CS/HB 1087

A bill to be entitled
2An act relating to insurance; amending s. 440.12, F.S.;
3authorizing payment of workers' compensation benefits on a
4prepaid card under certain circumstances; requiring the
5keeping and furnishing, upon request, of certain records;
6providing for the adoption of rules; amending s. 440.20,
7F.S.; specifying when an insurer's obligation to pay
8workers' compensation benefits is satisfied if payment is
9made on a prepaid card; amending s. 440.49, F.S.; revising
10the dates applicable to calculations of annual assessments
11upon certain workers' compensation insurers relating to
12the special disability trust fund; providing application
13to specified years and rate filings; amending s. 624.402,
14F.S.; providing an exemption from having to obtain a
15certificate of authority to insurers that cover only
16nonresidents of the United States under certain
17conditions; requiring such insurers to provide certain
18documentation to the Office of Insurance Regulation;
19requiring certificates, policies, or contracts issued by
20such insurers to include a disclaimer relating to the
21coverage provided; defining a "nonresident" for purposes
22of applying the exemption provided to such insurers from
23having to obtain a certificate of authority; providing
24penalties applicable to alien insurers who transact
25insurance without complying with certain provisions;
26deleting procedures and requirements relating to an
27exemption from obtaining a certificate of authority
28provided to alien insurers who issue life insurance
29policies and annuity contracts to certain nonresidents;
30amending s. 624.424, F.S.; revising the timeframes that
31limit how frequently an insurer may use the same
32accountant or partner to prepare an annual audited
33financial report; amending s. 626.207, F.S.; defining the
34term "financial services business"; precluding licensure
35under the Florida Insurance Code of specified persons who
36commit specified offenses; providing application to
37convictions and certain pleas, regardless of adjudication;
38establishing waiting periods relating to other specified
39offenses during which time an applicant is disqualified
40for licensure; granting rulemaking authority to the
41Department of Financial Services relating to specific
42penalties against licensees; clarifying rulemaking
43authority relating to penalties against licensees;
44providing that specified statutory provisions prohibiting
45prior crimes from being a bar to employment are not
46applicable to applicants for licensure under the Florida
47Insurance Code; amending s. 626.7451, F.S.; requiring
48funds collected for an insurer to be held in a bank
49insured by the Federal Deposit Insurance Corporation;
50amending s. 626.8651, F.S.; revising requirements for a
51public adjuster apprentice license to include additional
52qualifying designations; amending s. 627.4133, F.S.;
53changing the designated person or persons who must be
54notified by an insurer from the "insured" to the "first-
55named insured" in situations involving the nonrenewal,
56renewal premium, cancellation, or termination of workers'
57compensation, employer liability, or certain property and
58casualty insurance coverage; specifying that the date of
59cancellation of a workers' compensation or employer's
60liability policy is the date of the insured's written
61request to cancel; amending s. 627.4137, F.S.; requiring a
62claimant's request concerning insurance coverage to be
63served upon the disclosing entity in a specified manner;
64amending s. 627.7277, F.S.; making a conforming change
65that specifies the "first-named insured" as the person who
66is to receive notification of a renewal premium; amending
67s. 627.728, F.S.; changing the designated person or
68persons who must be notified by an insurer from the
69"insured" to the "first-named insured" in certain
70situations involving the cancellation or nonrenewal of
71motor vehicle insurance coverage; making a conforming
72change that specifies the "first-named insured's insurance
73agent" as a person who is to receive certain notifications
74relating to motor vehicle insurance coverage; amending s.
75627.7281, F.S.; making a conforming change that specifies
76the "first-named insured" as the person who is to receive
77notification of cancellation of motor vehicle insurance
78coverage; amending s. 634.403, F.S.; exempting certain
79persons providing service warranties relating to consumer
80products from licensing requirements under certain
81circumstances; amending s. 627.442, F.S.; limiting the
82requirement for premium audits of workers' compensation
83coverage to specified instances; amending s. 627.7295,
84F.S.; providing application; requiring a certain amount of
85motor vehicle insurance premium to be paid before the
86effective date of a policy binder or policy in order to
87issue the binder or policy; authorizing an insurer to
88cancel certain motor vehicle insurance policies or binders
89for nonpayment of premium; removing a restriction
90requiring payment of the first policy payment of a motor
91vehicle insurance policy before issuance of a binder or
92policy when payments are being made in a specified manner;
93amending s. 626.916, F.S.; revising provisions relating to
94insurance coverage eligibility for export under the
95Surplus Lines Law; providing applicability; amending s.
96817.234, F.S.; revising a cross-reference; providing civil
97penalties consisting of monetary fines relating to making
98false and fraudulent insurance claims for the purpose of
99receiving motor vehicle insurance proceeds; providing
100escalating monetary fines for repeat offenses; providing a
101mandatory minimum civil fine relating to certain
102international motor vehicle accident schemes; allocating
103fine revenues to a specified trust fund for specified
104purposes; authorizing certain agreements between a
105defendant and a state attorney relating to the payment of
106civil fines for making false and fraudulent insurance
107claims for the purpose of receiving motor vehicle
108insurance proceeds; providing effective dates.
110Be It Enacted by the Legislature of the State of Florida:
112     Section 1.  Subsection (1) of section 440.12, Florida
113Statutes, is amended to read:
114     440.12  Time for commencement and limits on weekly rate of
116     (1)  No Compensation is not shall be allowed for the first
1177 days of the disability, except for benefits provided under for
118in s. 440.13. However, if the injury results in disability of
119more than 21 days, compensation shall be allowed from the
120commencement of the disability.
121     (a)  All weekly compensation payments, except for the first
122payment, shall be paid by check or, if authorized by the
123employee, on a prepaid card pursuant to paragraph (b) or
124deposited directly into the employee's account at a financial
125institution. As used in this subsection, the term "financial
126institution" means a financial institution as defined in s.
