (10), and a new subsection 1791 (9) is added to that section, to read: 1792 627.4554 Annuity investments by seniors.— 1793 (3) DEFINITIONS.—For purposes of this section, the term: 1794 (a) “Annuity contract” means a fixed annuity, equity 1795 indexed annuity, fixed equity indexed annuity, or variable 1796 annuity that is individually solicited, whether the product is 1797 classified as an individual annuity or a group annuity. 1798 (b) “Accredited investor” means any person who comes within 1799 any of the following categories, or who the issuer reasonably 1800 believes comes within any of the following categories, at the 1801 time of the sale of an annuity to that person: 1802 1. The person’s net worth or joint net worth with his or 1803 her spouse, at the time of the purchase, exceeds $1 million; or 1804 2. The person had an individual income in excess of 1805 $200,000 in each of the 2 most recent years, or joint income 1806 with his or her spouse in excess of $300,000 in each of those 1807 years, and has a reasonable expectation of reaching the same 1808 income level in the current year. 1809 (c)(b)“Recommendation” means advice provided by an 1810 insurance agent, or an insurer if no insurance agent is 1811 involved, to an individual senior consumer which results in a 1812 purchase or exchange of an annuity in accordance with that 1813 advice. 1814 (d)(c)“Senior consumer” means a person 65 years of age or 1815 older. In the event of a joint purchase by more than one party, 1816 a purchaser is considered to be a senior consumer if any of the 1817 parties is age 65 or older. 1818 (5) MITIGATION OF RESPONSIBILITY.— 1819 (a) The office may order an insurer to take reasonably 1820 appropriate corrective action, including rescission of the 1821 policy or contract and a full refund of the premiums paid or the 1822 accumulation value, whichever is greater, for any senior 1823 consumer harmed by a violation of this section by the insurer or 1824 the insurer’s insurance agent. 1825 (b) The department may order: 1826 1. An insurance agent to take reasonably appropriate 1827 corrective action, including monetary restitution of penalties 1828 or fees incurred by the senior consumer, for any senior consumer 1829 harmed by a violation of this section by the insurance agent. 1830 2. A managing general agency or insurance agency that 1831 employs or contracts with an insurance agent to sell or solicit 1832 the sale of annuities to senior consumers to take reasonably 1833 appropriate corrective action for any senior consumer harmed by 1834 a violation of this section by the insurance agent. 1835 (c) The department shall, in addition to any other penalty 1836 authorized under chapter 626, order an insurance agent to pay 1837 restitution to any senior consumer who has been deprived of 1838 money by the agent’s misappropriation, conversion, or unlawful 1839 withholding of monies belonging to the senior consumer in the 1840 course of a transaction involving annuities. The amount of 1841 restitution required to be paid pursuant to this paragraph may 1842 not exceed the amount misappropriated, converted, or unlawfully 1843 withheld. This paragraph does not limit or restrict a person’s 1844 right to seek other remedies as provided by law. 1845 (d)(c)Any applicable penalty under the Florida Insurance 1846 Code for a violation of paragraph (4)(a), paragraph (4)(b), or 1847 subparagraph (4)(c)2. may be reduced or eliminated, according to 1848 a schedule adopted by the office or the department, as 1849 appropriate, if corrective action for the senior consumer was 1850 taken promptly after a violation was discovered. 1851 (9) PROHIBITED CHARGES.—An annuity contract issued to a 1852 senior consumer may not contain a surrender or deferred sales 1853 charge for a withdrawal of money from an annuity exceeding 10 1854 percent of the amount withdrawn. The charge shall be reduced so 1855 that no surrender or deferred sales charge exists after the end 1856 of the 10th policy year or 10 years after the premium is paid, 1857 whichever is later. This subsection does not apply to annuities 1858 purchased by an accredited investor or to those annuities 1859 specified in paragraph (7)(b). 1860 Section 53. Except as otherwise expressly provided in this 1861 act and except for this section, which shall take effect 1862 becoming a law, this act shall take effect January 1, 2011.