128     (b)  Upon receipt of authorization by the employee as
129provided in paragraph (a), a carrier may use a prepaid card to
130deliver the payment of compensation to an employee if the
131employee is:
132     1.  Provided with at least one means of accessing his or
133her entire compensation payment once per week without incurring
135     2.  Provided with the ability to make point-of-sale
136purchases without incurring fees from the financial institution
137issuing the prepaid card; and
138     3.  Provided with the terms and conditions of the prepaid
139card program, including a description of any fees that may be
141     (c)  Each carrier shall keep a record of all payments made
142under this subsection, including the time and manner of such
143payments, and shall furnish these records or a report based on
144these records to the Division of Insurance Fraud and the
145Division of Workers' Compensation, upon request.
146     (d)  The department may adopt rules to administer this
148     Section 2.  Paragraph (a) of subsection (1) of section
149440.20, Florida Statutes, is amended to read:
150     440.20  Time for payment of compensation and medical bills;
151penalties for late payment.-
152     (1)(a)  Unless it denies compensability or entitlement to
153benefits, the carrier shall pay compensation directly to the
154employee as required by ss. 440.14, 440.15, and 440.16, in
155accordance with the obligations set forth in those such
156sections. Upon receipt of the employee's authorization as
157provided for in s. 440.12(1)(a) If authorized by the employee,
158the carrier's obligation to pay compensation directly to the
159employee is satisfied when the carrier directly deposits, by
160electronic transfer or other means, compensation into the
161employee's account at a financial institution or onto a prepaid
162card in accordance with s. 440.12(1). As used in this paragraph,
163the term "financial institution" means a financial institution
164as defined in s. 655.005(1)(h). Compensation by direct deposit
165or through the use of a prepaid card is considered paid on the
166date the funds become available for withdrawal by the employee.
167     Section 3.  Paragraph (b) of subsection (9) of section
168440.49, Florida Statutes, is amended to read:
169     440.49  Limitation of liability for subsequent injury
170through Special Disability Trust Fund.-
172     (b)1.  The Special Disability Trust Fund shall be
173maintained by annual assessments upon the insurance companies
174writing compensation insurance in the state, the commercial
175self-insurers under ss. 624.462 and 624.4621, the assessable
176mutuals as defined in s. 628.6011, and the self-insurers under
177this chapter, which assessments shall become due and be paid
178quarterly at the same time and in addition to the assessments
179provided in s. 440.51. The department shall estimate annually in
180advance the amount necessary for the administration of this
181subsection and the maintenance of this fund and shall make such
182assessment in the manner hereinafter provided.
183     2.  The annual assessment shall be calculated to produce
184during the next calendar ensuing fiscal year an amount which,
185when combined with that part of the balance anticipated to be in
186the fund on December 31 June 30 of the current calendar fiscal
187year which is in excess of $100,000, is equal to the average of:
188     a.  The sum of disbursements from the fund during the
189immediate past 3 calendar years, and
190     b.  Two times the disbursements of the most recent calendar
192     c.  Such assessment rate shall first apply on a calendar
193year basis for the period beginning January 1, 2012, and shall
194be included in workers' compensation rate filings approved by
195the office which become effective on or after January 1, 2012.
196The assessment rate effective January 1, 2011, shall also apply
197to the interim period from July 1, 2011, through December 31,
1982011, and shall be included in workers' compensation rate
199filings, whether regular or amended, approved by the office
200which become effective on or after July 1, 2011. Thereafter, the
201annual assessment rate shall take effect January 1 of the next
202calendar year and shall be included in workers' compensation
203rate filings approved by the office which become effective on or
204after January 1 of the next calendar year. Assessments shall
205become due and be paid quarterly.
207Such amount shall be prorated among the insurance companies
208writing compensation insurance in the state and the self-
209insurers. Provided however, for those carriers that have
210excluded ceded reinsurance premiums from their assessments on or
211before January 1, 2000, no assessments on ceded reinsurance
212premiums shall be paid by those carriers until such time as the
213former Division of Workers' Compensation of the Department of
214Labor and Employment Security or the department advises each of
215those carriers of the impact that the inclusion of ceded
216reinsurance premiums has on their assessment. The department may
217not recover any past underpayments of assessments levied against
218any carrier that on or before January 1, 2000, excluded ceded
219reinsurance premiums from their assessment prior to the point
220that the former Division of Workers' Compensation of the
221Department of Labor and Employment Security or the department
222advises of the appropriate assessment that should have been
224     3.  The net premiums written by the companies for workers'
225compensation in this state and the net premium written
226applicable to the self-insurers in this state are the basis for
227computing the amount to be assessed as a percentage of net
228premiums. Such payments shall be made by each carrier and self-
229insurer to the department for the Special Disability Trust Fund
230in accordance with such regulations as the department
232     4.  The Chief Financial Officer is authorized to receive
233and credit to such Special Disability Trust Fund any sum or sums
234that may at any time be contributed to the state by the United
235States under any Act of Congress, or otherwise, to which the
236state may be or become entitled by reason of any payments made
237out of such fund.
238     Section 4.  Subsection (8) of section 624.402, Florida
239Statutes, is amended to read:
240     624.402  Exceptions, certificate of authority required.-A
241certificate of authority shall not be required of an insurer
242with respect to:
243     (8)(a)  An insurer domiciled outside the United States
244covering only persons who, at the time of issuance or renewal,
245are nonresidents of the United States if:
246     1.  The insurer or any affiliated person as defined in s.
247624.04 under common ownership or control with the insurer does
248not solicit, sell, or accept application for any insurance
249policy or contract to be delivered or issued for delivery to any
250person in any state;
251     2.  The insurer registers with the office via a letter of
252notification upon commencing business from this state;
253     3.  The insurer provides the following information, in
254English, to the office annually by March 1:
255     a.  The name of the insurer, the country of domicile, the
256address of the insurer's principal office and office in this
257state, the names of the owners of the insurer and their
258percentage of ownership, the names of the officers and directors
259of the insurer, the name, e-mail, and telephone number of a
260contact person for the insurer, and the number of individuals
261who are employed by the insurer or its affiliates in this state;
262     b.  The lines of insurance and types of products offered by
263the insurer;
264     c.  A statement from the applicable regulatory body of the
265insurer's domicile certifying that the insurer is licensed or
266registered for those lines of insurance and types of products in
267that domicile; and
268     d.  A copy of the filings required by the applicable
269regulatory body of the insurer's country of domicile in that
270country's official language or in English, if available;
271     4.  All certificates, policies, or contracts issued in this
272state showing coverage under the insurer's policy include the
273following statement in a contrasting color and at least 10-point
274type: "The policy providing your coverage and the insurer
275providing this policy have not been approved by the Florida
276Office of Insurance Regulation"; and
277     5.  In the event the insurer ceases to do business from
278this state, the insurer will provide written notification to the
279office within 30 days after cessation.
280     (b)  For purposes of this subsection, "nonresident" means a
281person who resides in and maintains a physical place of domicile
282in a country other than the United States, which he or she
283recognizes as and intends to maintain as his or her permanent
284home. A nonresident does not include an unauthorized immigrant
285present in the United States. Notwithstanding any other
286provision of law, it is conclusively presumed, for purposes of
287this subsection, that a person is a resident of the United
288States if such person has:
289     1.  Had his or her principal place of domicile in the
290United States for 180 days or more in the 365 days prior to
291issuance or renewal of the policy;
292     2.  Registered to vote in any state;
293     3.  Made a statement of domicile in any state; or
294     4.  Filed for homestead tax exemption on property in any
296     (c)  Subject to the limitations provided in this
297subsection, services, including those listed in s. 624.10, may
298be provided by the insurer or an affiliated person as defined in
299s. 624.04 under common ownership or control with the insurer.
300     (d)  An alien insurer transacting insurance in this state
301without complying with this subsection shall be in violation of
302this chapter and subject to the penalties provided in s. 624.15.
303     (a)  Life insurance policies or annuity contracts issued by
304an insurer domiciled outside the United States covering only
305persons who, at the time of issuance, are not residents of the
306United States and are not nonresidents illegally residing in the
307United States, provided:
308     1.  The insurer must currently be an authorized insurer in
309its country of domicile as to the kind or kinds of insurance
310proposed to be offered and must have been such an insurer for
311not fewer than the immediately preceding 3 years, or must be the
312wholly owned subsidiary of such authorized insurer or must be
313the wholly owned subsidiary of an already eligible authorized
314insurer as to the kind or kinds of insurance proposed for a
315period of not fewer than the immediately preceding 3 years.
316However, the office may waive the 3-year requirement if the
317insurer has operated successfully for a period of at least the
318immediately preceding year and has capital and surplus of not
319less than $25 million.
320     2.  Before the office may grant eligibility, the requesting
321insurer shall furnish the office with a duly authenticated copy
322of its current annual financial statement, in English, and with
323all monetary values therein expressed in United States dollars,
324at an exchange rate then-current and shown in the statement, in
325the case of statements originally made in the currencies of
326other countries, and with such additional information relative
327to the insurer as the office may request.
328     3.  The insurer must have and maintain surplus as to
329policyholders of not less than $15 million. Any such surplus as
330to policyholders shall be represented by investments consisting
331of eligible investments for like funds of like domestic insurers
332under part II of chapter 625; however, any such surplus as to
333policyholders may be represented by investments permitted by the
334domestic regulator of such alien insurance company if such
335investments are substantially similar in terms of quality,
336liquidity, and security to eligible investments for like funds
337of like domestic insurers under part II of chapter 625.
338     4.  The insurer must be of good reputation as to the
339providing of service to its policyholders and the payment of
340losses and claims.
341     5.  To maintain eligibility, the insurer shall furnish the
342office within the time period specified in s. 624.424(1)(a) a
343duly authenticated copy of its current annual and quarterly
344financial statements, in English, and with all monetary values
345therein expressed in United States dollars, at an exchange rate
346then-current and shown in the statement, in the case of
347statements originally made in the currencies of other countries,
348and with such additional information relative to the insurer as
349the office may request.
350     6.  An insurer receiving eligibility under this subsection
351shall agree to make its books and records pertaining to its
352operations in this state available for inspection during normal
353business hours upon request of the office.
354     7.  The insurer shall provide to the applicant for the
355policy or contract a copy of the most recent quarterly financial
356statements of the insurer providing, in clear and conspicuous
358     a.  The date of organization of the insurer.
359     b.  The identity of and rating assigned by each recognized
360insurance company rating organization that has rated the insurer
361or, if applicable, that the insurer is unrated.
362     c.  That the insurer does not hold a certificate of
363authority issued in this state and that the office does not
364exercise regulatory oversight over the insurer.
365     d.  The identity and address of the regulatory authority
366exercising oversight of the insurer.
368This paragraph does not impose upon the office any duty or
369responsibility to determine the actual financial condition or
370claims practices of any unauthorized insurer, and the status of
371eligibility, if granted by the office, indicates only that the
372insurer appears to be financially sound and to have satisfactory
373claims practices and that the office has no credible evidence to
374the contrary.
375     (b)  If at any time the office has reason to believe that
376an insurer issuing policies or contracts pursuant to this
377subsection is insolvent or is in unsound financial condition,
378does not make reasonable prompt payment of benefits, or is no
379longer eligible under the conditions specified in this
380subsection, the office may conduct an examination or
381investigation in accordance with s. 624.316, s. 624.3161, or s.
382624.320 and, if the findings of such examination or
383investigation warrant, may withdraw the eligibility of the
384insurer to issue policies or contracts pursuant to this
385subsection without having a certificate of authority issued by
386the office.
387     (c)  This subsection does not provide an exception to the
388agent licensure requirements of chapter 626. Any insurer issuing
389policies or contracts pursuant to this subsection shall appoint
390the agents that the insurer uses to sell such policies or
391contracts as provided in chapter 626.
392     (d)  An insurer issuing policies or contracts pursuant to
393this subsection is subject to part IX of chapter 626, Unfair
394Insurance Trade Practices, and the office may take such actions
395against the insurer for a violation as are provided in that
397     (e)  Policies and contracts issued pursuant to this
398subsection are not subject to the premium tax specified in s.
400     (f)  Applications for life insurance coverage offered under
401this subsection must contain, in contrasting color and not less
402than 12-point type, the following statement on the same page as
403the applicant's signature:
405This policy is primarily governed by the laws of a
406foreign country. As a result, all of the rating and
407underwriting laws applicable to policies filed in this
408state do not apply to this coverage, which may result
409in your premiums being higher than would be
410permissible under a Florida-approved policy. Any
411purchase of individual life insurance should be
412considered carefully, as future medical conditions may
413make it impossible to qualify for another individual
414life policy. If the insurer issuing your policy
415becomes insolvent, this policy is not covered by the
416Florida Life and Health Insurance Guaranty
417Association. For information concerning individual
418life coverage under a Florida-approved policy, consult
419your agent or the Florida Department of Financial
422     (g)  All life insurance policies and annuity contracts
423issued pursuant to this subsection must contain on the first
424page of the policy or contract, in contrasting color and not
425less than 10-point type, the following statement:
427The benefits of the policy providing your coverage are
428governed primarily by the law of a country other than
429the United States.
431     (h)  All single-premium life insurance policies and single-
432premium annuity contracts issued to persons who are not
433residents of the United States and are not nonresidents
434illegally residing in the United States pursuant to this
435subsection shall be subject to the provisions of chapter 896.
436     Section 5.  Paragraph (d) of subsection (8) of section
437624.424, Florida Statutes, is amended to read:
438     624.424  Annual statement and other information.-
439     (8)
440     (d)  An insurer may not use the same accountant or partner
441of an accounting firm responsible for preparing the report
442required by this subsection for more than 5 7 consecutive years.
443Following this period, the insurer may not use such accountant
444or partner for a period of 5 2 years, but may use another
445accountant or partner of the same firm. An insurer may request
446the office to waive this prohibition based upon an unusual
447hardship to the insurer and a determination that the accountant
448is exercising independent judgment that is not unduly influenced
449by the insurer considering such factors as the number of
450partners, expertise of the partners or the number of insurance
451clients of the accounting firm; the premium volume of the
452insurer; and the number of jurisdictions in which the insurer
453transacts business.
454     Section 6.  Effective upon this act becoming a law, section
455626.207, Florida Statutes, is amended to read:
456     626.207  Disqualification of applicants and licensees;
457penalties against licensees; rulemaking authority Department
458rulemaking authority; waiting periods for applicants; penalties
459against licensees.-
460     (1)  For purposes of this section, the term "financial
461services business" means any financial activity regulated by the
462Department of Financial Services, the Office of Insurance
463Regulation, or the Office of Financial Regulation. The
464department shall adopt rules establishing specific waiting
465periods for applicants to become eligible for licensure
466following denial, suspension, or revocation pursuant to s.
467626.611, s. 626.621, s. 626.8437, s. 626.844, s. 626.935, s.
468634.181, s. 634.191, s. 634.320, s. 634.321, s. 634.422, s.
469634.423, s. 642.041, or s. 642.043. The purpose of the waiting
470periods is to provide sufficient time to demonstrate reformation
471of character and rehabilitation. The waiting periods shall vary
472based on the type of conduct and the length of time since the
473conduct occurred and shall also be based on the probability that
474the propensity to commit illegal conduct has been overcome. The
475waiting periods may be adjusted based on aggravating and
476mitigating factors established by rule and consistent with this
478     (2)  For purposes of this section, the terms "felony of the
479first degree" and "capital felony" include all felonies
480designated as such by the Florida Statutes, as well as any
481felony so designated in the jurisdiction in which the plea is
482entered or judgment is rendered.
483     (3)  An applicant who commits a felony of the first degree,
484a capital felony, a felony involving money laundering, fraud, or
485embezzlement, or a felony directly related to the financial
486services business is permanently barred from applying for a
487license under this part. This bar applies to convictions, guilty
488pleas, or nolo contendere pleas, regardless of adjudication, by
489any applicant, officer, director, majority owner, partner,
490manager, or other person who manages or controls any applicant.
491     (4)  For all other crimes not included in subsection (3),
492the department shall adopt rules establishing the process and
493application of disqualifying periods that include:
494     (a)  A 15-year disqualifying period for all felonies
495involving moral turpitude that are not specifically included in
496the permanent bar contained in subsection (3).
497     (b)  A 7-year disqualifying period for all felonies to
498which neither the permanent bar in subsection (3) nor the 15-
499year disqualifying period in paragraph (a) applies.
500     (c)  A 7-year disqualifying period for all misdemeanors
501directly related to the financial services business.
502     (5)  The department shall adopt rules providing for
503additional disqualifying periods due to the commitment of
504multiple crimes and other factors reasonably related to the
505applicant's criminal history. The rules shall provide for
506mitigating and aggravating factors. However, mitigation may not
507result in a period of disqualification of less than 7 years and
508may not mitigate the disqualifying periods in paragraphs (4)(b)
509and (c).
510     (6)  For purposes of this section, the disqualifying
511periods begin upon the applicant's final release from
512supervision or upon completion of the applicant's criminal
513sentence, including payment of fines, restitution, and court
514costs for the crime for which the disqualifying period applies.
515     (7)  After the disqualifying period has been met, the
516burden is on the applicant to demonstrate that the applicant has
517been rehabilitated, does not pose a risk to the insurance-buying
518public, is fit and trustworthy to engage in the business of
519insurance pursuant to s. 626.611(7), and is otherwise qualified
520for licensure.
521     (8)(2)  The department shall adopt rules establishing
522specific penalties against licensees in accordance with ss.
523626.641 and 626.651 for violations of s. 626.611, s. 626.621, s.
524626.8437, s. 626.844, s. 626.935, s. 634.181, s. 634.191, s.
525634.320, s. 634.321, s. 634.422, s. 634.423, s. 642.041, or s.
526642.043. The purpose of the revocation or suspension is to
527provide a sufficient penalty to deter future violations of the
528Florida Insurance Code. The imposition of a revocation or the
529length of suspension shall be based on the type of conduct and
530the probability that the propensity to commit further illegal
531conduct has been overcome at the time of eligibility for
532relicensure. The revocation or the length of suspension may be
533adjusted based on aggravating or mitigating factors, established
534by rule and consistent with this purpose.
535     (9)  Section 112.011 does not apply to any applicants for
536licensure under the Florida Insurance Code, including, but not
537limited to, agents, agencies, adjusters, adjusting firms,
538customer representatives, or managing general agents.
539     Section 7.  Subsection (3) of section 626.7451, Florida
540Statutes, is amended to read:
541     626.7451  Managing general agents; required contract
542provisions.-No person acting in the capacity of a managing
543general agent shall place business with an insurer unless there
544is in force a written contract between the parties which sets
545forth the responsibility for a particular function, specifies
546the division of responsibilities, and contains the following
547minimum provisions:
548     (3)  All funds collected for the account of the insurer
549shall be held by the managing general agent in a fiduciary
550capacity in a bank which is insured by the Federal Deposit
551Insurance Corporation a member of the Federal Reserve System.
552The This account shall be used for all payment as directed by
553the insurer. The managing general agent may retain up to no more
554than 60 days of estimated claims payments and allocated loss
555adjustment expenses.
557For the purposes of this section and ss. 626.7453 and 626.7454,
558the term "controlling person" or "controlling" has the meaning
559set forth in s. 625.012(5)(b)1., and the term "controlled
560person" or "controlled" has the meaning set forth in s.
562     Section 8.  Subsection (4) of section 626.8651, Florida
563Statutes, is amended to read:
564     626.8651  Public adjuster apprentice license;
566     (4)  An applicant must have received designation as an
567Accredited Claims Adjuster (ACA), as a Certified Adjuster (CA),
568or as a Certified Claims Adjuster (CCA) after completion of
569training that qualifies the applicant to engage in the business
570of a public adjuster apprentice fairly and without injury to the
571public. Such training and instruction must address adjusting
572damages and losses under insurance contracts, the terms and
573effects of insurance contracts, and knowledge of the laws of
574this state relating to insurance contracts.
575     Section 9.  Paragraphs (a) and (b) of subsection (1),
576paragraphs (a) and (b) of subsection (2), and subsection (4) of
577section 627.4133, Florida Statutes, are amended to read:
578     627.4133  Notice of cancellation, nonrenewal, or renewal
580     (1)  Except as provided in subsection (2):
581     (a)  An insurer issuing a policy providing coverage for
582workers' compensation and employer's liability insurance,
583property, casualty, except mortgage guaranty, surety, or marine
584insurance, other than motor vehicle insurance subject to s.
585627.728, shall give the first-named named insured at least 45
586days' advance written notice of nonrenewal or of the renewal
587premium. If the policy is not to be renewed, the written notice
588shall state the reason or reasons as to why the policy is not to
589be renewed. This requirement applies only if the insured has
590furnished all of the necessary information so as to enable the
591insurer to develop the renewal premium prior to the expiration
592date of the policy to be renewed.
593     (b)  An insurer issuing a policy providing coverage for
594property, casualty, except mortgage guaranty, surety, or marine
595insurance, other than motor vehicle insurance subject to s.
596627.728 or s. 627.7281, shall give the first-named named insured
597written notice of cancellation or termination other than
598nonrenewal at least 45 days prior to the effective date of the
599cancellation or termination, including in the written notice the
600reason or reasons for the cancellation or termination, except
602     1.  When cancellation is for nonpayment of premium, at
603least 10 days' written notice of cancellation accompanied by the
604reason therefor shall be given. As used in this subparagraph and
605s. 440.42(3), the term "nonpayment of premium" means failure of
606the named insured to discharge when due any of her or his
607obligations in connection with the payment of premiums on a
608policy or any installment of such premium, whether the premium
609is payable directly to the insurer or its agent or indirectly
610under any premium finance plan or extension of credit, or
611failure to maintain membership in an organization if such
612membership is a condition precedent to insurance coverage.
613"Nonpayment of premium" also means the failure of a financial
614institution to honor an insurance applicant's check after
615delivery to a licensed agent for payment of a premium, even if
616the agent has previously delivered or transferred the premium to
617the insurer. If a dishonored check represents the initial
618premium payment, the contract and all contractual obligations
619shall be void ab initio unless the nonpayment is cured within
620the earlier of 5 days after actual notice by certified mail is
621received by the applicant or 15 days after notice is sent to the
622applicant by certified mail or registered mail, and if the
623contract is void, any premium received by the insurer from a
624third party shall be refunded to that party in full; and
625     2.  When such cancellation or termination occurs during the
626first 90 days during which the insurance is in force and the
627insurance is canceled or terminated for reasons other than
628nonpayment of premium, at least 20 days' written notice of
629cancellation or termination accompanied by the reason therefor
630shall be given except where there has been a material
631misstatement or misrepresentation or failure to comply with the
632underwriting requirements established by the insurer.
634After the policy has been in effect for 90 days, no such policy
635shall be canceled by the insurer except when there has been a
636material misstatement, a nonpayment of premium, a failure to
637comply with underwriting requirements established by the insurer
638within 90 days of the date of effectuation of coverage, or a
639substantial change in the risk covered by the policy or when the
640cancellation is for all insureds under such policies for a given
641class of insureds. This subsection does not apply to
642individually rated risks having a policy term of less than 90
644     (2)  With respect to any personal lines or commercial
645residential property insurance policy, including, but not
646limited to, any homeowner's, mobile home owner's, farmowner's,
647condominium association, condominium unit owner's, apartment
648building, or other policy covering a residential structure or
649its contents:
650     (a)  The insurer shall give the first-named named insured
651at least 45 days' advance written notice of the renewal premium.
652     (b)  The insurer shall give the first-named named insured
653written notice of nonrenewal, cancellation, or termination at
654least 100 days prior to the effective date of the nonrenewal,
655cancellation, or termination. However, the insurer shall give at
656least 100 days' written notice, or written notice by June 1,
657whichever is earlier, for any nonrenewal, cancellation, or
658termination that would be effective between June 1 and November
65930. The notice must include the reason or reasons for the
660nonrenewal, cancellation, or termination, except that:
661     1.  The insurer shall give the first-named named insured
662written notice of nonrenewal, cancellation, or termination at
663least 180 days prior to the effective date of the nonrenewal,
664cancellation, or termination for a first-named named insured
665whose residential structure has been insured by that insurer or
666an affiliated insurer for at least a 5-year period immediately
667prior to the date of the written notice.
668     2.  When cancellation is for nonpayment of premium, at
669least 10 days' written notice of cancellation accompanied by the
670reason therefor shall be given. As used in this subparagraph,
671the term "nonpayment of premium" means failure of the named
672insured to discharge when due any of her or his obligations in
673connection with the payment of premiums on a policy or any
674installment of such premium, whether the premium is payable
675directly to the insurer or its agent or indirectly under any
676premium finance plan or extension of credit, or failure to
677maintain membership in an organization if such membership is a
678condition precedent to insurance coverage. "Nonpayment of
679premium" also means the failure of a financial institution to
680honor an insurance applicant's check after delivery to a
681licensed agent for payment of a premium, even if the agent has
682previously delivered or transferred the premium to the insurer.
683If a dishonored check represents the initial premium payment,
684the contract and all contractual obligations shall be void ab
685initio unless the nonpayment is cured within the earlier of 5
686days after actual notice by certified mail is received by the
687applicant or 15 days after notice is sent to the applicant by
688certified mail or registered mail, and if the contract is void,
689any premium received by the insurer from a third party shall be
690refunded to that party in full.
691     3.  When such cancellation or termination occurs during the
692first 90 days during which the insurance is in force and the
693insurance is canceled or terminated for reasons other than
694nonpayment of premium, at least 20 days' written notice of
695cancellation or termination accompanied by the reason therefor
696shall be given except where there has been a material
697misstatement or misrepresentation or failure to comply with the
698underwriting requirements established by the insurer.
699     4.  The requirement for providing written notice of
700nonrenewal by June 1 of any nonrenewal that would be effective
701between June 1 and November 30 does not apply to the following
702situations, but the insurer remains subject to the requirement
703to provide such notice at least 100 days prior to the effective
704date of nonrenewal:
705     a.  A policy that is nonrenewed due to a revision in the
706coverage for sinkhole losses and catastrophic ground cover
707collapse pursuant to s. 627.706, as amended by s. 30, chapter
7082007-1, Laws of Florida.
709     b.  A policy that is nonrenewed by Citizens Property
710Insurance Corporation, pursuant to s. 627.351(6), for a policy
711that has been assumed by an authorized insurer offering
712replacement or renewal coverage to the policyholder.
714After the policy has been in effect for 90 days, the policy
715shall not be canceled by the insurer except when there has been
716a material misstatement, a nonpayment of premium, a failure to
717comply with underwriting requirements established by the insurer
718within 90 days of the date of effectuation of coverage, or a
719substantial change in the risk covered by the policy or when the
720cancellation is for all insureds under such policies for a given
721class of insureds. This paragraph does not apply to individually
722rated risks having a policy term of less than 90 days.
723     (4)  Notwithstanding the provisions of s. 440.42(3), if
724cancellation of a policy providing coverage for workers'
725compensation and employer's liability insurance is requested in
726writing by the insured, such cancellation shall be effective on
727the date requested by the insured or, if no date is specified by
728the insured, cancellation shall be effective on the date of the
729written request. The carrier is not required to send notice of
730cancellation to the insured if the cancellation is requested in
731writing by the insured the carrier sends the notice of
732cancellation to the insured. Any retroactive assumption of
733coverage and liabilities under a policy providing workers'
734compensation and employer's liability insurance may not exceed
73521 days.
736     Section 10.  Subsection (3) is added to section 627.4137,
737Florida Statutes, to read:
738     627.4137  Disclosure of certain information required.-
739     (3)  Any request made to a self-insured corporation
740pursuant to this section shall be sent by certified mail to the
741registered agent of the disclosing entity.
742     Section 11.  Subsection (2) of section 627.7277, Florida
743Statutes, is amended to read:
744     627.7277  Notice of renewal premium.-
745     (2)  An insurer shall mail or deliver to the first-named
746insured its policyholder at least 30 days' advance written
747notice of the renewal premium for the policy.
748     Section 12.  Paragraph (a) of subsection (3), paragraphs
749(a) and (d) of subsection (4), and subsections (5) and (6) of
750section 627.728, Florida Statutes, are amended to read:
751     627.728  Cancellations; nonrenewals.-
752     (3)(a)  No notice of cancellation of a policy to which this
753section applies shall be effective unless mailed or delivered by
754the insurer to the first-named named insured and to the first-
755named named insured's insurance agent at least 45 days prior to
756the effective date of cancellation, except that, when
757cancellation is for nonpayment of premium, at least 10 days'
758notice of cancellation accompanied by the reason therefor shall
759be given. No notice of cancellation of a policy to which this
760section applies shall be effective unless the reason or reasons
761for cancellation accompany the notice of cancellation.
762     (4)(a)  No insurer shall fail to renew a policy unless it
763mails or delivers to the first-named named insured, at the
764address shown in the policy, and to the first-named named
765insured's insurance agent at her or his business address, at
766least 45 days' advance notice of its intention not to renew; and
767the reasons for refusal to renew must accompany such notice.
768This subsection does not apply:
769     1.  If the insurer has manifested its willingness to renew;
771     2.  In case of nonpayment of premium.
773Notwithstanding the failure of an insurer to comply with this
774subsection, the policy shall terminate on the effective date of
775any other automobile liability insurance policy procured by the
776insured with respect to any automobile designated in both
777policies. Unless a written explanation for refusal to renew
778accompanies the notice of intention not to renew, the policy
779shall remain in full force and effect.
780     (d)  Instead of canceling or nonrenewing a policy, an
781insurer may, upon expiration of the policy term, transfer a
782policy to another insurer under the same ownership or management
783as the transferring insurer, by giving the first-named named
784insured at least 45 days' advance notice of its intent to
785transfer the policy and of the premium and the specific reasons
786for any increase in the premium.
787     (5)  United States postal proof of mailing or certified or
788registered mailing of notice of cancellation, of intention not
789to renew, or of reasons for cancellation, or of the intention of
790the insurer to issue a policy by an insurer under the same
791ownership or management, to the first-named named insured at the
792address shown in the policy shall be sufficient proof of notice.
793     (6)  When a policy is canceled, other than for nonpayment
794of premium, or in the event of failure to renew a policy to
795which subsection (4) applies, the insurer shall notify the
796first-named named insured of her or his possible eligibility for
797insurance through the Automobile Joint Underwriting Association.
798Such notice shall accompany or be included in the notice of
799cancellation or the notice of intent not to renew and shall
800state that such notice of availability of the Automobile Joint
801Underwriting Association is given pursuant to this section.
802     Section 13.  Section 627.7281, Florida Statutes, is amended
803to read:
804     627.7281  Cancellation notice.-An insurer issuing a policy
805of motor vehicle insurance not covered under the cancellation
806provisions of s. 627.728 shall give the first-named named
807insured notice of cancellation at least 45 days prior to the
808effective date of cancellation, except that, when cancellation
809is for nonpayment of premium, at least 10 days' notice of
810cancellation accompanied by the reason therefor shall be given.
811As used in this section, "policy" does not include a binder as
812defined in s. 627.420 unless the duration of the binder period
813exceeds 60 days.
814     Section 14.  Section 634.403, Florida Statutes, is amended
815to read:
816     634.403  License required; exemptions.-
817     (1)  No person in this state shall provide or offer to
818provide service warranties to residents of this state unless
819authorized therefor under a subsisting license issued by the
820office. The service warranty association shall pay to the office
821a license fee of $200 for such license for each license year, or
822part thereof, the license is in force.
823     (2)  An insurer, while authorized to transact property or
824casualty insurance in this state, may also transact a service
825warranty business without additional qualifications or
826authority, but shall be otherwise subject to the applicable
827provisions of this part.
828     (3)  The office may, pursuant to s. 120.569, in its
829discretion and without advance notice and hearing, issue an
830immediate final order to cease and desist to any person or
831entity which violates this section. The Legislature finds that a
832violation of this section constitutes an imminent and immediate
833threat to the public health, safety, and welfare of the
834residents of this state.
835     (4)  Any person that is an affiliate of a domestic insurer
836as defined in chapter 624 is exempt from application of this
837part if the person does not issue, or market or cause to be
838marketed, service warranties to residents of this state and does
839not administer service warranties that were originally issued to
840residents of this state. The domestic insurer or its wholly
841owned Florida licensed insurer must be the direct obligor of all
842service warranties issued by such affiliate or must issue a
843contractual liability insurance policy to such affiliate that
844meets the conditions described in s. 634.406(3). If the Office
845of Insurance Regulation determines, after notice and opportunity
846for a hearing, that a person's intentional business practices do
847not comply with any of the exemption requirements of this
848subsection, the person shall be subject to this part.
849     (5)  A person is exempt from the license requirement in
850this section if the person complies with the following:
851     (a)  The service warranties are only sold to nonresidents
852of this state and the person does not issue, market, or cause to
853be marketed service warranties to residents of this state.
854     (b)  The person submits a letter of notification that
855provides the following information to the office upon the start
856of business from this state and annually thereafter by March 1:
857     1.  The type of products offered and a statement certifying
858that the products are not regulated in the state in which the
859person is transacting business or that the person is licensed in
860the state in which the person is transacting business.
861     2.  The name of the person, the state of domicile, the home
862address and address in this state of the person, the names of
863the owners and their percentage of ownership, the names of the
864officers and directors, the name, e-mail, and telephone number
865of a contact person, the states in which the person is
866transacting business, and how many individuals are employed in
867this state.
868     (c)  If the person ceases to do business from this state,
869the person shall provide written notification to the office
870within 30 days after cessation of business.
871     (6)(5)  Any person who provides, offers to provide, or
872holds oneself out as providing or offering to provide a service
873warranty to residents of in this state or from this state
874without holding a subsisting license commits, in addition to any
875other violation, a misdemeanor of the first degree, punishable
876as provided in s. 775.082 or s. 775.083.
877     Section 15.  Section 627.442, Florida Statutes, is amended
878to read:
879     627.442  Insurance contracts.-
880     (1)  A person who requires a workers' compensation
881insurance policy pursuant to a construction contract may not
882reject a workers' compensation insurance policy issued by a
883self-insurance fund that is subject to part V of chapter 631
884based upon the self-insurance fund not being rated by a
885nationally recognized insurance rating service.
886     (2)  Notwithstanding s. 440.381(3), premium audits are not
887required for workers' compensation coverage, other than an audit
888required by the insurance policy or an order of the office, or
889at least once each policy period, if requested by the insured.
890     Section 16.  Subsections (4) and (7) of section 627.7295,
891Florida Statutes, are amended to read:
892     627.7295  Motor vehicle insurance contracts.-
893     (4)  If subsection (7) does not apply, the insurer may
894cancel the policy in accordance with this code except that,
895notwithstanding s. 627.728, an insurer may not cancel a new
896policy or binder during the first 60 days immediately following
897the effective date of the policy or binder except for nonpayment
898of premium unless the reason for the cancellation is the
899issuance of a check for the premium that is dishonored for any
901     (7)  A policy of private passenger motor vehicle insurance
902or a binder for such a policy may be initially issued in this
903state only if, before the effective date of such binder or
904policy, the insurer or agent has collected from the insured an
905amount equal to 2 months' premium. An insurer, agent, or premium
906finance company may not, directly or indirectly, take any action
907resulting in the insured having paid from the insured's own
908funds an amount less than the 2 months' premium required by this
909subsection. This subsection applies without regard to whether
910the premium is financed by a premium finance company or is paid
911pursuant to a periodic payment plan of an insurer or an
912insurance agent. This subsection does not apply if an insured or
913member of the insured's family is renewing or replacing a policy
914or a binder for such policy written by the same insurer or a
915member of the same insurer group. This subsection does not apply
916to an insurer that issues private passenger motor vehicle
917coverage primarily to active duty or former military personnel
918or their dependents. This subsection does not apply if all
919policy payments are paid pursuant to a payroll deduction plan or
920an automatic electronic funds transfer payment plan from the
921policyholder, provided that the first policy payment is made by
922cash, cashier's check, check, or a money order. This subsection
923and subsection (4) do not apply if all policy payments to an
924insurer are paid pursuant to an automatic electronic funds
925transfer payment plan from an agent, a managing general agent,
926or a premium finance company and if the policy includes, at a
927minimum, personal injury protection pursuant to ss. 627.730-
928627.7405; motor vehicle property damage liability pursuant to s.
929627.7275; and bodily injury liability in at least the amount of
930$10,000 because of bodily injury to, or death of, one person in
931any one accident and in the amount of $20,000 because of bodily
932injury to, or death of, two or more persons in any one accident.
933This subsection and subsection (4) do not apply if an insured
934has had a policy in effect for at least 6 months, the insured's
935agent is terminated by the insurer that issued the policy, and
936the insured obtains coverage on the policy's renewal date with a
937new company through the terminated agent.
938     Section 17.  Subsection (3) of section 626.916, Florida
939Statutes, is amended to read:
940     626.916  Eligibility for export.-
941     (3)(a)  Subsection (1) does not apply to wet marine and
942transportation or aviation risks which are subject to s.
944     (b)  Paragraphs (1)(a)-(d) do not apply to classes of
945insurance which are subject to s. 627.062(3)(d)1. These classes
946may be exportable under the following conditions:
947     1.  The insurance must be placed only by or through a
948surplus lines agent licensed in this state;
949     2.  The insurer must be made eligible under s. 626.918; and
950     3.  The insured must sign a disclosure that substantially
951provides the following: "You are agreeing to place coverage in
952the surplus lines market. Superior coverage may be available in
953the admitted market and at a lesser cost. Persons insured by
954surplus lines carriers are not protected under the Florida
955Insurance Guaranty Act with respect to any right of recovery for
956the obligation of an insolvent unlicensed insurer." If the
957notice is signed by the insured, the insured is presumed to have
958been informed and to know that other coverage may be available,
959and, with respect to the diligent-effort requirement under
960subsection (1), there is no liability on the part of, and no
961cause of action arises against, the retail agent presenting the
963     Section 18.  The amendments to s. 626.207, Florida
964Statutes, made by this act do not apply retroactively and apply
965only to applicants whose applications are pending or submitted
966on or after the date that the amendments to s. 626.207, Florida
967Statutes, made by this act become law. This section shall take
968effect upon this act becoming a law.
969     Section 19.  Paragraph (c) of subsection (7) of section
970817.234, Florida Statutes, is amended, present subsection (12)
971of that section is renumbered as subsection (13), and a new
972subsection (12) is added to that section, to read:
973     817.234  False and fraudulent insurance claims.-
974     (7)
975     (c)  An insurer, or any person acting at the direction of
976or on behalf of an insurer, may not change an opinion in a
977mental or physical report prepared under s. 627.736(8)(7) or
978direct the physician preparing the report to change such
979opinion; however, this provision does not preclude the insurer
980from calling to the attention of the physician errors of fact in
981the report based upon information in the claim file. Any person
982who violates this paragraph commits a felony of the third
983degree, punishable as provided in s. 775.082, s. 775.083, or s.
985     (12)  In addition to any criminal liability, a person
986convicted of violating any provision of this section for the
987purpose of receiving insurance proceeds from a motor vehicle
988insurance contract is subject to a civil penalty.
989     (a)  Except for a violation of subsection (9), the civil
990penalty shall be:
991     1.  A fine up to $5,000 for a first offense.
992     2.  A fine greater than $5,000, but not to exceed $10,000,
993for a second offense.
994     3.  A fine greater than $10,000, but not to exceed $15,000,
995for a third or subsequent offense.
996     (b)  The civil penalty for a violation of subsection (9)
997must be at least $15,000 but may not exceed $50,000.
998     (c)  The civil penalty shall be paid to the Insurance
999Regulatory Trust Fund within the Department of Financial
1000Services and used by the department for the investigation and
1001prosecution of insurance fraud.
1002     (d)  This subsection does not prohibit a state attorney
1003from entering into a written agreement in which the person
1004charged with the violation does not admit to or deny the charges
1005but consents to payment of the civil penalty.
1006     Section 20.  Except as otherwise expressly provided in this
1007act and except for this section, which shall take effect upon
1008this act becoming a law, this act shall take effect July 1,

CODING: Words stricken are deletions; words underlined are additions.